Tuesday, August 24, 2010

LGL-Newcrest merger to create US$25b empire

Miner to acquire high-margin, one-gold asset, says Gaurnaut 




THE merger between Lihir Gold Ltd (LGL) and the Australian gold miner Newcrest Mining Ltd (Newcrest) will create a A$25 billion (K60 billion) company with portfolio of a long-term high margin and a tier one gold asset,   LGL chairman Dr Ross Garnaut said yesterday, The National reports.

The merger agreement was finally signed yesterday in a special meeting among shareholders in Port Moresby for the proposed merger through a scheme of arrangement (SOA) announced last May.

 LGL shareholders overwhelmingly approved through a secret ballot the merger during the meeting.

They approved the SOA with 99.86% of the total number of votes cast at the meeting, exceeding the required majority of 75% as ordered by the Waigani national court.

The final hurdle for the merger is approval of the scheme by the national court with the hearing scheduled on Friday.

If approved, the scheme will become effective Aug 30 and is scheduled to be carried out on Sept 13.

“Through merger with Newcrest, we can immediately deliver strong returns to our shareholders with certainty, while simultaneously achieving greater diversification, reducing costs and improving our risk profile,” Garnaut said.

 “For the local communities where we operate, they can be assured that Newcrest has an excellent track record as a good corporate citizen, committed to delivering on its promises, sharing the benefits of its mining projects equitably, and operating in a way that is sensitive to diverse cultural needs and practices,” he said.

Gaurnaut said that Lihir mining project had played a special role in the development of the country’s mining industry and economy.

“It has demonstrated that with careful management and close co-operation with communities and governments, large-scale mining in PNG is consistent with exemplary outcomes for relations with communities and governments and for the environment,” he said.

“Newcrest’s commitment of more than US$10 billion (K27.25 billion), mostly for the Lihir Island asset, is a large vote of confidence in the PNG investment environment.”

Garnaut stressed the Lihir operation would continue to generate wealth and enhance society in the region for a long time to come.

“We expect high profitability will make the Lihir operations the second largest taxpayer in PNG next year.

“We have started paying sustainable dividends to shareholders.”

Newcrest chairman Don Mercer said the merger would create one of the world’s great gold mining companies with an outstanding platform to deliver superior returns to shareholders.

“The combination of Newcrest and LGL will create a world class portfolio of high quality operating mines and growth opportunities capable of delivering long term, sustainable production growth within the lowest cost quartile of the global industry,” Mercer said.

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