Commodities

Supporting growth opportunities in the gold sector

Macquarie Capital acted as joint lead manager, bookrunner and underwriter on Newcrest Mining's $A1.0 billion / $US653 million fully underwritten institutional placement.

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Sector	Commodities
Sub-sector	Metals and Mining
Location	Australia

Opportunity

In April 2020, an opportunity arose for Newcrest to increase its exposure to the world-class Fruta del Norte underground gold mine in Ecuador, by acquiring a gold pre-payment facility, precious metals stream and offtake package from Orion Resource Partners and Blackstone Tactical Opportunities for $US460 million. The acquisition was strategic to Newcrest given it increased economic exposure to the Fruta del Norte Mine, complementing its existing 32% equity interest in TSX-listed Lundin Gold.

Macquarie was selected as a joint lead manager for the equity raising given the strength of its Australian equity capital markets team, including a track record of delivering certain equity funding in accelerated timeframes and achieving tight pricing in a volatile market.

Approach

The equity raising was conducted during a period of increased market volatility associated with the COVID-19 pandemic and was the first acquisition equity raising in Australia to occur during this period. Macquarie Capital was able to deliver tight pricing and funding certainty through a confidential and targeted wall-crossing process to secure early investor interest before launch. Its positioning of the Newcrest investment thesis and acquisition rationale with investors post transaction launch supported a successful equity raising.

Outcome

The offer price of $A25.60 per share represented a 7.0% discount to Newcrest's last closing price of $A27.54 per share (as at Wednesday, 29 April 2020) and an 8.9% discount to the 5-day volume-weighted average price of $A28.10. The Placement was completed at the tightest discount* of any equity raising since the onset of the COVID-19 pandemic, driven by strong investor demand for Newcrest’s world-class asset portfolio and attraction to gold exposure during market volatility.

Proceeds from the equity raising were used to acquire various financing facilities associated with the Fruta del Norte gold mine and to fund organic growth opportunities.

$A1 billion Institutional Placement

Joint leader manager, underwriter and bookrunner

7.0% discount to last close

*Tightest discount of any equity raise since the onset of the COVID-19 pandemic

* Tightest discount at the time of transaction announcement

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Macquarie Capital

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