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Newcrest Mining considering options for SolGold stake: Reuters
Posted on Wednesday, 08 July 2020 13:01
Australia’s Newcrest Mining is exploring options for its minority interest in gold and copper producer SolGold, two sources familiar with the matter told Reuters.

The insiders, who asked not to be identified as the situation is still private, observed the buyer has hired investment bank RBC Capital Markets to review alternatives for its 13.6 per cent stake in the target.

No final decision has been made and it is not clear if Newcrest Mining is looking to sell or purchase more shares in SolGold.

The Ecuador-focused company agreed a financing package in May of up to USD 150.00 million and a USD 15.00 million bridge loan for its Alpala project with streaming company Franco-Nevada.

Newcrest Mining is billed as Australia’s biggest listed gold producer.

In an email to Reuters, the business said the royalty transaction, coupled with an expensive bridge loan, could lead to a transfer of significant risk to existing SolGold shareholders.

The target needs to secure more than USD 2.50 billion to complete the Alpala project, expected to start production of copper and gold in 2025.

Headquartered in Brisbane Australia, SolGold has offices in Australia, UK and Ecuador.

In the six months ended 31st December 2019, the business recorded a loss for the period of USD 4.98 million, compared to a loss of USD 27.48 million in the corresponding period of 2018.

Zephyr, the M&A database published by Bureau van Dijk, shows there have been 557 deals targeting metal ore mining companies announced worldwide in 2020 to date.

In the largest of these, Vedanta Resources of the UK has agreed to acquire the remaining stake 49.0 per cent stake in India’s Vedanta for INR 147.97 billion (USD 1.98 billion).

This was the only deal worth more than USD 1.00 million and was followed by China’s Zijin Mining Group issuing convertible bonds to raise no more than CNY 6.00 billion (USD 854.84 million).

Other targets included Newcrest Mining, Tibet Julong Copper Industry, Polyus and Lundin Gold's gold mining companies.

© Zephus Ltd