Newcrest, Catalpa and Conquest to form new company

Business, Normal

The National – Thursday, June 16, 2011

NEWCREST Mining, the operator of Lihir gold mine and joint operator of Hidden Valley, has agreed with Australia’s Catalpa Resources and Conquest Mining to form a A$1.1 billion company through a merger, asset sale and capital raising that is likely to scuttle St Barbara’s A$350 million bid for Catalpa.
In a statement by Newcrest yesterday, Catalpa and Conquest will merge and purchase Newcrest’s Mt Rawdon and Cracow gold mines in Australia, in exchange for a 38%  stake in the new company.
Shortly after the merger and sale, the new company plans to raise A$150 million in a pro-rata renounceable entitlement offer to “suitably capitalise the significantly enlarged merged entity, ensuring financial flexibility for development of the asset portfolio and to fund growth opportunities”.
After the raising and based on recent stock prices, the market value of the company would be more than A$1.1 billion, the companies said.
The merged company would produce 294,000 oz of gold this year and between 400,000 and 500,000 oz in 2013.
After St Barbara’s hostile bid was launched last month, Catalpa said it would explore all options available to it.
Newcrest director fi­nance and managing di­rector-elect Greg Ri­chards said: “We believe the proposed transection delivers a very good outcome for Newcrest shareholders.”
Meanwhile, Newcrest’s Lihir operation remained shut after a high voltage switchgear failure in the power station at its Lihir operation had interrupted production with the processing pant currently operating at a reduced capacity.