PERTH (miningweekly.com) – Takeover target Newcrest Mining has reported a 7% increase in revenue for the full year ended June, on the back of higher copper and gold production.

The miner reported that revenue for the 12 months to June had reached $4.5-billion, with gold production up 8% on the previous financial year, to 2.1-million ounces, and copper production up 10% to 133 149 t.

Earnings before interest, taxes, depreciation and amortisation was stable at $2.06-billion, while statutory and underlying profit declined by 11% to $778-million, primarily owing to the lower realised copper price, higher depreciation, higher operating costs, a decrease in the miner’s share of profits from its associates, and an increase in finance costs with a higher level of debt and a higher interest rate in the current period.

Newcrest on Friday said that these impacts were partially offset by the addition of the Brucejack project, a higher contribution of low-cost production from Cadia, exchange rate gains, lower income tax expenses and higher molybdenum revenue.

“In FY23 we produced 2.1-million ounces of gold and 133 000 t of copper, with a significantly improved free cash flow of $404-million and statutory and underlying profit of $778-million. Our balance sheet remains in excellent shape, sitting comfortably within all our financial policy targets as we continued to invest in our organic portfolio of value-generating projects,” said interim CEO Sherry Duhe.

“FY23 has been a transformational year for Newcrest. We made significant progress against our growth strategy with key study milestones achieved at Cadia and Lihir, the signing of the framework memorandum of understanding (MoU) at the world-class Wafi-Golpu copper/gold deposit, and continued success realised through the Brucejack transformation programme.

“Following our strong exploration performance we significantly expanded the exploration target at East Ridge, highlighting the exciting opportunity for Red Chris as the block cave feasibility study continued to pursue a range of optimisation opportunities. Together with activities underway to maximise the value of Telfer and Havieron, our global gold and copper portfolio is very well placed for the future.

“In May we reached an agreement for Newmont to acquire 100% of the issued shares in Newcrest. If the transaction receives the necessary approvals and proceeds, the combined company will set a new benchmark in gold production with increased diversification across a premier portfolio of gold and copper assets, as well as additional flexibility in project sequencing and growth optionality,” Duhe said.

Under the offer, Newcrest shareholders will receive 0.4 Newmont shares for each Newcrest shares held, with Newcrest additionally permitted to pay a fully franked special pre-completion dividend of up to $1.10 a share.

The offer values Newcrest shares at A$29.27 each and implies an equity value of A$26.2-billion and an enterprise value of A$28.8-billion to Newcrest.

“Our board has unanimously recommended that shareholders vote in favour of the transaction which is targeted for implementation in November 2023. We are incredibly proud of the successful business our people have created, and the significant premium offered by Newmont to acquire our company is testament to their hard work and dedication over many years,” Duhe said on Friday.

The company has provided a group gold production target of between 2-million and 2.3-million ounces for the 2024 financial year, and a copper target of between 120 000 t and 140 000 t. Some $560-million to $640-million has been earmarked as sustaining capital for the year, with a further $610-million to $735-million in non-sustaining capital expenditure.

A further $130-million to $150-million will be spent on exploration.

At the end of the financial year, Newcrest’s group reserves were up by 5% on the prior year, to 64-million ounces, with the company’s measured and indicated resources up by 4%, to 130-million ounces, and its inferred mineral resource up by 20%, to 25-million ounces.

Additionally, the reserves contain 11-million tonnes of copper, 42-million ounces of silver and 0.096-million tonnes of molybdenum.