Newcrest share price on watch amid results and takeover rejection

Newcrest saw both gold and copper production ramp up during the first half of the 2023 financial year, and management believes the company is worth more than Newmont is offering.

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The Newcrest Mining Ltd (ASX: NCM) share price is on watch this morning.

This comes after the S&P/ASX 200 Index (ASX: XJO) gold miner rejected the takeover offer from US gold giant Newmont and released its half-year results for the six months ending 31 December.

First, the takeover offer…

Newcrest share price in focus as takeover offer rebuffed

On 6 February, the Newcrest share price leapt 14% following news of Newmont's conditional, non-binding, and indicative proposal to acquire 100% of Newcrest by way of a scheme of arrangement.

Newmont offered 0.380 Newmont shares for each Newcrest share held.

At that time, the offer represented a 22% upside to the Newcrest share price.

Today the Newcrest board announced it had unanimously rejected the offer, saying it doesn't "represent sufficient value" for Newcrest shareholders.

The board said it considers "Newcrest to be uniquely positioned with a portfolio of long-life Tier 1 gold and copper assets, with increasing copper exposure and a high-quality development pipeline".

Management said they're happy to consider an improved proposal from Newmont but stressed there's no certainty one will be forthcoming.

What did the ASX 200 gold miner report for the half year

The Newcrest share prise is also on watch today after the ASX 200 gold miner reported its half-year results (1H FY23).

Highlights include:

  • Gold production of 1.04 million ounces, up 25% from 1H FY22
  • Copper production of 67,023 tonnes, up 32%
  • Revenue of $2.12 billion, up 24%
  • Earnings before interest, taxes, depreciation and amortisation (EBITDA) of $919 million, up 24%
  • Statutory and underlying profit of $293 million, down 2% from 1H FY22
  • All-In Sustaining Cost (AISC) of $1,089 per ounce, delivering an AISC margin of $585/oz
  • Interim dividend of US 15 cents per share (cps) and special dividend of US 20 cps, both fully franked

What did management say

Commenting on the results that have the Newcrest share price on watch this morning, CEO Sherry Duhe said:

We made significant progress on the execution of our growth strategy during the first half. We were very pleased to progress the Cadia PC1-2 and Lihir Phase 14A studies to execution, as well as completing the two-stage plant expansion at Cadia and further extending the mine life at Telfer.

Our global gold and copper portfolio is well placed for the future, with our transformation program delivering excellent progress at Brucejack, activities underway to maximise the value of our Red Chris and Havieron projects, and ongoing exploration success highlighting the potential for significant resource growth across our key target areas.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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