This report provides a summary of Gold & Precious Metal Funds that hold:
- The Acquired Company only: Newcrest Mining Ltd (ASX: NCM)
- The Acquirer only: Newmont Corp. (NYSE: NEM)
- Both the Acquirer and the Acquired Company
The world’s largest gold producer, Newmont Corp. (NYSE: NEM), has reported a ~ US$16.9 Billion offer for Australia’s leading gold producer, Newcrest Mining Ltd. (ASX: NCM), in an effort to build a global gold supermajor.
The indicative offer implies a 21% premium to Newcrest’s share price before the bid was announced, materially below the traditional 30% takeover premium. Newcrest shareholders would receive 0.38 Newmont shares for every Newcrest share, giving them a 30% stake in the enlarged miner. It is a 4.7% improvement from a previous offer that was rejected for not providing enough value, Newcrest disclosed.
Newcrest’s operations include its top-class Cadia asset in Australia, an expanding footprint in North America and Papua New Guinea, and growth potential in copper, highly prized as key to the energy transition.
Portfolio Holdings Summary
At the time of the most recently recorded asset allocation New York City based Midas Fund Inc., managed by Thomas B. Winmill LLB BA, was the only gold fund to have retained a holding in only the acquired company: Newcrest Mining Ltd. (ASX: NCM). This holding represented ~5.5% of the total portfolio of Midas Fund Inc. This fund would have received the highest material performance benefit from the acquisition news announcement. 28 gold funds held only Newmont Corp. (NYSE: NEM), and 38 funds held both Newmont Corp. (NYSE: NEM) and Newcrest Mining Ltd. (ASX: NCM).
“In advancing gold cycles, mergers and acquisitions amongst gold producers can accelerate. As gold company mergers reduce the total number of portfolio company holdings for gold funds, managers often invest more capital in mid-tier and smaller companies. This results in dynamic price activity for smaller gold producers and exploration companies as the gold cycle advances. At the beginning of 2023, we are in the early stages of this type of gold market cycle.” – Christopher J. Berlet BSc, CFA
MineralFunds.com provides prices, performance, and trade information for all the world’s metal ETFs including Precious Metals, Battery Metals, Platinum Group Metals, and Base Metals and comprehensive fund information, including asset allocations, for Gold & Precious Metals Managed Funds from all investment jurisdictions.
Report prepared by: Kay Samnani, Analyst supported by Christopher J. Berlet BSc, CFA
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