Newcrest raises $1b for growth as virus sends gold price soaring

The nation’s top gold miner Newcrest has launched a $1.1 billion equity raising to fund growth at mines around the world and cash in on rising gold prices by lifting its exposure to a mine in South America.

Newcrest, which on Thursday reported a 16 per cent fall in gold output for the March quarter, said the capital raising would include a $1 billion institutional placement at $27.54 a share and a $100 million share purchase plan.

The funds would be used to buy financial instruments worth 34 per cent of free cash flow from its part-owned Fruta Del Note mine in Ecuador over the next five years, the company said, and for growth options at its Red Chris operations in Canada and Haverion project in Western Australia.

Newcrest's Lihir gold mine in Papua New Guinea.

Newcrest’s Lihir gold mine in Papua New Guinea.

Newcrest chief executive Sandeep Biswas on Thursday said the ASX-listed miner was “entering a growth phase” with a healthy balance sheet and a strong porfolio of assets. Acquiring the royalty stream at Lundin Gold’s Fruta del Norte mine in Ecuador would give Newcrest exposure to about 400,000 ounces of gold from the mine through 2026, he said.

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