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Canadian and Chinese regulators clear B.C. gold mine sale to Australian firm

Australia's Newcrest Mining Ltd. takes over Brucejack gold mine in northwestern B.C.; maintains Chinese market with PRC-approval
Brucejack Gold Mine - northern B.C.
Brucejack Gold Mine, pictured during construction, is located in northern B.C.

Canadian and Chinese regulators have cleared the sale of a B.C. gold mine to Australian resource company Newcrest Mining Ltd.

The approximate $3.5-billion deal sees the Brucejack gold mine north of Terrace falling under the control of Newcrest, which acquired Vancouver-founded Pretium Resources Inc., in a cash and share transfer announced last November.

In Canada, the deal was cleared Feb. 25 under the Investment Canada Act, which reviews foreign investment for national security and the Competition Act, aimed at preventing anti-competitive practices in the marketplace.

The act calls for a review of investments over $1.141 billion by any non-state investors from World Trade Organization countries.

But because at least some Brucejack gold ends up in China, and Newcrest sells gold to third parties who then sell to China, the companies needed to clear Chinese regulators as well.

On Jan. 14, the State Administration for Market Regulation of the People’s Republic of China is said to have cleared the deal under China’s anti-monopoly law (AML).

According to the transaction contract, approval from China was a prerequisite of the deal. China has two types of reviews, including a “simple” one for mergers of companies with a combined market share of less than 15%, which would include Newcrest and Pretium.  

The review determines whether the transaction would “result in the elimination or restriction of competition in China,” according to the contract.

Brucejack is the province’s fourth largest mine, and largest not operated by mining juggernaut Teck Resources Ltd. It is also the largest underground mine in B.C. In 2020, it produced over 347,000 ounces of gold for about $828 million in revenue.

Neither company discloses just how much gold they sell to China (or is sold to China by way of third parties).

Pretium is to be delisted from the New York Stock Exchange (NYSE) and Toronto Stock Exchange (TSX) by the end of the week.

Newcrest paid shareholders either $18.50 or 0.8084 Newcrest shares per Pretium share, representing a 23% premium based on the share price in November (higher gold prices have since pushed Pretium shares above $19).

Pretium stated the transaction was also approved by 95.48% of the votes cast by shareholders.

On March 10, Newcrest shares sold for USD$19.92 as gold prices flirted at $2,000 per ounce.

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