Newcrest should better articulate the value of its long-life growth projects and maybe adjust its portfolio, he said. That could include selling the relatively modest Havieron gold mine in Australia and the nearby Telfer mine and processing plant, which is operating well below capacity.
Newcrest could also sell its 32% stake in Canada's Lundin Gold and the Lihir mine in Papua New Guinea, which uses deep sea tailings disposal and therefore does not fit with some investors' environmental mandates, he said. "Why not demerge that, then the rest of the portfolio would be more attractive to investors and acquirers?"
Other analysts said the most obvious potential buyer for Havieron was its minority shareholder Greatland Gold , which plans to list on the Australian Securities Exchange this year. Greatland Gold declined to comment.
A source told Reuters on Monday that Newmont was open to slightly increasing its $16.9 billion offer. Analysts say a 10% improvement in terms or cash would be expected by Newcrest investors, as a reflection of its strong growth projects. Goldman Sachs's hedge fund desk said on Monday it saw only a limited chance of Newmont improving its bid by more than 5%. A drop in Newmont shares would lower the offer price, which would lower the premium and so make it harder for Newcrest's board to recommend the deal, it said. Newmont's shares fell nearly 5% on Monday. "This is the biggest risk around the deal," it noted. For Australian investors, Newmont could also sweeten the offer, since it had franking (tax) credits of $440 million, Jefferies said in a note. Shares in Newcrest, which will report half-year results on Feb. 16, closed 1.7% higher at A$24.95 on Tuesday. Newmont's implied offer price is $27.16. (Reporting by Melanie Burton; Editing by Kim Coghill and Bradley Perrett)
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