Newcrest Mining has announced a bumper dividend as it rejected a takeover offer from the world's biggest gold miner Newmont.
Newcrest, Australia's largest goldminer, with gold and copper operations throughout Australia, the Pacific and the Americas, issued its response alongside its half-year earnings report on Thursday.
New York Stock Exchange-listed Newmont submitted a $24.3 billion all-scrip buyout proposal in early February, representing a 21 per cent premium.
Claiming it did not provide sufficient value for shareholders, Newcrest's board unanimously rejected the bid, instead offering to provide Newmont with additional non-public information in an attempt to draw a higher, revised proposal.
"The board considers Newcrest to be uniquely positioned with a portfolio of long-life tier one gold and copper assets, with increasing copper exposure and a high-quality development pipeline," it said in a release.
The company announced a US35c dividend, smashing consensus expectations of US11c per share.
It was boosted by a US20c special dividend derived from Lundin Gold's early repayment of a financial instrument.
"The hefty dividend is in part Newcrest signalling it does not need external funding for its long-life projects," said RBC Capital Markets analyst Alex Barkley.
"Including via a potential merger with Newmont."
While the takeover offer falling through would result in a short term drop in share price, the entire deal approach and strong dividend were positive signals of Newcrest's long-term prospects, said Mr Barkley.
Net profit also came in above expectations at US$293, beating consensus by 13 per cent.
The strong result was driven by higher gold and copper sales, depreciation benefits from a stronger US dollar and the addition of Canadian mine Brucejack, despite the death of a worker there in October 2022.
Interim CEO Sherry Duhe expects production to improve further in the second half and reaffirmed guidance for the full financial year.
"Newcrest is in an excellent position and, with positive momentum for gold and copper prices continuing into 2023, we look forward to a stronger second half of the year," she said
The company announced it continues to expand its mining operations, with West Australia's Telfer mine extended until 2025 and a feasibility study into an underground block cave at Red Chris in Canada due to be delivered in the second half of 2023.
Newcrest shares were down 1.4 per cent to $23.99 after the first hour of trading.
