Newcrest eyeing merger opportunitiesMarch 18, 2009 - 3:29PM Newcrest Mining Ltd chief executive Ian Smith says the gold miner is searching for merger and acquisition opportunities over the coming year.
"I think the next 12 months is rich with opportunity," Mr Smith told a business lunch on Wednesday.
Newcrest has two teams examining merger and acquisition (M&A) opportunities around the globe, Mr Smith said.
One team is looking for opportunities to take over the exploration operations of entry-level gold companies.
"We are actually scouring the world looking at ... any companies that may find themselves in a distressed position that have a really good resource, that they can't develop to the right rate and to the right size because of the profile they find themselves in," he said.
The second team is looking for opportunities to increase production at existing gold mines.
"There are some companies that are producing in the gold industry that are sitting on deposits that really avail themselves of a higher level of production, and for whatever reason they can't get that," Mr Smith said.
Newcrest did not need mergers or acquisitions to maintain its gold reserves, he said.
"We'll only undertake M&A if we see something that is particularly exciting or particularly value accretive compared to our other projects," Mr Smith said.
Mr Smith said he expected China to cope with the global economic crisis better than had been predicted.
"I think China will come out of this a lot quicker and a lot stronger than people suspect," he said.
"There's a driving social imperative in China, and as we all know they can mobilise very quickly when they want."
The price of gold would "stay in positive territory" for at least the next 18 months to two years, Mr Smith predicted.
"We can't see too many scenarios manifesting in the next 18 months that is going to push the gold price down," he said.
Mr Smith said Newcrest wasn't experiencing much impact from the financial crisis, and was one of five mining companies whose share price rose in 2008.
"We are lucky enough to be in that part of the industry that isn't really seeing the crisis," he said.
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