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SYDNEY - Australia's Newcrest Mining said yesterday it had raised A$1.586 billion ($1.89 billion) in an institutional entitlement offer to close out its gold hedge book, sending its shares up as much as 12.5 per cent.
About 96.5 per cent of eligible institutional shareholders took entitlements, indicating strong support for the restructuring, Newcrest said.
The goldminer also said it expected to raise a further A$456 million in a retail entitlement offer which opens on Monday.
Newcrest closed up A$2.28 to A$25.16 after a trading halt was lifted.
Newcrest is raising money to exit its gold price hedges - where a price is fixed for gold that has yet to be mined - to give it more exposure to rising bullion prices on the spot market.
Newcrest managing director Ian Smith said last week the company over the last few weeks had purchased 2.3 million ounces of gold on the open market at an average price of A$831 an ounce to fund a plan to unwind a massive out-of-the-money hedge book.
Newcrest is the latest in a line of goldminers globally reducing their hedges, including Barrick Gold, Newmont Mining, Lihir Gold, Harmony Gold, AngloGold Ashanti and Buenaventura.
- Reuters
