Daily Brief Australia: Newcrest Mining, Alkane Resources, CommsChoice Group Ltd and more

• Under the revised proposal, Newmont (NEM US) has bumped the all-scrip terms for Newcrest Mining (NCM AU) to 0.400 Newmont shares – from 0.380 – for each Newcrest share held. 
• Including a permissible franked special dividend of up to US$1.10/share, the revised proposal represents an implied value of A$32.87/share. Newmont indicated the revised bid represents its best and final price.
• Newcrest has granted Newmont confirmatory due diligence to put forward a binding proposal.

• Newcrest Mining (NCM AU) disclosed a revised non-binding indicative privatisation proposal from Newmont Mining (NEM US) at 0.400 Newmont shares per Newcrest share + US$1.10 special dividend. 
• Since the 6 February announcement, the average implied value of the revised offer is A$29.14 per share, which is 11.6% higher than the average of the previous offer of A$26.12.
• The offer is attractive in terms of historical prices and VWAP ratios but carries the volatility risk around Newmont shares and FX rates. Expect a binding proposal. 

Since our outlook note published on 7 July 2022, Alkane has made several important announcements. Firstly, it improved its FY23 production guidance to 62,000–70,000oz (a 17% increase) after impressive H123 production at Tomingley and now expects to reach the upper end of this range. This has resulted in our EPS forecast for FY23 increasing by 30.6% from A$0.0445/share to A$0.0582/share. This was followed by the approval of the Tomingley Gold Extension Project, permitting open-cut mining at the Roswell and San Antonio deposits (including underground mining at the former), extending the mine life at Tomingley to at least 2031. Additionally, Alkane announced an inferred mineral resource at Kaiser of 4.7Moz AuE (0.48Mt Cu, 2.05Moz Au). Finally, it reported Q323 gold production of 16,641oz, bringing the current year to date production figure to 54,431oz.

• The company has announced a restructure of its domestic retail business following a review that identified excess resourcing levels.
• The result is an estimated 20 redundancies and annualised cost saving of $2m at the EBITDA line
• We have upgraded our forecasts from FY24 and our valuation has increased as well.

• Comms Group Ltd (ASX:CCG) has announced a restructure within its domestic retail business following a review that identified excess resourcing levels.
• The result is an estimated 20 redundancies and an annualised cost saving of $2m at the EBITDA line.
• Guidance for FY23 EBITDA of $5.0m+ (RaaS $5.1m) remains intact for FY23.