ADELAIDE, Australia -- Newmont Corp. has made a roughly $17 billion offer to acquire Australia's Newcrest Mining Ltd., aiming to seal one of the biggest deals for a global gold miner as the industry struggles to make large new discoveries of the precious metal.

Newmont, based in Colorado and one of the world's largest producers of gold, submitted a conditional and nonbinding indicative proposal to acquire Newcrest, Australia's largest listed gold producer. Newmont said it would offer 0.380 of its own shares for each Newcrest share held.

The offer follows an earlier approach by the U.S. company that valued each Newcrest share at 0.363 Newmont shares. Newcrest's directors rejected that proposal as too low. On Monday, Newcrest said it would consider the terms of the latest offer.

The approach by Newmont illustrates how producers are seeking to do deals to shore up their gold reserves, cut costs and improve returns for shareholders. In 2019, Newmont acquired Canadian gold producer Goldcorp Inc. in a transaction valued at $10 billion. The same year, Newmont and rival Barrick Gold Corp. formed a joint venture in Nevada to cut costs, after an earlier offer from Barrick to buy Newmont was rejected.

Newmont said the businesses are complementary and that a combined entity -- which would be owned 30% by Newcrest shareholders and 70% by Newmont -- could "set the standard for sustainable and responsible gold mining." Newcrest has mines in Australia, Canada and Papua New Guinea.

"We believe a combination of Newmont and Newcrest presents a powerful value proposition to our respective shareholders, workforce and the communities in which we operate," Newmont Chief Executive Tom Palmer said in a statement.

One major shareholder in Newcrest would be surprised to see a deal proceed as currently proposed, he told The Wall Street Journal.

Simon Mawhinney, chief investment officer of Allan Gray Australia, said an all-stock offer makes sense, but the ratio as it stands doesn't look fair given Newcrest's low-cost and long-life assets. Allan Gray and its sister company Orbis owned a combined 7.4% of Newcrest's stock at the end of December, according to the miner's quarterly report.

"It must be the case that Newmont thinks that, at the current offer, they are buying something cheap, and I commend them for that," Mr. Mawhinney said. "But there is a lot of water to go under this bridge."

Newcrest's network of low-cost mines are some of the world's largest and this likely appeals to Newmont, analysts say. The company's assets can run for 22 years before becoming depleted, well above most of its listed rivals, say analysts at Barrenjoey, an Australian investment bank. The company also has plans to expand several of its operations.

The approach could flush out bids from rivals. "We see upside to the initial offer and view the current proposal as the opening public salvo which may entice alternate bidders to the market," analysts at investment bank Jefferies said in a client note.

Gold is present in the Earth's crust in much smaller quantities than many of the most commonly mined materials. All the gold ever mined could fit in a roughly 22-meter cubed crate, according to the World Gold Council.

Gold miners have for years found it difficult to add to reserves in low-risk countries, with many mines running low on gold that can be accessed easily and exploration campaigns turning up few big deposits. Of the 341 major deposits discovered between 1990 and 2021, only 28 were found in the past decade, and contained only 6% of the gold discovered since 1990, according to S&P Global Market Intelligence.

Gold producers have also been grappling with higher costs, due to increased wages and a jump in energy prices.

Newmont's approach comes at a time of upheaval for Newcrest, which announced in December that Sandeep Biswas would leave the company after eight years as chief executive. Newcrest named Chief Financial Officer Sherry Duhe as interim CEO while it searched for Mr. Biswas's successor.

Newcrest expects to produce between 2.1 million and 2.4 million troy ounces of gold in the year through June. It also produces copper, an industrial metal in demand among investors because of its heavy use in electric vehicles and renewable energy infrastructure. Newcrest expects to produce up to 155,000 metric tons of copper this fiscal year.

Gold prices have moved higher in recent months, amid expectations an economic slowdown will prompt the Federal Reserve to slow the pace of rate rises, making the precious metal more appealing to investors. Higher interest rates typically dent demand for gold, which provides no yield.

Newcrest said the latest all-stock proposal from Newmont implies an offer price of 27.16 Australian dollars, or roughly $18.80, for each Newcrest share. That represents a 21% premium to its Feb. 3 closing price, it said. Shares in Newcrest closed 9.3% higher in Sydney on Monday at A$24.53.

Questions:

• What is the strategic rationale for the combination of Newmont and Newcrest being put forward by Newmont?
• Based on comments from market commentators in the article, do you think that Newcrest (and, by extension, Newcrest shareholders) will accept Newmont's proposal?
• What factors appear to impact the market price for gold?