HomeGoldNewmont raises US$1.5 billion for acquisitions

Newmont raises US$1.5 billion for acquisitions

A haul truck moves
material from Newmont’s
Twin Creeks mega pit
in Nevada
Denver, United States — MININGREVIEW.COM — 29 January 2009 – Newmont Mining Corporation – a leading international gold producer with operations on five continents, and the largest U.S. gold producer – raised US$1.56 billion (R15.75 billion) to help finance the acquisition of full control of the Boddington mine in Australia from AngloGold Ashanti Ltd.

Bloomberg News reports that Newmont sold 30 million shares for US$37 (R370) each, according to a company source who declined to be identified before the news was released officially. The Denver-based company also sold US$450 million R4.5 billion) of convertible notes with a 3% coupon due in 2012.

The proceeds will fund the US$1.09 billion (R11 billion) acquisition of the remaining 33% stake in the Australian mine, Newmont said in a statement. Boddington will be Australia’s largest gold mine when it is completed this year, yielding 1 million ounces annually at a projected cost of $300 an ounce.

The share sale will also allow Newmont to make acquisitions and maintain investment-grade ratings on its debt, CEO Richard T. O’Brien said in an interview from Denver. “It’s the kind of market where opportunities arise, and we want to be on the receiving end of that,” O’Brien added.

The Boddington deposit will cost US$2.6 billion to $2.9 billion (R26 to R29 billion) to develop, and will take a year to ramp up to full production, Newmont added. The company plans to produce an overall total of 5.2 million to 5.5 million ounces of gold next year at a cost of US $400 to US$440 an ounce.