The major will issue 800,000 common shares to Moydow and pay a 2% royalty on all gold and silver production from Ntotoroso exceeding 1.2 million oz. gold-equivalent. Newmont will also forfeit for cancellation more than 1.3 million Moydow shares (representing about 5% of Moydow’s outstanding issue).
The share portion of the deal is valued at more than US$30 million, based on Newmont’s closing price of US$37.54 per share in New York on Aug. 22, the day before the deal’s announcement.
Moydow says its shareholders will receive proceeds from the sale of 600,000 of the Newmont shares. Following the cancellation of its own shares, Moydow will be left with 26.4 million outstanding shares, resulting in a distribution of about $1.20 per share (on an undiluted basis).
The deal has yet to be approved by shareholders and regulators, and is expected to close Oct. 30.
Newmont inherited Ntotoroso, which sits in the middle of the 2-km-long belt, during its takeover of Australia’s Normandy Mining in 2002. The project has a reserve of 14.8 million tonnes running 2.4 grams gold per tonne, based on a gold price of US$275 per oz. (T.N.M., March 31-April 6/03). Elsewhere along the belt, Newmont’s equity ounces in 11 deposits total 3.3 million oz. contained in 56.2 million tonnes averaging 1.9 grams gold.
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