Newmont merger approved — Yanacocha expansion in works

The Minera Yanacocha gold mine in northern Peru will be expanded to increase output in 1995.

Newmont Mining (NYSE), which owns 38% of the mine, says production will rise to 350,000-400,000 oz. from the planned 220,000 oz. in 1994. The mine entered production in August, 1993, and yielded 81,500 oz. during the last four months of 1993.

The new production will come from the Maqui Maqui deposits, 3 miles northeast of the project’s currently producing Carachugo mining area. About US$40 million will be spent to construct leaching and related metallurgical facilities for treatment of Maqui Maqui ore.

At the corporate level, shareholders of Newmont Gold (NYSE) have voted 94% in favor of combining the company’s assets and operations with those of Newmont Mining. A new preferred stock was also approved.

The combination stops short of a full merger. The common stocks of Newmont Gold and Newmont Mining will continue to be traded separately. The shares of both companies will have the same per-share assets, operating results, earnings and dividends. They are therefore expected to trade at substantially the same price.

Newmont Mining, which owned 90.1% of Newmont Gold’s common shares, was committed to vote its shares in accordance with the votes cast by Newmont Gold’s public shareholders. Newmont Mining shareholders were not required to vote on the combination.

Newmont Mining retains 89.22% of the common stock of Newmont Gold and all of its newly created preferred stock. The combination is effective as of Jan. 1, 1994.

In addition, Newmont Mining has declared a 1.2-to-1 share stock split on its common stock, payable as a stock dividend. The stock dividend is payable April 21 to Newmont Mining shareholders of record as of the close of business on March 31. This split will raise Newmont Mining’s outstanding shares to 85.8 million from 68.8 million shares previously outstanding. The purpose of the stock split is to have the same number of shares outstanding for Newmont Mining as the number of shares of Newmont Gold owned by Newmont Mining.

A special dividend of US12 cents per common share was declared by Newmont Gold and is payable April 21 to shareholders of record as of the close of business on March 31.

There will be 96.2 million shares of Newmont Gold outstanding, and of these the 10.4 million shares now publicly traded will continue in the public float, with Newmont Mining retaining 85.8 million shares of Newmont Gold. There also will be an equal 85.8 million Newmont Mining shares outstanding, all publicly traded.

The combined Newmont reserves were 26 million oz. gold at the end of 1993, and the combined company will have worldwide production exceeding 2 million oz. in 1997.

Meanwhile, Newmont says field tests have confirmed the commercial viability of a patented leaching process to recover gold from low-grade sulphidic materials that could not previously be treated economically. The process uses naturally occurring bacteria to oxidize gold-bearing materials containing sulphides. Analogous to heap-

leaching, the process has proved economic on low-grade, sulphidic material that already has been mined as a consequence of activity to recover higher-grade sulphidic material or oxidized ores.

The company also has a second bioleaching process under long-range commercial tests which is aimed at recovering gold from low-grade sulphidic material containing active carbon.