Newmont agrees to sell mine for $132m

The Waihi Gold Company mine.

Newmont has agreed to sell its gold mining operations in Waihi to OceanaGold Corporation for $132 million.

Newmont will retain a 1 per cent net smelter royalty for gold mined from a specific exploration north of Waihi, capped at 300,000 ounces of production.

OceanaGold operates New Zealand's largest gold mining operation at Macraes goldfield in Otago, and Reefton Open Pit mine on the West Coast.

The companies said current workforce, totalling about 340 Waihi Gold Company employees and contractors, would remain with the business under the new ownership.

"Waihi is really just a good strategic fit with OceanaGold's existing New Zealand portfolio," Ken Ramsey, Newmont Mining Corporation group executive for sustainability and external relations, told the Bay of Plenty Times from the company's regional office in Perth, Australia.

Mr Ramsey said the proposed sale had nothing to do with any problems Newmont had encountered with the Waihi community over the impact of drilling activities.

"In general, Newmont pursues any sort of transaction that is going to create shareholder value and better align our asset portfolio," he said.

Omar Jabara, a spokesman for Newmont Mining Corporation in Denver, US, said OceanaGold had approached Newmont with an interest in buying the Waihi mine.

"The company has 24 years' experience in New Zealand," he said. "They have a reputation for developing and maintaining strong positive relationships with communities. We believe they will be a good strategic, practical, and philosophical fit for Waihi."

The sale will be subject to approval under the Overseas Investment Act, with completion likely to be in July.

Newmont Waihi Gold general manager Glen Grindlay said it would be business as usual until the sale was completed.

"We want this transition to be as smooth as possible ... Waihi Gold employees will continue to be employed by the same company, Waihi Gold Company, but with new owners. All of our current existing New Zealand contracts will be transferred directly to the new owners of the company."

Grindlay also said all consent conditions would remain the same.

Mick Wilkes, OceanaGold's managing director and chief executive, said the company had long believed Waihi would be a strong strategic fit.

"Waihi represents a unique opportunity for us to acquire a high-quality asset that has demonstrated the propensity to extend mine life for more than two decades in what is still a very prospective, high-quality goldfield."

OceanaGold Corporation
Operations include:
•New Zealand's largest gold mining operation at the Macraes goldfield in Otago.
•The Reefton Open Pit mine on the West Coast.
•The Didipio Mine in northern Luzon, Philippines.
•Listed on the Toronto, Australian and New Zealand stock exchanges.
•In 2015, the company expects to produce 295,000 to 335,000 ounces of gold from the New Zealand (including Waihi) and Philippine operations.

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