With the intent to focus on projects that are closer to producing gold ore, Newmont Mining Corp. said it had signed a letter of intent to sell its stalled Hope Bay gold-mining project in the Canadian artic to TMAC Resources Inc.
Terms of the proposed transaction, which Newmont said would follow an acquisition agreement and “equity financing,” were not released and a press release did not elaborate on the nature of the equity financing.
Newmont placed the Hope Bay development on hold this year and took a $1.6 billion write-down during the fourth quarter of 2011.
Newmont, the world’s second-largest gold-mining company by production, acquired the Hope Bay development in 2007 through its $1.5 billion acquisition of Miramar Mining Corp.
TMAC is “the right partner to improve prospects for near-term development of the Hope Bay Project,” Randy Engel, executive vice president of Strategic Development for Newmont, said. “We look forward to developing a strong, long-term partnership as a significant shareholder of TMAC.”
Engel did not say what involvement Newmont might have after the transaction.
“There have been, for some time, a variety of parties interested in Hope Bay,” Newmont spokesman Omar Jabara told Dow Jones Newswires. “We know there’s gold there, it’s just a question of what’s the right option for developing the gold.”
“We believe the Hope Bay Belt has great potential to be Canada’s next major gold-mining camp and a long-term, profitable and environmentally responsible gold producer for the benefit of all stakeholders,” Terry MacGibbon, TMAC’s executive chairman said.