Newmont intends to sell Hope Bay project to TMAC Resources
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.