In a growing trend of consolidation in the gold mining industry, Newmont Mining Corp., the world's second largest gold producer, is acquiring Battle Mountain Gold Co.
The merger will solidify Newmont's position as the largest gold miner in North America, with an estimated production of 5.4 million ounces of gold this year, at less than $170 an ounce. Following the merger, Newmont will have reserves of 66.5 million ounces of gold, the third highest in the world, and 232.8 million ounces of silver.
"This transaction is part of a much-needed consolidation in the industry," Newmont Chairman and CEO Ronald C. Cambre says. "It will enable us to better rationalize our Nevada assets and determine the optimum investment and production levels to achieve the best return for our shareholders."
Blue Mountain's biggest contribution to Newmont is its Phoenix project, a large undeveloped gold field in Nevada not far from Newmont's mine. The combination of the companies' mines in Nevada should save them $10 million a year. "After a thorough review of the Phoenix project, which is the prime attraction for us, we concur with Battle Mountain Gold's management that it is one of the best undeveloped gold properties in North America," Cambre says. "Located within 30 miles of Newmont's Lone Tree complex, Phoenix provides an excellent fit with our Nevada infrastructure. We also acquire attractive, low-cost assets in Canada, Bolivia and Australia and will have the opportunity to broaden our workforce through the addition of talented people from Battle Mountain."
The completion of the acquisition is expected this fall, following customary regulatory approvals and approval by Battle Mountain Gold shareholders.
- by Julia M. Duncan