12th Sep 2014 06:23
LONDON (Alliance News) - Fresnillo PLC Friday said it has a binding agreement to buy Newmont Mining Corp's 44% stake in their Penmont joint venture for USD450 million in cash, a deal that gives it full control of the gold mining venture in Mexico.
In a statement, the London-listed miner said the move will allow it continue an aggressive expansion programme in the region, and will immediately add to its earnings. It will add 2.0 million ounces to Fresnillo's reserve and 5.1 million ounces to its resource base, and it has raised its target of 500,000 ounces of attributable gold production by 2018 to 750,000 ounces as a result.
The Penmont joint venture comprises the Herradura, Noche Buena and Soledad Dipolos mines, the Mega Centauro and Centauro Deep advanced exploration projects and a number of key exploration prospects.
"Acquiring full control of the Penmont assets would enable us to both maximize the value of current producing mines which we have extensive experience in operating, and unlock further long-term value from Herradura as a highly prospective region where we have a strong track record of exploration success," Fresnillo Chief Executive Octavio Alvídrez said in a statement.
"The acquisition of the Penmont assets from our JV partner Newmont would see Fresnillo assume control of a quality portfolio of assets which would significantly enhance our gold production and be central to our growth," he added.
The acquisition needs to be approved by Fresnillo shareholders.
By Steve McGrath; [email protected]; @stevemcgrath1
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