Newmont Mining Corporation (Newmont) announced an agreement to invest approximately US$109 million for 19.9 percent ownership of Continental Gold Inc. (Continental), supporting near-term development of the high grade Buriticá gold project in Colombia. The investment also covers three other exploration assets in this prospective gold district.
The Buriticá deposit consists of two major vein systems that remain open along strike and at depth. Continental has declared proven and probable reserves of 3.7 million ounces of gold averaging more than eight grams per tonne.1 The project is permitted and construction of the underground mine and process plant is expected to begin in the second half of 2017 with commercial production targeted for early 2020.
"We're investing in a world class asset and exploration prospects, in alignment with our goal to create long-term value for shareholders," said Gary Goldberg, President and Chief Executive Officer. "We're impressed with the quality of the deposit, the caliber of the management team, the community's support for the project, and the prospects for future growth. Our team is looking forward to joining forces with Continental to make the most of these opportunities."
Newmont has agreed to purchase 37.38 million common shares of Continental in a non-brokered private placement at a price of C$4.00 per share. Closing of this purchase remains subject to receipt of approval by the Toronto Stock Exchange, which is expected by May 18. Terms of the investment agreement include Newmont's right to participate in future equity issuance to maintain its ownership stake; the two companies establishing joint technical and sustainability committees and a strategic exploration alliance; and Newmont holding a seat on Continental's Board of Directors.
Newmont invests in profitable growth through projects, exploration and transactions that improve its margins, reserves and resources. Newmont recently built two new mines - Merian in Suriname and Long Canyon in Nevada - in two new gold districts on or ahead of schedule and more than 20 percent below budget, and is advancing profitable expansions at Carlin in North America, Tanami in Australia, and Ahafo in Ghana. Newmont has added 123 million ounces to its reserve base by the drill bit over the last 15 years, and recently invested in an option to explore a highly prospective gold district in Canada's Yukon Territory.