Fronteer Gold shareholders will see the world’s second largest gold producing company, Newmont Mining Corporation, take over the company in a Canadian $2.3 billion deal. This will result in a new company called Pilot Gold.
The shareholders of Fronteer Gold will get Canadian $14 in cash and one common share of the newly formed company in exchange for one common share of Fronteer Gold. This is at a 37% premier to the shares of the company on close of Wednesday’s trading at Canadian $ 10.25. After the announcement on Thursday the shares of Fronteer Gold rose more than 40% to Canadian $14.40.
The Chief Executive of Newmont Mining Corp, Mr Richard O’Brien said that what made Fronteer Gold more attractive was its Long Canyon project in Nevada. The company has been finding more resources at the location and Mr O’Brien said that it was near their own resources and they knew the territory. He added that they felt strongly about the geologic potential increasing over time.
Newmont Mining has been operating in the state of Nevada since the last 60 years after it discovered the Carlin gold trend in 1963. It is among the tow largest producers of gold in the state along with Barrick Gold Corporation. They are familiar with the state’s geology and thing that Long Canyon has a gold trend very similar to the legendary Carlin trend.