Newmont 08 Gold Sales In Line, Buys Boddington Stake
January 27 2009 - 6:50PM
Dow Jones News
U.S. gold producer Newmont Mining Corp. (NEM) Wednesday
announced 2008 gold sales of around 5.2 million troy ounces, in
line with expectations, as well as the acquisition of the remaining
33.3% stake in the Boddington mine in Western Australia state from
joint venture partner AngloGold Ashanti Ltd. (ANG.JO)
The Denver-based company also said capital costs for Boddington,
located about 130 kilometers southeast of Perth, will be at US$2.6
billion to US$2.9 billion, as previously stated.
Newmont announced a US$1.2 billion capital raising through
public offerings of common stock and convertible notes, in order to
fund the acquisition of the Boddington stake that is likely to cost
around US$1.1 billion.
Securities in dual-listed Newmont fell up to 14% to A$5.65 on
the Australian Stock Exchange, before recovering to trade at A$6.14
at around 0007 GMT, following the announcement of the capital
raising.
Gold prices were also down overnight, and Newmont's share price
on the New York Stock Exchange fell by about 4%.
Boddington is due to start production mid this year, and with a
nameplate capacity of 1 million ounces for the first five years of
operation.
The acquisition of the remaining stake in Boddington was
positive, with the company delivering gold sales in line with
expectations, one Canada-based analyst said, who declined to be
named.
Richard O'Brien, Newmont president and chief executive officer,
said gold sales and costs were consistent with expectations for the
year.
"For 2009, we expect equity gold sales to increase to between
5.2 and 5.5 million ounces at costs applicable to sales of between
US$400 and US$440 per ounce, assuming the completion of the
Boddington acquisition," O'Brien said.
Consolidated capital expenditure for 2008 was US$1.9 billion,
and is due to fall to US$1.4 billion to US$1.6 billion for this
calendar year because of completion of the Boddington mine as well
as a power plant in Nevada, the company said in a statement.
-By Elisabeth Behrmann, Dow Jones Newswires;
61-2-8272-4689 elisabeth.behrmann@dowjones.com
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