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Acquisition speculation rife as Newmont says it will raise $2 billion
Withgold tradingaround $1,000 and the Denver Gold Forum as the backdrop,Newmont MiningCorporation, the world's second largest gold miner,couldn't have chosena better time to announce it is to raise around $2billion through thesale of Senior Notes.
Author: Lawrence Williams
Posted:Wednesday,16 Sep 2009
DENVER -
Speculation wasrife at the Denver Gold Forum as to the reasons for NewmontMining Corporation's (NYSE: NEM) announcement it is to make a publicofferingof $2.0 billion of Senior Notes. Newmont reckons the netproceeds will amount to around $1,966 million, after deducting estimateddiscounts and expenses. With the gold price at around the $1,000 levelthis is aparticularly opportune time to make the offering given thestrongi nvestor interest in gold.
Newmont said that it intends touse the net proceeds of this offering for working capital and forgeneral corporate purposes,including costs of exploration, developmentof its project pipeline and acquisition initiatives that may becomeavailable, although no specificacquisitions were identified. Pendingthose uses, Newmont says itintends to use the money raised to repay aportion of its seniorrevolving credit facility and place the remainingproceeds inshort-term liquid investments.
The offering will be intwo parts - 5.125% Senior Notes due 2019 inthe principal amount of $900million, and 6.250% Senior Notes due 2039in the principal amount of$1.1 billion. The offering is expected to close on September 18th. Thejoint book-runners for the offer are Deutsche Bank Securities and UBSInvestment Bank.
With this announcement coinciding with the big Denver Gold Forum meeting, packed with mining companycorporate delegates as well as analysts and financiers there wasnaturally considerable speculation as to the reasons with the consensusbeing that the company almost certainly had a major acquisition targetin its sights, but which company this might be, and when news of anyoffer might emerge, was not immediately apparent.
With Newmont'sCEO, Richard O'Brien down to make a presentation on the company to thedelegates this afternoon, it is hoped that more news may be forthcoming,but given the SEC restrictions placed on what speakers can say in termsof future predictions, unless a bid is already under way it would seemunlikely that anything concrete will emerge.
From :
https://mineweb.co.za/mineweb/view/mineweb/en/page67?oid=89296&sn=Detail