Vancouver More consolidation in the gold sector could be in the offering as the World’s number 1 and number 4 producers have both gone to the market to top up their tills.
South African gold miner Gold Fields (GFI-N) issued 15 million new shares to investors at a price of US$13 a share, raising US$195 million.
The company plans to use the funds for capital spending in Ghana and Australia, as well as picking up possible offshore growth opportunities.
The Worlds largest gold miner, Newmont Mining (NEM-N) plans to raise about US$1 billion.
The Denver-based mining giant will offer 20 million of its shares to the public and expects the underwriters to pick up another two million shares to meet strong demand. The price of the shares will be set on Nov. 12.
According to Newmont, the funds will be used for “general corporate purposes, which may include new project development costs, other capital expenditures and debt reduction.”
At the end of September, Newmont had about US$1.2 billion in debt.
The recent financings come less than a month after Placer Dome (PDG-T) closed a US$530 million deal.
The major issued US$300 million of unsecured senior debentures with a 32-year maturity and US$230 million of unsecured senior convertible debentures with a 20-year maturity. The 32-year debentures will be sold at 99.649% of their principal amount to yield 6.476%, pegging the yearly interest rate at 6.45%. The US$230 million offering will be sold as unsecured senior convertible debentures with interest payable at 2.75% a year. The holders of this debt will have the right to convert the debentures into shares with each US$1,000 principal amount convertible into 47.79 shares, pegging Placer’s share price at US$20.925, some 55% above the US$13.50 closing price before the deal was announced.
Placer Dome retains the right to buy the convertible debentures at any time after seven years. Meanwhile, the debt holders may put the convertible debentures to Placer Dome in exchange for cash at 10 years and 15 years from the date of issue. The convertible debentures will mature in 20 years.
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