Vancouver — More consolidation in the gold sector could be in the offing, given that two of the world’s largest producers have gone to the market to top up their tills.
South Africa’s
The company will use the funds to finance capital expenditures in Ghana and Australia and possibly to acquire offshore properties.
Meanwhile, the world’s largest gold miner,
Newmont says 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 US$1.2 billion in debt.
The recent financings come less than a month after
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%, the yearly interest rate being 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. Placer’s share price is pegged at US$20.93, 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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