Newmont writes off AMC

It was an expensive report period for Denver-based Newmont Mining, which bit the bullet and wrote off its recent, A$100-million investment in Aussie-listed Australian Magnesium Corp., developer of the failed, partially built, A$1.7-million Stanwell project in Queensland.

Newmont didn’t disclose the amount of the writedown (it will do so in the second quarter), but it has carried its 27.8% interest in AMC on its books at US$96 million. Trading in AMC has been halted in Australia while the company undergoes a major restructuring and attempts to raise some A$200 million to cover cost overruns at Stanwell.

Newmont also gave an update on the status of its offer of US50 on the dollar for its outstanding liabilities at Yandal in Australia, for a maximum cash outlay of US$229 million. Now that it has secured acceptance from six of its seven hedging counterparties for a total cash payment of US$77 million, Newmont has extended to June 26, 2003, an offer to acquire all the outstanding 87/8% senior notes due April 2008. A total principal amount of $39.28 million of notes was tendered before the original deadline. However, Newmont says several noteholders needed more time to analyze the offer. Newmont ended the period up $2.34 to US$33.84.

The other major news was Ashanti Goldfields‘ poor first-quarter performance, which was characterized by a 64% drop in eanings, soaring costs and hedging losses. However, with AngloGold offering the equivalent of US$8.58 per share for the Ghanaian gold miner, investors took the quarterly report in stride and drove Ashanti up 75 to US$8.45.