Vancouver — The world’s top gold producer,
The agreement has Newmont purchasing 18.5 million units of Miramar at $2.35 apiece, with each unit comprising one common share and one warrant to purchase an additional share at $2.75 for four years. Upon closing, the senior will hold an immediate 9.9% interest in Miramar, and could increase its position up to 18% if all warrants are exercised.
Under the deal, Newmont may participate in future financings (up to 19.9%) and will co-operate on technical, financial and permitting issues. In addition, the major is not to exceed a 19.99% interest in Miramar for four years, barring a public bid for over 50% of Miramar; or alternatively, if Newmont proposes a full takeover bid for Miramar.
The inclusion of Newmont, essentially as a strategic partner, bodes well for Miramar, which has faced challenges in permitting its initial development plans for the Doris North project at Hope Bay. Last summer, the Nunavut Impact Review Board (NIRB) turned down the company’s initial application citing deficiencies in information. A revised application and final environmental impact statement has since been submitted to the NIRB. Upon review, the NIRB will make a recommendation to the federal Ministry of Indian and Northern Affairs as to whether the planned mine should proceed. The NIRB’s final public hearings are slated for early 2006.
Doris North is expected to produce about 150,000 oz. gold annually over the initial two years of a multi-stage development plan at Hope Bay that would see other deposits brought on-stream in sequence, potentially ramping up to gold output of about 400,000 oz. per year.
Miramar’s latest exploration work on its Hope Bay project continues to focus on resource expansion, particularly at the Naartok deposit.
Besides the Doris deposit’s proven and probable reserve of 458,000 tonnes grading 22 grams gold per tonne, the Hope Bay project (Boston, Doris and Madrid) hosts measured and indicated resources of 6.9 million tonnes grading 9.6 grams gold (for 2.1 million contained ounces). There is also an additional inferred resource of 19.2 million tonnes of 7 grams gold (4.3 million contained ounces).
Shares of Miramar were up strongly following news of Newmont’s pending investment, rallying up to the $2.50-per-share level on high volumes and setting a new peak in its 52-week trading range of 87 to $2.52.
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