Normandy buys out Inmet stake in Ovacik, Perama

Inmet Mining (IMN-T) has signed a letter-of-intent to sell its interests in two gold projects to joint-venture partner Normandy Mining (NDY-T).

For a total of $43 million, Inmet will sell its 33.3% interest in Eurogold Madencilik, which owns the Ovacik gold mine in Turkey, and its 22% interest in Thracean Gold Mining, which owns the Perama Hill gold prospect in Greece. The package also includes Inmet’s exploration tenements in the eastern Mediterranean.

With the deal, Normandy will boost to 100% its interest in Eurogold and to 66% its effective interest in Thracean Gold.

The letter-of-intent contemplates a cash payment to Inmet on closing of US$10 million and the assumption by Normandy of Inmet’s US$6.6 million project debt at Ovacik, net of cash collateral. Further payments of US$3.6 million and US$8 million are contingent on commercial production beginning at Ovacik and mine construction getting under way at Perama, respectively.

Inmet expects that definitive agreements can be settled by the end of April.

As part of an ongoing restructuring program, Inmet recently sold its remaining 3.2 million shares in Norddeutsche Affinerie (NA), representing a 10% interest, to a German financial institution for proceeds of $53.5 million. The purchase price of E10.10 per share reflects the recent market price of NA shares, and Inmet will record a $4-million gain on the transaction. The sale follows Inmet’s disposition of a 25% shareholding in NA following an initial public offering last July.

Inmet is also calling for early cash redemption of $125 million in subordinated convertible debentures due July 25, 1999.

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