Following a court ruling in their favor, Newmont Gold (NYSE) and its Peru-based partner, Buenaventura, will increase their ownership of the Yanacocha gold mine.
The move comes after an attempt by Bureau de Recherches Geologiques et Minieres (BRGM) to transfer its interest in the operation to an entity controlled by an Australian company, Normandy Poseidon. Newmont and Buenaventura responded by filing suit, citing bylaws of their agreement which give shareholders pre-emptive rights on the sale of any shareholder’s interest.
The Peruvian court ruling effectively cancelled BRGM’s share ownership in the property. Newmont and Buenaventura have chosen to exercise their pre-emptive rights on the sale of BRGM’s 24.7% interest.
Prior to the legal action, Newmont and Buenaventura owned 70.3% of the open-pit, heap-leach operation. The former now stands to own 51.4%, while the latter’s interest will be 43.6%. The remaining 5% is still held by the International Finance Corp. (IFC).
With the issuance of new shares, a new board of directors was elected, which excluded participation by BRGM. Pending final resolution of the action, Newmont and Buenaventura have deposited a court determined provisional value for the shares into a Peruvian bank.
Minera Yanacocha is the largest open-pit, heap-leach operation in Peru. It yielded 300,000 oz. gold in 1994 and is expected to produce 450,000 oz. this year.
Be the first to comment on "Partners boost Yanacocha stake"