Yandal deadline passes

Newmont Mining has had partial success sorting out the financial problems at its Yandal gold subsidiary in Australia.

On March 27, Newmont brashly gave its hedging counterparties and its noteholders at Yandal a 1-week deadline to accept US50 on the dollar for its outstanding liabilities, for a maximum cash outlay of US$229 million.

Newmont reports that six of its seven hedging counterparties accepted the offer for a total cash payment of US$77 million, representing 94% of the hedged ounces at Yandal and 76% of the negative mark-to-market liability of the Yandal hedge book.

With the deadline passed, Newmont has not said if any noteholders accepted the offer, though it cautioned that a failure to acquire all the outstanding notes or all the hedge contracts could result in Yandal’s insolvency, with no recourse to Newmont. Over the week, Newmont rose 30 to US$30.15.

Gold was in the mid-US$360-per-oz. range throughout the period, and the rest of the U.S.-listed gold majors were uniformly negative: AngloGold dropped 93 to US$29.22; Gold Fields was off 46 at US$11.24; Royal Gold crashed $2.77 to US$18.75; and Ashanti Goldfields slipped 3 to US$7.50.

Meanwhile, the base metal majors all headed in the opposite direction: Phelps Dodge advanced $1.43 to US$37.34; Anglo American was up 13 to US$15.52; BHP Billiton rose 25 to US$11.56; Rio Tinto jumped $1.89 to US$79.39; Alcoa advanced 66 to US$25.07; and Freeport-McMoRan Copper & Gold gained $1.03 to US$22.92.