Newmont Mining Corp (NYSE:NEM) reported a deal to invest nearly US$109 million for 19.9% interest of Continental Gold Inc., boosting near-term development of the premium grade Buriticá gold project based in Colombia. This investment comprises three other exploration assets in respective gold district.
The Buriticá deposit comprises of two major vein mechanisms that are open at depth and along strike. Continental has announced probable and proven reserves of gold. The project is allowed and establishment of the underground mine and process plant is projected to commence in Q2 2017 with commercial production aimed for early 2020.
Gary Goldberg, the President and CEO, reported that they are investing in a top class asset and exploration opportunities, in alignment with their goal to enhance long-term value for investors. They are impressed with the deposit quality, the competence of the management team, the prospects for imminent growth and the community’s support for the assignment. The team is expecting to joining forces with Continental to capitalize on these opportunities.
Newmont agreed to bought 37.38 million stock of Continental in a non-brokered private placement for C$4.00 per share. Terms of the investment deal comprise company’s right to participate in imminent equity issuance to hold its ownership stake; the two firms establishing joint sustainability and technical committees and a strategic exploration association; and company holding a position in Continental’s Board of Directors.
Newmont invests in growth through deals, projects and exploration that enhance its margins, resources and reserves. The company recently established two new mines, Long Canyon in Nevada and Merian in Suriname, in two gold districts on or ahead of plan and more than 20% below budget, and is progressing profitable expansions at Carlin, Tanami and Ahafo.
In the last trading session, the stock price of Newmont jumped more than 4% to close the day at $35.40.