Newmont sells New Zealand mine to OceanaGold for $101 million

Newmont sells New Zealand mine to OceanaGold for $101 million

Waihi mine.

Newmont Mining (NYSE:NEM) has sold its only mine in New Zealand, Waihi, to OceanaGold (TSX, ASX:OGC) for $101 million, as agreed in a non-binding letter of intent signed by the parties late April.

The deal also includes a $5 million contingent payment and a 1% royalty on a recent discovery north of Waihi’s current operations.

Last year, the mine produced approximately 132,000 ounces of gold, the company said. OceanaGold will acquire all of Waihi’s mining assets and liabilities.

Waihi is located approximately 150 kilometers southeast of Auckland. Gold was first discovered and mined in the area in 1878. The Martha open pit mine began operations in 1987 and was acquired by Newmont in 2002 during the merger with Normandy.

OceanaGold believes that based on Newmont’s track record of successfully replenishing reserves at Waihi, there is plenty of potential in the property, which hosts a low sulphidation epithermal gold system that has supported an open-pit mine as well as various underground mines for decades.

The acquisition also gives OceanaGold interests in three groups of highly prospective tenement packages within a 5-75 km radius of the Correnso underground mine, commissioned in the first quarter of 2015.