Fronteer Gold acquired by Newmont Mining in a $2.3 billion deal

On Thursday, Fronteer Gold announced that all its outstanding shares will be acquired by Newmont Mining. Size of the deal is $2.3 billion.

Fronteer Gold shareholders will receive CAN$14 in cash and one  common share in a new company called Pilot Gold. The new company will own certain exploration assets of Fronteer Gold located in Nevada, Turkey and Peru.

“The cash consideration represents a premium of approximately 37% to the closing price of the common shares of Fronteer Gold on the TSX as of February 2, 2011 and equates to a value of approximately Cdn$2.3 billion for Fronteer Gold,” said Fronteer in a statement.

Fronteer Gold owned the Long Canyon project, a development-stage project about one-hundred miles from Newmont’s existing operations in Nevada.

“The proximity of Long Canyon to Newmont’s Nevada operations provides the potential for significant development and operating synergies.  Fronteer Gold also owns a 100% interest in the Northumberland project and a joint venture interest with Newmont in the Sandman project in Nevada, among other assets.”

Newmont Mining shares were up 0.8% on the NYSE on the morning of the announcement.

Michael McCrae wrote this story. You can contact him at [email protected].

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