M&A

OceanaGold makes it official at Waihi

OCEANAGOLD Corporation has signed formal documentation with Newmont Mining for the acquisition of the Waihi gold mine in New Zealand.

Kristie Batten
OceanaGold makes it official at Waihi

The final sale price is $US101 million ($A132.5 million) in cash, a $5 million contingent payment and a 1% net smelter royalty on a recent discovery north of current operations capped at 300,000 ounces of gold.

The binding deal comes after the two companies signed a letter of intent in April.

OceanaGold managing director and CEO Mick Wilkes described the deal as a “significant milestone” for the company.

“Waihi represents a unique opportunity for us to acquire a high-quality asset that has demonstrated the propensity to extend mine life for more than two decades in what is still a very prospective, high-quality goldfield,” he said.

“This proposed acquisition is accretive to shareholders, grows our production profile and importantly will further reduce our industry leading all-in sustaining cost profile.”

Waihi produced 41,000oz gold at AISC of just $512/oz in the March quarter, and 132,000oz last year.

OceanaGold will fund the transaction from existing cash, which stood at $59.6 million at the end of March, and has drawn $77.8 million from its corporate revolving credit facility.

The company has also received final credit approved commitments to increase the facility to $225 million.

OceanaGold will have the economic benefit of the asset from July 1 with the transaction to close during the September quarter.

Newmont said the sale would further strengthen its balance sheet and improve its financial flexibility.

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