Newmont acquiring Battle Mountain Gold

RENO - North America's largest gold producer got even bigger Wednesday when Newmont Mining Corp. acquired Battle Mountain Gold Co. in a transaction worth at least $800 million.

''This transaction is part of a much needed consolidation in the industry,'' Newmont Chairman and Chief Executive Officer Ronald C. Cambre said.

He said the plum in the merger was the Phoenix project near Battle Mountain in north-central Nevada.

While it won't be receive all of it permits for another year and won't begin production until the year after that, its gold reserves are estimated at 5.7 million troy ounces. Production is expected to average 390,000 ounces of gold a year plus 1.35 million ounces of silver and 27.5 million pounds of copper.

''After a thorough review of the Phoenix project, which is the prime attraction for us, we concur with Battle Mountain Gold's management that it is one of the best undeveloped gold properties in North America,'' Cambre said.

The agreement calls for Battle Mountain Gold shareholders to receive 0.105 of a share of Newmont stock in exchange for each of their 230 million total shares. Newmont will issue 24 million new common shares, worth about $555 million.

Newmont also will absorb $200 million in Battle Mountain Gold debt and about $50 million worth of preferred stock.

The New York Stock Exchange reacted to the news Wednesday. Newmont Mining fell 62 cents a share to $22.313 cents a share while Battle Mountain Gold added 37 cents to $2.313 cents a share, a 19 percent gain at its trading level.

''This merger presents an outstanding opportunity for Battle Mountain Gold shareholders to participate in one of the strongest and largest precious metals producers in the industry,'' Karl Elers, the company's chairman and acting CEO said in a conference call.

Houston-based Battle Mountain Gold has reserves of 9.9 million ounces of gold and estimates production of 760,000 ounces this year. It lost $127 million last year and posted a $3.5 million loss the first quarter of this year.

Newmont Mining, based in Denver, earned $24.8 million last year and $6.6 million the first quarter of this year.

With the acquisition of Battle Mountain Gold, it will have reserves of 66.5 million ounces of gold - third highest in the world - 232.8 million ounces of silver and 6.1 billion pounds of copper. Its estimated gold production this year will be 5.4 million ounces.