Newmont, AngloGold in Exclusive Talks on Colorado Gold Mine

Reuters reported that Newmont Mining Corp. (NYSE:NEM) and AngloGold Ashanti Ltd. (JSE:ANG,NYSE:AU) are in exclusive talks regarding the sale of AngloGold’s Cripple Creek & Victor gold mine, located in Colorado.

Originally a $1-billion price tag was placed on the asset, but market watchers are now predicting it will be sold for much less.

As quoted in the market news:

The sources said that if South African-based AngloGold agrees to a sale, the asset is likely to fetch a price somewhere in the $700 million to $800 million range.

One source said that the divestiture process, which is being led by BMO Capital Markets, may still result in the partial sale and not an outright sale of the entire asset.

Newmont and BMO declined to comment on the matter. AngloGold could not be reached for comment.

Greenwood Village, Colorado-based Newmont is the world’s second-biggest gold producer by output. Its stock, up 44 percent this year, has outperformed its peers as the company has cut debt while managing to fund growth projects and reduce operating costs.

Other players that had been vying for the Cripple Creek asset and that may still re-enter the fray if Newmont fails to strike a deal, are Canadian gold miners Iamgold, Kinross, Goldcorp and Yamana.

U.S.-based gold and silver miner Hecla Mining Co had looked at the asset but decided against making a bid for it, Luke Russell, the company’s vice-president for external affairs said.

Click here to read the full Reuters report.