Fresnillo to Buy Newmont’s Stake in Penmont Joint Venture

Fresnillo plc (LSE:FRES) announced that it has entered into a binding agreement to acquire Newmont Mining Corp.’s (NYSE:NEM) 44-percent interest in the Penmont joint venture (JV) for US$450 million. If the plan goes through, Fresnillo will hold 100 percent of the JV.

Highlights include:

• Consolidates control of producing and exploration assets already operated by Fresnillo and builds on the Company’s leading position in the Herradura Corridor, one of Mexico’s most prospective gold belts
• Enables Fresnillo to implement strategy of developing quality assets in a key growth area and continue aggressive regional exploration programme:
  • o Mega Centauro and Centauro Deep advanced exploration projects with near-term production potential; lower risk as they are expansions of current ongoing operations
  • o three key exploration projects: Tajitos, Bellavista and Las Norias
  • o multiple additional exploration targets identified
• The acquisition is consistent with previously announced growth strategy and meets Fresnillo’s key acquisition criteria:
  • o transaction is immediately earnings accretive, with further upside potential from Mega Centauro and Centauro Deep
  • o average life of mine All-In Sustaining Costs (AISC) on current and future production is expected to be low
  • o significant exploration and development upside potential
• Adds 2.0 million ounces to reserve and 5.1 million ounces to resource base

Click here to read the full Fresnillo plc (LSE:FRES) press release.