Newmont Mining Corp will become the sole owner of the Boddington gold mine in Western Australia with the acquisition of AngloGold Ashanti Ltd's stake for $US1.1 billion ($1.66 billion).
The world's second largest gold company plans to raise about $US1.2 billion through public offerings of common stock and convertible notes to fund its purchase of the 33.33% stake.
``We are very pleased to consolidate our interest in Boddington, a world-class asset that we obviously know well,'' Newmont chief executive and president Richard O'Brien said in a statement.
Newmont boosted its stake in Boddington to 66.6% in early 2006 after acquiring Newcrest Mining Ltd's 22.2% interest in the project for $225 million.
The Boddington operation is a large open pit mine about 130 kilometres southeast of Perth and is expected to start first production in mid-2009.
The project has suffered a series of cost blowouts since construction was approved in February 2006, with Newmont initially estimating a capital cost contribution for its majority stake between $US900 million to $US1 billion.
The company said on Wednesday capital costs for Boddington were expected to be between $US2.6 billion and $US2.9 billion on a 100% basis.
Newmont said it expects to incur an additional $US250 million ($A376.9 million) of capital expenditure in 2009 as a result in its increased ownership of Boddington.
AngloGold Ashanti, Africa's largest gold producer, said the sale would strengthen the company's balance sheet and allow for the early repayment of a $US1 billion bridge facility.
``It is probably the best time to sell an operation when the underlying commodity is more likely to perform strongly and the Aussie dollar gold price is likely to improve,'' Fat Prophets analyst Gavin Wendt said.
``I think rationalisation of that asset was always on the cards.''
Boddington has a mine life in excess of 20 years and is expected to produce about one million ounces of gold per year for the first five years of life, before easing to about 850,000 ounces annually.
Meanwhile, Newmont has forecast gold sales of between 5.2 million ounces to 5.5 million ounces this year due to the start-up and increased ownership of Boddington, and increased sales from the Yanacocha mine in Peru and Batu Hijau in Indonesia.
The company sold 5.2 million ounces in calendar 200
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