Newmont Mining and Miramar Mining announced October 9 that they have entered into a definitive support agreement that provides for the acquisition by Newmont, with the unanimous support of the Miramar board of directors, of all the outstanding common shares of Miramar for C$6.25 cash per common share. The acquisition will be effected through a take-over bid.
Richard O’Brien, CEO and President of Newmont, said, “We made an initial investment in Miramar in 2005 because we saw the potential strategic opportunity offered by the Hope Bay project as part of our broader exploration and growth portfolio. We have been impressed with the progress of the project since that time, and believe that, as a result of its scale, the true potential of the project can best be realized with the additional expertise and resources of a global gold company like Newmont. Consistent with our strategic focus on exploration and project development, this transaction represents the next logical step for this world class resource. This transaction further emphasizes our focus on our core gold business while providing opportunities for sustainable, lower cost production and future reserve replacement.” The strategic benefits offered by this transaction include:
- The opportunity for Newmont to establish a new, core mining district in the Nunavut Territory of Canada
- The opportunity for Newmont’s exploration and project development teams to focus on a long-term deposit with competitive operating costs that is one of the top known, undeveloped gold deposits globally
- The opportunity to reduce the technical risk associated with the project using Newmont’s historic investment in and understanding of the Hope Bay project
- The opportunity for Newmont to control and explore a roughly 80 by 20 km greenstone belt with substantial exploration potential located in a AAA-rated country.
Tony Walsh, President and CEO of Miramar said, “We believe Newmont’s offer takes into account the value of the existing resources at Hope Bay along with the significant upside potential. I firmly believe this is a world class project and that its value will continue to be realized under the direction of Newmont, a world class gold mining company.”
The Hope Bay project is one of the largest undeveloped gold projects in North America. It extends over 1,000 km2 and encompasses one of the most prospective undeveloped greenstone belts in North America. Miramar has been exploring the Hope Bay belt since 1999 and believes that gold resource identified to date (approximately 9 Moz) may be just the beginning of a new gold camp that could see Hope Bay become the next great mining district in Canada.
Hope Bay is a typical Archean greenstone belt, comparable to the Yellowknife, Kirkland Lake and other prolific gold belts; it extends over 80 km in a north-south direction and is between 7 and 20 km wide. The belt comprises mafic meta-volcanic and meta-sedimentary rocks that are bound by Archean granite intrusives and gneisses. The greenstone package has been deformed during multiple events and is transected by major north-south trending shear zones that appear to exert a significant control on the occurrence of mineralization, particularly where major flexures are apparent and coincident with antiforms. Similar features are the locus for major gold deposits in other Archean greenstone gold camps (e.g. Kirkland Lake).
Three gold deposits have been defined on the belt thus far. Boston, is located near the south end of the belt and is associated with a flexure in the Hope Bay structural break. Gold is associated with sulphide mineralization (mostly pyrite) that forms in clots within the veins and as a halo in the wall rock around the veins. The best auriferous development occurs in zones of extensive hydrothermal alteration within a large iron-rich carbonate altered shear system. Three gold-rich mineralized zones sub-parallel to the shear have been defined, each of which consists of several en echelon, higher-grade lenses that have significant vertical continuity.
The Doris deposit is typical of the ‘Archean lode’ or ‘greenstone-hosted’ deposit style. It consists of a steeply dipping, over 3 km long quartz vein system in folded and metamorphosed pillow basalts and is situated at an inferred inflexion in the regional Hope Bay Break. At the north end, the veins are folded to create a high-grade anticlinal hinge zone lying close to surface (Doris North — the first anticipated mine on the belt). As part of the same vein system, 1.2 km to the south, an intersection of two structures creates a high-grade zone (Doris Central). The Doris Connector zone spans approximately 500 m in strike extent and is approximately 100 m north of Doris Central resource area. Alteration is defined by carbonate, paragonite, pyrite and sericite. Gold is found at quartz vein and wall rock contacts and is associated with dark-coloured tourmaline-pyrite septa or ribbons.
Prior to 2001, Madrid was seen as a lower grade target, associated with interbedded basalt, komatiitic volcanic flows, gabbros and black argillites, and was not a focus of activities. After major exploration success, the 2006 program focused on Madrid as a large open pit opportunity. Exploration in 2006 has been focused on establishing mineralization between the gaps of the four ore bodies that make up the current Madrid resource. This exploration has been largely successful and technical economic studies are underway to determine the optimal scenario for mining at Madrid looking at production that ranges from 300,000 to 650,000 oz/y.