The proposed acquisition of explorer Fronteer Gold Inc. by Newmont Mining Corp. is the latest in a string of mining deals announced in recent weeks, as companies seek to replace reserves and ensure growth amid a shrinking global supply of known gold reserves.
The deal, attributing a 37% premium to Fronteer, is valued at $2.3-billion.
“We feel like we paid a fair value for the company,” said Newmont chief executive officer Richard O’Brien.
Newmont noted it saw more value in buying development assets in today’s market rather than mines already in production.
Fronteer said it has currently identified 4.2 million ounces of “measured and indicated” gold resources at its three main projects in Nevada. Production at it’s key Long Canyon project is still about six years away.
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