Newmont Corp (TSX: NGT) evidently has little interest in being a major shareholder of assets they have just disposed of. The company late on Friday revealed they have sold a partial interest in Discovery Silver (TSX: DSV), which was acquired upon the sale of their Porcupine Complex in mid-April.
The gold major on May 8 sold a total of 50.5 million shares of Discovery Silver at an average price of C$2.457, resulting in total proceeds of $124.07 million, with the sale conducted through the TSX.
Prior to the sale, Newmont held a 14.95% interest in Discovery, which has dropped to a 8.64% interest on a post-transaction basis. Newmont’s holdings equated to 119.7 million shares, which has now dropped down to 79.2 million shares. The company has not indicated whether they intend to sell further shares or retain their interest in Discovery.
Newmont originally obtained the 119.7 million share position in Discovery followed the April-closing of a transaction announced in January, whereby Discovery acquired the Porcupine Complex in Timmins, establishing Discovery as a gold producer. Upfront consideration consisted of US$275 million, of which $200 million was paid for in cash and $75 million was paid for in shares, while $150 million in deferred consideration is also in play.
Shares issued under the purchase arrangement were claimed to have a one-year lock-up attached to them, however that lock-up evidently is no longer in play.
Discovery Silver last traded at $2.75 on the TSX.
Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
