Waterton Global Resource Management, a private equity firm based in Toronto that’s focused on the mining industry, continues its push to acquire mining assets in Nevada by purchasing the Midas mine in Elko County from Newmont Mining Corp.
Newmont and Waterton last week said they struck a preliminary deal for sale of the Midas mine. The underground operation produced 61,000 ounces of gold in the three months ended June 30, compared to 87,000 ounces in the same quarter in 2012. For the first six months of the year, Newmont mined 131,000 ounces of gold at Midas, a 30-percent decrease from a year earlier.
Waterton and Newmont expect the sale of the Midas mine, which employs 200 miners, to close by Oct. 14. Conditions of the sale weren’t disclosed.
Mary Korpi, director of external relations for Newmont, says the company had received unsolicited offers for the Midas mine in the past, mostly because of the mine’s modest size and somewhat standalone nature. The mine is about 60 miles northeast of Winnemucca.
The Midas mine is near the Hollister mine, which Waterton acquired through auction in April after former operator Great Basin Gold’s subsidiary, Rodeo Creek Gold, filed for Chapter 11 bankruptcy protection in February. At the time, Great Basin Gold was in credit protection proceedings in Canada.
The $15 million acquisition of Great Basin’s assets also included the Esmeralda mill near Hawthorne. Great Basin Gold had been transporting ores mined at Hollister 280 miles for processing at the Esmeralda site. The Hollister mine produced approximately 80,000 ounces of gold per year and had been in production since 2008.
Waterton earlier this year also acquired the Borealis heap leach property from Gryphon Gold of Carson City, which had been unable to make loan payments to Waterton and ceded the majority of its interest in the property to Waterton before filing for Chapter 11 bankruptcy protection on July 30.
Randy Engel, Newmont’s executive vice president of strategic development, says divesting non-core assets strengthens Newmont’s portfolio of Nevada properties as it continues to focus on value over volume. Newmont operates 14 open pit and three underground mines in the state, as well as 14 ore-processing facilities.
“Waterton has established a presence in Nevada and is well positioned to enable Midas’s success over the long term by using its processing and other assets to support Waterton’s operations in Nevada,” Engel said in a written statement.
Mining at the remote Midas mine site began in the late 1990s under Franco-Nevada Mining Corp. Normandy Mining Limited purchased the mine in May of 2001, and Newmont became the operator later that year after merging with both firms. The mine is approaching the end of its current mine life.