Newmont pays 37% premium to acquire Fronteer Gold

Section:

Newmont to Buy Canada's Fronteer Gold for C$2.3 Billion

By Steve James and Pav Jordan
Reuters
Thursday, February 3, 2011

http://www.reuters.com/article/2011/02/03/us-newmont-fronteer-idUSTRE712...

Newmont Mining Corp. has agreed to buy Fronteer Gold Inc for C$2.3 billion ($2.3 billion), extending its presence in the western United States as bullion prices hover near record highs.

The cash and stock transaction -- the latest in a string of deals targeting Canadian miners -- adds 4.2 million ounces of gold resource to the portfolio of the world's second-largest gold producer.

"The acquisition of Fronteer Gold will contribute significantly to our anticipated growth profile in North America," Newmont Chief Executive Richard O'Brien said in a statement today.

... Dispatch continues below ...



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Prophecy Resource Spins Off Platinum/Palladium Venture:
World-Class PGM Deposit in Yukon

Company Press Release, January 18, 2011

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy.

PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding.

Following the transaction:

-- Prophecy will own approximately 90 percent of PCNC.

-- PCNC will consolidate its share capital on a 10 old for one new basis.

-- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp.

-- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings.

Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000.

For the complete announcement, please visit:

http://prophecyresource.com/news_2011_jan18.php



Fronteer shareholders will receive C$14 in cash and one common share in a new company, called Pilot Gold, in exchange for each common share of Fronteer Gold.

The offer represents a 37 percent premium to Fronteer Gold's Wednesday close of C$10.25. Fronteer shares rose more than 40 percent to C$14.39 on Thursday morning.

Canada has spawned some of the world's most successful miners, including Barrick Gold Corp., the No. 1 gold producer. That has made many of them attractive targets for global players looking for growth.

Only last month, Ohio-based Cliffs Natural Resources offered more than C$4 billion for Consolidated Thompson Iron Mines, while Lundin Mining and Inmet Mining (IMN.TO) agreed to a C$9 billion combination.

Gold mining has become one of the biggest draws as bullion prices hover near record highs and producers race to fill demand.

Brazilian billionaire Eike Batista, for example, is the middle of a hostile bid to buy Ventana Gold Corp, a Vancouver-based exploration company with an early-stage gold property in Colombia.

Spot gold was trading at some $1,336 an ounce on Thursday, more than five times what its price a decade ago. Gold rose to a record of $1,430.95 an ounce in December.

The Fronteer Gold deal, which has the approval of its board, will extend Newmont's presence in the U.S. state of
Nevada, where it has operated since the 1960s.

Fronteer owns a 100 percent interest in the development-stage Long Canyon project in Nevada, located about 100 miles from Newmont's existing operations in the western state.

"The proximity of Long Canyon to Newmont's Nevada operations provides the potential for significant development and operating synergies," the company said.

Fronteer shareholders are expected to vote on the deal in early April. It requires two-thirds approval.

The two parties have agreed to a C$85 million break fee should either side back out of the deal.

Newmont's financial adviser is BMO Capital Markets, and its legal counsel is Goodmans LLP and Wachtell, Lipton, Rosen & Katz.

Fronteer Gold's financial adviser is RBC Capital Markets, and its legal counsel is Davies Ward Phillips& Vineberg LLP.

* * *

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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.

"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit:

http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf