Filed by Newmont Mining Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Normandy Mining Limited
Commission File No. 132-00965
[NEWMONT LETTERHEAD]
Newmont Mining Corporation
1700 Lincoln Street
Denver, Colorado 80203
NEWS RELEASE
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MEDIA CONTACT: INVESTOR CONTACT:
Doug Hock Wendy Yang
303-837-5812 303-837-6141
NEWMONT MAKES SUPERIOR OFFER FOR NORMANDY
o VALUED AT A$1.90 PER SHARE
o INCLUDES CASH CONSIDERATION OF A$0.40 PER NORMANDY SHARE
o RECOMMENDED BY NORMANDY BOARD
SYDNEY, DECEMBER 10, 2001 (Denver, December 9, 2001) - Newmont Mining
Corporation (NYSE: NEM) today announced that it has increased the value of its
off-market bid for Normandy Mining Limited (AUS: NDY) to A$1.90 per Normandy
share. Under Newmont's recommended offer, Normandy shareholders will receive for
each Normandy share A$0.40 cash, in addition to the 0.0385 common shares of
Newmont offered for Normandy on November 14, 2001. Payment of the cash
consideration is not conditioned upon achievement of 90% acceptance.
Wayne W. Murdy, Newmont's President and Chief Executive Officer said, "Our offer
to the Normandy shareholders is clearly superior to AngloGold's revised offer
and we are committed to completing our transactions by early in the new year.
The immediate economic benefits, plus the long-term strategic benefits for
Newmont and the industry, are compelling and fully justify our revised offer.
Ours is a better bid, a more secure and liquid security, a stronger vision and a
better company."
"We are offering Normandy shareholders the ability, through a simple off-market
bid, to participate in the premier gold company - the combined company will be
the industry leader in terms of gold production, total reserves, EBITDA
generation, trading liquidity and leverage to gold. The combined company will
benefit from a strong balance sheet, providing the financial flexibility to
capitalize on an outstanding pipeline of growth prospects."
Subject to their fiduciary duties, the Normandy Board of Directors has approved
and agreed to recommend that Normandy shareholders accept Newmont's revised
offer and reject the revised offer from AngloGold.
Robert J. Champion de Crespigny, Chairman and Chief Executive Officer of
Normandy said, "We are pleased that Newmont has increased its offer for
Normandy. The immediate value offered by Newmont is superior to that offered by
AngloGold and at the top of the value range established in an independent
valuation by Grant Samuel and Associates. The company created through the
acquisition of Normandy and Franco-Nevada by Newmont will create the world's
leading gold producer. It is an exciting opportunity for Normandy shareholders."
The Normandy board will be recommending, subject to their fiduciary duties, the
revised Newmont offer to shareholders of Normandy. Mr. De Champion Crespigny and
each of the other Normandy directors currently intends to accept the revised
Newmont offer with respect to the Normandy shares they hold.
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THE NEWMONT OFFER IS CLEARLY SUPERIOR
Significant premium to the AngloGold Offer:
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The Newmont offer values Normandy at A$1.90 per share, or A$0.25 (15%) more than
the current value of the revised offer announced by AngloGold Limited on
November 29, 2001.
Double the cash consideration:
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Under the Newmont offer, Normandy shareholders will receive a cash payment of
A$0.40 (compared to the A$0.20 offered under the AngloGold proposal) in addition
to 0.0385 Newmont common shares per Normandy share.
A more secure and liquid security:
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Under the Newmont offer, Normandy shareholders will receive shares of an
established North American-based enterprise with an 80-year operating history.
These shares are traded on the New York Stock Exchange (NYSE), are part of the
S&P 500 and afford shareholders greater liquidity than AngloGold shares.
RATIONALE FOR NEWMONT'S REVISED OFFER
Newmont has carefully considered its decision to increase its offer for
Normandy. Bruce D. Hansen, Senior Vice President and Chief Financial Officer of
Newmont said, "The acquisition of Normandy on this basis continues to be
accretive to Newmont in terms of earnings, free cash flow and net asset value.
Everything we have seen, reinforced by the successful completion of the capital
raising for Australian Magnesium Corporation Limited, makes us feel comfortable
in raising our bid for Normandy. We continue to believe that the substantial
opportunity for synergies provided by the acquisitions of Normandy and
Franco-Nevada and the financial strength of New Newmont should add significant
value for all current and future Newmont shareholders and support our bid at the
top of Grant Samuel's value range."
NEWMONT IS A SUPERIOR INVESTMENT VEHICLE
"Our management team has been meeting with investors all over the world since we
announced our offer. We have been very pleased with the support we are receiving
from shareholders of Newmont, Normandy, and Franco-Nevada, as well as potential
new investors," added Mr. Murdy. "They have embraced our vision for the new
company and agree that it will be the best gold investment platform in the
world."
Newmont's vision is for a company with:
o The largest upside to gold price appreciation of any company in the
industry;
o A pipeline of attractive development projects, as well as the
financial strength to develop those opportunities;
o A merchant banking business unit that provides an additional platform
for wealth creation and a gold royalty business that will be our
natural buffer against low gold prices; and
o A world class, geographically diverse portfolio of core properties
with low cash costs.
Pierre Lassonde, President and Co-Chief Executive Officer of Franco-Nevada,
commented that, "We believe that we can unlock significant shareholder value
through the rapid rationalization of assets and can position the New Newmont as
the leading non-hedged producer in light of our confidence in the future of
gold."
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Newmont's offer is superior to AngloGold's on a number of qualitative and
quantitative metrics:
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Pro Forma Newmont* Pro Forma AngloGold**
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Superior Value o A$1.90 o A$1.65
o Cash consideration of A$0.40 o Cash consideration of A$0.20
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.
Capital o Financial strength and o South African foreign
Structure/Financial flexibility to finance exchange controls
Leverage projects for growth o 33% Net Debt to Cap
o Investment grade debt
ratings
o 23% Net Debt to Cap
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Capital Markets/ o NYSE listed; Included in o Rand-based primary listing in
Trading Liquidity S&P 500 South Africa
o Public float trades freely o Large, controlling
in US dollars shareholder limits public
float and liquidity
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Political Risk o Approximately 70% of o Approximately 53% of
production and 60% of production and 58% of
reserves from countries reserves from Africa
rated AAA o Rand has declined
approximately 30% since
January 1, 2001
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Mining Complexity o 100% open pit and shallow o Approximately 36% of
underground operations production from deep
underground mines - typically
more complex, and difficult
to mine and develop
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Leverage to Gold Price o $25 increase in gold price o $25 increase in gold price
increases pre-tax cash flow increase pre-tax cash flow by
by $162 million $36 million
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<FN>
<F1.
*Reflects the acquisition of Normandy and
Franco-Nevada by Newmont.
**Reflects the acquisition of Normandy by AngloGold.
</FN>
Strong capital structure and financial flexibility:
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Following completion of the Normandy and Franco-Nevada transactions, Newmont
will be one of the best-capitalized gold companies in the world. With strong
free cash flow generating capacity and a net debt to capital ratio of 23%,
Newmont will have enhanced financial flexibility. Upon completion of the
transactions, New Newmont will have more than $850 million of cash and
short-term investments. The cash component of the Normandy bid will be funded
under Newmont's US$600 million revolving credit facility, which is currently
undrawn.
A key component of value creation in the acquisition of Normandy lies in the
development of new projects and exploration properties. Newmont will have the
flexibility and access to financial markets it needs to facilitate the
development of projects anywhere in the world.
Over the past two years, AngloGold had a cash flow deficit of approximately
US$153 million before financing activities, while paying out US$589 million in
dividends. Even if sustained with continued borrowings or future hedging, this
policy (compounded by the additional borrowings of A$450 million cash
consideration under its offer) is likely to hinder AngloGold's ability to
maximize shareholder returns through development of Normandy's attractive
portfolio of new projects.
A more liquid investment vehicle:
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Following the completion of the transactions, Newmont expects to be the world's
most liquid gold stock, listed on the NYSE and the Australian Stock Exchange
(ASX) and a member of the S&P 500 index, one of the world's leading trading
indexes. Newmont also will apply for inclusion in key ASX indices. Based on
historical trading volumes, Newmont should have significantly more liquidity
than AngloGold. AngloGold was removed from the S&P/ASX 200 in March 2001.
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Balanced political risk:
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The combined company will generate approximately 70% of its production and have
approximately 60% of its reserves in countries rated AAA by S&P. It will
generate approximately 12% of its production from Yanacocha in Peru, the largest
gold mine in South America and one of the lowest cost gold mines in the world.
Conversely, approximately 53% of AngloGold's pro forma production and 58% of its
pro forma reserve base would be located in Africa, with only 35% of pro forma
reserves located in AAA-rated countries.
Relatively low mining complexity:
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All of the combined company's reserves will be contained in either surface mines
or shallow underground mines, which are easier to mine and develop and have
lower capital costs. By contrast, high-risk, deep underground mines characterize
gold mining in South Africa, where approximately 45% of AngloGold's total
reserves are located. Mining in South Africa is typically more complex
geologically and operationally.
Significant exposure to a rising gold price:
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Newmont expects to continue to be largely unhedged to give gold equity investors
the greatest possible exposure to a rising gold price. The New Newmont will have
the largest amount of unhedged reserves in the world, and consequently the most
leverage to the gold price among major producers, generating approximately
US$162 million in incremental pre-tax cash flow from a US$25 increase in the
spot gold price. By comparison, the same increase in the spot gold price
generates only US$36 million in additional pre-tax cash flow for AngloGold on a
pro forma basis. Since its inception as a public company, AngloGold has had a
history of hedging a significant portion of its production. AngloGold has
publicly reported that, as of 30 September, 2001, it had a net committed hedge
position of 16.3mm oz. (approximately 24% of reported reserves, after giving
effect to the sale of the Free State assets).
CREATING SIGNIFICANT VALUE FOR SHAREHOLDERS
The New Newmont will create the new gold standard for the 21st Century. The
combined company will be first among gold producers in reserves, production and
pre-tax cash flows. Its shareholders will enjoy a diversified asset base and
balanced risk profile, superior trading liquidity, a solid capital structure and
an excellent platform for future growth. The New Newmont will benefit from an
exceptional management team, a low cash cost structure and significant
synergies, all with the industry's greatest leverage to a rising gold price.
DOCUMENTATION AND TIMING OF THE NEWMONT OFFER
Newmont currently intends to lodge its Bidder's Statement within a week and
complete its transactions by mid-February, 2002. The Newmont offer will provide
for prompt payment terms of five business days, subject to approval of ASX
listing and the satisfaction or waiver of the conditions of the offer. The offer
will be subject to a 50.1% minimum acceptance condition and the other conditions
set out in Newmont's original announcement of the offer on 14 November 2001,
with clarifications to the FIRB and public authority interference conditions in
response to certain comments of the Takeovers Panel. Newmont currently has no
basis to believe that these conditions will not be satisfied.
# # #
ALL SHARE PRICES AND EXCHANGE RATES ARE BASED ON CLOSING PRICES ON 7 DECEMBER
2001, UNLESS OTHERWISE INDICATED. SHAREHOLDERS SHOULD OBTAIN CURRENT QUOTES ON
SHARES OF NEWMONT, NORMANDY, FRANCO-NEVADA AND ANGLOGOLD.
# # #
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A CONFERENCE CALL IS SCHEDULED FOR MONDAY, DECEMBER 10, 2001 BEGINNING AT 11:00
A.M. SYDNEY TIME, AND SUNDAY, DECEMBER 9, 2001, 7:00 P.M. EASTERN, 6:00 P.M.
CENTRAL, 5:00 P.M. MOUNTAIN AND 4:00 P.M. PACIFIC.
TO PARTICIPATE -
DIAL-IN: 1-800-505-083 (IN AUSTRALIA)
61-3-9221-9775 (INTERNATIONAL)
A SECOND CONFERENCE CALL IS SCHEDULED FOR MONDAY, DECEMBER 10, 2001 BEGINNING AT
8:30 A.M. EASTERN, 7:30 A.M. CENTRAL, 6:30 A.M. MOUNTAIN AND 5:30 A.M. PACIFIC
AND 12:30 A.M., TUESDAY, DECEMBER 11, SYDNEY TIME.
TO PARTICIPATE -
DIAL-IN: 888-917-8044 (IN THE US)
712-271-0025 (INTERNATIONAL)
LEADER: WENDY YANG
PASSWORD: NEWMONT
BOTH CONFERENCE CALLS WILL ALSO BE SIMULTANEOUSLY CARRIED ON NEWMONT WEB SITE
UNDER INVESTOR RELATIONS/PRESENTATIONS AND WILL BE ARCHIVED THERE FOR A LIMITED
TIME. HTTP://WWW.NEWMONT.COM/INV_RELATIONS/PRESENTATIONS.HTM
REPLAY NUMBER: 800-280-4691 (IN THE US)
402-220-9723 (INTERNATIONAL)
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The following contains forward-looking information and statements about Newmont
Mining Corporation, Franco-Nevada Mining Corporation Limited, Normandy Mining
Limited and the combined company after completion of the transactions that are
intended to be covered by the safe harbor for "forward-looking statements"
provided by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are statements that are not historical facts. These
statements include financial projections and estimates and their underlying
assumptions; statements regarding plans, objectives and expectations with
respect to future operations, products and services; and statements regarding
future performance. Forward-looking statements are generally identified by the
words "expect," "anticipates," "believes," "intends," "estimates" and similar
expressions. The forward-looking information and statements in this press
release are subject to various risks and uncertainties, many of which are
difficult to predict and generally beyond the control of Newmont, Franco-Nevada
and Normandy Mining, that could cause actual results to differ materially from
those expressed in, or implied or projected by, the forward-looking information
and statements. These risks and uncertainties include those discussed or
identified in the public filings with the U.S. Securities and Exchange
Commission made by Newmont and Normandy, and Franco-Nevada's filings with the
Ontario Securities Commission; risks and uncertainties with respect to the
parties' expectations regarding the timing, completion and accounting and tax
treatment of the transactions, the value of the transaction consideration,
production and development opportunities, conducting worldwide operations,
earnings accretion, cost savings, revenue enhancements, synergies and other
benefits anticipated from the transactions; and the effect of gold price and
foreign exchange rate fluctuations, and general economic conditions such as
changes in interest rates and the performance of the financial markets, changes
in domestic and foreign laws, regulations and taxes, changes in competition and
pricing environments, the occurrence of significant natural disasters, civil
unrest and general market and industry conditions.
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ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed transactions, Newmont Mining Corporation will
file a proxy statement and a registration statement with a prospectus with the
U.S. Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE
ADVISED TO READ THE PROXY STATEMENT AND THE PROSPECTUS WHEN THEY BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and
security holders may obtain free copies the proxy statement and the prospectus
(when available) and other documents filed by Newmont with the Commission at the
Commission's web site at http://www.sec.gov. Free copies of the proxy statement
and the prospectus, once available, and other filings made by Newmont or
Normandy with the Commission, may also be obtained from Newmont. Free copies of
Newmont's and Normandy's filings may be obtained by directing a request to
Newmont Mining Corporation, Attn: Investor Relations, 1700 Lincoln Street,
Denver, Colorado 80203, Telephone: (303) 863-7414. Copies of Franco-Nevada's
filings may be obtained at http://www.sedar.com.
PARTICIPANTS IN SOLICITATION
Newmont Mining Corporation and its directors, executive officers and other
members of its management and employees may be soliciting proxies from its
stockholders in connection with the transactions. Information concerning
Newmont's participants in the solicitation is set forth in Newmont's Current
Report on Form 8-K filed with the Commission on November 14, 2001, as amended.
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