EXHIBIT 20.1
1.2 COMPANIES
NEWMONT MINING CORPORATION
Newmont Mining Corporation is a company incorporated in Delaware with its
shares listed on the New York Stock Exchange (NYSE) under the symbol "NEM" and
a supplemental listing application has been submitted to list the shares to be
issued in connection with the transaction.
We have filed an application to list our common stock on the Australian
Stock Exchange (ASX) as Clearing House Electronic Subregister System depositary
interests (CDIs). We anticipate that ten Newmont CDIs will represent one share
of our common stock. Because of the contemplated reorganization described in
section 1.1, our ASX listing application covered the possibility that either
Newmont or New Newmont will be the listed company.
We are a leading world gold producer, with operations in the United States,
Canada, Mexico, Peru, Bolivia, Uzbekistan, Australia and Indonesia. We are
engaged in the production of and exploration for gold and the acquisition and
development of gold properties worldwide. We expect to produce 5.4 million
ounces of gold in 2001 and have extensive gold reserves, totalling more than 66
million ounces at December 31, 2000. We are also a producer of copper
concentrates, and a recognized research and development leader in exploration
and metal extraction.
Our principal executive offices are located at 1700 Lincoln Street, Denver,
Colorado 80203 (United States). Our telephone number is (303) 863-7414.
NORMANDY MINING LIMITED
Normandy Mining Limited is a company incorporated in Australia with its
ordinary shares listed on the ASX under the symbol "NDY" and its American
depositary shares (ADSs) listed on The Toronto Stock Exchange (TSE) under the
symbol "NDY". One Normandy ADS is equivalent to ten ordinary shares of Normandy.
Normandy is Australia's largest gold producer, producing over 2 million
ounces of gold annually. Normandy has extensive production and exploration
interests, with operations in Australia, the United States, New Zealand,
Greece, Turkey, Chile, Brazil, Canada, Ghana and Uganda. Normandy is also a
producer of zinc concentrates (from its Golden Grove operations in Western
Australia), cobalt (from Kasese Cobalt Company Limited in Uganda) and magnesium
(from its interest in Australian Magnesium Corporation Limited).
Normandy's principal executive offices are located at 100 Hutt Street,
Adelaide, 5000, South Australia (Australia). Normandy's telephone number is
+61-8-8303-1700.
FRANCO-NEVADA MINING CORPORATION LIMITED
Franco-Nevada Mining Corporation Limited is a company incorporated under the
laws of Canada. Its common shares are listed on the TSE under the symbol "FN",
its class A warrants are listed on the TSE under the symbol "FN.WT" and its
class B warrants are listed on the Canadian Venture Exchange (CDNX) under the
symbol "YFN.WT.B".
Franco-Nevada is the leading precious minerals royalty company and, by
market capitalization, ranks among the largest gold companies in the world.
Franco-Nevada continues to deliver superior returns to investors through its
high-quality, high-margin assets in gold, platinum group metals, diamonds and
oil and gas located in politically secure countries. Franco-Nevada, which is
debt-free, has a very strong track record of successful investments.
Franco-Nevada's key assets include its Goldstrike gold royalty in Nevada, its
Stillwater platinum group metal royalty in Montana and oil and gas royalties in
western Canada. Franco-Nevada is also Normandy's largest shareholder, holding
446.1 million ordinary shares of Normandy, which represents a 19.79% interest
in Normandy, calculated on a fully-diluted basis.
Franco-Nevada's principal executive offices are located at Suite 1900, 20
Eglington Avenue West, Toronto, Ontario (Canada) M4R 1K8. Franco-Nevada's
telephone number is (416) 480-6480.
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2 OVERVIEW AND SELECTED INFORMATION
THE INFORMATION IN THIS SECTION SUMMARIZES INFORMATION AND STATEMENTS
ELSEWHERE IN THIS OFFER DOCUMENT. IT SHOULD BE READ IN CONJUNCTION WITH THE
WHOLE OFFER DOCUMENT.
2.1 QUESTIONS AND ANSWERS ABOUT THIS OFFER
Q: WHAT WILL HAPPEN IN THE OVERALL TRANSACTION?
A: In the proposed transactions, we intend to acquire both Normandy
Mining Limited and Franco-Nevada Mining Corporation Limited to create
the world's largest gold producer. It is also possible that we will
acquire less than all of the shares of Normandy, either together with
or separately from an acquisition of Franco-Nevada. We refer to the
combined company that will result from these transactions as "New
Newmont." To acquire Normandy, we are making an off-market bid for
all of the outstanding ordinary shares in the capital of Normandy in
exchange for 3.85 shares of Newmont common stock plus A$50.00 for
every 100 Normandy shares. To acquire Franco-Nevada, we have entered
into an arrangement agreement with Franco-Nevada, pursuant to which
we will acquire all of the shares of Franco-Nevada for 0.8 of a share
of Newmont common stock (or exchangeable shares, exchangeable for our
common stock) for each Franco-Nevada common share. OUR BID FOR
NORMANDY IS NOT CONDITIONED ON COMPLETION OF THE FRANCO-NEVADA
TRANSACTION. However, completion of the Franco-Nevada transaction is
conditioned on, among other things, Newmont and its associates
achieving a relevant interest in at least 50.1% of the ordinary
shares in the capital of Normandy, calculated on a fully-diluted
basis.
Q: WHAT WOULD I RECEIVE IN EXCHANGE FOR MY ORDINARY SHARES OF NORMANDY?
A: The consideration offered is 3.85 shares of our common stock and
A$50.00 for every 100 ordinary shares of Normandy (including shares
represented by Normandy ADSs), or the U.S. dollar equivalent thereof
for holders outside Australia.
See section 5.1 on page 48 of this offer document for additional
information.
Q: WHAT WILL NEW NEWMONT LOOK LIKE FOLLOWING THE TRANSACTIONS?
A: If the transactions are consummated in their entirety, New Newmont
will become the world's leading gold company in terms of gold
reserves, gold production and leverage to gold and will derive more
than 70% of its production from politically and economically stable
locations. The combination of Newmont, Normandy and Franco-Nevada
will create one of the financially strongest companies in the gold
industry. The transactions will strengthen our balance sheet and
decrease our net-debt to net-book capitalization (after transaction
costs) from 41% to an estimated 24%.
Although we currently expect to consummate both transactions, there
is a possibility that we will acquire Normandy while being unable to
acquire Franco-Nevada. If we only acquire Normandy, New Newmont would
still be the world's leading gold company in terms of reserves, gold
production and leverage to gold and would still derive approximately
70% of its production from politically stable locations. However, our
net-debt to net-book capitalization (after transaction costs) after
the acquisition of Normandy only would be an estimated 40%.
Q: WHY DOES NEWMONT WANT TO ACQUIRE CONTROL OF NORMANDY AND
FRANCO-NEVADA?
A: We believe that the acquisition of Normandy and Franco-Nevada will
provide us with a number of benefits and allow us to pursue our
strategy to deliver superior stockholder value, including:
7
. SCALE AND BALANCED POLITICAL RISK PROFILE. New Newmont will be
the leader in gold production and gold reserves. New Newmont will
have interests in 22 mines on five continents, including
preeminent land positions in world-class gold districts in
Nevada, Australia and Peru and a unique and diversified portfolio
of development and exploration projects. Approximately 70% of the
production (41% in the United States, 25% in Australia and 5% in
Canada) will be in countries rated "AAA" by Standard & Poor's
local currency credit rating. Approximately 60% of New Newmont's
reserves (39% in the United States, 18% in Australia and 4% in
Canada) will be in countries rated "AAA" by Standard & Poor's
local currency credit rating. The size and diversification of
these world-class assets and their balanced political risk
profile will better position New Newmont to develop its
attractive exploration properties around the world and will serve
as an excellent platform for future growth.
. EXPLORATION AND DEVELOPMENT. New Newmont will have several
advanced gold projects in its portfolio of assets and will have
the flexibility to optimize the development of these projects
based on project economics, political risk and and free cash flow
profiles.
. POTENTIAL COST SAVINGS AND SYNERGIES. New Newmont expects to
realize from the combination of Newmont, Normandy and
Franco-Nevada approximately US$70 million to US$80 million in
after-tax synergies in the first full year, increasing to
approximately US$80 million to US$90 million a year by the end of
the second full year. Newmont has a strong track record of
delivering on synergy expectations based on previous acquisition
experience. The synergies will arise from rationalization of
corporate overhead and exploration and development budgets,
rationalization of operating efficiencies, and reductions in
procurement costs, interest savings and tax benefits.
. FINANCIAL STRENGTH AND FLEXIBILITY. New Newmont's net-debt to
net-book capitalization will be an estimated 24%, compared to
approximately 41% for Newmont on a stand-alone basis. New Newmont
will benefit from the free cash flow generated by Franco-Nevada's
royalty stream and low cash cost operations that, together with
an improved balance sheet, will provide the combined company with
the ability to pursue growth while continuing to reduce overall
debt. New Newmont will help manage financial risk by preserving
and growing Franco-Nevada's royalty business, which will serve as
a natural hedge in the event of a low gold price environment. New
Newmont will also capitalize on the investment skill and
expertise of Franco-Nevada's management through a merchant
banking unit, which is expected to have the opportunity for
growth by taking advantage of Newmont's processing technologies
and the combined company's vast land package. The size and scope
of New Newmont's holdings and the strength of management will
afford a significant opportunity for strategic industry
rationalization. If 100% of Normandy is acquired the combined
company will review opportunities to further rationalize its
asset base through the consolidation of separately held and
managed assets and the sale or disposal of lower margin or
non-core operations.
. LEVERAGE TO GOLD PRICE. We have a strong belief in the long-term
value of gold. We intend to continue Newmont's "no-hedging"
philosophy, creating the gold industry's largest unhedged,
uncommitted reserve base of approximately 85 million ounces. The
largely unhedged reserve base will offer shareholders the
opportunity to benefit from New Newmont's substantial leverage to
gold, although this strategy also increases the exposure to a
fall in the gold price. New Newmont's annual pre-tax cash flow is
estimated to increase US$162 million for every US$25 per ounce
increase in the price of gold (this is the largest exposure in
the industry by approximately 80%). Over time, New Newmont plans
to opportunistically unwind Normandy's hedge book (currently at
10.4 million ounces,
8
exclusive of TVX Normandy) to further its upside potential from
increases in the price of gold.
. SUPERIOR MANAGEMENT. The management of New Newmont will employ
best practices and personnel, focusing on core mining operations,
reducing costs and applying the latest innovations and technology
to increase cash flows from operations and effectively develop
new opportunities. The combined management of the three companies
will bring an array of expertise and skills to New Newmont, such
as Newmont's and Normandy's strength in global operations, mine
development and exploration, Franco-Nevada's corporate
development skills and expertise in the management of royalty
assets and investments and Newmont's proven ability to integrate
acquisitions successfully by delivering synergies on schedule.
. GROWTH. New Newmont intends to use its experience in the
discovery, evaluation, development and operation of large,
sophisticated mining projects to continually optimize returns
from existing core operations, pursue rational and effective
development of Normandy's portfolio of development projects,
enhance and grow its operations and project pipeline through
strategic and opportunistic high-quality asset and equity
acquisitions and maintain a geographically and politically
diverse group of mining operations.
. MARKET LIQUIDITY. New Newmont will have significant capital
market scale, providing global trading liquidity to investors.
With an expected equity value of approximately US$8 billion and
listings on the NYSE, ASX and TSE, investors in New Newmont will
benefit from enhanced volume expected to be the largest in the
gold sector with approximately US$62 million in average daily
trading volume (based on historic trading of Newmont, Normandy
and Franco-Nevada) and increased stockholder diversity. New
Newmont will also be a member of the S&P 500 index, one of the
world's leading trading indices and will pursue inclusion in key
ASX indices as well.
Q: WOULD THE FAILURE TO ACQUIRE FRANCO-NEVADA PREVENT NEWMONT FROM
ACHIEVING THESE BENEFITS?
A: If we do not acquire Franco-Nevada, the expected benefits of the
transaction and their magnitude will be reduced; however, there would
still be significant benefits realized from a combination of Newmont
and Normandy.
See section 4.2 on page 38 of this offer document for additional
information.
Q: WHAT IS THE PREMIUM IMPLIED BY THIS OFFER?
A: Based on the closing price of our common stock on the NYSE on January
2, 2002, the last trading day in the United States prior to our
announcement of our intention to make this offer for all of the
outstanding ordinary shares of Normandy, and the relevant exchange
rate on that date of A$1.00=US$0.5148 as quoted by Bloomberg, the
consideration currently being offered by us, including the cash
consideration, represents a 5% premium over the closing price of
ordinary shares of Normandy on the ASX on that date. Based on the 30
trading day weighted average share prices prior to January 2, 2002 of
Newmont and Normandy on the NYSE and ASX, respectively, and the
exchange rate on January 2, 2002 of A$1.00=US$0.5148 as quoted by
Bloomberg, this offer, including the cash consideration, represents a
premium of 16%.
Our current offer values each ordinary share of Normandy at A$1.93,
based on the closing price of our common stock on the NYSE on January
2, 2002 and the relevant exchange rate on that date of
A$1.00=US$0.5148 as quoted by Bloomberg.
9
information to Newmont that would generally be required to be
included in this offer document under rules promulgated by the
SEC. Normandy has declined to assist in gathering this
information and has not provided Newmont access to Normandy's
detailed accounting records, nor has Normandy assisted in
preparing reconciliations to US GAAP. Normandy has also refused
to permit or direct its auditors to provide information necessary
for such US GAAP reconciliation, including an auditor's consent.
Therefore, no such US GAAP reconciliation is provided nor is any
pro forma financial information provided in this offer document.
See "Risk factors--Risks related to the offer--We have not
verified the reliability of the Normandy information included in,
or which may have been omitted from, this offer document" on page
27.
We have received Franco-Nevada's unanimous board recommendation for
our acquisition of Franco-Nevada and full support for the
Franco-Nevada/Newmont transaction.
Q: WHAT WILL BE THE FORM OF THE CONSIDERATION TO BE PAID TO ME IF I
ACCEPT THIS OFFER?
A: If you have a registered address in the United States or have a
registered address in Canada, you will receive your share
consideration in the form of our common stock (traded on the NYSE).
If you have a registered address outside the United States or outside
Canada, you will receive your share consideration in the form of
Newmont CDIs (traded on the ASX). We anticipate that ten Newmont CDIs
will represent one share of our common stock.
If you have a registered address outside Australia and its external
territories, and Newmont has not determined that the making or
accepting of the offer would be in compliance with the laws of that
jurisdiction, you will not receive or be entitled to receive Newmont
CDIs. Instead, you are offered and you will receive the cash proceeds
of a sale, on Newmont's behalf, on the open market of Newmont CDIs to
which you otherwise would have been entitled.
Whatever form of share consideration you receive, it will be
equivalent to 3.85 shares of our common stock for every 100 ordinary
shares of Normandy (including shares represented by Normandy ADSs).
In addition, whatever form of share consideration you receive, you
will also receive in cash A$0.50 per ordinary share of Normandy
(including shares represented by Normandy ADSs), or the U.S. dollar
equivalent thereof for holders outside Australia.
If your registered address on the Normandy shareholder register or
Normandy ADS register maintained by Normandy's depositary is within
Australia, you will receive your cash consideration in Australian
dollars. If your registered address on the Normandy shareholder
register or Normandy ADS register maintained by Normandy's depositary
is within any other jurisdiction (including the United States and
Canada), you will receive your cash consideration in U.S. dollars. If
you are to receive payment in U.S. dollars, we will convert the
Australian dollar sum into U.S. dollars using the noon buying rate,
as published by the Federal Reserve Bank of New York, on the date
your acceptance is received.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON YOUR CASH
CONSIDERATION, REGARDLESS OF ANY DELAY IN REMITTING SUCH
CONSIDERATION TO YOU.
See section 5.1 on page 48 of this offer document for more
information.
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Q: MAY I RECEIVE A COMBINATION OF NEWMONT SHARES AND NEWMONT CDIS?
A: No. You may receive only one form of share consideration with respect
to your ordinary shares of Normandy (including shares represented by
Normandy ADSs) as to which the offer has been accepted.
Q: CAN I ACCEPT THE OFFER IF I HOLD A NUMBER OF ORDINARY SHARES OF
NORMANDY THAT IS NOT EXACTLY DIVISIBLE BY 100?
A: Yes. If you hold ordinary shares of Normandy other than in multiples
of 100 ordinary shares of Normandy (or the equivalent represented by
Normandy ADSs), you can still accept the offer and you will be
entitled to (1) a pro rata entitlement to our shares (in the form of
shares of our common stock or Newmont CDIs) based on the ratio of
3.85 of our shares for every 100 of your ordinary shares of Normandy
(including shares represented by Normandy ADSs) and (2) cash of
A$0.50 per ordinary share of Normandy (including shares represented
by Normandy ADSs), or the U.S. dollar equivalent thereof for holders
outside Australia.
In either case, you will be subject to the provisions of this offer
document with respect to the treatment of fractional shares of our
common stock and fractional Newmont CDIs, regardless of the form of
consideration you receive.
See section 5.1 on page 48 of this offer document for more
information.
Q: HOW WILL FRACTIONAL NEWMONT SHARES AND NEWMONT CDIS BE TREATED?
A: If under the offer you become entitled to a fraction of a share of
our common stock or a fraction of a Newmont CDI, your entitlement to
that fraction will be aggregated with the fractional shares of our
common stock or fractional Newmont CDIs, as the case may be, of other
persons (so as to obtain whole shares of our common stock or whole
Newmont CDIs, as the case may be) and sold on the open market, and
you will receive your proportionate share of the net sale proceeds of
your fractional shares of our common stock or fractional Newmont
CDIs, as the case may be.
See section 5.1 on page 48 of this offer document for more
information.
Q: HAS THE NORMANDY BOARD OF DIRECTORS MADE ANY RECOMMENDATION REGARDING
THE OFFER TO NORMANDY SHAREHOLDERS AND HOLDERS OF NORMANDY ADSS?
A: Yes. Subject to its fiduciary duties, the Normandy board of directors
has agreed to recommend our offer to Normandy shareholders and
holders of Normandy ADSs. However, despite providing its
recommendation of Newmont's offer, the Normandy board of directors,
despite repeated requests from Newmont, has declined to supply
certain information to Newmont (including its auditor's consent) that
would generally be required to be included in this offer document
under rules promulgated by the SEC. See "Risk factors--Risks related
to the offer--We have not verified the reliability of the Normandy
information included in, or which may have been omitted from, this
offer document" on page 27.
Q: HAS THE FRANCO-NEVADA BOARD OF DIRECTORS MADE ANY RECOMMENDATION
REGARDING NEWMONT'S PROPOSED ACQUISITION OF ALL OF THE OUTSTANDING
FRANCO-NEVADA COMMON SHARES?
A: Yes. Other than Mr. Seymour Schulich, Mr. Pierre Lassonde and Mr. M.
Craig Haase, who are members of the management of Franco-Nevada and
recused themselves from voting, each member of the Franco-Nevada
board of directors has voted to approve Newmont's proposed
acquisition of all of the outstanding Franco-Nevada common shares
pursuant to the arrangement
13
agreement between the two parties, and recommends that Franco-Nevada
shareholders vote to approve the arrangement. Messrs. Schulich and
Lassonde recused themselves from voting due to their interests in the
transaction, but have independently agreed with Newmont to escrow a
significant portion of their Franco-Nevada common shares that will be
exchanged for shares of our common stock as a demonstration of their
commitment to the success of New Newmont.
Q: HOW MANY ORDINARY SHARES OF NORMANDY OR NORMANDY ADSS DOES NEWMONT
CURRENTLY OWN?
A: We do not directly own any ordinary shares of Normandy or Normandy
ADSs. However, Franco-Nevada and one of its subsidiaries, which
together own 446.1 million ordinary shares of Normandy, representing
19.79% of the ordinary shares of Normandy (calculated on a fully
diluted basis), have granted to us the right, exercisable at our
discretion (but subject to obtaining Foreign Investment and Review
Board (FIRB) approval in respect of 4.99% of the ordinary shares in
Normandy), to acquire their block of ordinary shares of Normandy for
the price of 3.85 of our shares for every 100 Normandy shares.
See section 14.2 on page 148 of this offer document for more
information.
Q: HOW LONG DO I HAVE TO ACCEPT THIS OFFER?
A: Unless the offer is extended, you will have until 7:00 p.m., Sydney
time, 3:00 a.m., New York City time, on February 15, 2002, to accept
the offer.
See section 5.2 on page 49 of this offer document for more
information.
Q: CAN NEWMONT EXTEND THE OFFER PERIOD?
A: Yes. We reserve the right, exercisable at our sole discretion, to
extend the offer period. In addition, if we vary (that is, amend) the
offer to increase the consideration offered, we will extend the offer
period to the extent required by the Corporations Act and U.S.
federal securities laws. In the event that the offer period is
extended, we will be obliged under the Corporations Act to give
Normandy and every Normandy shareholder (including every Normandy ADS
holder) written notice of such extension, so long as the extension is
not an extension of the offer period subsequent to the offer period
being declared unconditional in all respects, in which case such
notice will only be given to Normandy shareholders (including
Normandy ADS holders) who have not previously accepted the offer.
See section 5.2 on page 49 of this offer document for more
information.
Q: I HOLD ORDINARY SHARES OF NORMANDY IN MY NAME ON NORMANDY'S ISSUER
SPONSORED SUBREGISTER. HOW DO I PARTICIPATE IN THIS OFFER?
A: To accept the offer for ordinary shares of Normandy held in your name
on Normandy's issuer-sponsored subregister, you should:
. complete and sign the accompanying Acceptance Form in accordance
with the terms of the offer and the instructions on the
Acceptance Form, and
. ensure that the Acceptance Form and any documents required by the
terms of the offer are received in accordance with section 5.4(b)
of this offer document before 7:00 p.m., Sydney time, 3:00 a.m.,
New York City time, on February 15, 2002 (or any later date to
which the period of the offer is extended) at an address or
facsimile number specified in section 5.4(b) on page 50 of this
offer document.
See section 5.4 on page 50 of this offer document for more
information.
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5 TERMS OF THE OFFER
5.1 OUR OFFER
(a) We offer, upon the terms and subject to the conditions of the offer,
to acquire all of your ordinary shares of Normandy (including shares
represented by Normandy ADSs).
The consideration offered is 3.85 shares of our common stock for every
100 ordinary shares of Normandy (including shares represented by Normandy
ADSs). In addition, we will pay in cash an additional A$0.50 for each of
your ordinary shares of Normandy (including shares represented by Normandy
ADSs), or the U.S. dollar equivalent thereof for holders outside Australia.
(b) If you have a registered address in the Normandy shareholder register
in the United States or Canada, you will receive your share consideration in
the form of our common stock (to be traded primarily on the NYSE). If you
have a registered address in the Normandy shareholder register outside the
United States and Canada, you will be offered your share consideration in
the form of Newmont CDIs (to be traded on the ASX). We anticipate that ten
Newmont CDIs will represent one share of Newmont common stock.
If you have a registered address in the Normandy shareholder register
outside Australia and its external territories, and Newmont has not
determined that the making or accepting of the offer would be in compliance
with the laws of that jurisdiction, you will not receive or be entitled to
receive Newmont CDIs. Instead, you are offered and you will receive the cash
proceeds of a sale, on Newmont's behalf, on the open market of Newmont CDIs
to which you otherwise would have been entitled.
Whatever form of share consideration you receive, it will be equivalent
to 3.85 shares of our common stock for every 100 of your ordinary shares of
Normandy (including shares represented by Normandy ADSs).
In addition, whatever form of share consideration you receive, you will
also receive in cash A$0.50 for each of your ordinary shares of Normandy
(including shares represented by Normandy ADSs), or the U.S. dollar
equivalent thereof for holders outside Australia.
If your registered address on the Normandy shareholder register or
Normandy ADS register maintained by Normandy's depositary is within
Australia, you will receive your cash consideration in Australian dollars.
If your registered address on the Normandy shareholder register or Normandy
ADS register maintained by Normandy's depositary is within any other
jurisdiction (including the United States and Canada), you will receive your
cash consideration in U.S. dollars. If you are to receive payment in U.S.
dollars, we will convert the Australian dollar sum into U.S. dollars using
the noon buying rate, as published by the Federal Reserve Bank of New York,
on the date payment is made to you.
Payment of the cash consideration will be made by check posted to you at
your risk by ordinary mail at the address provided on your Acceptance Form
or ADS Letter of Transmittal.
You may receive only one form of share consideration with respect to your
ordinary shares of Normandy (including shares represented by Normandy ADSs)
as to which the offer has been accepted.
Under no circumstances will interest be paid on your cash consideration,
regardless of any delay in remitting such consideration to you.
Further details about this can be found in section 5.11, "--Payment of
consideration" on page 61.
(c) If you hold ordinary shares of Normandy other than in multiples of
100 ordinary shares of Normandy (or the equivalent represented by Normandy
ADSs), you can still accept the offer and you will be
48
entitled to (1) a pro rata entitlement to Newmont shares (in the form of
shares of our common stock or Newmont CDIs) based on the ratio of 3.85
shares of our common stock for every 100 of your ordinary shares of Normandy
(or the equivalent represented by Normandy ADSs) and (2) cash of A$0.50 for
each of your ordinary shares of Normandy (including shares represented by
Normandy ADSs), or the U.S. dollar equivalent thereof for holders outside
Australia. In either case, you will be subject to section 5.1(d) below with
respect to the treatment of fractional shares of our common stock or
fractional Newmont CDIs.
(d) We will not issue fractional shares of our common stock or fractional
Newmont CDIs to you, regardless of the form of consideration you receive. If
under the offer you become entitled to a fraction of a share of our common
stock or a fraction of a Newmont CDI, (after aggregating all of your
holdings of ordinary shares of Normandy, or ordinary shares of Normandy
represented by Normandy ADSs) your entitlement to that fraction will be
aggregated with the fractional shares of our common stock or fractional
Newmont CDIs, as the case may be, of other persons (so as to obtain whole
shares of our common stock or whole Newmont CDIs, as the case may be) and
sold on the open market in accordance with section 5.11, and you will
receive your proportionate share of the net sale proceeds of your fractional
shares of our common stock or fractional Newmont CDIs, as the case may be.
Further details about this sale and cash payment can be found in section
5.11, "--Payment of consideration" on page 61.
(e) The offer extends to all ordinary shares of Normandy which may be
issued before the end of the offer period pursuant to the exercise of
options to subscribe for ordinary shares of Normandy issued by Normandy
under its employee share bonus plan and executive share incentive plan.
(f) The offer document is dated January 10, 2002.
5.2 OFFER PERIOD
(a) Unless the offer period is extended or the offer is withdrawn, in
either case in accordance with the requirements of the Corporations Act, the
offer will remain open for acceptance by you during the period commencing on
the date of the offer and ending at 7:00 p.m., Sydney time, 3:00 a.m., New
York City time, on February 15, 2002.
(b) Subject to the Corporations Act, we may extend the offer period.
(c) In addition, if, within the last seven days of the offer period:
. the offer is varied (i.e., amended) to increase the consideration
offered; or
. our voting power in Normandy increases to more than 50%,
then, in accordance with the Corporations Act, the offer period will be
mandatorily extended so that it ends 14 days after this event.
In addition, to the extent the offer period is not extended pursuant to
the previous paragraph, in accordance with U.S. federal securities laws, we
will extend the offer period if we vary the offer to increase or decrease
the consideration offered within ten business days of the then scheduled
expiration of the offer period, so that the offer period ends ten business
days after the publication of this event. However, in accordance with the
Corporations Act, we will not decrease the consideration offered.
In the event that the offer period is extended, we will be obliged under
the Corporations Act to give Normandy and every Normandy shareholder
(including every Normandy ADS holder) written notice of such extension, so
long as the extension is not an extension of the offer period subsequent to
the offer being
49
declared unconditional in all respects, in which case such notice will only
be given to Normandy shareholders (including Normandy ADS holders) who have
not previously accepted the offer.
5.3 OFFEREES
(a) The offer is being made:
(1) to all the Normandy shareholders (including Normandy ADS holders)
who have a registered address, as shown in Normandy's register of
members, either in the United States or Canada and are registered as
such at 7:00 a.m., Sydney time, on December 20, 2001 (which corresponds
to 3:00 p.m., New York City time, on the previous day); and
(2) to any person who becomes registered or entitled to be registered
as the holder of any ordinary shares of Normandy by virtue of an
allotment of ordinary shares of Normandy under Normandy's employee share
bonus plan or executive share incentive plan during the offer period.
(b) If you are a holder of options to subscribe for ordinary shares of
Normandy issued by Normandy under its employee share bonus plan or executive
share incentive plan, you may accept the offer for the ordinary shares of
Normandy underlying such options if you exercise your options prior to the
expiration of the offer in accordance with their terms. You may then accept
the offer in relation to ordinary shares of Normandy issued upon exercise of
your Normandy options during the offer period before the holding statement
for those ordinary shares of Normandy is received by you, provided that:
(1) you have validly exercised your Normandy options;
(2) you have completed the payments required upon the exercise of
your Normandy options; and
(3) in all other respects you comply with section 5.4 of this offer
document and the instructions on the Acceptance Form;
and, if this section applies to you, you must deliver the relevant holding
statements to us at one of the addresses set forth in section 5.4 of this
offer document as soon as possible after they are received by you and, in
any event, prior to the expiration of the offer.
5.4 HOW TO ACCEPT THE OFFER IF YOU HOLD ORDINARY SHARES OF NORMANDY
(a) You may accept the offer at any time during the offer period.
(b) ORDINARY SHARES OF NORMANDY HELD IN YOUR NAME ON NORMANDY'S
ISSUER-SPONSORED SUBREGISTER
To accept the offer for ordinary shares of Normandy held in your name on
Normandy's issuer-sponsored subregister, you must:
(1) complete and sign the accompanying Acceptance Form (which forms
part of this offer document) in accordance with the terms of the offer
and the instructions on the Acceptance Form; and
(2) ensure that the Acceptance Form and any documents required by the
terms of the offer and the instructions on the Acceptance Form are
received before 7:00 p.m., Sydney time, 3:00 a.m., New York City time,
on February 15, 2002 (or any later date to which the period of the offer
is extended), at the following address or facsimile number:
Newmont Mining Corporation
c/o Computershare Trust Company of New York
Wall Street Station
P.O. Box 1010
New York, NY 10268-1010
50
Facsimile number: 212-701-7636
To confirm receipt of facsimile: 212-701-7624
or, if by hand delivery, delivered to the following address:
Newmont Mining Corporation
c/o Computershare Trust Company of New York
Wall Street Plaza
88 Pine Street, 19th Floor
New York, NY 10005
If your Acceptance Form (including any documents required by the terms of
the offer and the instructions on the Acceptance Form) is returned by
facsimile, it will be deemed to be received in time if the facsimile
transmission is received (evidenced by a confirmation of successful
transmission) before 7:00 p.m., Sydney time, 3:00 a.m., New York City time,
on February 15, 2002 (or any later date to which the period of the offer is
extended), but you will not be entitled to receive the consideration under
this offer to which you are entitled until your original Acceptance Form
(including any documents required by the terms of the offer and the
instructions on the Acceptance Form) is received at an address specified
above.
(c) ORDINARY SHARES OF NORMANDY HELD IN A CHESS HOLDING
To accept the offer for ordinary shares of Normandy held in a CHESS
Holding (as defined in the Securities Clearing House Business Rules), you
must:
(1) instruct your broker or controlling participant (for
non-institutional Normandy shareholders, this is normally the
stockbroker either through whom you bought your ordinary shares of
Normandy or through whom you ordinarily acquire ordinary shares of
Normandy on the ASX) to initiate acceptance of the offer in accordance
with Rule 16.3 of the Securities Clearing House Business Rules before
7:00 p.m., Sydney time, 3:00 a.m., New York City time, on February 15,
2002 (or any later date to which the period of the offer is extended); or
(2) if you are a CHESS participant who is not a broker (such as an
institution, custodian, trustee and the like), initiate acceptance of
the offer in accordance with Rule 16.3 of the Securities Clearing House
Business Rules before 7:00 p.m., Sydney time, 3:00 a.m., New York City
time, on February 15, 2002 (or any later date to which the period of the
offer is extended).
Although you are not required to, you may also sign and complete the
accompanying Acceptance Form in accordance with the terms of the offer and
the instructions on the Acceptance Form relating to shares in a CHESS
Holding and ensure that it (including any documents required by the terms of
the offer and the instructions on the Acceptance Form) is received by 7:00
p.m., Sydney time, 3:00 a.m., New York City time, on February 15, 2002 (or
any later date to which the period of the offer is extended), at an address
or facsimile number specified in section 5.4(b) of this offer document.
(d) To accept the offer in respect of ordinary shares of Normandy in
respect of which, at the time of acceptance, you are entitled to be
registered but are not registered you must complete and sign the Acceptance
Form enclosed with the offer in accordance with the instructions on it and
return it together with all other documents required by those instructions
to one of the addresses referred to in section 5.4(b) so that it is received
not later than the end of the offer period.
(e) An acceptance of the offer under section 5.4(b) and section 5.4(d)
shall not be complete until the Acceptance Form, completed and signed in
accordance with the instructions on it and all other documents required by
those instructions have been received (including receipt by facsimile
transmission in accordance with section 5.4(b)) at one of the addresses set
out in section 5.4(b). Notwithstanding the foregoing
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provisions of this paragraph, we may, in our absolute discretion, waive at
any time prior to the end of the offer period all or any of the requirements
specified in the Acceptance Form but payment of the consideration in
accordance with the offer will not be made until any irregularity has been
resolved and such other documents as may be necessary to procure
registration of the shares have been lodged with us.
(f) If you hold Normandy options on the date of the offer and if you are
entitled to and wish to exercise Normandy options during the offer period
and accept the offer, you may also return the completed Acceptance Form
together with your option certificates, a signed notice of exercise of your
Normandy options and a bank check in the sum of the exercise price for your
Normandy options made payable to "Normandy Mining Limited."
(g) Your acceptance of the offer must be in respect of all the ordinary
shares of Normandy registered in your name.
5.5 HOW TO ACCEPT THE OFFER IF YOU HOLD NORMANDY ADSS
(a) You may accept the offer at any time during the offer period, but
only in respect of all of your Normandy ADSs.
(b) HOLDERS OF NORMANDY ADRS EVIDENCING NORMANDY ADSS
If you hold Normandy ADRs evidencing Normandy ADSs and wish to accept the
offer, you may accept the offer by delivering, prior to the expiration of
the offer, the following materials together, and at the same time, to the
ADS exchange agent at one of its addresses set forth below:
. your Normandy ADRs;
. a properly completed and duly executed ADS Letter of Transmittal; and
. any other documents required by the ADS Letter of Transmittal.
The addresses for the ADS exchange agent are:
BY MAIL: BY COURIER: BY HAND:
-------- ----------- --------
Computershare Trust Computershare Trust Computershare Trust
Company of New York Company of New York Company of New York
Wall Street Station Wall Street Plaza Wall Street Plaza
P.O. Box 1010 88 Pine Street, 19th Floor 88 Pine Street, 19th Floor
New York, NY 10268-1010 New York, NY 10005 New York, NY 10005
(c) HOLDERS OF NORMANDY ADSS IN BOOK-ENTRY FORM
If you hold Normandy ADSs in book-entry form with a bank, broker or other
nominee and wish to accept the offer, you may accept the offer by following
the procedure for book-entry transfer described below. To accept the offer,
you must deliver, prior to the expiration of the offer, the following
materials to the ADS exchange agent at any of the addresses set forth in
section 5.5(b):
. a timely confirmation of a book-entry transfer of your Normandy ADSs
into the ADS exchange agent's account at DTC;
. an agent's message (instead of an ADS Letter of Transmittal); and
. any other documents required by the ADS Letter of Transmittal.
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In this discussion, the term "agent's message" means a message that is
transmitted by DTC to and received by the ADS exchange agent and that forms
a part of a book-entry confirmation. This message must state that:
. DTC has received an express acknowledgment from a participant in DTC's
system that the participant is accepting the offer with respect to
Normandy ADSs that are the subject of a confirmation of a book-entry
transfer;
. the participant has received and agrees to be bound by the ADS Letter of
Transmittal; and
. either we or the ADS exchange agent may enforce the agreement against the
participant.
In this discussion, the term "book-entry confirmation" means the
confirmation of a book-entry transfer of Normandy ADSs into the ADS exchange
agent's account at DTC.
Any financial institution that is a participant in the book-entry
transfer facility of DTC may make book-entry delivery of Normandy ADSs by
causing DTC to transfer the ADSs into the ADS exchange agent's account at
DTC. This must be done in accordance with DTC's procedures for the transfer.
If you hold your Normandy ADSs in book-entry form other than through a
broker or other DTC participant, you must first have your Normandy ADSs
transferred to an account at DTC, after which time you may follow the
procedure for book-entry transfer described above.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE ADS EXCHANGE AGENT.
(d) BENEFICIAL OWNERS OF NORMANDY ADSS REGISTERED IN THE NAME OF
FINANCIAL INSTITUTIONS
If you are a beneficial owner of Normandy ADSs that are registered in the
name of a broker, dealer, commercial bank, trust company or other nominee
and wish to accept the offer, you must contact this institution promptly and
instruct it to accept the offer on your behalf before the expiration of the
offer.
If you are a beneficial owner of Normandy ADSs and you wish to accept the
offer directly and not through an institution, you must either make
appropriate arrangements to register ownership of your Normandy ADSs in your
name or obtain a properly completed stock power from the registered holder.
This transfer of registered ownership may take considerable time, which you
should keep in mind in deciding when to accept the offer.
(e) Guaranteed delivery procedures cannot be used to accept the offer.
(f) Your signature on the ADS Letter of Transmittal with respect to
Normandy ADSs must be guaranteed by an eligible institution, as defined
below, unless:
. you are the registered holder of the Normandy ADSs; or
. you are accepting the offer with respect to Normandy ADSs for the account
of an eligible institution.
The term "eligible institution" means a financial institution that is a
participant in the Security Transfer Agents Medallion Program or the Stock
Exchange Medallion Program. Eligible institutions include commercial banks,
savings and loan associations and brokerage houses.
(g) Under the U.S. federal income tax laws, the ADS exchange agent may be
required to withhold 30% of any payments made to certain Normandy ADS
holders. In general, to prevent backup U.S. federal income tax withholding
with respect to any such payments made pursuant to the offer, if you hold
Normandy ADSs, you must provide the ADS exchange agent with your correct
taxpayer identification number and certify
53
whether you are subject to backup withholding of U.S. federal income tax by
completing the substitute form W-9 included in the ADS Letter of
Transmittal. Some Normandy ADS holders (including, among others, all
corporations and some non-U.S. individuals) are not subject to these backup
withholding and reporting requirements.
5.6 VALIDITY OF ACCEPTANCES
(a) Your acceptance will not be valid unless it is made in accordance
with the procedures set forth in section 5.4 or section 5.5 of this offer
document and the instructions on the Acceptance Form or the ADS Letter of
Transmittal, as appropriate.
(b) You must choose the method of delivery you will use to deliver your
Acceptance Form and/or your Normandy ADRs evidencing Normandy ADSs and your
ADS Letter of Transmittal and all other required documents as set forth in
sections 5.4 and 5.5. That delivery is at your risk. For Normandy
shareholders, we recommend that you use the postage pre-paid envelope
included with this offer document. For Normandy ADS holders, we recommend
that you use overnight or hand delivery service, properly insured, instead
of mail, and if delivery is by mail, we recommend that you use registered
mail, with return receipt requested, properly insured. IN ALL CASES ADS
HOLDERS SHOULD ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE ADS EXCHANGE
AGENT. Persons holding Normandy securities through brokers, dealers,
commercial banks, trust companies or nominees may request these persons to
effect the above deliveries on their behalf.
(c) We will determine, in our sole discretion, all questions as to the
form of documents, including the validity, eligibility, including time of
receipt, and acceptance of your ordinary shares of Normandy and Normandy
ADSs. Our determination will be final and binding on all parties.
(d) We may, in our sole discretion, at any time deem any Acceptance Form
or ADS Letter of Transmittal we receive to be a valid acceptance in respect
of your ordinary shares of Normandy or Normandy ADSs, as appropriate, even
if a requirement for acceptance has not been complied with.
(e) If any ordinary shares of Normandy or Normandy ADSs delivered by you
are not exchanged for any reason pursuant to the terms and conditions of the
offer, they will be returned with no cost to you at your risk promptly
following the expiration or termination of the offer. In such case, we will
dispatch at your risk your Acceptance Form or ADS Letter of Transmittal, as
appropriate, together with all other documents forwarded by you to your
address as shown on the Acceptance Form or ADS Letter of Transmittal, as
appropriate, or such other address as you may notify us in writing by
prepaid post.
5.7 ENTITLEMENT TO OFFER
(a) If at the time the offer is made to you, or at any time during the
offer period and before you accept the offer, another person is, or is
entitled to be, registered as the holder of, or is able to give good title
to, some or all of your ordinary shares of Normandy (such shares in this
paragraph being called "Transferred Shares") then, in accordance with
section 653B(1)(a) of the Corporations Act:
(1) a corresponding offer shall be deemed to have been made at that
time to that other person relating to the Transferred Shares;
(2) a corresponding offer shall be deemed to have been made at that
time to you relating to your ordinary shares of Normandy other than the
Transferred Shares; and
(3) the offer shall be deemed immediately after that time to have
been withdrawn.
(b) If at any time during the offer period and before the offer is
accepted you hold ordinary shares of Normandy on trust for, as nominee for
or on account of another person or persons, then a separate offer shall be
deemed, in accordance with Section 653B of the Corporations Act, to have
been made to you in relation
54
to each parcel of ordinary shares of Normandy within your holding of
ordinary shares of Normandy. An acceptance by you of the offer in respect of
any such distinct portion of your ordinary shares of Normandy will be
ineffective unless you have given us notice stating that your ordinary
shares of Normandy consist of separate parcels and your acceptance specifies
the number of ordinary shares of Normandy in the distinct portions to which
the acceptance relates. If your ordinary shares of Normandy are in a CHESS
Holding, such notice may be transmitted in an electronic form approved by
the Securities Clearing House Business Rules. Otherwise, such notice must be
given to us in writing.
5.8 THE EFFECT OF ACCEPTANCE
(a) Once you have accepted the offer, you will be unable to revoke your
acceptance, the contract resulting from your acceptance will be binding on
you and you will be unable to withdraw the ordinary shares of Normandy or
Normandy ADSs with respect to which your acceptance was made, except as
follows:
(1) if the offer remains conditional at the expiration of the time
that it may be freed of the conditions under section 5.10(b), the offer
will automatically terminate and your ordinary shares of Normandy or
Normandy ADSs will be returned to you; or
(2) if the offer period is extended for more than one month and, at
the time, the offer is subject to a defeating condition (which means
that a condition to the offer has not been satisfied or waived at that
time), you will be able to withdraw your acceptance and your ordinary
shares of Normandy or Normandy ADSs, as appropriate. A notice will be
sent to you at the time explaining your rights in this regard.
(b) By completing, signing and returning the Acceptance Form, the ADS
Letter of Transmittal or otherwise accepting the offer pursuant to section
5.4 or 5.5, you will be deemed to have:
(1) accepted the offer, subject to section 5.7, (and any variation of
it) in respect of all of your ordinary shares of Normandy;
(2) subject to the offer being declared free of the conditions in
section 5.10(a) and 5.10(c) or such conditions being fulfilled, agreed
to transfer to us all the ordinary shares of Normandy registered in your
name, regardless of the number of ordinary shares of Normandy specified
in the Acceptance Form;
(3) represented and warranted to us, as a fundamental condition going
to the root of the contract resulting from your acceptance of the offer,
that all your ordinary shares of Normandy or Normandy ADSs are and will
upon registration in our name be fully paid up and free from all
mortgages, charges, liens and other adverse interests and encumbrances
of any kind and restrictions on transfer of any kind, and that you have
full power and capacity to accept the offer and to sell and transfer the
legal and beneficial ownership in those ordinary shares of Normandy or
Normandy ADSs, as appropriate, to us, and that you have paid to Normandy
all amounts which at the time of acceptance have fallen due for payment
to Normandy in respect of those ordinary shares of Normandy or Normandy
ADSs;
(4) if you accepted the offer pursuant to section 5.4(b), irrevocably
authorized us (by any of our authorized officers), if necessary, to
complete on the Acceptance Form correct details of your ordinary shares
of Normandy, fill in any blanks remaining on the form and rectify any
errors or omissions from the form as may be necessary to make the form
an effective acceptance of the offer;
(5) appointed us and our authorized officers from time to time
jointly and each of them severally as your true and lawful attorney,
with effect from the date that any contract resulting from the
acceptance of the offer is declared free from all its conditions or
those conditions are satisfied, with power to exercise all powers and
rights which you could lawfully exercise as the registered holder of
such shares including, without limitation, requesting Normandy to
register your ordinary shares of Normandy in our name, attending and
voting at any meeting of Normandy, demanding a poll for any
55
vote taken at or proposing or seconding any resolutions to be considered
at any meeting of Normandy, requisitioning any meeting of Normandy,
signing any forms, notices or instruments relating to your ordinary
shares of Normandy and doing all things incidental and ancillary to any
of the foregoing and it is acknowledged and agreed that in exercising
such powers the attorney may act in our interests as the intended
registered holder of those shares;
(6) subject to the offer being declared free of the conditions in
section 5.10(a) and 5.10(c) or such conditions being fulfilled,
irrevocably authorized and directed Normandy to pay to us or to account
to us for all rights in respect of ordinary shares of Normandy
(including shares represented by Normandy ADSs) including without
limitation all rights to receive dividends, to subscribe for shares,
notes, options or other securities and all other distributions or
entitlements declared, paid, made or issued by Normandy in respect of
ordinary shares of Normandy (including shares represented by ADSs after
November 14, 2001 ("Rights"), subject however to any such Rights
received by us being accounted to you in the event the offer is
withdrawn or the contract resulting from your acceptance of the offer
being avoided;
(7) except where Rights have been paid or accounted for under section
5.8(b)(6), irrevocably authorized us to deduct from the consideration
payable in respect of your ordinary shares of Normandy, the cash amount
of any Rights paid to you or, where the Rights take a non-cash form, an
amount equal to the value of the Rights as reasonably assessed by the
Chairman of ASX or his or her nominee;
(8) if at the time of acceptance of the offer, your ordinary shares
of Normandy are in CHESS holding, have, with effect from the date that
either the offer or any contract resulting from the acceptance of the
offer is declared free from all its conditions or those conditions are
satisfied, authorized us to cause a message to be transmitted to
Securities Clearing House in accordance with Securities Clearing House
Business Rule 16.6.1 so as to transfer your ordinary shares of Normandy
to our Takeover Transferee Holding. We shall be so authorized even
though, at the time of such transfer, we have not paid the consideration
due to you under the offer;
(9) irrevocably authorized us to apply for the issue to your account
of that number of shares of our common stock in the form of our shares
of common stock or Newmont CDIs corresponding to your entitlement under
the offer at the date of application;
(10) agreed to accept Newmont shares (in the form of our common stock
or Newmont CDIs) to which you become entitled by acceptance of the
offer, subject to the terms of the offer, our charter and by-laws and
the provisions relating to the holding of shares of our common stock in
the form of Newmont CDIs, and authorized appropriate entries to be
placed in the relevant register of holders (including CDN being entered
in the depository register and our share register in relation to those
shares of our common stock);
(11) agreed to indemnify us in respect of any claim or action against
us or any loss, damage or liability whatsoever incurred by us as a
result of you not producing your holder identification number or in
consequence of the transfer of your ordinary shares of Normandy being
registered by Normandy without production of your holder identification
number for your ordinary shares of Normandy;
(12) represented and warranted to us that unless you have notified us
in accordance with section 5.7(b), your ordinary shares of Normandy do
not consist of several parcels of ordinary shares of Normandy; and
(13) agreed to execute all such documents, transfers and assurances
that may be necessary or desirable to convey your ordinary shares of
Normandy and any Rights to us, subject to the offer being declared free
of the conditions in section 5.10(a) and 5.10(c) or such conditions
being fulfilled.
The representations and warranties referred to in this section 5.8(b)
shall survive completion of the contract resulting from acceptance of
the offer.
56
(c) If your ordinary shares of Normandy are in a CHESS Holding and you
complete, sign and return the Acceptance Form in accordance with section
5.4(c) (which you are not bound, but are requested, to do) you will be
deemed to have irrevocably authorized us and any of our authorized officers:
(A) to instruct your controlling participant to initiate acceptance
of the offer in respect of those ordinary shares of Normandy which are
in a CHESS Holding in accordance with the Securities Clearing House
Business Rules (if you have not already done so); and
(B) to give any other instructions in relation to such ordinary
shares of Normandy to your controlling participant on your behalf under
the sponsorship agreement between you and the controlling participant;
(d) The undertakings and authorities referred to in section 5.8(b) will
remain in force after you receive the consideration for your ordinary shares
of Normandy (including shares represented by Normandy ADSs) acquired by us
and after we become registered as the holder of them.
5.9 DIVIDENDS AND OTHER ENTITLEMENTS
(a) We will be entitled to all Rights which arise or accrue after
November 14, 2001 in respect of the ordinary shares of Normandy (including
shares represented by Normandy ADSs) which we acquire pursuant to the offer.
(b) If any Rights are declared, paid or made or arise or accrue in cash
after November 14, 2001 in respect of the ordinary shares of Normandy
(including shares represented by Normandy ADSs), we will (provided the same
has not been paid to us) be entitled to reduce the consideration specified
in section 5.1 and payable by us to accepting holders of ordinary shares of
Normandy by an amount equal to the cash amount of such Rights.
(c) If any non-cash Rights are issued or made or arise or accrue after
November 14, 2001 in respect of the ordinary shares of Normandy (including
shares represented by Normandy ADSs), then we will (provided the same has
not been transferred to us) be entitled to reduce the consideration
specified in section 5.1 and payable by us to accepting holders of ordinary
shares of Normandy by an amount equal to the value (as reasonably assessed
by the Chairman of ASX or his or her nominee) of such non-cash Rights.
5.10 CONDITIONS OF THIS OFFER
(a) Subject to section 5.10(b), this offer and any contract resulting
from your acceptance of the offer, and each other offer and each contract
resulting from the acceptance thereof, are subject to the satisfaction or
waiver by us of the following conditions:
(1) AUSTRALIAN FOREIGN INVESTMENT REVIEW BOARD
The Treasurer of the Commonwealth of Australia advises us in writing,
before the expiration date of the offer that there is no objection under
the Australian Federal Government's foreign investment policy or under
the Foreign Acquisitions and Takeovers Act 1975 (Cth) of Australia to
the acquisition of ordinary shares of Normandy (including shares
represented by Normandy ADSs) by us, such an acquisition otherwise not
being in breach of that legislation or the Treasurer ceases to be
entitled to make an order under Part II of that legislation regarding
the acquisition of such ordinary shares by us;
(2) MINIMUM ACCEPTANCE CONDITION
Before the end of the offer period, we and our associates have
relevant interests in at least 50.1% of the ordinary shares of Normandy
(including shares represented by Normandy ADSs), calculated on a fully
diluted basis;
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(3) NEWMONT STOCKHOLDER APPROVAL
Before the end of the offer period, our stockholders shall have taken
all actions necessary to approve the issuance of the shares of Newmont
common stock under the offer;
(4) NO PRESCRIBED OCCURRENCES
None of the following prescribed occurrences happen after November
14, 2001 and before the expiration of the offer:
(A) Normandy converting all or any of its shares into a larger or
smaller number of shares under section 254H of the Corporations Act;
(B) Normandy or a subsidiary of Normandy resolving to reduce its
share capital in any way;
(C) Normandy or a subsidiary of Normandy entering into a buyback
agreement or resolving to approve the terms of a buyback agreement
under sections 257C(1) or 257D(1) of the Corporations Act;
(D) Normandy or a subsidiary of Normandy making an issue of its
shares (other than ordinary shares of Normandy issued as a result of
the exercise of options issued under Normandy's employee share bonus
plan or executive share incentive plan or the issue of shares by
Normandy NFM Limited, a subsidiary of Normandy, as consideration for
the takeover bid for Otter Gold Mines Limited) or granting an option
over its shares or agreeing to make such an issue or grant such an
option;
(E) Normandy or a subsidiary of Normandy issuing, or agreeing to
issue, convertible notes;
(F) Normandy or a subsidiary of Normandy disposing, or agreeing to
dispose, of the whole, or a substantial part, of its business or
property;
(G) Normandy or a subsidiary of Normandy charging, or agreeing to
charge, the whole, or a substantial part, of its business or property;
(H) Normandy or a subsidiary of Normandy resolving that it be
wound up;
(I) the appointment of a liquidator or provisional liquidator of
Normandy or of a subsidiary of Normandy;
(J) the making of an order by a court for the winding up of
Normandy or of a subsidiary of Normandy;
(K) an administrator of Normandy or of a subsidiary of Normandy
being appointed under section 436A, 436B or 436C of the Corporations
Act;
(L) Normandy or a subsidiary of Normandy executing a deed of
company arrangement; or
(M) the appointment of a receiver, receiver and manager, other
controller (as defined in the Corporations Act) or similar official
in relation to the whole, or a substantial part, of the property of
Normandy or of a subsidiary of Normandy;
(5) NO MATERIAL ADVERSE CHANGE
Before the end of the offer period, no material adverse change occurs
or is announced in the business, financial or trading position or
condition, assets or liabilities, profitability or prospects of Normandy
and its subsidiaries taken as a whole;
(6) MISLEADING ANNOUNCEMENT
Before the end of the offer period, Normandy does not disclose any
untrue statement of, or omission to state, a fact that was required to
be stated, or necessary so as to make a statement not
58
misleading, in any document filed by or on behalf of Normandy with ASX
or ASIC since January 1, 2001, where the untrue statement or omission of
fact results in a material adverse effect in relation to the business,
financial or trading position or condition, assets or liabilities,
profitability or prospects of Normandy and its subsidiaries taken as a
whole;
(7) NO PUBLIC AUTHORITY INTERFERENCE
During the period from November 14, 2001 to the expiration of the
offer:
(A) there is not in effect any preliminary or final decision,
order or decree issued by any government or governmental,
semi-governmental, statutory or judicial entity or authority, whether
in Australia or elsewhere, including without limitation any
self-regulatory organization established under statute or any stock
exchange (a ''Public Authority''), or
(B) no application is made to any Public Authority (other than by
us), or commenced by a Public Authority against either Newmont,
Normandy or Delta Acquisition LLC, in consequence or in connection
with the offer, which restrains or prohibits or otherwise materially
adversely impacts upon, the making of the offer or the completion of
any transaction contemplated by the offer or the deeds of undertaking
entered into by us and Normandy or the rights of us or our associates
in respect of Normandy and the ordinary shares of Normandy to be
acquired under the offer or otherwise;
(8) DEEDS OF UNDERTAKING
Before the end of the offer period, no breach of any covenant,
warranty or representation made by Normandy or in the deeds of
undertaking entered into by us and Normandy occurs or is announced which
has a material adverse effect on the business, financial or trading
position or condition, assets or liabilities, profitability or prospects
of Normandy and its subsidiaries taken as a whole;
(9) OTHER GOVERNMENTAL OR REGULATORY APPROVALS
All necessary governmental or regulatory filings (including under the
U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and other competition and foreign investment approval filings or
notifications) having been made, all applicable waiting periods with
respect to any governmental or regulatory filings having expired or
having been terminated, no action having been taken to restrain the
offer by any governmental authority, and all necessary governmental or
regulatory approvals having been obtained to ensure that:
(A) we can vote and acquire all ordinary shares of Normandy
(including shares represented by Normandy ADSs) under the offer; and
(B) our shares of common stock and Newmont CDIs can be issued
under the offer and traded without restriction, including, without
limitation, under the U.S. Securities Act of 1933, as amended;
(10) AUSTRALIAN MAGNESIUM CORPORATION LIMITED COMMITMENTS
(A) neither Normandy nor any subsidiary of Normandy is a party to
any agreement with Australian Magnesium Corporation Limited or is
subject to any other obligation in respect of Australian Magnesium
Corporation Limited for an amount greater than A$20 million other
than:
(i) those agreements and obligations disclosed in the
Australian Magnesium Corporation Limited prospectus dated October
15, 2001; or
(ii) an obligation by Normandy to subscribe for Australian
Magnesium Corporation Limited shares in the manner and subject to
the conditions contained in the Australian Magnesium Corporation
Limited prospectus dated October 15, 2001; and
(B) before the end of the offer period, there is no waiver of any
condition precedent to the commitment of either Normandy, any
subsidiary of Normandy, the syndicate of banks, the
59
Australian Federal Government or the State Government of Queensland
to provide funds to Australian Magnesium Corporation Limited being
conditions precedent to commitments disclosed or referred to in the
Australian Magnesium Corporation Limited prospectus dated October 15,
2001.
(b) It is a term of the offer that we may, subject to section 650F of the
Corporations Act, declare the offer and all other offers and all contracts
resulting from the acceptance of offers to be free from the conditions (or
any one or more of them or any part thereof) set out in section 5.10(a). Any
declaration made under this section 5.10(b) shall be made by us by notice in
writing to Normandy.
(c) In accordance with section 625(3) of the Corporations Act, the offer
and all other offers and all contracts that result from the acceptance of
offers are subject to the condition that:
(1) an application for admission to quotation of Newmont on ASX and
of the shares of Newmont common stock on the NYSE will be made within
seven days after the date when the bidder's statement is given to
Normandy; and
(2) permission for admission to quotation of Newmont CDIs on ASX and
for quotation of the shares of Newmont common stock on the NYSE will be
granted no later than seven days after the end of the offer period.
We will apply for the necessary quotations as soon as practicable in
order to satisfy this condition. The offer may not be declared free of
this condition.
(d) The condition in section 5.10(a)(1) above is a condition precedent to
our acquisition of an interest (within the meaning of those terms in the
Foreign Acquisitions and Takeovers Act) in your ordinary shares of Normandy
(including shares represented by Normandy ADSs). The other conditions in
section 5.10(a) are conditions subsequent. The non-fulfillment of any
condition subsequent does not prevent a contract to sell your ordinary
shares of Normandy (including shares represented by Normandy ADSs) resulting
from your acceptance of the offer, but entitles us by written notice to you,
to rescind the contract resulting from your acceptance of the offer.
(e) Subject to the provisions of the Corporations Act, we alone have the
benefit of the conditions in section 5.10(a) above and any breach or
non-fulfillment of any such conditions may be relied on only by us.
(f) The date specified for giving the notice referred to in section
630(3) of the Corporations Act is February 7, 2002, subject to extension in
accordance with section 630(2) of the Corporations Act if the offer period
is extended in accordance with the Corporations Act.
(g) If at the end of the offer period in respect of the conditions
specified in section 5.10(a) above:
(1) we have not declared the offer and all other offers made by us
and all contracts resulting from the acceptance of offers to be free
from the conditions; and
(2) the conditions have not been fulfilled,
then all contracts resulting from the acceptance of offers and all offers
that have been accepted and from whose acceptance binding contracts have not
yet resulted are void. In that event, we will, if you have accepted the
offer:
(1) return at your risk your Acceptance Form together with all
documents forwarded by you with that form to your address as shown in
the Acceptance Form; or
(2) if your ordinary shares of Normandy are in a CHESS Holding,
notify Securities Clearing House under the Securities Clearing House
Business Rules that the contract resulting from your acceptance of the
offer is avoided.
60
5.11 PAYMENT OF CONSIDERATION
(a) Subject to this section 5.11 and the Corporations Act, we will
provide the consideration for your ordinary shares of Normandy (including
shares represented by Normandy ADSs) as follows:
(i) within five business days after the date of your acceptance of
the offer if the offer is unconditional at that time; or
(ii) if the offer is conditional when you accept it, within five
business days after the date upon which all the conditions (including
the condition in section 5.10(c)) are satisfied or waived.
Under no circumstance will interest be paid on the consideration payable
to you under the offer, regardless of any delay in making the exchange or
any extension of the offer.
(b) Where the Acceptance Form requires an additional document to be given
with your acceptance (such as a power of attorney):
(1) if that document is delivered with your acceptance, we will
provide the consideration in accordance with section 5.11(a);
(2) if that document is delivered after acceptance and before the end
of the offer period while the offer is subject to a condition, we will
provide the consideration within 5 business days after the offer becomes
unconditional.
(3) if that document is delivered after your acceptance and before
the end of the offer period while the offer is not subject to any
condition, we will provide the consideration within 5 business days
after the document is delivered; or
(4) if that document is delivered after the end of the offer period,
we will provide the consideration within 5 business days after that
document is delivered.
(c) If you are resident in any place specified by the Reserve Bank of
Australia as being a place for which a resident is not entitled to receive
the cash component of the consideration specified above, in the absence of
any necessary authority of the Reserve Bank of Australia and the Australian
Taxation Office, acceptance of the offer will not create or transfer to you
any right (contractual or contingent) to receive the consideration specified
in the offer unless and until any necessary authority of the Reserve Bank of
Australia and the Australian Taxation Office has been obtained. Such
authority is currently required only in respect of Libya, Iraq, the Taliban
(Islamic Emirate of Afghanistan) and any undertaking owned or controlled by
the Taliban, certain persons associated with the former government and
governmental authorities of the Federal Republic of Yugoslavia (Serbia and
Montenegro) and the National Union for the Total Independence of Angola
(UNITA), including its senior officials and their immediate families AND IN
RESPECT OF ANY PERSON OR ENTITY NAMED IN AN ANNEX TO THE INSTRUMENTS OF
OCTOBER 3 OR 17 AND NOVEMBER 19, 2001 ISSUED UNDER THE AUSTRALIAN BANKING
(FOREIGN EXCHANGE) REGULATIONS.
(d) If you accept the offer and are entitled to payment of a cash amount
instead of shares of our common stock or Newmont CDIs under section 5.1(b)
or (d), we will:
(1) arrange for the allotment to a nominee approved by ASIC of the
number of shares or fractional entitlements of our common stock or
Newmont CDIs to which you and all other shareholders would have been
entitled but for this paragraph (d);
(2) cause those shares of our common stock or Newmont CDIs issued to
the nominee to be offered for sale within 5 business days after the end
of the offer period in such manner, at such price and on such other
terms and conditions as are determined by the nominee; and
(3) pay to you the amount ascertained in accordance with the formula:
Net Proceeds of Sale x Newmont Shares
-------------------------------------
TSA
61
where:
"Net Proceeds of Sale" means the amount (if any) remaining after
deducting the expenses of the sale from the proceeds of the sale of
shares of our common stock (including shares underlying Newmont CDIs) on
the open market;
"Newmont Shares" means the number of shares of our common stock
(including the fractional number of a share of our common stock
underlying Newmont CDIs) which would but for section 5.1(d) otherwise
have been allotted to you; and
"TSA" means the total number of shares of our common stock (including
shares underlying Newmont CDIs) allotted to the nominee under section
5.1(b) or (d) in respect of the shares of our common stock (including
shares underlying Newmont CDIs) held by shareholders and ADS holders
affected by these sections.
If your registered address on the Normandy shareholder register or
Normandy ADS register maintained by Normandy's depositary is within
Australia, you will receive your share of the proceeds of this sale in
Australian dollars. If your registered address on the Normandy shareholder
register or Normandy ADS register maintained by Normandy's depositary is
within any other jurisdiction (including the United States and Canada), you
will receive your share of the proceeds of this sale in U.S. dollars. If you
are to receive payment in U.S. dollars, we will convert the Australian
dollar sum into U.S. dollars using the noon buying rate on the date of the
sale by the nominee, as published by the Federal Reserve Bank of New York.
Payment will be made by check posted to you at your risk by ordinary mail at
the address provided on your Acceptance Form or ADS Letter of Transmittal.
Under no circumstances will interest be paid on your share of the
proceeds of this sale, regardless of any delay in remitting these proceeds
to you.
(e) Where the ADS Letter of Transmittal requires an additional document
to be delivered with your ADS Letter of Transmittal (such as your Normandy
ADRs), such document must be delivered with, and at the same time as, your
ADS Letter of Transmittal.
5.12 WITHDRAWAL OR TERMINATION OF THIS OFFER
We may withdraw unaccepted offers with the written consent of ASIC, which
consent may be given subject to such conditions (if any) as are specified in
the consent. Notice of any withdrawal will be given to ASX, Normandy and to
each person to whom an offer has been made.
5.13 VARIATION OF THIS OFFER
We may at any time, and from time to time, vary the offer in accordance with
the Corporations Act.
In the event that we vary the offer, we are obliged under the Corporations
Act to notify Normandy, the ASX and every Normandy shareholder (including
Normandy ADS holders) of such variation, so long as the variation is not an
extension of the offer period subsequent to the offer being declared
unconditional in all respects, in which case such notice will only go to
Normandy shareholders (including Normandy ADS holders) who have not previously
accepted the offer.
Under Australian law, all Normandy shareholders and Normandy ADS holders who
accept the offer will be entitled to the benefit of any variation of the offer
which improves the consideration offered, even if that occurs after the
Normandy shareholder's or Normandy ADS holder's acceptance is received. Under
the Corporations Act, we are not permitted to vary the offer to decrease the
number of ordinary shares of Normandy (including in the form of Normandy ADSs)
that are being sought in the offer.
62
5.14 STAMP DUTY AND BROKERAGE FEES
If your ordinary shares of Normandy or Normandy ADSs are registered in your
name and you deliver them directly to us or the ADS exchange agent, as
appropriate, you will not incur any brokerage or other transaction fees in
connection with your acceptance of the offer. If you hold your ordinary shares
of Normandy or Normandy ADSs through a bank, broker or other nominee, you
should ask your bank, broker or other nominee whether it will charge any
transaction fees or service charges in connection with your acceptance of this
offer.
Any stamp duty payable in respect of transfers of ordinary shares of
Normandy and Normandy ADSs to us pursuant to the offer will be paid by us.
5.15 COSTS AND TAXES
All costs and expenses of the preparation of this offer document and of the
preparation and circulation of the offer will be paid by us.
No Australian goods and services tax is payable as a consequence of the
offer.
5.16 NOTICES
(a) Any notices to be given by us to Normandy may be given to Normandy by
leaving them at, or sending them by prepaid ordinary post to, the registered
office of Normandy or by sending them by facsimile transmission to Normandy
at its registered office.
(b) Any notices to be given to us by you or by Normandy under the bid may
be given to us by leaving them at or sending them by prepaid ordinary post
to us at one of the addresses referred to in section 5.4(b).
(c) Any notices to be given by us to you may be given to you by leaving
them at or sending them by prepaid ordinary post or if your address is
outside Australia, by airmail, to your address as shown in the register of
members of Normandy.
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9 INFORMATION ABOUT NORMANDY
9.1 DISCLAIMER INFORMATION IN RELATION TO NORMANDY
We conducted a due diligence review of limited information and documents
made available by Normandy to us before announcing our offer. Information
included in this offer document relating to Normandy and its business is based
on publicly available information about Normandy, including Normandy's 2001
annual report and quarterly activities report for the quarter ended September
30, 2001 and Normandy's target statement.
Pursuant to Rule 409 promulgated under the U.S. Securities Act of 1933, on
December 17, 2001, we requested that Normandy and its independent public
accountants provide to us all material information required to be included in
this offer document or required to make statements made herein not misleading.
On December 11, 2001, we requested that Normandy's independent public
accountants consent in a customary manner to the inclusion of its audit reports
with respect to the financial statements of Normandy included in this offer
document. On December 14, 2001, Normandy's independent public accountants
responded in writing to our December 11, 2001 letter stating that they were
reluctant to give consent for the inclusion of its audit report where consent
has not been given for the financial statements themselves, and believed it was
appropriate that its consent be given concurrently with Normandy's consent. On
December 19, 2001, Normandy, on its own behalf and on behalf of its
accountants, responded in writing to our December 17, 2001 letter and stated
that it was not appropriate for Normandy to bear any burden as to what the
offer document should contain and whether or not such document was misleading.
Normandy further stated that if there were specifics which Newmont wished to
refer to Normandy for review and comment, Normandy would consider whether it
could be of assistance and to what extent, on a case by case basis. In
addition, Normandy stated that its accountants were not in a position to
provide assistance to us, that work on US GAAP reconciliation of its financial
statements had not been completed to Normandy's satisfaction and that Normandy
had not yet determined whether it would allow US GAAP reconciliation of its
financial statements to be made public at this time.
On December 31, 2001, we reiterated our requests previously made to Normandy
to provide the information required for inclusion in our United States filings,
including the consent of Normandy's independent accountants and the information
necessary to permit Normandy's financial statements to be reconciled to US
GAAP. On January 2, 2002, Normandy responded to Newmont's reiterated request
stating that Normandy had carefully considered our requests and determined that
it must maintain Normandy's stance as expressed in Normandy's letter dated
December 19, 2001. Normandy stated that in its opinion it was not appropriate
that Normandy or its directors should have any legal responsibility for the
content of Newmont's registration statement. Normandy noted that the issue was
deliberately not covered in the pre-bid documentation because Normandy was not
prepared to take responsibility for the content of Newmont's offer document or
registration statement and that, in Normandy's opinion, responsibility for the
content of the Newmont registration statement must remain with Newmont.
Normandy also noted that its own work on US GAAP reconciliation was still not
complete and, therefore, Normandy's directors were not prepared to permit the
publication of US GAAP reconciliations of Normandy's accounts. Normandy also
noted that it did not know whether its work on US GAAP reconciliation would
ever be completed, in view of the two competing bids and their announced
timeframes. See Section 4.3 "Reasons for and background to the
transactions--Background to the transactions" on page 40. For further
information, see section 9.3, "--Presentation of Normandy accounting
information" on page 106. We will provide any and all information that we
receive from Normandy or its independent accountants prior to the expiration of
the offer that we deem material, reliable and appropriate in a subsequently
prepared amendment or supplement hereto.
While we have included information in this offer document concerning
Normandy that is known to us based on publicly available information, other
than as described above, we have not had access to material non-public
information regarding Normandy and could not use any such information for the
purpose of preparing this offer document. Although we have no knowledge that
would indicate that statements relating to Normandy contained in this offer
document are inaccurate or incomplete, we are not in a position to verify
information concerning Normandy. We and our respective directors and officers
are not aware of any errors in such information.
100
The due diligence was conducted pursuant to a Confidentiality Agreement, a
term of which is as follows:
"NORMANDY IS NOT AWARE OF ANY MATERIAL INFORMATION IN RELATION TO
NORMANDY WHICH HAS NOT BEEN PROVIDED OR OTHERWISE MADE AVAILABLE TO THE
INDEPENDENT EXPERT WHICH HAS BEEN RETAINED BY NORMANDY FOR THE PURPOSE OF
PROVIDING A REPORT TO BE INCLUDED IN NORMANDY'S TARGET STATEMENT, OR
OTHERWISE INCLUDED IN NORMANDY'S TARGET STATEMENT, WHICH WILL BE ISSUED IN
RESPONSE TO THE OFF-MARKET BID FOR ANGLOGOLD LIMITED IN RESPECT OF WHICH A
BIDDER'S STATEMENT DATED OCTOBER 17, 2001 WAS SERVED ON NORMANDY."
Subsequent to the completion of the due diligence, and prior to the
announcement of our bid, we and Normandy entered into the deeds of undertaking
described in section 14.1, "Certain relationships and transactions with respect
to Newmont, Normandy and Franco-Nevada--Deeds of Undertaking" on page 146.
Normandy gave a number of warranties to us in the deed of undertaking,
including a warranty that:
"The Normandy Board and the Normandy Senior Management are not aware of
any information being information otherwise liable to be disclosed under ASX
listing rule 3.1 which has not been publicly disclosed by Normandy in
reliance on the carve out from disclosure which is contained in ASX listing
rule 3.1 which has not been provided to the expert for review in connection
with the preparation of the independent expert's report which is to
accompany the Normandy Target's Statement which will be given in response to
the AngloGold Bidder's Statement dated 16 October 2001 and AngloGold's F-4
Registration Statement dated 9 November 2001."
We are not aware of any non-public information of Normandy, of which we
became aware in the course of the due diligence referred to above, being
information which:
. is not set out or referred to in this offer document, in Normandy's
target statement or being information which has not otherwise been made
available publicly by Normandy; and
. is material to a decision by a Normandy shareholder whether or not to
accept our offer.
We are not able to verify the information provided by Normandy. Normandy
shareholders and Normandy ADS holders should form their own views concerning
Normandy from the full range of public information available concerning
Normandy. In particular, Normandy shareholders and Normandy ADS holders should
carefully consider the disclosures made by Normandy and its directors
concerning Normandy in response to the offer.
9.2 GENERAL DESCRIPTION OF NORMANDY'S OPERATIONS
Normandy is a gold company with extensive production and exploration
interests. Normandy has operations in Australia, the United States, New
Zealand, Turkey, Chile, Brazil and Canada. Normandy is also a producer of zinc
concentrate (from Golden Grove), cobalt (from Kasese) and magnesium (from
Australian Magnesium Corporation Limited).
A detailed description of Normandy's operations and investments has been
included in section 7, "Information about New Newmont" on page 66.
GOLD OPERATIONS
During the financial year ended June 30, 2001, Normandy had attributable
gold production of 2.2 million ounces. In addition to its directly owned gold
assets, Normandy has major interests in two ASX listed gold companies, Normandy
NFM Limited (87.5%) and Normandy Mt. Leyshon Limited (13.7%).
101
In May 2001, Normandy acquired 100% ownership of the Midas gold mine and 105
square kilometers of highly prospective adjoining tenements. This transaction
positions Normandy in the Carlin Trend of northern Nevada, in the United
States. A strategic alliance with TVX Gold Inc. in May 1999 formed TVX Normandy
Americas (Normandy 49.9%), delivering attributable gold production to Normandy
of approximately 250,000 ounces from five mines in North and South America.
AUSTRALIA
KALGOORLIE OPERATIONS (50%). The Kalgoorlie operations comprise the Super
Pit and Mt. Charlotte underground mine at Kalgoorlie-Boulder, 600 km east of
Perth in the Eastern Goldfields.
BODDINGTON MINE (44.4%). Boddington, a large-scale open pit mining
operation, is located 120 km southeast of Perth.
YANDAL OPERATIONS (100%). Yandal operations comprise the Bronzewing, Jundee
and Wiluna mines, situated in the prospective Yandal Goldfield of Western
Australia.
TANAMI OPERATIONS (87.5%). The Tanami operations comprise The Granites,
located approximately 550 km by road northwest of Alice Springs, and Dead
Bullock Soak, about 40 km west of The Granites, and are owned by Normandy NFM
Limited, a publicly listed, 87.5% owned, subsidiary of Normandy. Dead Bullock
Soak operations comprise Callie underground and Villa, Triumph Hill and
Colliwobble open pits. The Tanami operations include the Goldrush deposit. Ore
from this deposit will be processed at the Tanami plant (owned by Otter Gold
Mining Limited and Newmont) under a lease arrangement. Mining of this deposit
commenced in mid-September 2001 and gold production will commence in
mid-December 2001.
MT. LEYSHON (13.7%). The Mt. Leyshon mine, 24 km south of Charters Towers,
Queensland, is owned by Normandy Mt. Leyshon Limited, a publicly listed company
13.7% owned by Normandy. This large-scale open pit ceased mining operations in
February 2001. A comprehensive mine closure and rehabilitation plan covering
remaining operations, closure, rehabilitation, decommissioning and post-closure
monitoring has been implemented.
PAJINGO OPERATIONS (50%). The Vera-Nancy mine, on the Pajingo Joint Venture
tenements, is located 50 km southeast of Charters Towers in North Queensland.
UNITED STATES OF AMERICA
MIDAS MINE (100%). The Midas mine is approximately 100 km northwest of the
regional center of Winnemucca in northern Nevada, United States. Normandy
acquired its 100% interest in the mine and 105 square kilometers of adjoining
tenements in May 2001.
NEW ZEALAND
MARTHA MINE (67.06%). The Martha gold mine is located within the town of
Waihi.
TURKEY
OVACIK (100%). Construction of the Ovacik gold mine in Turkey was completed
in December 1997. Commencement of production was delayed. Production has now
commenced with the first gold produced in May 2001. The mine, however, is the
subject of a regulatory action which could result in its closure.
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TVX NORMANDY AMERICAS
Normandy formed a strategic alliance with Canadian-based TVX Gold Inc.,
creating a new company, TVX Normandy Americas (owned 49.9% by Normandy and
50.1% by TVX Gold Inc.). The principal assets of the company are five operating
gold mines in the Americas, as follows:
. Paracatu (Brazil, 49%),
. La Coipa (Chile, 50%),
. New Britannia (Canada, 50%), and
. Musselwhite (Canada, 32%).
In addition, TVX and Normandy each own a 25% interest in the Crixas property
in Brazil.
ADDITIONAL GOLD PROJECTS
YAMFO-SEFWI (90%). Yamfo-Sefwi is a new gold belt in western Ghana, with
Normandy holding licenses covering 95 strike km.
PERAMA (80%). The Perama gold deposit is located 25 km northwest of
Alexandroupolis in northeastern Greece. Normandy and its joint venture partners
hold a strong tenement position covering about 450 square kilometers. The area
is considered prospective for the occurrence of gold deposits.
MASTRA (100%). The Mastra gold deposit is located in the Black Sea region of
northeastern Turkey.
NON-GOLD METALS OPERATIONS
Normandy is also a base metals producer. Production from the Golden Grove
operations in Western Australia for the financial year ended June 30, 2001
totaled 182,655 tonnes of zinc concentrate and 52,807 tonnes of copper
concentrate, plus significant lead and silver. Normandy also has an effective
53.9% interest in the Kasese cobalt project, located in western Uganda.
GOLDEN GROVE OPERATIONS (100%). Golden Grove operations are located in
Western Australia, 230 km east of the port of Geraldton and 50 km southeast of
Yalgoo, and comprise the Scuddles mine and treatment plant, the Gossan Hill
mine and exploration tenements covering the 35 kilometer-long host horizon, a
sequence of acid-volcanogenic rocks of Archaean age.
KASESE COBALT (BANFF RESOURCES 63%). Banff Resources Limited, a company
listed on the Canadian Venture Exchange, has a 63% interest in the Kasese
cobalt project in Uganda, Africa. Normandy presently holds a controlling 86%
interest in Banff Resources.
AUSTRALIAN MAGNESIUM CORPORATION LIMITED
Normandy currently has a 22.8% voting interest (and a 13.9% equity interest)
in Australian Magnesium Corporation Limited, one of the world's largest
integrated magnesia and magnesium companies. Major activities of Australian
Magnesium Corporation Limited are QMag, Enviromag and the development of a
A$1.6 billion Stanwell Magnesium Project.
Australian Magnesium Corporation Limited is an Australian publicly listed
company based in Brisbane which developed and is now seeking to commercialize
the Australian Magnesium process technology to produce magnesium metal. The AM
process is expected to produce magnesium metal at the lowest cost in the world.
This is done through a number of chemical processes. The process aims to
minimize all effluents and, where possible, recycle them for other purposes.
103
Following development of the technology of the AM process, Australian
Magnesium Corporation Limited entered into an agreement in January 1997 with
Ford Motor Company of America, Commonwealth Scientific and Industrial Research
Organisation and Fluor Daniel Pty Ltd to construct a 1,500 tpa demonstration
plant and to complete a full feasibility study. The viability of the AM process
was confirmed following successful production of magnesium metal ingots from
the operational demonstration plant in August 1999. In March 2000, Australian
Magnesium Corporation Limited announced a positive feasibility recommendation
for the proposed commercial plant, located at Stanwell, near Rockhampton in
Queensland. Australian Magnesium Corporation Limited has also committed to
selling 45,000 tpa of magnesium alloy to Ford under a long-term contract.
RESOURCE. In January 1997, Australian Magnesium Corporation Limited acquired
the freehold title to an area within the Kunwarara magnesite deposit to source
sufficient magnesite to run the commercial plant at its planned initial
capacity. The Kunwarara magnesite deposit which covers an area of 63 square
kilometers, is located 70 km and 160 km northwest of Rockhampton and Gladstone,
respectively.
QMAG. Australian Magnesium Corporation Limited produces a range of
dead-burned and electrofused magnesia products sold to the world's refractory
industry as a raw material for high-quality basic refractory bricks
RECENT DEVELOPMENTS
In May 2001, Normandy acquired 100% ownership in the Midas gold mine and 105
square kilometers of highly prospective adjoining tenements. This transaction
positions Normandy in the prolific gold-producing Carlin Trend of northern
Nevada in the United States.
On June 5, 2001, Australian Magnesium Corporation Limited announced the
finalization of a A$932 million underwritten debt financing for the development
of its Stanwell Magnesium Project.
On July 20, 2001, Australian Magnesium Corporation Limited announced that it
had withdrawn the A$680 million equity offering to complete funding development
for its Stanwell Magnesium Project.
On August 14, 2001, Normandy Mt Leyshon Limited announced that, due to the
scheduled closure of the Mt Leyshon mine in February 2002, the directors of
Normandy Mt Leyshon Limited had proposed a cash distribution of A$0.33 per
share and a restructuring of the company as an alternative to orderly
liquidation. The new company would have a specific strategic focus on
exploration and would hold tenements in the Mt Leyshon district as well as a
portfolio of exploration properties, including tenements in the Musgrave region
of Western Australia and in the Kidston, Agate Creek and Cloncurry regions of
Queensland, Australia. As part of the transfer of the tenement package,
Normandy would be issued with shares representing 12% of the new company. In
the announcement of August 14, 2001, Normandy Mt. Leyshon Limited stated that
if these proposals are not approved by its shareholders, Normandy Mt Leyshon
Limited intends to make an interim distribution of A$0.25 per share with the
prospect of a final distribution of between A$0.10 and A$0.15 per share.
On September 5, 2001, AngloGold announced its intention to offer to acquire
all the outstanding shares of Normandy for 2.15 AngloGold shares in exchange
for every 100 ordinary shares of Normandy. On that same day, Normandy responded
to AngloGold's offer by announcing that it had appointed Macquarie Bank to
assist Normandy's board of directors in assessing AngloGold's offer and in
preparing a formal recommendation to Normandy shareholders and Normandy ADS
holders with respect to AngloGold's offer.
On September 27, 2001, Australian Magnesium Corporation Limited announced
that, due to unstable conditions in equity and capital markets, it is reviewing
the timing of its equity raising to fund the development of the Stanwell
Magnesium Project.
On September 28, 2001, Normandy published its annual shareholder report
including audited consolidated financial statements for the financial year
ended June 30, 2001. Excerpts from the annual shareholder report are included
under Annex B to this offer document.
104
On October 11, 2001, Normandy NFM Limited announced its intention to launch
an offer for Otter Gold Mines Limited, whereby 1.9 Normandy NFM Limited shares
will be offered for every 100 Otter shares. Normandy NFM Limited also agreed on
that date to purchase 7,798,000 Otter shares (9.9% of the outstanding Otter
shares) from the Guiness Peat Group at the same exchange ratio being offered to
other Otter shareholders. Otter's primary assets are a 60% interest in the
Tanami Joint Venture (the other 40% is held by AngloGold), owner of the Tanami
mill, significant exploration properties held 100% in the Tanami region of
Central Australia and a 33% interest in the Waihi Operations in New Zealand,
held through Martha Hill and Union Hill joint ventures, the remaining 67%
interest in which is held by Normandy. According to publicly available
information published by Normandy NFM Limited, as at October 9, 2001, Normandy
is the largest shareholder of Normandy NFM Limited with an 87.45% interest.
On October 15, 2001, Australian Magnesium Corporation Limited announced
revised arrangements for a capital raising of up to A$525 million for the
development of the Stanwell Magnesium Project. On the same date, Normandy
announced that, as part of and conditional on these capital raising plans, it
has agreed to subscribe for A$100 million of shares in Australian Magnesium
Corporation Limited between October 31, 2002 and January 31, 2003 and that it
has increased its loan facilities available to Australian Magnesium Corporation
Limited by A$10.6 million to fund expenses of the Stanwell Magnesium Project
until completion of the capital raising.
On October 25, 2001, Normandy published its first quarter report to
shareholders including unaudited condensed financial information for the three
months ended September 30, 2001. Excerpts from the first quarter report to
shareholders are included under Annex B to this offer document.
On November 14, 2000, Normandy, Newmont and Franco-Nevada announced that
Newmont intended to make a recommended offer of 0.0385 shares of Newmont common
stock for each Normandy share. In addition, Newmont offered to pay A$0.05 per
Normandy share in cash if the Newmont offer was accepted by holders of at least
90% of the Normandy shares. Newmont also agreed to acquire Franco-Nevada in a
stock-for-stock transaction, in which Franco-Nevada common shareholders will
receive 0.8 a share of Newmont common stock (or exchangeable shares,
exchangeable for Newmont common stock) for each share of Franco-Nevada common
stock pursuant to a Canadian plan of arrangement.
On November 19, 2001, Normandy published its response document in which the
Normandy board of directors recommended that holders of Normandy shares and
Normandy ADSs not accept AngloGold's previous offer to acquire all of the
outstanding Normandy shares for 2.15 AngloGold shares in exchange for every 100
Normandy shares. The board of directors of Normandy has not yet made a
recommendation to the Normandy shareholders and Normandy ADS holders regarding
the revised terms of the AngloGold offer.
On November 19, 2001, Australian Magnesium Corporation Limited announced
that it had closed its previously announced A$500 million public offer capital
raising and would accept $25 million in oversubscriptions.
On November 22, 2001, Normandy Mt. Leyshon Limited announced that the
restructure of the company had been completed. The company changed its name to
Leyshon Resources Limited and will operate with a new board and management and
with an initial focus on exploration of tenements acquired from Normandy.
On November 23, 2001, Australian Magnesium Corporation Limited confirmed
that it had completed the allotment of 660,258,713 Distribution Entitled
Securities on November 22, 2001.
On November 28, 2001, AngloGold raised its offer for ordinary shares of
Normandy to 2.15 AngloGold shares for every 100 ordinary shares of Normandy,
plus A$0.20 per share.
On December 6, 2001, Normandy NFM Limited announced that it had lodged its
offer document regarding the Otter Gold Mines takeover offer with the NZSE and
ASX.
On December 6, 2001, AngloGold withdrew arrangements to pay higher fees to
brokers who solicit acceptances to its offer in light of Newmont's application
for a restraining order.
105
On December 9, 2001, Newmont increased the cash component of its November
14, 2001 offer to A$0.40 per ordinary share of Normandy and removed the
condition that Newmont pay the cash component only if its offer was accepted by
holders of at least 90% of the Normandy shares.
On December 12, 2001, the Australian Takeover Panel refused AngloGold's
application to block this offer.
On December 13, 2001 AngloGold announced that it would appeal a ruling by
Australia's Takeover Panel. On December 20, 2001, the Takeover Panel declined
AngloGold's appeal. On December 21, the Takeover Panel announced that it had
declined to make a declaration of unacceptable circumstances in the application
for review.
On December 27, 2001, AngloGold announced that it had increased its offer
for Normandy by and additional A$0.10 in cash per Normandy share following
discussions regarding "possible patterns of cooperation" with Barrick. See
Section 4.3 "Reasons for and background to the transactions--Background to the
transactions" on page 40.
On January 2, 2002, Newmont announced that it was increasing the cash
consideration of its offer for Normandy by A$0.10 to A$0.50 per share. On the
same date, the Normandy board of directors, subject to its fiduciary duties,
re-affirmed its recommendation of the Newmont offer, as revised, and its
recommendation that Normandy shareholders reject the AngloGold offer. See
Section 4.3 "Reasons for and background to the transactions--Background to the
transactions" on page 40.
Normandy La Source has accepted an offer of US$10.7 million plus a royalty
for its interest in the Ity goldmine, as disclosed in Normandy's supplementary
target statement.
9.3 PRESENTATION OF NORMANDY ACCOUNTING INFORMATION
Normandy prepares and publishes its consolidated financial statements in
accordance with Australian GAAP. Except where expressly stated otherwise, all
financial information relating to Normandy presented in this offer document has
been prepared in accordance with Australian GAAP.
Normandy's financial data is presented in accordance with Australian GAAP,
which differs in certain significant respects from US GAAP. These differences
as they relate to Normandy cannot be fully quantified due to the limited
disclosure provided in publicly available financial information. Pursuant to
Rule 409 promulgated under the U.S. Securities Act of 1933, on December 17,
2001, we requested that Normandy and its independent public accountants provide
to us all material information required to be included in this offer document
or required to make statements made herein not misleading. On December 11,
2001, we requested that Normandy's independent public accountants consent in a
customary manner to the inclusion of its audit reports with respect to the
financial statements of Normandy included in this offer document. On December
14, 2001, Normandy's independent public accountants responded in writing to our
December 11, 2001 letter stating that they were reluctant to give consent for
the inclusion of its audit report where consent has not been given for the
financial statements themselves, and believed it was appropriate that its
consent be given concurrently with Normandy's consent. On December 19, 2001,
Normandy, on its own behalf and on behalf of its accountants, responded in
writing to our December 17, 2001 letter and stated that it was not appropriate
for Normandy to bear any burden as to what the offer document should contain
and whether or not such document was misleading. Normandy further stated that
if there were specifics which Newmont wished to refer to Normandy for review
and comment, Normandy would consider whether it could be of assistance and to
what extent, on a case by case basis. In addition, Normandy stated that its
accountants were not in a position to provide assistance to us, that work on US
GAAP reconciliation of its financial statements had not been completed to
Normandy's satisfaction and that Normandy had not yet determined whether it
would allow US GAAP reconciliation of its financial statements to be made
public at this time.
On December 31, 2001, we reiterated our requests previously made to Normandy to
provide the information required for inclusion in our United States filings,
including the consent of Normandy's independent accountants and the information
necessary to permit Normandy's financial statements to be reconciled to US
GAAP. On
106
January 2, 2002, Normandy responded to Newmont's reiterated request stating
that Normandy had carefully considered our requests and determined that it must
maintain Normandy's stance as expressed in Normandy's letter dated December 19,
2001. Normandy stated that in its opinion it was not appropriate that Normandy
or its directors should have any legal responsibility for the content of
Newmont's registration statement. Normandy noted that the issue was
deliberately not covered in the pre-bid documentation because Normandy was not
prepared to take responsibility for the content of Newmont's offer document or
registration statement and that, in Normandy's opinion responsibility for the
content of the Newmont registration statement must remain with Newmont.
Normandy also noted that its own work on US GAAP reconciliation was still not
complete and, therefore, Normandy's directors were not prepared to permit the
publication of US GAAP reconciliations of Normandy's accounts. Normandy also
noted that it did not know whether its work on US GAAP reconciliation would
ever be completed, in view of the two competing bids and their announced
timeframes. See Section 4.3 "Reasons for and background to the
transactions--Background to the transactions" on page 40.
KEY DIFFERENCES BETWEEN AUSTRALIAN GAAP AND US GAAP
Certain historical financial information for Normandy is included in this
offer document and Annex B to this offer document. This historical information
for Normandy is presented in accordance with accounting principles generally
accepted in Australia ("Australian GAAP"), which differs in certain significant
respects from US GAAP. These differences as they relate to Normandy cannot be
quantified due to the limited disclosures provided in publicly available
financial information. See Section 3.1, "Risk factors--Risks related to the
offer--We have not verified the reliability of the Normandy information
included in, or which may have been omitted from, this offer document" on page
27.
The key differences between Australian GAAP and US GAAP are as follows:
. EXPLORATION COSTS. US GAAP requires that all costs associated with ongoing
exploration efforts be expensed until development of an ore-body commences
or a bankable feasibility study on proven and probable reserves exists.
Australian GAAP allows for the capitalization of exploration costs
provided the rights to the exploration area are current and provided that
at least one of the following conditions are met:
. Such costs are expected to be recouped through successful development
and exploitation or alternatively by sale of the area of interest, or
. Exploration activities in the area of interest have not reached a stage
at the balance sheet date which permits a reasonable assessment of the
existence or otherwise of economically recoverable reserves.
. REVENUE RECOGNITION. US GAAP requires that specific criteria be met
including final delivery to the purchaser having occurred. Australian GAAP
requires that revenue be recognized when control passes to the purchaser,
which is determined by a combination of factors, one of which would
include delivery.
. INVENTORY. US GAAP requires inventory to be recorded at the lower of net
realizable value or cost. Australian GAAP allows gold bullion in its final
saleable form to be recorded at specific hedge contract amounts.
. CAPITALIZED INTEREST. US GAAP requires interest to be capitalized for all
assets in construction to the extent outstanding borrowings exist.
Australian GAAP only allows interest on specific project related
indebtedness to be capitalized.
. DERIVATIVE INSTRUMENTS. US GAAP requires all derivatives to be recorded at
fair value. Qualifying derivatives may qualify for special hedge
accounting allowing for the deferral of recognition of the change in the
effective portion of the derivative instrument. Australian GAAP does not
require derivatives to be recorded at fair value and hedge accounting may
be applied in specified circumstances. Disclosure of fair value is
required.
. GOODWILL. US GAAP does not allow for amortization of goodwill. Australian
GAAP limits the amortization period to 20 years, subject to recoverability
tests.
107
. MINORITY INTEREST. US GAAP requires minority interest to be a separate
component of the balance sheet outside of equity. Australian GAAP requires
minority interest to be classified as a component of shareholders equity.
Additionally, US GAAP reports minority interest at book value while
Australian GAAP measures minority interest at fair value on the date the
entity becomes a subsidiary.
. DIVIDENDS PAYABLE. US GAAP classifies dividends payable in equity.
Australian GAAP presents dividends payable as a liability.
. PENSIONS AND EMPLOYEE BENEFITS. US GAAP measures such amounts at nominal
amounts. Australian GAAP measures the non-current portion at the present
value of expected future cash outflows.
. START-UP COSTS. US GAAP requires that all start-up costs be expensed as
incurred. There are no provisions for capitalizing start up costs under
Australian GAAP. In accordance with the 'matching' principle, start up
costs may be deferred and amortized provided the start-up costs meet the
definition of an asset.
. DEFERRED TAXES. US GAAP provides for netting of deferred tax assets and
liabilities arising in the same taxing jurisdiction within each current
and non-current category. Under Australian GAAP, there is no provision for
netting deferred tax assets and liabilities of different companies within
a group in a consolidated set of accounts. Under US GAAP, deferred tax
assets for temporary differences and carryforward losses are recognized,
but reduced by a valuation allowance to the extent it is more likely than
not that the asset will be realized. Under Australian GAAP, there is
recognition of deferred tax assets on temporary differences if realization
is beyond reasonable doubt, and there is recognition of deferred tax
assets on carryforward losses if realization is virtually certain.
9.4 SELECTED FINANCIAL INFORMATION FOR NORMANDY
The following table sets forth selected historical financial data of
Normandy for each of the five years ended and as at June 30, 2001 and the
three-month periods ended September 30, 2000 and 2001. The selected historical
financial data for the five-year period ended June 30, 2001 has been extracted
from, and should be read in conjunction with, Normandy's audited annual
consolidated financial statements for the five-year period ended June 30, 2001,
including the notes thereto, included in Normandy's annual shareholder reports
prepared for those financial years. The selected historical financial data for
the three months ended September 30, 2000 and 2001 has been extracted from, and
should be read in conjunction with, Normandy's unaudited simplified financial
statements for these periods, including the notes thereto, included in
Normandy's reports on activities to shareholders for each of the three-month
periods ended September 30, 2000 and 2001. Normandy's audited annual
consolidated financial statements for each of the three years ended June 30,
2001, including the notes thereto, as extracted from Normandy's annual
shareholder reports, as well as Normandy's unaudited simplified financial
statements for the three months ended and as at September 30, 2001, including
the notes thereto, as extracted from Normandy's report on activities to
shareholders, have been reproduced in Annex B to this offer document.
Under U.S. securities laws, pro forma financial information for Normandy
would generally be required to be provided in this offer document. However,
Normandy has declined to assist in gathering this information and has not
provided Newmont access to Normandy's detailed accounting records, nor has
Normandy assisted in preparing reconciliations to US GAAP. Normandy has also
refused to permit or direct its auditors to provide information necessary for
such US GAAP reconciliation, including an auditor's consent. Therefore, no such
US GAAP reconciliation is provided, nor is any pro forma financial information
provided in this offer document. See Section 3.1, "Risk factors--Risks related
to the offer--We have not verified the reliability of the Normandy information
included in, or which may have been omitted from, this offer document" on page
27. We note that Normandy's historical financial data is presented in this
offer document in accordance with Australian GAAP, which differs in certain
significant respects from US GAAP. See Section 9.3, "Information about
Normandy--Presentation of Normandy accounting information--Key Differences
between Australian GAAP and US GAAP" on page 107. These differences as they
relate to Normandy cannot be quantified due to the limited disclosures provided
in Normandy's publicly available financial information.
108
The selected historical financial data for the five years ended and as at
June 30, 2001 were prepared in Australian dollars as prescribed by Australian
law and in accordance with Australian Accounting Standards. Except where
expressly stated otherwise, the financial information presented in this offer
document relating to Normandy is expressed in Australian dollars. For
information on the exchange rates between Australian dollars and U.S. dollars,
and Canadian dollars and U.S. dollars, see section 15.8, "Additional
Information--Selected exchange rate data" on page 163.
THREE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED JUNE 30,
------------ ---------------------------------
2001 2000 2001 2000 1999 1998 1997
----- ---- ----- ----- ----- ----- -----
A$M A$M A$M A$M A$M A$M A$M
CONSOLIDATED STATEMENT OF INCOME
Sales revenue......................................... 430 * 1,544 1,324 1,356 1,484 1,334
Total depreciation and amortization................... (72) (62) (287) (141) (160) (191) (166)
Profit/(loss) from ordinary activities(1)............. 52 39 (103) (285) 113 140 206
Income tax (expense) benefit relating to ordinary
activities........................................... (12) (8) (20) 9 (32) (33) (61)
Net profit/(loss) attributable to members of the
parent entity........................................ 35 31 (155) (282) 104 119 124
OTHER FINANCIAL DATA
Basic earnings/(loss) per share (in Australian cents
per share)(2)........................................ * * (8.6) (16.2) 6.1 7.2 7.8
Dividends per share (in Australian cents per share)... -- -- 2.5 6.0 6.0 6.0 6.0
Total cash costs (A$/ounce)(3)........................ 310 298 300 304 335 321 336
CONSOLIDATED BALANCE SHEET DATA (AS AT END OF PERIOD)
Current assets........................................ 870 800 672 838 570 595
Non-current assets.................................... 3,088 3,047 2,954 2,560 2,506 2,020
Total assets.......................................... 3,958 3,847 3,626 3,397 3,076 2,615
Current liabilities................................... 622 603 523 907 366 507
Non-current liabilities............................... 1,899 1,846 2,117 1,117 1,212 731
Total liabilities..................................... 2,521 2,449 2,640 2,024 1,578 1,238
Net assets............................................ 1,437 1,398 986 1,373 1,498 1,377
Stockholders equity................................... 1,437 1,398 986 1,373 1,498 1,377
SHARES IN ISSUE (IN MILLIONS)......................... 2,231 2,231 1,752 1,717 1,671 1,632
- --------
* This information has not been publicly disclosed by Normandy.
(1) Prior to the year ended June 30, 2001, information disclosed as operating
profit/(loss) before income tax.
(2) Prior to the year ended June 30, 2001, information disclosed as basic
earnings per share after abnormal items.
(3) A consolidated group cash cost (A$/ounce) is not presented, only cash cost
(A$/ounce) for gold operations is available.
See Annex B for more detailed information on Normandy's historical financial
information.
9.5 WHERE YOU CAN FIND MORE INFORMATION ON NORMANDY
As a reporting issuer in the Province of Ontario, Normandy is required to
file with the Ontario Securities Commission its periodic disclosure documents,
such as its annual audited financial statements, unaudited interim financial
statements, proxy materials and material change reports. These documents are
available through the internet on the System for Electronic Document Analysis
and Retrieval (SEDAR), which can be accessed at http://www.sedar.com.
Ordinary shares of Normandy are listed on the ASX under the symbol "NDY" and
Normandy ADSs are listed on the TSE under the symbol "NDY". You may consult
reports and other information about Normandy that it files pursuant to the
rules of the ASX and the TSE at the offices of the ASX, ASIC and the TSE.
For selected excerpts from Normandy's publicly available documents, see
Annex B. You may also find additional information on Normandy on its website at
http://www.normandy.com.au.
109
10 INFORMATION ABOUT FRANCO-NEVADA
10.1 GENERAL DESCRIPTION OF FRANCO-NEVADA'S OPERATIONS
ABOUT FRANCO-NEVADA
Franco-Nevada was originally incorporated under the Canada Business
Corporations Act on October 5, 1982. It amalgamated by plan of arrangement with
Euro-Nevada Mining Corporation Limited effective September 20, 1999, and its
incorporating documents are articles of arrangement dated September 20, 1999.
The primary business of Franco-Nevada is the acquisition of:
(1) direct interests in mineral properties and, when appropriate, developing
those properties;
(2) royalty interests in producing precious metals mines and precious metals
properties in the development or advanced exploration stage;
(3) direct interests in mineral properties with a view to exploring and
selling, leasing or joint venturing the properties to established mine
operators and retaining royalty interests; and
(4) indirect interests in mineral deposits through strategic interests in
companies that own interests in mineral deposits.
Franco-Nevada has a portfolio of royalty interests covering producing and
non-producing mineral properties located in the United States, Canada,
Australia, South Africa, Indonesia and various Latin American countries.
A detailed description of Franco-Nevada's royalty interests and investments
has been included in section 7, "Information about New Newmont" on page 66.
Franco-Nevada has a portfolio of oil and gas interests in Alberta,
Saskatchewan, Manitoba and the Canadian Arctic and also has various direct and
indirect interests in resource properties located in Nevada, Ontario,
Saskatchewan, Central and South America, the Dominican Republic, Australia,
Indonesia, and South Africa.
Franco-Nevada currently has 25 employees in total: 14 in Canada, and 11 in
the United States.
RECENT TRANSACTIONS
On September 20, 1999, Franco-Nevada and Euro-Nevada Mining Corporation
Limited merged. The name of the amalgamated corporation is Franco-Nevada Mining
Corporation Limited. The merger of Franco-Nevada and Euro-Nevada was accounted
for as a pooling of interests. Euro-Nevada shareholders received 0.77
Franco-Nevada shares for each Euro-Nevada share. At the time of the merger,
Franco-Nevada and Euro-Nevada were two of only four public companies in North
America actively pursuing NSRs and NPIs in mineral properties. Franco-Nevada
and Euro-Nevada shared four executive officers and three directors who
collectively owned 9% and 10% of the common shares of the two companies,
respectively. Management now owns 10% of Franco-Nevada.
During fiscal year 2001, Franco-Nevada:
(1) tendered its 9,576,173 Inco Limited Class VBN Shares to Inco in exchange
for 4,309,277 warrants of Inco and cash proceeds of C$72 million per VBN
share. Each warrant plus $30 is exchangeable for an Inco common share;
and
(2) sold its 2.5% interest in San Juan Basin Royalty Trust, an oil and gas
royalty trust listed on the NYSE. Franco-Nevada held 2,000,000 units.
110
NORMANDY TRANSACTION
On April 2, 2001, Franco-Nevada announced that it had entered into an
agreement with Normandy. On May 30, 2001, the transaction pursuant to this
agreement was completed. Under the terms of the agreement, Franco-Nevada
transferred to Normandy 100% ownership of its Ken Snyder Mine and Midas
exploration properties in Nevada and its Australian interests as well as
subscribe for $48 million in Normandy shares. In return, Franco-Nevada received
446.1 million new ordinary shares of Normandy representing a 19.99% interest
(currently 19.79%, calculated on a fully diluted basis) in Normandy, calculated
on a fully diluted basis. Franco-Nevada also retained a minimum 5% net smelter
return royalty on the Ken Snyder Mine and Midas exploration properties which
escalates at gold prices over $300 per ounce to a maximum 10% net smelter
return royalty at gold prices over US$400 per ounce. Both companies granted
each other preferential rights on future asset transactions.
STOCK EXCHANGES
Franco-Nevada's common shares are listed on the TSE under the symbol "FN",
its class A warrants are listed on the TSE under the symbol "FN.WT" and its
class B warrants are listed on the CDNX under the symbol "YFN.WT.B".
ADDRESS
The registered and principal executive office of Franco-Nevada is at Suite
1900, 20 Eglinton Avenue West, Toronto, Ontario M4R 1 K8.
10.2 SELECTED FINANCIAL INFORMATION FOR FRANCO-NEVADA
The table below shows selected historical financial information for
Franco-Nevada as of and for the years ended March 31, 2001, 2000, 1999, 1998
and 1997 and has been prepared using the audited consolidated financial
statements of Franco-Nevada. The information as of and for the six months ended
September 30, 2001 and 2000 has been prepared using the unaudited consolidated
financial statements of Franco-Nevada. This information is only summary, and
you should read it in conjunction with Franco-Nevada's historical financial
statements and related notes and Management's Discussion and Analysis contained
in Annex C of this document.
SIX MONTHS
SEPTEMBER 30 YEARS ENDED MARCH 31
------------------- -----------------------------------------------
2001 2000 2001 2000 1999 1998 1997
--------- --------- --------- --------- --------- --------- -------
CDN$, CDN GAAP
INCOME STATEMENT
Revenue.......................... 85,440 80,102 177,631 120,577 116,107 124,209 131,479
Income from continuing operations 55,115 44,186 79,872 63,995 63,454 72,628 77,839
Discontinued operations.......... 21,902 16,931 33,573 33,641 5,075 1,074 790
Net Income....................... 77,017 61,117 113,445 97,636 68,529 73,702 78,629
PER SHARE DATA
Income from continuing operations 0.35 0.28 0.51 0.41 0.42 0.49 0.55
Discontinued operations.......... 0.14 0.11 0.21 0.21 0.03 0.01 0.01
Net Income....................... 0.49 0.39 0.72 0.62 0.45 0.50 0.56
Dividend per share............... -- -- 0.35 0.30 0.21 0.19 0.23
BALANCE SHEET DATA
Cash and short term investments.. 864,053 730,099 939,011 705,714 707,507 766,004 636,819
Working capital.................. 932,359 829,992 941,193 739,489 720,467 782,833 637,624
Total assets..................... 1,607,126 1,514,516 1,547,750 1,420,891 1,389,525 1,146,256 932,625
Long term debt................... -- -- -- -- -- -- --
Net assets....................... 1,521,700 1,419,052 1,435,456 1,346,187 1,318,094 1,096,654 888,207
Minority interest................ -- -- -- -- -- -- --
Shareholders' equity............. 1,521,700 1,419,052 1,435,456 1,346,187 1,318,094 1,096,654 888,207
Common shares outstanding (000s). 158,920 158,631 158,631 158,631 158,357 152,293 145,781
See Annex C for more detailed information on Franco-Nevada's historical
financial information.
111
10.3 WHERE YOU CAN FIND MORE INFORMATION ON FRANCO-NEVADA
As a reporting issuer (or its equivalent) in each of the provinces of
Canada, Franco-Nevada is required to file with the various securities
commissions or similar authorities its periodic disclosure documents, such as
its annual audited financial statements, unaudited interim financial
statements, annual reports, annual information forms, proxy materials and
material change reports. These documents are available through the internet on
the System for Electronic Document Analysis and Retrieval (SEDAR), which can be
accessed at http://www.sedar.com.
Securities of Franco-Nevada are listed on the TSE and the CDNX. You may
consult reports and other information about Franco-Nevada that it files
pursuant to the rules of the TSE and CDNX at the offices of the TSE and the
CDNX or you can access their websites at http://www.tse.com and
http://www.cdnx.com.
You may also find additional information on Franco-Nevada on its website at
http://www.franco-nevada.com.
112
11 INTENTIONS
11.1 INTRODUCTION
This section sets out our intentions concerning:
(a) the continuation of the business of Normandy;
(b) any major changes to be made to the business of Normandy, including any
redeployment of the fixed assets of Normandy; and
(c) the future employment of the present employees of Normandy.
You should read this section in conjunction with section 7, "Information
about New Newmont" on page 66.
Our intentions are based on our review of publicly available information
about Normandy and a review of selected non-public information about Normandy,
which is referred to in section 9.1. Prior to implementing the intentions set
out in this section, we will seek to undertake a thorough review of Normandy's
operations and any other internal confidential information and consideration of
any other relevant facts and circumstances to confirm our intentions.
Accordingly, the statements set out in this section are statements of current
intentions only and are based on limited information, which may vary as
circumstances and further information require.
11.2 INTENTIONS IF COMPULSORY ACQUISITION IS ACHIEVED
We have the following intentions if we become entitled to proceed to acquire
compulsorily the remaining Normandy shares (including shares represented by
Normandy ADSs) following completion of the offer:
(a) CORPORATE MATTERS
We intend to:
(1) acquire compulsorily the remaining Normandy shares (including shares
represented by Normandy ADSs) in accordance with the provisions of the
Corporations Act;
(2) seek to acquire compulsorily under the Corporations Act:
(A) Normandy options which have not been exercised prior to the
expiration of the offer, and
(B) any ordinary shares of Normandy issued after the expiration of the
offer as a result of the exercise of Normandy options;
(3) procure that Normandy's shares are removed from the official list of the
ASX and that Normandy applies to the Ontario Securities Commission to
cease to be a reporting issuer in the Province of Ontario and to the TSE
to delist the Normandy ADSs from that exchange;
(4) replace some or all of the members of the board of directors of
Normandy. Our representatives have not yet been identified and their
identity will depend on the circumstances at the relevant time; and
(5) reconstitute our board as outlined in section 7.1.
(b) INTEGRATION OF NEWMONT AND NORMANDY
Newmont and Normandy conduct exploration programs in many of the same
regions around the world. We intend to consolidate these programs and
prioritize exploration projects and expenditures in an optimized and efficient
manner. We intend that exploration activities within Australia will be
conducted on an ongoing basis, although the level of activity in any year will
vary, depending on, among other things, the prevailing gold price and prior
results. We expect to realize certain synergies with respect to this
consolidation effort that may include reduction or redeployment of existing
employees as well as the closure of certain exploration offices.
113
We do not have significant operations in Australia and intend to maintain a
regional office in Australia as a management platform for our Australasian
properties. We intend to maximize both companies' managerial and technical
expertise within New Newmont's worldwide operations and to realize cost savings
from the elimination of selected, redundant administrative functions.
We also intend to realize cost savings from the elimination of selected,
redundant administrative and mine operation functions at Normandy's Midas mine,
which is located near Newmont's mines in Nevada. In addition, we expect to
realize synergies from the application of Newmont's global procurement systems
to Normandy's operations.
(c) NON-CORE ASSETS
(1) GOLD
While we have no immediate intentions of making any major changes to
Normandy's business, we will review Normandy's gold assets over time and make
assessments regarding whether certain of these assets continue to fit into the
longer-term strategy of the combined company.
(2) NON-GOLD
In relation to Normandy's non-gold assets, our intentions are:
(A) GOLDEN GROVE. To continue to operate and maintain capital support for
Golden Grove until zinc and copper commodity prices materially
increase, when consideration will be given to whether a disposal of
the assets can be achieved on appropriate terms;
(B) AUSTRALIAN MAGNESIUM CORPORATION. To honor all of Normandy's
obligations and commitments known to us at the date of announcement
of this offer (being those referred to in the condition in section
5.10(a)(10) above), including those regarding the development of the
Stanwell Magnesium Project. As a gold company, Newmont might, in the
future, consider a possible exit from AMC, but we would not intend to
do so in a manner that would compromise the benefit AMC enjoys as a
result of Normandy's obligations and commitments.
(C) OTHER ASSETS. To dispose of other non-core, non-gold assets of
Normandy, provided appropriate prices can be obtained and appropriate
contractual terms can be negotiated.
11.3 INTENTIONS UPON GAINING CONTROL BUT LESS THAN 90% OF NORMANDY
If we gain control of Normandy but are not entitled to acquire compulsorily
the outstanding ordinary shares of Normandy (including shares represented by
Normandy ADSs), then we currently intend to:
(a) subject to the Corporations Act and the constitution of Normandy,
reconstitute the board of directors of Normandy to reflect our majority
ownership interest in Normandy. Replacement board members have not yet
been identified and their number and identity will depend on the
circumstances at the relevant time;
(b) subject to the ASX Listing Rules and the TSE Listing Rules, request that
the board of directors of Normandy review whether ordinary shares of
Normandy should continue to be listed on the ASX and whether the
Normandy ADSs should continue to be listed on the TSE; and
(c) to the extent possible, implement the intentions outlined above, which
are consistent with Newmont gaining control of Normandy.
We would only make decisions on these courses of action following receipt of
legal, taxation and financial advice and our intentions must be read as subject
to the legal obligation of the Normandy board of directors to comply with all
legal and regulatory requirements and their fiduciary and statutory duties.
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11.4 EFFECTS OF THE OFFER ON THE MARKET FOR ORDINARY SHARES OF NORMANDY AND
NORMANDY ADSS
After the completion of the offer, in addition to the possible effects
outlined in sections 11.2 and 11.3, the number of Normandy shareholders or
Normandy ADS holders and the number of ordinary shares of Normandy or Normandy
ADSs remaining in public circulation may be reduced to a level that there will
be a less active trading market for ordinary shares of Normandy or Normandy
ADSs. This may adversely affect the market price of remaining ordinary shares
of Normandy or Normandy ADSs.
11.5 BUSINESS, ASSETS AND EMPLOYEES
Other than as set out in this section 11, it is our present intention:
(a) to continue the business of Normandy;
(b) not to make any major changes to the business of Normandy and not to
re-deploy any of the fixed assets of Normandy; and
(c) to maintain the employment of substantially all of Normandy's existing
employees.
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15 ADDITIONAL INFORMATION
15.1 SECURITY STRUCTURE OF NORMANDY
To our knowledge, as at November 30, 2001, Normandy has on issue the
following securities:
. 2,232,768,401 ordinary shares of Normandy; and
. 21,544,057 Normandy options.
Franco-Nevada and one of its subsidiaries, which together own 446,100,000
ordinary shares of Normandy, representing 19.79% of the ordinary shares of
Normandy, calculated on a fully-diluted basis, have granted to us the right,
exercisable at our discretion, to acquire their block of ordinary shares of
Normandy at the exchange ratio of our bid for Normandy. Consequently,
immediately before the lodgment of this offer document with ASIC on December
20, 2001, we had a relevant interest in 446,100,000 ordinary shares of
Normandy. Details of that relevant interest are set out in section 14.2. Delta
Acquisition LLC is an associate of Newmont, and thus has voting power in the
446,100,000 Normandy shares. Subject thereto, we did not have a relevant
interest in any other ordinary shares of Normandy or Normandy options at that
time.
Our voting power in Normandy is 19.99% (represented by the 446,100,000
ordinary shares of Normandy referred to above) as at the date of this offer
document and immediately before the offer will be sent to Normandy shareholders.
15.2 NORMANDY OPTIONS
As at November 30, 2001, there were 21,544,057 Normandy options,
convertible into 21,597,982 shares, all of which were issued pursuant to the
Normandy Executive Share Incentive Plan or the Employee Share Bonus Plan. The
offer extends to all ordinary shares of Normandy which are issued prior to the
end of the offer period as a result of Normandy options being exercised.
If at the end of the offer period there are Normandy options which have not
been exercised, then, subject to us being permitted to do so under the
Corporations Act, we intend to seek to acquire compulsorily, under the
provisions of the Corporations Act, any Normandy options which have not been
exercised.
15.3 NORMANDY SECURITIES COVERED BY BID
Offers will be made under the Australian offer document to all holders of
Normandy shares other than those who at the offer date have registered
addresses recorded in the Normandy register of members in either the United
States or Canada.
Offers will also extend to Normandy shares which are issued during the
period commencing on the offer date and ending at the end of the offer period
as a result of the exercise of Normandy options in accordance with their terms.
Offers will be made under the United States offer document to holders of
Normandy shares who, at the offer date, have registered addresses recorded in
Normandy's register of members in either the United States or Canada.
Details of the structure of the offers are provided in section 5.
15.4 SOURCES OF CONSIDERATION
(a) Cash Consideration
The consideration for the acquisition of the Normandy shares to which the
offers relate will be satisfied in part by the payment of cash.
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Assuming that all Normandy options are exercised prior to the commencement
of or during the offer period, and acceptances are received in respect of such
Normandy shares, the total amount of cash that we may become obliged to pay to
offerees under the offers is approximately A$1,127,440,000.
The cash consideration for the offers referred to above and funds to satisfy
our other obligations relating to the offers will be provided under a loan
facility which Delta Acquisition LLC has entered into with Newmont (the "Delta
Facility"). Delta Acquisition LLC is an indirect wholly owned subsidiary of
Newmont. The terms of the Delta Facility are set out in a letter of offer from
Newmont dated December 18, 2001 (varied on January 2, 2002) which has been
accepted by Delta Acquisition LLC. The terms of the Delta Facility are as
follows:
. the amount of the Delta Facility is A$1,127,440,000;
. the funds provided under the Delta Facility are for the purpose of
acquiring the Normandy shares under the offer and paying transaction costs
associated with the offer;
. the basic terms (such as events of default and interest payable) of the
Delta Facility are identical to the terms of the Revolving Credit
Facilities described below;
. the Delta Facility is unsecured; and
. there are no conditions precedent which need to be satisfied by Delta
Acquisition LLC to draw-down under the Delta Facility.
The funds which are to be advanced by Newmont under the Delta Facility will be
provided under banking facilities (the "Revolving Credit Facilities") which
Newmont has entered into with the Chase Manhattan Bank, as agent. The terms of
the Revolving Credit Facilities are set out in two agreements, dated as of
October 10, 2001. The terms of the Revolving Credit Facilities are as follows:
. The amount of the Revolving Credit Facility is US$600,000,000
(US$400,000,000 under the 5 year revolving credit facility and
US$200,000,000 under a 364 Day Facility).
. The funds provided under the Revolving Credit Facilities are for general
corporate purposes.
. Interest rates under the facility are variable, can be fixed for up to six
months at Newmont's option and are subject to adjustment if changes in
Newmont's long term credit rating occur.
. The Revolving Credit Facilities are unsecured. Under the terms of the
Revolving Credit Facilities, there is a negative pledge of the assets of
Newmont as well as two financial covenants: Net debt/capitalization may
not exceed 62.5% and the ratio of Net debt/EBITDA may not exceed 4.0 to
1.0. There are also limitations on Newmont undergoing fundamental business
changes and incurring liens.
. There are no conditions precedent that need to be satisfied by Newmont for
it to draw-down under the Revolving Credit Facilities.
. The events of default are customary events of default for facilities of
this nature, including failure to make repayments of principal and
interest, failure to comply with covenants and insolvency proceedings.
. The representations and warranties to be given on draw-down are the usual
form of representations and warranties, such as valid incorporation and
the absence of default.
. The Revolving Credit Facilities are undrawn.
(b) Shares
We have agreed to issue or procure the issue of sufficient shares of our
common stock to satisfy the consideration payable to Normandy shareholders.
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