Newmont Mining

(NEM) - Get Report

bought 28.5 million shares of Denver miner Queenstake in a private placement at 41 Canadian cents a share.

With this purchase, Newmont will own about 4.9% of Queenstake's basic outstanding common shares.

As part of the private placement, Newmont got a four-year warrant for another 28.5 million common shares at 55 Canadian cents a share. In addition, the affiliates of the company are conveying three of their Nevada exploration properties, including the Shwin Ranch project along the Cortez-Battle Mountain Trend, to Queenstake. Another affiliate of the company is selling concentrates and ore from its Nevada operations to Queenstake for processing at its Jerritt Canyon roasting and milling facility in Northeastern Nevada.

The contract calls for the purchase of about 500,000 tons of concentrates and ore per year over two years.

Newmont said that after a contractual six-month holding period, the shares held by the company may be freely traded in Canada.

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