Filed by Newmont Mining Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Normandy Mining Limited
Commission File No. 132-00965
December 10, 2001, as amended
NEWMONT + NORMANDY + FRANCO-NEVADA =
THE NEW GOLD STANDARD FOR THE 21ST CENTURY
[NEWMONT MINING CORPORATION LOGO]
[FRANCO-NEVADA MINING CORPORATION LIMITED LOGO]
[NORMANDY MINING LIMITED LOGO]
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REVISED BID FOR NORMANDY
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o REVISED OFFER OF A$1.90 PER NORMANDY SHARE (1)
- 0.0385 shares of Newmont
- Cash payment of A$0.40 per share
o CASH OF 40 CENTS OF US $369 MILLION (1), (2) TO BE PAID USING UNDRAWN CREDIT
FACILITIES
o RECOMMENDATION BY NORMANDY BOARD
o TERMS OF FRANCO-NEVADA TRANSACTION UNCHANGED
(1) Market data as of 7 December 2001
(2) Based on 80.1% of Normandy shares reflecting Franco-Nevada interest
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COMPELLING TRANSACTIONS FOR NEWMONT
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o ACCRETIVE TO EARNINGS, NAV AND FREE CASH FLOW
o SIGNIFICANT UPSIDE AT NORMANDY PROPERTIES
o SUCCESSFUL COMPLETION OF AMC EQUITY OFFERING
o BALANCED POLITICAL RISK PROFILE
o STRENGTHENS NEWMONT CAPITAL STRUCTURE
o MAINTAINS LEVERAGE TO GOLD
o PROVIDES FURTHER GROWTH OPPORTUNITIES
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CREATING THE NEW GOLD STANDARD
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LEVERAGE
TO RISING
GOLD PRICE
^ LARGEST NON-HEDGED GOLD PRODUCER
| PROVIDES SHAREHOLDERS MOST UPSIDE TO GOLD
|
|
| DEVELOPMENT PROJECTS TO ADD UPSIDE
| LEVERAGE
| o Phoenix, Martabe, Akim, Yamfo,
| Boddington, Martha
| Total: 26.8 million ozs
|
|
| MERCHANT BANKING WEALTH CREATION
| o Property synergies o Royalty creation
| o Asset disposal o Exploration
| 94,000 sq. km.
|
| WORLD CLASS CORE PROPERTIES WITH LOW CASH
| COSTS
| o Nevada, Yanacocha, Batu Hijau, Western
| Australia
|
| ROYALTY CASH FLOW / STRONG BALANCE
| AS NATURAL HEDGE / SHEET
| AGAINST LOW GOLD /
| PRICE /
V
STABILITY AT
LOWER GOLD PRICES
[graphic of gold bars]
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[NORMANDY MINING LIMITED LOGO]
NORMANDY SHAREHOLDERS BECOME PART OF:
THE NEW INDUSTRY LEADER...
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[Graph]
2001E production (MM oz.) v.
Enterprise value (US$ millions) (3)
(Size of circles proportionate to reported gold reserves)
2001E Production Enterprise Value
Gold Fields [Medium Circle] 3.7 MM oz. 2,075.7 million
Placer Dome [Small Circle] 2.9 MM oz. 4,120 million
AngloGold (2) [Medium Circle] 5.8 MM oz. 4,500.6 million
Barrick/Homestake [Medium Circle] 6.1 MM oz. 8,469.7 million
Newmont PF (1) [Large Circle] 8.2 MM oz. 9,800 million
Others [random dots] [<2 MM oz.] [<2,000 milllion]
o LEADING NON-HEDGING PRODUCER
o ONLY SUBSTANTIAL USA GOLD COMPANY
Source: Public filings
(1) Reflects the sum of Newmont, Normandy and Franco-Nevada enterprise values
as of 9 November 2001; includes production attributable to Franco-Nevada's
share of Echo Bay
(2) AngloGold's reserves assume sale of Free State assets
(3) Enterprise value represents market capitalization plus net debt, minority
interests and preferred stock
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...WITH THE INDUSTRY'S MOST ATTRACTIVE ASSET PORTFOLIO
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[World map marked to show the following combined gold interests:
Core Operations:
Midas, Nevada
Carlin, Nevada
Phoenix, Nevada
Lone Tree, Nevada
Twin CreekS, Nevada
Yanacocha
Tanami
Yandal
Kalgoorlie
Batu Hijau
Strategic Operations:
Yamfo-Sefwi
Akim
Zarafshan
Martabe
Martha
Pajingo/Vera-Nancy
Others:
New Britannia
Musslewhite
Holloway
Golden Giant
Mesquite
La Herradura
Kori Kollo
La Coipa
Crixas
Paracatu
Ovacik
Minahasa
Boddington
Australian Magnesium Corporation]
MAJOR DISTRICT RESERVE BASE:
NEVADA 34MM OZ.
YANACOCHA 19MM OZ.
WESTERN AUSTRALIA 14MM OZ.
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TOTAL 67MM OZ.
69% OF RESERVES
LARGEST GLOBAL LAND POSITION = 94,000 SQ.MI./244,000 SQ. KM
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BALANCED POLITICAL RISK PORTFOLIO
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NEWMONT PF PRODUCTION (8 MILLION OZ.)
[Pie Chart depicting:
U.S./Canada [U.S. and Canadian flags] 46%
Australia [Australian flag] 25%
South America 16%
Other 13%]
NEWMONT PF RESERVES (97 MILLION OZ.)
[Pie Chart depicting:
U.S./Canada [U.S. and Canadian flags] 43%
Australia [Australian flag] 18%
South America 23%
Other 16%]
PRO FORMA FOR THE TRANSACTIONS, APPROXIMATELY 70% OF NEWMONT'S PRODUCTION (1),
(2) AND 60% OF RESERVES (2) WILL BE IN COUNTRIES RATED AAA (3) BY S&P
Source: Public filings
(1) Last twelve months ended 30 September 2001
(2) Includes production and reserves attributable to Franco-Nevada and Echo Bay
(3) S&P local currency credit rating
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NEWMONT WILL HAVE SIGNIFICANT FINANCIAL FLEXIBILITY
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o COMBINED COMPANY WILL HAVE APPROXIMATELY $380 MILLION IN CASH AND SHORT TERM
INVESTMENTS (AFTER PAYMENT OF THE A$0.40 PER ORDINARY SHARE TO NORMANDY
SHAREHOLDERS AND TRANSACTION COSTS OF ESTIMATED US $90MM)
o OPPORTUNITY TO RATIONALIZE ASSET PORTFOLIO OVER TIME
o STRONG CASH FLOW GENERATION ALLOWS FOR CONTINUED DEBT REDUCTION, EVEN AT
CURRENT GOLD PRICES
NET DEBT/NET BOOK CAPITALIZATION (1)
[Bar graph depicting
9/30/01 Actual 41%
9/30/01 Pro Forma 23%]
Note: balance sheet as of 30 September 2001; pro forma net of transaction
adjustments
(1) Net book capitalization defined as net debt plus minority interest plus book
equity plus preferred stock
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#1 IN EBITDA
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NOT VULNERABLE TO DROP IN HEDGING CASH FLOW OR POTENTIAL HEDGING LOSSES
LAST TWELVE MONTHS EBITDA
[Bar graph depicting:
EBITDA in US$ millions
EBITDA Hedge gain (2) Total
[U.S. flag] Newmont PF 938 34.6 972
[Canadian flag] Barrick/Homestake 461 321 782
[South African flag] AngloGold (1) 440 193 633
[Canadian flag] Placer Dome 291 165 456
[South African flag] Gold Fields 236 -3 233]
Source: Public filings; EBITDA defined as revenue less: cost of sale (excluding
DD&A), SG&A, exploration and research and other operating expenses;
Franco-Nevada revenue includes interest income
(1) AngloGold EBITDA includes Free State (approximately $55MM), EBITDA excluding
Free State is approximately $578MM
(2) Hedge gain = Last twelve months production multiplied by the result of last
twelve months realized gold price less last twelve months average spot gold
price.
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TRADING LIQUIDITY
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[Bar Graph depicting:
AVERAGE DAILY DOLLAR TRADING VOLUME (1) vs. US$ MILLIONS
[U.S. flag] Newmont PF (2) 62
[Canadian flag] Barrick/Homestake (3) 58
[Canadian flag] Placer Dome 33
[South African flag] AngloGold 15
[South African flag] Gold Fields 7]
Source: Bloomberg
(1) Average daily trading volume for the six-month period ending 9 November 2001
(2) Aggregate average daily US dollar volume is based on trading of Newmont,
Normandy and Franco-Nevada
(3) ABX/HM combined average daily volume presented is for the six months prior
to their merger announcement given substantial post-announcement arbitrage
activity
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NEWMONT WILL REALIZE SIGNIFICANT OPERATING SYNERGIES
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o G&A
o EXPLORATION AND DEVELOPMENT
o OPERATIONS/PROCUREMENT
o INTEREST SAVINGS
o NET TAX SYNERGIES
TOTAL SYNERGIES IN THE SECOND YEAR ARE EXPECTED TO BE US$80-90 MILLION
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COMPLEMENTARY STRENGTHS
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[Pie chart depicting:
[Newmont logo] Newmont Mining Corporation 0.33
o Global operations
o Development expertise
o Proven integration history
[Franco-Nevada logo] Franco-Nevada 0.33
o Merchant banking expertise
o Corporate development skills
o Royalty interests
[Normandy logo] Normandy 0.33
o Strong Australian position
o Exploration and development properties]
LEVERAGING COMPLEMENTARY ASSETS AND SKILLS TO DELIVER SHAREHOLDER VALUE
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FRANCO-NEVADA HAS GENERATED SIGNIFICANT SHAREHOLDER VALUE
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EXPERTISE RESULTS
o EXPERIENCED MANAGEMENT TEAM WITH A PROVEN RECORD OF O $1,000 INVESTED IN FRANCO-NEVADA'S 1983 IPO IS NOW WORTH
CONSISTENTLY CREATING SUPERIOR RETURNS FOR SHAREHOLDERS $556,000 (1) - A 38% COMPOUNDED ANNUAL RATE OF RETURN
o STRONG BALANCE SHEET AND INVESTMENT PORTFOLIO o TEN YEAR PRICE APPRECIATION OF 350% (VERSUS 8% FOR THE TSE GOLD
- Over US$850 million in cash and investments, not AND PRECIOUS MINERALS INDEX) PLUS A FURTHER 33% FROM CUMULATIVE
including Normandy DIVIDENDS
o HIGH MARGIN (95% OPERATING MARGIN) AND LOW RISK ROYALTY O AVERAGE RETURN ON EQUITY OF 14.9% FROM 1991 THROUGH 2000 --
BUSINESS - PARTICIPATION IN SOME OF THE BEST GOLD AND ALMOST 50% GREATER THAN ANY OTHER NORTH AMERICAN GOLD COMPANY
PRECIOUS METALS MINES IN THE WORLD.
O RECENT VALUE-ENHANCING DEALS INCLUDE:
- Trade of Midas mine for cash and 19.99% ownership of
Normandy
- Purchase of 14.1% of Aber Resources for C$69.5 million
(current market value C$167million)
- Conversion of Echo Bay capital securities into 49.5%
common interest
(1) As of 9 November 2001
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A SHARED BELIEF IN THE FUTURE OF GOLD
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o MINE SUPPLY IS DECREASING
o PRODUCER HEDGING IS DECREASIG
- Contango is falling
- Producers are unwinding
hedge books
o UNCERTAIN GLOBAL FINANCIAL
MARKETS ONCE AGAIN TURNING
ATTENTION TO GOLD
- Investment demand is rising
- Portfolio diversification
strategies
[LINE GRAPH SHOWING S&P 500 INDEX/GOLD PRICE FOR THE YEARS FROM 1871 TO
2001 (IN FIVE YEAR INCREMENTS) STARTING WITH APPROXIMATELY 1.5 US$/OZ.
AND ENDING WITH APPROXIMATELY 18.5 US$/OZ, INCLUDING A 1998 PEAK AT 25 US$/OZ.,
APPROXIMATELY]
Source: M. Murenbeeld Associates Inc.
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WHY GOLD GOES UP
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[Line graph depicting 90-day T-Bill less 12 month inflation rate from 1990
through 2001, measured in yield percentage]
[Line graph depicting Gold Price in US dollars from 1990 through 2001, with an
arrow indicating prices will rise after 2001]
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LEVERAGE TO GOLD
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[Bar graph depicting:
ESTIMATED INCREASE IN ANNUAL PRE-TAX CASH FLOW FROM US$25 INCREASE IN
GOLD PRICE (1),(2) vs. US$ MILLIONS
Further upside as
"New Newmont" unwinds
its hedge book
[U.S. flag] Newmont PF 162 ----------------> 196
[South African flag] Gold Fields 90
[Canadian flag] Placer Dome 36
[Canadian flag] Barrick/Homestake 25
[South African flag] AngloGold (3) 8]
Based on analysis of public filings
(1) US$25 per ounce multiplied by unhedged 2001E production
(2) Newmont includes pre-tax cash flow from Normandy and Franco-Nevada. Assumes
a gold price increase from US$275 per ounce to US$300 per ounce
(3) Pro forma for the sale of Free State assets; assumes no adjustment to hedge
book
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UPSIDE POTENTIAL
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[Bar Graph depicting:
ADJUSTED ENTERPRISE VALUE (1) PER PRODUCTION OUNCE
ABX/HM $1,356.90
Newmont PF $1,118.80]
[Bar Graph depicting:
ADJUSTED ENTERPRISE VALUE (1) PER RESERVE OUNCE
ABX/HM $107.00
Newmont PF $97.70]
[Bar Graph depicting:
PRICE/LTM CFPS (2)
ABX/HM 11.70x
Newmont PF 10.30x]
Note: Newmont PF includes attributable reserves and production of Franco-Nevada
and Echo Bay
(1) Newmont PF reflects the sum of Newmont, Normandy and Franco-Nevada
enterprise values as of 9 November 2001 (adjusted enterprise value excludes
Franco-Nevada's publicly traded equity interests in Aber Resources and
Metallica)
(2) Last twelve months as of 30 September 2001
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ALL SHAREHOLDERS BENEFIT FROM THIS COMBINATION
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NEWMONT FRANCO-NEVADA NORMANDY
o Operational and capital o 22% premium paid on o Fair premium paid
markets scale Franco-Nevada shares (1) on Normandy shares
o Attractive global assets o Tax-free rollover o Substantial
with balanced political trading liquidity
risk profile
o Strong capital structure o Exchangeables remain o Immediate North
Canadian property American rating
o Platform for expansion o Delivers excellent o Improved financial
leverage to gold flexibility and
ability to develop
o Flexibility to optimize o Diversification of and optimize
project pipeline asset portfolio projects
TOGETHER CREATING THE WORLD'S BEST GOLD COMPANY
(1) Based on closing prices on 13 November 2001
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CREATING SIGNIFICANT VALUE FOR SHAREHOLDERS
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o #1 in reserves \
o #1 in gold production \
o #1 in leverage to gold \
o #1 in trading liquidity \
o #1 in EBITDA \ THE NEW GOLD
o Balance sheet strength and \ STANDARD FOR
financial flexibility / THE 21ST
o Low cash costs / CENTURY
o Balanced political risk /
o Management strength /
o North American stock /
o "No hedging" philosophy /
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SAFE HARBOR STATEMENT
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SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
The following contains forward-looking information and statements about Newmont
Mining Corporation, Franco-Nevada Mining Corporation Limited, Normandy Mining
Limited and the combined company after completion of the transactions that are
intended to be covered by the safe harbor for "forward-looking statements"
provided by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are statements that are not historical facts. These
statements include financial projections and estimates and their underlying
assumptions; statements regarding plans, objectives and expectations with
respect to future operations, products and services; and statements regarding
future performance. Forward-looking statements are generally identified by the
words "expect," "anticipates," "believes," "intends," "estimates" and similar
expressions. The forward-looking information and statements in this presentation
are subject to various risks and uncertainties, many of which are difficult to
predict and generally beyond the control of Newmont, Franco-Nevada and Normandy
Mining, that could cause actual results to differ materially from those
expressed in, or implied or projected by, the forward-looking information and
statements. These risks and uncertainties include those discussed or identified
in the public filings with the U.S. Securities and Exchange Commission made by
Newmont and Normandy, and Franco-Nevada's filings with the Ontario Securities
Commission; risks and uncertainties with respect to the parties' expectations
regarding the timing, completion and accounting and tax treatment of the
transactions, the value of the transaction consideration, production and
development opportunities, conducting worldwide operations, earnings accretion,
cost savings, revenue enhancements, synergies and other benefits anticipated
from the transactions; and the effect of gold price and foreign exchange rate
fluctuations, and general economic conditions such as changes in interest rates
and the performance of the financial markets, changes in domestic and foreign
laws, regulations and taxes, changes in competition and pricing environments,
the occurrence of significant natural disasters, civil unrest and general market
and industry conditions.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with their proposed transactions, Newmont Mining Corporation
will file a proxy statement and a registration statement with a prospectus
with the U.S. Securities and Exchange Commission. INVESTORS AND SECURITY
HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND THE PROSPECTUS WHEN THEY
BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors
and security holders may obtain free copies of the proxy statement and the
prospectus (when available) and other documents filed by Newmont with the
Commission at the Commission's web site at http://www.sec.gov. Free copies
of the proxy statement and the prospectus, once available, and other filings
made by Newmont or Normandy with the Commission, may also be obtained from
Newmont. Free copies of Newmont's and Normandy's filings may be obtained by
directing a request to Newmont Mining Corporation, Attn: Investor Relations,
1700 Lincoln Street, Denver, Colorado 80203, Telephone: (303) 863-7414.
Copies of Franco-Nevada's foreign filings may be obtained at
http://www.sedar.com.
PARTICIPANTS IN SOLICITATION
Newmont Mining Corporation and its directors, executive officers and other
members of its management and employees may be soliciting proxies from its
stockholders in connection with the transactions. Information concerning
Newmont's participants in the solicitation is set forth in Newmont's Current
Report on Form 8-K filed with the Commission on November 14, 2001, as amended.
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APPENDIX
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SUMMARY TRANSACTION OVERVIEW
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NORMANDY TRANSACTION FRANCO-NEVADA TRANSACTION
o 0.0385 NEWMONT SHARES PER NORMANDY o 0.8000 NEWMONT SHARES OR CANADIAN
SHARE, PLUS UNCONDITIONAL CASH EXCHANGEABLES PER FRANCO-NEVADA
PAYMENT A$0.40 SHARE
- Implied offer price per share of - Implied price of C$28.36 at
A$1.90 based on closing stock announcement
prices and the A$ exchange rate
on Tuesday, December 7 - Premium of 22% over Franco-Nevada's
market price prior to announcement
- Premium of 15% (A$0.25 per share)
over AngloGold's implied offer price - Franco-Nevada shareholders to own
32% of Newmont pro forma
- 50.1% minimum acceptance condition
- Exchangeables are tax receieved
- Normandy shareholders to own 18% free
of Newmont pro forma
- Exchangeables to trade on Toronto
- Newmont to seek listing on ASX Stock Exchange
RECOMMENDED AND SUPPORTED BY ALL THREE BOARDS OF DIRECTORS
19.9% OF NORMANDY SHARES ALREADY COMMITED TO THE BID
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COMPANY SUMMARY
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NEWMONT NORMANDY FRANCO-NEVADA NEWMONT PF
---------- ----------- ---------------- -------------
Local currency share price US$22.25 A$1.44 C$23.20
(11/13/01)
Diluted shares outstanding 197.0 2,238.2 160.4
(millons) ---------- ----------- ----------------
MARKET VALUE OF EQUITY $4,383 $1,677 $2,326
(US$ IN MILLIONS)
--------------
Reserves (MM oz.) 66.3 26.4 4.4 (1) | 97.1 (1) |
| |
LTM production (MM oz.) 5.8 2.4 0.3 (1) | 8.6 (1) |
| |
LTM cash costs ($/oz.) 179 160 228 (1) | 175 (1) |
| |
LTM total costs ($/oz.) 209 224 291 (1) | 217 (1) |
--------------
Sources: Public filings
(1) Reflects proporational 49.5% ownership of Echo Bay
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PRO FORMA CREDIT STATISTICS
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U.S. DOLLARS IN MILLIONS
Normandy (1) Franco-Nevada (1)
Newmont (U.S. GAAP) (U.S. GAAP) Newmont PF(2)
-----------------------------------------------------------------------------------------------------------------------
Cash and short-term $98 $193 $547 $380
investments
Total debt 1,282 672 0 2,068
Minority interest 231 84 0 314
Book equity 1,460 314 975 5,389
------- ------ ------ ------
Net book capitalization(3) 2,874 876 428 7,392
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Net debt/net book capitalization 41% 55% NM 23%
----------------------------------------------------------------------------------------------------------------------
(1) Adjusted to conform to U.S. GAAP accounting
(2) Net of transaction adjustments including transaction costs of estimated
US$90 mm and payment of A$0.40 per ordinary share to Normandy shareholders;
pro forma debt includes mark-to-market adjustment to Normandy debt
(3) Net book capitlization defined as net debt plus minority interest plus book
equity plus preferred stock
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WHY GOLD IS GOING UP
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SUPPLY IS DECREASING
O REDUCED HEDGING AND SHORT SALES COMBINE WITH FLAT MINE PRODUCTION AND STABLE
CENTRAL BANK SALES, RESULTING IN REDUCED GOLD SUPPLY
[Bar Graph depicting:
TOTAL SUPPLY 4,234 4,106 4,154 3,970 3,845
(Tonnes of Gold)
Mine production 2,479 2,538 2,568 2,576 2,604
Old gold scrap 628 1,097 616 607 652
Implied net disinvestment 297 0 0 316 102
Official sector sales 326 374 464 471 487
Net producer hedging 504 97 506 0 0
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1997 1998 1999 2000 2001E]
Source: GFMS data
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WHY GOLD IS GOING UP (CONT'D)
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CONTANGO IS FALLING
O A LOW CONTANGO (LIBOR LESS GOLD LEASE RATE) DISCOURAGES FUTURE PRODUCER
HEDGING AND SHORT SALES BY SPECULATORS
LEASE RATES(1), CONTANGO VS. GOLD PRICE
[Line graphs depicting gold lease rate, gold price and Contango.
(US$/oz./date)]
(1) 3-month gold lease rates
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WHY GOLD IS GOING UP (CONT'D)
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PRODUCER HEDGING IS DECREASING
O PRODUCERS HAVE BEEN NET BUYERS OF GOLD IN 2000 AND 2001
[Bar graph depicting:
NET PRODUCER HEDGING
(Tonnes of gold)
135 142 105 475 142 504 97 506 (10) (30)
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1992 1993 1994 1995 1996 1997 1998 1999 2000 2001F]
Source: GFMS data
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NORMANDY TRANSACTION SUMMARY
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STRUCTURE o Newmont will offer to acquire all of the common shares of
Normandy through an "off market" bid.
BOARD o The Normandy Board recommended the bid subject to their
RECOMMENDATION fiduciary duties.
OWNERSHIP o Normandy shareholders will hold approximately 18% of
Newmont upon completion of the Franco-Nevada and Normandy
transactions.
CONSIDERATION o 0.0385 of a Newmont common shares (to be traded as CHESS
Depository Interests (CDIs) in Australia) plus A$0.40 per
share in cash
BOARD OF NEWMONT o Robert J. Champion de Crespigny, Chairman of Normandy, and
another member of the board of Normandy will be offered
positions on the board of Newmont.
PRINCIPAL o Various regulatory approvals in United States and
CONDITIONS Australia.
- Hart-Scott-Rodino Antitrust Improvements Act.
- Foreign Investment Review Board.
- Australia Securities Investment Commission.
o Acceptance by holders of at least 50.1% (calculated on a
fully-diluted basis) of the shares of Normandy, including
Franco-Nevada's 19.99% stake in Normandy.
o Approval by holders of a majority of the outstanding
Newmont shares.
o Conditions set out in Newmont's announcement of the bid on
14 November 2001, including 50.1% minimum acceptance, with
clarifications to the FIRB and public authority
interference conditions in response to certain comments of
the Austrialian Takeovers Panel.
CALL OPTION o Newmont has the right to acquire 446.1 million shares
(19.99%) of Normandy held by Franco-Nevada.
SUPPORT o In the event of a successful competing offer for Normandy:
AGREEMENTS
- Franco-Nevada may ask to tender to that offer, and
Newmont may exercise its call right or, if it does not,
will receive US$20 million from Franco-Nevada and the
arrangements will terminate; and
- Shares held by Newmont or Franco-Nevada thereafter will
be subject to a two-year restricted period in which
they cannot be disposed of without the consent of the
other.
BREAK-UP FEES o Normandy to pay a break-up fee and reimbursement of
expenses of A$38.33 million to Newmont under specified
circumstances.
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FRANCO-NEVADA TRANSACTION SUMMARY
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STRUCTURE o Newmont will acquire all of the shares of Franco-Nevada
pursuant to a Plan of Arrangement recommended by the board of
directors of Franco-Nevada (and unanimously by the six outside
directors).
OWNERSHIP o Franco-Nevada shareholders will hold approximately 32% of
Newmont upon completion of the Franco-Nevada and Normandy
transactions.
CONSIDERATION o At the option of the holder of a Franco-Nevada share:
- 0.80 of a Canadian Exchangeable Share; or
- 0.80 of a Newmont common share.
o Franco-Nevada options and warrants will be adjusted
automatically to entitle the holder to acquire 0.80 Newmont
common shares in lieu of each Franco-Nevada common share the
holder otherwise would have received on the exercise of the
option or warrant.
CANADIAN o Each Canadian Exchangeable Share (which may be used to afford
EXCHANGEABLE Canadian shareholders of Franco-Nevada a roll-over for Canadian
SHARES tax purposes) will:
- Entitle the holder to economic and voting rights
substantially the same as one Newmont common share (but in
no event will votes relating to all Exchangeable Shares be
more than 10% of the votes attaching to Newmont common
shares);
- Be exchangeable for one Newmont common share; and
- Not be redeemable by the company (except in certain limited
circumstances) for seven years.
BOARD AND o Seymour Schulich, Chairman and Co-CEO of Franco-Nevada, Pierre
SENIOR Lassonde, President and Co-CEO of Franco-Nevada and another
MANAGEMENT OF member of the board of Franco-Nevada will join the board of
NEWMONT Newmont.
o Mr. Lassonde will also be President of Newmont.
o Mr. Schulich will be the Chairman of Newmont's new merchant
banking subsidiary.
PRINCIPAL o Various regulatory approvals in Canada and the United States:
CLOSING
CONDITIONS - Hart-Scott-Rodino Antitrust Improvements Act (U.S.)
- Investment Canada.
- Competition Act (Canada).
o Approval of 66 2/3rd % of the votes which are cast by
Franco-Nevada's shareholders at the meeting held to approve the
Plan of Arrangement.
o At least 50.1% (calculated on a fully-diluted basis) of the
shares of Normandy, including Franco-Nevada's 19.99% stake in
Normandy, being acquired by Newmont.
o Approval by holders of a majority of the outstanding Newmont
shares.
o Court approval of arrangement.
o Other standard and customary conditions.
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FRANCO-NEVADA TRANSACTION SUMMARY (CONT'D)
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LOCK-UP AND o Franco-Nevada's Co-CEOs have agreed to support the transaction.
SUPPORT
ESCROW o Franco-Nevada's Co-CEOs have agreed to a three year escrow of
AGREEMENTS the shares received by them: to be released 30% on closing, 60%
on first anniversary, 80% on second anniversary and 100% on
third anniversary.
BREAK-UP o Franco-Nevada to pay Newmont aggregate break-up fees of US$100
FEES million in certain circumstances.
o Newmont to pay Franco-Nevada US$10 million expense
reimbursement if Newmont shareholders vote down.
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ACQUISITION VALUE
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IN ITS ACQUITION OF NORMANDY, NEWMONT IS PAYING LESS PER RESERVE OUNCE THAN
BARRICK PAID IN ITS RECENT ACQUISITION OF HOMESTAKE
[Bar Graph depicting:
ACQUISITION VALUE PER RESERVE OUNCE (US$) vs. ACQUISITION VALUE PER RESERVE
OUNCE
Barrick/Homestake (Adjusted) (1) 116
Barrick/Homestake (2) 99
Newmont/Normandy ($300/oz. Gold) (3) 85]
(1) Homestake reserves include the reported reserves for Cowal of 2.5 million
oz.; subracts 3.3 million oz. in reserves to account for the
reclassification of Veladero reserves to mineralisation
(2) Homestake reserves include the reported reserves for Cowal of 2.5 million
oz.
(3) Normandy reserves are based on the Grant Samuel report
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