What was the main purpose of this 8-K filing?

This 8-K filing was made to report the entry into a material definitive agreement, specifically a Sale Agreement concerning certain assets and subsidiaries of the Australian Magnesium Corporation (AMC) Group, which has implications for Newmont Mining Corporation.

What is the financial impact of this transaction on Newmont?

Newmont expects to record a non-cash, pre-tax gain of approximately $10 million to $12 million. This gain is largely a result of reversing a prior $30 million loss contingency related to a loan guarantee, offset by adjustments for a new loan provided by Newmont.

What role did Newmont play in the transaction beyond the gain recognition?

Newmont's subsidiaries were involved in forgiving outstanding loans and guarantee fees owed by AMC and QMAG, and Newmont Finance Limited provided a new A$30 million subordinated loan. The company also guaranteed a loan facility that has now been paid off by RCF.

Why is this filing being made on a 'cautionary basis'?

The filing is made on a cautionary basis because the expected gain, while material, is contingent on the final accounting and could impact Newmont's fourth-quarter 2004 financial results. It serves to inform investors of a significant event and its potential financial consequences.

NEM/NEMCL 8-K: Material Agreements

Summary

Newmont Mining Corporation (Newmont) filed an 8-K on December 2, 2004, reporting a material definitive agreement entered into on November 29, 2004. This agreement relates to the sale of certain subsidiaries and assets within the Australian Magnesium Corporation (AMC) Group, specifically involving the Queensland Magnesia project (QMAG) and the Kunwarara magnesite deposit. The transaction, which closed on December 1, 2004, involved Resource Capital Fund III L.P. (RCF) as a key acquirer, alongside other entities. Newmont's involvement included the forgiveness of certain loans and guarantee fees, and the provision of a subordinated loan. A significant financial impact for Newmont is the expectation of recording a non-cash, pre-tax gain of approximately $10 million to $12 million. This gain arises from the reversal of a previously recorded $30 million loss contingency related to a loan guarantee, partially offset by valuation adjustments for a new loan extended by Newmont. This filing is made on a cautionary basis, indicating the potential materiality of this gain to Newmont's fourth-quarter 2004 results.

Key Highlights

1Newmont Mining Corporation entered into a definitive Sale Agreement on November 29, 2004, concerning assets within the Australian Magnesium Corporation (AMC) Group.
2The transaction involves the sale of subsidiaries and the Queensland Magnesia project (QMAG) and Kunwarara magnesite deposit to Resource Capital Fund III L.P. (RCF) and other parties.
3The deal closed on December 1, 2004, following the satisfaction of several conditions, including shareholder and regulatory approvals, and the arrangement of a senior debt facility.
4Newmont's subsidiary, Newmont Australia Limited, forgave A$5 million in loans to AMC and approximately A$2.8 million in guarantee fees related to QMAG.
5Newmont's subsidiary, Newmont Finance Limited (NFL), provided a subordinated loan of A$30 million to ACN and QMCH.
6Newmont expects to record a non-cash, pre-tax gain of $10 million to $12 million from this transaction.
7The expected gain is primarily due to the reversal of a $30 million loss contingency related to a previous loan guarantee.

NEWMONT Corp /DE/ 8-K Report, Material Agreement (Dec 3, 2004)

Summary

Key Highlights

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