By Micah Maidenberg
Newmont Goldcorp Corp. (NEM) plans to sell its stake in Continental Gold Inc. (CNL.T) in connection with a Chinese company's proposed deal to takeover that firm.
Newmont Monday said it signed a contract to support Fujian, China-based Zijin Mining Group Co.'s proposed $1.4 billion Canadian dollars acquisition of Continental, which has been developing a gold mine in Colombia.
Denver-based Newmont owns a 19.9% equity stake in Continental, Newmont said Monday. It will sell that holding as well as a convertible bond for $260 million and use the proceeds for investments, to support returning capital to shareholders and to bolster its balance sheet.
"While we have valued our partnership with Continental, this is an appropriate time to sell into a strong bid," Newmont Chief Executive Tom Palmer said in a statement.
Zijin's proposed bid for Continental values the latter company's shares at C$5.50.
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