TORONTO (miningweekly.com) – US gold producer Newmont Mining has formalised a $106-million deal that has increased Australasia-focused OceanaGold's operating mines in New Zealand to four.

The Waihi gold mine is about 150 km south-east of Auckland on the Oceania-nation’s North Island and will expand OceanaGold's output by about 100 000 oz/y.

“The sale of Waihi further strengthens Newmont’s balance sheet and improves our financial flexibility as we continue to sell select assets for cash at fair value,” Newmont executive VP for strategic development Randy Engel noted in a statement on Friday.

Both companies’ boards had accepted the deal, which, subject to satisfying conditions precedent and regulatory approval, was expected to close in the third quarter.

OceanaGold was paying for the transaction with about $60-million cash on hand, as at the end of the third quarter, and had drawn about $77.8-million from its recently increased $225-million revolving credit facility.

Triple-listed OceanaGold had for decades owned and operated New Zealand's largest gold mine, the Macraes openpit, as well as the Frasers underground and the Reefton openpit mines, located on the pristine South Island of the country.

Under the terms of the deal, the price would include a $5-million contingency payment and a 1% net smelter royalty on a recent discovery north of Waihi’s current operations. OceanaGold acquired the entire mine's openpit and underground mining assets and liabilities, including all social, environmental and employee obligations.

Having been mined from 1988 and adding underground operations since 2005, the Waihi gold mine had ore reserves of about two-million tonnes, grading 5.25 g/t for about 360 000 oz of gold. The mine produced 132 000 oz of gold last year at all-in-sustaining costs of between $760/oz and $820/oz.

Waihi’s Correnso underground mine had a mine plan in place until 2018. The Martha openpit mine started operations in 1987 and was acquired by Newmont in 2002, during the merger with Normandy.

Major gold miners had, in recent years, been selling noncore assets in the wake of falling metals prices to shore up their balance sheets and focusing on improving efficiencies at their core operations. Cashed-up competitors had been swooping in on discarded assets as majors were struggling to repair debt-ridden balance sheets.

So far this year, OceanaGold’s TSX-listed shares had gained 37%. An intraday C$0.08 gain to C$3.04 placed the stock within sight off its 52-week high of C$3.74.