Council Raises Concerns About Timing of Mega Sale
Rick Langenberg
Newmont Mining, one of Teller County’s biggest employers, has completed phase one of a detailed plan to sell its Cripple Creek & Victor (CC&V) Gold Mine and to turn over the ownership reins to a new operator by the end of the year.
In addition, Newmont officials stress that their CC&V operation is a good and profitable company, and that the decision to divest of this holding is part of a Newmont corporate strategy linked to their earlier acquisition of cooper giant Newcrest. In essence, Newmont now abounds with too many gold mining operations around the world and needs to sell some of their lower-producing companies.
But for right now, it’s business as usual for CC&V, which is undergoing another big expansion and an additional amendment pursuit.
These were some of the highlights of a report made by CC&V general manager Johan Van Huyssteen during a presentation before the Cripple Creek City Council last week. Huyssteen stated that CC&V is right on schedule to change ownership hands by the end of the year.
Similar to an earlier appearance before the council in May, the CC&V general manager attributed the sales announcement to an overall corporate move. CC&V is one of about six gold mining operations that has been placed on the Newmont sales block. Other operators getting sold are located in Australia, Canada and Ghana.
The CC&V boss made it clear, though, that Newmont wasn’t in a position to sell CC&V at any price, with the corporation; now the biggest gold mining company in the world, announcing a detailed three-phase process.
According to Huyssteen, CC&V has completed phase one, which gave Newmont the opportunity to recruit potential buyers and to open its books for interested future operators. He said it sought out operators that met its values and standards.
For the next phase, potential operators actually visit the CC&V operation and hear presentations by CC&V leaders. The third stage involves negotiating an offer and finalizing a sales deal and other operational details.
During last week’s council meeting, the CC&V manager, who has only held this position with the company for about three months, remained quite optimistic about the mining giant’s prospects of completing a final deal by the end of the year. “We will proceed with that (final offer),” said the CC&V general manager.
But what happens if this timeline cannot be fulfilled?
This was the main question posed by the city council in responding to the CC&V general manager.
Several top elected officials, including Mayor Annie Durham and Mayor Pro Tem Bruce Brown, sought reassurances that CC&V would not shut down, if it cannot acquire a suitable buyer.
Huyssteen responded that CC&V would continue their operation and stressed that it had a promising future with a project lifeline of at least 10 more years.
“We will continue with our operation in a safe manner. We believe there is still a lot of gold up here,” the gold mine manager related.
In a joking manner, he referred to the current proposed situation to that of a divorce and separation proceeding (between Newmont and CC&V.) He said that if a deal couldn’t get reached, the company would reach out to the prospective buyer/operator and try to find out why a deal couldn’t get finalized.
New Expansion Amendment in the Works
The sales update definitely capped CC&V’s regular report before the council. A future sale has generated some concerns in the district, since Newmont is a major employer and sponsors a number of events. In addition, it is a big contributor to community groups, already dishing out $100,000 to various organizations this year.
Huyssteen admitted that the sales news has been an issue of concern among CC&V’s work force, which encompasses a 400-plus employee base.
At the same time, sales developments for CC&V aren’t that surprising. “This is something that seems to happen every five years up here,” said Jeff Mosher, the special projects director for the city of Cripple Creek, in a previous interview. Similar to the views espoused by Huyssteen, he indicated that CC&V is a profitable mining operation, but size-wise, it is not that big compared other mining ventures across the country. This makes it susceptible to getting put on the market quite frequently.
It currently mines a little more than 170,00 ounces of gold annually. To avoid being put on the market, the company would have had to generate a minimum of producing 500,000 ounces, according to the estimates of Huyssteen.
As far as other activities, company officials indicated that its reclamation and community investments pursuits are quite active.
Plus, the company is gearing up for pursing Amendment 14, which includes an expansion of the Cresson pit and more development of the Gold Hill, East Cresson and Elkton sites. In addition, the mill platform area would get expanded. No changes, though, would occur impacting the viewshed around Cripple Creek, according to company officials. A slight delay has occurred in the okaying of these plans by state officials.
Once this approval occurs, then the new amendment will face the scrutiny of the Teller County Planning commission, and then the Board of County Commissioners.
