A new auction for the assets of the bankrupt Zarafshan-Newmont, gold mining joint venture in Uzbekistan, has been scheduled for 4 June 2007, the country’s Real Estate Exchange said in an announcement posted by local newspapers.
The starting price of the assets is 172.858 billion soums (about US$140 million).
This will be the fifth attempt to sell the assets. No bids were made at the previous attempts, the most recent being on 2 May. Newmont Mining, the world’s No. 2 gold producer, owned half of the equity in the joint venture, which was adjudged bankrupt last fall.
The auction was originally due to take place on 18 December 2006, but it was put back a month because there was only one bidder on that occasion. No bids were received the second time of asking in January, and creditors are refusing to lower the starting price.
The book value of Newmont’s ownership interest in the venture was about US$94 million as of 30 June 2006.
Newmont, the Uzbek State Geology and Mineral Resources Committee and the Navoi Mining and Metals Plant set the Zarafshan venture up in 1992 to recover gold from tailings at the Muruntau open pit. The venture had resources of 220million tonnes of ore with an average grading of 1.4 g/t for gold.
The joint venture produced 7.192 tonnes of gold in 2006, down from 7.714 tonnes in 2005 and 12 tonnes in 2004.