Newmont Mining (NYSE:NEM) Taking Over Fronteer Gold (Amex:FRG)

Newmont Mining (NYSE:NEM) announced it'll be acquiring Fronteer Gold (Amex:FRG) for $2.33 Billion.

The deal was driven primarily by potential gold in the Long Canyon project in in Nevada and its close proximity to Newmont projects in Nevada, which will help them cut costs. Fronteer also has the Northumberland and Sandman projects in Nevada as well.

Combined projected gold for the three assets is 4.2 million ounces.

Fronteer Gold President and CEO, Mark O'Dea, said: "This transaction delivers an immediate and attractive premium to our shareholders. It not only recognizes the current value of our key Nevada gold projects, but rewards shareholders for their future growth."

The Long Canyon project is located about 100 miles from Newmont's infrastructure in Nevada.

Richard O’Brien, Newmont’s chief executive officer, added, “The acquisition of Frontier Gold will contribute significantly to our anticipated growth profile in North America,”

The deal values Fronteer at a 37 percent premium over its Wednesday close.

Newmont was trading at $56.51, gaining $0.86, or 1.55 percent, as of 12:09 PM EST. Fronteer Gold was trading at $14.42, up $4.02, or 38.65 percent.