--Newmont placed the Hope Bay development on hold this year

--Executives said the Colorado company would focus on projects that were closer to yielding gold ore

--Newmont spokesman: 'We know there's gold there, it's just a question of what's the right option for developing the gold'

(Adds comment from Newmont spokesman in ninth paragraph.)

 
   By Matt Day

Newmont Mining Corp. (NEM) said it had signed a letter of intent to sell its stalled Hope Bay gold-mining project in Canada to TMAC Resources Inc., closely held mining-development company.

Terms of the proposed transaction, which Newmont said would follow an acquisition agreement and "equity financing," weren't released. A press release didn't elaborate on the nature of the equity financing.

Newmont placed the Hope Bay development, located in the harsh Canadian arctic, on hold this year and took a $1.6 billion write-down during the fourth quarter of 2011.

Executives said the Colorado company would focus on projects that were closer to yielding gold ore.

Pressured by a lack of easy-to-access gold deposits, companies such as Newmont in recent years looked to mine in increasingly remote or politically risky locations. But rapidly escalating costs industrywide--and mounting investor anger at massive capital spending bills--caused some companies to rethink their growth plans.

Newmont, the world's second-largest gold-mining company by production, acquired the Hope Bay development in 2007 through its $1.5 billion acquisition of Miramar Mining Corp.

TMAC is "the right partner to improve prospects for near-term development of the Hope Bay Project," Randy Engel, executive vice president of Strategic Development for Newmont, said. "We look forward to developing a strong, long-term partnership as a significant shareholder of TMAC."

Mr. Engel didn't say what involvement Newmont might have after the transaction.

"There have been, for some time, a variety of parties interested in Hope Bay," Newmont spokesman Omar Jabara said. "We know there's gold there, it's just a question of what's the right option for developing the gold."

Terry MacGibbon, TMAC's executive chairman, is a mining-industry veteran. He founded precious-and-base-metals mining explorer FNX Mining, leaving his role there as CEO following the merger of FNX with Quadra Mining. He is currently the chairman of gold-exploration company Torex Gold Resources (TXG.T, TORXF).

Catharine Farrow, also formerly of FNX, will serve as TMAC's chief executive, Mr. MacGibbon said.

"We believe the Hope Bay Belt has great potential to be Canada's next major gold-mining camp and a long-term, profitable and environmentally responsible gold producer for the benefit of all stakeholders," Mr. MacGibbon said.

Write to Matt Day at matt.day@dowjones.com

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