Newmont's Strategic Shift: Divesting Porcupine for up to $425 Million

Newmont Corporation (NYSE: NEM, TSX: NGT, ASX: NEM, PNGX: NEM), the world's leading gold company, has announced the sale of its Porcupine operation in Ontario, Canada to Discovery Silver Corp. (TSXV: DSV) for up to $425 million in total consideration. This transaction marks the final non-core operation divestiture in Newmont's strategic program, which aims to focus on Tier 1 assets and generate up to $4.3 billion in total proceeds from non-core asset divestitures and investments.

The Porcupine deal is expected to close in the first half of 2025, subject to certain conditions being satisfied. Under the terms of the agreement, Newmont expects to receive gross proceeds of up to $425 million, which includes cash consideration of $200 million due upon closing, equity consideration of $75 million in the form of Discovery shares to be issued upon closing, and deferred cash consideration of $150 million.

Tom Palmer, Newmont's President and Chief Executive Officer, stated, "Today's announcement represents a significant milestone for Newmont as we have agreed to sell the final non-core operation from our divestiture program. The sale is part of Newmont's ongoing program to divest non-core assets as we make a strategic shift to focus on our Tier 1 assets. We have full confidence that Discovery's leadership team will continue to operate Porcupine responsibly, leveraging their extensive experience and history in the area. Including the Porcupine divestiture, we expect to generate up to $4.3 billion in total proceeds from the announced sales of our high-quality non-core assets and investments, enabling us to further reduce debt and return capital to shareholders."

Newmont's divestiture program has been progressing steadily since February 2024, when the company announced its intent to divest non-core assets, including six operations and two projects from its Australian, Ghanaian, and North American business units. To date, Newmont has divested or has definitive agreements in place to divest all six operations and one project classified as held for sale in its financial statements. Total gross proceeds from transactions announced in 2024 to date are expected to be up to $4.3 billion, including $3.8 billion from non-core divestitures and $527 million from the sale of other investments.

The structured nature of the Porcupine deal, which includes a mix of immediate cash, equity, and deferred consideration, provides a balanced approach to value realization while maintaining potential upside through equity participation. This transaction structure mitigates immediate market impact while securing future value streams. By including equity consideration, Newmont maintains exposure to the upside potential of Discovery Silver Corp., which could generate additional value in the future.

The successful execution of Newmont's divestiture program across multiple jurisdictions (Australia, Ghana, North America) demonstrates the company's strong transaction management capabilities. This includes diverse portfolio and market knowledge, negotiation and structuring capabilities, and operational continuity. The program's successful completion positions Newmont for enhanced operational focus and improved capital returns to shareholders.



In conclusion, Newmont's strategic shift towards focusing on Tier 1 assets, as evidenced by the sale of the Porcupine operation, is expected to bring numerous benefits, including improved financial flexibility, enhanced operational efficiency, maximized value realization, and strengthened competitive positioning. The company's balanced approach to value realization and maintaining potential upside through equity participation, as demonstrated by the Porcupine deal, aligns with its overall investment strategy. Newmont's strong transaction management capabilities, demonstrated by the successful execution of the divestiture program across multiple jurisdictions, position the company well for future investments and acquisitions.