Newmont Mining (NEM.US) sells Australian gold-copper project for $475M to accelerate asset-light strategy

Market VisionThursday, Sep 12, 2024 2:50 am ET

1min read

Newmont Corporation (NEM.US) announced that it has agreed to sell 70% of its Telfer mine and the Havieron gold-copper project in Western Australia to Greatland Gold for $475 million in cash and stock. The transaction is part of Newmont's strategy to divest non-core assets, and is expected to be completed in the fourth quarter of 2024, subject to certain conditions.

Under the terms of the agreement, Newmont is expected to receive up to $475 million in total proceeds, including $207.5 million in cash at closing, $167.5 million in Greatland Gold stock, and up to $100 million in deferred or conditional cash payments. Newmont expressed confidence in Greatland Gold's ability to manage these assets, noting that this is the first asset divestiture since the asset sale plan announced in February. The sale aligns with Newmont's goal of raising at least $2 billion through the sale of non-core assets to focus on its top-tier assets, reduce debt, and return value to shareholders.

The assets being sold are part of Newmont's asset divestiture plan, marking the first sale since its acquisition of Newcrest. Newmont plans to focus on its six top-tier assets, including Boddington, Tanami, Cadia, and Lihir in Australia, Pe asquito in Mexico, and Ahafo in Ghana, as well as assets held through two non-managed joint ventures, the Nevada gold mines in the US and Pueblo Viejo in the Dominican Republic.

Newmont maintains its 2024 targets unchanged. As the transaction is expected to be completed in the fourth quarter, the company has made a slight adjustment to its non-core gold and copper production guidance to reflect the sale of the Telfer mine, which has been classified as held for sale in the financial statements.

In 2024, Newmont expects its top-tier asset portfolio to produce 5.63 million ounces of gold, unchanged from 2023, with an additional 1.12 million ounces from non-core assets, bringing the total gold production to 6.75 million ounces. Copper production is expected to be 145,000 tons, with 144,000 tons from top-tier assets and 1,000 tons from non-core assets.

Over the past year, Newmont's stock price has risen by 32.1%, slightly below the 33.4% industry average rise during the same period.

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