DENVER - Newmont Corporation (NYSE: NEM), a leading gold producer, has entered into an agreement to sell its Musselwhite mine in Ontario, Canada, to Orla Mining Ltd for a total consideration of up to $850 million. The deal includes an upfront cash payment of $810 million and contingent payments of up to $40 million, subject to the satisfaction of certain conditions.
The transaction is part of Newmont's ongoing strategy to divest non-core assets and is expected to close in the first quarter of 2025, pending approval by Orla shareholders and regulatory clearances, including the Canadian Competition Act. This divestiture is set to contribute to Newmont's goal of garnering more than $2 billion from the sale of non-core assets.
Tom Palmer, Newmont's President and CEO, expressed confidence in Orla's ability to responsibly manage the Musselwhite operation and maintain strong community partnerships. The divestment aligns with Newmont's plan to streamline its portfolio and meet transaction commitments announced earlier in the year. The company anticipates that the cumulative gross proceeds from its divestiture program could reach up to $2.9 billion.
Newmont's divestiture program, unveiled in February 2024, targets the sale of six operations and two projects across Australia, Ghana, and North America. With agreements for Australian and Ghanaian assets already in place, the company is focusing on completing the sale of other North American assets by early 2025.
The proceeds from these transactions are slated to support Newmont's capital allocation priorities, which include strengthening the balance sheet and returning capital to shareholders. As part of this strategy, Newmont has a $3 billion share repurchase program authorized through October 2026. Since the commencement of the program, the company has bought back 22.4 million shares, totaling $1.1 billion.
In addition to share repurchases, Newmont has made strides in reducing its debt, retiring approximately $500 million in 2024. BMO Capital Markets and Goodmans LLP are serving as financial and legal advisers, respectively, for the Musselwhite transaction.
Newmont, founded in 1921 and publicly traded since 1925, is the only gold producer listed in the S&P 500 Index and is known for its environmental, social, and governance practices. The company's portfolio spans across Africa, Australia, Latin America & Caribbean, North America, and Papua New Guinea.
This news article is based on a press release statement from Newmont Corporation.
In other recent news, Newmont Mining Corp (NYSE:NEM). has been downgraded by UBS from Buy to Neutral due to disappointing third-quarter results and lowered medium-term production forecasts. This downgrade reflects reduced confidence in Newmont's ability to meet its guidance and regain market trust. Additionally, the company's Q3 2024 financial results showed a steady gold production and a focus on cost management. Newmont produced almost 1.7 million ounces of gold and generated $1.6 billion in cash flow from operations. The company also initiated a $2 billion share repurchase program and returned $786 million to its shareholders. Furthermore, Newmont is on track to meet its Q4 2024 gold production target of approximately 1.8 million ounces. Despite challenges, Newmont announced divestments of non-core assets, aiming for at least $2 billion in proceeds. These are the latest developments for Newmont as it continues to navigate the complexities of the global gold market.
InvestingPro Insights
Newmont Corporation's recent decision to sell its Musselwhite mine aligns with the company's broader strategy of portfolio optimization and focus on core assets. This move is reflected in several key metrics and insights from InvestingPro.
According to InvestingPro data, Newmont's market capitalization stands at $46.39 billion, underscoring its position as a major player in the gold mining industry. The company's revenue for the last twelve months as of Q3 2024 was $16.99 billion, with a significant revenue growth of 53.66% over the same period. This growth trajectory supports the company's ability to execute on its divestiture program and capital allocation priorities.
InvestingPro Tips highlight that Newmont has maintained dividend payments for 54 consecutive years, demonstrating a commitment to shareholder returns. This aligns with the company's stated intention to use proceeds from asset sales to support capital allocation priorities, including returning capital to shareholders.
The company's liquid assets exceeding short-term obligations, as noted in another InvestingPro Tip, provides financial flexibility to pursue its strategic initiatives, including the $3 billion share repurchase program mentioned in the article.
While Newmont was not profitable over the last twelve months, analysts predict the company will be profitable this year, according to InvestingPro Tips. This outlook, coupled with the expected sales growth in the current year, suggests that the company's strategic moves, including the Musselwhite mine sale, may be positioning it for improved financial performance.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights on Newmont Corporation, with 8 more tips available on the platform.
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