MONOPOLY CAPITALI$M

Newmont to sell six non-core assets in Canada, Australia

Cecilia Jamasmie | February 22, 2024 | 

The Éléonore gold mine in Quebec, Canada, is one of the assets Newmont wants to divest. (Image courtesy of Newmont.)

Newmont Corp (NYSE: NEM) said on Thursday it plans to sell six non-core assets, including its Éléonore mine in Quebec, the Musselwhite and Porcupine mines in Ontario, the Coffee project in the Yukon Territory and its 70% stake in the Havieron joint venture with Greatland Gold (LON: GGP) in Western Australia.


The world’s largest gold miner, which completed the acquisition of Newcrest Mining in November, said that proceeds from the transactions will be used to cut debt. The company, which had $8 billion in debt at the end of 2023, has set a near-term debt-reduction target of $1 billion.

The US-based miner has also identified an additional $500 million in cost and productivity improvements, including job cuts.

“A big part of our commitment is to deliver $100 million of free cash flow by bringing Newmont and Newcrest together…there is a reduction in headcount in order to achieve those synergies,” chief executive Tom Palmer said in a statement.

After the divestments, the gold giant will focus on ten tier-1 assets, its “go-forward portfolio”, which it plans to secure long-term growth.

“Our go-forward portfolio is the new standard for gold and copper mining [and] provides our shareholders with exposure to the highest concentration of Tier 1 assets in the sector,” Palmer said.

Tier 1 assets are “company making” mines and projects, which are not only large in size, but also have a long productive life and low costs.
Challenges

The gold giant, which also announced its fourth quarter and full-year 2023 results, said it produced 5.5 million ounces of gold last year, a 6.9% drop from the 5.96 million gold announces it churned out in 2022.

Its overall performance was affected by several challenges, including $1.9 billion in impairment charges, $1.5 billion in reclamation charges, and $464 million in Newcrest transaction and integration costs.

The Denver, Colorado-based company said it had a loss of $3.21 per share. Earnings, adjusted for one-time gains and costs, came to 50 US cents per share, slightly short of the 51 US cents estimated by Wall Street.

Despite the challenges, Newmont handed $1.4 billion in dividends to shareholders and is forecasting 2024 total production of nearly 6.9 million gold ounces, underpinned by 5.6 million gold ounces from its tier 1 portfolio.

The company also reported higher gold reserves of 135.9 million attributable ounces for 2023 compared to the 96.1 million ounces it had at the end of 2022. Newmont noted it has significant upside to other metals, including more than 30 billion pounds of copper reserves and nearly 600 million ounces of silver reserves.