Newmont Corporation (NYSE: NEM) (TSX: NGT) is looking to sell six mines and two projects to generate USD$2 billion in cash.
The company said on Thursday that it intends to divest from three of its Canadian gold assets, these being Éléonore, Musselwhite and Porcupine, as well as Cripple Creek and Victor in the United States. Additionally, the company is divesting from Ghana and Australia’s Telfer mine, and selling two of its non-core projects, which are Havieron in Australia and Coffee Gold in Canada.
The choice to sell off certain key assets came after the company’s legacy assets added 2.2 million ounces to its balance sheet offset only by net negative revisions of 1.8 million ounces by mines at Peñasquito, Tanami, Musselwhite, and Ahafo.
The Peñasquito site experienced net negative revisions of 0.6 million ounces, before depletion, primarily due to an updated resource model that will further support future production planning. Sites such as Éléonore, Porcupine, Cerro Negro, and Merian substantially replaced depletion.
Tom Palmer, Newmont’s chief executive officer, said that the company is divesting mines that do not meet its criteria of “Tier 1” assets, which he defines as producing 500,000 gold equivalent ounces or more, having a life of at least 10 years, and being located in a top jurisdiction.
“We have a number of Tier 2 assets that are very good assets, run by very good people, but that don’t make our Tier 1 category,” Palmer said.
Palmer mentioned that the company has already begun receiving interest from potential buyers.
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Newmont signalled sell-off after Newcrest acquisition
After closing its roughly USD$15 billion acquisition of Newcrest Mining Ltd. in November, Newmont first signalled plans to sell assets, solidifying its position as by far the world’s biggest gold producer. With the takeover, Newmont now operates 20 mines in 11 countries and expects to produce 6.7 million ounces of gold annually by 2028.
Newmont boasts robust gold reserves totalling 135.9 million ounces, including a 41 per cent increase over the previous year’s tally of 96.1 million ounces. The acquisition of Newcrest in 2023 contributed a net addition of 44 million ounces of gold reserves.
Nearly all gold and copper reserves and resources belong to the Newmont tier 1 portfolio. This portfolio is supported by a strong base of operating sites, including Boddington, Lihir, Cadia, Tanami, Ahafo, Merian, Pueblo Viejo, and Nevada Gold Mines (NGM).
Furthermore, it is enhanced by Newmont’s broader portfolio and organic project pipeline, ensuring a gold reserve life of 10 years or more.
In addition to gold reserves, Newmont also boasts measured and indicated gold mineral resources of 104.8 million ounces and Inferred Resources of 69.1 million ounces.
The company also has significant exposure to copper, with 30.1 billion pounds in reserves, 33.1 billion pounds in measured and indicated resources, and 24.0 billion pounds in inferred resources.
Like gold, nearly all copper reserves and resources are attributable to the Newmont Tier 1 Portfolio. Additionally, Newmont has exposure to other metals such as silver, lead, zinc, and molybdenum.
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Nevada is one of the strongest jurisdictions
Newmont held a 38.5 per cent interest in NGM at year end, which accounted for 18.3 million attributable ounces of gold reserves, down from 18.6 million ounces in 2022. Similarly, the company’s 40 percent interest in Pueblo Viejo represented 8.0 million attributable ounces of gold reserves, compared to 8.2 million ounces in the prior year.
However, despite the decline in attributable gold reserve ounces for NGM, Nevada continues to be one of the strongest gold jurisdictions.
For example, Calibre Mining (TSX: CXB) (OTCQX: CXBMF) announced a 96 percent increase in net income for 2023, reaching USD$85 million, surpassing its production guidance by almost 8,500 gold ounces.
In 2023, Calibre achieved its fourth consecutive year of production growth, producing 283,494 ounces of gold. The company has now set the high end of its 2024 guidance at 300,000 ounces.
A large component of that was its Pan Mine in Nevada and the company anticipates that its activities in the state will become even more significant in 2024 after the Gold Rock mine close to the Pan operation goes into operation.
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