Newmont to sell mines in Canada, Australia after Newcrest buy

Newmont (TSX: NGT; NYSE: NEM) says it plans to sell six inessential assets including mines in Quebec, Ontario, the Yukon and Western Australia to cut debt. 

The list contains the Éléonore mine in Quebec, the Musselwhite and Porcupine mines in Ontario and the Coffee project in the Yukon, the world’s largest gold miner said on Thursday. Also on the block is its 70% stake in the Havieron joint venture with Greatland Gold (LSE: GGP) in Australia’s remote northwest.

Newmont, which completed the acquisition of Newcrest Mining in November, plans to use the proceeds to help cut at least US$1 billion debt in the near-term. The company had US$8 billion in debt at the end of 2023.

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

“A big part of our commitment is to deliver US$100 million of free cash flow by bringing Newmont and Newcrest together,” CEO Tom Palmer said in the release. “There is a reduction in headcount in order to achieve those synergies.” 

After the divestments, the gold giant is to focus on 10 tier-one assets – deemed as mines and projects that are not only large in size but also have long lives and low costs – to secure long-term growth, it said. 

“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-one assets in the sector,” Palmer said.

Challenges

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

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

The company posted a loss of US$3.21 per share. Earnings, adjusted for one-time gains and costs, came to US50¢ per share, slightly short of the US51¢ per share estimated by Wall Street.

Despite the challenges, Newmont handed US$1.4 billion in dividends to shareholders and it’s forecasting 2024 total production to increase to nearly 6.9 million gold oz. underpinned by 5.6 million gold oz from its tier one portfolio.

The mining giant also reported higher gold reserves of 135.9 million attributable oz. for last year compared to the 96.1 million oz. it had at the end of 2022. Newmont noted it has significant upside in other metals, including reserves of more than 30 billion lb. of copper and nearly 600 million oz. of silver.