Newmont successfully completed the sale of its 50 per cent stake in Kalgoorlie Consolidated Gold Mines (KCGM) to Northern Star Resources receiving cash proceeds of US$800 million.
“Newmont is pleased to complete the sale of KCGM to Northern Star and hand over the asset in good order to a well-established gold producer with a commitment to safety, community development and responsible environmental practices,” said Tom Palmer, President and Chief Executive Officer.
“Proceeds from the transaction will support Newmont’s disciplined approach to capital allocation, which includes strategically reinvesting in the business, strengthening the Company’s investment-grade balance sheet and returning cash to shareholders,” added Mr Palmer.
Total proceeds from the transaction include a US$25 million payment that gives Northern Star specified exploration tenements, transitional services support and an option to exclusively negotiate for the purchase of Newmont’s Kalgoorlie power business for a 120-day period. The US$25 million payment will be credited against the purchase price for the power business or US$22.5 million would be returned to Northern Star if the power business is sold to a third party.
Combined with the previously announced agreements to sell Red Lake in Canada for US$375 million and the Company’s stake in Continental Gold for US$260 million, Newmont has met its divestiture target of US$1.0 to US$1.5 billion, with more than US$1.4 billion in cash proceeds expected to be received in the first quarter of 2020. The sale of KCGM further streamlines Newmont’s portfolio, with 12 top-tier assets located on four continents in the world’s most favorable gold mining jurisdictions.
Following the divestiture of KCGM, the Company is updating its 2020 guidance and long-term outlook.
On the tail end of the sale, Newmont has also announced that it has refreshed its brand, name and logo to reflect “its strong and stable foundation following two historic transactions in 2019”.
The Company’s refreshed brand is being unveiled as Newmont enters its centenary year in May of 2020.
“We successfully completed two historic transactions in 2019, which have transformed Newmont into a truly international organisation with an unmatched portfolio of assets and prospects in top-tier jurisdictions around the world,” commented Mr Palmer.
“As this company has done many times in the past, Newmont has demonstrated its ability to adapt to change, which is truly a hallmark of our success over the last 100 years. Updating our brand represents a natural step as we approach the next 100 years in Newmont’s long and proud legacy of operating discipline, profitable growth, environmental stewardship, and developing the industry’s best talent.”