DENVER - Newmont Corporation (NYSE: NEM, TSX: NGT, ASX: NEM, PNGX: NEM), a global leader in gold production, announced today its agreement to sell certain Australian assets to Greatland Gold plc (AIM:GGP). The sale includes the Telfer operation, Newmont's 70% interest in the Havieron gold-copper project, and other related interests in the Paterson region. The transaction is slated for completion in the fourth quarter of 2024, pending regulatory approvals and other customary closing conditions.
The deal is expected to net Newmont up to $475 million in proceeds, comprising $207.5 million in cash upon closing, $167.5 million in Greatland shares also issued at closing, and up to $100 million in deferred contingent cash consideration tied to the future performance of the Havieron project.
Tom Palmer, President and CEO of Newmont, expressed confidence in Greatland's management, stating, "The transaction announced today represents the first asset sale in the divestiture program announced in February." Palmer added that the divestiture aligns with Newmont's strategy to focus on its Tier 1 assets, reduce debt, and return capital to shareholders.
In light of the impending sale, Newmont has revised its non-core gold and copper production guidance for 2024. The company's 2024 outlook, released on July 24, 2024, reflects these adjustments, with the Telfer divestiture now marked as 'held for sale' in Newmont's financial statements.
The 2024 guidance for Newmont's Tier 1 gold production remains unchanged at 5,630 thousand ounces (Koz), while production from non-core assets is expected to be 1,120 Koz. Copper production forecasts also remain steady at 144 kilotonnes for the Tier 1 portfolio, with a minor contribution of 1 kilotonne from non-core assets.
Newmont engaged Macquarie Capital as its financial adviser and Allens and Linklaters as its legal advisers to facilitate the transaction.
This news is based on a press release statement from Newmont Corporation, which is recognized for its strong environmental, social, and governance practices and is the only gold producer listed in the S&P 500 Index. The company emphasizes that forward-looking statements in the release are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
In other recent news, Newmont Mining Corp (NYSE:NEM). has been the subject of significant developments. The company reported strong Q2 2024 revenue of $4.4 billion, driven by the production of 1.6 million ounces of gold and 477,000 gold equivalent ounces from other metals. This resulted in a substantial $1.4 billion in cash flow from operations and $594 million in free cash flow.
Argus and Scotiabank have both upgraded Newmont Mining's stock rating, reflecting confidence in the company's prospects. Argus raised its rating from Hold to Buy, setting a new price target of $58. Scotiabank, on the other hand, upgraded the rating from Sector Perform to Sector Outperform and increased the price target to $59.
Newmont Mining also announced the monetization of Batu Hijau obligations, expecting $153 million by September 30. The company returned $540 million to shareholders through dividends and share repurchases and is on track to meet the synergy target of $130 million and $2 billion from non-core asset sales. The company anticipates higher production in the second half of the year and aims for at least $2 billion from the sale of non-core assets.
InvestingPro Insights
As Newmont Corporation (NYSE: NEM) navigates the strategic sale of its Australian assets, the company's financial health and market performance remain key areas of interest for investors. According to recent data from InvestingPro, Newmont boasts a market capitalization of $58.28 billion, reflecting its substantial presence in the global gold production industry. The company's revenue growth has been impressive, with a 32.86% increase over the last twelve months as of Q2 2024 and an even more remarkable quarterly growth of 64.07% for the same period. This growth trajectory is echoed by analysts' expectations, as highlighted in one of the InvestingPro Tips, which anticipates sales growth in the current year.
Newmont's commitment to shareholder returns is evidenced by its track record of maintaining dividend payments for 54 consecutive years, a reassuring sign for investors looking for stability in their investments. Additionally, the company's stock is known for its low price volatility, which may appeal to investors seeking less turbulent market experiences. Investors can access a total of 10 InvestingPro Tips for Newmont Corporation, which provide deeper insights into the company's financials and market expectations, by visiting https://www.investing.com/pro/NEM.
Despite facing a negative P/E ratio of -26.18, analysts predict a positive turnaround with the company expected to be profitable this year, a sentiment that aligns with the company's own confidence in its strategic divestitures and focus on Tier 1 assets. Moreover, Newmont's stock has experienced a strong return over the last three months, with a 23.41% price total return, and is trading near its 52-week high, at 94.38% of the peak value, indicating robust investor confidence in the company's future prospects.
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