Newmont to sell Australian mine, project in $475M cash and stock deal
Gold and Silver Prices Climb Higher Amid Continued and Chronic Instability and Inflation
Newmont Corporation has reached an agreement to sell its Telfer gold-copper mine and a 70% stake in the Havieron project in Western Australia to Greatland Gold for up to $475 million. This deal is part of Newmont's strategy to divest non-core assets following its acquisition of Newcrest Mining in 2023.The transaction includes:
$207.5 million in cash at closing
$167.5 million in Greatland Gold shares
Up to $100 million in deferred contingent cash payments based on future performance metrics
This sale represents the first asset divestiture in Newmont's program announced in February 2024. The company aims to generate at least $2 billion in total proceeds from selling high-quality, non-core assets. This will allow Newmont to focus on its Tier 1 assets, reduce debt, and return capital to shareholders.
The deal is expected to close by the end of 2024, subject to certain conditions, including the remediation of Telfer's cracked tailings dam. Newmont has made minor adjustments to its non-core production guidance for 2024 as a result of this divestment, but the outlook for its Tier 1 portfolio remains unchanged.
Greatland Gold, which already held a 30% interest in Havieron, will now consolidate its position in the Paterson region of Western Australia. This acquisition is expected to enhance Greatland's future development plans for the area, with potential synergies between the operational Telfer mine and the developing Havieron project
Gold and Silver Prices Climb Higher Amid Continued and Chronic Instability and Inflation
Gold has demonstrated exceptional performance in 2024, reaching new all-time highs an impressive 34 times throughout the year. This remarkable achievement underscores gold's enduring appeal as a safe-haven asset during periods of economic uncertainty.
The precious metal's market capitalization has surged by an astounding $5.7 trillion, reaching a total of $17.2 trillion. This represents a staggering 49.6% increase year-to-date, far outpacing many other asset classes.
The dramatic rise can be attributed to several factors, including geopolitical tensions, inflation concerns, and a weakening US dollar.
Central banks, particularly those in emerging markets, have played a significant role in driving gold's price upward through their continued purchases. This trend, coupled with strong investor demand and limited supply growth, has created a perfect storm for gold's price appreciation.
The gold mining industry has faced challenges in recent years, with new discoveries becoming increasingly rare and existing deposits often located in remote regions.
These supply constraints, juxtaposed against rising demand, have created a favorable environment for sustained price growth.
As gold continues to break records, many analysts predict further upside potential. Some experts project gold prices could approach or even surpass $3,000 per ounce before the year's end, gold's remarkable run is just getting started. FOMO kicks in at the $3,000 dollar number then gold may increase 5X to 10X in less than 2 years.
Gold always brings its little friend named Silver along wherever it goes.