Newmont to offload Australian assets in $475m deal with Greatland Gold

Newmont Corporation, the world’s largest gold mining company, has signed an agreement to sell its Telfer gold-copper mine and a 70% stake in the Havieron gold-copper project, along with other related interests in Australia’s Paterson region, to Greatland Gold plc. The deal is valued at up to $475 million and represents a strategic move by Newmont to divest its non-core assets as part of a larger restructuring plan. This transaction is expected to close in the fourth quarter of 2024, pending regulatory and shareholder approvals.

Deal Details and Strategic Implications

The agreement includes three components: $207.5 million in cash payable at closing, $167.5 million in Greatland Gold shares to be issued upon closing, and up to $100 million in deferred cash consideration linked to future gold prices and production from the Havieron project. This structure allows Newmont to immediately monetize a significant portion of its assets while retaining upside potential through the deferred payment mechanism tied to commodity prices.

Tom Palmer, President and CEO of Newmont, emphasized that the sale of the Telfer mine and Havieron stake to Greatland Gold aligns with Newmont’s broader strategy to streamline its portfolio and focus on high-quality Tier 1 assets. “The transaction announced today represents the first asset sale in the divestiture program announced in February. I am pleased that Telfer and Havieron are being sold to Greatland, a company with a highly experienced management team and board of directors. I have full confidence that the Greatland team will be outstanding stewards of these assets,” said Palmer. He added that Newmont expects to generate at least $2 billion in total proceeds from the sale of its non-core assets, which will help reduce debt and return capital to shareholders.

Greatland Gold’s Strategic Position

For Greatland Gold, acquiring the Telfer mine and a majority stake in Havieron is a significant step in consolidating its presence in the Paterson region of Western Australia. The Havieron project, discovered by Greatland in 2018, is located about 45 kilometers east of Newcrest Mining’s Telfer operation and 500 kilometers from rail and port facilities at Port Hedland. The project is considered one of the most promising gold-copper prospects in Australia, with the potential to leverage existing infrastructure from the Telfer mine to expedite development.

Greatland Gold has been positioning itself for this acquisition, backed by a strong balance sheet and the financial support of major shareholders like Australian mining magnate Andrew Forrest. The company believes this acquisition will significantly enhance its growth profile and create value for its shareholders by transitioning from an explorer to a producer.

Adjustments to Production Guidance and Broader Market Impacts

Following the transaction, Newmont has made minor adjustments to its production guidance for non-core gold and copper assets. The new guidance suggests total attributable gold production from non-core assets will be 1.12 million ounces in 2024, while copper production is projected to be around 1,000 tonnes. However, Newmont’s guidance for its Tier 1 assets remains unchanged, emphasizing the company’s ongoing commitment to high-margin production.

The sale of Telfer and Havieron is not the only divestiture Newmont has planned. Other assets under consideration for sale include mines such as Éléonore in Canada, Ahafo in Ghana, and Musselwhite in Ontario. The market has shown considerable interest in these assets, particularly from major mining companies like Shandong Gold and Zijin Mining, as well as regional players like Asante Gold.

Newmont’s decision to sell its Telfer operation and Havieron stake marks a pivotal moment in its strategy to streamline operations and strengthen its focus on core assets. This move is not only financially strategic but also positions Greatland Gold to become a more significant player in the Australian mining sector, potentially leading to further consolidation in the region. The divestiture aligns with both companies’ strategic goals, promising a transformative impact on their future operations.