Newmont Corporation (NEM) – Shuffling the assets

Newmont Corporation engages in the production and exploration of gold. It also explores for copper, silver, zinc, and lead. The company has operations and assets in the US, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, Papua New Guinea, Ecuador, Fiji, and Ghana.

Newmont has agreed to sell the Telfer gold mine and its 70%stake in the Haverion copper project, both located in Western Australia, to London-listed Greatland Gold for US$475 million ($706 million).

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Under the terms of the deal, Newmont will receive US$201million up front in cash, US$168 million in Greatland scrip, and deferred contingent consideration of up to US$100 million.

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Ord Minnett views the deal as a good result for both companies, with Greatland, which plans to list on the ASX, able to better focu son the Telfer and Haverion assets, while Newmont gets a solid price and potential upside from its stake in the smaller company and the earn-out provision.

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This deal may provide a blueprint for the other assets on the block, in that it is willing to consider equity as currency, which will give it a share in any value added by the new owners. Newmont still expects to realise more than US$2 billion in total from the divestment process. As part of the announcement, Newmont also reiterated CY24 total production guidance from its core assets.

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We maintain our Accumulate recommendation on Newmont and our target price of $80.00.

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