Newmont Corporation (ASX:NEM) has made a second major asset sale in a couple of months as it continues to integrate last year’s Newcrest takeover.
Unlike the first sale in September of former Newcrest assets in the shape of the Telfer mine in WA and the nearby Havieron prospect, this latest deal involves one of Newmont’s own assets – an ageing gold mine in Ghana.
Newmont got US$475 million from the sale of Telfer and Havieron to Greatland Gold, the other partner in Havieron, with a funding assist from Twiggy Forrest's private mining investment arm, Wyloo.
Newmont will get US$1 billion (A$1.48 billion) from selling its Akyem operation in Ghana to China's Zijin Mining Group.
Zijin has mines in China, Canada, Australia and Serbia, South America, Russia and PNG.
Newmont will receive a cash consideration of US$900 million upon closing, with a final US$100 million expected to be received once certain conditions are satisfied (a performance-based earn out).
The operation is one of the largest gold mines in Ghana. The processing plant's design capacity is 8.5 million tonnes a year. From 2021 to 2023, the mine produced 11.9 tonnes, 13.1 tonnes, and 9.2 tonnes of gold, respectively, Zijin said.
In the six months to June, Akyem produced 116,000 ounces of gold, down from 120,000 in the first half of 2023.
That’s in sharp contrast to the existing Ahafo mine in Ghana it is keeping. That saw Ahafo output jump 41% to 374,000 ounces in the first half of 2024 from 265,000 ounces in the same period of 2023. Ahafo North is 30km north-east of Ahafo and is due to come on stream midway through 2025, producing around 3.5 million tonnes of ore a year.
Newmont said it "remains committed to Ghana", including through the investment of up to US$1.05 billion of development capital in its Ahafo North gold-mining project.
Newmont said the sale is part of the company's sale of non-core assets (in the wake of the Newcrest takeover) to focus on its Tier 1 mining assets, especially those with copper.
The company said it will use the proceeds from the sale to strengthen its balance sheet and return capital to shareholders.
The sale will not have a material impact on Newmont's 2024 outlook as it is expected to close in the fourth quarter of 2024, subject to regulatory approvals.
"We believe the proposed transaction results in the greatest overall value for Newmont shareholders and is the best strategic fit for Akyem," Newmont president and CEO Tom Palmer said in the statement.
"The successful completion of this transaction will strengthen our confidence in Ghana as a favourable mining jurisdiction and Newmont will continue to support the growth and development of the region including our development of Ahafo North.”
Zijin Mining controls the Paddington gold mining operation in WA with an annual capacity of five million tonnes of ore a year and production of around 6.7 million tonnes, according to Zijin’s website. The company also has a 50% stake in the Pogera gold mine in PNG.
Newmont US listed shares are up 30% so far in 2024 – just ahead of gold’s 27% rise on Comex.
