Gold Miner Newmont Looks To Sell Assets, Reduce $8B Debt Load

Gold miner Newmont NEM looks to consolidate its business and reduce its $8 billion debt load by divesting a chunk of its assets.

What Happened: Following last year’s acquisition of Newcrest, Newmont is focusing on what it calls a “go-forward portfolio” that will provide shareholders with exposure to so-called tier-one assets in “the world’s most favorable mining jurisdictions," according to president and CEO Tom Palmer.

The six mines up for sale include Éléonore, Musselwhite, and Porcupine in Canada, CC&V in the US and Akyem in Ghana, and a non-core project, Coffee in Canada.

Additionally, the company is offloading two Australian assets acquired through Newcrest — the Telfer and Havieron mines.

Newmont’s tier-one assets include Boddington, Tanami, Cadia, and Lihir in Australia, Peñasquito in Mexico, and Ahafo in Ghana.

The company also intends to concentrate on three tier-one assets, namely Merian in Suriname, Cerro Negro in Argentina, and Yanacocha in Peru. An emerging tier-one district in the Golden Triangle in British Columbia is also part of Newmont’s strategic plan.

Palmer acknowledged the company’s commitment to delivering value, stating, “It is from this platform that Newmont has established a balanced shareholder return framework, designed to return capital to shareholders through a stable base dividend and share repurchase program.”

See Also: Barrick Targets Northern Nevada – It’s ‘Far From Being A Mature Gold District,’ CEO Says

Why It Matters: By auctioning assets, Newmont hopes to reduce its debt load by $1 billion in the short term.

Palmer also intends to achieve $100 million in free cash flow by integrating Newmont and Newcrest, and cutting jobs.

Newmont faces other challenges, including a 6.9% drop in gold production in 2023 compared to the previous year. There were also impairment charges, reclamation charges, and transaction and integration costs related to the Newcrest acquisition.

Despite these hurdles, Newmont reported higher gold reserves and a dividend commitment, having paid $1.4 billion to shareholders.

Looking ahead to 2025 and beyond, Newmont expects its portfolio to improve gold production to 6.7 million ounces by 2028. This outlook is supported by ongoing projects such as Ahafo North in Ghana, Tanami’s expansion, and block cave developments at Cadia in Australia.

The company also hopes to enhance production levels, improve cost metrics, and focus on returning capital to shareholders through dividends and share repurchases.

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Image: Image by Dariusz Sankowski from Pixabay