Newmont has announced the sale of its Porcupine operation in Ontario, Canada, to Discovery Silver for up to $425m.
This transaction is part of Newmont’s ongoing divestiture programme aimed at non-core assets. It contributes to Newmont’s aim of generating up to $4.3bn from divestitures and investments.
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The agreement outlines that Newmont will receive up to $425m in gross proceeds, comprising $200m in cash upon closing, $75m in equity through Discovery shares and $150m in deferred cash consideration.
The sale is expected to close in the first half of 2025 (H1 2025), subject to certain conditions being met.
In February 2024, Newmont unveiled plans to offload non-core assets comprising six operations and two projects in its Australian, Ghanaian and North American divisions.
With the Porcupine sale, Newmont has agreements in place for all six operations and one project listed for sale. The anticipated total gross proceeds from 2024 transactions are up to $4.3bn, including $3.8bn from non-core divestitures and $527m from other investments.
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By GlobalDataThis includes sales from the Akyem, CC&V, Éléonore, Musselwhite, Porcupine and Telfer operations.
Newmont president and CEO Tom Palmer said: “Today’s announcement represents a significant milestone for Newmont as we have agreed to sell the final non-core operation from our divestiture programme. The sale is part of Newmont’s ongoing programme to divest non-core assets as we make a strategic shift to focus on our Tier 1 assets.
“We have full confidence that Discovery’s leadership team will continue to operate Porcupine responsibly, leveraging their extensive experience and history in the area. Including the Porcupine divestiture, we expect to generate up to $4.3bn in total proceeds from the announced sales of our high-quality non-core assets and investments, enabling us to further reduce debt and return capital to shareholders.”
BMO Capital Markets served as the financial adviser, while Goodmans acted as the legal adviser for the Porcupine transaction.
In a related development, Franco-Nevada entered into a financing agreement with Discovery Silver to support the acquisition of the Porcupine Complex.
This package provides Discovery with the necessary funding to not only secure the Porcupine Complex but also to drive key capital initiatives aimed at unlocking its value.
The deal includes a $300m (C$431.69m) net smelter return royalty, paid in two parts as production from the complex starts, and a $100m senior secured loan, available for Discovery Silver to use within two years. It also includes $49m in equity through a public offering.
