DENVER - Newmont Corporation (NYSE: NEM), a global leader in gold production, announced the sale of its Éléonore operation in Northern Quebec, Canada, to Dhilmar Ltd for $795 million in cash. The sale is part of Newmont's strategy to optimize its portfolio by divesting non-core assets. The transaction is expected to close in the first quarter of 2025, subject to regulatory approvals and other customary conditions.
With this divestiture, Newmont progresses in its plan to focus on high-quality gold and copper assets. The company's President and CEO, Tom Palmer, stated that the sale of Éléonore exceeds their initial target of $2 billion in cash through portfolio optimization, having now surpassed it by over $1.5 billion. Proceeds from this and other sales are intended to strengthen Newmont's balance sheet and return capital to shareholders.
Dhilmar, a UK-based private mining company, is led by CEO Alexander Ramlie, who has a history of collaboration with Newmont. In 2016, Ramlie's team acquired the Batu Hijau mine in Indonesia, which has since grown significantly under his leadership. Newmont expressed confidence in Dhilmar's capability to manage the Éléonore operation effectively.
The divestiture program Newmont announced in February 2024 includes six operations and two projects from its Australian, Ghanaian, and North American business units. To date, the company has agreements in place to divest four operations and one project, with the remaining sales expected to conclude in early 2025.
Newmont's divestment efforts in 2024 are anticipated to yield up to $3.6 billion in gross proceeds. This includes $3.1 billion from the sale of non-core operations and $527 million from other investment sales. The company's advisors for the Éléonore transaction were BMO Capital Markets and Goodmans LLP.
This news is based on a press release statement and contains forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially. Newmont, founded in 1921 and publicly traded since 1925, is the only gold producer listed in the S&P 500 Index and is known for its commitment to environmental, social, and governance practices.
InvestingPro Insights
Newmont's strategic divestiture of the Éléonore operation aligns with its focus on optimizing its portfolio, as reflected in recent InvestingPro data. The company's market capitalization stands at $49.18 billion, underscoring its significant presence in the gold mining sector.
Newmont's revenue growth has been robust, with a 53.66% increase over the last twelve months as of Q3 2024, and an even more impressive 84.72% growth in the most recent quarter. This strong performance supports the company's ability to execute its portfolio optimization strategy effectively.
The company's EBITDA growth of 80.67% over the last twelve months further demonstrates its operational efficiency and the potential benefits of focusing on core, high-quality assets. This growth trajectory aligns with Newmont's stated goal of strengthening its balance sheet and returning capital to shareholders.
InvestingPro Tips highlight additional aspects of Newmont's financial health:
1. Newmont has maintained dividend payments for 36 consecutive years, reflecting a commitment to shareholder returns that aligns with the company's stated intentions for the proceeds from asset sales.
2. The company's earnings per share have grown over the past year, indicating improving profitability which could be further enhanced by the strategic divestitures.
InvestingPro offers 15 additional tips for Newmont, providing investors with a comprehensive analysis of the company's financial position and future prospects. These insights can be particularly valuable in assessing the long-term impact of Newmont's portfolio optimization strategy.
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