Newmont Goldcorp Successfully Reaches Agreement to Sell Red Lake -- $375 Million in Cash Plus Up To $100 Million in Contingen...
November 25 2019 - 4:38PM
Business Wire
Sale further optimizes world-class portfolio while improving
financial flexibility
Newmont Goldcorp Corporation (NYSE: NEM, TSX: NGT) (Newmont or
the Company) has continued to streamline its asset base by entering
into a binding agreement to sell the Red Lake complex in Ontario,
Canada to Evolution Mining Limited (Evolution). Upon closing of the
transaction, expected in the first quarter of 2020, Newmont will
receive $375 million in cash and contingent payments of up to an
additional $100 million tied to new resource discoveries.
“This transaction both strengthens our balance sheet and
provides ongoing exposure to new discoveries at Red Lake,” said Tom
Palmer, President and Chief Executive Officer. “Evolution is a
highly respected and responsible gold producer who is committed to
the success of Red Lake and who we believe will prove a great
partner for surrounding communities and stakeholders.”
Under terms of the $100 million contingent payment, Evolution
will pay Newmont $20 million for each one million ounces of new
gold resources added to the existing Red Lake resource base over a
fifteen year period. The contingent payment is applicable to the
first five million ounces of new resources.
Newmont intends to use proceeds from the transaction to support
the Company’s capital allocation priorities of returning cash to
shareholders, maintaining an investment-grade balance sheet, and
investing in a world-class portfolio.
Evolution Mining is a leading, growth-focused Australian gold
producer. Evolution operates five wholly-owned mines – Cowal in New
South Wales, Cracow, Mt Carlton and Mt Rawdon in Queensland, and
Mungari in Western Australia.
Newmont has the strongest and most sustainable portfolio of
operations, projects and exploration prospects in the gold sector.
These assets allow the Company to sequence profitable projects in
its unmatched pipeline to sustain gold production over a
decades-long time horizon.
About Newmont Goldcorp
Newmont Goldcorp is the world’s leading gold company and a
producer of copper, silver, zinc and lead. The Company’s
world-class portfolio of assets, prospects and talent is anchored
in favorable mining jurisdictions in North America, South America,
Australia and Africa. Newmont Goldcorp is the only gold producer
listed in the S&P 500 Index and is widely recognized for its
principled environmental, social and governance practices. The
Company is an industry leader in value creation, supported by
robust safety standards, superior execution and technical
proficiency. Newmont Goldcorp was founded in 1921 and has been
publicly traded since 1925.
Legal Disclaimer and Cautionary Statement
This release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
which are intended to be covered by the safe harbors provided for
under such sections. Forward-looking statements may be accompanied
by terminology such as “will,” “expect,” “intend,” or comparable
terminology. Forward-looking statements used herein may include,
without limitation, estimates and expectations regarding the
completion of the Red Lake sale transaction, timing of closing,
receipt of related cash and contingent consideration, future
success and performance of Red Lake, future balance sheet strength
of the Company maintenance of an investment-grade balance sheet,
anticipated use of proceeds, return of cash to shareholders, future
project profitability and long-term gold production. Where the
Company expresses an expectation or belief as to future events or
results, such expectation or belief is expressed in good faith and
believed to have a reasonable basis. However, such statements are
subject to risks, uncertainties and other factors, which could
cause actual results to differ materially from future results
expressed, projected or implied by the “forward-looking
statements.” For example, the closing of the transaction remains
contingent on the receipt of regulatory approvals and satisfaction
of other conditions precedent, and the timing and amount of
contingent payment will also remain subject to risks and
uncertainties, including whether new gold resources are added to
the existing Red Lake resource base during the covered period. As
such, no guarantees can be made with respect to future performance
or the closing of the contemplated transaction. Estimates or
expectations of future events or the Company’s future results are
also based upon certain assumptions, which may prove to be
incorrect. Such assumptions, include, but are not limited to: (i)
there being no significant change to current geotechnical,
metallurgical, hydrological and other physical conditions; (ii)
permitting, development, operations and expansion of operations and
projects being consistent with current expectations and mine plans,
including, without limitation, receipt of export approvals; (iii)
political developments in any jurisdiction in which the Company
operates being consistent with its current expectations; (iv)
certain exchange rate assumptions being approximately consistent
with current levels; (v) certain price assumptions for gold,
copper, silver, zinc, lead and oil; (vi) prices for key supplies
being approximately consistent with current levels; (vii) the
accuracy of current mineral reserve and mineralized material
estimates; and (viii) other planning assumptions. For a more
detailed discussion of risks and other factors that might impact
future looking statements, see the Company’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2019 under the heading
“Risk Factors”, filed with the U.S. Securities and Exchange
Commission (the “SEC”) and available on the SEC website or
www.newmontgoldcorp.com, as well as the Company’s other SEC
filings, including the most recent Quarterly Report on Form 10-Q
for the quarter ended September 30, 2019. The Company does not
undertake any obligation to release publicly revisions to any
“forward-looking statement,” including, without limitation,
outlook, to reflect events or circumstances after the date of this
news release, or to reflect the occurrence of unanticipated events,
except as may be required under applicable securities laws.
Investors should not assume that any lack of update to a previously
issued “forward-looking statement” constitutes a reaffirmation of
that statement. Continued reliance on “forward-looking statements”
is at investors' own risk.
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version on businesswire.com: https://www.businesswire.com/news/home/20191125005807/en/
Media Contact Omar Jabara
303.837.5114 omar.jabara@newmont.com
Investor Contact Jessica
Largent 303.837.5484 jessica.largent@newmont.com
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