Newmont and Kirkland Lake Gold Reach Agreement for Strategic Alliance and Holt Royalty Liability
August 17 2020 - 5:04PM
Business Wire
Newmont Corporation (NYSE: NEM, TSX: NGT) (Newmont or The
Company) and Kirkland Lake Gold Ltd. (NYSE: KL, TSX: KL, ASK: KLA)
(Kirkland Lake Gold or Kirkland) have signed a Strategic Alliance
Agreement to jointly assess regional exploration opportunities
around Newmont’s Timmins properties and Kirkland’s Holt Complex in
Ontario, Canada.
As part of the Strategic Alliance, Newmont has acquired an
option (the Option) from Kirkland on the mining and mineral rights
subject to a royalty payable by Newmont to Royal Gold, Inc. (the
Holt Royalty) in exchange for a $75 million payment to Kirkland
Lake Gold. Newmont can exercise the Option only in the event
Kirkland intends to restart operations at the Holt Mine and process
material subject to the Holt Royalty. Kirkland has the right to
assume Newmont’s obligations under the Holt Royalty at any time, in
which case the Option would terminate. The effect of the Option
structure is that Newmont will have no additional liability
exposure in relation to the Holt Royalty.
As a result of the Strategic Alliance Agreement and the Option,
Newmont expects to remove the approximately $350 million liability
for the Holt Royalty on its balance sheet at June 30, 2020 and
record a gain of approximately $275 million in Net income (loss)
from discontinued operations in its results for the third quarter
of 2020.
The formation of the Strategic Alliance provides Kirkland Lake
Gold with capital to evaluate strategic alternatives for the future
of the Holt mining complex, explore on its existing properties, and
evaluate other regional opportunities where Kirkland and Newmont
may cooperate in the future. Kirkland Lake Gold will act as manager
of Strategic Alliance activities.
About Newmont
Newmont 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 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 expertise. Newmont was founded in 1921 and
has been publicly traded since 1925.
About Kirkland Lake Gold Ltd.
Kirkland Lake Gold Ltd. is a growing gold producer operating in
Canada and Australia that produced 974,615 ounces in 2019. The
production profile of the Company is anchored by three high-quality
operations, including the Macassa Mine and Detour Lake Mine, both
located in Northern Ontario, and the Fosterville Mine located in
the state of Victoria, Australia. Kirkland Lake Gold's solid base
of quality assets is complemented by district scale exploration
potential, supported by a strong financial position with extensive
management expertise.
Cautionary Statement:
This news release may contain “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 harbor
created by such sections and other applicable laws. Where a
forward-looking statement expresses or implies 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. Forward-looking statements may
include management’s expectations related to future results of the
strategic alliance, exploration plans and results of exploration,
future operations (including, without limitation, future operations
at the Holt mine), and expectations regarding the anticipated
accounting treatment and financial impacts for the third quarter
related to the liability for the Holt royalty and Strategic
Alliance Agreement. For a discussion of risk and other factors that
might impact Newmont’s business and future looking statements, see
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2019 filed with the U.S. Securities and Exchange
Commission (the “SEC”), under the heading “Risk Factors”, as well
as the Company’s subsequent Quarterly Reports on Form 10-Q,
available on the SEC website or www.newmont.com. 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200817005671/en/
Media Contact Eric Colby
303-837-5724 eric.colby@newmont.com
Investor Contact Jessica Largent
303-837-5484 jessica.largent@newmont.com
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