Newmont Mining Announces Sale of Australian Mine as Part Of Portfolio Optimization Efforts
Newmont Mining recently made an announcement indicating the sale of its Jundee underground gold mine in Australia. The sale was awarded to Northern Star Resources Limited for total proceeds of $91 million.
According to the company, Newmont accepted a binding agreement with Northern Star to sell the Jundee underground mine for cash proceeds of $77 million and an additional payment of $14 million for working capital. All of Jundee’s assets and liabilities, including all environmental and employee obligations, are set to go to Northern Star. Aside from contingencies such as Northern Star securing financing and the subjection to a third party’s right of refusal, all of the ink for this contract is set to dry next month in July.
The high cost of operating Jundeed underground gold mine represents a significant motivator for Newmont’s decision to sell. Newmont’s pervasive strategy is structured around the optimization of its portfolio through increased focus on lower cost and longer life operations.
This deal comes off the stake sales in Canadian Oil Sands, the Midas underground mine in Nevada and Paladin Energy Limited. The total proceeds from these stake sales along with the Jundee transaction comes in at approximately $800 million.
Newmont is cutting costs, divesting high cost and non-core assets in order to improve the way it is able to deal with a market environment typified by low gold prices, which have corrected significantly over the course of last year. It is expected that we will see similar deals in the future.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.