360° Coverage : Newmont Announces Sale Of Australian Mine As Part Of Portfolio...

2 Updates

Newmont Announces Sale Of Australian Mine As Part Of Portfolio Optimization Efforts

May 14 2014, 12:52pm CDT | by

Newmont Mining has announced the sale of its Jundee underground gold mine in Australia to Northern Star Resources Limited for total proceeds of $91 million. The company said in a statement that it...

Filed under: news

 
 
 

18 weeks ago

Newmont Announces Sale Of Australian Mine As Part Of Portfolio Optimization Efforts

May 14 2014, 12:52pm CDT | by

Newmont Mining has announced the sale of its Jundee underground gold mine in Australia to Northern Star Resources Limited for total proceeds of $91 million. The company said in a statement that it had entered into a binding agreement with Northern Star to sell the Jundee underground mine for cash proceeds of $77 million and a further payment of $14 million for working capital. Northern Star is acquiring all of Jundee’s assets and liabilities, including all environmental and employee obligations. The sale is expected to be completed in July. Completion of the sale is contingent upon Northern Star securing financing and is subject to a third party’s right of refusal.
/>

The transaction is consistent with Newmont’s strategy to optimize its portfolio by selling off its high cost mines and focusing on lower cost and longer life operations.

You can check out our complete analysis for Newmont here:

The Jundee Mine

The Jundee mine is located about 435 miles northeast of Perth in Western Australia. It is 100% owned by Newmont. Jundee represents a fairly minuscule portion of Newmont’s overall gold mining operations. The mine produced 279,000 ounces of gold out of a total attributable production of 5.065 million ounces for Newmont in 2013. In terms of gold reserves, Jundee accounted for only 410,000 ounces in proven and probable reserves, out of a total of 88.35 million ounces in proven and probable reserves attributable to Newmont in 2013.

The Jundee mine, being a part of Newmont’s Australia and New Zealand operations, is a fairly high cost asset. The All In Sustaining Cost metric for the Australia and New Zealand operations stood at $1,176 per ounce as compared to $1,105 per ounce for Newmont’s overall gold mining operations in 2013. The AISC metric captures all of the expenditures incurred to discover, develop and sustain production. AISC includes costs applicable to sales, remediation costs, general and administrative costs, advanced projects and exploration expenses, treatment and refining costs, sustaining capital expenditure and other miscellaneous expenses. This metric helps investors gauge the company’s performance better.
/>

Rationale For The Sale

The sale is part of Newmont’s overall strategy to optimize its portfolio by divesting non-core assets. It follows stake sales in Canadian Oil Sands, the Midas underground mine in Nevada and Paladin Energy Limited. Combined with the Jundee transaction, the total proceeds from these stake sales is around $800 million.

Newmont is cutting costs, divesting high cost and non-core assets in order to better cope with an environment characterized by low gold prices, which have corrected significantly over the course of last year. These have been reacting to cues regarding Quantitative Easing tapering by the Federal Reserve. London PM Fix gold prices have fallen from average levels of $1,650 per ounce in Q1 2013 to $1,300 per ounce in Q1 2014. Going forward, the expected strengthening of the U.S. economy is likely to result in further QE tapering and continued pressure on gold prices.
/>

The company management has already stated that Newmont will focus on lower cost and longer life operations. Given the bleak gold price environment, there may be more such divestments in the future.
/>

Like our charts? Embed them in your own posts using the Trefis WordPress Plugin.

 
Update
2

3 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new compan ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

3 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the doub ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Pakistani president appeals for foreign investments
Islamabad, Sep 22 (IANS) President Mamnoon Hussain Monday called on foreign investors and industrialists to invest in Pakistan and take full advantage of a business friendly environment, as the government is implementing a liberal policy to promote trade and economic activities.
 
 
Russia wants economically stable Ukraine: Putin
Moscow, Sep 22 (IANS) Russian President Vladimir Putin said Monday that Russia's banks should continue operating in Ukraine and help the country remain economically reliable and stable, despite troubled relations between the two countries.
 
 
WHO committee identifies more action to contain Ebola
Geneva, Sep 22 (IANS) The World Health Organisation (WHO) Monday said the second meeting of the emergency committee on the 2014 Ebola virus disease outbreak in West Africa identified a number of areas where more action and attention is urgently needed to contain the growing outbreak.
 
 
Ebola outbreak in DRC under control
Kinshasa, Sep 22 (IANS) The Ebola virus disease outbreak in Equateur province in northern Democratic Republic of Congo (DRC), is being brought under control, an official statement citing Health Minister Felix Kabange said.
 
 
 

Latest from the Network

Bindra announces retirement from professional shooting
Incheon, Sep 22 (IANS) India's only individual Olympic gold medallist Abhinav Bindra Monday announced his retirement from competitive shooting, saying the 2014 Asian Games would be his last, but added that he would...
Read more on Sport Balla
 
Ebola outbreak in DRC under control
Kinshasa, Sep 22 (IANS) The Ebola virus disease outbreak in Equateur province in northern Democratic Republic of Congo (DRC), is being brought under control, an official statement citing Health Minister Felix Kabange...
Read more on Business Balla
 
23 suspected terrorists killed in Pakistan: Army
Islamabad, Sep 22 (IANS) At least 23 suspected terrorists were killed Monday in aerial strikes on terrorist hideouts in the country's tribal region of North Waziristan, the Pakistani Army said. According to a...
Read more on Politics Balla
 
'Pakistan army chief exposed Imran-Qadri-US conspiracy'
Islamabd, Sep 22 (IANS) Pakistan Tehreek-e-Insaf (PTI) chairman Imran Khan and Pakistan Awami Tehreek (PAT) chief Tahir-ul Qadri conspired with the US government to overthrow the government and it was exposed by...
Read more on Politics Balla
 
Six killed in China fireworks plant explosion
Beijing, Sep 22 (IANS) An explosion at a fireworks plant in central China's Hunan Province left six people dead and 33 others injured Monday, authorities said. The blast happened at around 3 p.m. at a fireworks...
Read more on Politics Balla
 
16 Palestinians arrested in West Bank
Jerusalem, Sep 22 (IANS) Israel arrested 16 Palestinians in raids across the West Bank overnight, the Israeli army said Monday. Those detained were suspected of involvement in rioting and "terrorist" activities,...
Read more on Politics Balla
 
IS seizes over 100 Kurdish villages in Syria
Beirut, Sep 22 (IANS/EFE) The Islamic State (IS) Sunni radical organisation has seized control over more than 100 Kurdish villages near Kobani city in the northern Syrian province of Aleppo, a Kurdish source told Efe...
Read more on Politics Balla
 
Bahrain set to sign media agreement with India
Manama, Sep 22 (IANS) Bahrain is set to sign an information and media agreement with India, media reported Monday. The country's cabinet Sunday gave its initial approval to the proposed agreement presented by Minister...
Read more on Ad Balla
 
Bangladesh empowers parliament to sack SC judges
Dhaka, Sep 22 (IANS) Bangladesh President Md. Abdul Hamid has given his consent to the 16th Constitution Amendment bill, empowering parliament to sack Supreme Court judges. The president endorsed the bill five days...
Read more on Politics Balla
 
Asiad wushu: India assured of two medals
Incheon, Sep 22 (IANS) Wushu athletes Narender Grewal and Yumnam Sanathoi Devi assured India of two more Asian Games medals after winning their respective men's and women's quarterfinal matches at the Ganghwa Dolmens...
Read more on Sport Balla