) has closed the earlier announced sale of its Jundee underground
gold mine in Australia to Northern Star Resources for roughly $91
million. The company announced the deal last month. Total proceeds
from the sale consist of around $77 million of cash and $14 million
for working capital.
The Jundee gold mine in Western Australia began production in 1995
from a complex of open pit mines. It started operation as an
underground mine in 1997. The mine produced 279,000 ounces of gold
Under the agreement, Northern Star bought all of Jundee's assets
and liabilities including all environmental and employee
obligations. All existing fixed plant and onsite equipment owned by
Newmont has been transferred to Northern Star. Moreover, most of
Jundee's non-contract staffs were offered continuing employment.
The divestment underscores Newmont's strategy to focus more on its
core assets that have longer life and lower cost. As part of this
strategy, the company has sold its Midas mine in Nevada to Klondex
Mines Ltd. It has also sold its equity interest in Paladin Energy
Ltd. With the completion of the Jundee deal, Newmont has generated
around $800 million in proceeds over the last 12 months from the
sale of non-core assets.
Gold miners are shedding non-core assets to optimize their
portfolio as they grapple with lower
and high mining costs. Another gold major
) also sold its Kanowna and Plutonic gold mines in Australia to
Northern Star as part of its aggressive portfolio optimization
Newmont saw its profit from continuing operations (as reported)
tumble roughly 63% year over year in first-quarter 2014, hurt by
lower pricing for gold and copper. Nevertheless, the company
witnessed a rise in gold and copper productions in the quarter.
Newmont is a Zacks Rank #3 (Hold) stock.
Better-ranked gold stocks include
Pretium Resources Inc.
Rio Alto Mining Limited
) with both retaining a Zacks Rank #1 (Strong Buy).
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PRETIUM RES INC (PVG): Free Stock Analysis
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RIO ALTO MINING (RIOM): Free Stock Analysis
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