) has completed the sale of its Midas operation in Nevada to
Klondex Mines Ltd. for total consideration of more than $83
million. The gold miner acquired the mine through its merger with
Normandy in 2002.
Newmont, in Dec 2013, landed a deal to sell its Midas underground
operation and mill complex to Klondex for $55 million in cash and
$28 million for the replacement of its surety arrangements with
Nevada and federal regulatory authorities. Under the deal,
Newmont also received 5 million purchase warrants of Klondex
having a 15-year term, subject to acceleration in specific
The Midas mine operates through roughly 200 employees and is
located in north central Nevada, between Elko and Reno. Proven
gold reserve at the mine was 30,000 ounces at the end of 2012,
accounting for just 0.2% of total reserves of 14.8 million ounces
for Newmont's Nevada mines.
BARRICK GOLD CP (ABX): Free Stock Analysis
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LAKE SHORE GOLD (LSG): Free Stock Analysis
NEWMONT MINING (NEM): Free Stock Analysis
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The divestment underscores Newmont's strategy to focus more on
its core assets that have longer life and lower cost. Newmont is
making notable progress with its growth projects that are
expected to boost its production performance. The company's key
projects include Batu Hijau in Indonesia and Akyem in Ghana.
Gold miners are shedding non-core assets to optimize their
portfolio as they grapple with higher mining costs and lower gold
prices. Last month, another gold major
) agreed to sell its Kanowna gold mine in Western Australia to
Northern Star Resources Ltd as part of its aggressive portfolio
optimization strategy. The company is also divesting its Plutonic
mine in Australia to Northern Star Resources.
Newmont recently divulged its preliminary production results for
2013. Attributable gold production was 5.1 million ounces for the
year, meeting the higher end of the company's guidance of 4.8 to
5.1 million ounces. Attributable gold production for the fourth
quarter was 1.5 million ounces, an increase from roughly 1.3
million ounces registered a year ago.
Newmont, a Zacks Rank #3 (Hold) stock, will report its
fourth-quarter results after the close on Feb 20.
Other gold stocks worth considering include
Lake Shore Gold Corp.
) with both carrying a Zacks Rank #2 (Buy).