Newmont sells 13.3% Orla Mining stake for $605 million
Newmont Corp. [NGT-TSX, NEM-NYSE, ASX, PNGX] said it has sold its entire stake in Orla Mining Ltd. [OLA-TSX] for $605 million.
The U.S. gold mining giant said it sold 43.2 million Orla common shares for $14 per share. Prior to the sale, Newmont held a 13.3% interest in Orla on a non diluted basis. But as a result of the deposition, it no longer holds any shares in the company.
Orla shares were active on the news, easing 7.14% or $1.09 to $14.17. The shares trade in a 52-week range of $17.78 and $5.26.
In February 2024, Newmont announced its intention to divest its non-core assets, including six operations and two projects from its Australian, Ghanian, and North American business units. In keeping with that goal, Newmont recently agreed to sell its Coffee Project in the Canadian Yukon to Fuerte Metals Corp. [FMT-TSXV] for up to $150 million.
Upon completion of the sale of Coffee to Fuerte, Newmont will have divested all six operations and both projects that were classified as held for sale in financial statements.
“Today’s announcement (of the Orla share sale) demonstrates Newmont’s ongoing commitment to streamlining our equity portfolio and unlocks significant cash to support Newmont’s capital allocation priorities,’’ said Newmont CEO Tom Palmer. “We value the strong relationship we’ve had with Orla since our initial investment,’’ he said.
Orla was in the news last year when the company announced a strategic expansion into Canada with the acquisition of the Musselwhite Gold Mine in northwestern Ontario from Newmont for $810 million cash. Orla also agreed to pay a gold-linked consideration of $40 million.
The combination of the proven Musselwhite mine and Orla’s Camino Rojo mine in Zacatecas State, Mexico, more than doubled the company’s annual production to over 300,000 ounces, with the expected near-term growth to over 500,000 ounces annually as the South Railroad project in Nevada is expected to start production in 2027. The transaction was also expected to significantly enhance Orla’s free cash flow, providing additional cash for the company’s organic growth plans.
Musselwhite is a producing underground gold mine located on the shore of Opapimiskan Lake in northwestern Ontario. It has been in operation for 25 years, having produced close to 6.0 million ounces of gold to date, with a long history of resource growth and expansion.
News of the sale by Newmont comes after Agnico-Eagle Mines Ltd. (AEM-TSX, AEM-NYSE) recently announced the disposition of its 11.3% interest in Orla. Agnico said it sold 38 million common shares of Orla to buyers in Canada, the United States and elsewhere for $14.75 per share for a total consideration of $560.5 million.
After giving effect to the disposition, Agnico will not have any interest in Orla.
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