Newmont selling off Timmins and Musselwhite

Newmont Corporation has announced a comprehensive strategy to enhance its position as a leading gold and copper mining entity and it includes the sale of the Porcupine (Timmins) division as well as Musselwhite. This strategy is underpinned by a focus on Tier 1 assets, which are characterized by their scale, longevity, and ability to generate robust free cash flows. These assets are strategically located in the most favorable mining jurisdictions worldwide. As part of this strategy, Newmont plans to divest six non-core assets and two non-core projects to concentrate on its portfolio of Tier 1 and emerging Tier 1 assets. This move is aimed at optimizing the company's project development capabilities and advancing the gold industry's premier pipeline of projects.

The company has outlined a long-term outlook, targeting a production increase to 6.7 million ounces of gold by 2028, with gold equivalent ounce (GEO) production expected to reach 8.3 million by the same year. This growth will be supported by an average annual sustaining capital expenditure of $1.5 billion over the next five years, focusing on key projects related to tailings management, water, infrastructure, and equipment reliability. Additionally, an average annual development capital expenditure of $1.3 billion is anticipated, aimed at advancing the most value-accretive opportunities in a disciplined manner.

Newmont has also established a balanced capital allocation strategy and return of capital framework, emphasizing maintaining an investment-grade balance sheet with approximately $7 billion in available liquidity. This includes a near-term debt reduction target of $1 billion, achieved through free cash flow and proceeds from the sale of non-core assets. The company is committed to returning capital to shareholders through a stable base dividend and a $1 billion share repurchase program over the next 24 months, funded by excess free cash flow.

Tom Palmer, Newmont's President and Chief Executive Officer, spoke about the company's strategic direction and portfolio optimization in the announcement. He provided insights into the rationale behind the divestiture and the company's focus on Tier 1 assets. Here are the direct quotes from Tom Palmer regarding the strategy:

• On the company's portfolio and strategy: "Newmont's go-forward portfolio is the new standard for gold and copper mining. This portfolio provides our shareholders with exposure to the highest concentration of Tier 1 assets in the sector, each with the scale and mine life to generate strong free cash flows, and all located in the world's most favorable mining jurisdictions."

• On shareholder returns and capital allocation: "It is from this platform that Newmont has established a balanced shareholder return framework, designed to return capital to shareholders through a stable base dividend and share repurchase program."

• On the company's outlook and commitment: "As we look forward to this very important year of integration and transformation, I am confident in the quality of our assets and the capability of our team to deliver on our commitments, return capital to shareholders and justify our position as the benchmark gold equity."

A dividend of $0.25 per share of common stock for the fourth quarter of 2023 has been declared, payable on March 28, 2024, to shareholders of record as of March 5, 2024.

Newmont Corporation announced its intention to divest six non-core assets and two non-core projects as part of its strategic focus on optimizing its portfolio towards Tier 1 assets. The assets slated for divestiture include:

1. Éléonore (Canada)
2. Musselwhite (Canada)
3. Porcupine (Canada)
4. Cripple Creek & Victor (CC&V) (USA)
5. Akyem (Ghana)
6. Telfer (Australia)

Additionally, the two non-core projects identified for divestiture are:

1. Havieron (Australia)
2. Coffee (Canada)

The rationale behind this decision is to streamline Newmont's focus towards assets and projects that align with its strategic vision of having a portfolio concentrated on Tier 1 assets. Tier 1 assets are defined by their large scale, long mine life, and potential to generate substantial free cash flow, all situated within the most favorable mining jurisdictions globally. This strategic move is aimed at enhancing project development capabilities and advancing a leading pipeline of gold and copper projects, thereby ensuring the company's growth and efficiency.

By divesting these non-core assets and projects, Newmont aims to reallocate resources and management focus towards its most promising and productive operations. This approach is expected to optimize the company's asset base, improve its financial performance, and ultimately deliver greater value to its shareholders. The decision to sell these assets is also indicative of Newmont's commitment to a disciplined capital allocation strategy, focusing on safe and efficient development of opportunities that are most aligned with the company's strategic objectives.

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