The US-based mining company Newmont Goldcorp recently entered an agreement to sell its 50% stake in KCGM (Kalgoorlie Consolidated Gold Mines) to Northern Star Resources Ltd., a leading resource company based in Australia.
As a part of the agreement, Newmont Goldcorp will receive an amount of $800 million in cash for its interests in Kalgoorlie Consolidated Gold Mines, which is inclusive of a $25 million payment that gives Northern Star Resources transitional services support, specified exploration tenements, as well as an option to negotiate exclusively for 120 days after the purchase of Newmont’s KCGM power business for fair market value. If the power business is sold to a third party, the payment of $25 million will be credited against the purchase price for the power business or will be returned to Northern Star.
Following the receipt of ministerial consent required under Kalgoorlie’s crown leases, the transaction is expected to close in the first quarter of 2020.
Tom Palmer, President & CEO OF Newmont Goldcorp was reportedly quoted saying that the recent transaction has generated exceptional value and further strengthened Newmont’s financial position by increasing proceeds from the firm’s 2019 asset sale agreements to more than $1.4 billion. For Newmont, Australia remains a core operating region, and the sale of KCGM will allow the company to focus on investing in profitable growth as well as in creation of top-tier Boddington and Tanami complexes across the region.
Palmer added saying that Northern Star is a renowned gold producer in Australia with a core competency in exploration, responsible environmental stewardship, commitment to community development, and safety.
As per sources close to the matter, the sale of Kalgoorlie Consolidated Gold Mines will streamline Newmont’s portfolio, with twelve top-tier assets situated in 4 continents in the world’s most favorable gold mining territories.