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Newmont Corporation (NEM) - free report >>
AngloGold Ashanti PLC (AU) - free report >>
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Newmont's Unit Repays Remaining Balance on Credit Facility
Gold miner Newmont’s (NEM - Free Report) Indonesian subsidiary PT Newmont Nusa Tenggara (“PTNNT”) has repaid the remaining balance of $190 million under its revolving credit facility due in 2017. The outstanding balance was repaid from cash held at the subsidiary.
Newmont and PT Amman Mineral Internasional ("PT AMI"), in Jun 2016, entered into a binding agreement for the sale of Newmont’s 48.5% interest in PTNNT, which operates the Batu Hijau copper and gold mine in Indonesia, for $1.3 billion. Newmont said that the stake sale is in sync with its strategic priorities to pare debt and fund highest margin projects.
The repayment of the remaining balance under the revolving credit facility marks a key step in the completion of the PTNNT stake sale. Newmont expects to complete the sale in late third-quarter 2016 or early fourth quarter.
Newmont has reduced its total debt by more than $1.1 billion year-to-date. The company has generated $1.9 billion in fairly valued asset sales since 2013, which will rise to $2.8 billion upon completion of the sale of PTNNT.
Newmont, last month, paid off the remaining $275 million balance under its term loan due in 2019. The premature repayment of the term loan results in lower overall corporate debt position and reduced cash interest expense.
The company continues to assess options for optimizing the best uses of cash that include investment in profitable new production, repayment of debt and returning capital to shareholders.
Newmont’s shares closed roughly 1% lower at $38.60 yesterday.
NEWMONT MINING Price
NEWMONT MINING Price | NEWMONT MINING Quote
Newmont is a Zacks Rank #3 (Hold) stock.
Better-ranked companies in the gold mining space include New Gold, Inc. (NGD - Free Report) , AngloGold Ashanti Ltd. (AU - Free Report) and IAMGOLD Corp. (IAG - Free Report) . While New Gold sports a Zacks Rank #1 (Strong Buy), both AngloGold Ashanti and IAMGOLD carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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