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Newmont to Divest Musselwhite Operation for Up to $850 Million

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Newmont Corporation (NEM - Free Report) has agreed to sell its Musselwhite operation in Ontario, Canada, to Orla Mining Ltd for up to $850 million in total consideration. 

According to the terms of the agreement, Newmont would get $810 million in cash at closing, plus up to $40 million in contingent payments. The acquisition is expected to be completed in the first quarter of 2025, pending certain conditions being met. Upon completion of the announced agreements, Newmont will have exceeded its goal of generating more than $2 billion in gross proceeds from non-core divestitures.

In February 2024, Newmont revealed its intention to sell non-core assets, including six operations and two projects in its Australian, Ghanaian and North American business units. With agreements to sell assets in Australia, Ghana and now Musselwhite, NEM is focusing on completing the sales processes for its other North American non-core businesses, which are expected to be completed in the first quarter of 2025. Total gross proceeds from transactions announced so far this year are expected to be up to $2.9 billion, including $2.3 billion from non-core divestitures.

Newmont continues to use free cash flow from operations and divestiture proceeds to increase long-term value for shareholders by repurchasing shares on a ratable basis. Under this approach, NEM has a $3 billion share repurchase program approved for implementation through October 2026. 

In addition, Newmont has made substantial progress toward its targeted debt level of $8 billion, retiring roughly $500 million in 2024 and highlighting its commitment to a disciplined and balanced approach to capital allocation.

Newmont’s shares have gained 18% in the past year compared with a 31.1% rise of the industry.

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Newmont expects fourth-quarter 2024 attributable production of 1.8 million gold ounces. The company anticipates that the fourth-quarter costs applicable to sales will be $1,050 per ounce, with an all-in-sustaining costs of $1,475 per ounce.

NEM’s Rank & Other Key Picks

NEM currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , IAMGOLD Corporation (IAG - Free Report) and CF Industries Inc. (CF - Free Report) . 

Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.1%. The company's shares have soared 157.2% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for IAG’s current-year earnings is pegged at 56 cents, indicating a year-over-year rise of 522.2%. The Zacks Consensus Estimate for IAG's current-year earnings has increased in the past 30 days. IAG, a Zacks Rank #2 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 203.4%. The company's shares have rallied roughly 112% in the past year.

The Zacks Consensus Estimate for CF’s current-year earnings is pegged at $6.32 per share. CF, a Zacks Rank #1 stock, beat the consensus estimate in two of the last four quarters while missed twice, with the average earnings surprise being 10.3%. CF has rallied around 13.1% in the past year.

 

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