US-based gold mining company Newmont has agreed to divest its Musselwhite gold mine in Ontario, Canada, to Orla Mining in a deal worth up to $850m.
According to the terms of the definitive agreement, Newmont will receive $810m in cash payable at closing and up to $40m in contingent payments.
Through the transaction, Orla aims to add a second high-quality and high-margin asset to its portfolio.
The integration of the Musselwhite mine with Orla’s low-cost Camino Rojo oxide operation is expected to more than double the company’s annual gold production to over 300,000 ounces.
Further growth is anticipated, with production expected to exceed 500,000 ounces annually by 2027, as the South Railroad project is slated to begin production.
Located on the shore of Opapimiskan Lake in Northwestern Ontario, the Musselwhite operation is a producing underground gold mine. It has been in operation for more than 25 years.
The Musselwhite gold mine has produced approximately six million ounces of gold to date.
As part of the transaction, Orla commissioned an independent NI 43-101 technical report for the Musselwhite mine.
Based on the current reserves, the Musselwhite operation has a mine life of seven years with an average annual gold production of 202,000 ounces.
The net present value (NPV) of the Musselwhite gold mine, as of 1 January 2025, is estimated to be $760m. Furthermore, the CIP processing facility has a nameplate capacity of 1.5 million tonnes per annum (Mtpa), with only 1Mtpa currently being utilised.
Orla president and CEO Jason Simpson said: “We intend to not only continue to operate Musselwhite, but to seek optimisation opportunities and to invest in its future, grow its reserves and resources, and extend its mine life.
“The mine has a proven history of successful production, cash generation, and reserve replacement, having consistently added to mine life.”
Following the closing of this proposed deal, Newmont will surpass its target of generating over $2bn in proceeds from its non-core asset divestiture programme.
The sale of Musselwhite gold operation is part of Newmont’s broader strategy announced in February 2024 to streamline its portfolio. The initiative identified six operations and two projects across its Australian, Ghanaian, and North American business units.
The definitive agreements are also in place for assets in Australia and Ghana. Newmont is moving forward with plans to finalise sales of other North American assets by Q1 2025.
To date, total gross proceeds from announced transactions in 2024 are expected to reach up to $2.9bn, including $2.3bn from non-core divestitures and $527m from the sale of investments.
The proceeds from these transactions are being used to enhance shareholder value through a $3bn share repurchase programme authorised through October 2026.
Since the programme’s inception, Newmont has repurchased 22.4 million shares worth $1.1bn, including 7.2 million shares since October 2024 for $336m.
Newmont president and CEO Tom Palmer said: “The announced divestitures are expected deliver up to $2.9bn in gross proceeds to support Newmont’s capital allocation priorities, which include strengthening our balance sheet and returning capital to shareholders.”
Subject to regulatory approval and other customary conditions, the transaction is expected to be completed in Q1 2025.
