Newmont Goldcorp has entered into a binding agreement to sell its Red Lake complex in Ontario, Canada to Evolution Mining.
The deal is expected to be finalised in the first quarter of 2020 when Newmont will receive $375mn in cash and contingent payments of up to an additional $100mn tied to new resource discoveries.
“This transaction both strengthens our balance sheet and provides ongoing exposure to new discoveries at Red Lake,” said Tom Palmer, President and Chief Executive Officer. “Evolution is a highly respected and responsible gold producer who is committed to the success of Red Lake and who we believe will prove a great partner for surrounding communities and stakeholders.”
Under terms of the $100mn contingent payment, Evolution will pay Newmont $20mn for each one million ounces of new gold resources added to the existing Red Lake resource base over a fifteen-year period. The contingent payment is applicable to the first five million ounces of new resources.
Newmont intends to use proceeds from the transaction to support the company’s capital allocation priorities of returning cash to shareholders, maintaining an investment-grade balance sheet, and investing in a world-class portfolio.
Evolution Mining is a leading, growth-focused Australian gold producer. Evolution operates five wholly-owned mines - Cowal in New South Wales, Cracow, Mt Carlton and Mt Rawdon in Queensland, and Mungari in Western Australia.
Since its merger with Goldcorp, Newmont has the strongest and most sustainable portfolio of operations, projects and exploration prospects in the gold sector. These assets allow the company to sequence profitable projects in its unmatched pipeline to sustain gold production over a decades-long time horizon.