Newmont Mining Corporation (NYSE:NEM) has signed an agreement to sell its 44 percent stake in the Penmont joint venture to Fresnillo plc for $450 million in cash.
As part of the deal, the UK-based Fresnillo will have full control of three mines and two advanced low-cost projects. The transaction will include 100 percent of the assets and liabilities including related gold properties La Herradura, Soledad-Dipolos and Noche Buena, which are located in the Sonora region of Mexico.
“We are pleased to announce our agreement with Fresnillo, which further strengthens Newmont's financial flexibility while allowing our partner to consolidate their position in the Herradura Corridor,” said Randy Engel , Newmont’s Executive Vice President for Strategic Development.
Newmont has sold $1.3 billion in assets after posting a record loss of $2.5 billion last year. The company is currentlyworking to cut costs in an effort to yield better returns for investors.
“Since last year, Newmont has generated $1.3 billion from the sale of non-core assets at fair value, thereby significantly improving our financial flexibility and better positioning us to fund the next generation of the Company’s profitable operations, such as Merian in Suriname.”
According to Fresnillo's Chief Executive Octavio Alvidrez, the move will increase the miner's 2018 gold production target by 50% to 750,000 troy ounces.
Fresnillo is the world’s largest primary silver producer and Mexico’s second largest gold miner.
Find the full press release here: http://newmont.q4web.com/Press-Releases/News-Release/2014/Newmont-Signs-Agreement-to-Sell-Stake-in-Penmont-Joint-Venture-in-Mexico/default.aspx