Newmont Closes KGCM Stake Sale, Cuts 2020 Production View
Zacks Investment Research | Jan 02, 2020 09:57PM ET
Newmont Goldcorp Corporation (NYSE:NEM) has successfully completed the divestment of its 50% interest in Kalgoorlie Consolidated Gold Mines (KCGM) to Northern Star Resources Limited for cash proceeds of $800 million.
Newmont had previously announced the agreements to sell Red Lake in Canada for $375 million and its stake in Continental Gold for $260 million. Through the latest move, the company has achieved its divestiture target of between $1 billion and $1.5 billion. Newmont expects to receive more than $1.4 billion in cash proceeds in first-quarter 2020. The divestment of KCGM streamlines Newmont’s portfolio. It now has 12 top-tier assets, which are located in four continents having favorable gold mining jurisdictions.
The company has also issued an updated 2020 guidance and long-term view. For 2020, Newmont expects attributable gold production to be 6.4 million ounces, down from earlier forecast of 6.7 million ounces. In the long term, gold production is projected in the range of 6.2-6.7 million ounces through 2024.
Gold costs applicable to sales (CAS) projection for 2020 is unchanged at $750 per ounce. Gold CAS per ounce for 2021 and 2022 are expected between $650 and $750 and in the band of $600-$700 for 2023 and 2024.
All-in sustaining costs (AISC) per ounce expectation for gold for 2020 are unchanged at $975 and between $850 and $950 for 2021 and 2022. Gold AISC per ounce is projected between $800 and $900 for 2023 and 2024.
The company has lowered attributable sustaining capital guidance for 2020 to $950 million and in the range of $0.9-$1.1 billion in the long-term through 2024.
Newmont’s shares have gained 25.8% in the past year compared with 52.5% surge of the Zacks Investment Research
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