Newmont Divests Akyem Gold Mine to Zijin Mining in US$1 Billion Deal

Newmont (TSX:NGT,NYSE:NEM) has entered into a definitive agreement to sell its Akyem gold mining operation in Ghana to Zijin Mining Group (OTC Pink:ZIJMF,SHA:601899) for up to US$1 billion.

The transaction, expected to close in the fourth quarter of 2024, includes a cash payment of US$900 million at closing, with an additional US$100 million payment within a five year window.

The decision to sell the Akyem mine comes as part of Newmont's ongoing asset divestiture program, which was announced earlier this year. While the sale of Akyem marks Newmont's exit from the asset, the company remains committed to its other operations in Ghana, including its Ahafo South gold mine and Ahafo North gold project.

Newmont's Ahafo South and Akyem gold operations are the country's two highest producers of gold, putting out 581,000 and 295,000 ounces of gold in 2023, respectively.

According to Tom Palmer, president and CEO of Newmont, the sale will help the company achieve greater value for shareholders and enable Newmont to focus on assets that are central to its long-term growth strategy.

“The successful completion of this transaction will strengthen our confidence in Ghana as a favorable mining jurisdiction and Newmont will continue to support the growth and development of the region including our development of Ahafo North,” he said in the announcement.

Zijin Mining, a major player in the global mining industry, is expected to benefit from this acquisition as it seeks to expand its portfolio of international mining assets. The deal offers Zijin the opportunity to further establish its presence in West Africa.

In addition to the US$900 million upfront payment, Newmont is set to receive a further US$100 million on the ratification of the mine’s extended eastern mining lease by the Ghanaian Parliament. If the mining lease or a replacement one has not yet been ratified within five years of the closing date, Newmont will instead receive the payment on the five year anniversary.

The divestiture is in line with Newmont’s ongoing capital allocation strategy, which includes improving its balance sheet and returning capital to shareholders.

The company has indicated that proceeds from the sale will be used to strengthen its financial position, which has been a priority amid fluctuating gold prices and the evolving regulatory environment.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.