Newmont Goldcorp Corp Sells Musselwhite Gold Mine

Investing.com – Goldminer Newmont Goldcorp Corp (NYSE:NEM) shares gained on Monday following the sale of its Musselwhite gold mine to Orla Mining Ltd (NYSE:ORLA) in a deal valued at $850 million.

RBC Capital Markets, which has a price target of $47 on Newmont, labelled the transaction a “neutral” move. Newmont shares were up roughly 3% at $42, while U.S.-listed shares of Canadian miner Orla were up 7.5%.

The deal includes $810 million in cash at closing and an additional $40 million contingent on gold prices. This is part of Orla Mining’s strategy to more than double its production of gold, as stated in a press release on Monday.

RBC analysts indicated that the transaction will have no material impact on Newmont’s valuation since it already considers the divestiture. They noted the sale price is reflective of a 5-10% premium and aligns with their projections.

The asset sale is consistent with Newmont’s strategy to divest non-core assets and finance its share buyback program, according to RBC.

RBC’s estimated fair value for Musselwhite ranges from $828 million to $984 million, depending on the gold price.