Newmont (NYSE:NEM,TSX:NGT,ASX:NEM) has announced the sale of its Coffee gold project in Yukon, Canada.
The deal is part of Newmont’s broader strategy to streamline its portfolio and focus on core operations, according to CEO Tom Palmer. This transaction marks a significant step for Newmont as it completes the final divestment of eight non-core assets, a move that was initiated in February 2024.
Transaction details
The transaction, valued at up to US$150 million in gross proceeds, will see the asset transferred to Fuerte Metals (TSXV:FMT,OTCQB:FUEMF). If conditions are satisfied, the sale is expected to close in the fourth quarter of 2024.
The agreement includes US$10 million in cash and US$40 million in equity consideration in the form of Fuerte shares, both of which will be issued upon closing.
Additionally, Newmont will receive a 3.0 percent net smelter return (NSR) royalty on the Coffee gold project, with Fuerte holding the option to repurchase the NSR for up to US$100 million.
Fuerte Metals’ role and investors
Fuerte Metals, a resource company focused on copper and precious metals projects in Mexico and Chile, is backed by notable investors, including former Newmont President Pierre Lassonde and Trinity Capital Partners. Newmont’s CEO expressed confidence in Fuerte’s ability to develop the Coffee gold project responsibly, honoring agreements and relationships with First Nations partners and other stakeholders.
Equity stake in Fuerte Metals
Upon closing, Newmont will acquire approximately 27 percent of Fuerte’s issued and outstanding capital through the issuance of 34 million shares. Newmont plans to evaluate its investment on an ongoing basis, with the possibility of adjusting its ownership based on market conditions and other factors.
For more information on Newmont’s operations and strategic initiatives, visit its INN company profile and our list of top gold-mining companies.
Gold market outlook and trends
Amid these corporate developments, the broader gold market is seeing significant gains, repeatedly breaking all-time highs in September to top US$3,700 per troy ounce. According to John Feneck, portfolio manager and consultant at Feneck Consulting, his target for gold is US$3,800 per ounce, and he also expects silver to reach US$50 per ounce this year. Feneck highlights opportunities in the junior miners sector, suggesting potential growth for savvy investors.
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