Newmont to sell mines after Newcrest acquisition

Newmont CEO Tom Palmer told Bloomberg that the merged company can now initiate a process to sell mines and determine which exploration projects to prioritize over the next two years.

“It will result from a combination of asset divestments and the resequencing of projects to ensure we have the appropriate and consistent allocation of cash for reinvestment,” Palmer said.

Among the assets under discussion is Newmont’s Cripple Creek & Victor mine in Teller county, Colorado.

Cripple Creek “is certainly in that category of operations you debate around their fit,” Palmer told the Wall Street Journal.

Newmont acquired the Cripple Creek mine from AngloGold Ashanti for $820 million eight years ago.

In the nine months leading up to September, Newmont extracted 134,000 ounces of gold from Cripple Creek. Although this represented a 7% increase compared to the previous year, the operation remained one of the smallest contributors to overall output.

The acquisition of Newcrest, the largest takeover in the mining industry this year, comes as gold producers face the prospect of stagnating output, harder-to-mine deposits and rising input costs.

Newmont’s bullion output has stalled for the past three years, and the company predicted that without a major acquisition its production would remain the same for another decade.

The miner also faced a four-month strike at its Penasquito mine in Mexico and was forced to cut guidance and post lower-than-expected earnings in the latest quarter.

Shares of Newmont fell 2% by 12:00 p.m. EDT.

(With files from Bloomberg)