Mining Giant's Strategic Shift Amidst Strong Gold Prices

The proposed sale of the Akyem gold mine by Newmont has sparked significant interest from potential buyers, particularly Chinese mining companies, against the backdrop of surging gold prices.

Perseus Mining, an Australian firm, has thrown its hat into the ring, expressing keen interest in acquiring the Akyem mine located in Ghana following Newmont's announcement of its divestment plans. Newmont, in collaboration with Citigroup Inc., has initiated discussions with prospective buyers regarding the sale.

Among the companies showing early interest in the asset are Shandong Gold Mining Co. and Zijin Mining Group Co., alongside Chifeng Jilong Gold Mining Co. However, it's noted that deliberations are still in preliminary stages and potential buyers may opt not to proceed with bids. When approached for comments, representatives of Newmont, Citigroup, Shandong Gold, and Zijin declined to provide any statements, according to undisclosed sources.

The intended sale of the Akyem mine is part of Newmont's strategy to generate $2 billion in cash through divestitures, following its acquisition of Newcrest Mining Ltd. in November. Alongside the Akyem mine, Newmont is also looking to offload four gold mines in North America and one in Australia.

Mining Giant's Strategic Shift Amidst Strong Gold Prices

The Akyem mine, which produced 420,000 ounces of gold annually by the end of 2022, has gained attention amid a significant surge in gold prices, which recently surpassed $2,200 per ounce for the first time and has witnessed a 10% rally in the past month.

Newmont's Chief Executive Officer, Tom Palmer, emphasized the company's intent to streamline its portfolio to exclusively consist of "Tier one" assets. This strategic move necessitates the divestment of certain assets, including the Akyem mine.

Furthermore, Newmont aims to sell two "non-core" projects, namely Havieron in Australia and Coffee Gold in Canada. Perseus Mining has already expressed interest in acquiring the Akyem mine, highlighting its potential to double its gold output through this acquisition.

Despite the impending sale, Newmont's presence in Ghana will persist through its retention of the Ahafo South and Ahafo North mines. The company remains committed to responsible mining operations in Ghana, as reaffirmed by David Thornton, Regional Senior Vice-President for Africa.

The divestiture of mining assets coincides with the release of Newmont's 2023 full-year report, which outlines a strong outlook following the acquisition of Newcrest. Despite recording a net loss driven by impairment charges and integration costs, Newmont declared an increase in total reserves and resources, positioning itself for future growth and debt reduction in 2024.