Posted by Daniel Gleeson on November 23, 2021
Newmont has agreed to sell its Kalgoorlie power business to Australia’s Northern Star Resources Ltd in a deal that could see the main gold miner pocket $ 95 million in cash.
The agreement follows the sale in January 2020 of Newmont’s 50% stake in Kalgoorlie Consolidated Gold Mines (KCGM). Of the $ 95 million in cash, $ 25 million relates to an option payment previously received from Northern Star in connection with this stake. The cost of the option will be deducted from the final purchase price, leaving Northern Star to pay the balance of $ 70 million upon completion, which is expected to occur in December 2021.
Newmont said Kalgoorlie’s electrical business has been a profitable asset for Newmont since the sale of its stake in KCGM. It supplies electricity to KCGM through a series of contracts, licenses, approvals and arrangements with third parties, including a 50% interest in the 110 MW dual fuel gas turbine power plant of Parkeston near Kalgoorlie, owned in a joint venture with Canada’s energy utility, TransAlta Corp. .
Northern Star said the purchase provided the company with significant synergies and value, including infrastructure and energy security to meet KCGM’s requirements; lower electricity costs at KCGM; other options for Northern Star to implement renewable energy.
Northern Star Managing Director Stuart Tonkin said: âThe purchase means that our Kalgoorlie power supply will now be part of our studies on how to meet our commitment to become carbon neutral. “
Newmont President and CEO Tom Palmer added, âAustralia is a critical contributor to Newmont’s global portfolio of world-class assets, located in leading jurisdictions. With the sale of this non-core asset, we will continue to focus on creating long-term value in our Boddington and Tanami operations and advancing our future portfolio of projects through active exploration campaigns.