Newmont has confirmed it has inked a deal with Peruvian precious miner Compañia de Minas Buenaventura to acquire its 43.65% interest in the Minera Yanacocha gold mine in Peru.
The $300 million transaction, which also includes contingent payments of up to $100 million hinging upon market pricing, will also allow Newmont to transfer its ownership interest in the La Zanja joint venture to Buenaventura in exchange for royalties on future production.
It will also contribute $45 million to Buenaventura to cover future closure costs at La Zanja.
Newmont President and CEO Tom Palmer stressed that the miner has been successfully operating in Peru for more than three decades and maintains a deep knowledge of the asset and its value.
“Buenaventura has been an exceptional partner and we look forward to continuing a strong relationship,” he said.
“This acquisition gives Newmont control of the Yanacocha district where we are positioning the sulfides project for profitable production and value generation for decades to come. We are committed to continuing to be a catalyst for sustainable development in Peru by working closely with communities in the Cajamarca region and the Peruvian government.”
Newmont may also have the opportunity to fully consolidate its ownership of Yanacocha, as Sumitomo is assessing whether to exercise a right in its 2018 purchase agreement to return its 5% interest in the asset in exchange for its initial purchase price.
The miner said the interest acquisition enhances its world-class asset ownership range, despite outside influences.
“Newmont continues to advance its sulfides project at the pace the pandemic allows, investing more than half a billion dollars through 2022 as the project continues to progress toward a full-funds decision later this year,” the company said. “The sulfides project will increase Newmont’s copper position, supporting the transition to a green economy.”
No timeline for closure of the deal was released.