What is Newmont selling and for how much?

Newmont is selling its 48.5% economic interest in PT Newmont Nusa Tenggara (PTNNT), which operates the Batu Hijau copper and gold mine in Indonesia. The total consideration is approximately $1.3 billion, with $920 million due at closing and the rest in contingent payments.

What are the key conditions for closing this sale?

Key closing conditions include obtaining necessary approvals from the Indonesian Ministry of Energy and Mineral Resources and the Indonesian Investment Coordinating Board, PTNNT maintaining a valid export license, concurrent closing of other related asset sales, and the satisfaction of other customary closing conditions and no material adverse events occurring.

What are the contingent payments related to the sale?

The contingent payments are structured through several deeds and can amount to approximately $225 million related to future production and copper prices (Contingent Payment Deed), up to $203.7 million tied to the Elang development (Elang Development Deferred Payment Deed), and up to $229.7 million based on copper prices exceeding certain thresholds (Metal Price Upside Deferred Payment Deed).

Is Newmont exiting Indonesia entirely with this deal?

Yes, this agreement signifies Newmont's exit from its Indonesian operations through the sale of its interest in the Batu Hijau mine.

NEM/NEMCL 8-K: Material Agreements

Summary

Newmont Mining Corporation announced a significant divestiture on June 30, 2016, by entering into a binding agreement to sell its interest in the Batu Hijau copper and gold mine in Indonesia. The company is selling its 48.5% economic interest in PT Newmont Nusa Tenggara (PTNNT) to PT Amman Mineral Internasional (PT AMI) for a total consideration of approximately $1.3 billion. This amount includes an initial cash payment of $1.3 billion, with approximately $920 million due at closing and the remainder in contingent payments tied to future metal prices and development at the Elang prospect. This transaction represents a strategic move for Newmont to exit its Indonesian operations and streamline its asset portfolio. The sale is subject to several closing conditions, including regulatory approvals from Indonesian authorities, a valid export license for PTNNT, and the concurrent closing of other related transactions. Newmont has provided guarantees for certain obligations to ensure the smooth transition. The company anticipates the transaction to close in the third quarter of 2016.

Key Highlights

1Newmont Mining Corporation has agreed to sell its 48.5% economic interest in the Batu Hijau copper and gold mine in Indonesia to PT Amman Mineral Internasional.
2The total consideration for the sale is approximately $1.3 billion, comprising an initial cash payment and significant contingent payments.
3Approximately $920 million of the sale proceeds are expected to be paid at closing, with the remainder contingent on future copper prices and development at the Elang prospect.
4The transaction is subject to various closing conditions, including Indonesian government approvals and the satisfaction of other regulatory and contractual requirements.
5Newmont is also selling its rights and obligations under a loan agreement related to PTNNT for approximately $312.6 million.
6The company anticipates the transaction will close in the third quarter of 2016.
7This divestiture is a strategic move to exit Indonesian operations and simplify Newmont's asset base.

NEWMONT Corp /DE/ 8-K Report, Material Agreement (Jul 6, 2016)

Summary

Key Highlights

Frequently Asked Questions