Newcrest Mining has sold its 89.9 per cent stake in the Bonikro mine in Cote d’Ivoire (Ivory Coast), west Africa, to a consortium of F&M Gold Resources and Africa Finance Corporation, for $81 million.
Newcrest will get $72 million in cash plus royalty estimated to be worth $9 million on future ore mined.
It expects to earn a small profit on the sale, subject to the timing of its completion.
The sale follows an extensive review of the asset and will provide a clear future path for the Bonikro mine for the benefit of its employees and stakeholders, Newcrest chief executive Sandeep Biswas said.
The gold miner acquired the Bonikro stake as part of its 2010 acquisition of Lihir Gold.
Bonikro produced 128,000 ounces of gold, or about five per cent Newcrest’s output, in the year to June 2017.
Morgans analyst Adrian Prendergast said the deal comes at a healthy price for a non-core asset, but is likely to be immaterially value-accretive for Newcrest.
The transaction, which is subject to approval from the Cote d’Ivoire government and renewal of the Bonikro Mining Investment Convention, is expected to be completed in the March 2018 quarter.
It will be effective from October 1, 2017.
Newcrest said it will retain its other exploration tenements in Cote d’Ivoire as it continues to see the country as highly prospective for near-surface gold discoveries and an attractive jurisdiction for mining investment.