Good morning,

Now that the Newcrest-Newmont mega-merger is a done deal, bankers and shareholders are dusting off a pet topic – which assets would the combined business divest?

The company has already said it wants to raise about $US2 billion ($3 billion) from mine sales and project divestments over the next two years.

Out of its portfolio, Macquarie Research reckons Newmont should be thinking about selling six – Musselwhite, Porcupine and Eleonore in Canada, the Cripple Creek & Victor mine in Colorado (which ceased mining in 2021), and the open-pit Akyem Mine in Ghana. These are collectively worth $US2 billion on Macquarie’s numbers.

While Newmont boss Tom Palmer has tried to quash M&A talk around its ageing WA Telfer gold mine, Macquarie still put it on its list, with caveats.

“...We suspect its relatively modest scale, high near-term cost base and upcoming capital spend and development risk could cause NCM to consider it for divestment,” they said.

“However, third-party discoveries in the Telfer region could also see NEM consider the operation as a regionally significant asset worth retaining.”

Should Newmont press play on divestments, Telfer is expected to generate the lion’s share of interest locally. Northern Star Resources and Evolution, the next two biggest gold miners on the ASX after Newcrest, have both indicated a lack of interest in Telfer and nearby Havieron. London-listed Greatland Gold would make the most sense given it’s in a joint venture with Newcrest at Havieron.

Keep a close eye on the gold price, which if you believe UBS is shifting up towards $US2150 an ounce as the markets start expecting the US Fed’s hiking cycle to come to an end.

Happy reading,

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