US-based mining giant Newmont announced on Monday that it would sell its Porcupine mine in Canada to Toronto-listed Discovery Silver for $425-million. This move marks the completion of Newmont's programme to divest noncore assets as it sharpens its focus on Tier 1 operations.

Including the Porcupine divestiture, Newmont expects to generate up to $4.3-billion in total proceeds from the announced sales of its noncore assets and investments, CEO Tom Palmer reported in a statement.

In February last year, Newmont announced the intent to divest its noncore assets, including six operations and two projects from its Australian, Ghanaian, and North American business units.

The Porcupine transaction, expected to close in the first half of 2025, consists of $200-million in cash and $75-million in common shares, as well as $150-million of deferred consideration to be paid over four installments.  

To fund the deal and provide liquidity in support of operating and growing Porcupine, Discovery announced binding commitments for $555-million of financing, including $400-million related to royalty and debt agreements with Franco-Nevada and $155-million from a bought deal public offering of subscription receipts.

“The acquisition of the Porcupine Complex is an important step forward as we work to build a highly profitable precious metals producer,” said Discovery CEO Tony Makuch.

He highlighted that a key feature of the transaction was the opportunity it provided to combine high-quality gold production with a leadership team that has extensive experience in the Timmins Camp.

"On a personal level, I am from Timmins and have worked extensively in the area, including serving as general manager at Hoyle Pond and other sites, and acting as CEO of Lake Shore Gold, which built and operated the first new major mining operation in Timmins in over two decades. Other members of our team are also from the area and have similar experience working in various operational and management roles in Timmins. We know these assets well and have an extensive understanding of where the value creation opportunities exist.

"We have a deep connection to the community, including local First Nations groups . . . ," said Makuch.

"For shareholders, the transaction is attractive and will establish a new North American precious metals producer with excellent value creation upside through future operating performance, multiple development projects and extensive exploration potential," he continued.

The Porcupine Complex consists of the Hoyle Pond and Pamour mine properties and the Dome mine property and milling facility in Timmins, as well as the Borden underground mining operation near Chapleau.

Based on the results of a new technical report, yearly production at the Porcupine Complex is expected to average more than 285 000 oz during the next ten years. Current gold production comes primarily from Borden, a relatively new mine, with commercial production starting in 2019, that is located on a large land position with extensive upside potential, as well as from Hoyle Pond, a high-grade underground mine, which commenced operations in 1987 and has established a solid track record for replacing reserves.

The transaction also means that Discovery is diversifying its portfolio, which will reduce risk and provide shareholders with leverage to both gold and silver prices. The company owns the Cordero silver mine in Mexico.