After the close of trade Friday on the ASX, Newcrest Mining Limited (ASX: NCM) signed an agreement to sell 100% of Newcrest Singapore Holdings Pte Ltd (NSH). The Newcrest share price has lifted 1.29% on the news at the time of writing and is currently trading for $29.91.
What did Newcrest announce?
Newcrest is one of the world's largest gold mining companies, with its portfolio located in Australia, the Pacific region, Asia and Africa.
NSH owns a 75% interest in PT Nusa Halmahera Minerals (PTNHM), which operates the Gosowong mine in Indonesia, and 100% of PT Puncakbaru Jayatama (PTPJ), which employs exploration personnel in Indonesia to PT Indotan Halmahera Bangkit (Indotan).
Gosowong has been a part of Newcrest's operating portfolio since it discovered it in 1993, with first production commencing in 1999.
The sale agreement for consideration totals $90 million, comprising a $5 million cash deposit paid on execution of the sale and purchase agreement, $55 million cash payable on completion of the transaction ,and $30 million deferred cash payable 18 months after completion.
Economic ownership of NSH transfers on 31 December 2019. The sale of NSH followed a strategic review of the asset by Newcrest and was also to comply with the amended Gosowong Contract of Work, which required Newcrest to sell down to at least 49% of PT NHM by 30 June 2020.
Newcrest Managing Director and Chief Executive Officer Sandeep Biswas commented:
Following an extensive review and sale process we are pleased to be able to announce the sale of Gosowong to Indotan. This outcome delivers value for Newcrest shareholders and provides a clear future path for Gosowong for the benefit of its employees and the community.
Subject to completion, Newcrest expects to recognise a $44 million loss on divestment of its 75% interest after taking into account the sales proceeds less written down value of the assets sold and transaction costs.
