Newcrest announced today that it has signed an agreement to sell Newcrest PNG 1 to a wholly owned subsidiary of Harmony Gold Mining Company.
Following completion of the sale, Harmony will become 100% owner of the Hidden Valley Joint Venture including the Hidden Valley mine.
Newcrest says it wants to focus on its other assets; however, Newcrest and Harmony will remain 50/50 joint venture partners in the Wafi-Golpu project.
Newcrest Managing Director and CEO, Sandeep Biswas, said, “Having completed the strategic review of Hidden Valley, Newcrest determined that the best outcome was to exit the operation and focus our attention on safe, profitable growth at our other assets. We look forward to continuing to work with Harmony on the Wafi-Golpu project.”
Newcrest expects a loss on sale of Newcrest PNG 1 of approximately US$10 million.
As part of the transaction Newcrest has funded Newcrest PNG 1 Ltd with an amount of US$22.5m representing Newcrest’s one-off contribution towards future Hidden Valley closure liability partially offset by the option value of the possible future cash flows of the asset.
The completion of this sale is conditional upon South African regulatory approval.