In a Feb. 22, 2024 press release, Newmont Mining Corporation announced their intention to “divest” of the Cripple Creek and Victor Mine in “key actions that together will deliver on (Newmont’s) clear and consistent strategy.”

Within that announcement entitled “Newmont Announces Balanced Capital Allocation Strategy and Return of Capital Framework Supported by Portfolio of Tier 1 Operations and Projects,” was the disclosure that the company will be divesting the CC&V mining property, along with five other mines.

“This (Tier 1) portfolio provides our shareholders with exposure to the highest concentration of Tier 1 assets in the sector, each with the scale and mine life to generate strong free cash flows, and all located in the world’s most favorable mining jurisdictions,” stated Tom Palmer, Newmont President and Chief Executive Officer.

The press release states the company’s intent to “…divest six non-core mining assets including Éléonore, Musselwhite, Porcupine, CC&V, Akyem and Telfer.”

In other words, for the purpose of Newmont’s portfolio going forward, these six mines are not considered to be “Tier 1” candidates and will be offered up for sale.

According to Jennifer Pakradooni in a follow-up email sent on March 1, “…with the announcement to divest six of our sites: Cripple Creek & Victor, Musselwhite, Éléonore Porcupine, Telfer and Akyem, and undergo project re-sequencing, our aim is to realize these savings within a 12-month period.

“The six mines we are selling are attractive, healthy, non-distressed assets, they just no longer fit within our long-term strategy. six assets within a year, not by the end of the year (i.e. within 12 months),” Pakradooni said.

The company has not disclosed a sales price at this time.

In 2015, Newmont purchased the CC&V gold mine from AngloGold Ashanti Ltd. for $820 million in cash, plus a 2.5 percent net smelter return royalty for gold production from potential future underground ore. The acquisition was funded with net proceeds generated from a “common equity issuance of 29 million shares, and supplemented with cash from Newmont’s balance sheet” allowing Newmont to “maintain financial flexibility while continuing to develop profitable projects.”

At that point in time, Newmont considered CC&V as representing an opportunity for Newmont to improve mine life and lower costs through improved productivity and optimization.CC&V’s expansion included a new leach pad and recovery plant, and a new mill to augment production.

Regarding the determining factor that placed CCV outside of the Tier 1 scope and criteria used in that decision for Tier 1 mines remaining with Newmont, Pakrdooni wrote:

“(Newmont) and the industry generally define Tier 1 assets as 500,000 or more Gold Equivalent Ounces (GEO)’s / year, average All in Sustainable Costs (AISC) / oz in the lower cost curve and a mine life of 10+ years in countries with A and B rating by Moody, S&P or Fitch.”

According to Pakradooni, CC&V’s most recent mine life extension was extended in 2021 with Amendment 13 and continues under the current operating permit. The approved mine life allows mining through 2031 with further processing through 2042. Reclamation activities will continue from 2042-2050 as well as a 5-year monitoring reclamation plan from 2050-2055.

Regarding estimated CC&V gold reserves, the 2023 estimates are reported at year’s end and can be found in the Feb. 22, 2024 press release on the website at: https://www.newmont.com.

Looking forward, Palmer, said Newmont’s overall focus is “to integrate and transform our leading portfolio of Tier 1 assets into a unique collection of the world’s best gold and copper operations and projects.”

“With stable production and structured reinvestment throughout the year, we are strongly positioned to deliver on our commitments in 2024 and set the stage for meaningful growth in 2025 and beyond.”

Newmont’s Cripple Creek and Victor Mine is located in Teller County, Colorado, southwest of Pikes Peak between the towns of Cripple Creek on the eastern side and Victor directly adjacent on the south side. The center of the mine’s permit area lies approximately two miles southeast of Cripple Creek and approximately one mile north of Victor.

The Cripple Creek Mining District was mined historically with underground operations until the 1960’s. Small-scale surface mining using the heap-leach gold recovery method began in 1971 followed by large-scale surface mining, which grew with the start of production in 1995 at CC&V’s current mining operation, called the Cresson Project.

CC&V is a surface mine that provides ore to a crusher and a leach facility. The first mine expansion was completed in 2013, with a second expansion approved and initiated by AngloGold Ashanti in 2013. Newmont purchased CC&V in 2015.

The operations are conducted primarily on privately owned lands, with both the surface and mineral rights held in private ownership.

CC&V’s operating permits allow for surface mining of various ore types, including gold and silver. CC&V is the largest gold mine in the state of Colorado and the only remaining large-scale producer of gold in the state. CC&V produced 272,000 gold ounces in 2020 and 220,000 gold ounces in 2021. The majority of the ore is processed in a zero- discharge, valley-type, leach pad to recover gold and silver.

Pakrdooni shared Newmont’s forecast:

“As announced last week on our Earnings call, we announced our strategy for how we are transforming our business into a unique collection of the world’s best gold and copper operations and projects. To do that, we are focusing our management efforts on our portfolio of Tier 1 assets and emerging Tier 1 assets, those that we characterize as having production scale, long-life, low-cost and located in the best mining jurisdictions.

“We are also creating the industry’s strongest portfolio of world-class gold and copper assets and looking to deliver $500 million dollars of annual synergies and realize over $2 billion dollars in cash from portfolio optimization while driving a disciplined, balanced approach to capital allocation.

“As the world’s largest and best gold mining company, with a secure pathway to becoming a global scale copper producer, we are committed to delivering $500 million in synergies from G&A, Supply Chain and Full Potential over the next 24 months. We also committed to $2 billion in portfolio optimization and project re-sequencing.  

“With both gold and copper production, Newmont remains the best investment for those interested in investing in gold, and the security it provides in turbulent times. But it also offers access to copper for those who are interested in investing in the energy transition.,” Pakradooni states.

High-grade gold ore is transported by truck to this rock crushing facility and then layered on leach fields during the extraction process.

Sonja Oliver

Newmont Mining Corp.’s open pit mining operation delves ever deeper for gold ore at the Cripple Creek and Victor Gold Mine facility. 

Sonja Oliver