Coeur Mining sale of Nevada asset to AngloGold pushes stocks higher
Coeur Mining announced the closure of the sale of its southern Nevada assets on 4 November. The Sterling and Crown exploration sites, which occupy a land area of 14,365 ha, will be purchased by a subsidiary of AngloGold Ashanti (NYSE: AU). AngloGold has existing gold projects in the Beatty area of Nevada, making the purchase a strategically important one.
The Sterling site, which is located to the south of the plot, is a high-grade gold project with a past-producing open pit and underground heap leach gold mine. The Crown site to the north includes the Daisy, Secret Pass, SNA and recently discovered C-Horst heap-leachable deposits.
Who
The purchase stipulates that Coeur Mining is to receive $150 million in cash up front, with a deferred cash consideration of $50 million in the event that the Sterling and Crown sites achieve a combined development of 3.5 million ounces in gold. Coeur’s share price shot up 8.4% following the sale.
“The divestiture of Crown Sterling unlocks significant value for Coeur stockholders and demonstrates our ongoing commitment to allocating capital into our existing portfolio of near-term core growth projects, highlighted by the Rochester expansion in northern Nevada,” said Mitchell Krebs, president and CEO of Coeur Mining.
AngloGold had previously purchased all nearby projects held by Corvus Gold in a $370 million acquisition, and now increases its presence in Nevada’s Beatty district.
“Following its recent acquisition of Corvus Gold, AngloGold has consolidated a significant portion of the Beatty district and is the logical operator of a future standalone mining operation in the Beatty district,” noted Krebs.
Why it matters
Demand for gold has been trending higher as of late, easily compensating for the drop-off observed during the COVID-19 pandemic and returning to levels last seen in 2013. Central bank purchases have accounted for the bulk of the increase, with Turkey, Uzbekistan, Qatar and India all making significant acquisitions to boost their reserves in a period of currency volatility. Furthermore, luxury markets in India and China have held up in the midst of an economic downturn, with demand for gold in the jewellery sector rising 10% this year.
