Newmont’s Porcupine Complex gold mine in the Timmins, Ont., area has been sold to Canadian mineral exploration company Discovery Silver Corp. for US$425 million.
“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 in a news release.
“Through this acquisition, we are combining growing gold production at Porcupine with tremendous upside in one of the world’s great gold camps with our Cordero project, one of the industry’s leading silver development projects based on reserves and expected production.”
The Porcupine Complex purchase was announced in a news release Monday morning and includes Hoyle Pond, Pamour, Dome mine property and milling facility in Timmins and the Borden underground mine near Chapleau.
“The consideration to Newmont for the transaction consists of $200 million in cash and $75 million payable in common shares of Discovery, both of which are payable upon closing of the transaction, and $150 million of deferred consideration,” Discovery Silver Corp. said.
The deferred portion of $150 million will be paid in four annual cash payments of $37.5 million beginning Dec. 31, 2027.
To fund the transaction and support the operation and growth of the Porcupine Complex, Discovery Silver has obtained $555 million in financing from Franco-Nevada.
The deal is expected to close during the first half of this year.
Makuch has extensive experience working in the mining industry in the area.
“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 (Timmins West Mine),” he said.
“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.”
The mine is expected to produce more than 285,000 ounces of gold annually during the next decade and has a 22-year life expectancy.
“The Porcupine district has produced more than 68 million ounces (of gold) since 1910,” Newmont said.
Read the full news release.
