TIMMINS - Newmont has finally sold its Porcupine operations in Timmins to Discovery Silver Corp. of Toronto for US$425 million.
Promising to invest heavily in the northeastern Ontario gold camp is one of the city's native sons, Tony Makuch, the former CEO of Lake Shore Gold, who now steers this growing upstart company.
The deal is expected to close during the first half of this year.
To fund this transaction, Discovery said it’s being backstopped with a $555-million financing package from Franco Nevada.
The Porcupine Complex consists of the Hoyle Pond and Pamour mine properties and the Dome mine (now closed) and mill property along with the Borden underground operation outside Chapleau.
In a Jan. 27 news release, Discovery said its entry into the Timmins camp catapults them into the position of being a leading Canadian gold producer. Discovery’s only other asset is the Cordero silver project in Mexico, claimed to be the world’s largest undeveloped silver reserve.
Discovery said it sees significant gold upside in the area and plans to unlock further opportunity to boost production and lower costs at Hoyle Pond, Pamour and Borden. The company also eyes the potential to upgrade a nearly 11-million-ounce inferred resource at Dome. Discovery said it will make a commitment to drill extensively in the Timmins area.
In a statement, Makuch called the acquisition of the Porcupine Complex an important community-building step in the precious metals sector. He plans to create a team that has extensive knowledge of 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),” said Makuch.
“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."
Makuch said they bring a "deep connection to the community, including local First Nations groups" and are planning "significant investments in site restoration and progressive rehabilitation in order to ensure that all sites are properly remediated and are available for future use by the community."
In a Jan. 27 news release, Denver-based Newmont said this is the final piece of its divestiture plan, announced in February 2024, involving the sale of six mines and two exploration properties in Ontario, Australia and Ghana it deemed as non-core assets.
The Musselwhite Mine in northwestern Ontario, which was included in that batch of assets, was sold to Orla Mining for $850 million in November.
Through the Porcupine sale, Newmont said it will receive US$200 million and $75 million in Discovery shares upon closing, due upon closing with deferred cash consideration of $150 million to be paid in four annual cash payments of $37.5 million starting on Dec. 31, 2027.
Newmont said it will generate US$4.3 billion from the sale of these assets.