Canadian miner Orla Mining (ORLA) agreed to buy the Musselwhite Gold Mine in Ontario from Newmont Corp. (NEM) for up to $850 million, a deal that would more than double Orla's annual gold production capacity.

Orla Mining will make an upfront cash payment of $810 million, with a gold price-linked contingent consideration of $40 million, the companies said in separate statements on Monday.

The deal provides Orla a presence in Ontario, "one of the premier mining jurisdictions in the world," Chief Executive Jason Simpson said in a statement. The transaction adds a second high-margin asset to Orla's portfolio and more than doubles its annual gold production to over 300,000 ounces.

"The mine has a proven history of successful production, cash generation, and reserve replacement, having consistently added to mine life," Simpson said.

The transaction -- expected to close in the first quarter of 2025 -- is part of Newmont's plan to divest its non-core assets. Colorado-based Newmont is a gold company and a producer of copper, zinc, lead, and silver.

Non-core asset divestitures announced since February are expected to "deliver up to $2.9 billion in gross proceeds to support Newmont's capital allocation priorities, which include strengthening our balance sheet and returning capital to shareholders," Newmont Chief Executive Tom Palmer said.

Orla's NYSE American-listed shares were up 7.7% in Monday trade, while Newmont's stock gained 3.6%. Gold futures climbed 1.7% to about $2,613 per troy ounce, rebounding on geopolitical concerns after a deep weekly loss, Saxo Bank wrote in a Monday note.

The new business is expected to be "materially accretive" to all key operating and financial per-share metrics, Orla wrote. The company expects its annual gold output to cross 500,000 ounces once the South Railroad Project in Nevada begins production in 2027.