UPDATE 3-Orla Mining to buy Newmont's Ontario mine in $850 mln deal

(Adds comments from CEO of Orla Mining in paragraph 3, comments on impact of Trump Presidency in paragraph 6, updates shares) By Sourasis Bose and Divya Rajagopal Nov 18 (Reuters) - Orla Mining OLA.TO will buy the Musselwhite Gold Mine in Ontario from Newmont NEM.N in a deal valued at $850 million that will help more than double its production of the precious metal, the Canadian miner said on Monday. The deal will enable Newmont to generate up to $2.9 billion in gross proceeds from non-core divestitures. The world's largest gold miner had set a target of more than $2 billion in such sales following its $17 billion purchase of Newcrest. Newmont's shares were down 3.6% and shares of Orla Mining were up 8% at 11.15am ET (1615 GMT). "It is nothing newsy for Orla to pick up assets that are a bit too small for majors, show them a bit of love and attention and liberate tremendous value," said Jason Simpson, CEO of Orla Mining. The company counts mining entrepreneur Pierre Lassonde and Fairfax Financial FFH.TO as its top investors. Adding that a combination of its Canadian asset and its mine in Mexico will fund the construction of its next gold mine in Nevada. Orla's gold production will scale up to more than 300,000 ounces immediately following the purchase and also increases exposure to the current record gold prices, the company said. Simpson also said that for the mining industry and for Orla the new U.S. administration led by Donald Trump would be helpful. "The reality is that there was a difference between the two administrations and the Republican administration coming in will be helpful to businesses including ours." Mining companies are hoping that under Trump the time taken to build a new mine will ease. U.S. has the second longest timeline to build a mine according to S&P Global. Gold prices XAU= have rallied to new highs this year, boosted by the U.S. Federal Reserve's larger-than-expected interest rate cut and demand for the safe-haven asset. The Musselwhite mine is expected to generate more than $150 million in average annual free cash flow over the next six years, Orla said. The company will pay Newmont $810 million in cash and rest in two tranches if gold prices exceed $2,900/ounce and $3,000/ounce for the initial one-year and second full-year period following the deal close, expected in the first quarter. Spot gold XAU= was trading 1.2% higher at $2,591.43 per ounce by 1027 GMT on Monday. U.S. gold futures GCv1 were up 1% at $2,595.80. Musselwhite was one of the two Canadian projects, alongside Eleonore in Quebec, Newmont was looking to divest alongside the earlier deals. (Reporting by Sourasis Bose in Bengaluru, Divya Rajagopal in Toronto; Editing by Krishna Chandra Eluri, Sriraj Kalluvila and David Evans) (([email protected];))