VANCOUVER (miningweekly.com) – US gold producer Newmont has declared commercial production at the Merian gold mine, in Suriname, which was completed on time and $150-million, or 20%, under budget.

“We took an optimised approach to project development and benefited from being one of the only gold producers investing in growth during the lower price cycle,” stated president and CEO Gary Goldberg.

Newmont poured first gold and declared commercial production on October 1, having achieved sustained average mill throughput of 80% and gold recovery of more than 90% over the last 30 days.

The company believes that the mine will have strong financial returns and provide a strategic foothold in the prospective north-eastern South American mining district.

The mine, which cost about $1-billion to build, is expected to produce an average of between 400 000 oz/y and 500 000 oz/y in the first five full years of production, at some of the lowest costs in the company’s portfolio. All-in sustaining costs are expected to average between $650/oz and $750/oz over the same initial period.

Merian contains gold reserves of 5.1-million ounces.

According to Newmont, ongoing exploration has extended the mine life from 11 to 13 years, and the company is identifying further upside potential within Newmont’s 500 000 ha area of interest, including a new discovery at Sabajo. The government of Suriname’s fully-funded interest includes contributions to all future project capital, operating expenses and exploration within the area of interest.

Suriname manages its participation through the government-owned Staatsolie firm. The former Dutch colony is also host to Iamgold’s Rosebel gold mine.

Merian is one of Newmont’s five self-funded growth projects – along with Long Canyon, expansions at Tanami and Carlin, and the recently completed expansion at Cripple Creek & Victor. Taken together, these projects are expected to add one-million ounces of lower-cost gold production over the next two years, Newmont advised.