VANCOUVER (miningweekly.com) – US gold major Newmont Mining said Tuesday it expected to book a noncash impairment charge of between $1-billion and $1.2-billion during the fourth quarter owing to rising costs related to the closure plan of its Yanacocha mine, in Peru.
In a filing with the US Securities and Exchange Commission, the Denver, Colorado-based company said that, after reviewing the mine’s closure plan as part of the requirement to submit an updated closure plan to Peruvian regulators every five years, management expects to record an increase to the asset retirement obligation at Yanacocha of between $400-million and $500-million during the fourth quarter.
The increase to the asset retirement obligation is mainly a result of higher estimated future water treatment costs, earthworks, demolition and related support activities.
Because of the changes to the updated Yanacocha closure plan and related increases in estimated future closure costs, Newmont has determined that it is required to assess Yanacocha’s long-lived assets for impairment.
Yanacocha, which is a joint venture between Newmont (51.35%), Minas Buenaventura (43.65%) and the International Finance Corporation (5%), poured first gold in 1993 and is currently nearing the end of its mine life.