Newmont OKs $1bn Suriname mine development, lifts Q2 profit
TORONTO (miningweekly.com) – Denver, Colorado-based gold producer Newmont this week announced that it would proceed with developing the $1-billion Merian gold mine, in Suriname, the first new big gold-mining project announced by a major miner since a wave of project cancellations, deferrals and sell-offs hit the industry, driven in part by rising costs and the sharply lower gold price last year.
NYSE-listed Newmont said on Tuesday that the new mine was expected to start production in late 2016, pending receiving a right of exploitation from the Suriname government.
Merian, which contains gold reserves of 4.2-million ounces and was expected to produce an average of 300 000 oz/y to 400 000 oz/y of gold, was expected to produce yellow-metal ounces at all-in sustaining costs (AISCs) of between $750/oz and $850/oz in the first five years of its 11-year life, and between $825/oz and $960/oz for the life of the operation.
Higher-grade ore and throughput in the early phases would boost yearly output to an average of 400 000 oz/y to 500 000 oz/y of gold in the first five years and reduce the payback period.
The project has a capital investment budget of between $900-million and $1-billion, and the Suriname government has the option to earn a 25% fully funded equity stake, including all project capital and operating expenses and an initial earn-in contribution. Newmont said it expected to fund its share of development through available cash balances and projected cash flows.
“This decision marks an important milestone in our portfolio optimisation process – we have divested nearly $800-million in noncore assets to help fund the next generation of lower-cost projects in our portfolio. Equally important, we established community agreements and are working with experts to reduce our impact on the environment – getting it right from the beginning is critical,” president and CEO Gary Goldberg said.
Merian would operate under the auspices of Surgold, a South American Newmont subsidiary.
Among the initial development work to be undertaken were upgrading roads and preparing the camp, mine and mill sites. Surgold expected to employ 2 500 people during project development and 1 300 during full operation, and would launch processes to facilitate local employment and procurement once the exploitation right had been granted.
The project has gold reserves of 4.2-million ounces at an average grade of 1.22 g/t.
Q2 FINANCIALS
Newmont also on Tuesday reported a second-quarter adjusted profit of $182-million, or $0.20 a share, beating analyst expectations of an adjusted profit of $0.19 a share for the period ended June 30.
Newmont, which operates mines in North and South America, the Asia-Pacific region and in Africa, reported net income attributable to shareholders of $182-million, or $0.37 a share, compared with a loss of $2.1-billion, or $4.29 a share, in the second quarter of 2013.
Sales fell 13% year-on-year to $1.77-billion, down from $2-billion in the comparable period last year.
Second-quarter gold output rose 5% to 1.22-million ounces, compared with 1.17-million a year earlier. Newmont also produced 20 200 t of copper in the period, up 4% from 19 400 t.
The company reported average AISCs of $1 063/oz of gold compared with $1 283/oz a year earlier.
Newmont lifted its full-year gold output guidance to between 4.7-million ounces and 5-million ounces, up from 4.6-million ounces to 4.9-million ounces, and said costs would be lower at between $720/oz and $760/oz, down from previous guidance of between $740/oz and 790/oz.
Newmont’s NYSE-listed stock on Thursday fell as much as $0.40 a share to $25.19 apiece in early trading.
Comments
The
content
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation