Newmont to build Phase 1 of Long Canyon mine
TORONTO (miningweekly.com) – US gold producer Newmont Mining will build the first phase of Long Canyon, an oxide gold mine with significant upside potential in an emerging gold district located about 160 km from the company's existing Nevada operations.
NYSE-listed Newmont said the first phase of development would comprise an openpit mine and a heap-leach operation, with expected gold output of between 100 000 oz/y and 150 000 oz/y over an eight-year mine life, at an estimated all-in sustaining cost of between $500/oz and $600/oz.
At current gold prices, the project was expected to generate about $100-million in earnings before interest, taxes, depreciation and amortisation annually, starting in 2017.
“Taking a phased approach to developing Long Canyon gave us the means to lower development capital to between $250-million and $300-million, generate an internal rate of return of about 17% at current gold prices and reduce the payback period to just over four years after first commercial production, which we expect to reach in the first half of 2017,” president and CEO Gary Goldberg said in a statement.
The project would be funded through free cash flow and available cash balances, and would leverage Newmont’s existing equipment, infrastructure and personnel in Nevada.
Capital expenditures would be allocated roughly equally in 2015 and 2016, with minimal spending in 2017.
The project had compliant gold reserves of 1.2-million ounces at an average grade of 2.29 g/t, with significant exploration potential over about 5 km of strike length.
Newmont explained that federal and state permits required to proceed with development had been secured following a 36-month study and public comment period.
Once in operation, Long Canyon Phase 1 was expected to directly employ about 260 people.
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