Newmont to Develop New Merian Gold Mine in Suriname
30 July 2014 - 08:42AM
Business Wire
Merian offers lower cost new production in a prospective new
gold district
Newmont Mining Corporation (NYSE: NEM) will invest in developing
the Merian gold mine in Suriname with strong local support for the
project and expected all-in sustaining costs of between $750 and
$850 per ounce in the first five years. The new mine is expected to
begin production in late 2016, pending receipt of the Right of
Exploitation from the government of Suriname.
The total capital investment is approximately $900 million to $1
billion, and the government of Suriname has the option to earn a 25
percent fully-funded equity ownership stake, including all project
capital and operating expenses and an initial earn-in contribution.
Newmont expects to fund its share of development through available
cash balances and projected cash flows.
Merian contains gold reserves of 4.2 million ounces and is
expected to produce an average of 300,000 to 400,000 ounces of gold
annually at competitive costs over a mine life of 11 years. Higher
grade ore and throughput in the early phases will boost annual
production to an average of 400,000 to 500,000 ounces of gold per
year in the first five years and reduce the payback period.
“We have forged a more efficient approach to developing Merian
while upholding our leading safety, technical, social and
environmental standards,” said Gary Goldberg, President and Chief
Executive Officer. “This decision marks an important milestone in
our portfolio optimization process – we have divested nearly $800
million in non-core 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
minimize our impact on the environment – getting it right from the
beginning is critical.”
Merian will operate under the banner of Surgold, a wholly-owned
entity. Initial development will include upgrading roads and
preparing the camp, mine and mill sites. Surgold expects to employ
2,500 people during project development and 1,300 during full
operation, and will launch processes to facilitate local employment
and procurement once the Right of Exploitation is granted. Project
highlights include:
- Gold reserves of 4.2 million ounces at
an average grade of 1.22 grams per tonne1
- Estimated average annual gold
production of between 400,000 and 500,000 ounces per year in the
first five years, and 300,000 to 400,000 ounces per year for the
life of the operation (11 years)
- Estimated average costs applicable to
sales of between $650 and $750 per ounce in the first five years,
and between $725 and $850 per ounce for the life of the
operation
- Estimated average all-in sustaining
costs2 of between $750 and $850 per ounce in the first five years,
and between $825 and $960 per ounce for the life of the
operation
- Total capital investment of
approximately $900 million to $1 billion
- Newmont’s Mineral Agreement in Suriname
covers 500,000 hectares, with exploration continuing to show
promising results
About Newmont
Founded in 1921 and publicly traded since 1925, Newmont is a
leading producer of gold and copper. Headquartered in Colorado, the
Company has approximately 30,000 employees and contractors, with
the majority working at managed operations in the United States,
Australia, New Zealand, Peru, Indonesia and Ghana. Newmont is the
only gold company listed in the S&P 500 index and in 2007
became the first gold company selected to be part of the Dow Jones
Sustainability World Index. Newmont is an industry leader in value
creation, supported by its leading technical, environmental, and
health and safety performance.
Cautionary Statement Regarding Forward-Looking
Statements:
This release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
which are intended to be covered by the safe harbor created by such
sections and other applicable laws. Such forward-looking statements
may include, without limitation: (i) estimates of future production
and sales; (ii) estimates of future costs applicable to sales and
all-in sustaining costs; (iii) estimates of future consolidated and
attributable capital expenditures; (iv) plans and expectations to
reduce costs and expenditures; (v) expectations regarding the
development, growth and exploration upside potential of Merian;
(vi)total investment and full funding estimates; (vii) expectations
regarding the receipt of the right of exploitation and other
rights, permits and licenses; (viii) expectations as to whether the
Government of Suriname will exercise its ownership option; and (ix)
expectations regarding future funding and cash flow. . Estimates or
expectations of future events or results are based upon certain
assumptions, which may prove to be incorrect. Such assumptions,
include, but are not limited to: (i) there being no significant
change to current geotechnical, metallurgical, hydrological and
other physical conditions; (ii) permitting, development, operations
and expansion of the Company’s projects being consistent with
current expectations and mine plans, including without limitation
receipt of export approvals; (iii) political developments in any
jurisdiction in which the Company operates being consistent with
its current expectations; (iv) certain exchange rate assumptions
for the Australian dollar to the U.S. dollar, as well as other the
exchange rates being approximately consistent with current levels;
(v) certain price assumptions for gold, copper and oil; (vi) prices
for key supplies being approximately consistent with current
levels; and (vii) the accuracy of our current mineral reserve and
mineral resource estimates. Where the Company expresses or implies
an expectation or belief as to future events or results, such
expectation or belief is expressed in good faith and believed to
have a reasonable basis. However, such statements are subject to
risks, uncertainties and other factors, which could cause actual
results to differ materially from future results expressed,
projected or implied by the “forward-looking statements”. Such
risks include, but are not limited to, gold and other metals price
volatility, currency fluctuations, increased production costs and
variances in ore grade or recovery rates from those assumed in
mining plans, political and operational risks, community relations,
conflict resolution and outcome of projects or oppositions and
governmental regulation and judicial outcomes. For a more detailed
discussion of such risks and other factors, see the Company’s 2013
Annual Report on Form 10-K, filed on February 21, 2014, with the
Securities and Exchange Commission (SEC), as well as the Company’s
other SEC filings. The Company does not undertake any obligation to
release publicly revisions to any “forward-looking statement,”
including, without limitation, outlook, to reflect events or
circumstances after the date of this news release, or to reflect
the occurrence of unanticipated events, except as may be required
under applicable securities laws. Investors should not assume that
any lack of update to a previously issued “forward-looking
statement” constitutes a reaffirmation of that statement. Continued
reliance on “forward-looking statements” is at investors' own
risk.
________________________________________
1 Reserves are presented as of December 31, 2013 on a
consolidated basis. On such basis, reserves at Merian were
estimated at 108,250 ktonnes of Probable Reserves, grading 1.22 gpt
for 4.2Moz, using a $1,300/oz gold price assumption. See
http://www.newmont.com/our-investors/reserves-and-resources for the
Company’s 2013 Reserves and Resources and additionalinformation.2
All-in sustaining costs is a non-GAAP metric and is estimated for
purposes of this forward-looking statement as the sum of expected
cost applicable to sales (including all direct and indirect costs
related to gold production incurred to execute on the current mine
plan), remediation costs (including operating accretion and
amortization of asset retirement costs), G&A, exploration
expense, advanced projects and R&D, treatment and refining
costs, other expense, net of one-time adjustments and sustaining
capital. See cautionary note on page 2 regarding Forwarding-Looking
Statements.
Newmont Mining CorporationInvestor
ContactsMeredith Bandy,
303-837-5143meredith.bandy@newmont.comorKirsten Benefiel,
303-837-6117kirsten.benefiel@newmont.comorMedia ContactsOmar Jabara,
303-837-5114omar.jabara@newmont.comorDiane Reberger,
303-967-9455diane.reberger@newmont.com
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