Newmont to spend $900 million to develop Suriname gold mine
Newmont Mining (NYSE:NEM) will develop the Merian gold mine in Suriname at an estimated cost of $900 million to $1 billion.
At the end of the trading day Newmont was up over the past five days 0.51% to $25.54. The 52 week range is $20.78 to $34.27.
Production is expected to being in late 2016 pending receipt of the Right of Exploitation from the government of Suriname
According to a company press release, 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.
The company highlighted the project:
- Gold reserves of 4.2 million ounces at an average grade of 1.22 grams per tonne
- 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
“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.”