Newmont Mining (NYSE:NEM) announced Friday that the $245-milion power station project for its Tanami gold mine in northern Australia had been completed.
The world’s No.2 gold and copper producer, which has fully owned and operated the mine since 2002, said the project included the installation of two power stations, a 66 kV interconnected power line, and a 450 km natural gas pipeline.
The additions are expected to provide Tanami with a safe and reliable energy source while lowering power costs and carbon emission by 20%. According to Newmont, the upgrades will generate net cash savings of $34 per ounce from 2019 to 2023, delivering an internal rate of return of over 50%.
The company, which is in the process of acquiring Canada’s Goldcorp (TSX:G) (NYSE:GG) for $10 billion, said the project completion coincided with Tanami pouring its 10 millionth ounce since operations began in 1986, on the back of record production of 500,000 ounces last year.
Tanami is Australia’s second-largest underground gold mine. Newmont says its exploration program has created potential to extend mine life beyond 2028, with additional upside through a possible second expansion project. The company says a funding decision is expected in the second half this year.
A first expansion of the mine was completed in 2017, which extended its operative life by three years, reduced all-in sustaining costs (AISC) and lent support to the ongoing exploration and development of the mine’s prospective underground resources.