Merian offers strong returns and a foothold in a prospective new
gold district
Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company)
has completed construction of the Merian gold mine in Suriname on
time and more than $150 million or nearly 20 percent below its
initial development capital budget. First gold was poured and
Newmont declared commercial production on October 1, having
achieved sustained average mill throughput of 80 percent and gold
recovery of more than 90 percent over the last 30 days. Stockpiled
ore represents nearly 160,000 contained ounces of gold.
Merian contains gold reserves of 5.1 million ounces1 and annual
production is expected to average between 400,000 and 500,000
ounces of gold at competitive costs in the first five full years of
production (100 percent basis). Costs are expected to be among the
lowest in the portfolio, averaging between $575 and $675 per ounce
in costs applicable to sales and between $650 and $750 per ounce in
all-in sustaining costs in the first five years.2 Exploration has
extended mine life from 11 to 13 years, and continues to identify
further upside potential within Newmont’s 500,000 hectare Area of
Interest, including a new discovery at Sabajo.
“We took an optimized approach to project development and
benefitted from being one of the only gold producers investing in
growth during the lower price cycle,” said Gary Goldberg, President
and Chief Executive Officer. “Our team built Merian safely, on
schedule and significantly below budget – and delivered our
strategy to strengthen the portfolio by adding more than a decade
of profitable production and creating a foothold in a prospective
new gold district. This accomplishment is also the result of strong
partnerships with the government and people of Suriname, and the
extensive experience G-Mining brought to project development.”
The government of Suriname exercised its option to participate
in a fully-funded 25 percent equity ownership stake in Merian in
November 2013. Suriname manages its participation through
Staatsolie, a Surinamese corporation that is wholly owned by the
government.
Merian will operate under the banner of Newmont Suriname and be
managed as part of Newmont’s South America region in accordance
with leading safety, technical, social and environmental standards.
Its current workforce includes just over 1,100 employees, 20
percent of whom are indigenous Pamakkans, and 200 contractors. The
team has taken a proactive approach to minimizing its environmental
impact and engaged experts to inform its biodiversity offset
programs. Newmont also signed an agreement with the Pamakkan
community that establishes local hiring and procurement targets, as
well as a community development fund.
Merian is one of Newmont’s five self-funded growth projects –
along with Long Canyon, expansions at Tanami and Carlin, and the
recently completed expansion at Cripple Creek & Victor. Taken
together, these projects are expected to add one million ounces of
lower cost gold production over the next two years.
About Newmont
Newmont is a leading gold and copper producer with operations in
the United States, Australia, Ghana, Peru, Indonesia and Suriname.
Newmont is the only gold producer listed in the S&P 500 Index
and was named the mining industry leader by the Dow Jones
Sustainability World Index in 2015 and 2016. The Company is also an
industry leader in value creation, supported by its leading
technical, environmental, social and safety performance. Newmont
was founded in 1921 and has been publicly traded since 1925.
Legal Cautionary Statement Regarding Forward-Looking
Information
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 capital
expenditures; (iv) expectations regarding the development, growth
and exploration upside potential and future production potential of
Newmont Mining Corporation’s (the Company) operations and projects,
including, without limitation, relating to Merian (including at
Sabajo), Long Canyon, expansions at Tanami, Carlin and Cripple
Creek & Victor; (v) expectations regarding mine life; and (vi)
expectations regarding project funding and returns. 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;
(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 2015
Annual Report on Form 10-K, filed with the SEC on or about February
17, 2016, 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 Investors are reminded that the 5.1 Moz (134Mt @ 1.2 g/t Au)
gold reserve noted above is an estimate prepared in accordance with
Industry Guide 7 published by the U.S. Securities Exchange
Commission (SEC), and such estimate is as of December 31, 2015. For
more information regarding Newmont Mining Corporation’s (Newmont or
the Company) reserves, see the Company’s Annual Report on Form
10-K, filed with the SEC on February 17, 2016, which is available
at www.sec.gov or on the Company’s website, www.newmont.com.
2 All-in sustaining costs (or AISC) as used above is a
forward-looking non-GAAP metric defined as the sum of cost
applicable to sales (including all direct and indirect costs
related to current 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. Please refer to pages 13-19 of the Company’s
most recent earnings release for the quarter ended June 30, 2016,
filed with the SEC, on Form 8-K on July 20, 2016, which is also
available on www.newmont.com or www.sec.gov,, for additional
information regarding AISC and reconciliation to the nearest GAAP
metric for historical results.
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version on businesswire.com: http://www.businesswire.com/news/home/20161003006046/en/
Newmont Mining CorporationInvestor
ContactMeredith Bandy,
303-837-5143meredith.bandy@newmont.comorMedia ContactOmar Jabara,
303-837-5114omar.jabara@newmont.com
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