First phase of high grade oxide deposit to deliver strong
returns and significant upside
Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company)
poured first gold from Long Canyon ore on Tuesday, 8 November, and
expects to declare commercial production next week. The operation
is located 100 miles from Newmont’s existing Nevada complex and was
completed two months ahead of schedule for just under $225 million
– about $50 million or 18 percent below budget.
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First gold poured at Newmont's Long
Canyon mine in Nevada (Photo: Business Wire)
Long Canyon is the most significant oxide gold discovery in
Nevada in more than a decade, with characteristics similar to the
Carlin Trend where Newmont has been operating for more than 50
years. During the first phase, the Company will produce between
100,000 and 150,000 ounces of gold annually over an eight-year mine
life at some of the lowest costs in its portfolio. Costs applicable
to sales are expected to average between $400 and $500 per ounce
and all-in sustaining costs are expected to average between $500
and $600 per ounce.i
“Our team built the first phase of Long Canyon safely, ahead of
schedule and below budget. Taking a phased approach lowered initial
development capital, helping to generate a 26 percent rate of
return and reducing the payback period to just over four years,”
said Gary Goldberg, President and Chief Executive Officer. “The
project was further optimized by using refurbished equipment
instead of new, building a leach facility instead of a mill, and
leveraging our established infrastructure, expertise and
stakeholder relationships in Nevada. We appreciate the strong
support we have received from neighboring communities and
government leaders including Nevada Governor Brian Sandoval, who
dedicated the site on 28 September. We also acknowledge and thank
local Goshute Tribe and Wells Band members for their collaboration
in guiding a culturally sensitive approach to developing our newest
mine.”
Newmont has grown the resource base at Long Canyon by 30 percent
in two years; from an initial resource of 2.6 million ounces in
2013 to reserves and resources of 3.4 million ounces as of the end
of 2015ii. Up to 11 drill rigs have been operating at Long Canyon
this year. Newmont geologists have increased the mineralized strike
by 70 percent to a length of more than five kilometers and
oxide mineralization remains open in all directions.
Long Canyon is one of four profitable operations Newmont has
added to its portfolio in the last three years, including Merian in
Suriname in October 2016, Cripple Creek & Victor in Colorado in
August 2015, and Akyem in Ghana in November 2013. The Company has
also generated $2.8 billion in fairly valued asset sales in the
same time frame. Taken together, these efforts have resulted in a
lower cost, longer life asset portfolio, a stronger balance sheet,
and among the highest free cash flow generation in the gold
sector.
About Newmont
Newmont is a leading gold and copper producer. The Company’s
operations are primarily in the United States, Australia, Ghana,
Peru, 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 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.
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, estimates of first commercial
production and timing, estimates of annual gold production,
estimates of mine life and development, estimates of future costs,
including costs applicable to sales and all-in sustaining costs,
expectations regarding future returns and upside. 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, increased production costs and
variances in ore grade or recovery rates from those assumed in
mining plans, political and operational risks, community relations
risks, changes in governmental and environmental regulations and
judicial outcomes. For a more detailed discussion of other risks
that may impact the Company’s future performance, see the Company’s
2015 Annual Report on Form 10-K, filed on February 17, 2016, with
the Securities and Exchange Commission (SEC), Form 10-Q for the
quarter ended September 30, 2016, filed with the SEC on October 26,
2016, and other SEC filings. The Company does not undertake any
obligation to release publicly revisions to any “forward-looking
statement” 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.
i All-in sustaining costs (AISC) as used above is a
forward-looking non-GAAP metric defined as the sum of costs
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 14-20 of the Company’s
most recent earnings release for the quarter ended September 30,
2016, filed with the SEC, on Form 8-K on October 26, 2016, which is
also available on www.newmont.com, for additional information
regarding AISC and for reconciliations to the nearest GAAP metric
of certain historical results and the Company’s consolidated 2016
gold AISC outlook.
ii Reserves were 1.2 Moz (16.3Mt @ 2.3 g/t Au) as of December
31, 2015 and resources were 2.2 Moz (22.1Mt @ 3.1 g/t Au) as of
December 31, 2015. Resources include measured and indicated
(0.9Moz) and inferred (1.3Moz) resources. U.S. investors are
reminded that reserves were prepared in compliance with Industry
Guide 7 published by the SEC. Whereas, the terms resource, measured
and indicated resource and inferred resource are not SEC recognized
terms. Newmont has determined that such resources would be
substantively the same as those prepared using the Guidelines
established by the Society of Mining, Metallurgy and Exploration
and defined as Mineral Resource. Estimates of resources are subject
to further exploration and development, are subject to additional
risks, and no assurance can be given that they will eventually
convert to future reserves. Inferred resources, in particular, have
a great amount of uncertainty as to their existence and their
economic and legal feasibility. Investors are cautioned not to
assume that any part or all of the inferred resource exists, or is
economically or legally mineable. For more information regarding
the Company’s proven and probable reserves prepared in compliance
with the SEC’s Industry Guide 7, see the Company’s 2015 Annual
Report filed with the SEC on February 17, 2016, which is available
at www.sec.gov or www.newmont.com. Additional information regarding
the Company’s resource estimates is available on the Company’s
website at
http://www.newmont.com/investor-relations/reserves-and-resources.
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version on businesswire.com: http://www.businesswire.com/news/home/20161111005346/en/
Newmont Mining CorporationMedia
ContactOmar Jabara,
303-837-5114omar.jabara@newmont.comorInvestor
ContactMeredith Bandy,
303-837-5143meredith.bandy@newmont.com
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