Long Canyon adds profitable production and strengthens
Newmont’s track record of delivering projects safely, ahead of
schedule and below budget
Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company)
has reached commercial production at Long Canyon, a higher grade
oxide mine in an emerging gold district located less than 100 miles
from its existing Nevada operations. The Company declared
commercial production based on sustaining plant availability of
more than 85 percent, and achieving a minimum of 70 percent of
modeled leach recovery. The project was completed two months ahead
of schedule for an investment of just under $225 million, which is
about $50 million or 18 percent below budget.
The first phase of development is expected to produce between
100,000 and 150,000 ounces of gold per year over an eight year mine
life at estimated costs applicable to sales of between $400 and
$500 per ounce, and all-in sustaining cost of between $500 and $600
per ounce1. The project was optimized by taking a phased
development approach, relying on refurbished instead of new
equipment, and building a leach facility rather than a mill. At
current gold prices, the project is expected to generate a 26
percent rate of return with a payback period of just under four
years.
The operation includes a surface mine and heap leach pad which
currently holds one million tons of ore at an average estimated
grade of 1.13 grams of gold per ton. The project was funded through
free cash flow and available cash balances, and leverages Newmont’s
existing infrastructure, expertise and strong stakeholder
relationships in Nevada.
“Long Canyon marks the fourth profitable new operation we’ve
added to the portfolio in the last three years, including Merian in
Suriname last month, Cripple Creek & Victor in Colorado last
year, and Akyem in Ghana in late 2013,” said Gary Goldberg,
President and Chief Executive Officer. “We have completed these
organic growth projects on or ahead of schedule and at or below
budget; delivered a profitable expansion at Cripple Creek &
Victor earlier this year; and are on track to complete value-adding
expansions at Tanami by 2017 and at Carlin by 2018. These portfolio
improvements set the stage for Newmont to continue generating
superior free cash flow, which gives us the means to continue
investing in profitable growth, retiring debt and returning cash to
shareholders.”
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. The Company 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 20152. Newmont geologists have also 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 Phase 2 studies are underway and Newmont expects to
complete these and secure the necessary permits to proceed before
Phase 1 is depleted.
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 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/20161115006745/en/
Newmont Mining CorporationMedia
ContactOmar Jabara,
303-837-5114omar.jabara@newmont.comorInvestor
ContactMeredith Bandy,
303-837-5143meredith.bandy@newmont.com
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