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Main » 2017 » April » 24 » Newmont Adds Profitable Gold Production through Expansion of Ahafo in Ghana
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Newmont Adds Profitable Gold Production through Expansion of Ahafo in Ghana


DENVER -Saturday, April 22nd 2017 [ ME NewsWire ]

(BUSINESS WIRE)-- Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company) announced plans to extend profitable production at its Ahafo operations by building a new underground mine and expanding plant capacity by more than 50 percent. The Subika Underground mine is expected to produce 1.8 million ounces of gold over an 11-year mine life, and features ore grades of 4.7 grams per tonne. The mill expansion is expected to improve margins and support profitable production at Ahafo through at least 2029.

“We are building on strong performance and solid infrastructure by investing in the next generation of profitable production at Ahafo,” said Gary Goldberg, President and Chief Executive Officer. “The Subika Underground mine will also create a platform to support even longer-term growth. Recent exploration results demonstrate considerable upside within the Subika deposit and adjacent Apensu Deeps deposit.”

The projects have been optimized to improve internal rates of return to more than 20 percent at a $1,200 gold price. In the first five full years of production – or from 2020 through 2024 – they are forecast to add incremental gold production of between 200,000 and 300,000 ounces per year at Ahafo for total average annual production of 550,000 to 650,000 ounces. The projects are also expected to lower unit costs during the same time frame. Costs applicable to sales (CAS) are expected to decrease by between $150 and $250 per ounce compared to 2016 for total average CAS of $650 to $750 per ounce. All-in sustaining costs (AISC) are expected to decrease by between $250 and $350 per ounce compared to 2016 for total average AISC of $800 to $900 per ounce.i

Newmont received its environmental permit to build and operate the Subika Underground mine in March 2017. The resource has been studied for 11 years and execution and technical risks are well understood. The Company expects to reach first production at the mine in the second half of 2017 and commercial production in the second half of 2018.

The Ahafo Mill Expansion will increase annual mill capacity by 50 percent to nearly 10 million tonnes by adding a crusher, grinding mill and leach tanks to the circuit. The expansion supports more efficient processing of harder, lower grade ore from existing surface mines, as well as Ahafo’s stockpiles and the Subika Underground mine. Newmont expects first gold production at the mill expansion in the first half of 2019 and commercial production in the second half of 2019.

Development capital of between $300 million and $380 million will be funded through free cash flow and available cash balances. Newmont will uphold local hiring and procurement commitments and existing bargaining agreements through construction and operation.

Newmont has one of the strongest project pipelines in the gold sector. Last year, the Company built its Merian operation in Suriname on time and $150 below budget, and completed the first phase of its Long Canyon mine two months ahead of schedule and $50 million below budget.

Commercial production at Ahafo began in 2006 and the operation achieved five million ounces of gold production in October 2016. Three surface mines – Subika, Awonsu, Amoma – feed a conventional mill with a carbon-in-leach circuit. A fourth surface mine, Apensu, is currently being used for water storage.

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 and expectations of future average production, average CAS, average AISC, mill capacity and improvements, timing of first production and first commercial production, anticipated development capital and funding from free cash flow, rates of return and other statements relating to future performance. 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 or implied by the “forward-looking statements.” Risks relating to forward looking statements in regard to the Company’s business and future performance may include, but are not limited to, gold price volatility, currency fluctuations, increased production costs, variances in ore grade or recovery rates from those assumed in mining plans and other operational risks, geotechnical, metallurgical and hydrological risks, political and community relations risk, and changes in governmental regulation and requirements. For a discussion of such risks relating to our business and other factors, see the Company’s Form 10-K, filed on or about February 21, 2017, with the Securities and Exchange Commission (SEC) under the headings “Risk Factors” and “Forward-Looking Statements.” 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.

i All-in sustaining costs or AISC is a 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. A reconciliation has not been provided for future looking AISC outlook in reliance on Item 10(e)(1)(i)(B) of Regulation S-K. See the Company’s Form 10-K, filed on February 21, 2017, with the U.S. SEC under the heading Non-GAAP Financial Measures beginning on page 82 thereof for a reconciliation of historical 2016 all-in sustaining costs to costs applicable to sales.


Newmont Mining Corporation
Media Contact
Omar Jabara, 303-837-5114
Investor Contact
Meredith Bandy, 303-837-5143

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