Newmont Mining To Expand Ahafo Operations In Ghana

Allen Sykora  
Thursday April 20, 2017 10:21
(Kitco News) - Newmont Mining Corp. (NYSE: NEM) Thursday announced plans to build a new underground mine and expand plant capacity by more than 50% at its Ahafo operations in Ghana.

The company said development capital of between $300 million and $380 million will be funded through free cash flow and available cash balances.

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, Newmont said. The company said it expects first production in the second half of 2017 and commercial production in the second half of 2018.

“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 projects have been optimized to improve internal rates of return to more than 20% at a $1,200-an-ounce gold price, the company said. In the first five full years of production – 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, Newmont said. Costs applicable to sales are expected to decrease by between $150 and $250 per ounce compared to 2016 for a total of $650 to $750 per ounce. All-in sustaining costs are expected to decrease by between $250 and $350 per ounce from 2016 for total average AISC of $800 to $900 per ounce.

Newmont said it received an environmental permit to build and operate the Subika underground mine in March.

The Ahafo mill expansion will increase annual mill capacity by 50% to nearly 10 million tonnes by adding a crusher, grinding mill and leach tanks to the circuit, Newmont said. 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 said it expects first gold production at the mill expansion in the first half of 2019 and commercial production in the second half of 2019.

Commercial production at Ahafo began in 2006 and the operation hit 5 million ounces of gold production in October. 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.