DENVER--(BUSINESS WIRE)--Newmont Mining Corporation (NYSE: NEM) (“Newmont” or “the Company”) announced plans to expand its Tanami operations in Australia by building a second decline in the underground mine and additional plant capacity.
The expansion project is expected to add incremental gold production of approximately 80,000 ounces per year and decrease Tanami’s all-in sustaining costs by five to ten percent in the first five years of production. It will open access to two million ounces of profitable production and extend mine life by three years. The project will also create a platform for exploration drilling to support future growth. Recent exploration results demonstrate the potential to double current Reserves and Resources by expanding existing Tanami deposits, and developing adjacent discoveries.
“Tanami is a Newmont success story. Since 2012, the team has more than doubled gold production while cutting costs by about two-thirds and significantly improving resource confidence. The expansion project continues this trajectory, offering robust returns of more than 35 percent at current gold prices,” said Gary Goldberg, President and Chief Executive Officer.
Building a second decline at Tanami will support a step change in mining rates, which will ramp up to approximately 2.6 million tonnes per year. The processing plant expansion includes adding a ball mill, thickener and gravity circuit to improve recoveries and expand mill capacity from 2.3 to 2.6 million tonnes per year. When the expansion is complete, Tanami will produce between 425,000 and 475,000 ounces of gold per year at all-in sustaining costs of between $700 and $750 per ounce in the first five years of production.
Capital investment of between $100 million and $120 million will be funded through free cash flow and available cash balances. Of this amount, a quarter will be spent in 2015, half will be spent in 2016, and the remainder will be spent in 2017. First commercial production is anticipated in the second half of 2017.
Newmont has one of the strongest project pipelines in the gold sector, and remains on track to deliver profitable new production from Leeville in Nevada as the Turf Vent Shaft is completed in late 2015; from Cripple Creek & Victor’s expansion projects during 2016; from Merian in Suriname in late 2016; and from Long Canyon Phase 1 in Nevada beginning in 2017.
Tanami is located 590 miles southwest of Darwin and 350 miles northwest of Alice Springs in Australia’s Northern Territory. The expansion project falls within the existing Tanami operating footprint on the Granites and Dead Bullock Soak mineral leases. Newmont acquired its interest in 2002 through its merger with Normandy. In 2014 Tanami produced approximately 345,000 ounces of gold at all-in sustaining costs of $1,038 per ounce.
Newmont is a leading gold and copper producer. The Company employs approximately 27,000 employees and contractors, with the majority working at managed 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 in 2007 became the first named to the Dow Jones Sustainability World Index. 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: (i) estimates of future production; (ii) estimates of future costs applicable to sales and all-in sustaining costs; (iii) estimates of future capital expenditures and investments; (iv) expectations regarding future sources of funding, free cash flow and available cash balances; (v) expectations regarding the development, growth and exploration upside potential, future mineralization and future discoveries at Tanami; and (vi) expectations regarding future development and growth of the Company’s project pipeline, including without limitation, in connection with Turf Vent Shaft, Cripple Creek and Victor expansion, Merian and Long Canyon 1. 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 for the Australian dollar to the U.S. dollar, as well as other the exchange rates being approximately consistent with current levels; (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 risk factors section included in the Form 10-Q, filed on July 23, 2015, with the Securities and Exchange Commission (SEC), 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.