DENVER--(BUSINESS WIRE)--Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company) reached commercial production at the Tanami Expansion Project, which will increase profitable gold production and support ongoing exploration and development of Tanami’s prospective underground resource. The expansion included building a second decline in the underground mine and incremental capacity in the processing plant.
The project achieved commercial production safely and on schedule for the approved $120 million development capital investment. The expansion is expected to increase Tanami’s annual gold production by 80,000 ounces per year to between 425,000 and 475,000 ounces of gold per year, lower all-in sustaining costs1 to between $700 and $750 per ounce, and extend mine life by three years. This expansion also creates a platform for further growth and studies to develop a second expansion are underway.
“Tanami’s team has more than doubled gold production while cutting costs by about two-thirds and significantly improving resource confidence since 2012. The expansion project continues this trajectory, offering robust returns of 35 percent at a $1,200 gold price,” said Gary Goldberg, President and Chief Executive Officer. “The team also delivered this project safely and on schedule despite a one-month delay caused by record rainfall in the first quarter.”
The second decline was completed in mid-2016, enabling a step change in mining rates – which ramp up to 2.6 million tonnes per year – and opening new avenues for exploration drilling. Since that time, Tanami’s team has improved mine ventilation to support further growth, and increased mine development rates through drilling efficiency gains.
The processing plant expansion included adding a ball mill, thickener and gravity circuit to improve recoveries and expanding mill capacity from 2.3 to 2.6 million tonnes per year. The mill reached commercial production by achieving sustained throughput, mill availability and grind size results in late August.
Newmont has a strong track record for profitable project development. Over the past three years, the Company has built new mines at Merian and Long Canyon and delivered profitable expansions at Tanami and Cripple Creek & Victor. The Company will complete an expansion at Northwest Exodus next year, and in 2017, announced three more expansion projects to improve profitability and extend mine life at Ahafo and Twin Creeks.
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: (i) estimates of future production and expected increases in production; (ii) estimates of future all-in sustaining costs and expected cost improvements; (iii) expectations regarding future growth, drilling, exploration, mining rates and returns; (iv) estimates of future cost reductions and efficiencies; (v) expectations regarding future processing plan performance, including recoveries and capacities; and (vi) expectations regarding the timing and completion of the Northwest Exodus, Ahafo and Twin Creeks expansion projects. 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, 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 operations and projects being consistent with current expectations and mine plans; (iii) political developments in any jurisdiction in which the Company operates being consistent with its current expectations; (iv) certain exchange rate assumptions; (v) certain price assumptions for gold, copper and oil; (vi) prices for key supplies being approximately consistent with current levels; (vii) the accuracy of our current mineral reserve and mineralized material estimates; and (viii) other assumptions noted herein. For example, both the AISC range and the estimated return noted in this release assume $1,200/oz Au, $0.75 USD/AUD exchange rate, $55/barrel WTI and do not include inflation. Such assumptions and related forward looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially. Other risks relating to forward looking statements in regard to the Company’s business and future performance may 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 Company’s 2016 Annual Report on Form 10-K, filed on February 21, 2017, with the Securities and Exchange Commission (SEC), and 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” 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.
All-in sustaining costs or AISC as used in this press release are forward-looking non-GAAP metrics 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), reclamation 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 in reliance on Item 10(e)(1)(i)(B) of Regulation S-K because such reconciliation is not available without unreasonable efforts. For illustrative purposes, a reconciliation of historical AISC and 2017 AISC gold outlook on a consolidated basis can be found on pages 14-20 of the Company’s Q2 2017 Earnings Release available at www.newmont.com. See also the Cautionary Statement at the end of this news release for additional information regarding forward looking statements.