DENVER--(BUSINESS WIRE)--Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company) has achieved commercial production at its Twin Creeks Underground expansion project, adding higher-grade, lower-cost gold production at its Twin Creeks operation in Nevada. The project was completed on schedule for $42 million, slightly below guidance of between $45 and $55 million.
The Twin Creeks Underground mine will add between 30,000 and 40,000 ounces of gold production per year at all-in sustaining costs1 of between $650 and $750 per ounce for its first five years of production. This new ore will also allow Newmont to process stockpiled ore that had previously been classified as waste, and extend processing life to 2030.
“The expansion extends profitable production and improves recoveries at Twin Creeks, and serves as a platform to further explore the deposit, which remains open along strike and at depth,” said Gary Goldberg, President and Chief Executive Officer. “This project marks the sixth that Newmont has completed on or ahead of schedule and at or below budget over the last five years, and generates an internal rate of return of about 20 percent.”
The Twin Underground mine is mechanized, featuring remotely-operated loaders to improve safety and efficiency. Twin Underground ore will also be blended with ore from Turquoise Ridge. In early 2018, Newmont and Barrick Gold Corporation approved the Turquoise Ridge Mine Optimization project, which involves sinking a production shaft to access the richest part of the deposit. The new shaft is expected to increase ventilation capacity and lower unit costs by more than 20 percent, while increasing ore production rates to at least 1.1 million tons per annum when it comes on line in 2022.
Over the last five years, Newmont has built six new mines and expansions on four continents, including Akyem and the Phoenix Copper Leach in 2013, Merian and Long Canyon in 2016, and Tanami in 2017. The Company also completed a value-accretive acquisition of Cripple Creek and Victor in 2015 and delivered a profitable expansion at the mine in 2016.
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, 2016 and 2017. 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, including additions to production at Twin Creeks, and increases to production rates at Turquoise Ridge; (ii) estimates of future costs applicable to sales and all-in sustaining costs; (iii) expectations regarding extension of processing life; (iv) estimates of future cost reductions and efficiencies; and (v) expectations regarding future operating and financial results and rates of return. 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) certain price assumptions for gold, copper and oil; (iv) prices for key supplies being approximately consistent with current expectations; (v) the accuracy of our current mineral reserve and mineralized material estimates; and (vi) other assumptions. 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, operational risks, community relations risks, governmental regulation and political and judicial outcomes. For a more detailed discussion of such risks and other factors, see the Company’s 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC), and available at www.newmont.com, as well as the Company’s other SEC filings. The Company does not undertake any obligation to publicly release 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. Costs applicable to sales is expected to be between $525 and $625 per ounce for the same period. 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 2018 AISC gold outlook on a consolidated basis can be found on pages 15 to 19 of the Company’s Q1 2018 Earnings Release available at www.newmont.com. See also the Cautionary Statement for additional information regarding forward looking statements.