Long Canyon adds profitable production and strengthens Newmont’s
track record of delivering projects safely, ahead of schedule and below
budget
DENVER--(BUSINESS WIRE)--
Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company) has
reached commercial production at Long Canyon, a higher grade oxide mine
in an emerging gold district located less than 100 miles from its
existing Nevada operations. The Company declared commercial production
based on sustaining plant availability of more than 85 percent, and
achieving a minimum of 70 percent of modeled leach recovery. The project
was completed two months ahead of schedule for an investment of just
under $225 million, which is about $50 million or 18 percent below
budget.
The first phase of development is expected to produce between 100,000
and 150,000 ounces of gold per year over an eight year mine life at
estimated costs applicable to sales of between $400 and $500 per ounce,
and all-in sustaining cost of between $500 and $600 per ounce1.
The project was optimized by taking a phased development approach,
relying on refurbished instead of new equipment, and building a leach
facility rather than a mill. At current gold prices, the project is
expected to generate a 26 percent rate of return with a payback period
of just under four years.
The operation includes a surface mine and heap leach pad which currently
holds one million tons of ore at an average estimated grade of 1.13
grams of gold per ton. The project was funded through free cash flow and
available cash balances, and leverages Newmont’s existing
infrastructure, expertise and strong stakeholder relationships in Nevada.
“Long Canyon marks the fourth profitable new operation we’ve added to
the portfolio in the last three years, including Merian in Suriname last
month, Cripple Creek & Victor in Colorado last year, and Akyem in Ghana
in late 2013,” said Gary Goldberg, President and Chief Executive
Officer. “We have completed these organic growth projects on or ahead of
schedule and at or below budget; delivered a profitable expansion at
Cripple Creek & Victor earlier this year; and are on track to complete
value-adding expansions at Tanami by 2017 and at Carlin by 2018. These
portfolio improvements set the stage for Newmont to continue generating
superior free cash flow, which gives us the means to continue investing
in profitable growth, retiring debt and returning cash to shareholders.”
Long Canyon is the most significant oxide gold discovery in Nevada in
more than a decade, with characteristics similar to the Carlin Trend
where Newmont has been operating for more than 50 years. The Company has
grown the resource base at Long Canyon by 30 percent in two years; from
an initial resource of 2.6 million ounces in 2013 to reserves and
resources of 3.4 million ounces as of the end of 20152.
Newmont geologists have also increased the mineralized strike by 70
percent to a length of more than five kilometers and oxide
mineralization remains open in all directions.
Long Canyon Phase 2 studies are underway and Newmont expects to complete
these and secure the necessary permits to proceed before Phase 1 is
depleted.
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 of annual gold production, estimates of mine life
and development, estimates of future costs, including costs applicable
to sales and all-in sustaining costs, expectations regarding future
returns and upside. 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, increased production costs
and variances in ore grade or recovery rates from those assumed in
mining plans, political and operational risks, community relations
risks, changes in governmental and environmental regulations and
judicial outcomes. For a more detailed discussion of other risks that
may impact the Company’s future performance, see the Company’s 2015
Annual Report on Form 10-K, filed on February 17, 2016, with the
Securities and Exchange Commission (SEC), Form 10-Q for the quarter
ended September 30, 2016, filed with the SEC on October 26, 2016, and
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.
____________________________________
i All-in sustaining costs (AISC) as used above is a
forward-looking 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. Please refer to pages 14-20 of the
Company’s most recent earnings release for the quarter ended September
30, 2016, filed with the SEC, on Form 8-K on October 26, 2016, which is
also available on www.newmont.com,
for additional information regarding AISC and for reconciliations to the
nearest GAAP metric of certain historical results and the Company’s
consolidated 2016 gold AISC outlook.
ii Reserves were 1.2 Moz (16.3Mt @ 2.3 g/t Au) as of December
31, 2015 and resources were 2.2 Moz (22.1Mt @ 3.1 g/t Au) as of December
31, 2015. Resources include measured and indicated (0.9Moz) and inferred
(1.3Moz) resources. U.S. investors are reminded that reserves were
prepared in compliance with Industry Guide 7 published by the SEC.
Whereas, the terms resource, measured and indicated resource and
inferred resource are not SEC recognized terms. Newmont has determined
that such resources would be substantively the same as those prepared
using the Guidelines established by the Society of Mining, Metallurgy
and Exploration and defined as Mineral Resource. Estimates of resources
are subject to further exploration and development, are subject to
additional risks, and no assurance can be given that they will
eventually convert to future reserves. Inferred resources, in
particular, have a great amount of uncertainty as to their existence and
their economic and legal feasibility. Investors are cautioned not to
assume that any part or all of the inferred resource exists, or is
economically or legally mineable. For more information regarding the
Company’s proven and probable reserves prepared in compliance with the
SEC’s Industry Guide 7, see the Company’s 2015 Annual Report filed with
the SEC on February 17, 2016, which is available at www.sec.gov
or www.newmont.com.
Additional information regarding the Company’s resource estimates is
available on the Company’s website at http://www.newmont.com/investor-relations/reserves-and-resources.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161115006745/en/
Source: Newmont Mining Corporation