DENVER--(BUSINESS WIRE)--Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company) has achieved commercial production at the Subika Underground project, adding higher-grade, lower-cost gold production at the Ahafo mine in Ghana. Subika Underground represents Newmont’s third profitable expansion in 2018 and its tenth completed project since 2013. Subika Underground was delivered on schedule and within budget for approximately $186 million in development capital.
Beginning in 2019, Subika Underground will add average annual gold production of between 150,000 and 200,000 ounces per year for the first five years and has an initial mine life of around 10 years. Combined with completion of the Ahafo Mill Expansion project expected in the second half of 2019, Ahafo’s average annual all-in sustaining costs (AISC)1 are projected to improve by between $250 and $350 per ounce compared to 2016. The project has an expected Internal Rate of Return of more than 20 percent.
“In addition to increasing gold production and lowering costs at Ahafo, Subika Underground leverages the operation’s existing infrastructure and experienced workforce to further extend mine life,” said Gary Goldberg, Chief Executive Officer. “The mine provides an underground platform to explore additional upside potential in adjacent ore bodies and also includes some of the latest fit-for-purpose technologies to enhance safety, productivity and efficiency.”
As the Company’s newest mine, Subika Underground features semi-autonomous loading operations, proximity detection for vehicles, personnel tracking, and planned installation of ventilation-on-demand systems.
Over the last five years, Newmont has successfully built 10 new mines and expansions on four continents – on or ahead of schedule and at or below budget. These projects include Akyem and the Phoenix Copper Leach in 2013, the Turf Vent Shaft in 2015, Merian and Long Canyon in 2016, the Tanami Expansion in 2017, and Twin Underground and Northwest Exodus in 2018. 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.
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, 2016, 2017 and 2018. 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 in connection with Subika Underground; (ii) estimates of future improvements to costs applicable to sales and all-in sustaining cost at Ahafo, including in connection with Subika Underground and the Ahafo Mill Expansion; (iii) expectations regarding timing of completion of Ahafo Mill Expansion; (iv) expectations regarding mine life; and (v) expectations regarding future operating and financial results and internal 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.
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1 AISC or all-in sustaining cost
improvement as used in this press release are forward-looking non-GAAP
metrics. All-in sustaining cost is 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. Expected improvement to Ahafo’s
costs applicable to sales is expected to be $150 to $250 per ounce for
the comparison 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 14 to 20 of
the Company’s Q3 2018 Earnings Release available at www.newmont.com.
See also the Cautionary Statement for additional information regarding
forward-looking statements.