Newmont expects 2020 decision on Yanacocha sulfides

Newmont Mining, which has seen production dwindle in recent years at its Yanacocha gold mine in Peru, plans to take a definitive decision next year on a project aimed at extending the life of the mine, a senior executive said.

The company last month completed a feasibility study for Yanacocha's copper-gold sulfide project, COO Tom Palmer said. The project, which will process ore from Yanacocha Verde and Chaquicocha deposits, will produce 500,000oz/y gold equivalent in 2024-2028 and a total of 6.5Moz through 2039, he said.

"We expect to make a full-funds decision in 2020 and the project has a three-year development schedule," Palmer said on a conference call to discuss financial results. "Additional sulfide resources not included in the first phase of the project are expected to further extend the life of Yanacocha."

Yanacocha's US$250-300mn Quecher Main project, seen as a bridge to the sulfides development, started producing gold in December and is on track to reach commercial production in H2, Palmer said. Newmont expects to spend US$95-105mn on the project this year.

Stripping and leachpad construction remain on schedule at the project, expected to produce 200,000oz/y gold from 2020-2025 at all-in sustaining costs of US$900-1,000/oz, he said.

Yanacocha, where output peaked at 3.3Moz in 2005, produced 514,563oz gold last year, according to JV partner Buenaventura. Newmont, also completed construction of a primary crusher at its US$1bn Merian mine in Suriname to process harder rock, Palmer said.

EARNINGS

Newmont posted a US$280mn profit for full-year 2018, even though sales were down 2% to US$7.25bn, the Colorado-based company said in a statement. Newmont posted a US$60mn loss in 2017 on US$7.35bn in sales.

All-in sustaining costs ran at US$909/oz gold and US$2.02/lb copper last year, compared with US$924/oz and US$1.80/lb in 2017, respectively. The company added that it had US$3.4bn in cash and US$900mn in debt through December 31.

Attributable gold output fell 3% to 5.1Moz last year, while copper production dropped 4% to 49,000t. Its South American operations – including Yanacocha and Merian – produced 671,000oz of attributable gold, up from 660,000oz in 2017.

Newmont said it sold 5.13Moz gold at US$1,200/oz and 50,000t copper at US$2.74/lb compared to 5.24Moz gold at US$1,255/oz and 50,000t copper at US$32.83/lb in 2017. The company added that it allocated US$1.03bn to capex last year.

Newmont set 2019 gold production guidance at 5.2Moz with 650,000Moz in attributable output expected from its South American operations. Copper guidance was set at 45,000t, while AISC are expected to run at US$935/oz gold and US$2.45/lb copper..

Newmont, which also has operations in the US, Australia and Africa, plans US$1.07bn in capex this year, including US$250mn in South America.

Newmont, which is acquiring Canadian miner Goldcorp, also invested last year in Latin America-based mining firms Evrim Resources, Orosur Mining and Miranda Gold.