Modern Mining December 2018

MINING News

Newmont declares commercial production at Subika

Botswana based and owned company, we are pleased to have concluded a partner- ship with such a progressive black South African company as Lurco. The transaction will grant us access to markets that we haven’t had access to before. Together with Lurco we will work towards regional inclu- sivity and the partnership is a clear example of fulfilling SADC’s objectives of integration between Southern African countries in the energy industry. “The partnership is in line with Shumba Energy’s long-term strategy which is to address the chronic power shortage and satisfy the growing energy demand in the SADC region while monetising all of our existing assets. The terms we have received will ensure that we continue to accelerate the development of Sechaba while allow- ing us to fast track our other projects.”  Over the last five years, Newmont has successfully built 10 newmines and expan- sions on four continents – on or ahead of schedule and at or below budget. These projects include Akyem (Ghana) 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 acquisi- tion of Cripple Creek andVictor in the US in 2015 and delivered a profitable expansion at the mine in 2016.  and US$350 per ounce compared to 2016. The project has an expected Internal Rate of Return of more than 20 %. “In addition to increasing gold produc- tion and lowering costs at Ahafo, Subika Underground leverages the operation’s existing infrastructure and experienced workforce to further extend mine life,” said Gary Goldberg, Newmont’s Chief Executive Officer. “The mine provides an under- ground 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 detec- tion for vehicles, personnel tracking, and planned installation of ventilation-on- demand systems.

Underground ventilation fans at Newmont ‘s Subika mine in Ghana (photo: Business Wire).

Newmont Mining Corporation, listed on the NYSE, 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 proj- ect since 2013. Newmont says Subika Underground was delivered on sched- ule and within budget for approximately

US$186 million in development capital. Beginning in 2019, Subika Underground will add average annual gold produc- tion 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) are projected to improve by between US$250

Joint venture to develop Sechaba coal project Botswana Stock Exchange-listed Shumba Energy reports an agreement has been reached for the establishment of a 50:50 joint venture partnership between Shumba and black-owned Lurco Group South Africa to develop Shumba’s Sechaba thermal coal project situated in the Morupule coalfield in Botswana. The deal will allow the partner- ship to supply coal into the region and for export.

nership, Shumba will transfer Sechaba and related authorisations to a special purpose vehicle (SPV). Lurco will immediately con- clude any feasibility work and begin work on the opencast construction, spending a minimum of US$10 million. Further, an amount of US$10 million will be paid to Shumba in phases prior to Lurco earning its 50 %. Lastly, development capital expended by both Shumba and Lurco prior to com- mercial production will be recouped from the SPV in the form of shareholder loans. In addition to the above, the parties have agreed that coal produced at Sechaba from the open pit will be toll processed through a wash plant owned by Shumba. The Managing Director of Shumba, Mashale Phumaphi, commented: “As a

Lurco has been trading for eight years and is an emerging South African resource business with a focus on exploration, benefi- ciation and trading. It is a supplier to Eskom in South Africa and currently exports ther- mal coal to a number of international clients out of various ports in Southern Africa. Under the commercial terms of the part-

14  MODERN MINING  December 2018