Modern Mining May 2017

GOLD

Newmont to expand Ahafo

T he Subika Underground mine is expected to produce 1,8 million ounces of gold over an 11-year mine life and features ore grades of 4,7 g/t. The mill expansion is ex- pected to improve margins and support profit- able production at Ahafo through at least 2029. “We are building on strong performance and solid infrastructure by investing in the next generation of profitable production at Ahafo,” said Gary Goldberg, Newmont’s President and CEO. “The Subika Underground mine will also create a platform to support even longer-term growth. Recent exploration results demonstrate considerable upside within the Subika deposit and adjacent Apensu Deeps deposit.” The projects have been optimised to improve internal rates of return to more than 20 per cent at a US$1 200 gold price. In the first five full years of production – or from 2020 through 2024 – they are forecast to add incre- mental gold production of between 200 000 and 300 000 ounces per year at Ahafo for total aver- age annual production of 550 000 to 650 000 ounces. The projects are also expected to lower unit costs during the same time frame. Costs applicable to sales (CAS) are expected to decrease by between U$150 and US$250 per ounce compared to 2016 for total average CAS of US$650 to US$750 per ounce. All-in sus- taining costs (AISC) are expected to decrease by between US$250 and US$350 per ounce compared to 2016 for a total average AISC of US$800 to US$900 per ounce. Newmont received its environmental permit to build and operate the Subika Underground mine in March 2017. The resource has been studied for 11 years and execution and tech- nical risks are well understood. The company expects to reach first production at the mine in the second half of 2017 and commercial pro- duction in the second half of 2018. African Underground Mining Services (AUMS), a 50:50 joint venture between its Ahafo operations in Ghana by building a new underground mine and expanding plant capacity by more than 50 per cent. Newmont Mining Corporation, listed on the NYSE, has announced plans to extend profitable production at

ASX-listed Ausdrill and Barminco Holdings, has been appointed to undertake the Subika Underground mining contract. The contract has a five-year term and encom- passes the supply of all underground mining services for the Subika Underground mine, including development and production activi- ties, diamond drilling and associated services. The estimated value is US$280 million. The Ahafo mill expansion will increase annual mill capacity by 50 per cent to nearly 10 million tonnes by adding a crusher, grind- ing mill and leach tanks to the circuit. The expansion supports more efficient processing of harder, lower grade ore from existing surface mines, as well as Ahafo’s stockpiles and the Subika Underground mine. Newmont expects first gold production at the mill expansion in the first half of 2019 and commercial produc- tion in the second half of 2019. Development capital of between US$300 million and US$380 million will be funded through free cash flow and available cash bal- ances. Newmont will uphold local hiring and procurement commitments and existing bar- gaining agreements through construction and operation. Commercial production at Ahafo – located in the Brong Ahafo region, approximately 307 km north-west of Accra – began in 2006 and the operation achieved 5 Moz of gold pro- duction in October 2016. Three surface mines – Subika, Awonsu and Amoma – feed a con- ventional mill with a carbon-in-leach circuit. A fourth surface mine, Apensu, is currently being used for water storage. Newmont also owns and operates the Akyem mine in Ghana. Located in the Birim North District of the Eastern Region, approxi- mately 177 km north-west of Accra, Akyem has been in commercial production since 2013 and produced just over 400 000 ounces of gold in 2016. 

Processing facilities at Newmont’s Ahafo gold mine in Ghana (photo: Business Wire).

The resource has been studied for 11 years and execution and technical risks are well understood.

May 2017  MODERN MINING  27