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GOLD
May 2017
MODERN MINING
27
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
Newmont Mining Corporation, listed
on the NYSE, has announced plans
to extend profitable production at
its Ahafo operations in Ghana by
building a new underground mine
and expanding plant capacity by
more than 50 per cent.
Processing facilities at
Newmont’s Ahafo gold mine
in Ghana (photo: Business
Wire).
Newmont to expand Ahafo
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.
The resource has
been studied
for 11 years and
execution and
technical risks are
well understood.