Newmont Achieves Commercial Production at Merian Gold
Newmont Mining poured the first gold and declared commercial production at the Merian open-pit gold project in northeast Suriname on October 1. Declaration of commercial production was based on Merian mill throughput averaging 80% and gold recovery averaging more than 90% over the previous 30 days.
Ore mined from several pits at Merian will support a planned milling rate of 12 million mt/y during the first five years of operation. (Photo: Newmont Mining)
The project came in on time and more than $150 million, or nearly 20%, under its initial development capital budget.
The government of Suriname holds a fully funded 25% equity ownership stake in Merian and manages its participation through Staatsolie, a wholly owned government corporation. The mine will operate under the banner of Newmont Suriname and will be managed as part of Newmont’s South America region.
Merian has gold reserves of 5.1 million ounces (oz). Production is expected to average between 400,000 oz per year (oz/y) and 500,000 oz/y of gold (100% basis) at competitive costs during the first five full years of production. Costs are expected to be among the lowest in Newmont’s portfolio, averaging between $575/oz and $675/oz in costs applicable to sales and between $650/oz and $750/oz in all-in sustaining costs over the first five years.
Ore will be mined from several open pits. The milling rate is planned at 12 million mt/y during the first five years of operation. Mine life currently stands at 13 years, and exploration continues to identify upside potential within Newmont’s 500,000-ha area of interest.
Merian’s current workforce includes a little more than 1,100 employees, 20% of whom are indigenous Pamakkans, and 200 contractors. The development team has taken a proactive approach to minimizing its environmental impact and engaged experts to inform its biodiversity offset programs. Newmont also signed an agreement with the Pamakkan community that establishes local hiring and procurement targets, as well as a community development fund.
“We took an optimized approach to project development and benefited from being one of the only gold producers investing in growth during the lower price cycle,” said Newmont President and CEO Gary Goldberg.
Lundin Receives Approval for Fruta del Norte EIS
Lundin Gold reported in mid-October that the government of Ecuador approved the environmental impact study (EIS) for Lundin’s underground Fruta del Norte gold-silver project in southeast Ecuador. Early works field investigations for mine development have been completed, with the results of more than 2,000 meters (m) of geotechnical drilling, supporting the advance of designs for the mine portals, twin declines and north ventilation raise.
Lundin also reported it has awarded a services contract to G Mining Services. Lundin and G Mining will form an integrated project team to manage all aspects of the project, including optimization of all areas of the project design and execution plan, basic engineering, detailed engineering, procurement, construction, and commissioning. Other contracts have been awarded to Ausenco Services Canada for completion of plant layout optimization and basic and detailed engineering for the process plant and surface facilities, to Klohn Crippen Berger for surface geotechnical design and associated field investigations, to NCL Ingenieria y Construccion S.A. for underground mine design, to SRK Consulting for mine geotechnical services, and to Alan Auld Group for mine portal and soft tunneling design services.
The Fruta del Norte feasibility study supports development of an underground mine producing an average of 340,000 oz/y of gold over a mine life of 13 years. The project has current mineral reserves totaling 4.82 million oz of gold and 6.34 million oz of silver in 15.5 million mt, grading 9.67 g/mt gold and 12.7 g/mt silver. Life-of-mine production is estimated at approximately 4.4 million oz of gold and 5.2 million oz of silver, based on average gold recovery of 91.7% and average silver recovery of 81.5%.
Life-of-mine total cash costs of production are estimated at $553/oz, and all-in sustaining cash costs are estimated at $623/oz of gold, placing the project in the lowest-cash-cost quartile among the world’s gold mines.
Project capital cost is estimated at $669 million, including contingency. Start of construction is targeted for mid-2017.
