Newmont Mining will invest in developing the Merian gold mine in Suriname with strong local support for the project and expected all-in sustaining costs of between $750/oz and $850/oz in the first five years. The new mine is expected to begin production in late 2016, pending receipt of the Right of Exploitation from the government of Suriname.
The total capital investment is approximately $900 million to $1 billion, and the government of Suriname has the option to earn a 25% fully funded equity ownership stake, including all project capital and operating expenses and an initial earn-in contribution. Newmont expects to fund its share of development through available cash balances and projected cash flows.
With gold reserves estimated at 4.2 million oz at an average grade of 1.22 grams per metric ton (g/mt), it is expected to produce an average of 300,000 oz to 400,000 oz of gold annually at competitive costs over a mine life of 11 years. Higher grade ore and throughput in the early phases will boost annual production to an average of 400,000 oz/y to 500,000 oz/y of gold in the first five years and reduce the payback period.
“We have forged a more efficient approach to developing Merian while upholding our leading safety, technical, social and environmental standards,” said Gary Goldberg, president and CEO. “This decision marks an important milestone in our portfolio optimization process – we have divested nearly $800 million in non-core assets to help fund the next generation of lower cost projects in our portfolio. Equally important, we established community agreements and are working with experts to minimize our impact on the environment – getting it right from the beginning is critical.”
Merian will operate under the banner of Surgold, a wholly owned entity. Initial development will include upgrading roads and preparing the camp, mine and mill sites. Surgold expects to employ 2,500 people during project development and 1,300 during full operation, and will launch processes to facilitate local employment and procurement once the Right of Exploitation is granted.