Newmont Mining will build the first phase of Long Canyon, an oxide mine with significant upside potential, in an emerging gold district located less than 100 miles from its existing Nevada operations. The first phase of development consists of an open-pit mine and heap leach operation with expected gold production of between 100,000 and 150,000 oz/yr over an eight-year mine life at an estimated all-in sustaining costs of between $500/oz and $600/oz. At current gold prices, the project is expected to generate around $100 million in EBITDA annually, beginning in 2017.

"Taking a phased approach to developing Long Canyon gave us the means to lower development capital to between $250 million and $300 million; generate an internal rate of return of about 17% at current gold prices; and reduce the payback period to just over four years after first commercial production, which we expect to reach in the first half of 2017,” said Gary Goldberg, president and CEO, Newmont Mining. “I’m confident that we have the engineering, ore body knowledge and community agreements in place to deliver this project safely, on time and on budget."

The project will be funded through free cash flow and available cash balances, and by leveraging Newmont’s existing equipment, infrastructure and personnel. Capital expenditures will be allocated roughly equally in 2015 and 2016, with minimal spending in 2017.

The deposit is characterized as a high-grade oxide ore, which will be processed by heap leaching. The Long Canyon reserves are estimated at 1.2 million oz of gold at an average grade of 2.29 grams per metric ton (g/mt) and highly prospective mineralization over a three-mile strike length. Annual production rates are expected to be between 100,000 oz and 150,000 oz over an eight-year mine life for the first phase of operation.

Federal and state permits necessary to proceed with development of the project have been secured following a 36-month study and public comment period. Once in operation, Long Canyon Phase 1 is expected to directly employ about 260 miners.

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