A geologist examines a rock formation at Newmont Mining’s Long Canyon gold property in Nevada. First production is expected in 2017. (Photo courtesy of Newmont Mining)A geologist examines a rock formation at Newmont Mining’s Long Canyon gold property in Nevada. First production is expected in 2017. (Photo courtesy of Newmont Mining)

Newmont Mining has started construction of the first phase of its Long Canyon gold mine in the Pequop Mountains in eastern Elko county Nevada, less than 100 mi east of existing Newmont mines and infrastructure. The mine is the first in a district that has substantial potential for additional development.

Newmont acquired the Long Canyon project when it acquired Fronteer Gold in April 2011. Gold reserves in oxide ore currently total 1.2 million oz at an average grade of 2.29 g/mt, with additional highly prospective mineralization available over a three-mile strike length.

The first phase of Long Canyon development consists of an open-pit mine and heap leach operation, with expected gold production of between 100,000 and 150,000 oz/y over an eight-year mine life at an estimated all-in sustaining cost of between $500 and $600/oz. At current gold prices, the project is expected to generate around $100 million in EBITDA annually, beginning in 2017.

Newmont president and CEO Gary Goldberg commented, “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. I’m confident that we have the engineering, orebody knowledge, and community agreements in place to deliver this project safely, on time, and on budget.”

Newmont will fund the Long Canyon project through free cash flow and available cash balances and will leverage existing company equipment, infrastructure, and personnel to build the project. Capital expenditures will be allocated roughly equally in 2015 and 2016, with minimal spending in 2017.

Newmont secured federal and state permits necessary to proceed with construction at Long Canyon following a 36-month study and public comment period. Once in operation, Phase 1 of the project will directly employ about 260 people.

Resource Center Whitepapers, Videos, Case Studies

Let's stay in touch!

All of the latest mining news and our digital edition sent to your inbox once a week.

We'll never share your email address, and you can opt out at any time, we promise.