Newmont Mining reportedly plans to build a new underground mine, dubbed Subika Underground, and expand plant capacity by more than 50% at Ahafo.
“Recent exploration results demonstrate considerable upside within the Subika deposit and adjacent Apensu Deeps deposit,” Gary Goldberg, president and CEO, said.
Subika Underground should produce 1.8 million oz of gold over an 11-year mine life, and features ore grades of 4.7 grams per metric ton (g/mt), Newmont reported. The mill expansion should improve margins and support profitable production at Ahafo through at least 2029, it said.
The projects have been optimized to improve internal rates of return of more than 20% at a $1,200 per oz gold price, the company reported.
Newmont received its environmental permit to build and operate Subika Underground in March 2017. The company reportedly studied the deposit for 11 years.
The Ahafo mill expansion will increase mill capacity by 50% to nearly 10 million metric tons per year by adding a crusher, grinding 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 Subika Underground.
Development capital of between $300 million and $380 million will be funded through free cash flow and available cash balances. Newmont said it will uphold local hiring and procurement commitments and existing bargaining agreements through construction and operation.
Commercial production at Ahafo began in 2006, and the operation’s total gold production hit five million oz in October 2016. Three surface mines (Subika, Awonsu, Amoma) feed a conventional mill with a carbon-in-leach circuit. A fourth surface mine, Apensu, is currently being used for water storage.