Newmont’s operations at its Ahafo mine is pushing costs through the roof as total capital costs for the year inch closer to approximately 15% above prior estimate, citing costs associated with delayed land access.

The gold miner reported that development costs since approval, excluding capitalised interest, were $142 million, of which $75 million related to the six months ended June 30, 2022.

Despite this concern, the gold miner sees huge prospects for the project. The project is expected to add between 275,000 and 325,000 ounces per year for the first five full years of production.

Estimating the production timelines of the project, Newmont said the commercial production for the project is now expected to be in mid-2025. Formal updates to capital estimates and estimated project completion will be provided later in the year.

At Ahafo North, in Ghana, Newmont is building four new openpit mines and a standalone mill about 30 km from the Ahafo South operations, the schedule is also behind, and costs are rising.

“Ahafo North is the best unmined gold deposit in West Africa with approximately 3.5-million ounces of reserves and more than one-million ounces of measured, indicated and inferred resources and significant upside potential to extend beyond Ahafo North’s current 13-year mine life.”
Newmont

In the course of Q2 2022, Ahafo experienced challenges due to labor availability and supply chain disruptions impacting the delivery of new equipment and critical spares, which affected the company’s ability to ramp-up mining rates at Subika Underground.

As a result, Ahafo’s full-year production was reduced by approximately 80 thousand ounces. “The CC&V operation has begun the transition to a higher-value, longer-life leach-only operation, resulting in a reduction in full-year production of approximately 40 thousand ounces,” Newmont Said.

In addition, Newmont continues to experience lower productivity as a result of a competitive labor market in Canada and Australia, resulting in full-year production impacts of approximately 50 thousand ounces and 30 thousand ounces in those regions, respectively.

Other Developments in Newmont’s projects

Newmont would provide formal updates to Tanami Expansion 2 and Ahafo North’s capital estimates and estimated project completion dates later in the year.

Meanwhile, Newmont will later this year announce investment decisions for two more projects– $2.5 billion Yanacocha Sulphides, in Peru, and the $350 million to $450 million Pamour project, in Canada.

Yanacocha Sulphides will develop the first phase of sulphide deposits and an integrated processing circuit, including an autoclave to produce 45% gold, 45% copper and 10% silver. The project is expected to add average gold production of 525,000 gold equivalent ounces a year for the first full five years.

The first phase focuses on developing the Yanacocha Verde and Chaquicocha deposits to extend Yanacocha’s operations beyond 2040 with second and third phases having the potential to extend life for multiple decades.

Pamour will extend the life of the Porcupine mine and maintain production, beginning in 2024. The project will optimise mill capacity, adding volume and supporting high-grade ore from Borden and Hoyle Pond, while supporting further exploration in a highly prospective and proven mining district.

Newmont is also advancing the Cerro Negro District Expansion project, in Argentina, which entails the simultaneous development of the Marianas and Eastern districts to extend the mine life of Cerro Negro beyond 2030.