Newmont Gold Corp. forecasts a total gold output at its Ahafo and Akyem mines at 1.05 million ounces of gold for full year 2022, with 650koz of gold and 400koz of gold respectively.
In line with this production target, Newmont set all-in sustaining cost (AISC) for the combined operations of the Ahafo and Akyem project at $1,925 per ounce of gold, reflecting a breakdown of $1,000 per ounce of gold for the Ahafo project and $925 per ounce of gold for the Akyem project.
This is also guided by an expected cost applicable to sales (CAS) of $875 per ounce of gold at its Ahafo mine and $725 per ounce of gold at its Akyem mine.
Given the extent of work in each of these projects, the company has allocated $30 million and $10 million for the Ahafo and Akyem projects respectively as development capital expenditures while sustaining capital expenditure is forecast at $85 million and $40 million respectively.
Newmont’s Ahafo Mine in 2022
Particularly, Newmont’s new Ahafo North mine expands Newmont’s existing footprint in Ghana with four open pit mines and a stand-alone mill located approximately 30 kilometers from the Company’s Ahafo South operations. For its Ahafo North mine, development costs (excluding capitalized interest) for the first quarter of 2022 was $28 million.
The project is expected to add between 275,000 and 325,000 ounces per year with all-in sustaining costs between $600 and $700 per ounce for the first five full years of production (2024-2028). Capital costs for the project are estimated to be between $750 and $850 million with a construction completion date in late 2023 and commercial production in 2024.
“Ahafo North is the best unmined gold deposit in West Africa with approximately 3.5 million ounces of Reserves and more than 1 million ounces of Measured, Indicated and Inferred Resources and significant upside potential to extend beyond Ahafo North’s current 13-year mine life.
“Newmont continues to maintain wide-ranging protective measures for its workforce and neighboring communities, including screening, physical distancing, deep cleaning and avoiding exposure for at-risk individuals, which are expected to impact AISC per gold equivalent ounce by approximately $10 per ounce.”
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Safety of Newmont’s Operations
Newmont noted that, in line with its 2022 outlook, it has added an additional 5 per cent of cost escalation to its direct operating costs related to labor, energy, and material and supplies. In addition to this, its longer-term outlook assumes a $30 per ounce impact from production taxes and royalties attributable to higher gold prices.
Newmont underscored the outlook is based upon “certain assumptions, including, but not limited to, metal prices, oil prices, certain exchange rates and other assumptions”. Furthermore, the company indicated a caveat that “the outlook cannot be guaranteed”.
As a result, investors are therefore cautioned not to place undue reliance upon the outlook and forward-looking statements as there can be no assurance that the plans, assumptions or expectations upon which they are placed will occur, the company noted.
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