Newmont pays $2.4 million royalty

Accra, May 7, GNA - Newmont Mining Corporation's (NEM) Ahafo Mine has paid 2.4 million dollars to the government as mining royalty for the first quarter of 2007, the company said on Monday.

Newmont's External Relations Director, Dr Chris Anderson, told the Ghana News Agency (GNA) that the royalty which was paid on the April 20 covered a total of 124,862 ounces of gold produced and sold between January and March this year, which generated 80.67 million dollars.

Dr Anderson said management was upbeat about progress of production and expressed optimism that the company would attain its yearly production target despite the current power crisis.

"It's a pretty good quarter so far," Dr Anderson said. The company has projected it will produce at least 430,000 ounces in 2007. The Ahafo mine, which poured its first gold in July, last year, is projected to produce 500,000 ounces of gold yearly.

The mine produced 203,000 ounces between its first gold pour from July to December, down from an initial forecast of between 225,000 and 250,000 ounces. The shortfall was due to the power crisis, the company said.

The Volta River Authority (VRA) began load shedding on August 28 to both industry and domestic consumers, and asked Newmont and other bulk users to curtail their consumption by 50 per cent, citing low levels of water in the Akosombo Dam.

Dr Anderson said the mine has had to install four units of high capacity diesel generators to run its plant at costs four times higher than power from the national grid. He said the high power generating cost notwithstanding, Newmont was making satisfactory progress in production.

"We are happy to be on course. This means we are delivering on the commitments we made to the people and the government of Ghana." The Ahafo mine is capable of processing seven million tons of ore yearly.

Dr Anderson said by the end of 2007, Newmont would have invested over 665 million dollars in the Ahafo project, adding that over 50 per cent of total operational expenditure would stay in Ghana and make an impact the Ghanaian economy.

"Additionally, in 2007, the company anticipates spending over eight million on social and environmental projects, including funds allocated to programs to help the local economy, as well as environmental management, monitoring and restoration programs," he said.