Accra, Sept. 29, GNA - Newmont, Ghana's latest gold mining kid says it aims at defining a 10 million ounce reserve in Ghana by the end of the year, as a precursor to the development of two new gold mines. According to a statement issued by Newmont the projects to be located in Ahafo and Akyem are expected to produce over 800,000 ounces of gold on average annually. The Newmont Board is expected to make a final decision on the projects in December.
Newmont said the development of the Ahafo project would cost the group between 300 million dollars and 325 million dollars. "The mine will start producing gold in 2006 at a rate of 425,000 ounces to 475,000 ounces a year, at a costs of between 175 to 185 dollars per ounce.
The life of mine is expected to be 15 years.
The Akyem project would cost between 220 million dollars and 245 million dollars. Production would start in 2007 at a rate of 350,000 ounces to 400,000 ounces a year, at a costs of 150 dollars per ounce to 160 dollars per ounce over the 13-year life of the mine.
The discovery of the two projects is especially accidental for Newmont, which along with most of the world's gold majors, has been searching furiously for new ores to arrest a declining production profile.
Fortunately for Newmont, which has been derided in some quarters for overpaying for the Australian Company, Normandy's Management had not invested much money or drilling in the Ghanaian assets and had also tried, unsuccessfully, to hawk the two properties.
Newmont's geologists began shaking the drought out of the Normandy portfolio, which gave them a chance to get a closer look at Ghana. Early drilling turned up new ores immediately, with the reserve base climbing by nearly two-thirds, to 4.9 million ounces last year.
By the end of this year, that figure would have doubled again to around 10 million ounces with untold potential at depth given that Newmont has yet to probe below 300 metres.
While the near-exponential growth in reserves would almost certainly compel Newmont to venture into a continent it has been suspicious about, the company has still to tackle some serious outstanding issues. Tying down a favourable fiscal regime is one and ensuring a reliable power source is another.
Ghana's government has shown itself to be receptive to new mining investments and two new major mines that would together create more than 1,000 jobs would be most welcomed.
The new mines would also afford Newmont a net increase in production over the next four years, keeping it ahead of a chasing pack which has Barrick and a resurgent AngloGold out in front.
The production and cost numbers from Ghana are telling, particularly when viewed against the backdrop of what most commentators had expected to be a precipitous decline in production and simultaneous increase in Newmont's cash costs from the end of next year.
The picture now is very different, according to the statement Newmont expects its production to increase from current levels of 7.3 million ounces to 7.7 million ounces by 2007.
At the same time, it has forecast a fall in average cash costs across its operations from just over 200 dollars per ounce to between 175 and 190 dollars per ounce in 2007.
The Ghanaian strategy may have worked, but there's no doubt it was lucky. Pierre Lassonde, Newont's President, at the Diggers and Dealers Conference in Australia said the drilling results were "far better than expected" - the low value put on Ghana at the acquisition of Normandy, bears this out.
"Lucky it may be, but the wily Lassonde is leaving little else to chance. Newmont is already increasing its landholdings in Ghana and may have contributed to slow progress on other gold projects in the country, given that it has every available drill rig in the region working overtime on its own leases," the statement noted
Gold exploration may be a lottery, as Lassonde has pointed out on more than one occasion, but with a growing portfolio of real estate, he fancies Newmont's chances of winning another jackpot in Ghana. 29 Sept. 03
Accra, Sept. 29, GNA - Newmont, Ghana's latest gold mining kid says it aims at defining a 10 million ounce reserve in Ghana by the end of the year, as a precursor to the development of two new gold mines. According to a statement issued by Newmont the projects to be located in Ahafo and Akyem are expected to produce over 800,000 ounces of gold on average annually. The Newmont Board is expected to make a final decision on the projects in December.
Newmont said the development of the Ahafo project would cost the group between 300 million dollars and 325 million dollars. "The mine will start producing gold in 2006 at a rate of 425,000 ounces to 475,000 ounces a year, at a costs of between 175 to 185 dollars per ounce.
The life of mine is expected to be 15 years.
The Akyem project would cost between 220 million dollars and 245 million dollars. Production would start in 2007 at a rate of 350,000 ounces to 400,000 ounces a year, at a costs of 150 dollars per ounce to 160 dollars per ounce over the 13-year life of the mine.
The discovery of the two projects is especially accidental for Newmont, which along with most of the world's gold majors, has been searching furiously for new ores to arrest a declining production profile.
Fortunately for Newmont, which has been derided in some quarters for overpaying for the Australian Company, Normandy's Management had not invested much money or drilling in the Ghanaian assets and had also tried, unsuccessfully, to hawk the two properties.
Newmont's geologists began shaking the drought out of the Normandy portfolio, which gave them a chance to get a closer look at Ghana. Early drilling turned up new ores immediately, with the reserve base climbing by nearly two-thirds, to 4.9 million ounces last year.
By the end of this year, that figure would have doubled again to around 10 million ounces with untold potential at depth given that Newmont has yet to probe below 300 metres.
While the near-exponential growth in reserves would almost certainly compel Newmont to venture into a continent it has been suspicious about, the company has still to tackle some serious outstanding issues. Tying down a favourable fiscal regime is one and ensuring a reliable power source is another.
Ghana's government has shown itself to be receptive to new mining investments and two new major mines that would together create more than 1,000 jobs would be most welcomed.
The new mines would also afford Newmont a net increase in production over the next four years, keeping it ahead of a chasing pack which has Barrick and a resurgent AngloGold out in front.
The production and cost numbers from Ghana are telling, particularly when viewed against the backdrop of what most commentators had expected to be a precipitous decline in production and simultaneous increase in Newmont's cash costs from the end of next year.
The picture now is very different, according to the statement Newmont expects its production to increase from current levels of 7.3 million ounces to 7.7 million ounces by 2007.
At the same time, it has forecast a fall in average cash costs across its operations from just over 200 dollars per ounce to between 175 and 190 dollars per ounce in 2007.
The Ghanaian strategy may have worked, but there's no doubt it was lucky. Pierre Lassonde, Newont's President, at the Diggers and Dealers Conference in Australia said the drilling results were "far better than expected" - the low value put on Ghana at the acquisition of Normandy, bears this out.
"Lucky it may be, but the wily Lassonde is leaving little else to chance. Newmont is already increasing its landholdings in Ghana and may have contributed to slow progress on other gold projects in the country, given that it has every available drill rig in the region working overtime on its own leases," the statement noted
Gold exploration may be a lottery, as Lassonde has pointed out on more than one occasion, but with a growing portfolio of real estate, he fancies Newmont's chances of winning another jackpot in Ghana. 29 Sept. 03
