Newmont Expands Production at Ahafo in Ghana
“We are building on strong performance and solid infrastructure by investing in the next generation of profitable production at Ahafo,” said Gary Goldberg, president and CEO, Newmont Mining. “The Subika Underground mine will also create a platform to support even longer-term growth. Recent exploration results demonstrate considerable upside within the Subika deposit and adjacent Apensu Deeps deposit.”
The projects have been optimized to improve internal rates of return to more than 20% at a $1,200/oz gold price. In the first five full years of production — or from 2020 through 2024 — they are forecast to add incremental gold production of between 200,000 and 300,000 oz/y at Ahafo for total average annual production of 550,000 to 650,000 oz. The projects are also expected to lower unit costs during the same time frame. Costs applicable to sales (CAS) are expected to decrease by between $150/oz-$250/ oz compared to 2016 for total average CAS of $650/oz-$750/oz. All-in sustaining costs (AISC) are expected to decrease by between $250/oz-$350/oz compared to 2016 for total average AISC of $800/ oz-$900/oz.
Newmont received its environmental permit to build and operate Subika Underground in March 2017. The resource has been studied for 11 years and execution and technical risks are well understood. The company expects to reach first production at the mine in the second half of 2017 and commercial production in the second half of 2018.
The Ahafo mill expansion will increase mill capacity by 50% to nearly 10 million mt/y 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. Newmont expects first gold production at the mill expansion in the first half of 2019 and commercial production in the second half of 2019.
Development capital of between $300 million and $380 million will be funded through free cash flow and available cash balances. Newmont 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 achieved 5 million oz of gold production 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.