2 Newmont Projects Start Commercial Production - Analyst Blog


Gold miner Newmont Mining Corporation 's ( NEM ) Akyem project in Ghana and Phoenix Copper Leach project in Nevada have achieved commercial production safely on schedule and on budget. The employees and contractors in Ghana and Nevada worked efficiently to enable the projects work at full capacity.

Akyem is a large, open pit gold mine situated in the Birim North District in Eastern Ghana. As of Dec 31, 2012, the mine had proven and probable gold reserves of 7.4 million ounces and its mine life was estimated at roughly 16 years.

Akyem is a core asset of Newmont and it is expected to produce average annual gold of 350,000 to 450,000 ounces at costs applicable to sales of $500 to $650 per ounce in its initial five years of production. Average all-in sustaining costs for the initial five years of production are expected to be within $750 to $850 per ounce. Attributable gold production from the Akyem mine for 2013 is expected to be 50,000 to 100,000 ounces.

The Phoenix Copper Leach project is an extension of the Phoenix mine situated roughly 16 miles south of Battle Mountain, Nev. Copper is extracted from materials earlier defined as waste through a leaching process and then dipped in a solvent extraction/electrowining (SX/EW) facility. As of Dec 31, 2012, the mine held proven and probable copper reserves of 740 million pounds and mine life was estimated at 20 years.

The Phoenix Copper Leach project is expected to produce average annual copper production of nearly 20 million pounds at costs applicable to sales of $1.75 to $2.00 per pound in its initial five years of production. The Phoenix Copper Leach project has a 2013 attributable copper production outlook of 4 to 5 million pounds.

Newmont recently lowered its copper production outlook for 2013 and now expects it to be between 135 and 145 million pounds for the full year, down from 150 and 170 million pounds expected earlier.

The reduced copper production view is attributable to lower-than-expected mill throughput at the Boddington mine in Australia and lower-than-expected ore grade at the Batu Hijau mine in Indonesia.

However, Newmont backed its attributable gold production outlook for the full year in the band of 4.8 to 5.1 million ounces. The company noted that higher mill throughput in Nevada and the start of commercial production from the Akyem mine in Ghana in the fourth quarter will benefit gold production for the full year.

Newmont also reported preliminary attributable gold and copper production for third-quarter 2013 of 1.283 million ounces and 34 million pounds, respectively. Preliminary attributable gold and copper sales for the quarter were 1.263 million ounces and 35 million pounds, respectively.

Newmont, which currently retains a Zacks Rank #3 (Hold), will release its third quarter results after the closing bell today.

Other companies in the gold mining industry worth considering are Pretium Resources Inc. ( PVG ), Franco-Nevada Corp. ( FNV ) and Allied Nevada Gold Corp. ( ANV ). While Pretium Resources and Franco-Nevada carry a Zacks Rank #1 (Strong Buy), Allied Nevada holds a Zacks Rank #2 (Buy).

ALLIED NEV GOLD (ANV): Free Stock Analysis Report

FRANCO NV CP (FNV): Free Stock Analysis Report

NEWMONT MINING (NEM): Free Stock Analysis Report

PRETIUM RES INC (PVG): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ANV , FNV , NEM , PVG



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