(Recasts with details about the mine, background)
July 29 (Reuters) - Newmont Mining Corp said on Tuesday it plans to invest around $1 billion in building a gold mine in Suriname. The Merian gold mine is expected to start production late in 2016, pending government approvals.
Newmont, the biggest U.S. gold miner, said the project contains gold reserves of 4.2 million ounces and is expected to produce an average of 300,000 ounces to 400,000 ounces of gold a year over a mine life of 11 years.
The mine is expected to have all-in sustaining costs of between $750 an ounce and $850 an ounce in the first five years - low by gold industry standards.
"This decision marks an important milestone in our portfolio optimization process. We have divested nearly $800 million in non-core assets to help fund the next generation of lower cost projects in our portfolio," Newmont Chief Executive Officer Gary Goldberg said in a statement.
Announcements to build large new gold mines have slowed to a trickle in the past two years as miners, burnt by soaring costs and weaker gold prices, have slashed capital expenditure and turned shy of big capital projects.
The government of Suriname has the option to earn a 25 percent fully-funded equity stake in the mine. Newmont expects to fund its share of development through available cash and future cash flows.
Smaller Canadian-based gold miner Iamgold owns the Rosebel gold mine in Suriname, a country on the northeast coast of South America. (Reporting by Nicole Mordant in Vancouver; Editing by David Gregorio)