(Recasts with details about the mine, background)
July 29 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