April 8, 2015 / 8:40 PM / 4 years ago

UPDATE 1-Newmont Mining says will build new Nevada gold mine

(Adds more details on planned mine, context)

April 8 (Reuters) - Newmont Mining Corp will go ahead with building the first phase of its Long Canyon gold mine in Nevada, the company, the biggest U.S.-based gold miner said on Wednesday.

The first phase, which consists of an open pit mine and heap leach operation, is expected to produce between 100,000 ounces and 150,000 ounces of gold a year over eight years. First commercial production is expected in the first half of 2017.

“Taking a phased approach to developing Long Canyon gave us the means to lower development capital to between $250 million and $300 million,” Newmont Chief Executive Gary Goldberg said in a statement.

Gold miners globally have opted for smaller, phased projects in recent years after being hit by weaker gold prices and cost overruns on mine construction.

Long Canyon, less than 100 miles from Newmont’s existing Nevada operations, is expected to produce gold at a low all-in sustaining cost of between $500 and $600 an ounce.

At current gold prices, the project is expected to generate around $100 million in pre-tax earnings a year, beginning in 2017, Newmont said. The gold price was last at $1,202 an ounce. (Reporting by Nicole Mordant in Vancouver; Editing by David Gregorio)

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