Newmont Mining Announces New Mine
Copper and gold producer Newmont Mining Corp. (NYSE: NEM – $22.15) announced it will build the first phase of Long Canyon, an oxide mine with significant upside potential in an emerging gold district located less than 100 miles from its existing Nevada operations. The company said that the first phase of development consists of an open-pit mine and heap leach operation with expected gold production of between 100,000 and 150,000 ounces per year over an eight year mine life at an estimated all-in sustaining cost of between $500 and $600 per ounce. At current gold prices, the project is expected to generate around $100 million in EBITDA annually, beginning in 2017. The project will be funded through free cash flow and available cash balances, and leverage Newmont’s existing equipment, infrastructure and personnel. Meanwhile, the Turf Vent Shaft in Nevada and the new Merian mine in Suriname should keep gold production on the rise over the next couple of years, as well. In other news, Newmont received word that an Indonesian copper export permit will be extended for six months, after the company gave assurances that it will build a smelter with Freeport-McMoRan in the country. Newmont’s earnings and cash flow should progress nicely this year, assuming gold averages $1,200 an ounce and the shares can be held for recovery.