Newmont Goldcorp processes first ore from $140m to $180m Ahafo mill expansion

NORTH American gold producer, Newmont Goldcorp, processed its first ore from its Ahafo mill expansion in West Africa’s Ghana with commercial production pencilled in for the fourth quarter of this year, the company said in an update.

The expansion will increase Ahafo’s average annual gold production by 75,000 to 100,000 ounces for the first five years of operation, starting next year. Combined with the recently completed Subika underground developed, Ahafo’s production will be 550,000 to 650,000 ounces a year through to 2024.

The capital cost of the mill expansion is estimated to be between $140m and $180m which will be funded through free cash flow and available cash balances. Commercial gold output began at Ahafo in 2006, and in 2018 the operation sold 436,000 ounces of gold at all-in sustaining costs of $864 per ounce, said Newmont Goldcorp.

“The project also accelerates the efficient processing of stockpiled ore and supports profitable development of Ahafo’s highly prospective underground resources, which continue to demonstrate considerable upside,” said the firm’s president, Tom Palmer.

The project is expected to deliver an internal rate of return of more than 20% and, together with other projects at Ahafo, will extend profitable production through at least 2029, the company said.

Newmont suspended work on its Ahafo project last year following an accident in which six contractors lost their lives. Newmont operates two mines in Ghana: the other is Akyem, in Ghana’s eastern region, which poured its first gold in 2014.