The Board of Directors of US mining company Newmont Mining Corporation (NEM) gave its funding approval for the company’s Akyem project in Ghana.
The Board also cleared Akyem through the fourth stage-gate in Newmont’s four gate project review process, which is roughly in line with a bank’s feasibility approval process.
The Akyem mine had a measured and indicated reserve of 7.7-million ounces of gold at the end of the fourth quarter of 2010, and the life of the mine is predicted to be around 15 years. Initial capital costs are expected between $700 million and $1 billion. The mine is expected to produce its first ore at the end of 2013 or the beginning of 2014.
Last month when the company released its fourth quarter results, it also highlighted its upcoming Conga Project in Peru, which contains over 6 million attributable ounces of gold and 1.6 billion attributable pounds of copper reserves. Progress in the Akyem and the Conga mining projects, as well as continuation of its drilling programs at Hope Bay in Canada, are some of Newmont’s top priorities in 2011.
In its fourth quarter release last month, the company reported adjusted net income of $574 million or $1.16 per share versus $561 million or $1.14 per share in the year ago quarter and surpassed the Zacks Consensus Estimate of $1.11 per share.
Total revenue increased 1.1% year over year, missing the Zacks Consensus Estimate of $2.6 billion nonetheless.
The Ahafo project in Ghana produced 137,000 ounces of gold in the quarter and the company forecasts that the production in 2011 will be in the range of 550,000 to 590,000 ounces due to mining higher ore grade. Costs applicable to sales of approximately $485 to $535 per ounce are expected for 2011, primarily due to higher energy prices and higher labor and royalty costs.
Denver, Colorado-based Newmont Mining Corporation is one of the world’s largest producers of gold with several active mines in Nevada, Peru, Australia/New Zealand, Indonesia and Ghana.
The company has some promising projects in its pipeline, such as the Congo project in Peru, Akyem project in Ghana, Hope Bay in Canada and the Gold Quarry West Wall layback project in Nevada. Although the company faces some challenges at the Boddingtan mine, it remains positive and expects that production will ramp up in 2011.
The company faces stiff competition from Barrick Gold Corporation (ABX) and AngloGold Ashanti Ltd. (AU).
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