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Newmont’s gold, copper reserves rise

  • SOURCE: | qwesa2big
  • goldNewmont Mining Corporation has reported gold reserves of 73.7 million ounces and copper reserves of 5.7 billion pounds for 2015.

    The Company added 5.0 million ounces of reserves through exploration and 4.0 million ounces through the acquisition of Cripple Creek and Victor (CC&V), more than offsetting depletion of 6.5 million ounces, the miner said in a statement.

    It said notable gold reserve additions for the year include 1.1 million ounces at Kalgoorlie, 1.0 million ounces at Carlin underground, 0.8 million ounces at Tanami and 0.8 million ounces at Subika.

    Overall gold reserve grades rose slightly from the prior year to 1.06 grams per tonne.

    Gold resource additions include 0.9 million ounces at Subika, 0.8 million ounces at Carlin underground, 0.7 million ounces at Tanami, and 0.5 million ounces at Ahafo. Divestments, price changes and revisions offset these gains, Newmont said.

    Gold reserves were calculated at $1,200 per ounce, down from $1,300 per ounce in 2014, resulting in a negative 3.0 million ounce revision due to price.

    The miner said the largest price impact was at Akyem where a marginally economic layback, not included in the current mine plan, was moved to resources.

    Newmont also moved 6.5 million ounces of reserves at Conga to resources due to the expiration of certain operating and construction permits as well as uncertain prospects for future development and permitting. It reported 37.8 million ounces of attributable Measured and Indicated gold resources and 15.3 million ounces attributable Inferred gold resources in 2015.

    Total attributable gold resources increased by 10.4 million ounces or 24% from the prior year. The Company added 4.3 million ounces through exploration and 6.1 million ounces through the addition of CC&V, which more than offset conversions of 5.5 million ounces and divestments of 1.2 million ounces.

    Gold resources were calculated at $1,400 per ounce, unchanged from the prior year. Newmont also reported 5.7 billion pounds of attributable copper reserves, 9.7 billion pounds of attributable Measured and Indicated copper resources and 1.9 billion pounds attributable Inferred copper resources.

    Copper reserves were down from 2014 primarily due to the reclassification of Conga reserves. Copper reserves were calculated at $2.75 per pound, down from $3.00 per pound in 2014.

    Copper resources were calculated at $3.50 per pound, unchanged from 2014.

    Attributable Proven and Probable silver reserves for 2015 were 113 million ounces. Attributable Measured and Indicated silver resources for 2015 were 89 million ounces, with additional Inferred silver resources of 26 million ounces. Silver reserves and resources were calculated using prices of $19.00 and $24.00 per ounce, respectively, down from $20.00 and $25.00, respectively from 2014.

    Newmont said a $100 increase in gold price would result in an approximate 6% increase in gold reserves while a $100 decrease in gold price would result in an approximate 5% decrease in gold reserves.

    These sensitivities, Newmont noted, assume an oil price of $75 per barrel (WTI) and an Australian dollar exchange rate of $0.80.

    Newmont’s 2016 attributable exploration budget is approximately $185 million. Of this amount, the Company expects to spend about 45% in North America, 15% in South America, and the rest split between Asia Pacific, Africa and other locations.

    Of the total attributable exploration budget, Newmont expects to spend approximately 75% on near mine and brownfields exploration activities, with the balance allocated to greenfields programmes.

    Newmont said Proven and Probable reserves are based on extensive drilling, sampling, mine modeling and metallurgical testing from which it determines economic feasibility.

    Metal price assumptions follow SEC guidance not to exceed a three-year trailing average. The price sensitivity of reserves depends upon several factors including grade, metallurgical recovery, operating cost, waste-to-ore ratio and ore type.

    Metallurgical recovery rates vary depending on the metallurgical properties of each deposit and the production process used.

    The cut-off grade, or lowest grade of mineralised material considered economic to process, varies with material type, price, metallurgical recoveries, operating costs and co- or by-product credits. It said no assurance can be given that the indicated levels of recovery of gold and copper will be realised. Ounces of gold and silver or pounds of copper included in the proven and probable reserves are those contained prior to losses during metallurgical treatment. It said reserve estimates may require revision based on actual production.

    Market fluctuations in the price of gold or copper, as well as increased production costs or reduced metallurgical recovery rates, could render certain proven and probable reserves containing relatively lower grades of mineralisation uneconomic to exploit and might result in a reduction of reserves, the miner added.


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