Newmont Mining has announced plans to invest around $900m to $1bn in developing the Merian gold mine in Suriname.
Located approximately 60km south of Moengo, the Merian site is estimated to contain gold reserves of 4.2 million ounces and is initially expected to produce 400,000oz to 500,000oz of gold annually in the first five years.
Production at the mine will gradually reduce to about 300,000oz to 400,000oz a year through its 11-year life time, the company said.
Newmont is likely to incur costs between $750 and $850 per ounce in the first five years and between $825 and $960 per ounce for the complete mine life. This is considered to be low according to industry standards.
Newmont president and CEO Gary Goldberg said: “We have forged a more efficient approach to developing Merian while upholding our leading safety, technical, social and environmental standards.
“This decision marks an important milestone in our portfolio optimisation process. We have divested nearly $800m in non-core assets to help fund the next generation of lower cost projects in our portfolio.
“Equally important, we established community agreements and are working with experts to minimise our impact on the environment. Getting it right from the beginning is critical.”
Newmont’s wholly owned entity Surgold will operate the Merian mine, which is awaiting exploitation rights from the Suriname Government.
The government has an option to take a 25% ownership stake in the project that includes all project capital, operating expenses and an initial earn-in contribution.
Newmont plans to fund the development using its available cash and projected cashflows. The project is expected to employ 2,500 people during the development stage and 1,300 people on becoming fully operational.
With plans to start production at the mine in late 2016, the company has increased its entire gold production target to between 4.7 million ounces and five million ounces.