Newmont Mining Corp. has completed construction of the Merian gold mine in Suriname on time and more than $150 million or nearly 20 percent below its initial development capital budget. First gold was poured and Newmont declared commercial production on October 1, having achieved sustained average mill throughput of 80 percent and gold recovery of more than 90 percent over the previous 30 days. Stockpiled ore represents nearly 160,000 contained oz of gold.
Merian contains gold reserves of 5.1 million oz and annual production is expected to average between 400,000 and 500,000 oz of gold at competitive costs in the first five full years of production (100 percent basis). Costs are expected to be among the lowest in the portfolio, averaging between $575 and $675/oz in costs applicable to sales and between $650 and $750/oz in all-in sustaining costs in the first five years. Exploration has extended mine life from 11 to 13 years, and continues to identify further upside potential within Newmont’s 500,000 hectare area of interest, including a new discovery at Sabajo.
“We took an optimized approach to project development and benefitted from being one of the only gold producers investing in growth during the lower price cycle,” said Gary Goldberg, president and chief executive officer. “Our team built Merian safely, on schedule and significantly below budget – and delivered our strategy to strengthen the portfolio by adding more than a decade of profitable production and creating a foothold in a prospective new gold district. This accomplishment is also the result of strong partnerships with the government and people of Suriname, and the extensive experience G-Mining brought to project development.”
The government of Suriname exercised its option to participate in a fully-funded 25 percent equity ownership stake in Merian in November 2013. Suriname manages its participation through Staatsolie, a Surinamese corporation that is wholly owned by the government.
Merian will operate under the banner of Newmont Suriname and be managed as part of Newmont’s South America region in accordance with leading safety, technical, social and environmental standards. Its current workforce includes more than 1,100 employees, 20 percent of whom are indigenous Pamakkans, and 200 contractors. The team has taken a proactive approach to minimizing its environmental impact and engaged experts to inform its biodiversity offset programs. Newmont also signed an agreement with the Pamakkan community that establishes local hiring and procurement targets, as well as a community development fund.
Merian is one of Newmont’s five self-funded growth projects – along with Long Canyon, expansions at Tanami and Carlin, and the recently completed expansion at Cripple Creek & Victor. Taken together, these projects are expected to add one million ounces of lower cost gold production over the next two years.