Newmont reserves decline slightly

Proven and probable reserves at the end of 1992 stood at 19.5 million oz., down 600,000 oz. from the previous year-end, Newmont Gold (NYSE) reports.

Reserves added in 1992 amounted to 2 million oz. However, during the year, Newmont depleted 2.2 million oz. of reserves to produce the 1.6 million oz. it sold, the difference resulting from losses in metallurgical treatment. Also, Newmont declassified from reserves 600,000 oz. of low-grade material. This material was found to contain refractory elements that, at present, render it uneconomic to process.

The remaining difference between 1992 and 1991 reserves is the result of modifications in models and mine plans, the Denver, Colo.-based company says. In addition to its 19.5 million oz. in reserves, Newmont Gold had 13.6 million oz. of non-reserve mineralization at the end of 1992. In order for this mineralization to be reclassified as reserves, an improvement is required in either gold prices or recovery rates, as could be obtained through the bio-leaching process now being tested.

Newmont’s 1992 year-end reserves were calculated on the basis of a gold price of US$400 per oz. If the price were to fall to US$300, the reserves would decline by about 22%. Conversely, an increase in gold prices to $500 would cause an approximate 16% increase in reserves.

Of the year-end 1992 reserves, 18.2 million oz. (or 94%) are situated on private land.

Newmont produced gold from five mines in 1992, with only 1% of this production coming from federal land. Because of this negligible production from federal lands, the proposals before the U.S. Congress to impose royalties on gold output from federal land would have no significant impact on the company’s current operations or reserves, Newmont says.