Newmont hurt by gold price

Proven and probable reserves for Newmont Gold (NGC-N) at the end of 1997 stood at 52.7 million oz. gold, down 5% from the previous year.

The apparent decline is a function of the gold price used to calculate the reserves: the company assumed a price of US$400 per oz. in 1996; in the following year it lowered that figure to US$350 per oz., a number more widely accepted in the mining industry by year-end 1997.

If the price-assumption change had not been made, the 1997 reserves would have been 56.9 million oz. gold, 3% higher than 1996’s 55.2-million-oz.

total.

The company added 6.8 million oz. gold last year from new discoveries and the development of previously identified resources, said Chairman Ronald Cambre.

Much of the increase came from the Yanacocha mine in Peru, in which Newmont holds a 51% interest. Reserves there more than doubled to 13.9 million oz.

with the discovery of the 3-million-oz. Quinua deposit, as well as additions to the Yanacocha Sur and Oeste deposits.

In Nevada, Newmont added 1.1 million oz. to the Goldbug deposit on the Carlin trend, though reserve totals were lowered at many of the company’s Nevada operations because of the lower assumed gold price.

The company lists 18.9 million oz. gold as mineralized material not in the reserve category, which is down from 21.4 million oz. in 1996. Included in this category are ounces added at Yanacocha and the Minas Conga project, also in Peru, in which Newmont holds a 40% interest. The company also included its first published resource on the True North gold project in Alaska, namely, 10.2 million tons grading 0.078 oz. gold per ton, for just under 800,000 contained ounces.