Newmont on track for production targets

Despite a disappointing second quarter, Newmont Mining (NEW-N) says it is on track to meet this year’s targets of 5.4 million oz. gold produced at a total cash cost of US$180 per oz.

Production in the latest quarter came in below target, with 1.2 million oz. produced at a total cash cost of US$194 per oz. The shortfall was attributed to short-term operating changes at the Yanacocha mine in Peru and reduced throughput due to annual roaster maintenance at the Nevada operations.

Newmont owns 51.35% of Yanacocha, with the remainder held by joint-venture partner Compania de Minas Buenaventura (BVN-N). The mine achieved record production of 1.8 million oz. last year. Cash costs came in at US$88 per oz. in 2000, the first full year of owner-, rather than contractor-, mining.

Costs are expected to rise to about US$110 per oz. this year, as material from a new deposit, La Quinua, will require crushing and agglomerating before heap leaching. However, the new deposit will boost Yanacocha’s overall production to more than 2 million oz.

By the end of 2000, reserves had increased tenfold to nearly 37 million oz. from 3.7 million oz. in 1993. Oxide reserves are deemed sufficient for at least 20 years of mine life.