Newmont, Uzbekistan to join in gold venture

Newmont Mining (NYSE), North America’s biggest gold miner, is planning to team up with the second largest gold producer of the former Soviet republics to extract ore from low-grade deposits.

Newmont Chairman Gordon Parker said his company is negotiating to establish a 50-50 joint venture with the government of the Republic of Uzbekistan and a final agreement could be signed as early as March.

He said Newmont is proposing to employ leaching technology now being used by 90.1% owned Newmont Gold (NYSE) at its Nevada open pit mines to extract the gold from ores in Uzbekistan that currently are not being treated. “We already are working with them to design leach systems that will treat their low-grade ore from an existing mine in Muruntau, which is about 250 miles northwest of Tashkent, the republic’s capital,” he said. Once a joint venture is established, he said it will sell the gold that it produces on the world market for the equal benefit of the government and Newmont. However, a Newmont spokesman said the amount of available reserves and expected output isn’t being made available to the public. Last year, Newmont Mining’s share of gold extracted by Newmont Gold from the Carlin trend in Nevada was 1.4 million oz., down slightly from 1.5 million oz. in 1990.

Newmont attributed the decline to its decision to reduce production until a decision had been made on how refractory ore within its vast Carlin reserves should be treated. The company has since elected to use bioleaching technology to oxidize refractory ore beginning in 1994.

Meanwhile, Newmont Gold expects to accelerate its gold output from 1.58 million oz. in 1991 to 1.6 million oz. this year, and up to 1.7 million oz. in 1993.

In 1991, Newmont Mining reported net earnings of US$94.3 million or US$1.39 a share on revenues of US$622.7 million, compared with earnings of US$342.6 million or US$5.06 a share on revenues of US$683.5 million in 1990. Results for fiscal 1990 included a $174.1-million after-tax gain associated with Newmont’s investment in Peabody Holding Co. plus US$73 million from the sale of an Australian affiliate.

In the fourth quarter of 1991, Newmont Mining reported net earnings of US$22.7 million or 33 cents a share, up from US$5.1 million or US8 cents a share in the equivalent 1990 period. Fourth-quarter revenues were US$155.8 million, compared with US$163.2 million in the final quarter of 1990.