Newmont mine on track
Sydney Morning Herald
Saturday July 25, 2009
AUSTRALIA'S biggest and most expensive goldmine to build, the $3.5 billion Boddington in the Darling Ranges, south-east of Perth, is set to produce its first gold next month, slightly behind schedule.Owned by the US giant, Newmont, annual production is expected to average more than 1 million ounces, worth $1.16 billion at present prices.When the project was first discussed in the late 1990s, its development as a 500,000 ounce-a-year producer was estimated at $400 million. Since then the resource has become bigger, the scale of the project has increased and gold prices have trebled.Ownership of the project has also changed from a joint venture that once included Melbourne-based Newcrest and South Africa's AngloGold to sole ownership by Newmont.Once full production is achieved the mine will single-handedly boost Australia's gold output by 14 per cent, helping to drag the industry up from its 20-year lows.Before Boddington reaches full capacity, the battle for the title of Australia's biggest goldmine will continue to be fought out by the Newmont/Barrick "super pit" at Kalgoorlie and Newcrest's Telfer mine, also in WA. They average about 650,000 ounces each a year.Boddington is based on a 20.1 million ounce reserve and is expected to have a life of more than 24 years.The project's massive cost partly reflects the fact that most of its construction occurred during the resources boom, which sent the prices of materials and labour skyrocketing.But with production costs forecast to be $US300 an ounce (after byproduct copper metal credits), the mine will be capable of repaying the capital rapidly.It should enjoy a cash margin of $US650 an ounce at present gold prices, or $US650 million a year.The start to production represents a second coming for Boddington. A shallow and low-grade laterite gold resource covering the orebody was mined in the 1990s.
© 2009 Sydney Morning Herald