Newmont chairman’s formula for success: Explore like hell’

Situated along the Carlin trend near Elko, Newmont’s assemblage of ground contains proven and probable gold reserves totalling 16.3 million oz. The phenomenal exploration success at Carlin will allow Newmont to boost annual gold output to 1.5 million oz next year.

“Our target is to maintain production of 1.5 million oz per year into the future,” Parker said. “To do that, we have to find two million ounces annually.”

That daunting exploration task is faced by a team of 37 geologists who head a 70-man exploration group. “We’re asking our exploration people to come up with a new composition every year, not just play the same old tune,” Parker said. The results created by Newmont’s geologists during the past 10 years have been impressive.

Using a data base accumulated from 20 years of mining in the camp, Newmont’s exploration team has added more than 19 million oz of gold to the company’s reserves. In 1965, when Newmont opened its Carlin mine, reserves totalled 3.5 million oz of gold.

The bottom line of finding such rich reserves has translated into an average finding cost per oz of $4-5(US) in Nevada, Parker said. Worldwide, Newmont’s finding cost per oz of gold is about $25.

All that success can also spawn problems. According to Parker, Nevada’s state taxes on mining are beginning to escalate. In 1983, taxes amounted to $3 per oz of gold mined. Today, that figure is about $7 per oz.

More importantly, as a result of the state’s lack of income or corporate tax structure, legislators tend to look to mining for additional revenues. “Every time more money is needed, someone proposes further taxing the industry most likely to pay — mining.”

Mounting pressure from environmentalists in Nevada is also adding to costs. Long considered the best mining state in the U.S., “where a hole in the ground is beautiful,” Nevada’s environmental restrictions are increasing. Environmental impact statements can take up to two years to receive approval, Parker explained.

Despite the growing tax and environmental concerns, Newmont plans to be operating in the Carlin area well into the next century. Parker noted that much of the company’s ground displays excellent exploration potential for sulphide gold mineralization at depth.

Newmont’s latest discovery made last August came in an area just 500 yards north of the company’s Genesis gold mine. Known as the Deep Star, the find was made by a hole that intersected 350 ft grading 0.768 oz gold per ton. Since then, reserves hosting more than one million oz of gold have been defined by drilling.

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