The huge Batu Hijau copper-gold mine on the Indonesian island of Sumbawa is 90% complete and due to enter production in the fourth quarter. Commercial production is expected to follow in the first quarter of 2000.
The operation will include a 120-MW coal-fired power plant, a crusher, ball mills and a flotation circuit.
At full capacity, Batu Hijau will process 140,000 tonnes per day. Annual production in the first five years will be 600 million lbs. copper and 480,000 oz. gold at a cash cost (after gold credits) of less than US50 cents per lb. copper. Japan’s Sumitomo holds a 35% interest in Batu Hijau, with the remaining 20% held by P.T. Pukuafu Indah.
From all of its mines, Newmont expects to produce 3.9 million oz. gold in 1999, down from 4.1 million oz. last year. In the first quarter of this year, the company produced 956,100 oz., compared with a little over 1 million oz. a year ago.
The shortfall stems from operations in Nevada, where Newmont cranked out 17% less that in last year’s first quarter. Cash costs were held at US$209 per oz.
At the company’s other Indonesian mine, Minihasa, on Sulawesi island, production jumped 24% to 72,200 oz. at a cash cost of US$130 per oz. during the first quarter. Newmont intends to push production to 300,000 oz. by installing heap-leach technology.
In Peru, the company’s 51.3%-owned Yanacocha mine rose 13%, to 338,700 oz., between the first quarter of 1998 and 1999. Newmont’s share was 173,900 oz., and cash costs were held steady at US$114 per oz.
Newmont’s overall cash costs during the recent quarter were US$183 per oz., down US$3 from the year-ago period. Total production costs, including depreciation, depletion and amortization, fell 13% to US$236 per oz.
The lower costs resulted in higher cashflow, offsetting a US$31 decline in the realized gold price. Newmont’s mines produced US$55.3 million in cashflow, while the gold was sold at an average of US$293 per oz.
First-quarter earnings totalled US$9.9 million (or 6 cents per share), compared with a year-ago loss of US$2.7 million (2 cents per share).
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