GO­ING FOR GOLD

New­mont Tanami

The Australian Mining Review - - CONTENTS - EMMA DAVIES

NEW­MONT Min­ing is fo­cussed on long-term growth with Aus­tralian pro­duc­tion re­main­ing between 1.4 and 1.6 mil­lion ounces in 2018.

New­mont Min­ing re­gional pro­ject di­rec­tor Fran­cois Hardy told The Aus­tralian Min­ing Re­view that Tanami’s sec­ond phase ex­pan­sion will lever­age the mine for fu­ture growth and will max­imise value from the deeper ore­body, from between 1200m and 2600m be­low sur­face.

“Tanami Ex­pan­sion 2 se­cures the fu­ture of Tanami as a long-life, low-cost pro­ducer, adding ap­prox­i­mately 100,000oz per year (2023 – 2027) and re­duc­ing op­er­at­ing costs,” Mr Hardy said.

“The ex­pan­sion will pro­vide a plat­form for fu­ture growth, with the po­ten­tial to ex­tend the mine life to 2040.”

In­creas­ing prof­itable pro­duc­tion and ex­tend­ing Tanami’s mine life will have a pos­i­tive im­pact on New­mont’s other op­er­a­tions; the im­proved grade and pro­duc­tiv­ity at Tanami has al­ready helped to off­set geotech­ni­cal chal­lenges at the Kal­go­or­lie Con­sol­i­dated Gold Mine (KCGM) Joint Ven­ture.

Pre-fea­si­bil­ity stud­ies were un­der­way to im­prove ore­body knowl­edge and op­ti­mise the ap­proach to ma­te­rial han­dling, ven­ti­la­tion, and re­frig­er­a­tion.

Stage 2 will in­clude the con­struc­tion of a ver­ti­cal shaft and as­so­ci­ated ven­ti­la­tion to op­ti­mise pro­cess­ing plant ca­pac­ity and was ex­pected to take about three years to com­plete.

Cur­rently costs are es­ti­mated between $650 mil­lion and $750 mil­lion but Mr Hardy said fund­ing de­ci­sions have yet to be fi­nalised.

“We will be reach­ing a full fund­ing de­ci­sion in 2H of 2019 with the con­struc­tion phase still be­ing fi­nalised as we progress through de­fin­i­tive fea­si­bil­ity,” he said.

“We will be able to up­date more de­tail once we have reached a full fund­ing de­ci­sion.”

Fuel Shift

The Tanami site is due to tran­si­tion from diesel fuel to nat­u­ral gas, with two power sta­tions and a 450km nat­u­ral gas pipe­line cur­rently un­der con­struc­tion con­nect­ing the Tanami site to the Amadeus Gas Pipe­line.

Fol­low­ing is­sues with power gen­er­a­tion af­ter se­vere weather in early 2017, the power sta­tions will mit­i­gate fuel sup­ply risks as well as low­er­ing CO2 emis­sions and re­duc­ing power costs.

“The unit cost of power will re­duce over a five-year pe­riod as site power re­quire­ments in­crease,” Mr Hardy said.

“Car­bon emis­sions will be sig­nif­i­cantly re­duced with an es­ti­mated av­er­age re­duc­tion of 55,000 tonnes of car­bon re­duced per year over the first five years.

“It’s also ex­pected to re­duce power costs by ap­prox­i­mately 20 per cent, equat­ing to cash cost sav­ings of ap­prox­i­mately $34/oz.”

Cap­i­tal costs are es­ti­mated at between $225 mil­lion and $275 mil­lion, with an­nual cash lease pay­ments over a 10-year term be­gin­ning in 2019 with ap­prox­i­mately $10 mil­lion of owner’s costs paid in 2018.

The pro­ject In­ter­nal Re­turn Rate is ex­pected to be greater than 50 per­cent at $0.75 AUD.

“Once the new power sta­tions are com­mis­sioned, the old power sta­tions will be de­com­mis­sioned,” Mr Hardy said.

“The new power sta­tions have hy­brid gen­er­a­tors, that can run on ei­ther gas or diesel if re­quired and the risk of site shut­down due to road clo­sures from rain is all but elim­i­nated with a se­cure all weather gas sup­ply to the site power sta­tions.”

The Tanami Gas Pipe­line will be built, owned and op­er­ated by Aus­tralian Gas In­fra­struc­ture Group (AGIG) and has cre­ated about 400 jobs dur­ing con­struc­tion.

Mr Hardy said that there was suf­fi­cient ca­pac­ity in the pipe­line to pro­vide lo­cal com­mu­ni­ties along the pipe­line cor­ri­dor with the op­tion to con­nect to nat­u­ral gas for fu­ture power gen­er­a­tion or do­mes­tic use.

AGIG com­mer­cial gen­eral man­ager Jon Cleary said the devel­op­ment of the Tanami Gas Pipe­line could also lead to other in­fra­struc­ture projects in the re­gion.

“This in­vest­ment in in­fra­struc­ture in a re­mote part of the Ter­ri­tory could be the cat­a­lyst for fur­ther in­vest­ment which will lead to bet­ter op­por­tu­ni­ties and liv­ing stan­dards for the lo­cal com­mu­ni­ties that are nearby,” Mr Cleary said.

Mr Hardy also flagged the po­ten­tial for so­lar power at the mine in fu­ture.

As the cost for so­lar gen­er­a­tion con­tin­ues to de­crease, so­lar power may present a com­pet­i­tive and vi­able al­ter­na­tive com­pared to re­mote diesel gen­er­a­tion.

“The site is look­ing at a num­ber of op­tions to ex­pand the life and ca­pac­ity of the mine into the fu­ture,” he said.

“So­lar and other re­new­able op­tions are be­ing con­sid­ered to pro­vide some of the en­ergy re­quired to power these ex­pan­sions.

“New­mont has com­menced work­ing with all par­ties to de­velop the right mix of gas, power and re­new­ables to pro­vide the op­ti­mum so­lu­tion for the site and wider en­vi­ron­ment.”

Tier 1

Tier 1 sta­tus could also be on the hori­zon.

The Dow Jones Sus­tain­abil­ity World In­dex (DJSWI) re­cently named New­mont the ‘ Met­als and Min­ing’ sec­tor leader for the fourth con­sec­u­tive year.

New­mont pres­i­dent and chief ex­ec­u­tive Gary Gold­berg said the recog­ni­tion was an im­por­tant re­flec­tion of how well the com­pany is do­ing to cre­ate value and im­prove lives for all of their stake­hold­ers.

“Em­ploy­ees at our sites around the globe know that lead­ing in prof­itabil­ity and re­spon­si­bil­ity go hand-in-hand, and that their day-to-day work can have pos­i­tive and last­ing im­pacts on lo­cal com­mu­ni­ties,” Mr Gold­berg said.

“Our fo­cus is on the long-term suc­cess of our com­pany and do­ing that re­quires in­te­grat­ing sus­tain­abil­ity into all as­pects of our busi­ness.”

Mr Hardy said that the fo­cus of the Tanami op­er­a­tion is to grow mar­gins and re­serves ­which trans­lates into a low cost, long-life op­er­a­tion.

“Tanami con­tin­ues to fo­cus on grow­ing mar­gins and re­serves; Tanami Ex­pan­sion 1 (de­liv­ered in Q3 2017) was a big first step in the trans­for­ma­tion and has pro­vided a strong foun­da­tion for the next phase of growth,” Mr Hardy said.

“Tanami Ex­pan­sion 2 ( TE2) has the po­ten­tial to ex­tend life to 2040 and re­duce op­er­at­ing costs by up to 10 per cent which would help se­cure Tanami’s po­si­tion as a tier 1 as­set.”

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