Why Africa has the most potential of Newmont’s regions



Newmont’s presence in Africa

Newmont’s presence in Ghana includes the Ahafo mine in the Brong-Ahafo region and the Akyem operation in the Eastern region near New Abirem.

Newmont began working in Ghana with the acquisition of Normandy Mining in 2002. Production commenced in 2006 at the Ahafo mine and at the Akyem mine in 2013.

Article continues below advertisement


Ahafo, 100% owned, is in the Brong-Ahafo region of Ghana, approximately 290 kilometers northwest of the national capital city of Accra. Newmont Mining (NEM) operates four open pits at Ahafo with reserves contained in 11 pits and an underground mine presently in development.

Commercial production at Ahafo began in 2006. Ahafo has two primary ore zones: Ahafo South and Ahafo North. Mining is currently underway at Ahafo South. As of December 31, 2013, the company reported 10.1 million ounces of gold reserves. 


Akyem, 100% owned, is located approximately 125 kilometers northwest of Accra. Newmont obtained the mining lease for Akyem in 2010 and began commercial production in 2013. The process plant was commissioned in late August and ramped up to full commercial production in October 2013, producing 129,000 ounces of gold in 2013.

The company expects gold production to be approximately 350,000 to 450,000 ounces per year for the first five years of the mine’s operating life of approximately 19 years, based on current gold reserves. As of December 31, 2013, the company reported 7.2 million ounces of gold reserves at Akyem.

As we discussed in the earlier article, all-in sustaining costs (or AISC) for Newmont’s African region are quite low as compared to the company as a whole. For 2013, AISC for Africa was $790 per ounce compared to $1,105 per ounce for the company.

Newmont has planned mill expansions and mine extensions to increase Ahafo’s mine life. Newmont’s industry peers have also taken such initiatives, including Barrick Gold (ABX), Goldcorp (GG), and Kinross Gold (KGC). The VanEck Vectors Gold Miners ETF (GDX) is an ETF that invests in the stocks mentioned above. Investors can get exposure to spot gold by investing in the SPDR Gold Shares (GLD).

In the next few sections, we’ll talk about Newmont’s project pipeline and the important projects.


More From Market Realist