Newmont’s Correnso mine
Newmont’s Correnso mine in New Zealand will be situated 150 to 300 meters below residential properties in Waihi East. Access to Correnso will be via the existing Favona portal. Newmont expects to make an investment decision in early 2015. The Correnso mine has received $1.0 billion in investment. Newmont estimates the project will cost $200 million to bore 13.5 kilometers of truck-size tunnels and ~$190 million a year on goods, services, rates, taxes, and royalties.
Controversy surrounding Correnso
The Correnso mine is situated directly below a residential area. While strict conditions have been set on the magnitude and number of blasts, home owners are worried about the effect on their properties and environmental groups are concerned about the wider impact of the mine.
As part of its permission for production blasting, the company must offer to buy the affected property at market value or if the owner prefers, make an ex gratia payment equal to 5% of its value. If property owners elect to sell at market value, they will also get an “inconvenience payment” and help with legal and moving costs.
Importance of Correnso
The Correnso underground mine at Waihi is expected to deliver 150,000 ounces per year and adds roughly four years to Waihi’s mine life. Newmont is undertaking this project to improve its production profile due to asset sales and declining production.
Newmont projects a ~5% production decline in 2014 over 2013. This, however, is not an industry-wide trend. Goldcorp Inc. (GG) is focusing on increasing production and expects to report production growth of between 13% and 18% in 2014. With start-up mines in Canada and Argentina, Yamana Gold Inc. (AUY) and Agnico Eagle Mines Ltd (AEM) have also guided for increased production.