Newmont Mining Corp Announces Plans to Construct $1B Mine in Suriname

The largest mining corporation in the U.S. announced yesterday that they plan to open a new gold mine in the country of Suriname in an effort to further cut operating costs.

Newmont Mining Corporation, based out of Denver, Colorado, was founded in 1916 and currently operates mines in the United States, Australia, Peru, Indonesia, Ghana, New Zealand and Mexico.

Now they are pushing into Suriname. Located on the northeastern coast of South America, Suriname is bordered by Brazil, Guyana, and French Guiana. The government of Suriname has an option to earn a 25% equity stake in the new mine.

Expected to cost around 1 billion dollars, the mine should be operational some time in 2016, if all goes according to plan. It is projected to have an output between 300,000 and 400,000 ounces of gold annually. The company predicts the mining cost per ounce to be around $750 to $850 per ounce, providing the company with a significant savings of 29% less than the company average.

This is the largest gold-related project to be undertaken in over a year, signaling increased confidence in gold futures. "At current gold prices, we estimate Merian could have a payback in less than four years." said Michael S. Dudas, an analyst at Sterne Agee & Leach Inc.