Newmont puts off decision on Yanacocha spend

Newmont is planning to undertake cost-cutting efforts in 2024, and as such has opted to defer its decision of a full funds investment in the expansion of its Yanacocha sulphides expansion in Peru for “at least” two years.

Officially, the producer said it wants to “advance…[a] portfolio optimization strategy” that will prioritize other opportunities and support a disciplined capital allocation strategy that will balance a steady reinvestment in the business.

Newmont deferred its decision deadline for the $2 billion project in 2022. If it moves forward, the expansion would extend Yanacocha’s mine life beyond 2040. In the meantime, it is targeting a savings in 2024 in expenditures of about $300 million.

“Once complete, our proposed acquisition of Newcrest will create an industry-leading portfolio of Tier 1 operations and deepen our unmatched pipeline of value-accretive projects,” said President and CEO Tom Palmer.

“In connection with this transaction and our strategy to create lasting value, we are targeting at least $2 billion in near-term cash flow improvements through portfolio optimization within the first two years. The deferral of the Yanacocha Sulfides project represents the first step in delivering on this target, as we evaluate further opportunities to resequence project capital and rationalize the combined portfolio to build a more profitable and resilient future for the business.”

The decision to defer, the company said, was based on an analysis led by Peru CDO Dean Gehring over over nine months to further maximize the project’s economics in a period of high global inflation and market volatility.

“Newmont has a long history of operating in Peru, and Yanacocha is core to Newmont’s portfolio and long-term strategy,” Palmer noted.

“With the potential to operate as a Tier 1 gold and copper mine for several decades, we remain committed to managing Yanacocha’s operations and closure activities safely and responsibly.” 

The Yanacocha Sulfides project aims to develop the first phase of sulfide deposits at Yanacocha through an integrated processing circuit, including an autoclave to produce 45% gold, 45% copper and 10% silver.


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