Newmont defers investment decision for Yanacocha Sulfides Project to advance portfolio optimisation strategy

Newmont Corporation has announced that it will defer the full-funds investment decision for the Yanacocha Sulfides project in Peru for at least two years as part of its portfolio optimisation strategy.

The decision is aimed at maximising returns for shareholders and creating long-term value for other stakeholders.

By deferring the project, Newmont can prioritize other opportunities that provide value and align with its disciplined capital allocation strategy, which focuses on reinvestment, financial strength, flexibility, and shareholder returns.

Tom Palmer, President and CEO of Newmont, stated that the proposed acquisition of Newcrest will result in an industry-leading portfolio of Tier 1 operations and a strong pipeline of value-accretive projects.

As part of the strategy to create lasting value, Newmont aims to achieve at least $2 billion in near-term cash flow improvements through portfolio optimisation within the first two years. The deferral of the Yanacocha Sulfides project is the initial step in achieving this target, as the company evaluates additional opportunities to optimise project capital and rationalize its combined portfolio for a more profitable and resilient future.

The deferral of the full-funds investment decision will lead to a reduction in development capital expenditures, including an estimated $300 million that was included in Newmont’s 2024 outlook. The decision is based on a thorough analysis conducted by Dean Gehring, Chief Development Officer – Peru, over the past nine months.

This analysis took into account the impact of high global inflation and market volatility on the project’s economics. The work done so far will continue to support the project when construction resumes and will be integral to the preparation for a future investment decision.

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Despite the deferral, Newmont emphasises its long-term commitment to Peru and considers Yanacocha as a core asset in its portfolio. Yanacocha has the potential to operate as a Tier 1 gold and copper mine for several decades.

The company remains dedicated to safely and responsibly managing the operations and closure activities at Yanacocha.

Newmont will continue to collaborate closely with government stakeholders, business partners, and local communities in Peru as it prepares for a future investment decision on the Sulfides Project.

Dean Gehring, who led the Yanacocha operation and Sulfides project, will now shift his focus to leading integration planning for Newmont’s proposed acquisition of Newcrest.

In his role as Chief Integration Officer, Gehring will oversee essential activities required for a safe and smooth integration while ensuring ongoing success for the organisation.

The Yanacocha Sulfides Project aims to develop the sulfide deposits at Yanacocha through an integrated processing circuit, including an autoclave that will produce 45 per cent gold, 45 per cent copper, and 10 percent silver. The first phase of the project focuses on developing the Yanacocha Verde and Chaquicocha deposits to extend Yanacocha’s operations beyond 2040. There is potential for second and third phases to further extend the mine’s lifespan for multiple decades.

Newmont Corporation is a leading global gold company and a producer of copper, silver, zinc, and lead. Its portfolio of assets, prospects, and talent is anchored in favorable mining jurisdictions across North America, South America, Australia, and Africa.

As the only gold producer listed in the S&P 500 Index, Newmont is widely recognized for its principled environmental, social, and governance practices.

The company was founded in 1921 and has been publicly traded since 1925.

Source: ClassFMonline.com