Ghana gold hunt drives Newmont

NEWMONT Mining Corp plans to spend more than $760 million on two gold mines in Ghana, according to the West African nation's government.

Ghana's Mining Minister, Kwadwo Agyei-Darko, said executives from the world's biggest gold miner finalised agreements last week. Newmont inherited the Ghana prospects in its $5.3 billion takeover of Adelaide-based Normandy Mining last year.

"They expect to produce a total of about 7.5 million ounces from two new mines," Mr Agyei-Darko said.

"They'll pour their first gold in the first quarter of 2006 but they're investing now towards pre-mining construction activities at the mine site."

Newmont spokesman Doug Hock said the Akim and Ahafo deposits, previously known as Yamfo-Sefwi, could become a key asset for the US-based company.

While it was still early days, Newmont had found very good mineralisation at both properties, he said.

"Initially, we weren't sure it was a place we were interested in working but as we got on the ground and did more exploration we found it to be very promising," Mr Hock said.

He said Newmont executives had been in Ghana to ensure the company could get a release from a moratorium on mining within a forest preserve on which part of the Akim deposit is located.

"We need the critical mass of both deposits to make it worthwhile," Mr Hock said.

Mr Agyei-Darko said the $US450 million ($760 million) investment by Newmont would create 900 jobs.

Mining contributes to about 45 per cent of Ghana's foreign exchange earnings but has declined in recent years.

Cocoa is Ghana's other main export.

Newmont shares rose 10c to $4.80 on Friday.

The stock has climbed from $4.10 at the start of December but dipped over the past few weeks after touching $5.32 early this month.

Newmont is one of several listed gold miners shining on the share market thanks to a gold price sitting at its highest level in more than five years.

Gold is trading above $US355 an ounce, compared with a price a year ago of $US279 an ounce.