Newmont Goldcorp on Tuesday announced that the Ahafo Mill Expansion in Ghana achieved commercial production, on schedule and within budget for approximately $175 million.

Combined with the Subika Underground, which was successfully completed in November 2018, the mill expansion is expected to increase Ahafo’s average annual gold production to between 550,000 and 650,000 ounces per year through 2024, while lowering life-of-mine processing costs.

“The Ahafo Mill Expansion represents our third profitable project delivered on schedule and within budget in 2019, along with the Tanami Power project in Australia and the Borden mine in Canada,” said Tom Palmer, President and Chief Executive Officer.

“The mill expansion is expected to generate an internal rate of return of more than 20 per cent at a $1,200 gold price, while also extending profitable production at Ahafo through at least 2029. I continue to be encouraged by Ahafo’s and Ghana’s mineral prospectivity and the potential for ongoing, profitable growth.”

Features and benefits of the mill expansion include increasing mill capacity at Ahafo by more than 50 per cent to nearly 10 million tonnes per year with the addition of a crusher, grinding mill and leach tanks
to the circuit.

It will boost annual gold production of 75,000 to 100,000 ounces per year for the first five full years beginning in 2020, while accelerating efficient processing of ore from stockpiles and the Subika Underground mine, as well as harder, lower-grade ore from Ahafo’s existing pits.

It will also support profitable development of Ahafo’s highly prospective underground resources, which continue to demonstrate considerable upside.

Ahafo is expected to deliver record production this year – with improved costs – driven by higher grades from the Subika open pit, a full year of mining from the Subika Underground and the completion of
the Ahafo Mill Expansion.

Commercial production began at Ahafo in 2006, and in 2018 the operation sold 436,000 ounces of gold at all-in sustaining costs of $864 per ounce.