Newmont sees lower production, higher costs at Batu Hijau

US mining giant Newmont Mining Corp. reported on Thursday that total gold and copper sales at Batu Hijau mine in Sumbawa island, West Nusa Tenggara are expected to decrease sharply to between 333,000 and 366,000 ounces of gold and to between 344 and 366 million pounds of copper in 2008 versus 494,000 ounces of gold and 428 million pounds of copper in 2007.

The company said that the decrease would be the result of mining shifting from the high grade bottom of the pit into a lower grade mine sequence during 2008 and a portion of 2009. The planned sequencing is expected to result in lower recoveries as lower grade stockpile ore is fed to the mill.

Newmont has 45 percent equity in Batu Hijau copper and gold mine complex.

Costs applicable to sales at Batu Hijau are expected to increase in 2008 to between US$285 and $325 per ounce of gold ( versus $243 per ounce in 2007) and to between $1.30 and $1.40 per pound of copper (versus $1.10 in 2007), primarily driven by lower production and increased operating costs as the number of truck operating hours are expected to increase during the year, with associated increases in diesel, tires, and maintenance costs, offset by the benefit of building stockpiles in the second half of 2008, the company said.

Consolidated capital expenditures in 2008 at Batu Hijau are expected to increase to between $145 and $195 million ($65 - $90 million on an equity basis) versus $74 million in 2007 due to increased sustaining capital and initial feasibility spending on the third SAG mill expansion and pit dewatering infrastructure, the company said.(alex)