Newmont Goldcorp’s Ahafo Mill Expansion in Ghana. Credit: Business Wire.

Newmont Goldcorp has started commercial production at its Ahafo Mill Expansion (AME) in Ghana for approximately $175m.

Combined with the Subika Underground operation completed last November, the expansion is expected to increase Ahafo’s average annual gold production to between 550,000oz and 650,000oz a year until 2024, while reducing life-of-mine (LoM) processing costs.

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The mill expansion will benefit with the increased mill capacity at Ahafo by more than 50% to nearly 10Mtpa with the addition of a crusher, grinding mill and leach tanks to the circuit.

Newmont Goldcorp president and CEO Tom Palmer said: “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.

“The mill expansion is expected to generate an internal rate of return of more than 20% at a $1,200 gold price, while also extending profitable production at Ahafo through at least 2029.”

Ahafo Mill Expansion also features additional annual gold production of 75,000oz to 100,000oz a year for the first five full years starting from next year.

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In addition, the expansion features the supporting profitable development of Ahafo’s prospective underground resources. It will also accelerate the processing of ore from stockpiles and the Subika Underground mine and lower-grade ore from Ahafo’s existing pits.

In 2006, commercial production began at Ahafo, while the operation sold 436,000oz of gold priced at $864 per ounce last year.

Last month, the company processed first ore at Ahafo project.