Newmont Goldcorp has processed first ore at its Ahafo Mill Expansion (AME) project in Ghana, with commercial production expected in the fourth quarter of this year.

The expansion project is expected to increase average gold production at the Ahafo mine by between 75,000 and 100,000oz a year for the first five years, starting next year.

Following the addition of a crusher, grinding mill and leach tanks, the mill capacity is set to expand by more than 50%.

The AME project is expected to deliver an internal rate of return of more than 20%. Together with other projects in Ahafo, the project will reach profitable production through at least 2029.

Newmont Goldcorp president Tom Palmer said: “Combined with Subika Underground, which was successfully completed in November 2018, the mill expansion will increase Ahafo’s production to between 550,000 and 650,000 ounces per year through 2024, while lowering life-of-mine processing costs.

“The project also accelerates the efficient processing of stockpiled ore and supports profitable development of Ahafo’s highly prospective underground resources, which continue to demonstrate considerable upside.”

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By GlobalData

This year, Ahafo mine is expected to achieve record production with improved costs, driven by higher grades of the Subika open pit. The results will be derived with the input of a full year of mining from the Subika Underground and completion of the AME.

Capital costs for the AME are estimated at between $140m and $180m, financed through free cash flow and available cash balances.

Ahafo, which began commercial production in 2006, sold 436,000oz of gold last year, at a cost of $864 per ounce.

The plan to expand Ahafo mill was initially announced in April 2017.