Conga
Published: June 2013
Overview
The Conga project is a copper-gold porphyry deposit located 75 km
northeast of the city of Cajamarca, Peru and 24 kilometers northeast
of Newmont’s Yanacocha gold mine. Should construction of the
Conga project move forward, Newmont and its partners, Compania
de Minas Buenaventura and the International Finance Corporation,
plan to leverage existing operations at Yanacocha to develop
Conga’s potential within a world-class mining district. Construction
of Conga will continue, provided it can be done in a safe, socially and
environmentally responsible manner with risk-adjusted returns that
justify future investment.
The Conga project is one of Peru’s most thoroughly studied mining
projects with environmental and social impact analyses spanning
13 years. Following a three-year, public participation process on
the project’s Environmental Impact Assessment (EIA) and extensive
reviews by 12 government agencies in Peru, Conga’s EIA was
approved by the Ministry of Energy and Mines in October 2010.
However, due to protests led by anti-mining activists, construction
on the project was suspended in November 2011. In early 2012,
the Peruvian Central Government initiated an independent review of
the EIA. The results of the independent review by three international
experts, released in April 2012, confirmed that Conga’s EIA was
technically sound and conformed to both Peruvian and international
standards, and made recommendations to increase storage capacity
of the proposed water reservoirs contemplated by the project’s EIA,
which was accepted by Newmont.
Conga is a large, copper-gold porphyry located 24 kilometers northeast of
Newmont’s existing operations at Yanacocha in Peru.
Currently, Newmont is taking a slower, “water first” approach to
developing Conga by focusing on the construction of reservoirs
for downstream communities. Construction on the first reservoir,
Chailhuagon, was completed in May 2013. With a water storage
capacity of 2.6 million cubic meters, the reservoir has twice the
capacity of Chailhuagon lake and will help to provide year-round
water availability to downstream users, who currently only have water
flowing during the rainy season.
Other activities associated with the revised development schedule
include: engineering completion, additional construction of sediment
control structures and procurement of long lead time equipment.
Chailhuagon reservoir construction complete.
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As of December 31, 2012, Conga had 6.5 million attributable ounces
of gold reserves and 1.7 billion attributable pounds of copper reserves.
Conga
Project
Location
24 kilometers Northeast of
Yanacocha Operations near Cajamarca City, Peru
Lease
34,000 Hectares in the Conga area
6,000 Hectares Surface rights
Ownership
Newmont: 51.35%
Compania de Minas Buenaventura: 43.65%
International Financial Corp: 5.00%
Product
Copper, Gold, Silver
Operation
Capital Spend
$440M for 2012-2013 (equity basis)
Reserves and Resources1 Gold: 8-10 million ounce (Moz) potential with 6.5 Moz in reserves and 2.5 Moz in
resource
Copper: 4-6 billion pound (Blbs)
potential with 1.7 Blbs in reserves and 0.84 Blbs in resource
Mining Type
Open Pit
Infrastructure
Standard Copper Flotation Concentrator
1
Reserves and resource as of 12/31/2012
About Newmont
Founded in 1921 and publicly traded since 1925, Newmont
(www.Newmont.com) is one of the largest gold companies
in the world. Headquartered in Colorado, the company
has approximately 40,000 employees and contractors,
with the majority working at Newmont’s core operations in
the United States, Australia, Peru, Indonesia and Ghana.
Newmont is the only gold company listed in the S&P 500
index and in 2007 became the first gold company selected
to be part of the Dow Jones Sustainability World Index.
Newmont’s industry leading performance is reflected
through high standards in environmental management,
health and safety for its employees and creating value and
opportunity for host communities and shareholders.
Newmont Contact Information
Media Contacts:
Roberto Del Aguila, (511) 976223801
Omar Jabara, 303-837-5114
Diane Reberger, 303-967-9455
Investor Contacts:
John Seaberg, 303-837-5743
Health & Safety Highlights:
– Yanacocha’s proven safety record is being leveraged at Conga. Yanacocha has received multiple awards in safety, and won the Peruvian
Mining Safety Institute’s highest award for safety in open pit mines four
times.
– Conga has reached 9 million hours worked without a lost-time accident
through May 2013.
Community & Environmental Highlights:
– The Environmental Impact Assessment (EIA) was approved by
Peruvian authorities in October 2010.
– In 2012, an independent panel of international experts reviewed
the EIA and confirmed the project’s original EIA met Peruvian and
international standards.
– Water management practices incorporated in the EIA were designed
to mitigate impacts and improve year-round water availability to
downstream communities.
– In association with the Yanacocha-sponsored non-profit foundation,
Asociación Los Andes Cajamarca (ALAC), Conga is engaged in the
sustainable development of communities by focusing on health and
education, community-wide empowerment, livelihood skills training
and critical infrastructure programs. To date, these programs have:
- Reduced malnutrition among children and pregnant women;
- Reduced grade repetition and dropout rates among school
children;
- Improved livestock development and crop yields; and
- Constructed classrooms, power and water supply systems and
nearly 100 kilometers of roadways.
– Training and local employment plans implemented within the mutually
agreed upon “area of influence,” which spans 32 communities.
Current Project Development Highlights:
– Chailhuagon reservoir construction complete.
– Completed the camp construction with 2,300 bed capacity to support
the reservoir construction workforce.
Projected Economic Impact:
– Construction work is being executed exclusively by local-local
contractors (defined as jobs filled by residents from the areas nearest
the project).
– An estimated 1,000-1,500 local-local construction jobs during the
reservoir and sediment structure construction period.
– An estimated 5,000-7,000 construction jobs, at the peak of
construction.
– Approximately 1,600 jobs once operations commence.
– Preference given to local residents for employment and contracted
services.
– It is estimated that over the life of the mine royalties will be greater than
US$680 million and income tax greater than US$2 billion at current
metal prices ($1,500 per gold ounce; $3.50 per copper pound) with
50% of income tax being distributed to the Cajamarca region through
the government mining canon.
Cautionary Statement: This document contains “forward-looking statements”, which are intended to be covered by the safe harbor created by U.S. federal securities laws and other applicable laws, including, without
limitation, estimates of potential production, mineralization, CapEx and cost applicable to sales, as well as expectations regarding the development, timeline, anticipated permitting and funding approvals and future
economic impacts. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from future projected or implied results. Such risks include, but are not limited
to, gold and other metals price volatility, currency fluctuations, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, political and operational risks, permitting
and governmental regulation and judicial outcomes. For a more detailed discussion of such risks and other factors, see the Company’s 2012 Annual Report on Form 10-K filed with the SEC. We do not undertake any
obligation to update any forward-looking statements, except as may be required under applicable securities laws.
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