Newmont Mining Corp. is preparing to sell its mothballed Hope Bay gold property in the Kitikmeot to a privately-held firm called TMAC Resources Inc.that hopes to bring the dormant project back from suspended animation. The Hope Bay gold project project is located near Cambridge Bay, Nunavut.
Between 2009 and 2011, Newmont spent about $290 million on Kitikmeot and Nunavut based businesses before writing off $1.6 B of its investment in the Hope Bay project. The Hope Bay project was not included as part of the Company’s 2017 strategic growth plan or capital expenditure outlook for 2012.
An application to the Nunavut Impact Review Board for an environmental review on Phase II of Hope Bay, which would see the development of the big Boston and Windy deposits to the south of Doris North, is frozen at the moment. The company was to have taken Phase II through the development of guidelines but planned on stopping short of producing a draft environmental impact statement until after a decision to resume development of Hope Bay.
Newmont Mining Corporation (ticker NMC on TSX or NEM on NYSE) pulled the plug on the Hope Bay gold project project after cost over runs and an inability to work out a benefits deal with the Kitikmeot Inuit Association (KIA). Newmont estimated the Hope Bay property contains at least nine million ounces of gold.
Newmont (www.newmont.com) is one of the largest gold companies in the world. Headquartered in Colorado, the Company has more than 43,000 employees and contractors, with the majority working at core operations in the United States, Australia, Peru, Indonesia, New Zealand and Ghana.
Even a global mining giant can lose patience. Newmont would rather cut its loses on this Nunuvut mining project rather than have to expend hundreds of millions of dollars bringing the mine into production. The withdrawl of Newmont is partially related to intransigence by the KIA and partly due to huge costs. Perhaps the new proponent can make this project work. The property is attractive but the development is a risky proposition.