The Merian Project (the “Project”) is a gold deposit located approximately 66 kilometers (Km) south of the town of Moengo and 30 Km north of the Nassau Mountains in Suriname.
Suriname Gold Company LLC (“Surgold”), which is owned by Newmont Mining Corporation (“Newmont”), owns and operates the Project. In July 2014, Newmont announced it would invest in the development of the Project. Prior to reaching this milestone, Surgold completed the following requirements:
- Execution of the Mineral Agreement between the Government of Suriname and Surgold in November 2013; and
- Approval of the Feasibility Study and Environmental and Social Impact Statement (ESIA) by Suriname’s Ministry of Natural Resources in December 2013.
Pursuant to the Mineral Agreement, Surgold has satisfied all the conditions for the Government of Suriname to grant Surgold the right to mine. The Mineral Agreement outlines the terms of the
development and operation for the Project and includes royalties, taxes, labor, environmental and other provisions.
The Mineral Agreement provides the Government of Suriname with an option to participate in the Project as a partner at up to a 25 percent equity interest. Once the right to mine is granted, the Government of Suriname will have 60 days, plus a 45-day grace period, to exercise its option to participate by making an initial cash contribution equal to Surgold’s historical costs times a factor of 1.5 times the percentage of the government’s equity participation. At such point, a limited partnership will be created in which Surgold will be the managing partner and NV Twee (a Surinamese corporation fully owned by the Government of Suriname) will be the limited partner.
The Mineral Agreement also includes an extensive area of interest of approximately 500,000 hectares, where the same terms and conditions of the Mineral Agreement will apply and where Surgold, or the partnership, have preferential exploration rights.
Upon the Government of Suriname granting Surgold the right to mine, construction of the Project will begin. Commercial production is expected to commence in late 2016.
Merian will consist of several open pits, a gold ore processing plant and related site infrastructure. The Project gives Newmont a foothold in the highly prospective Guyana Shield.
|Location||Suriname: 66 Km south of the town of Moengo and 30 Km north of the Nassau Mountains|
|Estimated First Five-year Annual Production||400,000 to 500,000 ounces|
|Estimated Life-of-Mine Annual Production||300,000 to 400,000 ounces|
|Estimated Start of Commercial Production||Late 2016|
|Estimated Mine Life||11 years|
|Ownership||Newmont – 100 percent ownership of Surgold
Republic of Suriname – option to earn 25 percent equity ownership
|Capital Investment||Estimated between $900 million to $1.0 billion|
|Reserves and Resources||Gold reserves of approximately 4.2 million ounces (on a 100 percent basis, as of Dec. 31, 2013)|
|Mining Type||Open Pit|
|Expected Mining Rate for First Five Years||Approximately 50 million tonnes/year|
|Expected Milling Rate for First Five Years||Approximately 12 million tonnes/year|
Health and Safety Highlights
As of July 2014, Project operations have been conducted for more than 570 days without a Lost Time Injury(LTI).
Community and Environmental Highlights
Surgold continues to build relationships with the local communities, most notably the Paramaccaners. As part of the ESIA process, baseline environmental and social studies were conducted, which will allow the Project to stand as a positive example of responsible mineral resource development in Suriname. Surgold engaged an independent international consultancy, Environmental Resources Management (ERM), to complete permitting of the Project following the National Institute of Environmental and Development (NIMOS) guidelines, on behalf of Government of Suriname.
Public meetings were held from May through July of 2012 with communities and interested groups to discuss the findings of the impact assessment and to gain their feedback and recommendations. Furthermore, Surgold has entered into a Memorandum of Understanding with the Paramacca Community, which includes the creation of a development fund, terms for local employment and procurement and other issues.
Surgold is committed to continuing its close engagement with the Government of Suriname and local community members, working together to advance development of Merian in a way that generates sustainable economic and social benefits for the people of Suriname.
An estimated 2,500 jobs will be created during the construction phase. Once operations commence, Merian is expected to employ approximately 1,300 people, with preference being given to local residents for employment and contracted positions. Over the life of the mine, Merian is expected to generate US$700 million in royalties and taxes.