Newmont prices Red Chris underground at up to $4.8B

Newmont put a price of up to $4.8 billion (C$6.4 billion) on taking its Red Chris copper-gold mine underground in British Columbia, with commercial production targeted for 2033.

The $4.2 billion to $4.8 billion estimate, first reported by The Northern Miner and also reported by MINING.COM, includes contingency but excludes the cost of transitioning from open-pit to underground mining. It assumes a C$500 million federal contribution whose terms have not been finalized.

For allocators, Red Chris is equity exposure to a listed producer rather than a project stake, and commercial production is not targeted until 2033. Newmont owns 70% of Red Chris and operates it; Imperial Metals holds the remaining 30%. The project would average 275,000–325,000 oz. gold and 65,000–85,000 tonnes of copper a year from 2035 through 2040, Newmont said in its quarterly results.

Newmont expects to fund construction from internal cash flow. Engineering is at least 60% complete, CEO Natascha Viljoen said on the third-quarter analyst call. “The cave is now larger and it’s also orientated to prevent any intersection with major fault lines,” she said.

The spending figure sits well above the US$2.1 billion in Newcrest’s 2021 prefeasibility study, though the scope changed. That plan covered three mining blocks over 31 years, while Newmont’s initial stage covers two blocks over 13 years.

Scotiabank analyst Tanya Jakusconek wrote in a note that Newmont beat the bank’s earnings forecast and outlined lower 2027 capital spending than expected, but that “these estimates may be overshadowed by the higher capex” at Red Chris, which she said represents about 2% of Scotiabank’s estimate of Newmont’s net asset value.

British Columbia granted key permits in June through a consent-based process with the Tahltan Nation. Ottawa referred the expansion to its Major Projects Office in September last year, placing it among the first five projects selected for help coordinating regulatory approvals and financing.

The initial stage is designed to produce 3 million oz. of gold and more than 850,000 tonnes of copper. Newmont sees potential for a mine life of up to 70 years through later development including East Ridge, which is not in the initial plan.

Newmont shares fell 2% to $111.81 in New York on Friday morning, valuing the company at $116.1 billion; the stock has traded between $76.04 and $135.29 over the past 12 months.

The feasibility study is nearing completion, and Viljoen said an investment decision is expected early next year. Construction could begin in 2027, subject to board approvals.