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UPDATE 1-Newmont sees Q4 writedown related to Peru mine closure costs
December 13, 2016 / 10:58 PM / 7 months ago

UPDATE 1-Newmont sees Q4 writedown related to Peru mine closure costs

2 Min Read

(Adds details on increased costs, context, Yanacocha ownership)

Dec 13 (Reuters) - Newmont Mining Corp said on Tuesday it is likely it will record a non-cash impairment charge of between $1 billion and $1.2 billion in the fourth quarter related to an increase in the estimated cost of closing down its Yanacocha gold mine in Peru.

Newmont, the biggest U.S.-based gold miner, said that after reviewing Yanacocha's closure plan it now expects to record an increase to the asset retirement obligation at the mine of between $400 million and $500 million in fourth quarter.

The Yanacocha mine, which poured its first gold bar in 1993, is nearing the end of its mine life. Denver-based Newmont is required to submit an updated closure plan to Peruvian authorities every five years.

The increase in the mine's asset retirement obligation is mostly due to higher estimated future water treatment, earthworks and demolition costs, Newmont said in a statement.

Because of changes to the closure plan and the higher expected closure costs, Newmont said it was necessary to assess the mine's assets for impairment.

Yanacocha is jointly owned by Newmont, with 51.35 percent, Peruvian miner Minas Buenaventura with a 43.65 percent stake, and the International Finance Corporation, which has a 5 percent interest. (Reporting by Nicole Mordant in Vancouver; Editing by Bernard Orr)

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