Newmont Pegs Red Chris Block Cave At $4.2 Billion To $4.8 Billion, With A Funding Decision Due Early Next Year
CEO Natascha Viljoen named three drivers of the higher cost estimate but declined to split the gap among them until a final investment decision.
Newmont, the gold miner that also produces copper, silver, lead and zinc, estimates development capital for its Red Chris block cave in British Columbia at $4.2 billion to $4.8 billion on a 100% basis, CEO Natascha Viljoen said on the company's third-quarter earnings call on Thursday. The range includes an anticipated Canadian government grant, and a full funds decision is expected early next year.
Three drivers, no split
Pressed by a Scotiabank analyst to divide the gap from the earlier study among geotechnical changes, a bigger plant and inflation, Viljoen said she would "limit it to that" until the final investment decision, while technical and financial reviews continue.
She said the plant will go from 9 million tonnes per year to 15 million tonnes per year, which was not part of the original study. She also cited a better understanding of the rock conditions and current, demonstrated development costs and rights. The feasibility study has engineering beyond 60% complete, she said.
The US-dollar range equals 5.6 billion to 6.4 billion Canadian dollars. Viljoen said the Canadian government has announced C$500 million of funding for the project.
A project built for later caves
About 40% of the planned investment in processing facilities, material handling and other infrastructure is meant to serve future expansions, Viljoen said. She said returns are still modeled on 100% of the capital, because the project must stand on its own economics. The target is a double-digit internal rate of return above the country-specific discount rate.
The first phase, Macro Block 1-2, is less than 20% of potential mine life, which she said is backed by an endowment supporting 70 years. Construction is expected to ramp up in 2027, with commercial production targeted for 2033. Newmont expects 275,000 to 325,000 ounces of gold and 65,000 to 85,000 tons of copper a year after ramp-up, subject to board approval.
Asked by a Barrenjoey analyst whether Newmont might fund more than its 70% interest, Viljoen said the company is in discussion with its partner, who has full visibility of the project capital.
Spending ripple in 2027
CFO Brian Tabolt said Newmont now expects 2027 development capital about $500 million higher than in 2026. Viljoen said about half of that increase is tied to Red Chris, with the Lihir near-shore barrier project also in it. Closing out Yanacocha water treatment projects frees roughly $200 million in 2027.
Until there is more detail, she said, a linear spend profile is a safe assumption for Red Chris.
Viljoen said more detail on Red Chris spending will come with the final investment decision in February.
Sources
- Newmont beats third-quarter earnings expectations as higher gold sales boost profits; miner raises 2026 cost outlook | Kitco News — kitco.com
- Newmont Q3 2026 earnings preview: Analysts see qarterly growth (NYSE:NEM) | Seeking Alpha — seekingalpha.com
- Newmont Third-Quarter Profit Beats Wall Street Expectations - WSJ — The Wall Street Journal
- Newmont Non-GAAP EPS of $2.20 beats by $0.26, revenue of $6.36B beats by $120M (NYSE:NEM) — seekingalpha.com
- Agnico, Barrick, and Newmont fall following broad Freedom Broker downgrades — Yahoo Finance
