Boddington mine on track: Newmont

Newmont Mining says its Boddington gold mine is performing to expectations and will hit full capacity by the end of this year.

Speaking to delegates at a Perth conference, Newmont Asia Pacific regional group executive - operations, Philip Stephenson said the planned 12-month ramp up of the mine is about 70 per cent complete.

The first gold at Boddington for "Newmont's cornerstone asset for many years to come" Mr Stephenson said, was poured and shipped in September last year "with recoveries for both gold and copper above design expectations".

"The ramp-up is at about 70% and climbing and we anticipate reaching full capacity late in 2010 as this is a mega project and will correspondingly take time to ramp-up," said.

"Newmont will however continue to further develop this underexplored and highly prospective greenstone belt - so do not be surprised if this operation goes for at least 30, maybe 40 years."

The mine is expected to produce between 800,000 ounces and 875,000 ounces of gold this year and will hit the 1 million ounce mark next year.

Newmont is also a 50 per cent owner in Western Australia's giant Superpit gold mine at Kalgoorlie as well as the Jundee mine (WA), Tanami mine (NT) and Waihi gold (New Zealand).

On global gold equity markets, Mr Stephenson said there had been a huge growth in Exchange Traded Fund holdings with almost 600 tonnes of gold going into ETF holdings in 2009 as investors sought greater insurance against global economic uncertainty by boosting physical stocks of gold.

"This has increased ETF holdings to just below 45 million ounces or around 75% of annual mine production globally for the entire industry," Mr Stephenson said.

"To put this gold movement into perspective, the flight to gold in 2009 was twice what we saw in 2007 and 2008."

Mr Stephenson said the operating outlook for Newmont for 2010 was total gold output of 5.3 million to 5.5 million ounces at around US$450-480 an ounce which is expected to improve to around $US310-340 an ounce with copper credits for Boddington and Batu Hijau taken into account.

Meantime, Mr Stephenson said he believed the gold price will remain static, around the historically high $US1,100 per ounce mark, despite the US dollar strengthening, a major global gold producer says.

The gold price is usually high when the greenback is weak as the metal is seen as a safe haven investment. Staying around the $US1,100 mark would be to reverse the usual dynamic.

Mr Stephenson said the gold price would remain strong in the short-to-long term.

The US dollar had gained ground, Mr Stephenson said, reflecting uncertainty surrounding European economies, with investors piling out of the Euro and into the greenback.

"It will be interesting to see how long it is until it returns to its normal linkage," he said.

"Russia and India continue to buy and I don't see this changing in 2010.

"China's insatiable appetite for gold remains."