Newmont Mining to Invest $1-Billion in Merian Gold Mine in Suriname

US-based Newmont Mining (NYSE: NEM) says it will invest up to $1 billion to develop a new gold mine in the South American nation of Suriname.

Under the banner of Surgold, the Merian mine will produce an average of 300,000 to 400,000 ounces of gold annually. Higher grade ore and throughput in the early phases would propel annual production to an average of 400,000 to 500,000 ounces of gold per year in the first five years.

"This decision marks an important milestone in our portfolio optimization process--we have divested nearly $800 million in non-core assets to help fund the next generation of lower cost projects in our portfolio," said President and Chief Executive Officer Gary Goldberg.

Development of the mine will include a more efficient approach while maintaining Newmont’s safety, technical, social and environmental standards.

"Equally important, we established community agreements and are working with experts to minimize our impact on the environment--getting it right from the beginning is critical," says Goldberg.

The government of Suriname will have the option to earn a 25 percent fully-funded equity ownership stake in the project, including all project capital and operating expenses and an initial earn-in contribution.

The New Merian gold mine in Suriname is estimated to contain 4.2 million ounces of gold reserves with an operational life of 11 years. Production of the mine is expected to commence by the end of 2016.

Last year the company posted its worst loss in history as it continues to struggle with falling gold prices. Since 2011, stock for Newmont Mining has fallen more than 60 percent.