Newmont’s Lihir gold mine barrier plan: production and capex lens for engineers
Reviewed by Joe Ashwell
First reported on MINING.com
30 Second Briefing
Newmont expects a planned nearshore barrier at the Lihir mine in Papua New Guinea’s New Ireland Province to unlock more than 5 million oz of additional gold from 2028, while reaffirming 2026 production guidance after Q2 output of 1.3 million oz of gold, 17,000 tonnes of copper and 7 million oz of silver. Q2 cash flow from operations reached $2.9 billion and free cash flow hit a record $2.2 billion, with all-in sustaining costs of $1,621/oz against a $1,680/oz guidance and an average realised gold price of $4,414/oz. Management also reported regulatory progress at the Red Chris block cave in British Columbia and resumed cave production at Cadia in Australia, but flagged higher sustaining capital in Q3 and rising capital estimates at Red Chris.
Technical Brief
- Newmont links the barrier with improved mining stability and lower operating costs at Lihir.
- Management reports “greater mining stability” at Lihir, implying more consistent geotechnical and hydrological conditions in pit.
- Regulatory approvals for the Red Chris block cave in British Columbia are advancing towards feasibility and board sanction.
- Capital costs at Red Chris are now expected to exceed earlier Newcrest estimates, signalling higher block cave development intensity.
- Cadia’s operating caves in Australia resumed production in mid-June after an April seismic event.
- Ahafo North, Cerro Negro, Tanami and Boddington are grouped with Lihir as core long-term growth assets.
- Investor questioning focused on oil price exposure, Ghana policy risk and Red Chris capital escalation.
Our Take
With gold holding above the $4,000/oz support level in the 20–23 July price pieces in our database, a 5‑million‑ounce uplift at Lihir in Papua New Guinea positions Newmont as one of the few majors able to leverage current high prices with genuine volume growth rather than just margin expansion.
The strong second‑quarter free cash flow and $1.9 billion already returned to shareholders suggest Newmont has more flexibility than many gold peers flagged in recent price coverage (e.g. Barrick, Agnico Eagle, Kinross) to fund nearshore barrier works at Lihir while still advancing capital‑intensive projects like Red Chris block cave and Tanami.
Newmont’s activity in Canada spans both growth (Red Chris, Cadia‑style block caving) and portfolio pruning, as seen in the Mule Canyon divestment to Central Nevada Gold on 16 July, signalling a strategy of concentrating capital on large, long‑life gold–copper systems rather than smaller standalone gold assets.
Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.
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