Batu Hijau gold mine will start production in 1999

Batu Hijau gold mine will start production in 1999

SINGAPORE (Reuter): The chief financial officer of U.S. giant
Newmont Mining Corp said yesterday the company's US$1.9 billion
Batu Hijau mining project on Indonesia's Sumbawa island was
expected to start production late 1999.

"We start construction in May... It should go into production
late 1999," Wayne Murdy said.

Newmont's partner in the project is Japan's Sumitomo Corp,
which has taken a 35 percent stake in the project.

He said low gold prices has not affected Newmont's overall
exploration program, although smaller outfits were suffering.

"We're fortunate in that we are a low-cost producer," Murdy
told Reuters with gold prices to just under US$325 an ounce, from
more than $340 in July,

"We're the lowest-cost producer in North America," he said on
the sidelines of a three-day gold conference in Singapore. "We're
committed to exploration."

Newmont will spend $100 million this year in exploration and
will probably allocate the same amount in 1998.

Coupled with the lingering impact of the Busang gold scandal
in Indonesia, Murdy said in a speech to the conference "the
decline in the gold price has dried up investment capital for
many junior exploration companies and eliminated any thought of
equity offerings by the majors".

In his speech, Murdy said the decline in gold prices wiped out
about $3.5 billion of shareholder wealth.

"It is significant that stock prices for the North American
companies with the largest hedge positions have done no better
than those with limited hedges," he said.