GOLD NEWS

Newmont considering expanding net to include more politically risky countries

CEO, Richard O'Brien says, while not an overriding factor, it is something the group has to consider

Posted: Tuesday , 09 Mar 2010

NEW YORK (Reuters)  - 

Newmont Mining Corp (NEM.N), the world's No. 2 gold producer, might consider expanding operations into countries it previously believed were too politically risky, its chief executive said on Monday.

"It's not an overriding factor, but certainly one we have to consider," Richard O'Brien told the Reuters Global Mining and Steel Summit when asked about political risk.

"With as much triple-A production as we have, that allows us to take more risk," he said of the possibility of operating mines in less stable areas of the world.

Denver-based Newmont currently mines in Nevada, Canada, Mexico, Australia, New Zealand, Peru, Ghana and Indonesia

"We continue to evaluate where we want to be in the world and we want to be where the most valuable gold and copper deposits are," O'Brien said. "As a result, we have to expand our definition of countries where Newmont is willing to operate."

Last week, Newmont sold its interest in the Amulsar Gold Project in Armenia to its partner Lydian International Ltd (LYD.TO), in a cash and stock deal.

Asked at the Reuters Summit about the sale, O'Brien said: "We decided not to focus on (it) at this point.

"(But) We are very interested in Central Asia. That's why this was not a forever decision -- just not this particular deposit at this particular time."

Asked if there were any no-go areas of the world, the Newmont CEO said: "There are areas where we wouldn't go without something ... for example Russia -- a difficult environment in terms of discovery and ongoing operations, but I wouldn't say we wouldn't go to Russia.

"We really have to have a great partner, much as we have with Buenaventura (BUEv.LM) in Peru," where the companies mine the vast Yanacocha mine.

"I would say the same in China and a number of other countries where we see natural resources-rich environments."

O'Brien said Newmont just needed to work out the right way to get good partners in target countries, backed by capital and good relationships with the local government.

"I think we can find those partners over time and that's the direction we are going to go. At the end of the day, I'd like to say -- no limits. Today, I recognize there are some."

In afternoon trading on the New York Stock Exchange, Newmont stock was down 41 cents at $51.14.

(Reporting by Steve James; Editing by Lisa Shumaker)