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NEWS-LEADING DEVELOPMENTS MAY 2017 • E&MJ; 5 www.e-mj.com ter 2017. PT-FI's concentrate exports re- sumed on April 21, 2017. "During the first quarter, we contin- ued to strengthen our financial position despite the production interruptions experienced at our Indonesian opera- tions," said Richard C. Adkerson, Pres- ident and CEO, Freeport. "Our strong focus on cost and capital discipline com- bined with improved market conditions for copper are producing solid results. The resumption of concentrate exports in Indonesia and expected continued strong performance from our Americas operations will enable us to generate sig- nificant cash flows in the balance of the year. Our team is focused on reaching a positive near-term resolution to protect our past investments and support our long-term investment plans in Indonesia and in building long-term values in our large portfolio of high-quality copper as- sets in the Americas." Freeport said its consolidated sales for the year 2017 are expected to be 3.9 billion lb copper, 1.9 million oz gold and 93 million lb molybdenum, in- cluding 1 billion lb of copper, 440,000 oz of gold and 24 million lb molybde- num for second-quarter 2017. The av- erage realized prices for those metals were $2.67/lb for copper, $1,229/oz for gold and $8.71/lb for molybdenum for first-quarter 2017. Freeport reached agreement with the Indonesian government to resume concentrate exports, which had been suspended since January 12, 2017, for a six-month period to enable the negoti- ation of a new special operating license (IUPK) and investment stability agree- ment to support PT-FI's long-term invest- ment plans. Cliffs' Goncalves Expects 2017 to be Phenomenal Cliffs Natural Resources reported U.S. iron ore (USIO) pellet sales for the first quarter of 2017 of 3.1 million long tons, a 63% increase compared to the first quarter of 2016 (1 long ton = 1.12 short tons). "During the first quarter, we put our finishing touches on what has been a remarkable operational, commercial and financial transformation of this compa- ny," said Lourenco Goncalves, chairman, president and CEO, Cliffs. "Over the last two and half years, Cliffs has transformed itself into a lean and focused company, Newmont Mining announced plans to extend profitable production at its Ahafo operations by building a new underground mine and expanding plant capacity by more than 50%. Subika Underground is expected to produce 1.8 million oz of gold over an 11-year mine life, and fea- tures ore grades of 4.7 grams per metric ton (g/mt). The mill expansion is expect- ed to improve margins and support pro- fitable production at Ahafo through at least 2029. "We are building on strong perfor- mance and solid infrastructure by in- vesting in the next generation of prof- itable production at Ahafo," said Gary Goldberg, president and CEO, Newmont Mining. "The Subika Underground mine will also create a platform to support even longer-term growth. Recent exploration results demonstrate considerable upside within the Subika deposit and adjacent Apensu Deeps deposit." The projects have been optimized to improve internal rates of return to more than 20% at a $1,200/oz gold price. In the first five full years of production — or from 2020 through 2024 — they are forecast to add incremental gold produc- tion of between 200,000 and 300,000 oz/y at Ahafo for total average annual pro- duction of 550,000 to 650,000 oz. The projects are also expected to lower unit costs during the same time frame. Costs applicable to sales (CAS) are expected to decrease by between $150/oz-$250/ oz compared to 2016 for total average CAS of $650/oz-$750/oz. All-in sustain- ing costs (AISC) are expected to decrease by between $250/oz-$350/oz compared to 2016 for total average AISC of $800/ oz-$900/oz. Newmont received its environmental permit to build and operate Subika Un- derground in March 2017. The resource has been studied for 11 years and exe- cution and technical risks are well under- stood. The company expects to reach first production at the mine in the second half of 2017 and commercial production in the second half of 2018. The Ahafo mill expansion will increase mill capacity by 50% to nearly 10 million mt/y by adding a crusher, grinding mill and leach tanks to the circuit. The expan- sion supports more efficient processing of harder, lower grade ore from existing surface mines, as well as Ahafo's stock- piles and Subika Underground. Newmont expects first gold production at the mill expansion in the first half of 2019 and commercial production in the second half of 2019. Development capital of between $300 million and $380 million will be funded through free cash flow and available cash balances. Newmont will uphold local hir- ing and procurement commitments and existing bargaining agreements through construction and operation. Commercial production at Ahafo be- gan in 2006 and the operation achieved 5 million oz of gold production in October 2016. Three surface mines — Subika, Awonsu, Amoma — feed a convention- al mill with a carbon-in-leach circuit. A fourth surface mine, Apensu, is currently being used for water storage. Newmont Expands Production at Ahafo in Ghana The Ahafo mill will see its capacity increase by 50% to process harder, lower grade ore from existing sources as well as Subika Underground.