Top gold producer Newmont on Tuesday announced that it would defer the full-funds investment decision for the Yanacocha Sulphides project, in Peru, for at least two years to advance its portfolio optimisation strategy.

Newmont CEO Tom Palmer explained that the deferral of the Yanacocha Sulphides project formed part of the portfolio optimisation as part of the proposed acquisition of Australia-based Newcrest Mining.

“Once complete, our proposed acquisition of Newcrest will create an industry-leading portfolio of Tier 1 operations and deepen our unmatched pipeline of value-accretive projects.

“In connection with this transaction and our strategy to create lasting value, we are targeting at least $2-billion in near-term cash flow improvements through portfolio optimisation within the first two years. The deferral of the Yanacocha Sulphides project represents the first step in delivering on this target, as we evaluate further opportunities to resequence project capital and rationalise the combined portfolio to build a more profitable and resilient future for the business," said Palmer.

The deferral of the full-funds investment decision results in a reduction in development capital expenditure, including an estimated $300-million included in Newmont’s outlook for 2024.

The deferral follows an analysis led by chief development officer for Peru, Dean Gehring, who over the last nine months evaluated the project economics in a period of high global inflation and market volatility.

Gehring's focus will now shift from leading the Yanacocha operation and sulphides project to leading integration planning for Newmont’s proposed acquisition of Newcrest.

The Yanacocha Sulphides project aims to develop the first phase of sulphide deposits at Yanacocha through an integrated processing circuit, including an autoclave to produce 45% gold, 45% copper and 10% silver. The first phase focuses on developing the Yanacocha Verde and Chaquicocha deposits to extend Yanacocha’s operations beyond 2040, with second and third phases having the potential to extend the operation’s life for multiple decades.

Newmont previously said that the project would add an average of 525 000 gold-equivalent ounces a year to its production.