Newmont Mining Corp.'s (NEM) Ahafo Mine in Ghana has produced and sold 124,862 ounces of gold in the first quarter, with management upbeat about attaining its yearly production target, despite a crippling power crisis that has hit the West African country since August.

The Ahafo mine, which poured its first gold in July, is projected to produce 500,000 ounces of gold yearly.

Newmont on April 20 paid $2.4 million to the Ghanaian government as a mining royalty covering January-March sales, which totaled $80.67 million, the company 's official said.

Newmont has projected it will produce at least 430,000 ounces in 2007.

The mine produced 203,000 ounces between its first gold pour from July to December, down from an initial forecast of between 225,000 and 250,000 ounces. The shortfall was due to a national power crisis, the company said.

The Volta River Authority, Ghana's wholesale power utility, began load shedding on Aug. 28 to both industry and domestic consumers, and asked Newmont and other bulk users to curtail their consumption by as much as 50%, citing low levels of water in its main hydroelectric facilities.

The mine has had to install four units of high capacity diesel generators to run its plant at costs four times higher than power from the national grid. The high power generating cost notwithstanding, Newmont was making satisfactory progress in production.

The Ahafo mine, which has a revised 25-year lifespan, is capable of processing 7 million tons of ore yearly.

By the end of 2007, Newmont would have invested over $665 million in the Ahafo project, adding that over 50% of total operational expenditure will stay in Ghana and will impact the Ghanaian economy.

"Additionally, in 2007, the company anticipated spending over $8 million on social and environmental projects, including funds allocated to programs to help the local economy, as well as environmental management, monitoring and restoration programs", Newmont 's representative told.