US-based gold mining company Newmont has unveiled its plans to defer its $300m full funds investment decision for the Yanacocha gold project in Peru, for at least two more years.

Newmont decided to advance its portfolio optimisation strategy to maximise returns for shareholders and create long-term value for other stakeholders.

It will help the company prioritise other value-accretive opportunities, and support capital allocation strategy for steady reinvestment in the business.

Last month, Newmont signed a binding scheme implementation deed (SID) to acquire its rival gold mining company Newcrest Mining, in a deal valued at A$28.8bn ($19.26bn).

Under the terms of the SID, Newcrest shareholders will exchange each of their shares in the company for 0.4 shares of Newmont.

Newmont president and CEO Tom Palmer said: “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 $2bn in near-term cash flow improvements through portfolio optimisation within the first two years.

“The deferral of the Yanacocha Sulfides 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.”

The decision was based on an analysis led by the company’s Peru chief development officer Dean Gehring, over the last nine months.

With the postponement of the Yanacocha Sulfides project, Dean Gehring will now lead the integration planning for the proposed acquisition of Newcrest, as chief integration officer.

The Yanacocha Sulfides project was planned to be developed through an integrated processing circuit, which includes an autoclave to produce 45% gold, 45% copper and 10% silver.

Phase 1 focuses on the Yanacocha Verde and Chaquicocha deposits to extend the operations beyond 2040, with the second and third phases extending the operation’s life for multiple decades.

Palmer added: “Newmont has a long history of operating in Peru, and Yanacocha is core to Newmont’s portfolio and long-term strategy. With the potential to operate as a Tier 13 gold and copper mine for several decades, we remain committed to managing Yanacocha’s operations and closure activities safely and responsibly.

“We will continue to work closely with government stakeholders, business partners and local communities in Peru as we prepare for a future investment decision on the Sulfides Project.”