The deposit will lift Newcrest’s annual production rate to 800,000 ounces of gold and 100,000 tonnes of copper.
The Cadia East orebody is one of the world’s largest gold deposits, comprising resources of 2.34 billion tonnes for 33.2Moz of gold and 6.59Mt of copper It also has reserves of 18.7Moz of gold and 3.16Mt of copper, and will underpin production from the Cadia Valley for at least the next 30 years.
The project is based on the construction of an underground mine adjacent to the existing Cadia Hill open pit mine, and expandin the existing Cadia Valley processing plant capacity from 24 million tonnes per annum to 26Mtpa.
It will be Australia’s largest underground mine and one of the largest underground operations in the world.
Cadia East also will underpin Newcrest’s strategy to remain a low cost producer, with production costs well within the lowest quartile of global cash costs. Its cash cost over the first 10 years of production will be below $A100/oz with a total production cost of less than $250/oz.
The project will include an underground crushing and ore handling system, modifications to the existing processing plant and further development of bulk underground mining technologies including the application of automated remote loaders.
The development is expected to be funded from internal cash flows with the majority of the capital expenditure to be incurred by the end of the 2012 calendar year.
Construction will start immediately with first production expected in the second half of 2012.
Newcrest chief executive Ian Smith said the investment would enhance the company’s portfolio of long-life, low cost assets and is a key part of the group’s organic growth strategy to increase annual production by at least 40% to 2.3Moz by the 2014 financial year.
In relation to the proposed takeover of Lihir Gold, Smith said the Cadia East development demonstrated the strength of Newcrest’s organic growth pipeline and the growth options available to the company – regardless of whether or not the Lihir proposal proceeds.
“As we have said from the beginning, the proposed combination of Newcrest and Lihir has a great deal of logic and is compelling – but not vital,” he said.
“Newcrest shareholders – and potentially existing Lihir shareholders also – will benefit from an increase in the underlying long-term value of this company as we continue to generate and implement high quality projects such as Cadia East.”
Source: www.miningnews.net