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Newcrest Mining Limited (NCM) said its board has approved the development of the Cadia East gold and copper deposit near Orange in New South Wales. The company said the estimated capital cost of what will be Australia’s largest underground mine is $1.91 billion.

The announcement follows receipt of NSW Government planning approval in January this year.

Newcrest said the ore body is one of the world’s largest gold deposits, comprising a Mineral Resource of 2,347 million tonnes (Mt) containing 33.2 million ounces (Moz) of gold and 6.59Mt of copper, along with a current Ore Reserve of 18.7Moz of gold and 3.16Mt of copper.

The company said it would underpin production from the Cadia Valley for at least the next 30 years.

Newcrest said the project is based on the construction of an underground mine adjacent to the existing Cadia Hill open pit mine, and an expansion of the existing Cadia Valley processing plant capacity from 24mtpa to 26mtpa.

“The project will enable production from Cadia Valley Operations to increase to a range of 700 to 800 koz of gold and 75 to in excess of 100kt of Copper per year over the first 10 years,” the company said.

Newcrest expects the project 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 commence immediately with first production expected in the second half of 2012,” the company said.

“Commissioning and appreciable production levels will be occurring during the 2013 calendar year.”

CEO, Ian Smith, said the investment key part of Newcrest’s organic growth strategy to increase annual production by at least 40% to 2.3Moz by financial year 2014.

Mr Smith said, in relation to the proposed combination with Lihir Gold Limited (LGL), the Cadia East development demonstrates the strength of Newcrest’s organic growth pipeline and the growth options available to the company – 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,” Mr Smith said.

As at 1022 AEDT, Newcrest shares were down 12c to $35.38.

Filed under:
Materials and Resources, News and Views by egoli

Newcrest Mining Limited (NCM) said its board has approved the development of the Cadia East gold and copper deposit near Orange in New South Wales. The company said the estimated capital cost of what will be Australia’s largest underground mine is $1.91 billion.

The announcement follows receipt of NSW Government planning approval in January this year.

Newcrest said the ore body is one of the world’s largest gold deposits, comprising a Mineral Resource of 2,347 million tonnes (Mt) containing 33.2 million ounces (Moz) of gold and 6.59Mt of copper, along with a current Ore Reserve of 18.7Moz of gold and 3.16Mt of copper.

The company said it would underpin production from the Cadia Valley for at least the next 30 years.

Newcrest said the project is based on the construction of an underground mine adjacent to the existing Cadia Hill open pit mine, and an expansion of the existing Cadia Valley processing plant capacity from 24mtpa to 26mtpa.

“The project will enable production from Cadia Valley Operations to increase to a range of 700 to 800 koz of gold and 75 to in excess of 100kt of Copper per year over the first 10 years,” the company said.

Newcrest expects the project 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 commence immediately with first production expected in the second half of 2012,” the company said.

“Commissioning and appreciable production levels will be occurring during the 2013 calendar year.”

CEO, Ian Smith, said the investment key part of Newcrest’s organic growth strategy to increase annual production by at least 40% to 2.3Moz by financial year 2014.

Mr Smith said, in relation to the proposed combination with Lihir Gold Limited (LGL), the Cadia East development demonstrates the strength of Newcrest’s organic growth pipeline and the growth options available to the company – 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,” Mr Smith said.

As at 1022 AEDT, Newcrest shares were down 12c to $35.38.

Filed under:
Materials and Resources, News and Views by egoli