Newcrest Mining Ltd hasannounced that the Newcrest Board has approvedthe Cadia PC1-2 Pre-Feasibility Study, enabling the commencement of the Feasibility Stageand Early Works Program.The Study updates and defines a significant portion of Cadias future mine plan, with the development of PC1-2accounting for ~20% of Cadias current Ore Reserves. The approved commencement of the Early Works Programwill allow critical infrastructure to be established in parallel with the Feasibility Study, before the commencement ofthe Main Works program in the second half of CY22. A$120 millionof funding has been approvedfor this Early Works Program which is expected to commence in the December 2021 quarter.
It will have a~17 year mine life from first production, at an average of 15 Mt/ywith total ore production of 258 Mt producing 3.5 Moz of gold and 660,000 t of copper.Through the Feasibility Study, Newcrest will also investigate the application of single pass caving, mechanical excavation and remote production during the execution of PC1-2, in line with its Next-Gen Caving strategy. These have not been assumed in the Study findings to date and represent upside opportunities.
Total capital expenditure for the development of PC1-2 isestimated to be ~A$1.3 billion, with firstproduction expected in CY25. The timing of PC1-2s developmentis expected to ensure that, in conjunction with thealready approved PC2-3 project, the total Cadia mine production rate is sustained at ~35-36 Mt/y as production fromthe operational PC1 and PC2 caves begins to decline from FY24.The PC1-2 Pre-Feasibility Study includes enhancements over previously published mine designs, which include:
- Optimised North/South footprint configuration todebottleneck extraction drives and boost production
intensity by ~90% compared to previous designs
- Gold and copper production brought forward by prioritising PC1-2 higher grades
- Optimised pre-conditioning to enhance operatorsafety, mine schedules and reduce the underground
- Crusher productivity and ventilation enhancements withthe addition of a fifth tipping location and dedicated
It is planned to bring PC1-2 into production across two stages:
Stage 1:Execute a 12 month Early Works Program to establish ventilation systemsand other critical pathdevelopment. This is expected to commence in the December 2021 Quarter and has an estimatedcost of A$120 million.Completion of the Feasibility Study will run concurrently with the Early Works Program and has anestimated cost of A$14 million
Stage 2:Execute the PC1-2 Main Works Program followingthe conclusion of theFeasibility Study in thesecond half of CY22. The Main Works Program is expected to costA$1.12 billionand is expected to be completed by CY29
The PC1-2 cave is expected to take approximately six years to reach its maximum production capacity from the timeof the blasting of the first drawbell.Newcrest Managing Director and Chief Executive Officer,Sandeep Biswas, said: The development of the PC1-2cave is the next step in Cadiasblock caving journey. The Study underpins an optimised mine design which weexpect will deliver higher goldand copper grades and enable the deferral ofcapital expenditure in the medium term.We have significant financial headroom to fund the construction of PC1-2, together with our other organic growthoptions, from our expected cash flow generation over the development period and our strong balance sheet.This project, together with the expansion project currently in progress, isexpected to sustain Cadias position asone of the largest, lowest cost and long life gold mines in the world. The team at Cadia is passionately committed tobuilding on this world class asset, driving employment and other benefits for the local community and otherstakeholders, and maintaining a focus on innovation, continuous improvement and sustainable development.