Cadia's costs come in lower for Newcrest

Newcrest Mining, which has released its pre-feasibility study findings for the Cadia expansion project and has green-lighted progress into the feasibility phase, said costs for the Australian gold project have come in lower than previously anticipated, including significant savings for the project’s plant
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Newcrest's Cadia East mine in Australia

Staff Reporter

The miner said it has estimated total capital expenditure for Cadia's growth is now A$598 million (US$439 million). Capex for it and the plant expansion, totalling A$58 million for the facility and underground materials handling, has come in about A$252 million lower than estimated.

Most of the expense will be for the development of the next macro block, PC2-3, which on its own will be A$540 million.

"Two years ago we set out to expand Cadia to 32 million tonnes [annually] for an expected cost of A$310 million; today we announce expanding the plant to 33 million tonnes [annually] for A$58 million with potential to grow to 35mt/y," managing director and CEO Sandeep Biswas said, noting that, in addition to the A$252 million in savings, throughput capacity will rise by one million tonnes each year.

"The mining rate profile analysis showed that a long-term sustainable mining rate of 33mt/y is achievable and that 35mt/y represents the upper limit of Cadia's caving footprint capability until approximately [fiscal year 2027], when PC1-2 production ramps up."

The pre-feasibility study offers different scenarios for Cadia's expansion, including a capacity boost to its plant which, to reliably expand beyond 35mt/y, Newcrest said would require the addition of a third concentrator - and spike its capex by about A$440 million overall.

Additionally, it outlined, the facility would require a new secondary crushing circuit for the concentrator one million circuit, a crusher and secondary screen feed, pebble crusher and 1.5MW ball mill.

Production-wise, the assessed cases range between 30mt/y to 40mt/y.

Newcrest said it will release its feasibility study findings for the expansion in the first half of 2020.