The Newcrest Mining Limited (ASX: NCM) share price will be one to watch this morning after the release of an update by the gold mining giant.
What did Newcrest announce?
This morning Newcrest announced that its board has approved two projects moving to the execution phase. These are Stage 2 of the Cadia Expansion Project and the Lihir Front End Recovery Project.
Newcrest’s Managing Director and Chief Executive Officer, Sandeep Biswas, believes these projects will add a lot of value.
He commented: “It is an exciting time at Newcrest as we advance our growth pipeline with both of these projects adding value to our existing large scale, long life operations while we pursue the development of Red Chris and Havieron and exploration opportunities globally.”
What will the projects add?
The Stage 2 Cadia Expansion Project will increase its plant capacity from 33mtpa to 35mtpa. This will lead to an increase in gold and copper recoveries, an increase in production, and a reduction in unit costs.
Life of Mine gold recoveries are forecast to increase by 3.5%, with Life of Mine copper recoveries increasing by 2.7%. Cadia’s all-in sustaining cost (AISC) will reduce by an estimated $22 per ounce.
The estimated capital cost for Stage 2 is $175 million, with completion expected in late FY 2022.
Mr Biswas explained: “Cadia is one of the largest, lowest cost, long life gold mines in the world due to the application of Newcrest’s industry leading block caving technology, and this investment helps Cadia maintain this industry leading position.”
Newcrest expects the Lihir Front End Recovery Project to deliver additional production through an improvement in gold recoveries over the life of the mine.
The chief executive believes that “Lihir’s long reserve life makes this improvement in gold recoveries particularly valuable” to its shareholders.
Overall, Mr Biswas appears confident on the company’s outlook and believes it is well-positioned for growth.
He concluded: “Both projects demonstrate how we are using innovation and our technical expertise to continually improve our operations. With a strong balance sheet, low cost production, a range of organic growth options and a strong exploration portfolio, Newcrest is well positioned for the future.”
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