The Newcrest Mining Ltd (ASX: NCM) share price will be on watch on Wednesday.
This follows the release of an update on its Red Chris operation in British Columbia, Canada.
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What did Newcrest announce?
This morning Newcrest announced its initial mineral resource estimate for the Red Chris mine. This mine is operated by Newcrest under a 70:30 joint venture agreement with Imperial Metals.
The company notes that since becoming operator in August 2019, Newcrest has embarked on an extensive work program to define the potential of block cave mining beneath the existing open pit operation.
These activities have included additional exploration and resource definition drilling, resource optimisation for both open pit and underground mining scenarios, and the commencement of a pre-feasibility study (PFS) to support the potential development of an underground block cave.
What was the initial mineral resource estimate?
Newcrest advised that its initial mineral resource estimate for Red Chris assumes bulk open pit mining and bulk block cave underground mining.
Based on this, its measured and indicated mineral resources are estimated to be 980Mt @ 0.41 g/t gold and 0.38% copper for 13Moz contained gold and 3.7Mt contained copper. Approximately two-thirds is underground, with the balance in the open pit.
Newcrest's Managing Director and Chief Executive Officer, Sandeep Biswas, commented: "The announcement of our initial Mineral Resource estimate marks another milestone in our transformation of Red Chris. We remain on track to release the findings of our block cave Pre-Feasibility Study by the end of September 2021 and continue to evaluate a number of early mining options which could enable an acceleration of cash flows prior to the development of a block cave."
Exploration plans
Newcrest notes that its resource definition drilling at Red Chris has been focused on the East Zone. However, it sees opportunities to explore outside this area to potentially expand its mineral resource.
It explained: "The Brownfields Exploration program is focused on the discovery of additional zones of higher grade mineralisation within the Red Chris porphyry corridor, including targets outside of the Mineral Resource. A total of 109,177m of drilling from 92 drill holes have been drilled since Newcrest acquired its interest in the joint venture. Drilling continues to return significant intercepts across the entire porphyry corridor."
While today's update could be good news for the Newcrest share price, it may not be enough to offset a pullback in the gold price overnight. We'll soon find out at the market open.
