Newcrest Mining will require an estimated total capital expenditure of $598m for the expansion of Cadia gold operations in New South Wales, Australia, according to a pre-feasibility study (PFS).
The capex includes $540m to develop next Macro Block PC2-3 and the remaining $58m for the processing plant and underground materials handling expansion.
Go deeper with GlobalData
The PFS has outlined future potential de-bottlenecking options to increase plant capacity to 35Mtpa, which is designated as the upper limit of Cadia’s caving footprint capability until PC1-2 production increases.
In the interim, the study team has determined that 33Mtpa is achievable as a long-term sustainable mining rate.
The study also indicated that the company needs to install a third concentrator and invest an additional capex of $440m to expand the processing plant beyond 35Mtpa.
The previous estimation of Newcrest restricted the plant expansion capital cost at $850m.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataBased on the PFS, the expansion project will have an internal rate of return (IRR) of 21% and net present value (NPV) of $887m.
Newcrest Mining managing director and CEO Sandeep Biswas said: “Two years ago, we set out to expand Cadia to 32Mtpa for an expected cost of $310m; today, we announce expanding the plant to 33Mtpa for $58m with the potential to grow to 35Mtpa.
“The study has delivered a $252m saving and an additional 1Mtpa of throughput capacity. The project team have applied an ‘owner’s mindset’ in delivering an expansion plan with a low capital intensity which has the potential to deliver an impressive 21% return on capital and ensures Cadia remains a Tier 1 producer for a long time to come.”
In addition, the study has recommended the construction of a new secondary crushing circuit for the Concentrator 1 milling circuit as part of the proposed expansion.
The company will now commence a feasibility study for the Cadia expansion and expects to release it in the first half of FY20.
