PERTH (miningweekly.com) – The feasibility study into the Cadia PC1-2 panel cave operation has estimated that 3.7-million ounces of gold could be produced over a mine life of 16 years, gold miner Newcrest Mining said on Friday.

The study estimated that 231 000 oz/y of gold and 42 000 t/y of copper could be produced at the project, at an all-in sustaining cost of A$198/oz. The study estimated that the project would require a capital expenditure (capex) of A$1.4-billion, and could deliver an aftertax net present value of A$1.8-billion and an internal rate of return of 18%.

The study contemplated a high lift, undercut block cave producing up to 25-million tonnes a year of crushed ore at an attractive rate of return. First production from PC1-2 is expected in 2026, with execution targeted for 2029.

Development of PC1-2 is expected to sustain total Cadia mine production at approximately 35-million tonnes a year as production from the current operational PC1 and PC2 caves begins to decline from 2024. The first draw bell for PC2-3 was successfully fired in September 2022, with first production expected during the March 2023 quarter.

The PC1-2 cave is expected to take approximately six to seven years to reach its maximum production capacity following blasting of the first draw bell.

“We are very pleased to announce the findings of the Cadia PC1-2 feasibility study today, which indicates strong financial returns and underscores the quality of this world class asset,” said Newcrest MD and CEO Sandeep Biswas.

“Together with the Cadia expansion project which is nearing completion, we are confident that Cadia will continue to be an outstanding gold and copper producer for decades to come.”

“Through applying our technical expertise in deep underground mining and value breakthrough strategies, our team has further optimised the PC1-2 mine footprint since the prefeasibility study (PFS), creating a more efficient cave and substantially increasing expected ore production across the life of the project. We now expect to deliver additional gold and copper production over the next decade and beyond, which is an outstanding achievement by our team and a great example of our innovation and creativity in action.”

“We also have significant financial headroom to fund the construction of PC1-2 through our internal cash flow and prudent use of our strong balance sheet. This further underpins Cadia’s ability to continue contributing to the community and we remain focused on pursuing further optimisations during the Execution Stage of the project,” said Biswas.

Newcrest has continued to progress the early works programme since the PFS release in August last year, with A$74-million of capex incurred on key development activities, raise boring and earthworks to support construction of the primary ventilation system.

Biswas said that Newcrest was looking at options to reduce the cost of the project and to maximise long-term value.

The company currently holds a project approval for the Cadia East project until 2031, which includes permitting to develop PC1-2.

In December last year, Cadia received approval from the New South Wales Department of Planning, Industry and Environment for a modification to increase its permitted processing capacity from 32-million tonnes a year to 35-million tonnes a year. The modification also provides approval for Newcrest to repair the slumped section of the Northern tailings storage facility (NTSF) and revise the footprint of the NTSF and Southern tailings storage facility (STSF) to allow for a change from upstream to a centreline lift design.

Cadia has started planning for the long-term continuation of mining operations known as the Cadia continued operations project (CCOP). Key aspects of the CCOP include a proposed development for a new tailings storage facility adjacent to the current STSF.