Fed tests gold upleg
Gold’s outlook and fundamentals remain really bullish.
Newcrest Mining Ltd’s board has approved the second-stage expansion of its flagship Cadia gold mine and Lihir mine’s front-end recovery project, Australia’s top gold producer said on Friday.
The projects, estimated to cost about $236 million, will boost gold production and recoveries at the two mines that reported lower output in the fourth quarter.
Papua New Guinea-based Lihir’s “long reserve life makes this improvement in gold recoveries particularly valuable to our shareholders,” Newcrest Managing Director and Chief Executive Officer Sandeep Biswas said.
Expansion of the Cadia project, located in New South Wales, will likely increase plant capacity to 35 million tonnes per annum (mtpa) from 33 mtpa and reduce the all in sustaining costs (AISC) by an estimated $22 per ounce, the gold miner said.
AISC for the group in the fourth-quarter stood at $878 per ounce.
Cadia’s full expansion will add 1.8 million ounces of gold output and 67,000 tonnes of copper over the life of the mine, with an estimated $800 million increase in projected free cash flow, Newcrest said in October when it approved Cadia’s first-stage.
The mine’s expansion is expected to generate employment for about 860 people locally, while the Lihir recovery project will add about 150 jobs at its peak, CEO Biswas added.
(By Anushka Trivedi; Editing by Shinjini Ganguli)
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