Newcrest Resumes Mining At Cadia
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Shares in Newcrest Mining (NCM) added nearly 2% yesterday after the company confirmed that it had restarted production from the second of two key areas at its Cadia East gold mine in NSW.
Output from the mine, which is part of Australia’s largest underground gold mining operation, was halted on Good Friday, April 14 after what the company described as a “large seismic event”.
One area, knows as the East Panel Cave 2, came back online in July, and the company announced yesterday that extraction at East Panel Cave 1 has now recommenced.
Newcrest has submitted final ground support plans for the PC1 crusher chamber and extraction level to the regulator, and these have been accepted. As a result, the Prohibition Notice has been amended to allow operations to recommence as areas are upgraded in accordance with the submitted plans.
Remediation and upgrade work continues on other areas in the PC1 extraction level, which is expected to be completed by the end of December 2017.
As announced at the time, Newcrest completed the ‘test and response’ phase of the Panel Cave 2 (PC2) on 19 July 2017, with the ramp-up in production from PC2 continuing.
It is expected that Cadia East production rates will have been fully restored to normal by the end of March next year. The shares rose 1.8% to $22.61.
In August Newcrest said 2016-17 gold production dropped 2.4% to 2.38 million ounces, after Cadia - its biggest and lowest-cost mine - was hit by a magnitude 4.3 earthquake in central west NSW in April, prompting suspension of operations.
Production has resumed in Cadia’s panel cave 2, but repair work continues in panel cave 1, with production there expected to resume in the next few weeks
The miner has forecast gold production of between 2.4 and 2.7 million ounces and copper output between 80,000 and 90,000 tonnes for the 2018 financial year, subject to any delays at Cadia.
It said group production will likely be lower in the September quarter, compared to the June quarter as a result of a higher level of planned shutdown activity being undertaken.
“Gold production and free cash flow is expected to be higher in the second half of the financial year as Cadia East ore production ramps up and there are fewer planned shutdown events,” it said.
A further update is expected at the company’s annual meeting in the September quarter’s production report to be released next month.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.