Earthquake to interrupt Newcrest gold operation for months

Image: Newcrest Mining

Newcrest Mining expects operations at its Cadia East underground mine in New South Wales to perform below production capacity for several months following the Good Friday earthquake that interrupted mining at the site.

A large seismic event occurred in the region of the Cadia operation earlier this month, suspending underground mining at Newcrest’s largest Australian gold mine. Surface operations were not affected and no injuries were recorded.

The Cadia East mine remains subject to a prohibition notice, according to Newcrest, which has completed inspection of both panel caves at the site.

At Panel Cave (PC) 2, the larger of the two caves, Newcrest anticipates that production will restart in the early part of the 2018 financial year.

It said cleaning of access drives and the extraction level was well advanced, while ground support was being rehabilitated and enhanced in other areas.

“With the support of independent technical specialists, geotechnical mapping has been completed and a remedial ground support design has been developed,” Newcrest outlined.

However, Newcrest was unable to provide an estimate for when mining would resume at PC1. The company reported that damage was identified to the crusher chamber area and extraction drives.

“Work continues on quantifying the remediation and enhancement work where required in specific areas prior to recommencement of mining,” the company said in an ASX announcement.

“Newcrest will provide a definitive estimate of the timeline for the recommencement of mining in PC1 once confirmed.”

Newcrest announced last week that Cadia was not expected to meet its production guidance for the 2017 financial year following the seismic event.

Operations at Cadia are also being affected by rising electricity prices in Australia, according to the company’s latest quarterly report.

Newcrest said its electricity supply contract for the 2018 financial year was now finalised, with prices to be 90 per cent higher that what has been paid in 2017.

Newcrest produced 599,000 ounces of gold in the March quarter, a 2.6 per cent fall on the previous quarter. Cadia was Newcrest’s top producing mine in Australia during the quarter with 168,579 ounces.

The Lihir mine in Papua New Guinea produced 229,572 ounces over the three months, Newcrest’s largest single-mine output.

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