Newcrest Mining is on track to increase the Cadia Valley mine’s processing capacity to 33 million tonnes a year.
The company board approved its stage one expansion, which includes starting the next cave development and improving recovery rates.
Its second phase, which is undergoing a feasibility study, focusses on increasing the processing capacity further to 35 million tonnes a year.
Works during stage one will include upgrading the materials handling system, developing the mine and building associated infrastructure.
First production at Cadia is aimed for the 2023 financial year.
“This expansion plan is an improvement on the previous 2018 pre-feasibility study, with an estimated additional 1.8 million ounces of gold production and 67,000 tonnes of copper production and an estimated $800 million increase in projected free cash flow generation by Cadia over its life,” Newcrest managing director and chief executive officer Sandeep Biswas said.
“The capital investment has an estimated 21.5 per cent rate of return and ensures Cadia remains a tier one asset for many years to come.”
The rate of ore mined from Cadia is expected to vary over time according to draw rates, cave maturity and cave interaction as further caves are developed, with an average rate of 34 million tonnes a year expected from the 2027 financial year onward.
Newcrest is expecting a life of mine gold recovery rate improvement of around 80 per cent, with copper recovery rates of around 85 per cent after the expansion is complete.
Construction for stage one is expected to begin before the end of the 2019 financial year.