Newcrest Mining will spend $93 million to improve the operating margins and extend the life of the Telfer gold mine in the Pilbara region of Western Australia.
The investment will focus on expanding the West Dome open pit at Telfer, with Newcrest expecting the project to deliver ongoing access to economic grades of ore that will improve the mine’s narrow margins, which were $85 an ounce in fiscal 2017.
Newcrest said the investment would also extend the life of Telfer’s open pit by around four years to 2023, subject to metal prices and operating conditions.
Telfer produced 386,242 ounces of gold in the 2017 financial year, down from 462,461 ounces the previous year, mainly due to weather disruptions in the March quarter.
The site’s cash costs were higher in fiscal 2017, also partly due to poor weather conditions, rising to $1178 an ounce from $967 an ounce a year earlier.
Newcrest managing director Sandeep Biswas indicated that the WA Parliament vote last week that blocked the Labor Government’s proposed gold royalty rate hike played a role in the company making the investment decision.
“This decision, and the positive signal it sent about the state’s investment potential, has enabled us to proceed confidently with this investment to extend Telfer’s mine life,” Biswas said.
“It means jobs, ongoing royalties, a substantial flow of economic activity, and ongoing community services and employment opportunities in one of the most remote parts of Australia.”
Newcrest said the investment would support the ongoing employment of around 1550 workers at Telfer. The expansion will also provide employment for truck drivers, excavator operators, associated maintenance staff, and drill and blast crews.