Newcrest Mining has revealed the potential for significant profit margins in stage one of the pre-feasibility study (PFS) for the Havieron gold joint venture project in Western Australia.
According to the PFS, the joint venture project between Newcrest and Greatland Gold will deliver an estimated internal rate of return of 16 per cent with a four-year payback period.
This is based on estimated average gold production of 160,000 ounces per annum at an all-in sustaining cost of $US743 ($1101) per ounce across an initial nine-year mine life.
“It is an incredible achievement that, within two years of starting the Havieron drilling program, we have been able to deliver this significant project milestone and demonstrate financial returns that comfortably exceed our hurdle rate, even in this first stage,” Newcrest managing director and chief executive officer Sandeep Biswas said.
“The pre-feasibility study underpins an initial ore reserve estimate for the upper section of the South East Crescent zone which increases our confidence in achieving first production in FY24 and triggers our entitlement to a cumulative 70 per cent joint venture interest.
“We believe that this is just the first stage of a bright and profitable future for Havieron. Our extensive drilling program continues to assess the extent of the South East Crescent zone and further test the Northern and Eastern Breccia for mineralisation which may be suitable for bulk mining methods.”
The Havieron project is slated to begin production in 2024. According to Newcrest, the completion of the PFS has given the company an additional 10 per cent interest in Havieron, bringing its ownership to 70 per cent. The gold miner has approved the start of a feasibility study for Havieron.
Newcrest also released its PFS for the Lihir project in Papua New Guinea, which supports production growth to 1 million ounces per annum from the 2023-24 financial year.
The company’s block cave PFS for the Red Chris gold mine in Canada was also released which has confirmed tier one potential for the site. Biswas said the company is also looking at growing its copper output.
“The projected growth profile of our copper production is particularly exciting and would allow us not just to advance our own sustainability objectives, but to participate in the potential opportunities presented by a global shift to decarbonisation,” he said.
“While Newcrest is primarily a gold company, we will continue to have a substantial and increasing exposure to copper, a commodity we believe has a compelling growth outlook.”