Green light for Newcrest's $2bn mine

AUSTRALIA'S largest goldminer, Newcrest Mining, has received approval from the NSW Government to proceed with its $2 billion expansion of Cadia East, destined to be the country's largest underground mine.

By InvestSMART · 9 Jan 2010

By InvestSMART ·
9 Jan 2010

NSW Premier Kristina Keneally yesterday visited the project, near Orange in NSW's central west. She said the copper and gold mine would generate more than 2000 jobs and $1 billion for the area.

The Newcrest board will await final regulatory approvals before making a decision on the expansion. Cadia, a wholly owned subsidiary of Newcrest, will add to its nearby Cadia Hill open-cut mine. Cadia Hill is due to expire in 2013 but the expansion will extend the mine's life by at least 20 years.

Ms Keneally said that, at its peak, Cadia East would produce copper and gold worth $1 billion a year at today's prices.

Newcrest estimates the entire project will have a mineral resource of 18 million ounces of gold and 2.9 million tonnes of copper. An initial ore reserve study in June 2005 estimated 6 million ounces of gold and 0.63 million tonnes of copper. These estimates are supported by more than 165 kilometres of drilling from more than 168 holes.

Ms Keneally said rigorous monitoring of environmental conditions would accompany the development.

The market had expected approval to be granted and Newcrest slipped 95? to $36.20 in a slightly weaker market for materials stocks.