Orange strikes gold with Newcrest mine
NEWCREST’S new $2.2 billion Cadia East mine is set to underpin major gold production from the Cadia Valley.
NEWCREST’S new $2.2 billion Cadia East mine is set to underpin major gold production from the Cadia Valley near Orange in NSW for at least the next 30 years.
The mine was officially opened yesterday, having started commercial production in January. But it is still being ramped up to planned rates. In officially opening the mine, NSW Premier Mike Baird said the development was a “model for how agriculture and mining can exist together”.
When the underground mine hits its straps in 2016, production from Newcrest’s broader Cadia Valley operations will have grown from last year’s 447,000 ounces to 700,000 ounces, rivalling Newmont’s Boddington and Newmont-Barrick’s Super Pit in Western Australia for the title as Australia’s biggest gold producer.
Located 25km from Orange, 250km west of Sydney, the Cadia Valley operations are Newcrest’s lowest cost producer, with all-in sustaining costs of $381 an ounce in the March 2014 quarter.
The low costs are unmatched in the Australian industry and are partly due to the valuable byproduct revenue that comes from copper production. Analysts value Cadia Valley at more than $4.8bn on net present value basis, edging out Newcrest’s Lihir mine in PNG — acquired for $9.5bn in scrip and cash in 2010 — as the group’s most valuable operation. The Lihir operation has proved problematic and, following last calendar year’s 30 per cent fall in the US dollar gold price, it also became clear, with hindsight, that Newcrest overpaid.
Newcrest has since announced the retirement of its chief executive, Greg Robinson, with effect from July 4.
Mr Robinson said that, despite the low profile of the Cadia Valley operations in the broader community, they were one the great Australian mining stories.
“This is an enormous deal for us,” Mr Robinson said.
“Cadia East will be the flagship for the company for years to come.”
Mr Robinson’s replacement is former Rio Tinto senior executive, Sandeep Biswas. Mr Biswas was hired by Mr Robinson as Newcrest’s chief operating officer in January, with a view to him eventually taking the top job.
Barry FitzGerald travelled to Orange as a guest of Newcrest.