Newcrest meets key 2020 aspiration

NEWCREST Mining managing director Sandeep Biswas says the company has met its goal of achieving exposure to five tier one orebodies by the end of 2020.
Newcrest meets key 2020 aspiration Newcrest meets key 2020 aspiration Newcrest meets key 2020 aspiration Newcrest meets key 2020 aspiration Newcrest meets key 2020 aspiration

Newcrest managing director Sandeep Biswas

The company put the goal in place in late 2018, when it had exposure to three: Lihir, Cadia and Wafi-Golpu.

The definition of tier one differs from company to company. Newcrest defines a tier one orebody as having the potential to produce 300,000-400,000 ounces of gold per annum for more than 15 years.

"With Cadia, Lihir, Wafi-Golpu and Fruta del Norte, we currently consider ourselves as having exposure to four Tier One assets, and in Red Chris, we have a potential tier one orebody," Biswas said.

Biswas had previously touted Cascabel in Ecuador as another. Newcrest holds about 14% of Cascabel's 85% owner SolGold.

However, there was no mention of SolGold or Cascabel in today's AGM presentations.

"We definitely want to keep our position in SolGold," Biswas told reporters following the meeting.

"We see great potential in what might be at Cascabel or elsewhere."

Newcrest declined to participate in SolGold's recent capital raising and pulled its representative, Craig Jones, from the board over governance issues.

Biswas said Newcrest wasn't a fan of SolGold's US$150 million streaming deal with Franco-Nevada Corporation as it transferred unnecessary risk to shareholders.

"In terms of technical fundamentals, we still believe one day [Cascabel] will be a great mine but there's a way to go," he said.

Biswas said Newcrest had made progress across the other four pillars it set for itself in 2018, being safety & sustainability, people, operating performance, and technology & innovation.

The company has been fatality free for more than five years and achieved a first-quartile organisational health score for the first time.

On operating performance, Newcrest reported the lowest all-in sustaining cost per ounce of the major gold producers.

And on technology, which Biswas promotes as a key differentiator, the company achieved five breakthroughs.

"These breakthroughs comprise: single lift block caving at greater than 1km draw height; lowering the cost of refractory processing through adopting selective oxidation; lowering the cost and increasing rates of milling through use of coarse ore flotation; making gains on being able to work in hot ground conditions at Lihir through progressing explosive and placement technologies; and a successful trial of under-cutless caving that has the potential to reduce future cave establishment costs," he said.

Newcrest is looking to start building exploration declines at Red Chris and Havieron by the end of this year or early next year.

A maiden resource for Havieron is due in the "coming months", while the Red Chris maiden resource is due by the end of March 2021.

Shares in Newcrest were down 0.8% to A$29.235.