Newcrest Mining Ltd. is weighing its options over whether to inject further cash into expanding its Bonikro mine in Ivory Coast or sell the operation.
"We are undertaking a strategic review of Bonikro, which is our asset in Cote d'Ivoire, and pending the outcome of that we'll either retain it and run it or if the proposition is compelling then we'll look to sell it," Managing Director and CEO Sandeep Biswas said Aug. 14 during a media call following the release of Newcrest's 2017 financial year results.
Operating cash flow from Bonikro in the 2017 financial year slipped to US$65.0 million from US$76.0 million in the prior fiscal year. Gold production from the mine slipped to 128,000 ounces from 138,000 ounces, largely due to lower feed grades, which also contributed to higher all-in sustaining costs of US$1,105 per ounce in fiscal 2017 compared to US$941 million per ounce a year earlier.
Newcrest is at the stage where it needs to make a decision on investing in a fifth cut-back in the Bonikro pit.
"If you assume the no sale scenario, the scenario that we're looking at is whether we invest or not in pushback five," Biswas told reporters.
"That's the investment decision in front of us and at this point in time, and as we did at Telfer two years ago prior to that investment decision we made, we seek to see which is the best value option for us and that's what we're doing at Bonikro."
Newcrest has not set a deadline for the strategic review, but expects it will be completed in the September quarter.
Meanwhile, the Australian gold producer is primarily focused on growing its existing operations, but has mapped out an exploration strategy that includes several joint venture deals in West Africa and Indonesia.
"We've entered into a number of exploration joint ventures and alliances, certainly over the last year," Biswas noted. "We've also entered an alliance with Randgold Resources Ltd. in Cote d'Ivoire and also with PT Antam (Persero) Tbk. in Indonesia."
In November 2016, Newcrest signed a heads of agreement with Randgold to establish a joint venture to explore, develop and mine resources in the southeast of Ivory Coast, and formed an alliance with state-owned Antam to explore for copper-gold in Indonesia.
In West Africa, Newcrest is focusing on shallow monogenic-type deposits, while in Indonesia the targets are epithermal and porphyry deposits.
Biswas added that the company is also looking at Central and South America for potential new copper-gold porphyry discoveries.