Newcrest Mining Ltd. said Oct. 15 that its board approved the execution of the first of two stages of the Cadia expansion project in New South Wales, Australia.

Based on a feasibility study, the first stage has an estimated capital cost of US$685 million, comprised of PC2-3 mine development, materials handling system upgrades, associated infrastructure and the initial works to increase plant capacity to 33 million tonnes per annum. Production for the PC2-3 mine is targeted in fiscal 2023.

Meanwhile, the second stage has an estimated capital cost of US$180 million, comprised of further plant expansion to 35 Mtpa and recovery improvements targeting completion in late fiscal 2022, prior to the completion of PC2-3 mine development.

The expansion project, including both stages, has an estimated net present value of US$1.17 billion, with an internal rate of return of 21.5% and a payback period of 7.6 years.

The company noted that from fiscal 2027 onward, life of mine Cadia mining rates are generally expected to be in the range of 33 Mtpa to 35 Mtpa, with an average of 34 Mtpa used for financial evaluation purposes.

Gold recovery improvements resulting from the two stages are expected to achieve life of mine recovery rates of around 80% and copper recovery rates of around 85%.

Meanwhile, the replacement of the Concentrator 1 SAG mill motor is planned to occur in the second half of fiscal 2021.