Newcrest Mining has announced an agreement with Imperial Metals to acquire a 70% joint venture interest in, and operatorship of, the Red Chris mine and surrounding tenements in British Columbia, Canada for $806.5m.
Red Chris is a copper-gold porphyry with an operating open-pit mine and mineral resources of 20 million ounces of gold and 13 billion pounds of copper. The acquired property comprises 23,142 hectares of land with 77 mineral tenures, five of which are mining leases and sits within the traditional territory of the Tahltan Nation.
Newcrest Managing Director and CEO, Sandeep Biswas, commented: “We are delighted to add this asset into the Newcrest portfolio. Following due diligence, we believe we can bring our unique technical capabilities to unlock the full value potential of this orebody in one of the premier gold districts in the world. We have identified a clear pathway to potentially turn this orebody into a Tier 1 operation.
“The geology of Red Chris is similar to our Cadia orebodies in Australia and we will be applying our considerable experience in exploration, open pit mining, caving and processing to maximise the value of Red Chris and the opportunities in the surrounding region. We look at this opportunity in the same way as we do with Cadia, where we have proven we can create significant value from deep underground porphyry orebodies. We are pleased to be establishing a joint venture with Imperial and look forward to building a collaborative relationship with the Tahltan Nation and the Government of British Columbia.”
Newcrest has a two-stage plan to deliver value from the acquisition. Stage 1 - Apply Newcrest’s Edge transformation approach to existing Red Chris open pit and processing plant. Newcrest believes it can add significant value to Red Chris by applying the same Edge mindset and approach that has led to significant operating improvements across all Newcrest operations over the last five years.
Examples of where successful changes have been implemented to safely accelerate cash maximisation include process plant optimisation (debottlenecking, recovery uplifts, process control, improving concentrate quality), mine optimisation (improving orebody knowledge, grade control, fleet management system, mine planning) and supply chain cost reduction. As part of this stage, Newcrest will initiate an extensional drilling program.
Newcrest intends to optimise the current open pit mine plan and pursue initiatives to improve operational productivities and milling recoveries. The current open pit mine has an existing 11mtpa processing plant and associated infrastructure which allows ‘brownfield’ expansion options in the future.
Stage 2 – Apply Newcrest’s industry leading technology.