Newcrest Mining Ltd. [NCM-TSX, ASX, PNGX] said it has commenced construction of the box cut for the exploration decline at its at its Red Chris copper-gold mine in northwestern British Columbia.
Imperial Metals Corp. [III-TSX] formed a joint venture with Australian partner Newcrest at Red Chris in March 2019, after agreeing to sell a 70% stake in the mine to Newcrest, which is now the operator. Imperial continues to hold a 30% stake in the joint venture, which aims to leverage the Australian company’s technical expertise in block caving operations.
The partnership aims to leverage the Australian company’s technical expertise in block caving operations and use that to mine the deep resource beneath the current open pits. Their aim is to exploit high grades in the deep East zone.
In keeping with that plan, Newcrest board has also approved $135 million of funding for the construction of the exploration decline and associated infrastructure and permitting costs. These works are expected to commence following the completion of the box-cut and are subject to further regulatory approvals which are in progress.
“The commencement of construction of the box cut is a significant milestone in the objective of having a block cave in operation at Red Chris in the next five to six years,” said Newcrest CEO Sandeep Biswas.
“Drilling activities have confirmed the presence of high grade-pods in the upper sections of the macroblocks and we are evaluating a number of options to mine these pods with the aim of generating cash flows prior to the completion of the block cave,” he said.
Red Chris produced 88.3 million pounds of copper and 73,787 ounces of gold in 2020. Copper and gold production increased 22.9% and 102.9% respectively, compared to 71.9 million pounds of copper and 36,371 ounces of gold in 2019.
Imperial said the increased production was driven mainly by higher and better gold recoveries.
However, production in Q4 2020 was lower than Q3 2020 as a result of lower mill throughput rates. These impacts were partially offset by higher gold grade and recovery.
Imperial shares eased 0.61% or $0.03 to $4.85 in light trading activity.
In its metal production guidance, Newcrest has said it expects Red Chris to produce 55.1 to 66.1 million pounds of copper and 45,000 to 55,000 ounces of gold in the period from July 1, 2020, to June 30, 2021.