Newcrest rejects claims over $3.3 billion project
Australia's number one gold company Newcrest Mining (ASX:NCM) on Monday rejected accusations of licensing breaches by a private exploration company seeking to scupper the gold mining giant's $2 billion Cadia East gold-copper project.
Gold and Copper Resources (GCR) filed a claim with the New South Wales Land and Environment Court on Thursday – the private company has brought four other claims in the past two years – asserting that some of the Cadia East project's infrastructure is situated on land for which Newcrest lacks mining leases and "a breach of confidence in respect of GCR exploration technology."
Newcrest said in a statement it believes "none of the claims has merit" and considers that the matters are "not material, and do not adversely impact either day-to-day operations at Cadia or the commencement of commercial production at the Cadia East project."
"Newcrest's Cadia Valley assets have been in operation for 15 years. Over the past 5 years Newcrest has reinvested over $500 million into the Ridgeway Deeps mine, in excess of $2 billion into the Cadia East mine operation and plant expansion (on schedule to start commercial production in December 2012), and plans to invest a further $1.3 billion in Cadia East over the next 5 years. Newcrest has approximately 2700 employees and contractors currently working at Cadia Valley," the company stated.
Annual production at Cadia is pegged at 800,000 ounces of gold and 90,000 tonnes of copper post-expansion.
Newcrest's shares ended barely changed in Sydney on Monday giving it a market cap of $22 billion. A rising gold price and good news from its Papua New Guinea projects has seen the counter add more than 25% over the September quarter.
GCR is one of the largest private exploration companies in NSW with rights to 2,200 square kilometres of territory. The company also enjoys formidable backing and business ties. Key shareholders include Jeremy Barlow, the former director of Arrow Energy, former Rio Tinto boss Leigh Clifford and venture capitalist Mark Carnegie.