Newcrest Mining (ASX, TSX, PNGX: NCM) announced Wednesday that the company has begun construction of the box cut for the exploration decline at its Red Chris mine in British Columbia, following receipt of the necessary
“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,” Newcrest managing director and CEO Sandeep Biswas stated in a press release.
“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 added.
In addition, the board of directors has approved a C$135 million funding for the construction of the exploration decline and associated infrastructure and permitting costs, subject to further regulatory approvals. This funding is in addition to the previously approved amounts of C$12 million for the construction of the box cut.
Newcrest acquired its 70% interest and became the operator of Red Chris joint venture in August 2019. The remaining 30% interest is held by Imperial Metals Corp.
The existing Red Chris mine was built and is being operated as an open pit. Newcrest’s pre-acquisition due diligence and subsequent concept study identified the potential for Red Chris to have an operating block cave from FY 2027 to become a Tier 1 operating asset.
Meanwhile, Newcrest also announced that it posted an underlying profit of $553 million for the second half of 2020, nearly double the $280 million recorded in the previous year.
The miner benefitted from higher realized gold prices on the back of increased safe-haven demand.