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Newcrest Mining’s Cadia mine.

The board of Newcrest Mining has approved stage two of the Cadia expansion project in New South Wales, which is expected to increase plant capacity and reduce production costs.

The Cadia gold mine is one of Australia’s largest gold mines and comprises the Cadia East underground panel cave mine, and the Ridgeway underground mine which is under care and maintenance.

Stage two upgrades include a second coarse ore flotation circuit and equipment upgrades in concentrator two.

Newcrest expects the upgrades to increase plant capacity from 33 million tonnes a year to 35 million tonnes a year, and improve life of mine gold and copper recoveries by 3.5 per cent and 2.7 per cent respectively.

Newcrest managing director and chief executive Sandeep Biswas said the stage two upgrades, which were estimated to cost $US175 million ($244 million), will enhance the project’s market position.

“It is an exciting time at Newcrest as we advance our growth pipeline with both of these projects adding value to our existing large scale, long life operations while we pursue the development of Red Chris and Havieron and exploration opportunities globally,” he said.

“Stage (two) of the Cadia expansion project increases plant capacity to 35 (million tonnes a year), enabling an increase in gold and copper recoveries, an increase in production and a reduction in unit costs.

“Cadia is one of the largest, lowest cost, long life gold mines in the world due to the application of Newcrest’s industry leading block caving technology, and this investment helps Cadia maintain this industry leading position.”

Cadia’s all in sustaining costs will reduce by $US22 per ounce with stage two completion expected in the 2022 fiscal year.

Newcrest also announced that its board had approved the Lihir front end recovery project in Papua New Guinea.

The project includes the installation of flash flotation and additional cyclone capacity, along with cyclone efficiency upgrades to improve grinding classification.

As a result, life of mine gold recoveries at Lihir will increase by 1.2 per cent, with incremental life of mine gold production rising by 244,000 ounces.