Newcrest Mining Limited (ASX: NCM) is proceeding with the West Dome Stage 8 cutback at its Telfer operation, with the board a total investment of A$214 million, inclusive of mine operating costs, and A$73 million of capitalised production stripping.
Newcrest said the cutback would underpin continuity of operations at Telfer, with the mine now expected to extend operations into early FY25 .
The cutback is located adjacent to the current West Dome Stage 2 and West Dome Stage 5 pits, and first ore production is expected in the December 2022 quarter.
Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas, said: “We are delighted to further extend the life of our Telfer operation, highlighting our ability to maximise the full potential of our assets through our strong technical expertise. Telfer is strategically positioned in the highly prospective Paterson Province and we are continuing to progress several potential options to expand the resource base in the open pits and underground to unlock additional value.”
Telfer Hedging
As at 30 June 2022 the total outstanding volume of gold hedged for Telfer was 137,919 oz and the average price for gold was AU$1,942.
Newcrest said Telfer is a large scale, low grade mine and its profitability and cash flow are both very sensitive to the realised Australian Dollar gold price. Following the approval of West Dome Stage 8 cutback, Newcrest has completed further hedging of a portion of Telfer’s future planned production for FY23 and FY24 to secure margins and support investment in cutbacks and mine development.
A further 432,479 ounces of planned gold sales have been hedged in the form of Australian dollar gold zero cost collars. The total volume and prices of new hedges implemented for Telfer are as follows:
Financial Year Ending Gold Ounces Hedged Floor Price $A/oz Cap Price $A/oz
30 June 2023 123,723 $2,450 $2,773
30 June 2024 308,756 $2,500 $2,886
Telfer guidance for FY23 remains unchanged, including gold production (355-405koz), sustaining production stripping (US$55-75 million) and sustaining capital expenditure (US$35-55 million).
