Tag Archives: Telfer

Macmahon moves into “cash flow positive” territory on Newcrest Telfer contract

Macmahon Holdings says it has come to an agreement with Newcrest Mining over the increased rates for its work at the Telfer gold-copper mine, in Western Australia, with the settlement leading to the contract becoming “cash flow positive” over its remaining term.

In June, Macmahon said it had commenced facilitated negotiations with Newcrest regarding pricing for changes to the mine plan and contract program at Telfer following a disagreement between the two parties.

Macmahon first commenced the Telfer life of mine contract in February 2016 and, “despite previously disclosed risks and difficulties associated with the project, achieved an operational turnaround in 2018”, it said. Without a rate increase being agreed by Newcrest or some other form of contract amendment, the mine plan and program changes had a negative impact on Macmahon’s costs and returns from the project, according to the contractor.

Telfer, some 450 km east-south-east of Port Hedland, comprises the Main Dome and West Dome open pits and the Telfer underground mine.

Macmahon CEO and Managing Director, Michael Finnegan, said: “The resolution of this dispute means we can now focus all of our attention on maximising the performance of our existing business, and capitalising on growth opportunities. We have several opportunities in our tender pipeline that we are pursuing from an exclusive or shortlisted position, and I am optimistic about the prospects of winning additional work in Australia and achieving further growth in our profitable operations offshore.”

Macmahon has reiterated its financial year 2020 guidance, with revenue expected to be between A$1.2-$1.3 billion ($829-898 million), and EBIT between A$80-$90 million.

Newcrest to apply ‘unique technical capabilities’ to copper-gold mine in BC, Canada

Newcrest Mining has entered into an agreement to acquire a 70% joint venture interest in Imperial Metals’ Red Chris copper-gold mine and surrounding tenements in British Columbia, Canada, for $806.5 million.

The deal will see Newcrest become Red Chris operator, in charge of deciding how to exploit the copper-gold porphyry open-pit mine.

Newcrest said the acquisition of Red Chris was “a measured entry” into North America and aligned with its stated strategic goals of building a global portfolio of Tier 1 orebodies where Newcrest can “deliver value through application of its unique operating capabilities”.

Red Chris comes with a mineral resource of 20 Moz of gold and 5.9 Mt of copper. The acquired property comprises 23,142 ha of land with 77 mineral tenures, five of which are mining leases, and sits within the traditional territory of the Tahltan Nation.

Newcrest Managing Director and CEO, Sandeep Biswas, said: “We are delighted to add this asset into the Newcrest portfolio. Following due diligence, we believe we can bring our unique technical capabilities to unlock the full value potential of this orebody in one of the premier gold districts in the world.

“We have identified a clear pathway to potentially turn this orebody into a Tier 1 operation. The geology of Red Chris is similar to our Cadia orebodies in Australia and we will be applying our considerable experience in exploration, open-pit mining, caving and processing to maximise the value of Red Chris and the opportunities in the surrounding region. We look at this opportunity in the same way as we do with Cadia, where we have proven we can create significant value from deep underground porphyry orebodies.”

Following the intensive due diligence process Biswas mentioned, Newcrest said it has a two-stage plan to deliver value from the acquisition:

Stage one will see the company apply its “Edge transformation approach” to the existing Red Chris open-pit mine and processing plant.

“Newcrest believes it can add significant value to Red Chris by applying the same Edge mind-set and approach that has led to significant operating improvements across all Newcrest operations over the last five years,” the company said.

Examples of where successful changes have been implemented to safely accelerate cash maximisation include process plant optimisation (debottlenecking, recovery uplifts, process control, improving concentrate quality), mine optimisation (improving orebody knowledge, grade control, fleet management system, mine planning) and supply chain cost reduction, according to Newcrest.

As part of this stage, Newcrest said it will initiate an extensional drilling programme.

“Newcrest intends to optimise the current open-pit mine plan and pursue initiatives to improve operational productivities and milling recoveries,” Newcrest said.

The current open-pit mine has an existing 11 Mt/y processing plant and associated infrastructure which allows ‘brownfield’ expansion options in the future, it added.

Stage 2 will see the company apply “industry leading technology”.

The company said: “Newcrest believes it can add significant shareholder value by applying technology to Red Chris that it has successfully applied at its other operations.”

Examples include block caving – “Newcrest believes the orebody has the potential to become a high margin bulk underground block cave. Newcrest will accelerate the necessary drilling and studies. Newcrest intends to conduct studies and review the ore reserve of the Red Chris operation to allow for reporting in accordance with JORC 2012 to take into account the potential transition to a future block cave operation.”

Coarse ore flotation could also be considered, the company said.

“Having demonstrated the recovery benefits of coarse ore flotation at Cadia, Newcrest will look to apply this technology to Red Chris,” Newcrest said.

And, then there is the application of one of the most popular technologies today: ore sensing and sorting, of which Newcrest said: “Positive results from trials underway at Telfer may lead to this technology being deployed at Red Chris.”

In terms of exploration, Newcrest said it would apply its experience in deep underground brownfield and greenfield exploration on the existing orebody and the broader land package to potential uncover more tonnes of copper and ounces of gold.

“Newcrest has identified opportunities to expand Red Chris’s mineral resources along strike and at depth in areas where there has been limited deep drilling to date. Historical shallow drilling indicates that there is also potential for further deep discoveries to be made in the larger tenement package.

“Newcrest will be targeting prospective regions beyond the current mine looking for further porphyry centres including small footprint, higher-grade gold-rich porphyry systems leveraging knowledge gained from Cadia which has similar geological features,” Newcrest said.

Red Chris, on the northern edge of the Skeena Mountains, commenced construction in 2012 and was completed in November 2014 for a total cost of C$661 million ($492 million). Commercial production commenced in July 2015 and, in the first nine month of 2018, the mine produced 20,320 t of copper and 29,569 oz of gold.

Newcrest rolling out GE Mining collision avoidance system at Lihir

Newcrest Mining’s Lihir gold operation in Papua New Guinea is, this month, due to go live with a full installation of GE Mining’s collision avoidance system (CAS).

This follows the CAS being fitted to equipment in the Telfer open-pit mine (Western Australia) and the gradual installation of units at Lihir. Since installation 12 months ago at Telfer, vehicle-to-vehicle collisions have reduced by 33%, Newcrest said in its recently-published sustainability report.

Proximity detection technology has been progressively rolled out across the company following incidents at its operations involving collisions or near misses between vehicles and other vehicles, vehicles and pedestrians, and vehicles and infrastructure.

Supported by Newcrest’s Executive Committee, a working group comprising representatives from Newcrest’s Group Safety, Technology & Innovation, Group Supply, and key stakeholders from each of its sites, developed a strategy to deploy the technology and identified solutions suitable for use in surface and underground mining, supplied by GE Mining and Newtrax Mineprox, respectively.

Newcrest started implementing GE Mining’s CAS at Lihir back in October last year. Around 1,500 employees were to be protected in addition to up to 250 vehicles.

In addition to the GE Mining contract, Telfer and Gosowong (Indonesia) underground operations have awarded tenders to Newtrax to deploy Mineprox on the mobile mining fleets. Contractor mobilisation at Telfer commenced in September 2018.

And there could be more contract awards on the way.

Newcrest said: “Given the anticipated automation and teleremote system programme of works at Cadia (New South Wales), the business has adjusted the criteria for its proximity detection solution and is expected to award a contract soon.”

Newcrest Mining after Telfer profitability jump with ore sorting technology

Newcrest Mining has confirmed ore sorting technology is one of several innovations it is currently investigating at group level to increase profitability and build on its substantial resource base.

The gold and copper miner’s technology and innovation team spoke at length at the company’s recent investor day about how new developments could enable the miner to produce more, lower costs, increase mine lives and improve safety across the group.

Next generation caving and hydrometallurgical processing, plus robotic mining, was part of the company’s five breakthrough strategies target by 2020, as was selective processing and what it called “sustainable mines”. The latter could see an increased focus on mine electrification and the use of renewable energy.

X-ray ore sorting tests carried out by TOMRA on the company’s Telfer operation in Western Australia had already shown impressive results, according to Executive General Manager of Gosowong and Telfer, Phil Stephenson.

Results to date indicated ore sorting could triple the grade and recover nearly 80% of the gold in the scats stream, according to Stephenson.

Over three months from August, 100,000 t of feed had been tested in a >160 t/h pebble sorting circuit at an average gold and copper feed grade of 0.18 g/t Au and 0.04% Cu. Some 79% of gold and 60% of copper had been recovered with a mass recovery to product of 26% and product grades of 0.56 g/t Au and 0.08% Cu, according to Newcrest.

Following these results, feasibility work had already commenced to design and install a full-scale plant at the scats stream expected to increase overall gold recovery at Telfer by 2-4%, Newcrest said.

And, Stephenson admitted the company is already weighing up the use of this technology on Telfer ore, with a sample from the West Dome open pit recently sent off for testing.

Stephenson didn’t want to say too much on the results, but indicated they had “exceeded our expectations”.

“If we can get this to work at the front end, we could go from two [processing] trains to one,” he told investors last week, adding this would take a big chunk out of the operation’s cost base.

The ore from the Telfer mining operations is processed by a large, dual train, communition circuit followed by flotation and cyanide circuits, which produce gold doré and a copper-gold concentrate. In the financial year ending June 30, 2016, Telfer produced 462,461 oz of gold and 18,940 t of copper.

Should the technology prove worthwhile at Telfer, expect Newcrest to look to apply it elsewhere across its operations.