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March 9, 2022, 4:13 a.m. EST

Newcrest Announces Completion of the Acquisition of Pretium Resources

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  • Addition of a Tier 1, large scale, long life, low cost mine in a world class jurisdiction to Newcrest's unrivalled asset portfolio

  • Immediate increase in Newcrest's gold production and cash flows

  • Three phase transformation program initiated to optimise operations, realise full uplift potential and grow the Mineral Resource

  • Targeted mill throughput capacity upside in the range of 4,500 to 5,000 tonnes per day [[1]]

  • Aggressive drilling program planned to explore significant near mine and district-scale opportunities

  • Expected synergy benefits of ~C$15 to $20 million (US$12 to $16 million) per annum [[2]]

Melbourne, Australia--(Newsfile Corp. - March 9, 2022) - Newcrest Mining Limited (asx:NCM) /zigman2/quotes/200289815/delayed CA:NCM +3.64% (pngx:NCM) (Newcrest) is pleased to announce that it has completed the acquisition of Pretium Resources Inc.  (Pretivm) (the Transaction).

Pretivm owns the Brucejack mine in the highly prospective Golden Triangle region of British Columbia, Canada. Brucejack began commercial production in July 2017 and is one of the highest-grade operating gold mines in the world.

Newcrest's Managing Director and Chief Executive Officer, Sandeep Biswas, said "We are delighted to reach this major milestone and I welcome our new shareholders, employees, First Nations partners, local communities and business partners resulting from the Transaction. We are very excited to add Brucejack to Newcrest's portfolio, which now includes exposure to six Tier 1 assets. Through this acquisition and the continued development of our outstanding organic growth pipeline, Newcrest's base case gold production is expected to remain strong until at least 2030, and we have a range of further upside opportunities being progressed across the portfolio. This production profile is also expected to drive a major reduction in All-In Sustaining Costs, which makes Newcrest unique in the industry."

"We have a proud history and depth of experience in operating epithermal gold mines over many years. We will pursue efficiencies to simplify mining and increase productivity through a holistic view of the Brucejack operations and orebody."

"In parallel, our exploration team will be progressing an extensive drilling campaign across the Brucejack mineral claims which make up one of the largest epithermal footprints we have ever seen. The land package is largely unexplored and very early in its life, and we see significant upside potential beyond Valley of the Kings and Golden Marmot."

"The combined team is driven and has the capability to deliver our three phase transformation program which we believe will generate significant long-term value for our shareholders," said Mr Biswas.

Transformation plan for Brucejack

Newcrest has identified a range of opportunities to maximise the long-term potential and value of the Brucejack mine and associated district-scale potential. Building on the strong foundations set by Pretivm and the delivery of a three phase transformation program, Newcrest has identified a range of key initiatives that will leverage its experience and expertise to deliver long term value for its stakeholders.



To view an enhanced version of this graphic, please visit:
https://orders.newsfilecorp.com/files/7614/116099_83f769d83400b981_001full.jpg

Phase 1: Optimise

Newcrest will look to continue the safety improvement journey at Brucejack by embedding the Newcrest Safety Transformation Plan centred around the NewSafe safety program and Critical Control Management (CCM) program for high risk tasks. This proven program will provide a framework for the next evolution of safety at Brucejack, with a focus on eliminating life changing injuries and fatalities.

Phase 1 is expected to deliver efficiency gains through adoption of the latest technologies, including:

  • Improved mine equipment tracking and monitoring via underground mine dispatch and communication capabilities;

  • progressive adoption of semi-autonomous and autonomous remote capabilities;

  • asset management and asset health monitoring capabilities; and

  • assessment of ore sorting opportunity for incremental grade uplift.

The application of Newcrest's EDGE mindset to critical processes will further optimise the operation. For example, Newcrest will look to incorporate stope ore recovery and dilution improvement controls utilising a dedicated drill and blast improvement plan, which is a similar process to that which was successfully applied at Gosowong. Any improvements in the drill and blast process will optimise grade delivery to the mill and reduce costs, with further work to quantify the potential benefit anticipated to be completed in calendar year 2022 [[3]] .

Newcrest expects to deliver synergy benefits of approximately C$15 to $20 million (US$12 to $16 million) per annum [2] through leveraging supply, logistics, travel and procurement opportunities with Newcrest's majority-owned and operated Red Chris mine, approximately 140km away.

Phase 2: Unlock

In the next phase, Newcrest will focus on realising the full 'uplift' potential of Brucejack by increasing mill throughput capacity and improving mining performance. While Brucejack is a high-quality asset with a well-developed mine, there are a number of opportunities identified to enhance operational performance.

Newcrest is targeting an increase in the process plant capacity from the current permitted processing rate of 3,800 tonnes per day to between 4,500 to 5,000 tonnes per day [1] . This uplift will be subject to study outcomes and the required permitting and approvals. Current indications are that this is expected to be a capital efficient process, with much of the plant expansion related to debottlenecking opportunities across current constraints.

Another key component of Phase 2 is to deliver increased mine capacity. Newcrest anticipates mining rates will increase with an optimised mine plan including updated mining inventories from the Valley of the Kings. The current North Block resource expansion drilling results will inform future Mineral Resources and Ore Reserves estimates to potentially unlock further value with additional ore feed to the mill.

Phase 3: Grow

There is significant near mine and extensional exploration upside potential at Brucejack. Phase 3 will focus on leveraging Newcrest's expertise to unlock the full potential of the district in an effort to deliver Mineral Resource and Ore Reserve growth. An aggressive drilling program is planned for the next several years with approximately 200,000 metres to be completed in calendar year 2022 [3] .

As highlighted in the figure below, there is significant resource expansion potential in the Valley of the Kings system and surrounding areas including North Block, 1080 Level, Bridge Zone, West Zone and Gossan Hill. All targets are currently supported by high grade drill intercepts.



To view an enhanced version of this graphic, please visit:
https://orders.newsfilecorp.com/files/7614/116099_83f769d83400b981_002full.jpg

The region contains several encouraging district-scale drilling targets. Recent drilling has intersected high-grade gold mineralisation at Golden Marmot which is similar to the Brucejack-style mineralisation. Newcrest plans to complete follow-up drilling to define the extent of Golden Marmot and also continue the search for additional higher-grade centres across the Brucejack mineral claims.

The current Brucejack Mineral Resources and Mineral Reserves are qualifying foreign estimates (NI 43-101). Newcrest will be undertaking a verification program of work in the coming months. In addition, Newcrest will be undertaking an extensive drilling program to improve grade estimation in Brucejack and to progress the resource development of key resource growth targets defined above. Results of the exploration drilling programs targeting resource growth will be released as part of Newcrest's Quarterly Exploration Reports.

Guidance update [3]

Brucejack is expected to produce between 95 and 115 thousand ounces of gold during Newcrest's ownership in FY22. Brucejack's All-In Sustaining Cost, capital and exploration spend for FY22 is expected to be provided with Newcrest's March 2022 quarterly report, to be released on 28 April 2022.

Key milestones [1] [,] [3]

An indicative summary of key expected milestones for Brucejack is summarised below:

Key Milestones Date
FY22 guidance (All-In Sustaining Cost, capital and exploration spend for FY22) 28 April 2022
Exploration drilling results update 28 April 2022
FY23 guidance 19 August 2022
Update on uplift road map 19 August 2022

 

Indicative base case gold production profile to 2030 inclusive of Brucejack [[2]] [,] [[4]] [,] [[5]] [,] [[6]] [,] [[7]]

Including Brucejack and Newcrest's 32% attributable share of production from Fruta del Norte, Newcrest anticipates delivering in excess of 2Moz gold production per annum until at least 2030. This profile represents a base case projection only and does not consider further extensional, near mine and regional exploration opportunities, or mine to mill optimisation which Newcrest expects to deliver at Brucejack.

Newcrest also anticipates further upside from its organic growth portfolio, including the potential for further Telfer open pit and underground extensions which could increase production in FY24 and beyond, as well as further resource growth at Red Chris and Havieron [1] .

/zigman2/quotes/200289815/delayed
CA : Canada: Toronto
$ 19.06
+0.67 +3.64%
Volume: 216,112
Dec. 1, 2022 3:56p
P/E Ratio
14.58
Dividend Yield
0.00%
Market Cap
$16.03 billion
Rev. per Employee
N/A
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