The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Newcrest buyout aligns with gold major's key strategic drivers Mining Explorers 2023 - January 18, 2024
Ultrahigh-grade gold in core from a hole drilled at Newcrest Mining's Brucejack Mine in Northern British Columbia.
An aerial view of Newcrest Mining's high-grade Brucejack gold mine in British Columbia's Golden Triangle.
With the roughly $19 billion buyout of Newcrest Mining Ltd., Newmont Corp. has added two operating mines to its already impressive portfolio of gold and copper assets in the Golden Triangle region of Northern British Columbia.
"By combining the two existing Newcrest operations, Brucejack and Red Chris, with Newmont's Saddle North and Galore Creek projects, a Tier 1 district in the highly prospective Golden Triangle region of British Columbia will be created – a district in which Newmont will be operating for decades to come," Newmont President and CEO Tom Palmer said upon entering a definitive agreement to acquire Newcrest.
Adding to the gold and copper mining center it is building in Northern BC, Newmont is advancing toward production at the 2.3-million-ounce Coffee Gold Mine project in the Yukon, which lies about 475 miles northwest of the company's new Red Chris copper-gold mine.
The synergies being created through the consolidation of assets in Northern BC and the Yukon is a reflection of what the merger means for Newmont moving forward.
With the addition of Newcrest's portfolio, Newmont now owns or co-owns 19 global operations capable of contributing roughly 8 million oz of gold and 330 million pounds of copper to the company each year. This includes seven operations in North America, five in Latin America and Caribbean, four in Australia, two in Africa, and one in Papua New Guinea.
Palmer said the "transitional acquisition of Newcrest marks a historic milestone in our company and the industry," Palmer said.
This historic acquisition aligns with the world's largest gold mining company's key strategic drivers:
• Build, maintain, and strengthen its responsible gold leadership position through its culture, performance, and relationships.
• Identify industry consolidation opportunities that play to Newmont's strengths and advantages, while also adding value for shareholders.
• Find opportunities to diversify Newmont's commodity mix with an increasing future exposure to the world's key transition metal – copper.
"This transaction also increases Newmont's annual copper production – a metal vital for the new energy economy – and adds nearly 50 billion pounds of copper reserves and resources from Newcrest to our robust and balanced portfolio," said Palmer. "We intend to quickly realize these opportunities to create superior value for our shareholders, workforce, host communities and governments."
This integration includes the merging of Newcrest's Red Chris and Brucejack, the only large-scale mines currently operating in British Columbia's Golden Triangle, with Newmont's advanced-staged Tatogga gold-silver-copper exploration property and 50% interest in the world-class Galore Creek copper-gold mine project in this prolific copper and gold district in Northern BC.
Newmont's Tier 1 copper-gold production center in Northern BC is now centered at Red Chris, a large porphyry copper-gold mine that Newcrest bought 70% interest in during 2019 and operated under a joint venture with Imperial Metals Corp.
Currently, Red Chris is being operated as an open pit mine that produces roughly 50 million lb of copper and 50,000 oz of gold per year.
The copper and gold output at this Northern BC operation is expected to significantly increase with the transition from open pit to block cave underground mining.
A prefeasibility study completed in 2021 details an underground block cave mining operation forecast to produce 4.9 million oz of gold and 1.5 million metric tons (3.3 billion lb) of copper from 406 million metric tons of ore over roughly 31 years of mining.
This PFS, however, does not include Newcrest's substantial underground resource expansions over the past two years, including the East Ridge expansion area.
As of mid-2023, the underground portion of Red Chris hosted 670 million metric tons of measured and indicated resources averaging 0.46 g/t (10 million oz) gold and 0.4% (2.7 million lb) copper; plus 180 million metric tons of inferred resource averaging 0.32 g/t (1.8 million oz) gold and 0.3% (540,000 lb) copper.
Even as Newmont was gaining all the international approvals needed to finalize the merger, Newcrest was adding to Red Chris' value.
This added value came largely from additional drilling at East Ridge, a Red Chris exploration target with 400 metric tons of potential resource averaging 0.49% (4.2 billion lb) copper and 0.42 g/t (5.4 million oz) gold on the low end, and up to 500 million metric tons averaging 0.47 % (6.1 billion lb) copper and 0.39 g/t (6.1 million oz) gold on the high end.
"At Red Chris, we are exploring potential extensions to the Red Chris porphyry corridor and it was pleasing to deliver some impressive drilling results beyond the East Ridge Exploration Target, highlighting the potential for a fifth porphyry centre," said Sherry Duhe, who was serving as interim CEO of Newcrest at the time of the merger.
Much of Newcrest's pre-merger 2023 drilling at Red Chris focused on establishing an inaugural resource for this large eastern expansion target that could change the block cave mining plan.
"We might get an entire macro block cave just out of East Ridge that could change the whole sequence of the block cave that we're developing," said Duhe.
The former Newcrest CEO said this will likely result in "decades of production" from block cave mining at Red Chris.
This potential is evidenced by RC876, a 2023 hole drilled about 200 meters east of East Ridge that cut 274 meters averaging 0.45% copper and 0.67 g/t gold from a depth of 998 meters, including 42 meters averaging 1.1% copper and 1.5 g/t gold.
And the strong copper-gold mineralization continues to the Far East Ridge discovery target, which has the potential to become the fifth zone of mineralization along the Red Chris porphyry corridor.
The addition of an operating interest in Red Chris is a good fit with the Golden Triangle assets already in Newmont's portfolio.
The largest and most advanced of these assets is Galore Creek, a world-class copper-gold project about 75 miles (120 kilometers) southwest of Red Chris that is being advanced by Galore Creek Mining Corp. – a JV owned equally by Newmont and Teck Resources Ltd.
A prefeasibility study completed in 2011 envisioned a mine at Galore Creek producing 6.2 billion lb of copper over an 18-year span, which would rank as the largest copper operation in Canada.
Crediting the value of the 4 million oz of gold and 65.8 million oz of silver forecast to be recovered over that mine life, Galore Creek also would be the lowest-cost copper producer in the country.
Galore Creek Mining Corp. – a JV owned equally by Newmont and Teck – is working on an updated prefeasibility study that is expected to be finalized around midyear.
In 2021, Newmont further strengthened its foothold in Northern BC with the US$311 million buyout of GT Gold Corp. and that company's advanced-staged Tatogga gold-silver-copper exploration project about 20 kilometers (12.5 miles) south of Red Chris.
At the time of Newmont's acquisition, the Saddle North deposit on the Tatogga property hosted 298 million metric tons of indicated resource averaging 0.28% (1.81 billion pounds) copper, 0.36 grams per metric ton (3.47 million ounces) gold, and 0.8 g/t (7.58 million oz) silver; plus 543 million metric tons of inferred resource averaging 0.25% (2.98 billion lb) copper, 0.31 g/t (5.46 million oz) gold, and 0.7 g/t (11.64 million oz) silver.
Saddle North's proximity to Red Chris opens the potential for synergies.
In addition to substantially elevating Newmont's copper status, the merger with Newcrest added the high-grade Brucejack gold mine in Northern BC to the company's portfolio.
Lying about 100 miles south of Red Chris, Brucejack is an underground mine that produced 286,000 oz of gold from ore averaging 6.8 g/t gold during Newcrest's fiscal year 2023, which ended on June 30.
At the time of the Newmont buyout, Newcrest was in the midst of implementing a three-phase strategy to unlock the full potential of Brucejack and the district-scale property this high-grade gold target is located on. This included expanding the mill throughput to 4,500 to 5,000 metric tons per day, a roughly 18% to 32% boost to the current 3,800 t/d processing rate.
Exploration by Newcrest has shown that high-grade gold mineralization extends well beyond the areas currently being mined at Brucejack.
"Growth drilling at Brucejack also delivered some exciting results, with the potential for further brownfields growth in several targets outside the Valley of the Kings current resource," said Duhe.
According to the latest calculation, the mine project hosts 19 million metric tons of measured and indicated resources averaging 13 g/t (8.2 million oz) gold.
As a testament to the bonanza grades for which Brucejack is famed, one hole drilled by Newcrest this year cut 38.5 meters averaging 49 g/t (1.58 oz/t) gold, including a one-meter subsection averaging 1,735 g/t (55.78 oz/t) gold.
Newmont is also advancing its 2.3-million-ounce Coffee Gold Mine project in the Yukon toward production.
Lying only about 475 miles northwest of the company's new Red Chris Mine, Coffee should also benefit from the synergies of the gold and copper mining center Newmont is building in Northern BC.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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