Newcrest flags output hit after Cadia mine suspended following dam breach
Summary: Newcrest Mining said it expects to downgrade annual production and cost targets after suspending its Cadia gold operation in eastern Australia because part of a tailings dam wall collapsed.....
Newcrest (NCM) said there was “a limited breakthrough of tailings material,” a slurry of finely ground rock, water and some benign processing reagents, when the northern tailings dam embankment burst at Cadia on Friday. The spillover was contained in the southern tailings dam, said the miner, which added there were no injuries and that it hasn’t seen any environmental damage as a result of the collapse.
Newcrest by Saturday had fully suspended all mining and processing at the operation, 250 kilometres west of Sydney.
“Whilst it is too early in the evaluation and recovery process for Newcrest to provide an indication of the extent to which fiscal-year 2018 production, capital and cost guidance will be impacted, this event will adversely impact guidance for fiscal-year 2018 given the contribution of Cadia to the overall outcomes of Newcrest,” said the company.
Cadia is one of Newcrest’s biggest mines, accounting for roughly one quarter of group gold production last fiscal year. Newcrest had been projecting group output of 2.4 million-2.7 million troy ounces of gold in the year through June, 2018.
It said cracks had been noticed in the dam wall during a routine inspection earlier Friday and that it had stopped depositing tailings into both dams as a precaution. “No further movement of the wall has been detected since Friday night,” Newcrest said.
The miner said it is looking at possible repair options for the collapsed section of wall, and that it’s also reviewing alternative tailings locations including the old Cadia Hill open pit.
Newcrest also said it is working closely with regulators on a review of the incident.
By 11.20am (AEDT), shares in Newcrest has slid 4.72 per cent to $20.57 against the backdrop of broader market gains of about 1 per cent.