PERTH (miningweekly.com) – Gold miner Newcrest Mining has just less than 30 business days to decide on acquiring an additional 5% interest in the Havieron project, in Western Australia, for $60-million.

In its quarterly report released this week, Newcrest, which already holds a 70% interest in the project, told shareholders that work was ongoing to progress the feasibility study at Havieron, and that the company was reviewing the impact of inflationary pressures on future capital expenditure and operating costs, with value engineering and other cost mitigation strategies already under way.

A previously completed prefeasibility study estimated that the project would require a capital investment of A$529-million and could produce 160 000 oz/y of gold and 6 900 t/y of copper, over an initial mine life of nine years.

The PFS estimated an internal rate of return of 16% and a net present value of A$304-million, with a pay-back period of four years from first commercial production.

Havieron is located 45 km east of the existing Telfer operations, in Western Australia, and Newcrest has adopted a staged approach to the evaluation and development of Havieron aiming to deliver early production and cash flows from the project while work continues to define potential resource additions and assess growth targets.

During the quarter ended June, Newcrest continued with the development of the exploration decline at Havieron, however, the company encountered poor ground conditions.

Development advance rates accelerated compared to the prior period, but continue to be significantly impacted by unfavourable geotechnical and hydrogeological conditions requiring extensive local and surface dewatering, pre-excavation ground treatment and substantial ground support installation, Newcrest said.

Ground conditions have recently improved in line with the geotechnical modelling forecast, and a steady improvement in development rates is expected during the September 2022 quarter.

Changes in the design of the decline have been implemented bringing the first downward spiral to the current chainage, with better ground conditions being realised.

The schedule for first ore is currently under review and will be updated with the release of the feasibility study, which remains on track for completion during the December 2022 quarter.