News: NCM - Australia's Newcrest greenlights initial expansion phase of Cadia gold mine

Oct 15 (Reuters) - Australia's biggest gold producer Newcrest Mining Ltd (NCM) on Tuesday said its board approved the first stage of its project to expand the key Cadia mine near New South Wales.

The first stage of expansion was approved for execution with an estimated capital cost of $685 million, Newcrest said in statement, adding that this phase will include initial works to increase plant capacity to 33 metric tonnes per annum (mtpa).

The second stage, still under feasibility study, will comprise further plant expansion to 35 mtpa and recovery improvements targeting completion in late fiscal 2022. The expected net present value from both stages is $1.17 billion.

The expansion plan improves on 2018's pre-feasibility study and is expected to add 1.8 million ounces of gold output and 67,000 tonnes of copper, with an estimated $800 million increase in projected free cash flow generation by Cadia over its life.

"The capital investment has an estimated 21.5% rate of return and ensures Cadia remains a Tier One asset for many years to come," Newcrest Chief Executive Officer Sandeep Biswas said.

($1 = 1.4760 Australian dollars)