PERTH (miningweekly.com) – The CEO and MD of gold miner Newcrest Mining, Sandeep Biswas, on Friday outlined plans to bring the errant Lihir operation, in Papua New Guinea, under control.
“I’ve spent a lot of time understanding the challenges of Lihir and have come to the conclusion that the first phase of improvement must be driven by a ‘back to basics’ approach to operations, maintenance and planning,” Biswas told shareholders at the company’s annual general meeting.
Production at the Lihir mine has been on a steady decline for several quarters now. In the September 2014 quarter, the mine produced 153 826 oz of gold, compared with the 174 601 oz in the June quarter. In the September 2013 quarter, Lihir’s output was 194 713 oz.
Biswas noted that addressing the performance of the processing plant was currently the biggest lever in improving free cash flow from Lihir, while the key drivers of improvement were plant uptime, intensity and recovery.
He noted that Newcrest would increase plant feed from the 10-million tonnes achieved in 2014, to 12-million tonnes a year, and this would be achieved through a combination of increased uptime and intensity.
“This should provide the base for a sustainable increase in production,” Biswas told shareholders.
In order to engage the recovery drive, Newcrest would optimise the ore feed blend from its multiple ore sources, as well as the plant operating parameters to maximise gold recovery.
“Importantly, these three levers do not require significant capital. They just require doing the basics well, experienced leadership and a committed workforce,” Biswas said.
Another key lever was grade, and Biswas noted that while Newcrest was currently feeding the plant with ore from the Minifie pit and some of the sizeable ore stockpiles that overlaid both the Minifie and Kapit orebodies, the company was undertaking a review of its future ore sources to assess the optimum sequence of access.
“Our blended ore strategy allows us to manage material movement, grade and consistency of ore fed to the processing plant to maximise cash flow. This strategy is well suited to Lihir given the multiple ore sources available from the openpit, the previously stockpiled ore and the flexibility of the processing plant.”
Newcrest would also assess the Kapit deposit to review the capital and operating costs in the original design concept with the view to developing the project at a lower cost. The company would also review other options for Kapit that might allow for a quicker and lower cost, staged entry into the orebody, allowing it to form part of the blended ore strategy.
“Lihir is fixable, but it will take time to get it right,” Biswas reported.