Newcrest will use its Cadia Hill open pit as a tailings storage dam, sacrificing remaining gold and copper reserves to help it return to full production after a dam collapse halted operations at its NSW underground mine complex.
Newcrest on Monday said using its old Cadia open pit as a long-term tailings storage facility is the best possible economic outcome despite the move meaning it will forego ore reserves of approximately 1.5 million ounces of gold and 130,000 tonnes of copper.
"Newcrest has determined that the value of Cadia Hill as a long-term tailings storage solution is much greater than the economic value of the remaining ore reserves and mineral resources of the Cadia Hill open pit," the company said in a statement.
Gold production for the six months to December 31 was already down eight per cent to 1.14 million ounces and that was before Newcrest was forced to stop production at its biggest and lowest-cost mine, after the breach in the wall of its northern tailings dam on March 9.
Newcrest said the permit to use the Cadia pit from the NSW Department of Planning and Environment will provide enough storage for the Cadia mine to progressively return to full production and operate for approximately 16 months.
The old mine will be ready in the first week of May, with an updated guidance for Cadia to be released in late April.
Newcrest said it still does not know the cause of the tailings dam breach and that a ban on using the northern tailings dam remains in place.
At 1333 AEST Newcrest shares were 54 cents, or 2.7 per cent, higher at $20.53.
