Newmont’s Red Chris $4.8B block cave: capex, schedule and design notes for engineers
Reviewed by Joe Ashwell
First reported on MINING.com
30 Second Briefing
Newmont has priced the Red Chris block cave expansion in British Columbia at $4.2–$4.8 billion (including contingency and assuming a C$500 million federal contribution), targeting first underground production in 2033 and average output of 275,000–325,000 oz. gold and 65,000–85,000 tonnes copper from 2035–2040. Engineering is at least 60% complete, the cave has been reoriented to avoid major fault intersections, and initial development covers two mining blocks over 13 years with potential mine life up to 70 years. Development capex will rise about $500 million next year to $1.9 billion, with Red Chris accounting for roughly $250 million, funded from internal cash flow.
Technical Brief
- Newmont’s capex estimate of $4.2–$4.8 billion explicitly excludes open-pit to underground transition costs.
- Scope change from Newcrest’s 2021 PFS: three blocks over 31 years reduced to two blocks over 13 years.
- Initial underground phase is planned to deliver 3 Moz gold and >850,000 tonnes copper before any East Ridge add-ons.
- Federal C$500 million support is assumed but still subject to negotiation on terms and structure.
- B.C. permits were issued via a consent-based process with the Tahltan Nation, de-risking Indigenous approvals.
- Ottawa’s Major Projects Office is coordinating Red Chris approvals and financing, one of only five such projects.
- Red Chris will drive about $250 million of the ~$500 million year-on-year development capex increase, partly offset by lower Yanacocha reclamation spend.
Our Take
With Red Chris contributing only about 2% of Newmont’s estimated NAV but demanding up to US$4.8 billion in capex, the project effectively represents a long-dated copper-gold option that could be more about strategic copper exposure in British Columbia than near-term value accretion at the corporate level.
The step-up of roughly US$500 million in development spend next year, half of it tied to Red Chris, comes as Newmont is also managing large commitments at Tanami and Lihir; in our database, this kind of multi-asset capital load has often preceded portfolio pruning or JV rationalisations at other majors to protect balance sheets.
Commercial production at Red Chris only around 2033 means the mine will not help Newmont reach the 6-million-ounce annual gold level that BMO is watching for by 2027, so any move towards that target will have to come from debottlenecking or brownfield expansions at existing operations such as Boddington, Peñasquito or Cerro Negro rather than this Canadian build-out.
Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.
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