Newcrest Mining, the country’s largest gold mining company, has joined the list of resource groups whose operations were hit by weather problems in the first quarter of 2007.
Operations at its huge Telfer mine in Western Australia were affected by heavy rain, while its Cadia mine in NSW is facing the prospect of having to cut production if good rains do not fall soon.
Already BHP Billiton, Rio, Santos, Woodsideand ERA have revealed that heavy rain or cyclones hurt production and exports in the first quarter.
In fact ERA is the worst affected withoutput and sales of uranium yellowcake from its Northern territory mine likely to be affected well into 2008.
Newcrest said that said gold output rose six per cent in the March quarter but that was due to the higher output levels at the Cadia and Cracow mines.
Gold production totalled 390,096 ounces in the three months to the end of March, compared to 367,790 ounces in the first quarter of calendar 2006 (or the third quarter of the June 30 financial year).
The company also warned that output from the Cadia mine may be affected if there’s not good rain through the central west of NSW by the end of May.
Coming in the same statement as the problems at Telfer, it was a touch ironic.
Newcrest said that the full-year output forecast for the Telfer mine in Western Australia has been cut to 620,000 ounces of gold after heavy rains cut production in March and April.
Telfer produced 142,499 ounces of gold in the quarter, down 12 per cent from the first quarter of 2006.
That knocked the shares lower, touching a day’s low of $23.38 before a small recovery and then a final fall to close 54c lower at $23.26..
In a presentation, CEO Ian Smith said the full-year group gold and copper output is forecast to fall about 2 per cent.
The new, lowered forecast for Telfer of 620,000 ounces of gold compares to the previous estimate in the range of 675,000 ounces to 700,000 ounces.
Newcrest said the mine’s copper output will fall to around 27,000 tonnes, compared to the previous forecast of between 31,000 tonnes to 33,000 tonnes.
“The impact of the heavy rainfall on March and April production and the subsequent requirement to process lower grade, super gene stockpiles continues to affect quarter four production,” Newcrest said.
“Telfer’s production guidance for the current financial year is reduced to approximately 620,000 ounces gold and approximately 27,000 tonnes copper.”
“Underground and open pit production were adversely affected by heavy rainfall associated with three cyclonic events during March.
“A total of 466mm of rain fell during the month, a record amount since the commencement of the Telfer project (Cyclone Fay in 2004, 360mm).
“The underground mine lost 15 full days of production as a consequence, 9 days in March and 6 days in April.
“Underground production resumed on 7 April. The open pit lost 6 full days of production in March and operated on a restricted mining basis, with no access to the bottom of the pit for 19 days in March and throughout April,” the company said in its third quarter update.
Gold production from Cadia jumped 54 per cent to 70,535 ounces of gold while copper was up some 25 per cent to 6,376 tonnes from the previous quarter.
Newcrest produced 21,628 tonnes of copper in the quarter, compared with 23,219 tonnes in the same three months of 2006. Gold output from the 70 per cent-owned Cracow mine rose 24 per cent.
