Miner Newcrest has reported a sharp fall in gold and copper output for the three months to September but has not only said it will meet full-year guidance but has lifted that forecast.
Newcrest is the country’s largest gold producer (and a significant producer of copper) revealed in its first-quarter report that gold output for the three months ended September 30 fell 6.7% to 511,636 ounces (from the Same quarter in 2018 and down 23% from the June quarter), hurt by lower grades and a maintenance shutdown at its Cadia mine in NSW that ran overtime.
Copper production dipped 14% to 25,000 tonnes from the June quarter.
Newcrest raised gold production outlook for fiscal 2020 to between 2.38 million ounces (moz) and 2.54 moz, up from its previous forecast of 2.35 moz to 2.50 moz, to reflect production from the miner’s recently acquired Red Chris mine in Canada.
Newcrest said it conducted two maintenance shutdowns at the Cadia processing plant in central-western NSW, resulting in a 25% reduction in tonnes treated compared to the June quarter.
Newcrest also undertook routine inspections of the semi-autogenous grinding (SAG) mill motor at Cadia, which extended the downtime for the mill during the quarter.
The company’s ore production at the Telfer mine in Western Australia was also hit by unplanned equipment problems and Newcrest says production will be at the bottom end of its guidance range of 400,000 to 460,000 ounces.
At its Lihir operation in PNG, planned and unplanned shutdowns in the September quarter saw lower mill throughput and lower head grade.
Newcrest managing director and chief executive officer Sandeep Biswas remains confident the company will still make its higher production guidance of 2,375,000 to 2,535,000 ounces of gold and 139,000 to 145,000 tonnes of copper in the 2020 financial year.
“Though (planned maintenance shutdowns) impacted production and all-in sustaining cost per ounce this quarter, we expect improved performance in the coming quarters and our full-year guidance remains unchanged,” Biswas said.
But at the same time doubt has emerged about the long-promised new gold mine in Papua New Guinea with the timing of the start to the project again slipping.
Newcrest said work on starting the proposed Wafi-Golpu project was again delayed over the issue of how much gold Papua New Guinea wants to hang on to.
PNG’s commerce minister said last month that the country wants to keep 40% of gold produced from Wafi-Golpu, a potential hurdle to an agreement with Newcrest and its partner, the South Africa-based Harmony Gold.
“It is difficult to estimate the duration of this delay and the market will be advised when discussions recommence,” Newcrest told the ASX yesterday.
