Newcrest Mining, Australia’s biggest gold producer, has joined the generally upbeat parade of Australian resource companies in reporting a solid performance for the three months to March.
Newcrest said in its report that it produced 512,424 ounces during the March period, beating market forecasts of just under 500,000 ounces.
That was down 4% on the prior period after planned shutdowns at its Cadia, NSW and Lihir, PNG sites.
A 6% increase in production at the Telfer mine in WA helped offset some of these shutdowns.
Newcrest managing director and CEO Sandeep Biswas was bullish on the quarter’s performance, saying in Thursday’s statement, “Our world-class Cadia asset set a new record during the March quarter, reporting its lowest ever quarterly All-In Sustaining Cost of negative $160 per ounce”.
Those Cadia numbers helped reduce the overall the company’s All In Sustaining Cost margin by 7% to $US854 an ounce.
Newcrest left its FY21 production guidance was unchanged.
It is targeting group production of 1,950,000 to 2,150,000 ounces of gold for the full year. Newcrest has now produced 1,550,990 ounces in the 9 months to the end of March (and just behind the 1.581 million ounces in the first 9 months of 2019-20), so another quarter like March will see the bottom end of that guidance topped with output above 2.05 million ounces.
Gold production was boosted by 33,000 ounces relating to Newcrest’s 32% equity interest in Lundin Gold Inc, the owner of the Fruta del Norte mine in Ecuador.
In April, 2020 Newcrest paid $US460 million for the gold prepay and stream facilities and an offtake agreement in the mine and associated financing facilities.
With gold prices stuck at just under $US1,800 an ounce, copper has been providing the cream for producers such as OZ Minerals, BHP, Rio Tinto and now Newcrest.
Group copper production totalled 35,034 during the quarter, up marginally from the December quarter.
The company is targeting full-year guidance of 135,000 to 155,000 tonnes of copper with 104,354 tonnes produced year to date (up from 97,424 tonnes for the same period of 2019-20.
On that basis it will struggle to make the bottom end of guidance if the March quarter performance is repeated in the three months to June.
But a small shortfall won’t matter with copper prices up nearly 30% and more in 2021 at above $US4.50 a pound on Comex in New York and at 9-year highs.
Silver production for the first 9 months of the June year totalled 673,274 ounces, down 8% from the 731,226 in the first 9 months of 2019-20.
Newcrest shares ended Thursday’s session up 2.1% at $27.09.
