Takeover target Newcrest Mining reported a reasonable return for the three months to March – while gold production dipped by around half a per cent from the previous quarter, it was 6% better than the performance of a year earlier.
Newcrest revealed in its March 2023 quarterly yesterday that gold production totalled 509,637 ounces for the three months, down from 512,130 ounces in the three months to December, but well above the 479,839 ounces in the March 2022 quarter.
Copper output in the latest quarter at 31,148 tonnes was down nearly 10% from the 34,564 tonnes in the December 2022 quarter but on par with the 31,035 tonnes produced in the first quarter of last year.
The culprit for the lacklustre performance was lower production at its Cadia project in central western NSW following an unscheduled mechanical breakdown.
The company said maintenance activities at Cadia kept a lid on output from the mine, resulting in lower mill throughput following an unscheduled mechanical breakdown of the concentrate filter presses at the Blayney dewatering facility.
Without that hitch, gold and copper production would have gone close to the December quarter’s effort. Analysts at Barrenjoey, for example, had estimated gold production of 568,000 ounces for the quarter which was on the high side.
As important as the quarterly data is, interest in Newcrest is based on a best and final takeover offer from Newmont Corp that valued the Australian miner at $A29.4 billion.
Newcrest has given Newmont access to its books following the sweetened all-share bid that has received some support from shareholders.
Newmont is due to release its quarterly figures overnight Thursday and analysts say that its gold output figures will be down which will underline the importance of Newcrest for the US giant’s future ambitions.
For the time being though, Newcrest is ambling along and expects to do better this quarter.
“We expect gold and copper production to increase in the June quarter and remain on track to deliver a strong FY23 result,” Newcrest’s interim CEO Sherry Duhe said in the release on Thursday.
Newcrest said it remains on track to deliver its full year group production guidance of 2.1 to 2.4 million ounces of gold. Production for the 9 months to March 31 totalled 1.548 million ounces, well ahead of the 9-month figure in the 2021-22 financial year of 1.319 million ounces.
Cumulative copper output so far this financial year was 98,171 tonnes, against 81,979 tonnes for the same period in 2021-22. Copper guidance remains at 135,000 to 155,000 tonnes. Cumulative silver output is also well ahead of last year – 978,463 ounces against 568,132 ounces (no guidance for silver).
The company’s Brucejack operation in Western Canada, which returned to regular operations after a three-week suspension during a safety review in the previous quarter, is now expected to have a lower gold output about 300 thousand ounces for the full year, compared with the earlier guidance of about 320-370,000 of gold.
Newcrest’s All in Sustaining Cost of $US1,012/oz for the quarter was 7% lower than the prior period, driven by a higher copper realised price, lower production stripping expenditure at Lihir and Telfer and lower sustaining capital expenditure at Red Chris, Cadia and Brucejack. In addition, gold production was higher at Brucejack, Lihir and Fruta del Norte, driving an increase in gold sales volumes for the Group.
This was partly offset by the impact of a stronger Australian dollar against the US dollar on operating costs.
Newcrest shares eased 2% to $28.51.
