Newcrest Mining (NCM) said yesterday that gold production fell 12% in its fiscal first quarter as it mined lower-grade ore at some operations and tackled disruptions at its massive Lihir mine in Papua New Guinea.
The company reported gold output of 561,731 troy ounces for the three months through September, compared to 636,736 ounces in the previous quarter and 586,573 ounces in the previous corresponding.
However the company says its on track to meet 2014-15 guidance of 2.4 million ounces of gold and 75,000 to 85,000 tonnes of copper.
But Newcrest said it had anticipated the slide in production as it produced ore with a lower gold content at its Gosowong, Cadia Valley and the troubled Lihir mines.
At Lihir, it faced both planned and unexpected disruptions to its processing facilities that helped drive output from that site down 12% on-quarter, Newcrest said.
Australia’s largest-listed gold miner has been working to improve the reliability of its gold-mining operations after several years marred by production downgrades and billions of dollars of asset write-downs at a time when the gold price has been declining. It owns mines in Australia, Papua New Guinea, Indonesia and Ivory Coast, with the biggest headache at Lihir in PNG and in the Ivory Coast.
Newcrest said it had reduced costs by 5% to $A864 (US$757) an ounce compared with the previous three months. Newcrest said it received an average $A1,393 an ounce for the precious metal.
Copper production totalled 24,831 tonnes in the September quarter, up strongly from the 19,632 tonnes in the previous corresponding quarter. Silver production was 555,731 ounces, up from the 532,315 ounces in the September quarter of 2013, but below 665,604 ounces in the June quarter.
NCM YTD – Newcrest reaffirms guidance
Newcrest Managing Director and Chief Executive Officer Sandeep Biswas, said in yesterday’s statement that “It is pleasing to see Cadia East Panel Cave 2 achieving commercial production so early in the financial year, which positions Cadia East well to continue to increase its contribution to the Company. The focus at Lihir remains on progressive implementation of improvement programs to lift production, cost and cash performance.”
"Mine production at Cadia East continued to ramp up in the September 2014 quarter to 3.2Mt, 39% higher than the previous quarter. Cadia East Panel Cave 2 commenced commercial production from 1 October 2014. Overall gold production from Cadia Valley was broadly unchanged from the June 2014 quarter, with the increased ore volumes from both Cadia East and Ridgeway offsetting the impact of lower grade and recoveries,” the company said yesterday.
The report was a preliminary estimate and released because they held an open day for investors yesterday. The final report is due on October 21.
Newcrest shares fell 0.4% to $10 yesterday.
