Cadia Recovery Lifts Newcrest Output
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Newcrest Mining posted a 17.2% increase in gold production in the December quarter, driven by increased production at four of its mines and especially the Cadia operation in western NSW which has been recovering from the damage caused by a small earthquake on Good Friday of last year.
That saw the keep its full-year guidance range unchanged at 2.4 to 2.7 million ounces of gold, with production from its Cadia East mine expected to ramp up in the second half of the financial year, along with fewer planned shutdowns.
Newcrest shares dropped 44 cents, or 1.8%, to $22.59, not because of the report but the sharp fall in world gold prices as bond yield jumped on Monday and yesterday.
Production at Cadia’s Panel Cave 1 (PC1) and Panel Cave 2 (PC2) (where the quake damage was most noticeable) continued to increase, with recoveries also improving by 81%.
Australia’s biggest gold miner produced 612,695 ounces of gold in the three months to December 31, compared to 522,917 ounces in the September quarter (http://www.newcrest.com.au/media/quarterly_reports/NCM_Quarterly_Report_Dec_2017.pdf).
Copper output rose nearly 34% from the preceding quarter to 22,321 tonnes.
Newcrest managing director Sandeep Biswas said all but one of the company's operations improved on the previous quarter.
“I am particularly pleased with Cadia’s strong quarter-on-quarter production increase and record low quarterly AISC (costs) per ounce,” Mr Biswas said.
Production at Bonikro in Africa and Telfer in Western Australia also increased, while the company’s Lihir mine in Papua New Guinea moderated due to a motor failure in one of its semi-autogenous grinding mills, and production decreased at the Gosowong mine in Indonesia.
The all-in sustaining cost for the December quarter fell $69 per ounce to $US829 per ounce, primarily due to the increased production from Cadia as it recovers momentum(The all in cost there in the quarter was a very low $US129 an ounce.).
Newcrest’s average gold price so far in 2017-18 is $US1,295 an ounce against $US1,277 for the same period in 2016-17. Newcrest said its estimated copper price for the year is $US2.40 a pound, but noted that prices were above that level.
And Evolution Mining said second-quarter gold output fell 14.4% following the sale of a mine in September, but it still expects full-year production to be in the upper range of existing guidance.
Gold production fell to 186,488 ounces in the December quarter, from 217,812 ounces a year earlier, in line with the company’s forecast of 180,000 to 190,000 ounces, the gold miner said in its quarterly report for the three months to December.
The miner said it expected its full-year production to be above the midpoint of its 750,000 to 805,000 ounces guidance range.
Cost of production, measured on an all-in sustaining (AISC) basis, was $A784 per ounce for the quarter, compared with $A900 spent per ounce a year ago.
Despite the gold price slide, Evolution shares rose 0.3% to $2.77 yesterday.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.