Record PNG Production Lifts Newcrest

By Glenn Dyer | More Articles by Glenn Dyer

Shares in major gold miner, Newcrest rose yesterday on the higher gold price and better than expected news in its 4th quarter and 2017-18 production and sales report.

Comex gold prices thought might have edged over $US1,240 a tonne On Wednesday, but they still remain closer to year lows than their highs, so the positive interest in Newcrest shares was triggered by the news that the gold and copper production problems at the Cadia mine in NSW were not as damaging as first expected.

The shares were up 4.6% at 20.92.

Gold production for the year to June 30 was only down 1% from 2016-17 at 2.346 million ounces – at one stage it looked as though the figure could have been a lot lower because of the problems at Cadia – first in the early months of the year from the quake early in 2017 and then the damage to a tailing dam at the mine earlier this year from a second quake.

Gold output was helped by another solid year for the normally troubled Lihir mine in PNG – Newcrest said Lihir enjoyed a third successive year of record gold output.

In fact Newcrest said gold production ended up at upper end of revised guidance and only 2% below original guidance.

Copper production took more of a hit from the impact of the quakes at Cadia last year and earlier this year and fell 7% to 78,000 tonnes. But that was above the revised (lowered guidance) and only 3% below the first up guidance for the year.

In the 4th quarter gold production jumped 10% to 635,000 ounces while copper production was up 7% from the prior quarter ay 20,000 tonnes and Lihir saw a record gold production of 307,000 ounces in the quarter at a record low cost.

And Cadia exceeded the 30 million tonnes a year target full production run rate in the month of June as it put the impact of the quakes behind it.

In a statement Newcrest CEO, Sandeep Biswas, said “This was a quarter to be proud of. Lihir continued to impress with record quarterly mill throughput rates and record low quarterly AISC.

"Cadia recovered well from the tailings wall slump in March to post record monthly mine production and mill throughput rates in June at an annualised rate exceeding 30mtpa. Telfer achieved record total material movement, tonnes crushed and tonnes milled for the quarter.”

“We continue to progress options for profitable growth, including our organic growth options. The Environmental Impact Statement for Wafi-Golpu was submitted and the tender process for early works for the next Cadia block cave has commenced.

“We strive to safely operate our assets to their full potential and this quarter reflected the benefits of our safety program, our Edge performance improvement program, and our people whom I thank for their hard work to make this possible.”

Glenn Dyer

About Glenn Dyer

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.

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