JOHANNESBURG (miningweekly.com) – Gold major Newcrest Mining’s profit declined by nearly one-quarter in the 2016 financial year, owing to lower realised gold and copper prices, the suspension of operations at its Gosowong mine, in Indonesia, and lower copper sales volumes.

Australia’s largest gold producer on Monday posted underlying profit of $323-million in the 12 months ended June 30, compared with $424-million in 2015. Revenue decreased by 9% from $3.6-billion to $3.3-billion in 2016.

Gold revenue of $2.86-billion was 3% lower than the prior period, owing to a 5% reduction in the realised gold price ($1 166/oz in 2016, compared with $1 221/oz in 2015).

Newcrest said in a statement that the gold price impact was partially offset by a 1% increase in gold sales volumes, owing to higher ore feed grades and milling rates at the Lihir mine, in Papua New Guinea, and higher throughput at the Bonikro mine, in Côte d'Ivoire.

The group realised copper revenue of $403-million, which was 35% lower than the prior period, owing to a 24% reduction in the average realised copper price ($2.21/lb in 2016, compared with $2.89/lb in 2015) and a 16% decrease in copper sales, owing to lower output from Cadia, in New South Wales, and Telfer, in Western Australia.

Group gold production increased by 1% to 2.44-million ounces, while group all-in sustaining cost decreased by 2% to $762/oz. The Lihir mine produced record gold output of 900 034 oz in the year.

“Newcrest’s financial performance in the 2016 financial year was solid, with all sites contributing positive free cash flow and the group achieving a 27% reduction in net debt,” commented MD and CEO Sandeep Biswas in a statement.

Newcrest’s profitability, together with an improvement in its target financial metrics, gave the board the confidence to declare a final unfranked dividend of $0.75 a share.

Biswas added that the group had identified a range of opportunities to improve its performance in the 2017 financial year and to pursue profitable growth. Newcrest is advancing studies at Lihir, Cadia and Golpu.

The company has issued a group production guidance of between 2.40-million and 2.65-million ounces of gold and between 80 000 t and 90 000 t of copper for the 2017 financial year.