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Newcrest maintains outlook despite dip in production

Newcrest maintains outlook despite dip in production

Photo by Bloomberg

30th April 2019

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Australian gold major Newcrest Mining has maintained its full year production guidance, despite reporting a slight drop in production for the three months to March.

Newcrest on Tuesday reported that gold production for the quarter was down 5% on the December quarter, from 654 849 oz to 623 124 oz, while copper production was down 6% from 26 847 t to 25 303 t.

The lower production during the March quarter was driven by lower production from all of Newcrest’s mining operations, apart from the Telfer mine, in Western Australia, which saw an 11% increase in gold production.

The miner noted that production from the Cadia operation, in New South Wales, was negatively impacted by planned shutdowns in the process plant, while production from Lihir, in Papua New Guinea, was negatively impacted by lower recoveries, mainly as a result of unplanned shutdowns in the process plant.

The increase in production at Telfer was driven by increased mill throughput and recoveries.

Meanwhile, the Gosowong operation, in Indonesia, also reported lower head grades and lower volumes of mined ore, which saw gold production decline by 19% in the quarter.

“In what was a short quarter, gold and copper production for the March quarter were both down slightly compared with the record-breaking December quarter,” said Newcrest MD and CEO Sandeep Biswas.

“However, there are many positives to take away from this quarter, as consistent with our strategy, Newcrest remains a low cost, high margin major gold producer with an all-in sustaining cost of $738/oz and an all-in sustaining cost margin of $563/oz.”

Biswas noted that the agreement to acquire a 70% interest of the Red Chris mine, in British Colombia, would also provide the company with production asset diversification, and an opportunity to add value through its technical expertise, as well as significant potential exploration upside.

Red Chris produced around 44.8-million pounds of copper and 29 569 oz of gold, at a cash cost of $2.41/lb of copper, in the first nine months of the 2018 calendar year.

The openpit copper/gold porphyry project has a mineral resource of 20-million ounces of gold and 13-billion pounds of copper, covering 23 142 ha of land and consisting of 77 mineral tenures, five of which are mining leases.

Meanwhile, Newcrest on Tuesday revealed the findings of an independent technical review into the 2018 tailings dam embankment slump at its Cadia operation.

The report revealed that the dominant factor determining the location of the slump was the existence of a low-density foundation layer in the vicinity of the slump, as well as the height of the dam, the prevailing phreatic conditions, and excavations at the toe of the structure.

The review resulted in a number of recommendations, with Newcrest telling shareholders that the findings of this review would be factored into the study to repair the northern tailings facility, which will be completed in the second quarter of 2020.

The prohibition notice remains in place for the northern tailings facility, with the Cadia operation continuing to deposit tailings in both the southern tailings storage facility and into the Cadia Hill openpit talings storage facility.

Edited by Creamer Media Reporter

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