Price slide causes Newcrest to review projects
Australian gold major Newcrest Mining has warned that it is reviewing its operations in light of the declining gold price and the strong operating currencies.
“With its major projects ramping up and the more challenging external environment, Newcrest continues to review all its business activities, particularly those related to higher-cost current, or future, production,” the miner said in its quarterly results.
The miner blamed the review on the continued high operating and capital costs of its projects, as well as the recent decline in commodity prices, which had not been accompanied by a reduction in the strength of either the Australian dollar or the Papua New Guinea kina.
During the three months to March, ASX- and TSX-listed Newcrest increased its gold production to 532 237 oz, compared with the 492 906 oz produced during the previous three months.
Quarterly copper production decreased slightly to 19 023 t, compared with the 19 926 t produced in the three months to December.
Newcrest noted that the new and expanded operations at the Cadia East and Lihir mines performed to plan during the March quarter. Gold production at the Bonikro mine also increased by 10%, reflecting an increase in head grade.
However, quarterly production at Lihir and Goswong was negatively affected by restricted capacity and poor ground conditions, causing Newcrest to cut back on its 2012/13 production forecast by some 10%.
In March, the gold miner reported that full-year production was expected to be between 2-million and 2.15-million ounces, with yearly copper production remaining at between 75 000 t and 85 000 t.
Meanwhile, the miner noted that its study efforts remained focused on the Wafi-Golpu project, where good drilling results and better metallurgical recoveries continued to improve project economics.
The team was currently working on achieving a lower cost approach to first production.
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