Newcrest posts modest lift in annual gold output

Newcrest has reported a slight uptick in gold production, as Brexit jitters help shore up weakened margins.

Gold production weakened in the June quarter owing to lower grades at Cadia and the extended suspension of its Gosowong mine in Indonesia.

Newcrest has reported a slight lift in gold production for the full year, with the result coming in near the bottom end of its guidance range.

Australia’s largest gold miner said gold output lifted 0.7 per cent in the year to June 30, rising to 2.44 million ounces.

The group had tipped production to fall in a range between 2.4 million and 2.6 million ounces for the full-year.

Newcrest (NCM) said its copper and silver production also met guidance, with the former at the lower end of its estimated range after output dipped 14.2 per cent for the year, while the latter was towards the upper end, as output rose 3.8 per cent.

“We have delivered a solid performance considering the challenges we have experienced at some sites,” Newcrest chief executive Sandeep Biswas said.

“We look forward to safely building upon this performance with the continued ramp up of Cadia East and our ongoing operational improvements at Lihir.”

Gold production weakened in the June quarter owing to lower grades at Cadia and the extended suspension of its Gosowong mine in Indonesia, which was hit by a “geotechnical event” in the third quarter.

Its Lihir operations, meanwhile, enjoyed their best quarter since Newcrest took control six years ago.

The miner also reported a 2.3 per cent reduction in full-year costs, although its margins weakened 8.4 per cent as its realised gold price for FY2016 came in $US55 an ounce shy of 2015’s $US1,221 average price.

A strong rally in the precious metal around the Brexit vote, however, saw margins improve in the fourth quarter compared to the rest of the year and has it on track for a robust start to fiscal 2017.