Newcrest cuts output guidance on Hidden Valley exit
The gold miner has trimmed production guidance following its decision to exit the Hidden Valley joint venture in PNG.
Gold miner Newcrest has trimmed its full-year production guidance after offloading its stake in the Hidden Valley joint venture.
The agreement to sell its 50 per cent position in the Papua New Guinea mine, to partner Harmony Gold, will see Newcrest (NCM) no longer on the hook for long-term closure or rehabilitation costs.
The ASX-listed gold miner had already taken a provision for $US35 million ($46.7m) in regards to rehabilitation obligations, which will now be reversed, although the group will also recognise a $US10m loss on the sale and provide Harmony $US22.5m as a one-off injection to Hidden Valley’s closure liability.
Newcrest added the agreement would not impact its JV with Harmony Gold in the Wafi-Golpu project.
“Having completed the strategic review of Hidden Valley, Newcrest determined that the best outcome was to exit the operation and focus our attention on safe, profitable growth at our other assets,” Newcrest managing director Sandeep Biswas said.
“We look forward to continuing to work with Harmony on the Wafi-Golpu project.”
The sale has forced Newcrest to lower its gold production guidance for fiscal 2017 from 2.4 to 2.65 million ounces to 2.35-2.6 million ounces.
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