Newcrest production solid as gold prices rise
While short on last year’s figures, Newcrest hit its 2020 production guidance, saying it’s well placed as gold prices rise.
A good performance at its flagship Cadia gold mine in NSW helped Newcrest Mining hit its annual production guidance, although the company’s financial year output of 2.17 million ounces was well short of the 2.49 million ounces produced the year before.
Newcrest released its June quarter production figures on Thursday, showing group production lifted 7 per cent compared to the March period, to 573,175 an ounce as Cadia turned in an improved performance with output up 21 per cent to 236,705 ounces as the mine put record tonnes of ore through its mill.
Newcrest also benefited from a strong lift in production from its Telfer mine, where output lifted 17 per cent to 113,797 ounces.
The company said it expected output of 2.1 million to 2.2 million ounces for the financial year.
But lower copper prices, counted as a by-product from Newcrest’s operations in calculating its operating costs, hit the company’s all-in sustaining costs, which lifted $US661 an ounce to $US878 an ounce for the quarter.
Newcrest managing director Sandeep Biswas said the June period’s solid results put the company in a strong position amid rising gold prices.
“With the support of our shareholders we further strengthened our balance sheet through our Institutional Placement and Share Purchase Plan. We also refinanced our debt, which reduced its cost and significantly smoothed and extended its maturity profile,” he said in a statement.
“These actions, together with our strong underlying free cashflow generation, has given Newcrest a particularly strong balance sheet that positions us well to deliver our exciting growth portfolio.”
Mr Biswas said Newcrest had begun the process of seeking approval to lift Cadia’s processing capacity from 32 million to 35 million tonnes a year, a critical project needed to keep production levels strong at the ageing underground mine. Newcrest said it expected to submit environmental approval documents for the expansion to the NSW government by the end of the year.
Newcrest shares closed Wednesday at $34.13.
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