PNG’s Lihir mine weighs on Newcrest
Newcrest gold production has dipped 12pc amid outages and maintenance shutdowns as its giant Lihir mine in PNG.
Gold production across Newcrest Mining’s global operations dipped 12 per cent across the September quarter on the back of planned maintenance shutdowns and as the company hit fresh problems at its Lihir operations in Papua New Guinea.
Australia’s biggest gold miner produced 503,000 ounces of gold across the quarter, down from 573,175 ounces in the June period, as production at Lihir dropped 14 per cent, with unplanned outages at its mill exacerbating planned maintenance at the facility.
Newcrest ticked off on a $61m spending program at Lihir in early October, aimed at lifting gold recovery rates at the mine, but said on Thursday a further optimisation study due for delivery by the end of 2020 should help improve its performance.
Newcrest shares have shed more than $6 since early August, despite strong gold prices, to close at $30.60 on Wednesday.
Managing director Sandeep Biswas said ongoing issues at the giant PNG mine had clearly weighed on the company’s market performance.
“It’s evident that the difficult near-term operating conditions we highlighted at Lihir earlier this year adversely impacted our recent share price performance, so I’m pleased to report that the ongoing Lihir studies have improved our confidence in production plan deliverability and our first quarter performance across the group is in line with expectations. Lihir is a uniquely large, long-life asset and I remain confident we are on track to realise its full potential,” he said.
Production at Newcrest’s Cadia operations also dipped sharply in the September period, down 17 per cent to 197,000 ounces on lower grades and a 10 per cent reduction in throughput from the mine’s mill as Newcrest conducted major maintenance operations.
Lower production and the rising Australian dollar also hit Newcrest’s group costs, with the company’s all-in sustaining costs lifting $US102 per ounce to $US980.
“Consistent with prior years we executed a number of planned shutdown events across our operations in the September quarter, which is reflected in our production and all-in sustaining cost per ounce. We expect production to be higher in the December quarter and the company is on track to meet its FY21 production guidance,” Mr Biswas said.
Newcrest has previously said it expects output of 1.95 to 2.15 million ounces for the financial year.
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