Strong quarter for Lihir

NEWCREST Mining has posted an increase in production and decrease in costs for the December quarter, beating analyst estimates.
Strong quarter for Lihir Strong quarter for Lihir Strong quarter for Lihir Strong quarter for Lihir Strong quarter for Lihir

Staff Reporter

Gold production was 614,715 ounces, up by 2% over September after accounting for the divestment of the Hidden Valley mine.
 
Copper output jumped by 6.1% to 25,176 tonnes.
 
Half-year production was 1.23 million ounces of gold and 48,899t of copper, putting the company on track to meet FY17 guidance of 2.35-2.6Moz of gold and 80,000-90,000t of copper.
 
All-in sustaining costs fell by 4.9% to $US751 per ounce, though AISC margin dropped by 11.1% to $478/oz due to the fall in the gold price.
Newcrest's two flagship operations - Lihir in Papua New Guinea and Cadia in New South Wales - had a strong quarter.
 
"Newcrest achieved a significant milestone during the December quarter with Lihir reaching its target of an annualised mill throughput rate of 13Mt - a record for the site," Newcrest managing director and CEO Sandeep Biswas said.
 
"Cadia also continued to increase mill throughput, processing ore at an annualised rate of 26.4Mt, a 6% increase on the prior quarter and above the nameplate capacity of the plant.
 
"These achievements and efforts by all our operations contributed to a 5% decrease in Newcrest's all-in sustaining cost per ounce and an increase in production from our continuing operations."
 
Morgans analyst Adrian Prendergast said the December quarter had delivered a strong result for Newcrest, with production and costs beating expectations.
 
RBC Capital Markets analyst Paul Hissey said copper production beat expectations, and the cost result indicated the company was continuing to make progress on initiatives.
 
"Looking forward, Newcrest is likely to remain acutely linked to the gold price; however, it seems as though the operation is in sound health," he said. 
"We believe investors should feel comfortable that the operating volatility of recent times has been put behind."
 
RBC has a sector perform rating and $A19 price target for Newcrest, while Morgans has an add recommendation and target of $26.66.
 
At the time of the announcement, shares in Newcrest were 0.6% higher at $21.32. 

 

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