Quarter of records for Newcrest

IT was a quarter of records for Australia’s largest gold producer Newcrest Mining, culminating in production of 526,131 ounces of gold and 20,827 tonnes of copper at total cash costs of $A515 per ounce (after by-product credits).
Quarter of records for Newcrest Quarter of records for Newcrest Quarter of records for Newcrest Quarter of records for Newcrest Quarter of records for Newcrest

This compares to gold production of 416,651oz and copper output of 20,598t in the March quarter at total costs (after by-product credits) of $484/oz.

Its proposed merger with Lihir Gold is scheduled to be heard in a Papua New Guinea court today.

"We will update the market on the outcome of that hearing as appropriate," Newcrest said in its quarterly.

Records were set at the company's wholly owned Telfer copper-gold mine in Western Australia, which produced 188,875oz of gold and 8902t of copper, and at the Gosowong gold operation in Indonesia, which contributed a further 147,386oz of the precious metal.

Telfer production was 24% higher than the March quarter due to higher ore feed grades in the open pit and increased mill throughput which partly offset lower recoveries.

Gross cash costs for the period reached $500/oz, versus $604/oz in the March quarter, with net cash costs of $377/oz, compared to $530/oz for the March period.

At its 82.5% owned Gosowong site, production was 31% up on the March quarter results, driven by significantly higher feed grades and increased mill throughput, with gross and net cash costs of only $282/oz.

Turning to the world-class Cadia Valley operation in New South Wales, its contribution for the quarter was 151,332oz of gold, up 55% on the previous quarter, and 11,925t of copper, compared to 12,512t of copper in the March period.

Broken down, the Cadia Hill site contributed 120,037oz of gold for the quarter and 7884t of copper at a gross cash cost of $208/oz and net cash cost of $290/oz, compared to 77,678oz of gold and 6762t of copper at gross cash costs of $139/oz and a net cash cost of $151/oz for the March quarter.

The Ridgeway underground operation's June quarter performance of 31,295oz of gold and 4041t of copper at a gross cash cost of $67/oz and a net cash cost of $56/oz, was down slightly on the March results of 40,894oz of gold and 5750t of copper at a gross cash cost of $255/oz and a net cash cost of $244/oz.

Newcrest said the Cadia East project was also "progressing to schedule", with the owner's team and engineering resources essentially in place.

The project received board approval in April this year, with first production scheduled for the second half of 2012.

In Queensland, its 70% share in the Cracow underground gold mine kicked in a further 19,753oz for the latest three-month period at a gross cash cost of $543/oz and a net cash cost of $582/oz.

This compares with 15,021oz in the March quarter at a gross cash cost of $648/oz and a net cash cost of $618/oz.

As for its 50% stake in the Hidden Valley gold mine in Papua New Guinea, production for the June period was up on the March quarter with 18,785oz of gold and 115,561oz of silver produced versus the previous level of 17,680oz of gold and 84,253oz of silver.

Gross cash costs for the latest three-month period reached $1259/oz with net cash costs of $1323/oz.

However, full year production from the site has fallen short of Newcrest's revised production guidance range of 65,000-75,000oz.

Meanwhile, study work continues on the exploitation of its O'Callaghans tungsten deposit near its flagship Telfer mine, along with preliminary discussions with potential project development partners.

On the exploration front, resources are expected to be delivered or upgraded in the September quarter on a number of fronts, including the Phoenix, Kilkenny and Roses Pride deposits at Cracow, at Waisoi within its Namosi copper play in Fiji, at Damer and Yahut in Gosowong, and at Wafi-Golpu in PNG.

Shares in Newcrest were down 0.9% in morning trade to $33.28.

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