A challenging year: Newcrest

NEWCREST Mining expects the Lihir and Hidden Valley gold mines in Papua New Guinea to rebound from the unforeseen events that hit the mines in 2011 to collectively produce up to 985,000 ounces this financial year.
A challenging year: Newcrest A challenging year: Newcrest A challenging year: Newcrest A challenging year: Newcrest A challenging year: Newcrest

The Lihir mine produced 639,256oz in the recent financial year, a fall of more than 20% compared to the previous financial year when the mine was operated by Lihir Gold.

Newcrest estimated that 40,000oz of gold production was lost in the March quarter due to unseasonably low rainfall, which limited the supply of water to the processing plant.

The high voltage switchgear failure in June also hit the plant's operating capacity.

Newcrest and equal half owner Harmony Gold both achieved their goal of ramping up the Hidden Valley mine to full operating capacity in recent months.

The mine produced 100,232 ounces of gold in the 2010-11 financial year, an improvement of 69% over the previous year.

But the full impact of the ramp-up is yet to be felt as there was a major belt failure in the overland conveyor in March.

The joint venture has been burdened by the expense of trucking ore to the plant since and Newcrest expects the under-repair conveyor to return to operation by the end of September.

On the basis of no further misfortunes, Newcrest has forecast the Hidden Valley mine to produce 115,000-135,000oz gold this financial year.

"This has been a challenging year, with higher costs evident across the operation as the asset moved from development into full production," Newcrest said of Hidden Valley.

Newcrest forecast the Lihir mine to vastly improve this financial year and produce 815,000-850,000oz.


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