Newcrest downgrades guidance

AUSTRALIA’S largest gold producer Newcrest Mining has been forced to downgrade its production guidance for the 2012 financial year by 6% due to production disruptions at Lihir and Cadia Valley and lower feed grade and recoveries at Telfer.
Newcrest downgrades guidance Newcrest downgrades guidance Newcrest downgrades guidance Newcrest downgrades guidance Newcrest downgrades guidance

Full-year production is now expected to be 2.43-2.55 million ounces of gold, which is down 6% on the original guidance of 2.77-2.92Moz after adjusting for the recent sale of the Cracow and Mount Rawdon mines in Queensland to Evolution Mining.

It comes after lower-than-expected production for the September quarter of 587,296oz gold, which the company previously said could be made up during the remainder of the year.

"Based on present assessments, it is now unlikely the production shortfalls will be recovered during the remainder of the financial year," Newcrest said in a statement.

Lihir production is expected to be 100,000oz lower for the first half of the year due to a plant shutdown and heavy rainfall in September.

Newcrest said there were no further plant shutdowns forecast at Lihir for the rest of the financial year and the $US1.3 billion ($A1.3 billion) expansion was on budget and on schedule for commissioning before the end of 2012.

Meanwhile, production at Telfer is tipped to be 50,000oz lower due to lower feed grades and recoveries.

The company will commission Jameson cells in January and install an Isa mill next year to rectify the issues.

Cadia Valley production has been hit by around 30,000oz due to the recent ground slip.

Full mining won't resume until mid-January.

The company said the Cadia East project remained on time and on budget.

Guidance for the December quarter is 575,000-585,000oz gold.

Annual copper guidance remains at 75,000-85,000t, while cash costs are slated to remain at around $A500 per ounce.

The company flagged increased costs at Gosowong, due to a higher Australian dollar and additional costs associated with a helicopter crash in August, which will be offset by lower costs at Cadia Valley and Telfer.

Capital expenditure guidance for the year remains at $2-2.2 billion.

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