Newcrest Mining has slashed its gold production guidance for the 2018 financial year to reflect the impact of last month’s tailings dam breach at the Cadia mine in New South Wales.
The miner, which today released its March quarterly report, now expects to produce between 2.25–2.36Moz of gold in fiscal 2018, down from its previous guidance of between 2.4–2.7Moz.
It produced 576,000oz of gold at its five operating mines in the March quarter, 6 per cent lower than the previous three-month period.
At Cadia, Newcrest updated its guidance to between 550,000–600,000oz of gold from the previous estimate of 680,000–780,000oz.
The Cadia mine experienced an embankment slump at its Northern Tailings Facility on March 9, resulting in the temporary suspension of mining and processing activities at the operation near Orange.
Newcrest restarted mining at Cadia on March 27 and then processing at a limited rate on March 29. Earlier this week, the gold miner announced that the NSW Department of Planning and Environment approved use of the first 200m of the old Cadia Hill open pit as a tailings storage facility.
The permit to use the Cadia Hill open pit, in conjunction with the mine’s Southern Tailings Facility, will allow Newcrest to progressively return the operation to full production rates for about 16 months.
Newcrest produced 142,970oz of gold at Cadia in the March quarter after output reached 180,223oz at the mine in the December 2017 quarter.
Despite the challenges Newcrest faced at Cadia during the March quarter, chief executive Sandeep Biswas found some positivity out of the incident.
“I have been particularly impressed by the efforts of our people at Cadia who have risen to the challenge and are striving to safely restore the operations to normal production,” Biswas said.
Newcrest also lowered its 2018 production guidance at the Telfer mine in Western Australia to between 440,000–500,000oz from the previous 440,000–500,000oz estimate.
Gold production at Telfer dropped 27 per cent to 89,005oz in the March quarter due to lower mill feed grade, lower ore tonnes mined and reduced processing plant availability.
At Newcrest’s other mines, production increased at Lihir (235,626oz) in Papua New Guinea and Gosowong (71,410oz) in Indonesia during the March quarter.