Newcrest profits drop 48% due to Cadia earthquake, Aussie dollar strength

The Telfer site. Image: Newcrest Mining.

Gold miner Newcrest Mining has released its half-year results, posting a statutory profit of $98 million and underlying profit of $116 million as it produced 1.14 million ounces (Moz) of gold.

Statutory and underlying profits were down 48 per cent and 58 per cent on the company’s last half year results. Production, meanwhile, was down 8 per cent when compared with the previous period.

Newcrest attributed the losses to the temporary shutdown of its Cadia mine in New South Wales, which was closed from April to July last year due to a powerful earthquake, as well as a strengthening of the Australian dollar against the US dollar and lower overall gold sales.

Despite this, the company is still on track to meet its full-year targets, according to Newcrest managing director and chief executive officer Sandeep Biswas. The CEO also stressed that all but one operation during the period was cash flow positive, with the Telfer operation the one exception posting negative $9 million overall.

“We remain on track to achieve our annual guidance, with production expected to be stronger in the second half of the year and AISC (all-in sustaining cost) spend potentially being below the guidance range,” he explained.

“Cadia is targeting 30 million tonnes per annum of annualised production rate by June 2018 and Lihir is targeting 15Mt/y sustainable annualised mill throughput by end of June 2019.”

The company’s dividend remained unchanged at US7.5 cents per share (9.44 cents).

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