Newcrest remains on target despite Cadia shutdowns

The Cadia site. Image: Newcrest Mining.

Gold producer Newcrest Mining has reported a decrease in gold production in the March 2019 quarter following planned shutdowns at the Cadia process plant in New South Wales.

The company’s gold production fell five per cent in comparison to a record December quarter, driven by lower production from all operations except Telfer in Western Australia, where output increased by 11 per cent.

The lower gold and copper sales at Cadia meant that Newcrest’s all-In sustaining costs of $738 per ounce were three per cent higher than the December quarter.

Despite the shutdowns at Cadia, Newcrest expects its production at the site in the 2019 financial year to remain at the top end of guidance between 800,000–880,000 ounces.

Newcrest’s Lihir operation in Papau New Guinea also suffered a fall in gold production that was caused by unplanned shutdowns in the process plant, while the Gosowong mine in Indonesia produced lower volumes of mined ore that negatively impacted gold production by 19 per cent.

The Telfer mine was an anomaly in the March quarterly report, with improved performance resulting from increased mill throughput and recovery.

Newcrest production guidance for the 2019 financial year remains unchanged at between 2.35 and 2.6 million ounces.

Managing director and chief executive officer Sandeep Biswas said there were many positive signs to take away from their March quarter, even with the fall in production.

“As consistent with our strategy, Newcrest remains a low cost, high margin major gold product,” he said.

He also expressed his optimism following Newcrest’s decision to acquire 70 per cent of the Red Chris mine in British Columbia, Canada, which once completed, provides the company with “production and asset diversification”.

Newcrest has, meanwhile, released findings from an Independent Technical Review Board (ITRB) report into the slump in the southern wall of Cadia’s Northern Tailings storage facility in March 2018.

The report concluded that this was largely caused by the existence of a low-density foundation layer in the vicinity of the slump.

Other contributing factors included the local height of the dam, prevailing low pore water pressure and the excavation at the toe of the structure in the area of the slump.

Biswas commented: “We accept all the findings and recommendations of the ITRB and will work with our stakeholders, including the NSW regulators, and continue the extensive drilling and geotechnical analysis of the foundations of the northern and southern tailings facilities.”

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