Newcrest Mining Limited (ASX: NCM) has released their quarterly report for the three months which ended on 31 December 2018.
NCM’s MD and CEO, Sandeep Biswas said that the record production at Cadia and another sound performance from Lihir underpinned a strong start to the financial year, with a higher AISC margin than the same period last year despite lower gold and copper prices. Their first-half production performance establishes an excellent platform from which to deliver strong results for the remainder of the financial year.
In December 2018 quarter, gold production was up by 19% compared to the previous quarter, as a result of better production from all the operations. Cadia achieved record gold and copper production, and Lihir’s improved production performance reflected less planned downtime and higher head grades than the prior quarter. Telfer increased production was a result of higher productivity from the underground mine which enabled increased mill throughput and improved recovery. At Gosowong, higher head grade and mill throughput delivered higher gold production. Group gold production in the quarter was 7% higher than the December 2017 quarter.
Newcrest’s AISC for the December 2018 quarter of $720 per ounce was a 7% improvement on the prior quarter and a 13% improvement on the corresponding prior period. The improvement in AISC per ounce primarily reflects a combination of higher production and sales, the impact of favourable exchange rates on operating costs and increased copper by-product credits.
The operations in Cadia, Australia saw the gold production for the December quarter as 12 percent higher than the earlier quarter because of the record volume of tonnes processed with a higher grade. Further, a 6 months annualized milling output rate of 29mtpa was announced by Cadia.
Gold head grade increased as a result of the increased proportion of higher grade PC2 ore in the total ore feed to the mill during the December quarter. Cadia’s AISC of $121 per ounce for the December quarter was 15% lower than the prior quarter and is a record low quarterly AISC per ounce for the operation. The improvement was primarily due to an 8% decrease in operating costs per ounce as a result of higher gold head grades and a favourable exchange rate reducing operating costs in US$ terms, partially offset by a reduction in by-product credits per ounce reflecting an increase in the gold-to-copper ratio in the processed ore. Gold recovery of 78.1% was consistent with the prior quarter (78.3%). The Coarse Ore Flotation plant provided an overall recovery improvement of 0.8% during October and the first half of November before being taken offline for maintenance. The Course Ore Flotation plant recommenced operation in the last week of December. In early December 2018, Cadia commenced early works on the next Cadia East cave, PC2-3, which is located to the east of current mining operations. The Early Works Project includes establishing access and a ventilation system for the PC2-3 block cave.
NCM stock closed the day’s session at A$24.33, up by 3.53% or 0.830 points on 30 January 2019 with a market capitalization of circa A$18.05 billion.
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