Gold major Newcrest Mining has reached its production and cost targets for the 2023 financial year, following a strong June quarter.
The miner on Tuesday announced that gold production in the three months to June had reached 556 187 oz, up from the 509 637 oz produced in the previous quarter, while group copper production increased from 31 148 t to 34 978 t in the same period.
For the full year ended June, the miner reported a gold production of 2.1-million ounces and a copper production of 133 000 t.
Newcrest told shareholders that the 9% increase in gold production during the quarter was driven by higher mill throughput at Cadia, Lihir and Brucejack for the quarter, as well as higher gold head grade at Lihir and Brucejack. Gold production was also higher at Red Chris and Telfer compared to the prior period.
Gold production at Cadia reached 152 000 oz during the June quarter, 14% higher than the prior period, driven by higher mill throughput with lower planned and unplanned maintenance during the quarter. Gold recovery rates improved for the fourth consecutive quarter reflecting the benefits of the recovery improvement projects which were commissioned as part of the two-stage plant expansion project. This was partly offset by slightly lower gold head grade which was in line with expectations.
At Telfer, gold production was up 7% in the June quarter, to 91 000 oz, driven by higher gold head grade as mining transitioned into higher grade zones in the openpit and underground. Mill throughput also increased during the quarter with improved utilisation following the replacement of Train 1 liners in the March 2023 quarter, partly offset by the temporary shutdown of the processing plant in early April owing to Cyclone IIsa.
At Lihir, in Papua New Guinea, gold production was up 8% in the June quarter to 182 000 oz, owing to higher gold head grades and higher mill throughput. However, Newcrest told shareholders that Lihir’s performance was below expectations with mining and milling operations impacted by extreme rainfall which followed a prolonged period of drought.
Brucejack, in Canada, reported a 14% increase in production during the June quarter, contributing 80 000 oz, with production impacted by higher mill throughput and higher gold head grades. Despite the improved performance for the quarter, gold production was lower than expectations driven by lower than anticipated gold head grade.
At Red Chris, gold production was 30% higher in the June quarter, reaching 10 000 oz. This increase was largely driven by higher mill throughput with improved weather conditions during the quarter.
Meanwhile, the group’s all-in sustaining costs (AISC) for the quarter ended June were reported at A$1 196/oz, while full-year AISC reached A$1 094/oz.
AISC during the June quarter was 20% higher than the previous quarter, driven by higher capital expenditure mainly at Lihir, Cadia and Red Chris, and a lower realised copper price. This was partly offset by higher gold production across all operating sites during the quarter, except for Fruta del Norte, driving an increase in gold sales volumes for the Group, as well as the benefits of higher copper sales volumes and a weakening Australian dollar against the US dollar on operating costs.
“We were pleased to achieve our 2023 group guidance for gold production and AISC following an improved operational performance in the June quarter. We also made further progress on our growth strategy, with the Wafi-Golpu framework memorandum of understanding signed in early April, marking a pivotal milestone towards development of this world-class copper/gold deposit,” said interim CEO Sherry Dehu.
“In May we reached an agreement for Newmont to acquire 100% of the issued shares in Newcrest. The transaction will bring forward significant value to Newcrest shareholders through the recognition of our outstanding portfolio of long-life assets, our material and increasing exposure to copper, and our well-established organic growth pipeline. The combined group will create a clear global leader in gold production, with increased flexibility in project sequencing and growth optionality, and a market-leading position in safety and sustainability. Our board is unanimously recommending that shareholders vote in favour of the proposal which we expect will be implemented by the end of 2023,” Dehu added.
