Newcrest on target as it makes progress on growth

NEWCREST Mining has reported a strong quarter of production and cost performance, while advancing its key growth projects.
Newcrest on target as it makes progress on growth Newcrest on target as it makes progress on growth Newcrest on target as it makes progress on growth Newcrest on target as it makes progress on growth Newcrest on target as it makes progress on growth

Newcrest Mining's Cadia operation in New South Wales

December quarter production was 535,000 ounces of gold, up 6%, and 35,000 tonnes of copper, driven by stronger quarters at Lihir in Papua New Guinea and Telfer in Western Australia, and a reduction in scheduled maintenance.

Half-year production of 1.03 million ounces keeps the company on track to meet full-year guidance of 1.95-2.15Moz of gold, while copper output of 69,320t is in line with the FY21 target of 135,000-155,000t.

All-in sustaining costs for the quarter fell slightly to US$968 an ounce, delivering an AISC margin of $836/oz.

The result was driven by the lowest ever AISC at Cadia in New South Wales of negative $6/oz, which equated to an AISC margin of $1821/oz.

"Our results for the December quarter were underpinned by a strong operational and safety performance together with significant advancements in our growth agenda and sustainability commitments," Newcrest managing director and CEO Sandeep Biswas said.

Total recordable injury frequency rates fell to record lows at Telfer and Red Chris, in Canada, contributing to an equal group record low quarterly TRIFR of 1.6.

"This fantastic achievement demonstrates the success of Newcrest's Safety Transformation Plan and highlights the commitment and dedication of all our people in embedding the safety culture in our workplace," Biswas said.

The company will release a mine optimisation study for Lihir with its half-year results on February 11.

"The continued improvement of the handling and processing of the argillic ores has contributed to an increase in throughput and recovery, and culminated in a 13% increase in gold production in the quarter," Biswas said.

"We recently announced the signing of a new compensation, relocation and benefits sharing agreement with the mining lease area landholders, building on the strong relationships we have developed over recent years."

Newcrest also advanced its key growth projects, Havieron in WA, and Red Chris.

The company last month reported a maiden resource for Havieron of 3.4Moz of gold and 160,000t of copper.

Early works, comprising earthmoving activities to prepare for construction of the box cut and decline, began last week.

Biswas said the project was on track to be in production within three years.

New drilling results included 111.7m at 3.6 grams per tonne gold and 0.46% copper from 804.7m, including 40.2m at 8.4gpt gold and 0.53% copper; 37.7m at 9.8gpt gold and 0.27% copper from 814.3m; 140.3m at 2.5gpt gold and 0.48% copper from 554m, including 37.7m at 8.2gpt gold and 1.4% copper; and 134m at 3.1gpt gold and 0.45% copper from 558m, including 22.9m at 12gpt gold and 0.56% copper.

About 65,000m of growth-related drilling is planned for the next two quarters.

At Red Chris, Newcrest is hoping to start building an exploration decline later this quarter.

New drilling results including 338m at 0.58gpt gold and 0.51% copper from 762m, including 154m at 0.91gpt gold and 0,7% copper, including 54m at 1.2gpt gold and 0.82% copper; and 194m at 0.62gpt gold and 0.46% copper from 476m, including 76m at 1.2gpt gold and 0.75% copper, including 62m at 1.4gpt gold and 0.78% copper.

There was also some progress on the stalled Wafi-Golpu project, with an environmental permit received in December, which is a step towards being granted the all-important special mining lease.

Shares in Newcrest dropped 1.1% to A$25.78, a 2021 low.