Newcrest Mining Limited - Preliminary[1] September Quarterly Report for the three months ending 30 September 2014
MELBOURNE, Australia, Oct. 7, 2014 /CNW/ - Newcrest Mining Limited (ASX: NCM) - Newcrest today released a Preliminary1 Quarterly Report in respect of the three months ended 30 September 2014 (these figures are unaudited).
The material contained in this report has been released earlier than usual as a result of the Company hosting its Investor Day on 7 October 2014, and remains subject to finalisation and confirmation in the full Quarterly Report scheduled to be released on 21 October 2014.
Key Points
- Quarterly gold production of 561,731 ounces
- Quarterly copper production of 24,831 tonnes
- Average realised gold price for the quarter of A$1,393/oz
- Group All-In Sustaining Cost2 for the quarter of A$864/oz
(US$801/oz at an average A$:US$ exchange rate in the quarter of $0.926) - All-In Sustaining Cost2 at each operation was below the average realised gold price for the quarter
- Cadia East Panel Cave 2 commenced commercial production from 1 October 2014
Overview
Newcrest's production for the September 2014 quarter was 561,731 ounces of gold and 24,831 tonnes of copper with an All-In Sustaining Cost (AISC)2 of sales of A$864 (US$8013) per ounce. This represents a 12% decrease in gold production and 5% reduction in AISC per ounce compared to the June 2014 quarter. The AISC margin in the September 2014 quarter was A$529 (US$4893) per ounce.
Gold production for the September 2014 quarter was below the June 2014 quarter, as expected4. The September 2014 quarter was characterised by anticipated lower gold grades than the June 2014 quarter at Gosowong, Cadia Valley and Lihir, and major planned shuts in the mill area and Autoclave 4 at Lihir.
Mine production at Cadia East continued to ramp up in the September 2014 quarter to 3.2Mt, 39% higher than the previous quarter. Cadia East Panel Cave 2 commenced commercial production from 1 October 2014. Overall gold production from Cadia Valley was broadly unchanged from the June 2014 quarter, with the increased ore volumes from both Cadia East and Ridgeway offsetting the impact of lower grade and recoveries.
1 Preliminary - Newcrest's report in relation to the quarter ended 30 September 2014, for the purposes of ASX Listing Rule 5.1, is scheduled to be released on 21 October 2014. Newcrest believes that the information contained in this report is a materially accurate representation of its performance over the September 2014 quarter but the information is subject to finalisation and confirmation so should be treated with caution.
2 All-In Sustaining Cost metrics as per World Gold Council Guidance Note on Non-GAAP Metrics, released 27 June 2013. Newcrest Group All-In Sustaining Cost will vary from quarter to quarter as a result of various factors including production performance, timing of sales, the level of sustaining capital and the relative contribution of each asset.
3 September 2014 quarter All-In Sustaining Costs in Australian Dollars are converted to US Dollars at an average A$:US$ exchange rate of $0.926.
4 As announced in the June 2014 Quarterly Report, released 24 July 2014.
At Lihir, throughput was impacted by a planned 12 day shutdown of Autoclave 4 (the largest of the four autoclaves on site), shorter duration mill shuts and unplanned events in the crusher which are now rectified. Encouragingly, mill throughput was 3% higher than the June 2014 quarter. The average grade to the mill of 2.32g/t in the quarter was 14% lower than the 2.69g/t in the June 2014 quarter; this is in line with the mine plan which sees the grade vary quarter on quarter. Recoveries were 1% lower in line with lower grade mill feed. As a result, overall production in the September 2014 quarter was 20,775 ounces - or 12% - lower than the June 2014 quarter.
At Telfer, more tonnes were mined from Stage 4 open pit, reducing the level of processing of lower grade stockpiled ore and increasing the average feed grade to the mill. Lower recoveries at Telfer in the September 2014 quarter were due to operational issues with the final concentrate filter which are now rectified. Total gold production in the September 2014 quarter was 6,399 ounces, or 5%, higher than the June 2014 quarter.
At Gosowong, gold production was in line with expectation. Mine production in the September 2014 quarter was 28% lower than the June 2014 quarter and below expectations due to hot water issues at Toguraci and ground conditions at Kencana. Gold grade in the September 2014 quarter was 32% lower than the June 2014 quarter. Gold grades will continue to vary from quarter to quarter depending on the mine sequencing.
The Company's All-In Sustaining Cost per ounce varies from quarter to quarter as a result of various factors including production performance, timing of sales, the level of sustaining capital and the relative contribution of each asset. The strong All-In Sustaining Cost per ounce outcome at Cadia Valley, together with its greater share of total Newcrest sales in the period, was a major driver of the improvement in the Company's All-In Sustaining Cost outcome in the September 2014 quarter, with lower levels of sustaining capital also a driver.
As previously announced, commencing commercial production at Cadia East Panel Cave is expected to temporarily increase the unit All-in Sustaining Cost of Cadia East gold production over the coming few quarters from that achieved in the September 2014 quarter, as production from Cadia East Panel Cave 2 is profitable but not yet at full ramp up rates.
Guidance for the full year remains unchanged.
Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas, said "It is pleasing to see Cadia East Panel Cave 2 achieving commercial production so early in the financial year, which positions Cadia East well to continue to increase its contribution to the Company. The focus at Lihir remains on progressive implementation of improvement programs to lift production, cost and cash performance."
Forward Looking Statements
These materials include forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", and "guidance", or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs.
Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.
Forward looking statements are based on the company and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the company's business and operations in the future. The company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the company or management or beyond the company's control.
Although the company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.
A copy of the full release can be found on Newcrest's website: www.newcrest.com.au and on SEDAR: www.sedar.com.
SOURCE: Newcrest Mining Limited
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