UPDATE: Newcrest Sees Fiscal Year Gold Output 2.82 Million Oz Vs 2.85 Million-2.95 Million Previously
April 19 2011 - 4:19AM
Dow Jones News
Newcrest Mining Ltd.'s (NCM.AU) gold production this fiscal year
will be up to 4.4% below previous forecasts, the miner said
Tuesday, after bad weather in Australia and Papua New Guinea and
unrest in Ivory Coast cut output from three of the company's key
sites.
The world's third-largest gold miner by market capitalization,
after Canada's Barrick Gold Corp. (ABX) and Newmont Mining Corp.
(NEM), said excess rainfall in eastern Australia had hit production
from its massive Cadia Valley operations while drought around Papua
New Guinea limited supplies of fresh water for processing at its
Lihir Island mine site.
Meanwhile, work is still halted at its Bonikro mine in Ivory
Coast as a result of the country's post-election violence, which
last week resulted in the detention of former president Laurent
Gbagbo, who had refused to cede power to his opponent.
The problems at its mines are preventing Newcrest from
capitalizing fully on record prices of gold, which hit an all-time
nominal high of US$1497.79 in European trade Monday. Gold has
surged as investors sought safe havens from the risk of inflation
in countries like China, deflation and devaluation of major
currencies.
Total production for the year to the end of June would come to
2.82 million troy ounces of gold, Newcrest said, plus or minus
35,000 oz, compared to a previous estimate of 2.85 million oz-2.95
million oz.
Newcrest took over the Lihir and Bonikro sites last year as part
of its A$9.2 billion takeover of Lihir Gold Ltd.
In a presentation accompanying the release, Newcrest said the
problems at Cadia Valley and Lihir had been resolved but 8,000 oz
of production would be lost from the Bonikro mine for each month it
was out of action, while problems at the Hidden Valley mine in
Papua New Guinea would also lower production by 5,000 oz-9,000oz in
the three months to the end of June.
Newcrest said output in the first three months of the year came
to 604,791 troy ounces of gold, 16% down on the previous quarter,
while copper production rose 13% to 20,098 metric tons.
Cash costs rose to A$497/oz, or US$500/oz, from A$440/oz in the
previous quarter.
Separately, the miner said it was raising its exploration target
for the Wafi-Golpu project in Papua New Guinea to 40 million ounces
of gold and 15 million tons of copper. The project has potential to
be one of the biggest new copper-gold discoveries in decades.
-By David Fickling, Dow Jones Newswires; +61 2 8272 4689;
david.fickling@dowjones.com
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