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Newcrest eyes gold and copper boost

Cadia

Newcrest Mining has forecast improved gold and copper production in the December quarter following a decrease in shutdown activities and the completion of a SAG mill motor replacement at the Cadia gold operation in New South Wales.

In line with expectations, the miner experienced a drop in gold and copper output in the September quarter, resulting from the SAG mill motor upgrade at Cadia and the re-bricking of Autoclave 4 at the Lihir gold mine in Papua New Guinea.

Other company-wide planned maintenance shutdowns also affected production – occurrences consistent with prior years.

Gold production decreased by 27 per cent from 542,332 ounces in the June quarter to 396,214 ounces in the three months just completed, while copper production reduced from 38,370 tonnes to 24,527 tonnes across the same timeframe.

Newcrest remains on track with its production guidance for the 2022 financial year, forecast to be between 1.8 million and two million ounces of gold and between 125,000 and 130,000 tonnes of copper.

The company released findings from various pre-feasibility studies in October, with updates on new developments at Cadia and its Havieron gold-copper joint venture with Greatland Gold.

Pre-feasibility findings were also released on developments at Lihir, as well as Newcrest’s Red Chris gold-copper joint venture in Canada, where a block cave is being installed.

Newcrest managing director and chief executive officer Sandeep Biswas is buoyed by the potential of these prospective projects.

“Newcrest expects to achieve very attractive rates of return on each project, with strong growth in copper production and a reduction of more than 50 per cent in our already low all-in sustaining cost (AISC) expected over the next decade,” he said.

“These studies outlined our base case projections and have the potential for further upside to deliver strong gold and copper production for decades to come.”

Newcrest’s AISC of $1270 per ounce for the September 2021 quarter was higher than the prior period.

This was reflected by lower gold and copper sales volumes, higher production stripping at Lihir with increased waste mined and a lower realised copper price.

The increased AISC was partially offset by the benefit of a weakening Australian dollar against the US dollar on operating costs.

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