Newcrest Mining bounced back strongly in the June quarter, posting a 31 per cent increase in group gold production from the previous period.
The major miner produced 637,032 ounces (oz) of gold across the three months, up from the 486,851oz output in the March quarter and the 436,085oz output the quarter before that.
The production spike can put down to the improved performance of the Cadia gold operation in New South Wales, which underwent a planned replacement and upgrade of its semi-autogenous grinding (SAG) mill motor in November 2021. Cadia’s output increased by 25 per cent quarter-on-quarter (QoQ).
Newcrest’s Lihir operation in Papua New Guinea was another standout performer, lifting its production 26 per cent QoQ, while the recently acquired Brucejack operation in Canada produced 90,408oz in the June quarter, after delivering Newcrest 24,013oz in the March quarter following its acquisition in late February.
Perhaps more surprisingly given the current inflationary environment, Newcrest’s all-in sustaining cost (AISC) dropped 10 per cent to $US896/oz in the June quarter. The major miner put this down to higher gold and copper sales volumes and lower site operating costs on a dollar-per-ounce basis due to the higher production.
“Newcrest delivered a strong fourth quarter to achieve our group gold production for the year,” managing director and chief executive officer Sandeep Biswas said.
“Over the last four quarters we have steadily increased our gold and copper production, driving lower group all-in sustaining costs and delivering a record-breaking annual cost performance at Cadia.
“We were particularly pleased to record a fourth consecutive quarter of lower group costs during this challenging inflationary environment.”
While Newcrest is firing on all cylinders, the same can’t be said for the gold price, which dropped below $US1700/oz this week to achieve a new 11-month low.
According to the World Gold Council (WGC), gold was trading at $US1693/oz at the time of writing amid fears of more aggressive interest rate hikes in the US.
Gold and interest rates typically have a negative correlation. Rising interest rates traditionally favour bonds and other fixed-income investments, meaning money will flow out of gold to higher-yielding investments.