Gold Output of Newcrest Mining Drops

Newcrest Mining (NCM) has announced in the second quarter report that there was fall in the output and raise in the cost. The company’s output fell by 16.2 per cent to 382,584 ounces during the 4Q of 2008 after a drop in production from Gosowong in Indonesia and Cadia Hill in NSW. The miner is planning to expand its existing mines including Gosowong, where $179 million is being spent to lift annual output to 450,000 ounces, and the Hidden Valley mine in Papua New Guinea. Newcrest's copper production of 21,232 metric tons in the December quarter was in line with guidance.

In the year ending June 30, Newcrest forecasts gold production in the range of 1.63 million ounces and 1.7 million ounces and copper output between 85,000 and 88,000 tons. Commenting on the situation the company said “Costs initiatives are being aggressively pursued, particularly at Telfer and Gosowong to ensure cost guidance is delivered”. Production at Telfer, in Western Australia State, during the past two quarters was affected by a maintenance shutdown, Newcrest added. A research report last month, forecast Newcrest would produce 1.964 million ounces of gold in fiscal 2010.

The revised annual guidance range slightly increases production at the Gosowong mine in Indonesia to between 405,000 and 420,000 ounces, but reduces output from the bigger Telfer mine in western Australia to 630,000 to 655,000 ounces. Newcrest, which has secured interim gas supply for Telfer from the Woodside Petroleum (WPL) operated North West Shelf venture, has estimated the gas outage will cost the company about $34.3 million.

Newcrest said its $545 million Ridgeway Deeps development at the Cadia Valley operation, near Orang in the NSW Central West, remained on schedule and budget and was 39 per cent complete. Newcrest said that drilling was ongoing at the Telfer mine to define a potential mine expansion below the current operating Telfer Deeps sub-level cave mine. A resource estimate for the new area was expected before the end of 2008, Newcrest said.