Newcrest Mining Limited
.JPG)
NCM Details
Gold production in the June 2017 quarter stood at 7.8% lower than the prior quarter driven by a decrease in production from Cadia, following the seismic event on 14 April 2017, while production from Lihir increased significantly, achieving record quarterly gold production of 276koz due to a record mill throughput rate result of 14.5mtpa. Production at Telfer was also higher than the prior quarter following the rainfall events experienced in the March 2017 quarter. The Group AISC per ounce for the June quarter of $902 per ounce, after normalization for the Cadia seismic event, was 26.5% higher than the prior quarter. This was driven by higher AISC at Cadia, Gosowong and Bonikro, partially offset by lower AISC at Lihir and Telfer. The reported Group AISC for the full year has been normalized (i.e. reduced) by $28 per ounce for the seismic event at Cadia, in line with World Gold Council guidelines.
Production highlights; (Source: Company reports)
Given the suspension of mining activities at Cadia East for most of the quarter, gold production was 54.6% lower in the June quarter than the March quarter. Production in the September 2017 quarter is anticipated to be above the June quarter, but is expected to remain below pre-seismic event levels as remediation and upgrade of ground support work in PC1 continues and ore production from PC2 ramps up. Cadia’s AISC per ounce for the June quarter was 70.2% higher than the prior quarter principally due to the lower sales volume impacting the sustaining capital on a per ounce sold basis. Moreover, Cadia’s AISC for the June quarter has been reduced by $839 per ounce for the seismic event which reflects the earnings normalization only (i.e. Adjusted Operating Costs) in line with World Gold Council guidelines. It is expected that Cadia’s September quarter AISC will also be normalized when reported to reflect the non-representative scale of operation and cost associated with the site recovering from the seismic event. We give maintain an “Expensive” recommendation at the current market price of $19.76
NCM Daily chart; (Source: Thomson Reuters)
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