In its quarterly statement, released this morning, the gold major said that Hidden Valley was likely to produce only 65-70,000 ounces for the financial year – down from initial projections of 110-125,000oz.
That figure is likely to drag Newcrest’s total production towards the lower end of its 1.81-19.1 million ounce financial year guidance.
Hidden Valley produced only 17,680oz for the quarter, down from 21,514oz in the December period, though the company said it has completed commissioning of the processing plant at the mine, including the silver flotation circuit, with the mine expected to reach full capacity this quarter.
Overall, Newcrest produced 416,651oz for the quarter, 6% less than last quarter. Net cash costs remained steady at $310/oz, and the company realised an average gold price of $1144/oz, down from $1155/oz last quarter.
Copper production was down 13.7% on last quarter, at 20,598 tonnes, with the average price $3.64 per pound, up from $3.26/lb in the previous reporting period.
Production was down across the board at Newcrest mines, with the exception of Gosowong, in Indonesia, which lifted 24% quarter-on-quarter as higher-grade ore zones were hit. Cash costs at the mine also dropped significantly, from $329 per ounce to $282/oz.
Production at all of the company’s other mines dropped, however, with Telfer down 17% to 152,495oz, Cadia Valley down 7.4% to 118,572oz and the company’s 70%-owned Cracow mine in Queensland down 11% to 15,021oz.
The company’s board also approved the $A1.91 billion Cadia East development in New South Wales in the early April.
The deposit will lift Newcrest’s annual production from its Cadia Valley operations to 800,000oz of gold and 100,000t of copper.
The Cadia East orebody is one of the world’s largest gold deposits, according to Newcrest, comprising resources of 2.34 billion tonnes for 33.2 million ounces of gold and 6.59 million tonnes of copper.
It also has reserves of 18.7Moz of gold and 3.16Mt of copper, and will underpin production from Cadia Valley for at least the next 30 years.
Newcrest shares dropped 23c in early trading, trading as low as $A33.74 after the market opened.
