Handing down its December quarter report, Newcrest said gold production had fallen to 382,584 ounces from 485,978oz in the previous quarter as a result of production at Gosowong and Cadia Hill declining from record levels achieved in the September quarter.

Group cash costs for the quarter jumped a massive 52% to $554 an ounce on the back of lower production levels, lower by-product credits and the foreign exchange impact of converting Gosowong's US dollar-denominated costs into Australian dollars.

At Telfer, production for the quarter was 151,892oz, up around 1% on the previous quarter, as a result of higher open grades and recoveries.

However, Telfer production was partially offset by an additional maintenance shutdown of the processing facility and dilution management issues in the open pit.

Newcrest also released a revised full year forecast for gold production in the range of 1.63-1.70 million ounces, down from its previous forecast of 1.68-1.78Moz of gold for the year to June 30, 2009.

According to the company, full year production from its Gosowong operations is expected to increase slightly to 405,000-420,000oz, however Telfer's full year production is anticipated to fall to 630,000-655,000oz.

Meantime, copper production for the December quarter was 21,232 tonnes, down slightly from 21,550t in the September quarter, while full year copper production guidance remains at 85,000-88,000t.

During the quarter, Newcrest's Gosowong expansion project in Indonesia, which is expected to increase annual gold production when construction is wrapped up next year, received approval to proceed to development.

The Cadia-East feasibility study was also finished during the quarter, while Ridgeway Deeps development at Cadia Valley remains on schedule and on budget with more than 95% of capital committed and project construction 54% complete.

Shares in Newcrest, which hit at a high of $34 and a low of $16.55 during the quarter, were $1.95 (6%) lower at $31.09 in morning trade.