Newcrest digs up less gold
Newcrest Mining has completed another underwhelming quarter, confirming today that four of its six mines produced less gold in the September period than in the three months to June.
The 460,425 ounces of gold produced by Newcrest in the September quarter was more than 20 per cent less than the previous quarter, with unit costs duly rising.
Newcrest shares rose 25 cents, or 0.9 per cent, to $27.87 in early trade.
While the slump would not have surprised most shareholders following the announcement of production problems in September, today's release of the quarterly results demonstrates how the poorer performance was spread across most of Newcrest's big assets.
Only the Bonikro mine in Ivory Coast and the Hidden Valley mine in Papua New Guinea improved their production compared to the June quarter, and unfortunately for Newcrest, those two mines are Newcrest's smallest.
The company had previously warned that incidents at Lihir and Cadia's Ridgeway mine would drag down the September production numbers, but other big mines like Telfer and Gosowong were also running behind the pace set in June due to a combination of planned and unplanned events.
But despite its ongoing reliability problems, Newcrest continues to find the gold business very lucrative as gold prices rise.
The company reported today that its profit margin per ounce of gold was $US880, and that will only rise if, as expected, gold prices continue to rise on the back of stimulus measures in the United States.
Newcrest said its full year guidance, which projects gold production between 2.3 to 2.5 million ounces of gold, remained unchanged.
The company expects its gold production rates to increase over the year, with two of its big growth assets - Cadia and Lihir - drawing closer to a start date.
The Cadia East expansion is due for first commercial production in December, while the plant upgrade at Lihir is due for completion in December.