Newcrest Mining has maintained its gold guidance despite boosting output throughout the December quarter.
The gold miner reported quarterly gold production was six per cent higher at 621,125 ounces, in comparison to the September period, which saw 586,573 ounces produced.
Achieving an average gold price of AUD $1372 per ounce, Newcrest’s all-in sustaining cost for the quarter was AUD $921 per ounce.
The company told investors that increased production, sales, lower levels of production stripping and sustaining capital and a continuing “cost-out” focus combined to reduce all-in sustaining costs by 16 per cent compared to the previous quarter.
“A range of initiatives to improve free cash flow continued during the December 2013 quarter,” Newcrest said.
“Including reducing mining activity and increased stockpile processing at Lihir, cessation of processing of low-grade stockpiles at Cadia Valley and reducing open pit activity at Telfer.”
Newcrest MD and CEO Greg Robinson said in the face of a challenging gold industry Newcrest will forge ahead with implementing cost-control and productivity measures.
“Newcrest is maintaining its focus on improving productivity, reducing costs and capital expenditures, maximising free cash flow and maintaining growth options,” he said.
In line with previous investor announcements, the gold miner expects gold production for fiscal 2014 to be at the upper end of the guidance range with all-in costs forecast to be around the lower end.
The jump in output for the three months to December is largely due to a 27 per cent production increase at the company’s Telfer operation in Western Australia.
Producing 156,789 ounces of gold for the quarter, Telfer’s lift in production is the result of a 21 per cent increase in gold grade, a 9 per cent increase in mill throughput and higher gold recoveries.
Grade cut offs have also been lifted at Newcrest’s Cadia Valley operations in New South Wales with the processing of lower-grade stockpiles stopped in the December quarter.
As a result gold production was two per cent lower and mill throughput fell 32 per cent but the average gold grade rose 39 per cent.
Development of its Cadia East Panel Cave 2 in New South Wales moved ahead during the quarter, with commissioning scheduled for the June quarter.
On the corporate side Newcrest experienced a number of executive changes throughout the December quarter with its chairman Don Mercer stepping down, replaced by Peter Hay and Sandeep Biswas taking on the role of Executive Director and COO.
Biswas is expected to be the next MD and CEO, succeeding Greg Robinson in the second half of 2014.