Newcrest cuts Telfer production forecast

Newcrest Mining, Australia's biggest gold company, has delivered a drop in gold production during the second quarter and cut full year production forecasts for its Telfer mine in Western Australia.

Gold output fell 16.2 per cent to 382,584 ounces during the three months to December 31 after a decline in production from Gosowong in Indonesia and Cadia Hill in NSW.

Copper production decreased by 4.2 per cent during the second quarter to 21,232 tonnes.

Newcrest maintained its production guidance of 1.63 million ounces to 1.73 million ounces for the 2009 financial year, but reduced the forecast output for the Telfer to a range of 630,000 to 655,000 ounces.

The company said production at Telfer during the first half of the 2009 financial year had been affected by an extra maintenance shutdown of its processing facility and dilution issues in the open pit.

In October last year, Newcrest announced it would cut some 400 jobs at Telfer as part of a cost reduction program to save some $30 million at the mine in the 2009 financial year.. Today the miner said most of the benefits from the program will surface in the latter half of FY09.

Newcrest owns and operates six mines, five in Australia and one in Indonesia.

Group cash costs increased 81.6 per cent during the quarter to $A554 an ounce, up from $A305 an ounce in the previous corresponding quarter in 2007.

Newcrest said lower gold production levels, lower by-product credits and the impact of converting Gosowong's US dollar costs to Australian dollars were responsible for the increase in group cash costs.

The company achieved an average gold price of $A1,198 an ounce during the second quarter, up from $A870 an ounce on the previous corresponding quarter.