23/07/2020 - 12:00

Newcrest posts drop in FY output

23/07/2020 - 12:00

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Newcrest Mining has achieved its production guidance for the 2020 financial year, however, the goldminer’s full-year output was 13 per cent down on the prior year.

Newcrest posts drop in FY output
Production at the Telfer goldmine in Western Australia was down 15 per cent on FY19. Photo: Newcrest Mining

Newcrest Mining has achieved its production guidance for the 2020 financial year, however, the goldminer’s full-year output was 13 per cent down on the prior year.

The Melbourne-headquartered company, which operates the Telfer goldmine in Western Australia, produced around 2.17 million ounces of gold in FY20, well within its guidance of between 2.1m oz and 2.2m oz.

The result, however, was down on FY19 output of 2.5m oz.

The full-year result reflected lower production from Newcrest’s gold operations in WA, NSW and Papua New Guinea.

Production at the Telfer goldmine, located about 400 kilometres from Port Hedland, was 17 per cent higher on the previous quarter, having produced 113,797oz of gold in the three months to June 30.

However, Telfer’s full-year output of 393,161oz – within guidance of 360,000-400,000oz – was about 15 per cent below its FY19 output.

The Cadia goldmine in NSW also achieved higher output on the previous quarter and within the top-end of its full-year guidance; however, its FY20 output of 843,338oz was well below the 912,777oz produced in FY19.

Newcrest’s Lihir operations in Papua New Guinea were worst hit, with full-year output of 775,987oz about 20 per cent lower on FY19.

Managing director Sandeep Biswas said Newcrest’s strong fourth quarter output had enabled the company to meet its gold production guidance for FY20.

Newcrest's Fruta del Norte goldmine in Ecuador, which the company acquired from Vancouver-based Lundin Mining earlier this year, produced 16,422oz for the financial year.

Mr Biswas said Fruta del Norte would provide Newcrest with significant additional cash flows going forward.

He said actions taken to reduce costs, including refinancing the company’s debt, had given Newcrest a strong balance sheet.

That includes $60 million from the sale of Newcrest's Gosowng gold-silver mine in Indonesia, via the sale of its Newcrest Singapore subsidiary to Indotan Halmahera Bangkit.

Newcrest will receive a further $30 million from Indotan, which is payable within 18 months of the sale.

Shares in Newcrest were up 2.1 per cent at 2:47pm AEST to trade at $34.84.

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