Newcrest Mining Limited - Quarterly Report for the three months ending 30 June 2014
MELBOURNE, Australia, July 24, 2014 /CNW/ - Newcrest Mining Limited (ASX: NCM) - Quarterly Report for the three months ending 30 June 2014 (these figures are unaudited).
- Gold production of 636,736 ounces (85,146 ounces or 15% higher than the March 2014 quarter)
- Copper production of 22,871 tonnes (1,859 tonnes or 9% higher than the March 2014 quarter)
- Group All-In Sustaining Cost1 of A$913/oz (US$851/oz2) (8% lower than the March 2014 quarter)
- Group All-In Sustaining Cost margin of A$469/oz on average realised gold price of A$1,382/oz
- Gold production of 2,396,023 ounces (a 14% increase on 2,109,784 ounces in the 2013 financial year)
- Copper production of 86,118 tonnes (a 7% increase on 80,366 tonnes in the 2013 financial year)
- Group All-In Sustaining Cost1 of A$976/oz (US$897/oz2) was 24% lower than the 2013 financial year
- Group All-In Sustaining Cost1 margin of A$434/oz was A$167/oz higher than the 2013 financial year, notwithstanding the average realised gold price in the 2014 financial year of A$1,410/oz was A$140/oz lower
- Group free cash flow for the year is estimated to be approximately A$130 million (subject to finalisation of audited financial statements)
- Expected asset impairment of A$1.5 to A$2.5 billion
Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas, described the improved operational results for the June 2014 quarter and full financial year as reflective of the Company's focus on safety, cost reduction and cash generation.
"Newcrest is firmly focused on realising the full potential of each of the Company's assets, prioritising operating discipline and maximising cash across all sites. All sites achieved production and cost guidance for the year, with some performing significantly better," Mr Biswas said. "Looking ahead, the main focus will continue to be on the improvement of operational and safety performance. The sustainable generation of strong free cash flow will produce a higher return on invested capital and enable the Company to reduce debt and progressively return to paying dividends. Growth will be focused on profitable, high return projects."
Gold production for the 2014 financial year of 2,396,023 ounces exceeded the top end of the guidance range (of 2.3 million ounces) and was 14% higher than the prior year. Full year copper production of 86,118 tonnes also exceeded the top end of the guidance range (of 85,000 tonnes) and was 7% higher than the prior year. The AISC for the 2014 financial year was A$976 (US$ 897) per ounce, 24% lower than the 2013 financial year of A$1,283 per ounce. The AISC margin in the 2014 financial year was A$434 (US$397) per ounce, A$167 per ounce higher than the prior year notwithstanding the average realised gold price in the 2014 financial year of A$1,410 was A$140 per ounce lower.
In the June 2014 quarter the Company produced 636,736 ounces of gold and 22,871 tonnes of copper with an AISC of A$913 (US$851) per ounce. This represents a 15% increase in gold production and 8% reduction in AISC compared to the March 2014 quarter. Safety performance also improved in the June quarter with a total recordable injury frequency rate (TRIFR) of 2.1 compared to a TRIFR of 3.1 over the last twelve months.
Gold production for the June quarter increased at all sites except Bonikro. The key drivers of increased quarterly production were higher gold grades and plant throughput at Gosowong, increased mining rates at Ridgeway, continued ramp up at Cadia East and higher gold recoveries at Lihir.
The expansion of the Cadia East Panel Cave 2 footprint continued during the June quarter and the project is expected to achieve commercial production around the middle of the 2015 financial year.
Newcrest Group AISC of A$913 per ounce was 8% lower than the March 2014 quarter. This was primarily due to a reduction in site operating costs per ounce, which were lower than the previous quarter at all sites except Telfer, and lower production stripping activity.
In the context of the unit cost improvement achieved elsewhere in the Group, the unit cost performance of Lihir in the June quarter and the 2014 financial year was disappointing. The Company has a major review underway to identify and accelerate initiatives to improve Lihir's operating and financial performance.
1 All references to All-In Sustaining Cost (AISC) throughout this report
are references to metrics as per World Gold Council Guidance Note on
Non-GAAP Metrics, released 27 June 2013. Newcrest Group All-In
Sustaining Cost will vary from quarter to quarter as a result of
various factors including production performance, timing of sales, the
level of sustaining capital and the relative contribution of each
2 All references to AISC, cash costs and total costs in US dollars throughout this report are converted to USD at an average A$:US$ exchange rate for the period, being $0.93 for the June 2014 quarter,$0.92 for the 2014 financial year and A$0.90 for the March 2014 quarter.
Forward Looking Statements
These materials include forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", and "guidance", or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs.
Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance andachievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.
Forward looking statements are based on the company and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the company's business and operations in the future. The company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the company or management or beyond the company's control.
Although the company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.
Ore Reserves and Mineral Resources Reporting Requirements
As an Australian company with securities listed on the Australian Securities Exchange ("ASX"), Newcrest is subject to Australian disclosure requirements and standards, including the requirements of the Corporations Act and the ASX. Investors should note that it is a requirement of the ASX listing rules that the reporting of ore reserves and mineral resources in Australia comply with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code") and that Newcrest's ore reserve and mineral resource estimates comply with the JORC Code. Newcrest ceased its listing on the Toronto Stock Exchange ("TSX") on 4 September 2013, but will remain subject to certain Canadian disclosure requirements and standards until it ceases to be an Ontario Securities Commission registrant. Prior to that, Newcrest will continue, in accordance with the requirements of National Instrument 43-101 - Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators, to report its ore reserves and mineral resources estimates in compliance with the JORC Code, along with a reconciliation to the material differences between the JORC Code and the applicable definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM Definition Standards). In relation to the December 2013 Resources and Reserves Statement, released to the ASX on 14 February 2014, the reconciliation is set out in Newcrest's Canadian News Release dated 14 February 2014, and is available at www.sedar.com and at Newcrest's website www.newcrest.com.au. Except as otherwise noted in that document, there are no material differences between the definitions of Measured, Indicated and Inferred Mineral Resources, and Proven and Probable Reserves, under the CIM Definition Standards and the equivalent or corresponding definitions in the JORC Code.
Competent Person's Statement
The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources and Ore Reserves and other scientific and technical information, is based on information compiled by Mr C. Moorhead. Mr Moorhead is the Executive General Manager Minerals and a full-time employee of Newcrest Mining Limited. He is a shareholder in Newcrest Mining Limited and is entitled to participate in Newcrest's executive equity long term incentive plan, details of which are included in Newcrest's 2013 Remuneration Report. Ore Reserves growth is one of the performance measures under that plan. He is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Moorhead has sufficient experience which is relevant to the styles of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in The JORC Code 2012 and is a Qualified Person within the meaning of National Instrument 43-101 - Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ("NI 43-101"). Mr Moorhead consents to the the inclusion in this report of the matters based on his information in the form and context in which it appears including sampling, analytical and test data underlying the results.
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