Australia’s Newcrest Mining posts 7% rise in Q2 gold output

The Cadia Valley operation in New South Wales was 2018’s top producing mine, dethroning Newmont’s Boddington operation in WA. (Image courtesy of Newcrest Mining)

Australia’s Newcrest Mining on Wednesday reported a near 7 percent rise in its second quarter gold output, driven by increased production across all its operations, led by its flagship Cadia mine. Total gold production for the country’s largest independent gold miner for the three months to Dec. 31 came in at 654,849 ounces compared with 612,695 ounces a year ago, a 19 percent increase from the previous quarter.

The miner maintained its fiscal 2019 gold production guidance of 2.35 million ounces to 2.6 million ounces.

Newcrest said it continues to expect gold production in the second half of the year to be higher than the first half due to fewer planned shutdowns.

The company’s low-cost Cadia Valley Operations in New South Wales achieved record gold output in the second quarter, it said, producing 239,470 ounces of gold, which made up about 37 percent of its overall production.

All-in sustaining costs were down to A$720 per ounce in the quarter, the company said in a statement, from A$829 per ounce a year ago.

In December, Newcrest raised its stake in Ecuador gold and copper developer SolGold Plc and solidified its position as the largest investor, ahead of mining giant BHP Group.

Gold producers across the world are on a deal-making spree to bolster their shrinking reserves, amidst higher prices for the yellow metal.

After two recent large acquisitions by Newmont Mining and Barrick Gold, analysts are expecting Newcrest to be one of the next gold companies to combine with a rival.

Newcrest also signed a deal in December with the government of Papua New Guinea to fast-track approval for a major mining lease by the end of June 2019. The company is already developing a joint venture in its Wafi Golpu project with Harmony Gold Mining in Oceania’s poorest country.

Newcrest’s stock price had risen about 12.3 percent in the last three months of 2018, with a corresponding rise in gold prices of around 7.6 percent.

(By Niyati Shetty in Bengaluru; Editing by James Dalgleish and Leslie Adler)

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