PERTH (miningweekly.com) – Gold miner Newcrest Mining has reported an 18% interest in underlying profits and a 3% increase in revenue during the six months to December, compared with the previous corresponding period, despite an 12% decline in gold production.

Underlying profits for the interim period reached $280-million, up from the $237-million in the previous corresponding period, while revenue increased from $1.73-billion to $1.79-billion.

While gold production for the half-year declined by 12%, to 1.1-million ounces, the realised gold price increased by 18%, to $1 446/oz, up from $1 228/oz in the first half of 2019.

Free cash flow for the half-year was negative $729-million, but was positive $106-million before the acquisition of Red Chris and the additional investment into TSX-listed Lundin Gold was taken into account.

“The first half of the financial year was one in which we invested for the future. We completed the acquisition of 70% of Red Chris, a mine with a potential tier one orebody in Canada, we increased our investment in Lundin Gold, the owner of Fruta del Norte, a tier one mine in Ecuador, and we delivered some excellent drill results at Havieron and Red Chris,” said Newcrest MD and CEO Sandeep Biswas.

“At Lihir and Telfer, we applied updated operating and maintenance strategies to optimise equipment uptime and utilization and, in the case of Telfer, ore grade to the plant.

“At Cadia, we approved to execution the first of two stages of our expansion of this tier one multi-decade mine and recent developments in relation to the state of Papua New Guinea to progress Wafi-Golpu are encouraging.”

Gold production at Cadia reached 411 452 oz during the half-year, 9% lower than the previous corresponding period, driven by lower volumes and a decrease in gold grades, while Lihir production was 12% lower also owing to lower head grades.

Telfer production was down 15% on the previous corresponding period, driven by a 32% decline in tonnes of ore milled, while Gosowong production was 26% lower owing to lower head grades.

Newcrest earlier this month struck a $90-million agreement to divest of the Gosowong mine, in Indonesia, selling its interest to PT Nusa Halmahera Minerals.