PERTH (miningweekly.com) – Australian gold miner Newcrest Mining, which will retain ownership of the Telfer mine, in Western Australia, has swung back into profit during the financial year ended June.

Newcrest on Monday reported a statutory profit of A$546-million, compared with a loss of A$2.2-billion in the previous financial year.

Underlying profit for the year increased by 19% to A$515-million, while earnings before interest, taxes, depreciation and amortisation were up by 11% to A$1.6-billion.

During the year, Newcrest achieved a 1% increase in gold production to 2.42-million ounces, while copper production rose 12% year-on-year to 96 800 t, driven by the ramp-up of the Cadia East underground mine and higher ore feed grades at the Gosowong and West African projects, while higher milling rates at Lihir partially offset the impact of lower feed grades at the mine.

As a result of the higher output, revenue for the period increased by 8% to A$4.3-billion, up from the just over A$4-billion reported in 2014.

All-in sustaining costs for the year were 12% lower year-on-year at $789/oz, reflecting the lower levels of production stripping, while both capital expenditure (capex) and exploration expenditure came in below guidance at A$564-million and A$46-million respectively.

“The group’s 2015 financial performance was good, with improved profitability, increased free cash flow and substantial reduction in our US dollar denominated debt,” said Newcrest MD and CEO Sandeep Biswas.

“Newcrest remains focused on further strengthening its balance sheet through safely maximising cash flow from operations and capital discipline, driven by our successful Edge programme.”

Biswas noted that the company’s improved financial position provided a platform for future growth.

“Our studies are highlighting the value in our asset portfolio. Lihir and Cadia provide near-term growth, Golpu is an attractive project for the medium term and our exploration and participation in early-stage projects underpin our longer-term growth,” he said.

The miner expected to increase its capex in 2016 to between A$700-million and A$825-million, while exploration expenditure would increase to between A$60-million and A$70-million.

Meanwhile, Newcrest told shareholders that, following a review of the future operating options for Telfer, the company had found that the project’s value would be maximised by Newcrest retaining Telfer and investing in future cutbacks.

Newcrest had previously indicated that a lower cost-base at Telfer would be required to support future cutback investments at the mine.

The company said on Monday that findings from the review, along with the mine’s strong operating and financial performance during 2015 and the improved market outlook for Telfer’s costs, had supported the decision to retain the mine.

Looking ahead, Newcrest expected to produce between 2.4-million and 2.6-million ounces of gold and between 80 000 t and 90 000 t of copper in 2016.