Photo by: Bloomberg
PERTH (miningweekly.com) – Australian gold major Newcrest on Friday flagged the possible sale of its Telfer gold mine, in Western Australia, where the miner is working hard to lower costs.
Newcrest previously indicated that a lower cost-base at Telfer would be required to support future cutback investments at the mine, and reported on Friday that a 21% decrease in the mine’s all-in sustaining cost to A$867/oz in the first half of the 2015 financial year, had increased the attractiveness for investment options being reviewed at Telfer.
A stronger gold price, underpinned by a weaker Australian dollar, also increased the attractiveness of investment options at the mine.
Newcrest said that a review of the mine had been broadened to include an evaluation of hedging of fuel and Australian dollar metal prices, as well as “alternative ownership options”.
For the 2015 financial year, the Telfer mine expects to produce between 510 000 oz and 560 000 oz of gold.
Meanwhile, Newcrest on Friday reported a 400% increase in net profit for the six months to the end of December. The miner reported that statutory profit for the period increased to A$200-million during the interim period, compared with the A$40-million in the previous corresponding period.
Earnings before interest, taxes, depreciation and amortisation margins remained unchanged at 36.3%, for A$730-million.
However, gold production for the interim period was down 6% on the previous corresponding period to 1.13-million ounces, while copper production was up by 19% to 50 300 t.
The lower gold production was owing primarily to lower grades at the Lihir mine, in Papua New Guinea, while gold production from the Cadia East operation, in New South Wales, increased during the period, to replace the processing of lower-grade, lower margin stockpiles, which ceased during the previous corresponding period.
The increased copper recovery corresponded with the increased production from Cadia East, as well as improved copper recovery at Telfer.
The miner told shareholders that the company’s focus over the last six months had been on intensifying efforts to reduce major hazards and significant potential incidents, as well as operational discipline and maximising cash flow generation at all of its operations.
The company also implemented a comprehensive, company-wide improvement programme to pursue improvements across all areas of the business.
The gold miner recently upped its gold production expectations for the full-year from between 2.2-million and 2.4-million ounces, to between 2.3-million and 2.5-million ounces, while copper production expectations have also been increased from the previous estimate of between 75 000 t and 85 000 t, to between 90 000 t and 100 000 t.