NEWCREST MINING LIMI

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Newcrest Mining : June 2021 Quarterly Report

07/21/2021 | 06:28pm

Quarterly Report

For the three months ended 30 June 2021

(figures are unaudited and in US$ except where stated)

Strong June Quarter delivers FY21 guidance and quarterly records

  • Creating a brighter future for people through safe and responsible miningo Goal of net zero carbon emissions by 2050(1)
    o Industry leading low injury rates(2) underpinned by a 27% improvement in TRIFR(3) in the June 2021 quarter
  • Achieved FY21 production guidance, with Cadia exceeding the top end of its guidance range(4)
    1. Quarterly gold production of 542koz(5) and copper production of 38kt
    1. All-InSustaining Cost (AISC) of $797/oz(5) in the June quarter
    1. June quarter AISC margin of 55% or $983/oz(6)
    1. Cadia achieved record annualised mined ore and mill throughput rates
    1. Cadia recorded its lowest reported quarterly AISC of negative $377/oz
    1. Red Chris recorded its lowest reported quarterly AISC of $651/oz
    1. FY21 AISC of $905/oz, delivering an AISC margin of 49% or $884/oz(6) for the financial year
  • Advancing multiple organic growth options
    1. Exploration decline development works progressing well at Red Chris and Havieron
  1. Cadia Molybdenum Plant first production is expected by the end of September 2021(7)
  1. Lihir Phase 14A Pre-Feasibility Study expected to be released by the end of September 2021(8) o Cadia PC1-2Pre-Feasibility Study expected to be released by the end of September 2021(8) o Red Chris Pre-Feasibility Study expected to be released by the end of September 2021(8)
    o Havieron Pre-Feasibility Study expected to be released in the second half of CY21(8)

Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas, said, "Newcrest has safely delivered its group production and cost guidance for the year following a strong fourth quarter. Cadia exceeded the top end of its production guidance range and delivered mine and mill throughput records, showcasing the quality of this world class asset. Newcrest's All-In Sustaining Cost of $797/oz for the June quarter was underpinned by record quarterly AISC outcomes for Cadia and Red Chris, translating to an impressive All-In Sustaining Cost margin of $983/oz."

"We have made significant progress advancing our multiple organic gold and copper growth options during the quarter. At Red Chris and Havieron we commenced decline development works which are the critical path to reaching commercial production. We are also on track to release the outcomes of several of our exciting growth studies through the remainder of the calendar year which we believe will help articulate the future potential of our business."

"Following the localised seismic event at Cadia earlier this month, the Prohibition Notice has been lifted and we are currently rehabilitating the affected area. As previously disclosed, we do not expect this event to impact gold and copper production in FY22 and our development and expansion works continue uninterrupted," said Mr Biswas.

  1. Relating to its operational (Scope 1 and 2) emissions. Newcrest will work across its value chain to reduce its Scope 3 emissions.
  2. Injury rates are lowest quartile when compared to the International Council on Mining & Metals report titled "Safety Performance - Benchmarking progress of ICMM members in 2020".
  3. Total Recordable Injury Frequency Rate (injuries per million hours).
  4. See information under heading "Non-IFRS Financial Information" on Page 17 of this report for further information.
  5. Includes 35koz based on Newcrest's 32% attributable share of Fruta del Norte. The AISC estimate for Fruta del Norte did not impact Newcrest's AISC from its operations for the quarter. Refer to the Appendix for calculation and further details.
  6. Newcrest's AISC margin has been determined by deducting the All-In Sustaining Cost attributable to Newcrest's operations from Newcrest's realised gold price. Refer to the Appendix for details.
  7. Subject to market and operating conditions and potential delays due to COVID-19 impacts.
  8. Subject to Board approval.

Newcrest Mining Limited - Level 8, 600 St Kilda Road, Melbourne - Quarterly Report to 30 June 2021

1

Overview

Gold production was 6% higher than the prior period(9) driven by a strong performance from Cadia and Telfer. Lihir's gold production was 4% lower in the quarter due to unplanned downtime in the autoclaves, lower head grade and recovery rates, and the overrun of the planned March 2021 shutdown.

Newcrest's AISC for the June 2021 quarter of $797/oz(5) was $96/oz lower than the prior period, reflecting the benefit of higher copper sales volumes at Cadia, Telfer and Red Chris, a higher realised copper price and higher gold sales volumes at Telfer and Cadia. These benefits were partially offset by the associated increase in treatment, refining and transportation costs and royalties.

Metric

Jun

Mar

Dec

Sep

FY21

FY20

FY21

2021 Qtr

2021 Qtr

2020 Qtr

2020 Qtr

Guidance(10)

Group(5)

- gold

oz

542,332

512,424

535,477

503,089

2,093,322

2,171,118

1,950-2,150koz

- copper

t

38,370

35,034

34,557

34,763

142,724

137,623

135-155kt

- silver

oz

270,797

228,543

230,769

214,412

944,521

983,431

Cadia

- gold

oz

194,757

179,546

194,088

196,504

764,895

843,338

680-760koz

- copper

t

28,105

26,324

26,643

25,329

106,402

96,042

95-105kt

Lihir

- gold

oz

176,341

183,231

200,173

177,337

737,082

775,978

720-820koz

Telfer

- gold

oz

125,603

105,228

98,855

86,452

416,138

393,164

360-420koz

- copper

t

4,685

3,666

2,443

2,384

13,177

16,278

10-20kt

Red Chris(11)

- gold

oz

10,815

11,095

11,375

12,636

45,922

38,933

45-55koz

- copper

t

5,580

5,044

5,471

7,050

23,145

25,302

25-30kt

Gosowong(12)

- gold

oz

-

-

-

-

-

103,282

Fruta del Norte(5),(13)

- gold

oz

34,816

33,324

30,986

30,160

129,285

16,422

95-110koz

Fatalities

Number

0

0

0

0

0

0

TRIFR(14)

mhrs

1.9

2.6

1.6

2.6

2.3

2.6

All-In Sustaining Cost(5),(15)

$/oz

797

893(16)

963(16)

980

905

862

All-In Cost(17)

$/oz

1,242

1,253

1,349

1,275

1,278

1,044

All-In Sustaining Cost

$/oz

983

854

836

847

884

668

margin(6)

Realised gold price(18)

$/oz

1,780

1,751

1,815

1,837

1,100%

1,530

Realised copper price(18)

$/lb

4.42

3.86

3.26

2.97

3.66

2.57

Realised copper price(18)

$/t

9,744

8,510

7,187

6,548

8,069

5,666

Average exchange rate

AUD:USD

0.7700

0.7729

0.7303

0.7147

0.7467

0.6715

Average exchange rate

PGK:USD

0.2843

0.2846

0.2853

0.2872

0.2854

0.2927

Average exchange rate

CAD:USD

0.8124

0.7896

0.7667

0.7504

0.7789

0.7452

All figures are shown at 100% unless stated otherwise.

9 References to the prior period are to the March 2021 quarter.

  1. Newcrest's guidance for Fruta del Norte is an annualised figure based on Lundin Gold Inc's production guidance for 1 July 2020 to 31 December 2020. See Appendix for further details.
  2. The figures shown represent Newcrest's 70% share of the unincorporated Red Chris JV. Production outcomes for FY20 are reported from the date of acquisition (15 August 2019).
  3. The figures shown represent 100%. Prior to the divestment on 4 March 2020, Newcrest owned 75% of Gosowong through its holding in PT Nusa Halmahera Minerals, an incorporated joint venture. Production and financial outcomes for FY20 represent Newcrest's period of ownership to the divestment date.
  4. The figures shown represent Newcrest's 32% attributable share, through its 32% equity interest in Lundin Gold Inc.
  5. TRIFR for FY20 includes safety results for Red Chris from acquisition.
  6. Due to the negligible impact of Fruta del Norte on Newcrest's Group AISC for FY20 it has been excluded from the FY20 calculation.
  7. AISC for the March 2021 and December 2020 quarters have been restated following the release of Lundin Gold's March 2021 quarterly results on 12 May 2021 and their 2020 Annual Report on 15 March 2021. This resulted in a $2/oz increase to Newcrest's previously reported AISC outcome for the March 2021 quarter and a $5/oz benefit to Newcrest's previously reported AISC outcome for the December 2020 quarter.
  8. From Newcrest's operations only and does not include Newcrest's 32% attributable share of Fruta del Norte through its 32% equity interest in Lundin Gold Inc.
  9. Realised metal prices are the US$ spot prices at the time of sale per unit of metal sold (net of Telfer gold production hedges), excluding deductions related to treatment and refining charges and the impact of price related finalisations for metals in concentrate. The realised price has been calculated from sales ounces generated by Newcrest's operations only (i.e. excluding Fruta del Norte).

Newcrest Mining Limited - Level 8, 600 St Kilda Road, Melbourne - Quarterly Report to 30 June 2021

2

Operations

Cadia, Australia

Highlights

Metric

Jun

Mar

Dec

Sep

FY21

FY20

FY21

2021 Qtr

2021 Qtr

2020 Qtr

2020 Qtr

Guidance

TRIFR

mhrs

2.0

11.3

7.5

3.6

6.1

4.9

Total production

- gold

oz

194,757

179,546

194,088

196,504

764,895

843,338

680-760koz

- copper

t

28,105

26,324

26,643

25,329

106,402

96,042

95-105kt

Head Grade

- gold

g/t

0.92

0.94

0.95

1.02

0.95

1.14

- copper

%

0.40

0.41

0.39

0.40

0.40

0.39

Sales

- gold

oz

201,494

175,295

194,183

195,146

766,118

848,959

- copper

t

29,039

25,332

26,477

24,596

105,444

96,437

All-In Sustaining Cost

$/oz

(377)

(160)

(6)

113

(109)

160

All-In Sustaining Cost margin

$/oz

2,157

1,911

1,821

1,724

1,905

1,370

Cadia achieved record annualised mined ore volumes from Cadia East of 38.1mtpa and a record annualised mill throughput rate of 34.3mtpa in the June 2021 quarter. The higher volumes of ore processed offset the reduction in grade and contributed to an 8% increase in gold production in the period. Mill throughput also benefited from no major planned shutdown events, higher plant availability and debottlenecking initiatives in Concentrator 1.

Cadia's new quarterly AISC record of negative $377/oz reflects the benefits of higher gold and copper sales volumes and a higher realised copper price. These benefits were only partially offset by associated higher royalty payments and treatment, refining and transportation costs.

On 2 July 2021, a localised seismic event occurred in the Eastern end of Panel Cave 2. No injuries were sustained and all personnel working in the affected area were accounted for and safely returned to surface in accordance with Newcrest's standard operating procedure. Mining operations in all other areas, development activities and above-ground operations all continued uninterrupted. The Prohibition Notice that was issued by the New South Wales Government Resources Regulator in respect of the event was lifted on 5 July 2021. An improvement notice has been issued and rehabilitation of the affected area is currently underway. Newcrest does not expect this event to impact gold or copper production in FY22.

As foreshadowed in Newcrest's March 2021 quarterly report, the replacement of the SAG mill motor commenced in early July 2021 and is expected to take ~19 weeks(19) to complete. Newcrest has implemented a SAG bypass for the duration of the SAG mill motor replacement and Concentrator 1 is operating at ~60% of its normal capacity, which will temporarily reduce gold and copper production and increase AISC/oz during this period.

Newcrest is on track to complete commissioning of the Molybdenum Plant (Moly Plant) and expects to achieve first production by the end of September 2021(19). The Moly Plant is expected to deliver an additional revenue stream for Cadia in the form of a molybdenum concentrate which will be recognised as a by-product credit to AISC.

The Cadia PC1-2Pre-Feasibility Study is expected to be released by the end of September 2021(20).

19 Subject to market and operating conditions and potential delays due to COVID-19 impacts. 20 Subject to Board approval.

Newcrest Mining Limited - Level 8, 600 St Kilda Road, Melbourne - Quarterly Report to 30 June 2021

3

Lihir, Papua New Guinea

Highlights

Metric

Jun

Mar

Dec

Sep

FY21

FY20

FY21

2021 Qtr

2021 Qtr

2020 Qtr

2020 Qtr

Guidance

TRIFR

mhrs

0.4

0.4

0.0

0.5

0.3

0.6

Production

- gold

oz

176,341

183,231

200,173

177,337

737,082

775,978

720-820koz

Head Grade

- gold

g/t

2.45

2.58

2.27

2.34

2.40

2.38

Sales

- gold

oz

197,651

194,356

170,308

210,831

773,146

760,724

All-In Sustaining Cost

$/oz

1,481

1,293

1,438

1,283

1,370

1,206

All-In Sustaining Cost margin

$/oz

299

458

377

554

426

324

Gold production of 176koz was 4% lower than the prior period reflecting the impact of unplanned downtime in the autoclaves, lower head grade and recovery rates, and the overrun of the planned March 2021 shutdown. This was partially offset by the benefit of there being no planned shutdown events in the period, which enabled a 6% increase in mill throughput. Head grade and recovery were impacted by a higher proportion of lower grade stockpile feed as access to expit ore in Phase 14 was obstructed by high rainfall events.

Scheduled maintenance activities that were planned for September 2021 have been brought forward and are expected to be completed during a period of unplanned downtime of Autoclave 4. This planned maintenance activity is currently underway, largely offsetting the impact on FY22 gold production associated with the Autoclave 4 downtime.

Lihir's AISC of $1,481/oz was 15% higher than the prior period driven by an increase in stripping activities in Phase 15, timing of sustaining capital spend and higher COVID-19 related costs. These impacts were partially offset by marginally higher gold sales volumes.

Technical and risk mitigation studies to support the Phase 14A Pre-Feasibility Study were substantially progressed during the June 2021 quarter. Newcrest expects to release the findings of the Phase 14A Pre-Feasibility Study by the end of September 2021(21). Newcrest also expects to complete the Seepage Barrier Feasibility Study by the end of September 2021.

21 Subject to Board approval.

Newcrest Mining Limited - Level 8, 600 St Kilda Road, Melbourne - Quarterly Report to 30 June 2021

4

Lihir - Material Movements

Ore Source

Metric

Jun

Mar

Dec

Sep

FY21

FY20

2021 Qtr

2021 Qtr

2020 Qtr

2020 Qtr

Ex-pit crushed tonnes

kt

819

1,407

1,918

1,236

5,379

5,445

Ex-pit to stockpile

kt

364

695

615

1,610

3,283

6,585

Waste

kt

6,776

6,967

4,793

6,269

24,805

18,055

Total Ex-pit

kt

7,959

9,068

7,326

9,115

33,467

30,085

Stockpile reclaim

kt

2,229

1,566

1,765

2,192

7,752

8,250

Stockpile relocation

kt

3,164

3,139

2,884

3,306

12,493

13,599

Total Other

kt

5,393

4,705

4,649

5,498

20,244

21,850

Total Material Moved

kt

13,352

13,774

11,975

14,613

53,712

51,935

Lihir - Processing

Equipment

Metric

Jun

Mar

Dec

Sep

FY21

FY20

2021 Qtr

2021 Qtr

2020 Qtr

2020 Qtr

Crushing

kt

3,048

2,973

3,683

3,426

13,130

13,696

Milling

kt

3,010

2,835

3,691

3,255

12,792

13,798

Flotation

kt

2,191

2,070

2,835

2,780

9,876

10,414

Total Autoclave

kt

1,722

1,642

1,998

1,592

6,954

7,319

Newcrest Mining Limited - Level 8, 600 St Kilda Road, Melbourne - Quarterly Report to 30 June 2021

5

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Newcrest Mining Limited published this content on 22 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 July 2021 22:27:09 UTC.

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