Miner confident in Lihir

AUSTRALIA’S largest mining company and gold producer and the operator of Lihir Gold Limited Newcrest Mining Limited (Newcrest) reported its December quarter of 2014 characterised by a significant gold production outperformance relative to expectations at Cadia (165koz) and Telfer (140koz).

Newcrest said this was partially offset by below expected performance at Gosowong, Lihir and Hidden Valley.

The quarter’s report highlighted that the performances of Cadia and Telfer have resulted in gold production guidance for FY15 being raised to 2.3-2.5Moz.

Stronger copper production, as well as improved operating efficiencies and cost reductions from the Edge program, have resulted in the All-In Sustaining Cost guidance range for the group being lowered to AUD 2.3-2.5billion. (K5.9 –K6.4 billion).

The report said a fatality at Hidden Valley on December 6, 2014, closed milling operations for 17 days.

Newcrest managing director and chief executive officer (CEO), Sandeep Biswas, said, "The tragic fatality of one of our colleagues at Hidden Valley is something that we consider to be absolutely unacceptable in our workplace.

There is no higher priority for everyone at Newcrest than safety and this fatality reinforces the need to continue focusing our efforts on eliminating potential hazards from our workplace."

The CEO indicated that Lihir’s gold production was higher than the prior quarter but lower than expected. Lihir’s AUD All-In Sustaining Cost (AISC) increased in the quarter primarily as a result of the deterioration of the exchange rate. "While Lihir continues to under perform against its potential, I’m confident that we now have the right strategy and people in place, having recruited some of the best people externally and from our other operations. December was the first month the entire new management and technical team were fully in place and I was pleased to see an immediate positive impact on our key focus areas of uptime and intensity," said Sandeep.

The miner alluded to previous announcement; Cadia East Panel Cave 1 reached a major milestone by safely propagating through to the surface in late October 2014, significantly ahead of expectations.

The anticipated rise in Cadia overall AISC, following Cadia East Panel Cave 2 commencing commercial production (on October 1, 2014), was not as large as expected primarily due to higher than expected production and higher copper prices during the quarter.

Higher throughput rates at Telfer contributed to a 4% increase in gold produced. Ongoing efficiency improvement initiatives helped achieve a 6% increase in underground mine production.
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