Newcrest Gold Output Falls 13% After Shutdowns on Deathsby
Operations in Australia and Papua New Guinea were halted
Maintenance work at Lihir mine also restricted output
Newcrest Mining Ltd., Australia’s biggest gold producer, reported first-quarter output fell 13 percent, missing analysts’ estimates, after operations at two mines were halted following the deaths of workers. Its shares fell the most in more than two months.
Gold production was 583,745 ounces in the three months ended September 30, compared to 673,542 ounces in the previous three months, the Melbourne-based company said Tuesday in a statement. That missed a median forecast of 622,000 ounces of three analysts surveyed by Bloomberg.
A mine technician was fatally injured last month at the Ridgeway mine at the producer’s Cadia Valley operations in Australia. In a separate incident, an employee at the Hidden Valley operation in Papua New Guinea mine was killed on July 18.
“Operations at Ridgeway and Hidden Valley were suspended for 11 and 33 days respectively following the fatalities, impacting production at both sites,” the company said in the statement. Newcrest has begun a detailed safety review, “with a particular focus on high risk tasks,” Chief Executive Officer Sandeep Biswas said in the statement.
While gold futures have posted five straight quarterly declines, producers in Australia are being spared some of the impact of lower prices as the local currency falls against the dollar, boosting margins. The currency and rising low-cost output helped Newcrest swing to a profit in the year ended June 30.
Newcrest slumped 5.1 percent, the most since Aug. 18, to A$14.11 in Sydney trading, trimming its advance this year to 30 percent. An index of 22 Australian gold producers declined 3.5 percent.
The producer’s all-in sustaining costs, a measure that includes spending on production, administration, capital and exploration, rose to $791 an ounce, from $762 an ounce in the previous quarter, the company said in the statement.
Newcrest said its full-year gold output guidance remained unchanged. It earlier forecast production of between 2.4 million and 2.6 million ounces in the 12 months through June 30. Lower levels of maintenance at its Lihir mine in the current quarter will lift output, the company said.