Gold production drops by 17pc
Newcrest Limited’s gold production of 775,978 ounces at Lihir, New Ireland, was 17 per cent lower than the prior period driven by a decrease in gold grade milled and lower gold recovery.
The company in its full year result for 2020 noted that total ore mined was lower in the current period due to the completion of mining in phase 9 early last year and ex-pit ore now being primarily sourced from phase 14 in the current period. Gold head grade was 17 per cent lower than the prior period.
Gold recovery was three per cent lower primarily due to a higher proportion of stockpile ore feed and reduced autoclave throughput as the higher levels of clay in the stockpile feed created materials handling issues and increased viscosity which affects oxygen transfer in the autoclaves.
Earnings before interest and taxes (EBIT) of AU$170 million (K416.4mil) was AU$10mil (K24.4mil) or six per cent lower than the prior period due to lower sales volumes and higher operating costs.
This was partially offset by a higher realised gold price and lower depreciation.
Depreciation in the current period was AU$41mil (K100.43mil) or 12 per cent lower primarily due to a decrease in ore mined resulting in lower depreciation of production stripping assets and the lower sales volumes.
Free cash flow of AU$233mil (K570.73mil) for the current period was AU$68mil or 23 per cent lower than the prior period, driven by lower production and associated sales volumes and increased operating and capital expenditure.
This was partially offset by a higher realised gold price and favourable movements in working capital. Meanwhile, Newcrest and Wafi-Golpu Joint Venture partner Harmony, are looking forward to re-engaging with the Government and progress discussions on the special mining lease for the Wafi-Golpu project and are encouraged by the recent statement by Prime Minister James Marape that Wafi-Golpu is a priority project and will be advanced within the existing legal parameters of Papua New Guinea.