Australia’s leading gold mining company Newcrest Mining (ASX: NCM) announced a sequential increase of 9.1 per cent in its gold production for the fourth quarter, driven by a recovery in production at its principal Cadia mine in New South Wales.
The company reported on Monday that its Cadia mine saw a nearly 14 per cent sequential rise in production due to reduced planned and unplanned maintenance, marking a significant rebound from a dip in the previous quarter.
Meanwhile, Newcrest’s Lihir mine in Papua New Guinea reported an 8.2 per cent sequential increase in production. However, the output was below the company’s projected figures due to adverse weather conditions that impacted mining and milling operations.
The company’s gold production for the quarter ending June 30 was 556 kilo ounces (koz), falling short of the Visible Alpha consensus estimate of 584 koz. This compares to 510 koz in the third quarter and 637 koz in the same period a year ago.
Over the year, Newcrest produced 2,100 koz of gold, just meeting the lower end of its guidance range of 2,100 koz to 2,400 koz.
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Currently, Newcrest is the target of a takeover bid from Newmont Corporation (TSX: NGT) (NYSE: NEM) valued at AUD$26.2 billion ($17.65 billion).
“In May we reached an agreement for Newmont to acquire 100 per cent of the issued shares in Newcrest,” Newcrest CEO Sherry Dube said.
“The transaction will bring forward significant value to Newcrest shareholders through the recognition of our outstanding portfolio of long-life assets, our material and increasing exposure to copper, and our well-established organic growth pipeline.”
Dube added that the combined group will create a clear global leader in gold production, with increased flexibility in project sequencing and growth optionality and a market-leading position in safety and sustainability.
The Cadia mine, which has been under scrutiny by the Environment Protection Authority, made significant adjustments to its operations in June to reduce dust emissions from the mine’s main vent.
The company announced that Cadia is set to undergo a human health risk assessment in September, which will provide a comprehensive overview of the district’s overall air quality.
The miner’s all-in sustaining costs increased to $1,196/oz, up from $1,012/oz in the previous quarter.
Newcrest stock stayed flat on Tuesday at $23.89 on the Toronto Stock Exchange.
