Newcrest on track for Cadia and Lihir

26 Jul 2012, 5:13 pm   -   Source: AAP
Newcrest Mining says it has exceeded its copper production targets for its 2012 financial year. (AAP)

Newcrest Mining says it has exceeded its copper production targets for its 2012 financial year. (AAP)

Newcrest Mining says project expansion at Cadia and Lihir are on track as its shares rise six per cent in 48 hours

Australia's biggest gold miner Newcrest Mining says major project expansions at Cadia Valley and Lihir remain on schedule as its shares jump six per cent in 48 hours.

Newcrest shares closed one per cent higher at $22.37 on Thursday after jumping more than five per cent on Wednesday.

Analysts said it appeared word had got out that the company was about to deliver a relatively clean June quarter production report.

Newcrest on Thursday said gold production was in line with forecasts while copper production exceeded targets for its 2012 financial year.

The major project expansions at Cadia Valley and Lihir remained on schedule and the Lihir MOPU project was on budget and on schedule for completion in the December 2012 quarter, the company said.

But the company's Hidden Valley operation in PNG was still recovering after high rainfall in the March 2012 quarter.

Newcrest Managing director Greg Robinson told analysts Hidden Valley was "not where it needs to be".

He said costs had to come down in the year ahead.

The company plans to release a five year plan in August before conducting investor trips to Cadia and Lihir later in the year.

"It's a very busy six months ahead," Mr Robinson said.

He added that Newcrest continued to expect the impact of the federal government's carbon tax to be around one to three per cent of group profit.

The miner produced 2.3 million ounces of gold in the year, in line with its forecast.

For the final quarter of 2012, Newcrest produced 20,544 tonnes of copper and 587,310 ounces of gold.

Cash costs were $604 per ounce and cash margins remained strong at $970 per ounce.

IG Markets analyst Cameron Peacock said Newcrest made the Lihir acquisition with the intention of boosting production and further diversifying.

"So they've achieved that," Mr Peacock said.

"There were some teething issues with the takeover of Lihir, but based on this report at least they seem to have ironed some of those out."

Newcrest operates mines in four countries: Australia, PNG, Indonesia and Ivory Coast.

It focuses on two major growth projects, the Cadia East underground mine in central western NSW - which will be Australia's largest underground miner - and Lihir Million Ounce Plant Upgrade project in Papua New Guinea (PNG).

It also aims to have the Wafi-Golpu gold/copper project in PNG in production by the end of the decade.

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