Newcrest reports lower N. Maluku gold output

The following is an excerpt from Australian miner Newcrest Mining Corp.?s quarterly report for the three months ending March.31, 2011 released on Tuesday.

Operation

Gosowong, Halmahera Island, N. Maluku (82.5%)
Gosowong?s March quarter performance was 109,045 ounces of gold at a net cash cost of A$351 per ounce and a gross cash cost of A$382 per ounce. This compares with the December quarter performance of 112,103 ounces of gold at a net cash cost of A$335 per ounce and a gross cash cost of A$357 per ounce.

Gold production was 3% lower than the previous quarter which reflects higher mill throughput being negatively offset by a lower gold feed grade. Gold recoveries in excess of 95% were maintained.

Gold production was also lower compared to the same period last year of 112,883 ounce.

Mining continued in the K1, K2 and K-Link orebodies during the quarter. A higher proportion of mining in K1 resulted in increased ore production at a lower average grade than the previous quarter. Waste movement continued on the Gosowong open pit cutback ahead of expected production during the 2011/2012 financial year.

Site costs were in line with the previous quarter and the higher unit cash costs reflect the lower gold production.

Project Development

Mine design for the development of a second underground mining front in the Toguraci area at Gosowong was essentially completed during the quarter with final approval of the design expected during the June 2011 quarter.

Approved early works including road access, the establishment of the portal area and key infrastructure such as security, water and power supply arrangements are now largely complete.

Exploration

Step-out drilling south at Toguraci returned a significant result of 2.2m @ 35g/t Au from 282.4m in TSR009, confirming the presence of high grade gold mineralisation 500m south of the previously mined open pit. In conjunction with the results reported last quarter to the north of Toguraci (3.0m @ 8.7g/t Au and 2.2m @ 14g/t Au in NTD012W), this intersection highlights the along strike potential for additional resources within the

Toguraci Corridor.

Extensions to Indicated Resources were also demonstrated, with continuity of mineralisation between BOD and Yahut and further extensions to Damar established. Significant results on the Yahut-BOD structure include 2.0m (1.0m)1 @ 19g/t Au from 142.2m in BOD080 and high grade intersections on the Damar Structure including:
- BOD081 2.0m (1.2m)1 @ 14g/t Au from 247.3m
- TND128 3.2m (1.0m)1 @ 16g/t Au from 356.7m
- TND134 2.3m (0.4m)1 @ 11g/t Au from 78.0m
- TND135 4.0m (3.7m)1 @ 27g/t Au from 166.9m
- TND139 3.6m (1.0m)1 @ 70g/t Au from 183.4m
- TND142 3.5m (1.6m)1 @ 34g/t Au from 324.2m

Discrete epithermal vein structures which returned significant results including 3.5m @ 13g/t Au from 101.6m in TND130 and 5.6m @ 15g/t Au from 422.5m in TND140 have been intersected proximal to the Damar shoot and along the Midas structure with BOD087R returning 9.9m (7.4m)1 @ 17g/t Au from 75.1m. Further drilling is planned to define the extent of mineralisation.

At Kencana, approximately 600m to the south of the underground operation, DSD402 intersected two 5m wide epithermal vein breccias in a 40m wide quartz vein stockwork zone. Although gold assays returned up to 1.1g/t Au, the presence of adularia is the best indication to date of the potential for a new ore shoot in this area.

Regionally, target generation conducted in the Contract of Work (CoW) continues to identify highly prospective epithermal targets for drill testing. (end of edited excerpt)