Newcrest reports lower Q2 gold output, sales at Gosowong mine

By Romel S. Gurky

ASX-listed Newcrest Mining Ltd said that gold production at the Gosowong mine on Halmahera Island, North Maluku province, in the second quarter of this year dropped by 54.60 percent to 17,644 ounces from 38,865 ounces in the first quarter.

The company said in a statement obtained Monday that gold sales volume dropped to 12,333 ounces from 46,170 ounces.

Meanwhile, the company said that All-In Sustaining Cost (AISC) per ounce in the June quarter was higher as a result of lower sales volume due to mining activity being largely suspended during the quarter following the geotechnical event on February 8, 2016. As previously communicated, production at the Toguraci mine resumed on April 12, 2016 while mining activities at the Kencana mine recommenced on June 10, 2016. ?The impact of this geotechnical event has resulted in a revised mining sequence and a move to cut and fill as the sole mining method to be employed at Kencana,? the company said in the statement.

With the change in mining method, the ore production capacity in terms of ore mined from Gosowong is expected to be approximately three quarters of the production levels previously achieved prior to the geotechnical event. It is expected that Gosowong will ramp up production to this level during the first quarter of 2017, Newcrest said.

Gosowong?s reported AISC for the full year has been normalised (i.e. reduced) by $94 per ounce for the suspension of operations at Toguraci and Kencana.

Newcrest said that at the Gosowong, near-mine drilling utilising one surface and two underground core rigs targeted strike extensions to existing resources at Toguraci and Kencana. This drilling is being conducted in conjunction with testing of conceptual targets identified by a recent structural review of Toguraci. The structural review and target generation is now focused on Kencana. The regional exploration search for new high grade veins continued in the greater Contract of Work area at Gosowong with drill testing of priority targets, which will continue during the September quarter. Further target generation work comprising surface geochemical sampling and a regional ground geophysical survey (Induced Polarisation) continues with a number of new targets identified.

Editing by Reiner Simanjuntak