Issue link: http://resourceworld.uberflip.com/i/124506
A U S T RALIAN UPD ATE Newcrest Mining has several irons in the fire Australian-based gold producer Newcrest Mining Ltd. [NM-TSX; NCM-ASX] is the fourth largest in the world and on March 2 this year the company began trading on the TSX. Things got tough for Newcrest Mining; the company announced, on March 28, that it was cutting its financial year 2012/13 gold production guidance to 2.00 to 2.15 million ounces, down around 10% on its previous forecast. The major culprit was its Lihir asset in Papua New Guinea. Last year, Newcrest produced 2.29M oz. It is forecasting 75,000 to 85,000 tonnes of copper production this year and has reserves with a life of just short of 40 years. Newcrest Mining's three major projects in terms of growth focus are Cadia in New South Wales, Lihir and Wafi Golpu in Papua New Guinea. The Cadia Valley Operation is 250 km west of Sydney and only 25 km from the town of Orange. There are three mines – the open pit Cadia Hill and the Cadia East and Ridgeway underground mines. Operating since 1999, these mines have produced more than 7 million oz gold. The most recent positive development at Cadia has been the Cadia East underground mine which began commercial production January 1, 2013. At time of writing, the March 2013 quarterly report had not been released, but the December 2012 quarter figures for the Cadia Valley projects showed production of 94,151 oz at a total cost of AUD $746/oz. which makes this operation a strong performer for Newcrest Mining. The Lihir Project has been more difficult, but good news is not far away. While it produced 147,126 oz in the December 2012 quarter, this was at total cost of AUD $889/oz. In its March 28 announcement, Newcrest noted "the Lihir operation is running at reduced production capacity following a shutdown of autoclave 1, part of the original Lihir plant. Newcrest will undertake a complete and permanent repair to ensure the long term, reliable and safe performance of the autoclave, expected to take five to seven weeks." Despite this, Newcrest Mining is confident about the longer term future of Lihir. The company has spent US $1.4 Bn on a major expansion of the Lihir process plant, known as the Million Ounce Plant Upgrade (MOPU). The MOPU project consists of installation of a new crushing facility, upgrades to the ore processing plant, and additional power generation capacity and water supply. It will enable Lihir to produce around 1 M oz/year by 2015, up from 660,000 oz. The Cadia and Lihir upgrades have got a positive reaction from some in the market. Dan Debow from USAA Global Metals and Minerals Fund said in an interview on March 19 that Newcrest has "delivered two new projects this year – Cadia Valley and an expansion of the Lihir project in Papua New Guinea. So the cashflow they've been spending on those projects is going to come to an end. They're going to start generating free cashflow, start returning that to shareholders as well." Newcrest Mining's third priority project, Wafi-Golpu, is a 50/50 joint venture with Harmony Gold Mining Company [HMY-NYSE]. Wafi-Golpu has a resource of 29 M oz gold and 9 M tonnes copper. Wafi-Golpu is an epithermal gold and porphyry copper project, common in Papua New Guinea. The project is described by Newcrest Mining CEO, Greg Robinson, in glowing terms. "It's what I think is the best copper-gold porphyry, non-producing asset in the world," Robinson said in Hong Kong in March. The aim is for a feasibility study to be completed this year and for production to start in 2019. n M AY 2 0 1 3 Huldra Silver reaches commercial production Huldra Silver Inc. [HDA-TSXV] reports that as of March 26, 2013 commercial production was achieved based on current production levels at its Treasure Mountain silver-lead-zinc mine 28 km northeast of Hope, three hours drive east of Vancouver, southwest British Columbia. The company plans to release production accounting and cash flow statements for Q2 2013. Huldra continues to see significant monthly increases in production and shipments of concentrates. In the first lot period March 1-15, a total of 92.58 dry metric tonnes of lead-silver concentrate and 131.24 dry metric tonnes of zinc concentrate were shipped to the smelter. In the second lot period March 16-31, an estimated 73 dry metric tonnes of lead-silver concentrate and 38 dry metric tonnes of zinc concentrate were shipped to the smelter. Total smelter payments received for March were US $1,508,588 plus HST. From March 17 to 21, 2013, production was temporarily halted for a ball mill re-lining and other upgrades to the mill. The result of these modifications will increase total utilization of the mill and Huldra expects monthly shipments of concentrates to continue to increase. With the current changes in place, the company has begun to introduce higher quality mill feed. Huldra utilizes an off-site mill for processing mill feed located outside of the town of Merritt, southwest BC. Ryan Sharp, President and CEO states, "I am very excited that the goals we set three years ago on being a silver producer have been met. I would personally like to congratulate the entire Huldra Silver team on this milestone achievement." n www.resourceworld.com 47