INCREASED gold production during the December quarter for Newcrest Mining was primarily driven by increased output at Lihir and Telfer, with Newcrest managing director Sandeep Biswas saying Lihir’s performance is “very pleasing”.

Lihir achieved a 12.4 million tonnes per annum annualised milling throughput rate for the quarter, according to Newcrest’s December report.

“Lihir’s performance was very pleasing, surpassing its 12mtpa target by achieving a record mill throughput, at an annualised rate of 12.4mtpa, and delivering a significant improvement in its all in sustaining cost per ounce.”

In February, Newcrest reported a half year statutory profit of US$81 million and an underlying profit of US$63 million, underpinned by production of 1.204 million ounces of gold.

Group all in sustaining cost was reduced by 5 per cent to US$770 per ounce.

Gold production was up 6%, while copper production was down 23% at 38,918 tonnes.

“Lihir and Cadia continue to provide near term growth, Wafi-Golpu stage one is an attractive project for the medium term, and our global exploration program and participation in the early stage projects are designed to support our longer term growth,” Mr Biswas said.

At Lihir, gold production was 26% higher in the December quarter, primarily driven by 12% higher milled tonnes and 15% higher milled head grade.

This was partially offset by marginally lower gold recovery, Newcrest said.

In a bid to improve recoveries, a pipeline connecting the floatation tails to the leaching circuit was commissioned in December with the aim of partially offsetting flotation recovery losses by allowing treatment of flotation tailings using the leaching circuit to maximise throughput.

Lower operating costs at Lihir were driven by lower fixed plant maintenance costs due to fewer shutdowns across the site during the quarter.

Reduced power costs due to lower realised heavy fuel oil prices and a weaker Kina and Australian dollar against the United States dollar were also contributing factors.

Waste stripping of phase 14 at Lihir commenced during the December quarter.

Newcrest said drought conditions remain a concern and the company is focused on efficiently managing water to limit potential production impacts.

Newcrest’s 50% owned Hidden Valley mine was affected by poor grade and road closures during the December quarter, which restricted mining activity.

Newcrest and its joint venture partners are currently assessing all options in relation to the future of the Hidden Valley mine asset.

Two drill holes were completed at the Wamum project during the December quarter, with the hole NWDD001 designed to test the Idzan Creek target, intersecting a new zone of mineralisation.

Follow up drilling at Idzan Creek is currently underway, Newcrest said.

The Wamum project is located 22 kilometres north west of Wafi-Golpu.

The project contains two known porphyry systems, Idzan Creek and Wamum.

Group production guidance for the 2015-2016 financial year remains unchanged.

Newcrest expects production from Lihir and Bonikro to be around the upper end of their ranges, while production from Telfer and Hidden Valley is expected to be around the bottom end of their ranges.