By Sarah Byrne

NEWCREST Mining reported a statutory profit of A$546 million, with an underlying profit of A$515 million for the financial year ending 30 June 2015, but says there is room for improvement at its PNG operations.

Gold production for the financial year was 2.423 million ounces, within the group’s guidance range of 2.3 – 2.5 million ounces, and full year copper production of 96.8 thousand tonnes was also within guidance.

Newcrest said higher milling rates at its Lihir project in Papua New Guinea (PNG) partially offset the impact of lower ore feed grades at the site in the current period.

Lihir gold production and sales of 688,714 ounces and 691,660 ounces, were 5 per cent and 7% lower than in the corresponding period.

Revenue at Lihir of A$1,02 billion was 3% lower than the corresponding period, reflecting lower sales volume.

Speaking on a recent conference call, Newcrest managing director Sandeep Biswas said there is opportunity for further improvement at Lihir, with improvements to the milling rate a key opportunity.

“Although the plant is not performing to a level I am satisfied with, the improvements in milling throughput are substantial,” he said.

“Our target remains to achieve a sustainable milling throughput rate of 12 million tonnes per annum by December this year. “

“Continued improvement in plant reliability and cost reduction remain the biggest levers for improving Lihir’s performance,” Mr Biswas said.

With feasibility at Wafi-Golpu expected to be completed by the end of December, Mr Biswas said the exploration project is a world class growth option for the company.

Newcrest has a permit for advanced exploration at Wafi-Golpu and feasibility support has been granted, with the company currently in the process of finalising suitable framework with the PNG government and in discussions with local landowners, according to Mr Biswas.

“We are also seeking value creation through early exploration and project entry,” he added.

Harmony Gold holds the remaining 50% interest in Wafi-Golpu, with Newcrest having a pre-emptive right over the interest if it goes on the market.

Commenting on whether Newcrest would be interested in Harmony’s stake in the project if it were to come on the market, Mr Biswas said Newcrest would definitely be interested if it were on the market at the right price.

Newcrest reported all operations, excluding Hidden Valley, improved free cash flow generation in the current period and were free cash flow positive.

Commenting on results at Hidden Valley, Mr Biswas said stripping work for this year has been postponed and the company remains focused on mining out the resources currently there.

Safety at Hidden Valley and the project achieving free cash flow positive results are a focus for the coming year, Mr Biswas said.

“We have deferred the next phase at Hidden Valley as a result of the gold price, but if the price were to go up then that is something that would come back on the table.”

Overall the company reported all-in sustaining cost expenditure of A$2.27 billion, with total capital expenditure of A$564 million and exploration expenditure of A$46 million, both figures below their guidance range.

Newcrest’s all-in sustaining cost of A$941 per ounce sold in the current period was 4% lower than the corresponding period.

Newcrest said this is a reflection of lower levels of production stripping and sustaining capital expenditure, higher by-product revenue associated with higher copper sales volumes, partially offset by the 9% deterioration in the average Australian dollar against the corresponding period.

The Lihir gold project is 100% owned by Newcrest and is located in the New Ireland province.

Newcrest holds a 50% interest in the Hidden Valley gold and silver project, which is located in the Morobe province, with South African mining company Harmony Gold holding the remaining 50% interest.