Newcrest Mining is seeing its share value plunge this week after the grades at three of its mines in Australia were revealed to be diminishing. The shares came down 85 cents to rest at $30.22 on Tuesday, rising to $31.65 at midday Wednesday (AEST).
In accordance to the disappointing news Newcrest mining announced that it was expecting a 6% lower production for the year ending June 2012 after the close of trading on the Australian Securities Exchange. The initial production guidance was 2.925 million ounces of gold in the year but it is being readjusted to as low as 2.550 million ounces.
This is the cumulative effect of dropping gold production at a couple of its mines. At the Telfer mine in Australia the poor gold grades and low production rates over the last six months have affected its predicted guidance. The actual production is 50,000 ounces lower.
Similarly in the Lihir Mine in Papua New Guinea a planned shit down got extended due to the rains and caused a lowering of production. The mine is expected to produce 100,000 ounces less than previously predicted.
At the Cadia Valley mine the heavy rainfall in New South Wales combined with the slip in the open pit to bring down production rates for gold. The mine is slated to produce 30,000 less ounces of gold from what was given in the guidance for the year. On the plus side all the projects remain on schedule and are operating within the forecasted budget.