Newcrest to produce gold in RI

Newcrest to produce gold in RI

KALGOORLIE, Australia (Reuter): Newcrest Mining Ltd said yesterday it expects to produce 150,000 ounces of gold annually from its Gosowong project in Indonesia at an average cash cost of US$150 an ounce.

Production at the mine should start in late 1998, Newcrest official David Sasson told the Diggers and Dealers mining conference here.

The project is estimated to cost US$60 million, he said. Sasson also said the Telfer mine in Western Australia, which has been plagued by high costs and flooding, would operate in the black beginning this financial year to June 30.

"Telfer will be profitable from this year onwards," Sasson said.

Analysts have said the problems at Telfer are weighing on the Newcrest's bottom line.

Stockbroker Hartley Poynton Ltd said in a recent report it expected Newcrest to post a net loss of A$24.6 million in 1997/98.

Sasson also said Newcrest's Cadia gold mine in New South Wales would commence production in September 1998 and that the nearby high-grade Ridgeway deposit was "moving toward feasibility."

"Newcrest will continue to fund exploration, albeit in a more structured manner," he said.

Former Newcrest managing director John Quinn resigned from the company in May 1997 following a failed bid by Newcrest to merge with rival Normandy Mining Ltd.