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Newcrest says its FY22 profit down 25% to $872 million due to lower gold and copper production, rising costs

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(Kitco News) - Newcrest Mining (TSX: NCM), one of the world's largest gold producers, announced today that for the year ended 30 June 2022 (FY22), the company produced 1,956,182 oz of gold (FY21: 2,093,322 oz) and 120,650 t of copper (FY21: 142,724 t).  

In its statement, the company also indicated that FY22 all-in sustaining costs were $1,043 per ounce of gold, up 14% compared to FY21 ($911 per ounce).

The company said that its FY22 statutory profit and underlying profit were both $872 million, down $292 million or 25% compared to FY21 ($1,164 million).

Newcrest added that underlying profit was $292 million lower than the prior period primarily due to lower production volumes at Cadia following the planned replacement and upgrade of the SAG mill motor (completed in November 2021).

The company noted that production volumes were also lower at Lihir which reflects the impact of major maintenance activity, lower autoclave availabilities and unplanned downtime.

According to a press-release, the current period reflected lower gold and copper sales volumes driven by lower production.

The company said that operating costs were impacted by the acute inflationary pressures experienced globally across a range of input costs such as oil and gas, steel and labour as well as higher shipping costs due to the global tightness and challenges in the sea freight market.

In FY23, the company expects to produce 2,100 – 2,400 koz of gold and 135 – 155 ktonnes of copper.

Importantly, Newcrest said it remains committed to disciplined capital management and announced a fully franked final dividend of 20 cents per share, bringing its total dividend for the 2022 financial year to 27.5 cents per share, which exceeds the minimum payout targeted by the company’s dividend policy.

Newcrest is the largest gold producer listed on the Australian Securities Exchange and one of the world's largest gold mining companies.

Newcrest owns and operates a portfolio of operating mines and exploration projects located in Australia, Canada and Papua New Guinea. The company's current gold reserves represent more than 24 years of production at current rates.

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