Newcrest's Lihir gold mine in Papua New Guinea.
The production downgrade comes at an inopportune time for the ASX-listed gold miner,with the price of the precious metal in Australian dollars close to a record high. Australian-denominated gold on Wednesday was hovering around $2500 an ounce,as investors sought a safe haven from the economic uncertainty caused by the coronavirus outbreak and the dramatic fall in the oil price.
Newcrest chief executive Sandeep Biswas said increased gold production at its Cadia mine in NSW and Red Chris mine in Canada's British Columbia would not be enough to offset the shortfalls at Lihir and Telfer.
While the divestment of Newcrest's Gosowong mine in Indonesia was a contributing factor,the miner's output downgrade was largely due to the challenging mining conditions faced at Lihir,located in an extinct but geothermally active volcanic crater on an island 900 kilometres north-east of Port Morseby.
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Mr Biswas said output at Lihir,usually one of Newcrest's top-producing mines,will now come in between 775,000 and 825,000 ounces.
"Lihir has been challenged by difficult mining and geothermal conditions,leading to a sub-optimal blend of ore feed to the plant,"Mr Biswas said.
"Operating improvements planned at Lihir for the remainder of the 2020 financial year will be insufficient to address its shortfall in production."