Why has gold production plummeted for these 5 gold miners?

March quarterly updates reveal some surprises on gold miners’ production.

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Gold production from some of Australia’s biggest listed gold producers plummeted in the most recent March quarter, compared to the last three months of 2013 as maintenance, mine shutdowns, rain and flooding hampered operations.

Production from Newcrest Mining Limited (ASX: NCM) fell 11% over the December quarter because of lower mill throughput associated with increased maintenance activity. This included a shutdown of a crusher at Cadia East and processing plant maintenance at the company’s Lihir operation in Papa New Guinea.

Positively for investors, Newcrest reiterated that it is still on track to deliver full year production around the top of its guidance range of 2.0-2.3 million ounces.

Lower grade ore and heavy rainfalls resulted in a 35% drop in production from Evolution Resources(ASX: EVO) Mt Rawdon mine, however this is expected to bounce back again for the coming June quarter.

Regis Resources Limited (ASX: RRL) was also impacted by a severe rainfall event resulting in flooding of open pits at both its Garden Well Operations and Rosemont Gold project. Production continued from ore stockpiles, but was still well down on the previous quarter.

Company

Gold Production Dec Quarter 2013 (oz)

Gold Production Mar Quarter 2014 (oz)

Change (%)

Newcrest Mining Limited (NCM)

621,125

551,590

-11.2%

Evolution Mining Limited (EVO)

107,201

101,408

-5.4%

Regis Resources Limited (RRL)

71,991

64,176

-10.9%

Silver Lake Resources Limited (SLR)

61,152

49,289

-20%

Beadell Resources Limited (BDR)

60,823

32,507

-46.6%

Source: company releases

Silver Lake Resources Limited (ASX: SLR) suffered a massive 20% fall in production as a result of the company’s Murchison Gold Operations being placed on care and maintenance following the fall in gold price and relatively high cost of the mine.

The biggest fall though was from Beadell Resources Limited (ASX: BDL) which has interests in Australia and Brazil. The company saw a significant reduction in gold produced from its Tucano Gold mine which was due to the combined impact of a particularly strong December quarter and less mined ore during Brazil’s wet season.

Beadell is still on track for a strong year and anticipates significant improvement for the remaining three quarters this year. Full-year production guidance remains unchanged at 200,000 – 220,000 ounces of gold.

Foolish takeaway

Although some of the production falls can be attributed to seasonal factors, it’s still important to judge each company on its own. Beadell Resources for example still produced more gold year on year, despite the big fall, while Silver Lake’s drop is likely to continue into coming quarters this year until Murchison Gold Operations can be brought back online.

Motley Fool contributor Regan Pearson does not own shares in any of the companies mentioned in this article.

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