Newcrest Mining is reviewing the future of some of its mines, as the recent gold price plunge continues to take a toll on the nation's fourth-biggest mineral export industry.
Newcrest was one of several ASX-listed gold miners to reveal March quarter results on Tuesday, and the publication of production costs revealed that numerous mines across Australasia are unprofitable at current gold prices.
While Newcrest's biggest mines are low cost, its portfolio includes stakes in high-cost mines such as Papua New Guinea's Hidden Valley, which the company owns in partnership with Harmony Gold.
Tuesday's report revealed that "all in" costs for the mine were $2268 an ounce during the March quarter; drastically higher than the $US1410 $1326) that gold was fetching on Tuesday evening.
Newcrest said a program to improve performance and "assess the future" of the mine was under way with "considerable focus".
The Telfer mine in Western Australia is also becoming expensive to run, with production costs of $1573 an ounce in the March quarter.
In what sounded like a portent to divesting certain assets, Newcrest said it would take action to "simplify and reduce activity" across its business.
"Newcrest continues to review all of its business activities, particularly those related to higher cost current or future production," the company said.
"The company is focused on creating a strong return from our major investments in expanded lower cost production sources and generating free cashflow."
Newcrest revealed it had already cut 150 jobs from its Melbourne and Brisbane offices as part of a cost-cutting regime.
While Newcrest shares lost more than 3 per cent of their value, mid-tier gold producer St Barbara was the gold sector's worst performer, losing almost 14 per cent after downgrading its production guidance. The miner conceded it would produce about 3 per cent less gold than forecast in the year to June 30.
St Barbara said it had reassessed all its mines after the gold price slump over the past fortnight, and expects all can survive assuming a gold price of at least $US1400 an ounce.
Several of the company's other mines are also producing on very thin margins at current gold prices.
Evolution Mining shares also fell more than 6 per cent after the company revealed an "all-in" production cost of $1353 an ounce during the March quarter.
Evolution disappointed the market in terms of gold produced, but retained its full-year guidance.