(Updates with company comment in second paragraph.)
Aug. 1 (Bloomberg) -- Newcrest Mining Ltd., Australia’s biggest gold producer, said it needs to expand production at the Bonikro site in West Africa to make the unit a viable part of its portfolio of mines.
Exploration to increase Bonikro’s resource base is expected to start from the next quarter, Colin Moorhead, executive general manager of exploration of the Melbourne-based company, said at a conference today in Western Australia. Bonikro, located near Hire, about 250 kilometers (155 miles) northwest of the commercial capital Abidjan, produces about 120,000 ounces of gold a year.
“We’re certainly not there for a 100,000 ounce operation,” Moorhead said. The mine was shut for a number of months starting in December because of political unrest in Ivory Coast.
Spot gold, which reached a record $1,632.80 an ounce on July 29, advanced 8.5 percent last month on concern that sovereign-debt crises in the U.S. and Europe may derail the global economic recovery. Newcrest acquired Bonikro and the surrounding exploration area when it bought smaller rival Lihir Gold Ltd. in August last year.
Newcrest produced 2.7 million ounces during the financial year ended June 30 from operations in Australia, Papua New Guinea and Indonesia. The company in June announced it’s selling two of its smaller mines in Australia.
Newcrest rose as much as 1.3 percent to A$40.07 and traded at A$39.82 as of 2:27 p.m. in Sydney. The stock has declined 1.5 percent this year, compared with a 5 percent drop in the benchmark S&P/ASX 200 Index.
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