Hedge funds slash bullish wagers on gold over Trump election win
The precious metal has fallen about 8% from a record high on Oct. 31, with losses accelerating after Trump’s election victory last week.
Shares in Newcrest Mining (ASX:NCM) climbed Monday after the gold miner, Australia’s biggest, said its plan to use the first 200 metres of its Cadia Hill mine’s open pit as a tailings storage facility had been approved.
The company said the permit would create enough storage capacity to enable Cadia East underground mine to return to full production following a dam collapse in March, which halted operations.
Use of the pit as a tailing storage facility means the miner will sacrifice remaining gold and copper reserves.
It also said the approval was the best possible economic outcome despite the move meaning it will forego ore reserves of about 1.5 million ounces of gold and 130,000 tonnes of copper.
It noted that while using the open pit to store tailings would lead to the loss of some gold and copper reserves, the value of Cadia Hill as a long-term tailings storage solution was much greater than the value of the remaining reserves.
The gold producer said the permit from the New South Wales Department of Planning and Environment would enable the underground complex to return to full production rates for about 16 months.
Cadia East underground mine resumed production on March 27, while processing restarted three days later.
Newcrest shares closed 56 cents, or 2.8% higher at A$20.55 on the news.
Updated guidance for Cadia will be released on Thursday, when the miner releases its March quarterly report.
