Australia's Newcrest Mining to raise $655 million, quarterly gold output drops

(Reuters) - Australia's Newcrest Mining Ltd NCM.AX on Thursday said it planned to raise A$1 billion ($655 million) to acquire financing facilities for Ecuador's Fruta del Norte mine and fund growth projects, increasing its exposure to rising gold prices.

Australia’s biggest listed gold producer announced the institutional placement as it reported a 16.7% slump in third quarter gold output, missing analyst expectations.

Newcrest said it planned to issue about 39.1 million new shares at A$25.60 per share, representing a 7% discount to its last close on Wednesday.

Some of the funds would be used to acquire the gold pre-pay and stream facilities of Canada-based gold miner Lundin Gold's LUG.TO Fruta del Norte mine.

Newcrest reported that total gold production fell to 518,770 ounces in the three months ended March 31, from 623,124 ounces a year earlier, missing a UBS estimate of 562,000 ounces of gold output. Lower production at its Cadia and Telfer mines and the divestment of its Gosowong mine in Indonesia offset a rise in output from its Lihir mine.

Newcrest last month cut its fiscal 2020 gold production forecast to between 2.1 million ounces and 2.2 million ounces.

It said on Thursday it expects gold production in the June quarter to be higher than March quarter, due to fewer planned shutdowns and forecast favourable gold prices. Gold prices XAU= climbed 3.6% in the March quarter amid a rush for the safe-haven metal due to the coronavirus outbreak.

Reporting by Sameer Manekar in Bengaluru; Editing by Shounak Dasgupta