Newcrest Mining Announces FY19 Half-Yearly Results

NCM

Leading Gold Mining Company, Newcrest Mining Limited (ASX: NCM) has released its half-year results for FY 2019 (H1 FY19). For the half-year period, the company has reported statutory profit and underlying profit of $237 mn and $237 mn, respectively. The statutory profit was up by 142% on the previous corresponding period (pcp), and the underlying profit was up by 104%.

The company has reported a gold production of 1.2 million ounces which is 6% higher than pcp. Further, the company witnessed a record low half-yearly Group All-In Sustaining Cost (AISC) of $747 per ounce which is 13% lower than pcp. The company’s net debt has been reduced to $959 mn. It reported Gearing at 11.5%, and net debt to Ebitda ratio of 0.6x. It also reported franked interim dividend at US 7.5 cents per share. 

Currently, the company has operating assets and advanced projects in Cadia, Lihir, Golpu, Gosowong, and Telfer.

At Cadia, all in sustaining cost has been estimated at $131/oz, ore reserves and mineral resources consists 22 mn oz gold & 4.3 mn t copper, and 38 mn oz gold & 8.3 mn t copper respectively. At Lihir, all in sustaining cost has been estimated at $925/oz, ore reserves and mineral resources consists 24 mn oz gold, and 50 mn oz gold respectively. At Gosowong, all in sustaining cost has been estimated at $1076/oz, ore reserves and mineral resources consists 0.37 mn oz gold & 0.54 mn t copper, and 1.1 mn oz gold & 1.5 mn t copper respectively. At Telfer, all in sustaining cost has been estimated at $1347/oz, ore reserves and mineral resources consists 2 mn oz gold & 0.2 mn t copper, and 6.4 mn oz gold & 0.59 mn t copper respectively. At Golpu special mining lease application has been made for the development project, its ore reserves, and mineral resources consist 5.5 mn oz gold & 2.5 mn t copper, and 13 mn oz gold & 4.4 mn t copper respectively.

The company aspires to target five breakthroughs by the end of the year 2020 through NextGen caving, NextGen HydroMet, selective processing, robotic mining, and sustainable mines. NCM’s footprint can be observed at numerous places such as Cote d’Ivoire, Indonesia, North America, Mexico, Ecuador, Chile, and Argentina.

NCM’s return on investments from 1 July 2015 to 6 February 2018 stood at 94% in AUD, and 80% in USD, beating the benchmark Gold Index which rose by 30%. A joint venture with Lundin Gold in Ecuador includes eight early stage exploration concessions north and south of Fruta del Norte, up to 50% interest earn-in project worth $20m over a 5yr period, incl. minimum of $4m in first 2 yrs.

The company aspires to increase and manage its portfolio assets within 10 years with 5 times Tier 1 assets and 2 – 4 x Tier 2 assets. Tier 1 assets have the potential of more than 300 k oz p.a. gold with more than 15 years of mine life at AISC < $800 per oz, whereas Tier 2 assets have the potential of more than 200 k oz p.a. gold with more than 10 years of mine life at AISC < $900 per oz.

The company reported $176 mn of free cash flow in H1 FY19 as compared to $134 mn in H1 FY18. Its leverage ratio (Net Debt/Ebitda) was observed at circa 0.6x in H1 FY19 as compared to 0.7x in H2 FY18 and 1.1x in H1 FY18. It reported its coverage metrics at $3.1 bn in H1 FY19 as compared to $3.0 bn in H2 FY18 and $2.5 bn in H1 FY18.

On stock information, NCM last traded at $24.98 (down -1.382%, February 14, 2019) with the market capitalization of $19.46 bn. Its current PE multiple is at 71.19. Its 52 weeks high has been noted at $25.5 and low at $18.575. Its absolute return for 3 months, 1 year, and 5 years are 23.56%, 13.18%, and 124.96% respectively.


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