Gold Stocks under Investor’s Purview- NST, NCM

  • May 12, 2019 AEST
  • Team Kalkine
Gold Stocks under Investor’s Purview- NST, NCM

Amidst US President’s recently shared intention of increasing the Chinese import tariffs to 25% on $200 worth of imports, gold investors are keeping a close eye on safe-haven.

Let’s look at two gold miners on ASX under Investor’s purview.

Northern Star Resources Ltd (ASX: NST)

Northern Star Resources Ltd is Australia’s leading gold exploration and production company. The company recently completed $15 million (Two-Tranche at A$0.13 per share) to fund exploration strategy and also intends to conduct $3 million SPP.

On 1 May 2019, the company presented key financial highlights at Macquarie Australia Conference. During 1H FY2019, the underlying net profit after tax was up by 11% on pcp at $89.1 million. There was an increase in the cash flow from the operating activities by 33% to A$169 million on pcp. The company declared an interim dividend of 6 cps, up by 33% PCP. The balance sheet of the company remained strong during the period with A$288 million Bullion & Investments and no debt. During the period, the company continued to generate favorable ROE (18%), ROIC (14%) and EBITDA margin (over 45%). The company expects 850koz-900koz pa at an AISC of A$1225/OZ-A$1275/oz for FY2019.

The company had acquired the high-grade Underground Gold Mine in Alaska, Pogo for A$351 million. The investment in Pogo has generated outstanding results. Jundee Operations reported a significant 285 koz gold sales in FY2018 at AISC of A$870/oz. There was an increase in the resources by 31% to 4.3 Moz and reserves by 14% to 1.6 Moz. Kalgoorlie reported around 262 koz in FY2018 at AISC A$1,174/oz.

In the previous 5 years, the stock has generated an excellent return of 694.49%. By the closure of ASX on 10 May 2019, the closing price of the stock was A$8.950, up by 1.359% as compared to its previous closing price. Northern Star Resources Ltd holds a market capitalization of A$5.65 billion with approximately 639.45 million outstanding shares and a PE ratio of 27.59x.

Newcrest Mining Limited (ASX: NCM)

Newcrest Mining Limited is from the metals and the mining sector and engaged in the exploration, development, mining and the sale of gold.

In the recent Macquarie Australia Conference presentation, the company showcased its approach to value creation. In the presentation, the company discussed its vision, assets, growth, safety and sustainability along with technology and innovation. To read in detail, please click here.

During the March 2019 quarter, the gold production was down by 5% to 623koz as compared to December 2018 quarter. The copper production was down by 6% to 25kt on its previous quarter. The Group AISC was up by $18/oz as compared to its previous quarter. The YTD gold and copper production were up by 7% and 33% respectively on the previous December 2018 quarter. The YTD AISC of $744/oz was down by 12% as compared to the previous year.

By the closure of the market on 10 May 2019, the shares of NCM closed at A$25.470, up by 1.553% as compared to its previous closing price. NCN holds a market capitalization of A$19.31 billion and approx. 768.48 million outstanding shares.


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