Latest With Newcrest Mining Limited On Wafi-Golpu Project

An MOU (Memorandum of Understanding) has been signed between Newcrest Mining Limited’s WGJV (Wafi-Golpu Joint Venture) partner, Harmony Gold Mining with the independent state of Papua New Guinea with regards to the Wafi-Golpu Project. The MOU is being looked as an assurance of the parties’ intent on exploring better potential from the Wafi-Golpu Project. Newcrest Mining Limited (ASX:NCM) is in the mining industry; and the company and its subsidiaries are engaged in the exploration, mine operation. The company got listed in 1987.

The MOU in discussion has set the layout for the parties with regards to permits required at the Wafi-Golpu project in a seamless manner with regulatory processes being considered. The Memorandum of Understanding reassures the intention of the parties to complete the permitting process, and by 30 June 2019, the parties are required to achieve the grant of a Special Mining Lease.

Newcrest’s Chief Executive Officer and Managing Director, Sandeep Biswas, has flagged that the company is effectively working with the Papua New Guinea’s government and aims to sort of progress well on attaining the critical milestones. This depends on the Feasibility Study update provided in 2018 and Environmental Impact Statement indicated to be sought in June 2018.

The MOU marks the progress on approval processes and substantial work program being established on the project and underground access for drilling etc. are being considered. Further, the work entails constructing of the bridge over the Markham River. All in all, the work represents a major economic significance to Papua New Guinea.

With respect to performance of September Quarter 2018, gold production was below the prior quarter. This was due to lower than expected production at Lihir, Gosowong and Telfer. FY19 Guidance remains unchanged, and planned shutdown events on the gold production will be fewer in the 1H of the financial year compared to the 2H. The company’s free cash flow is also expected to be lower in the first half of the financial year, which reflects shutdowns as well as usual draw on working capital in H1 financial year.

In FY18, the company has generated statutory profit of $202 million, underlying profit of $459 million, EBITDA Margin of 43.9%, EBIT margin of 21.7%, cash flow from operating activities of $1,434 million, free cash flow of $601 million, interest coverage ratio of 17.9 times, ROCE of 8.8%, cash and cash equivalents of $953 million and reduced net debt by $459 million. The company has issued a total dividend of 18.5 cents per share fully franked.

In the last six months, the price of the company has shown a negative return of 7.93 percent as on 6 September 2018, but after that stock price has recovered giving a positive return of around 4 percent as on 10 December 2018 and it was 2 percent up over the past one month. Newcrest Mining Limited shares are trading at $20.99 with a market capitalization of $16.19 billion as on 12 December 2018, 11:30 AM AEST.


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