Newcrest’s Gold Production Dipped During The September Quarter Ahead Of Planned Shutdowns

  • Oct 24, 2018 AEDT
  • Team Kalkine
Newcrest’s Gold Production Dipped During The September Quarter Ahead Of Planned Shutdowns

Newcrest’s gold production in September quarter slipped 548 koz, 14% lower than the previous June 2018 quarter due to major plants shutdown as planned by the company. It reflects the lower production at Lihir, Telfer and Gosowong, partially offset by an increase in production at Cadia, stated Newcrest Mining Limited (ASX: NCM).

However, if we compare 2018 September quarter’s gold production with previous corresponding period, i.e. September 2017, we can see that there has been slight improvement of 5% mainly due to significant growth in Cadia’s operating and financial performance during the first quarter of FY19. The improvement was such that Cadia mill throughput has increased 30% to 28.1mtpa compared to the prior quarter.

Group’s AISC has reduced from US$795 per oz in June 2018 quarter to US$778 per oz in September 2018 quarter, reflecting higher sales contribution from low cost Cadia. But the gold prices realized by the company has gone down during the reporting period. For the three-month ended 30 September 2018, Newcrest has realized US$1,219 per oz compared to US$1,302 per oz gold price, realized in prior quarter, Q4 FY18. 

On the copper production front, miner Newcrest has shown tremendous improvement since the start of Fiscal 2019. Copper Production level has reached to 25kt that means 49% higher from previous corresponding period and 24% higher from previous quarter, June 2018. The realised copper price was US$6,107 per ton, down from $6,945 /t in prior quarter.

The company has delivered another quarter of safe workplace footprint as its TRIFR remains low to 2.1 mmhrs, in line with previous quarter.

Newcrest told that it is still in talking with Papua New Guinea Government in respect of the Special Mining Lease (SML) application for the Wafi-Golpu project. This project is expected to deliver the first production nearly 4.75 years later the receipt of SML and other necessary approvals.

Guidance for full fiscal year 2019 is reported to remain the same. The company continues to anticipate the lower production in the first half of FY19 compared to the second half. It is because the numbers of planned shutdowns are reported to be lower in the second half which is expected to push the production higher in comparison to the first six months ending 31 December 2018. Subsequently free cash flows are also anticipated to be lower in the first half underpinned by the production impacts from the shutdown as well as the usual draw on working capital in 1H FY19.

Further, along with brownfield exploration activities at Telfer, Gosowong, and Cadia, the company is on the lookout for new discoveries as it has undertaken exploration activities at Cote d’Ivoire, Australia, PNG, Indonesia, United States of America, Argentina and Chile during the reporting quarter ended 30 September 2018.

With the release of Newcrest’s quarterly report, NCM stock has surged 2.899% to close at $21.300 on 24 October 2018. But, over the past one year the stock has fallen by 3.86% however, it is steadily picking up since the last three months, reflecting +3.71% daily price change. Today, 24 October 2018, NCM last traded at a PE of 58.180 x with market capitalization of $15.9 billion.


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