Newcrest Mining (ASX:NCM) share price gains on FY22 results

Highlights

• Newcrest Mining shared its financial results for 2022 today (19 August).
• The statutory and underlying profits of the company for the current period were AU$872 million.
• Fully franked final dividend of US 20 cents per share.

Newcrest Mining Limited (ASX:NCM), an ASX-listed company that is involved in the exploration, development, mining and sale of gold, shared its financial results for 2022 today (19 August).

Following the announcement, shares of Newcrest started the day on a positive note and the shares were 3.94% up at AU$19.44 each on ASX today at 10.31 AM AEST.

This outperforms ASX 200 Materials index, which was 1.20% higher at 16,587.90 points today at the same time.

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Data Source- Company announcement dated 19 August 2022 

FY22 highlights

• The statutory and underlying profits for the current period were US$872 million.
• Cash flows from operating activities of US$1,680 million.
• Fully franked final dividend of US 20 cents per share.
• Since the planned replacement and upgrade of the SAG mill motor, lower production volumes at Cadia resulted in a lower underlying profit of US$292 million compared to the prior period.
• At Lihir, production quantities were also lower due to significant maintenance work, reduced autoclave availability, and unscheduled downtime.
• Reduced output led to lower sales volumes of gold and copper over the present period.
• Acute worldwide inflationary pressures on various input costs, including labour, steel, and oil and gas, as well as higher shipping costs due to market constraints, had an impact on operating costs.

Mineral Resource and Ore Reserve update

In a separate filing, Newcrest also shared an update on its group Mineral Resource and Ore Reserve for the six months ending on 30 June 2022.

According to estimates, the Group Ore Reserves had around 61 million ounces of gold, 11 million tonnes of copper, 29 million ounces of silver, and 0.099 million tonnes of molybdenum as of 30 June 2022.

In comparison to the estimate as of 31 December 2021, this reflects declines of roughly 2 million ounces of gold (3%), 0.3 million tonnes of copper (3%), 1 million ounces of silver (6%), and 0.011 million tonnes of molybdenum (6%), primarily due to mining depletion.

The Group Ore Reserves on 30 June 2022 have changed from 31 December 2021 in the following ways:

• An estimated 1.3 million ounces of gold, 0.1 million tonnes of copper, 0.5 million ounces of silver, and trace amounts of molybdenum were depleted through mining.
• Minor adjustments to Cadia and Telfer's pricing, cost, and technical input assumptions led to a minor decline in ore reserves.

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Future guidance

The production forecast for FY23 takes no disruptions caused by COVID-19 into account.

AISC spending projection for FY23 includes:

• Operating cost impacts of about 6-8% due to inflation.
• The cost of Brucejack for a year.
• The effect of higher throughput rates and mining costs in Cadia and Lihir.

Due to the intense inflationary pressures observed across several input costs, including energy and steel, and the competition for labour from infrastructure projects, the company is anticipating continued pressure on capital costs. Newcrest has already taken this into account in its FY23 guidance.

As its feasibility studies move forward, Newcrest continues to assess cost estimates to manage operating and capital cost pressures in the current inflationary climate.