Why is Newcrest Mining (ASX: NCM) share price climbing?

By - Kamalika Ghosh


  • Newcrest Mining (ASX: NCM), the Australian mining firm’s share were up 2.72 per cent, rising for the third day in a row.
  • The shares of Newcrest with a market capitalisation of AU$21.20 billion, have a year-to-date return of 3.26%.
  • They stocks have a current dividend yield of 2.41 per cent.

The shares of the Australian mining company Newcrest Mining (ASX: NCM) were up 2.72 per cent on 14 July at 4:06 PM AEST, as Australia's gold index jumped 2.5 per cent to its highest level since 17 June. The shares were trading at AU$26.65.

The company recently, on 2 July, had informed that Panel Cave 2 at Cadia operation site faced a localised seismic impact. There were no injuries incurred because of the occurrence all workers could be brought back to the surface post the occurrence. The ground support mechanism helped the company in avoiding damage to infrastructure.

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Newcrest’s (ASX: NCM) share performance

In the announcement of its results for the quarter ended 31 March, the company said that it was aiming for an annual dividend payout that would be between 30-60 per cent of the cash flow. A minimum of $15 cents each share would be paid as total annual dividends for a whole year.

Gold prices firmed up overnight as data revealed that last month, US consumer prices saw the biggest rise in 13 years. The US central bank supports gold, which makes it unlikely on its part to opt for tightening of monetary policy response.

Australia’s biggest listed gold miner stock has added over 2 per cent and is expected to end higher for the third straight day.

The shares of Newcrest have a year-to-date return of 3.26 per cent, with a market capitalisation of AU$21.20 billion. The shares have a dividend yield of 2.41 per cent and a price-to-earnings ratio of 16.12. The share is trading 30.22 per cent below its 52-week high reached on 28 July 2020, and 15.31 per cent above the 52-week low witnessed on 5 March 2021.

Newcrest’s trading update

For the quarter ended 31 March 2021, the company’s copper production stood at 35kt and gold production was at 512koz; the numbers were in line with the company’ expectations. The company is hopeful of delivering its FY21 guidance.

In an exploration update on 10 June, the company said that at Red Chris it was continuing work to expand higher grade mineralisation and expand the higher-grade footprint. Drilling operations are ongoing to define the extent of the quality of higher grades. At the Havieron site, growth drilling has returned high grade extensions.

Sandeep Biswas, the company’s managing director and CEO said that in the March quarter, the Cadia asset achieved a new milestone by posting the lowest quarterly sustaining cost of negative $160/oz. Combined with unit costs in all other sites falling, both achievements helped the company to reduce the quarter’s all-in sustaining cost by 7 per cent each ounce. It posted a robust $854/oz all-in sustaining cost margin.

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