Newcrest (ASX: NCM) share price up, Cadia site seismic event not to impact much

Summary

  • Newcrest Mining Limited’s share price was up 1.8 per cent on 7 July, trading at $26.18 on the Australian Securities Exchange.
  • At Newcrest’s Cadia operation site on Friday last week, there was a localised seismic impact which was felt in the Panel Cave 2.
  • NCM had paid an interim dividend of $0.193 per share in March this year.

The Australian mining company Newcrest Mining Limited’s (ASX: NCM) price was up 1.8 per cent on 7 July, trading at $26.18 on the Australian Securities Exchange. The company has a market capitalisation of $21.01 billion. It paid an interim dividend of $0.193 per share in March this year. The shares have an annual yield of 1.69 per cent.

On 5 July, the company informed that  last week on Friday, there was a localised seismic impact which was felt in the Panel Cave 2 at Cadia operation site. The company said that there no injuries incurred because of the event. In keeping with the safety standards, all the workers were brought back to the surface safely. Inspections proved that investments made earlier in ground support helped in preventing damage to infrastructure.

Newcrest’s Production and financial update

For the quarter ended 31 March 2021, the company announced that gold production at 512koz and copper production at 35kt was in line with the expectations. It also said that the company would be able to deliver its FY21 guidance.

The company’s CEO and managing director Sandeep Biswas said that the company’s Cadia asset, in the March quarter, achieved a new milestone and reported the lowest quarterly sustaining cost of negative $160/oz. This, combined with a reduction in unit costs in all other sites, helped in bringing down the company’s all-in sustaining cost each ounce by 7 per cent in the quarter. The company reported a robust all-in sustaining cost margin of $854/oz.

Newcrest announced that it was targeting an annual dividend payment that would be at least between 30-60 per cent of the company’s cash flow. The total annual dividends would be a minimum of $15 cents each share for a full year.

Damages to the Newcrest’s Cadia site

The event managed to restrict the damage to only roads and ground support close to the two extraction drives and incurred very little damage to ground support to a ventilation rise nearby. A prohibition notice has been put out in the affected area, and the company was working in consultation with New South Wales Government Resources Regulator. The company would send a report today to the regulator seeking permission to resume operations in that area.

The other areas of the Cadia site or surface operations have not been affected by the occurrence. The company does not anticipate any impact of the event on copper and gold production of FY22.

Company’s major drilling programmes are underway in all of its four Antipa Projects in Paterson Province. At the moment, 9 of the company’s drilling rigs are active, which include one air core, four reverse circulation (RC) drilling, and four-diamond core drilling.

Other projects

The company’s joint venture with Rio Tinto, called Citadel Joint Venture, has been drilled to 23,000m and includes a combination of RC and diamond core drilling. For the project in Wilki Farm-in, the progress has been over 5,000m through RC drilling. The partnership with IGO in Paterson Farm-in, the progress has been till 13,000m, which includes diamond core and air core drilling. In Minyari dome, drilling has been up to 21,000m involving RC and diamond core drilling. The company’s other exploration work includes soil sampling surveys.

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