Newcrest Mining Share Price Up on Quarterly Gold Production Results

Australia’s largest ASX-listed gold producer, Newcrest Mining Ltd [ASX:NCM], released its quarterly update today.

For the three months ending in 30 June 2020 the group produced a total of 573,175 ounces of gold from their mines in Australia (Cadia and Telfer), Papua New Guinea (Lihir) and Canada (Red Chris). This is a 7% increase from the 535koz of gold produced in the previous quarter.

For the FY20 year, the group produced a total of 2.17 million ounces of gold. While this was well within their 2,100–2,200 koz guidance. However, that’s a lower guidance than the 2,375­–2,535 koz the company had provided earlier. The total year’s production is 13% lower from FY19’s production, mainly after Newcrest sold Gosowong, in Indonesia.

For the June quarter, Cadia produced 21% more gold than in the March quarter, to a total of 843 koz for the year, exceeding the 800–840 koz guidance. The company said the main reason for the increase in gold production from the previous quarter was that it processed higher ore volumes.

Lihir’s gold production for the June quarter was close to 11% higher than the previous quarter, for a total 207koz.

You can see all the production results below:

ASX NCM Share Price - Newcrest Mining Production Results
Source: Newcrest Mining

Newcrest also carried out a $1.2 billion equity raising throughout the quarter. With some of that money going to buy Fruta del Norte in Ecuador and the rest to fund organic growth options.

What could happen next?

The NCM share price is up 1.7% today with shares trading at $34.71 at time of writing. So far for the year Newcrest shares have gained over 15%.

Gold prices have been pushing higher as investors jumped into gold during the pandemic.

Gold prices in US dollars have been edging higher this week. At time of writing, an ounce of gold is trading at US$1,868. This is a close to 23% return year-to-date.

But gold is also quickly approaching its historical all time high of US$1,920, so keep an eye out for gold…

One way to get exposure to gold is through gold stocks, but it’s not easy to pick the winners. That’s why Rum Rebellion’s editor Greg Canavan has prepared a report on ‘How to Pick Winning Gold Stocks’.

To download this free report, click here.


Selva Freigedo

Selva Freigedo is a research analyst for The Rum Rebellion.

Born in Argentina, her passion for economic analysis started at a young age. Her father was an economist for the Argentinean governments and the family used to discuss politics and economics at the dinner table.

Argentina is a country with an unusual economic history. Growing up there gave Selva first-hand experience on different economic phenomena such as hyperinflation, devaluation and debt default.

Selva has also lived in Brazil, Spain and the USA.

Back in 2000 she was living in the US as the dot com bubble popped…
And in 2008 she was in Spain as the property market exploded and then collapsed…

She has seen first-hand what happens when bubbles burst.

Selva joined Fat Tail Investment Research’s team in 2016, as an analyst. She now writes from her vantage point in Australia, where she settled in 2015.

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