Newcrest Mining ( NCM)
OVERALL, a solid quarter maintaining the momentum of the March quarter. Copper came in at the top end of expectations and fullyear production was in the middle- top end of forecasts. Overall it was a reasonable quarter showing NCM’s programs of cost control and efficiency are having a sustained effect. Solid result in our view and should be well received in light of the recent share price weakness.
Exploration seems to be increasing with a few projects showing detailed exploration at Gosowong, the Mungana JV and NZ projects.
Production came in at 2.42Moz which is in the middle of NCM’s forecast guidance range, all in sustaining costs were slightly higher at A$ 978/ oz ( versus A$ 946 in the March quarter) and full- year costs averaged $ 941/ oz.
Telfer lagged on production with 116koz ( vs. 129koz in the pcp). Lihir, their problematic operation performed well as improved processing circuit performance paid off with higher gold production. Lihir achieved a 9 per cent improvement to 195koz ( vs. 178koz in the pcp). Cadiz production was up.
Their all- in sustaining costs of A$ 247/ oz were lower than the previous quarter as economies of scale improved. Gosowong had a whopping 62 per cent higher production up to 122Koz ( from 75koz) on higher grades and showing what a gem the project is when it intercepts high grade pods with all- in costs of A$ 709/ oz – impressive. Bonikro production remained at the higher March quarter levels – a solid result at 36koz at A$ 839/ oz.