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Australian Gold Miner Achieves Strong Q2 FY19 Production, Maintains Full-Year Guidance
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A CIBC report reviewed the production levels this metals company achieved and the capital it spent during the quarter.

In a Jan. 30 research note, analyst Anita Soni reported Newcrest Mining Ltd.'s (NCM:ASX) gold and copper production in Q2 FY19 (ended Dec. 31, 2018) were a beat.

Newcrest produced 655,000 ounces (655 Koz) of gold in Q2 FY19, 19% higher than "the relatively weak Q1 FY19," Soni wrote, and higher than CIBC's estimate of 642 Koz. As for copper, the company output 27,000 tons (27 Kt), above CIBC's forecast of 26 Kt.

The company's production beat is attributed to a record quarter at the Cadia operations due to higher grades and throughput. The strong performance at Cadia helped offset small shortfalls at other mines.

Newcrest's all-in sustaining cost for Q2 FY19 also came in better than expected. It amounted $720 per ounce versus CIBC's projection of $755 per ounce.

The gold miner plans to announce H1 FY19 financial results on Feb. 14.

Soni also reported that Newcrest maintained its production guidance for full-year FY19: For gold, it is 2.35–2.6 million ounces; for copper, it is 100–110 Kt. Capex guidance for FY19 is $590–690 million and, the analyst noted, should fall in the low end of that range.

The gold major, Soni concluded, "continues to offer appealing long-term potential with the ramp-up of Cadia, the expansion of Lihir and the potential development of Wafi-Golpu."

CIBC has a Neutral rating and an AU$27 per share price target on Newcrest, whose current share price is about AU$24.51.


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Disclosures from CIBC, Newcrest Mining Ltd., January 30, 2019

Analyst Certification:
Each CIBC World Markets Corp./Inc. research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst's personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Analysts employed outside the U.S. are not registered as research analysts with FINRA. These analysts may not be associated persons of CIBC World Markets Corp. and therefore may not be subject to FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Potential Conflicts of Interest:
Equity research analysts employed by CIBC World Markets Corp./Inc. are compensated from revenues generated by various CIBC World Markets Corp./Inc. businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets Corp./Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets Corp./Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers.

In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, CIBC World Markets Corp./Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon.

Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.

Important Disclosure Footnotes for Newcrest Mining Ltd. (NCM)

CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from Newcrest Mining Ltd. in the next 3 months.

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