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.[NLINSERT]
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Disclosures from CIBC, Newcrest Mining Ltd., January 30, 2019
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Important Disclosure Footnotes for Newcrest Mining Ltd. (NCM)
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