REPORTING SEASON: Newcrest Mining Limited (NCM)

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Figure 1: Newcrest Mining Limited 12 month chart


Gold miner fights lower prices with lower costs.

 Newcrest Mining (NCM) has reported a statutory net profit after tax profit of $200 million, an increase of $160 million. The increase reflects the tax expenses and impairments that were a feature of the previous corresponding period. In underlying terms, NPAT fell by 3% to $200 million, which was below market expectations. $257 million in debt was repaid over the period thanks to an increase in free cash flow which rose by $497 million

 Gold sales eased over the last 6 months, although this was balanced by higher copper sales. Gold production of 1,139k ounces was 6% lower due to lower grade at Lihir. Copper production increased by 19% to 50.3 thousand tonnes. This result was due to increased production at Cadia East, which delivers a higher grade of ore. Another factor helping copper outcomes was the improved copper recovery seen at the Telfer mine.

 The all in sustaining cost per ounce for the period was $917, a decline of 9%. Factors contributing to the drop in costs included reduced levels of stripping and capital expenditure in addition to higher by-product revenue associated with higher copper sales and lower corporate costs.

 Production guidance remains in line with the production upgrades announced on 30 Jan 2015. NCM expects to produce 2.3 – 2.5 million ounces of gold in the year ending June 30. The miner estimates copper output will be in a range of between 90,000-100,000 metric tons.

 No interim dividend was declared for the six months ended 30 December 2014


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Tom Piotrowski, Market Analyst,