Newcrest (ASX:NCM) share price lifts as upcoming projects valued at $3.2b

Miner with thumbs up at mine

The Newcrest Mining Ltd (ASX: NCM) share price is in the green following a massive growth update from the company.

The company’s board has progressed 3 of the company’s projects to the feasibility stage today, leaving Newcrest with 4 pre-feasibility study (PFS) stage organic growth projects.

They are each expected to deliver internal rates of return of 16% or higher and, together, have a net present value of $3.2 billion.

At the time of writing, the Newcrest share price is $24, 0.42% higher than its previous close.

Let’s take a closer look at today’s exciting news from the gold mining company.

Newcrest share price boosted on 3 project updates

The Newcrest Mining share price is gaining today after the company released a barrage of positive pre-feasibility study results.

Additionally, the company plans to fund its 4 up-and-coming projects with existing liquidity and operating cash flow.

Together, the projects will boost Newcrest’s copper production by more than 37% and reduce its all-in sustaining costs by more than 50% to around $500 per ounce by 2030.

Newcrest’s managing director and CEO Sandeep Biswas, commented on the findings, saying:

Newcrest is in an enviable position… The progression of these studies is consistent with our long term strategy of pursuing profitable growth in a safe and sustainable manner from a portfolio of long-life, high-quality assets optimised through innovation and creativity.

The projected growth profile of our copper production is particularly exciting and would allow us not just to advance our own sustainability objectives, but to participate in the potential opportunities presented by a global shift to decarbonisation.  

Here’s a brief outline of the newly advanced future projects boosting the Newcrest share price today:

Red Chris Block Cave

The Red Chris Block Cave Project is in Canada. Newcrest bought a 70% hold in the project in 2019.

Red Chris Block Cave has now been found to have the potential to be a tier 1 producer with a mine life of 31 years.

It has an initial ore reserve estimate of 8.1 million ounces of gold and 2.2 million tonnes of copper. The company expects an average annual gold production of 158,000 ounces and copper production of 48,500 tonnes over the mine’s life.

Additionally, drilling is continuing to expand the project’s resource base.

Red Chris Block Cave has an internal rate of return of 17% and a net present value of around $1.28 billion

Havieron

The Australian Havieron Project has been slapped with an estimated average gold production of 160,000 ounces each year over an initial 9-year mine life.

Newcrest now holds a 70% interest in the project’s joint venture. Additionally, the company expects the project’s maiden production to occur in financial year 2024.

The mine’s all-in sustaining cost is expected to be US$743 per ounce. It has a predicted internal rate of return of 16% and a net present value of $160 million

Lihir

Perhaps the most exciting announcement bolstering the Newcrest share price today is of the company’s Paupa New Guinean Lihir Project.

The project’s PFS confirmed Lihir is capable of producing more than 1 million ounces of gold every year for at least 10 years, starting in financial year 2024.

The PSF has also increased Lihir’s ore reserves by 1 million ounces of gold.

It has an internal rate of return of 37% and a net present value of $1284 million. Lihir’s feasibility study is expected to be completed in the fourth quarter of this financial year.

Cadia

Finally, the company released the Australian Cadia Project’s PFS results in August.

The project has been found to have a total ore production of 258 million tonnes. It is capable of producing 3.5 million ounces of gold and 660,000 tonnes of copper.

It also has an internal rate of return of 22% and a net present value of around $1.48 billion.

Newcrest Mining share price snapshot

Despite today’s abundance of news, the Newcrest Mining share price is still in the long-term red.

The company’s stock has slumped 11% since the start of 2021. It is also 24% lower than it was this time last year.

The post Newcrest (ASX:NCM) share price lifts as upcoming projects valued at $3.2b appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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