Key points
- Newcrest delivers solid production growth in the second quarter
- Management expects this trend to continue in the second half
- FY 2022 production guidance has been reaffirmed
The Newcrest Mining Ltd (ASX: NCM) share price is under pressure on Friday morning.
At the time of writing, the gold miner’s shares are down 4% to $22.050.
Why is the Newcrest share price falling?
The Newcrest share price is falling today after a pullback in the gold price offset any positives from its second quarter production report.
In respect to the latter, for the three months ended 31 December, Newcrest delivered gold production of 436koz and copper production of 26kt. This was an increase of 10% and 7.7%, respectively, quarter on quarter.
This production growth was driven by its Cadia, Lihir, and Telfer operations, which offset softer performances from the Red Chris and Fruta del Norte operations.
Management notes that Cadia’s mill capacity increased during the quarter, with completion of the replacement and upgrade of the SAG mill motor in November resulting in higher gold production. In addition, mill throughput rates were higher at Lihir and Telfer with a reduction in planned and unplanned shutdown activities compared to the first quarter.
Newcrest achieved this production with an all-in sustaining cost (AISC) of $1,127 an ounce, which resulted in an AISC margin of $588 an ounce. The latter was up 45% from $406 an ounce during the previous quarter.
Looking ahead, management expects its production to increase in the third quarter. After which, it believes the company is on track to deliver its full year production guidance of 1,800koz to 2,000koz.
Management commentary
Newcrest’s Managing Director and Chief Executive Officer, Sandeep Biswas, was pleased with the company’s performance during the quarter.
He said: “We maintained a strong operational focus on maintenance and productivity improvements during the quarter. It was a tremendous achievement for our team to safely complete the replacement and upgrade of the SAG mill motor at Cadia, which is now operating at full capacity. It was also pleasing to receive approval to increase the permitted processing capacity at Cadia from 32Mtpa to 35Mtpa during the period. Across all our operations, we are well positioned for a strong second half and remain on track to meet our FY22 guidance.”
The post Newcrest (ASX:NCM) share price down 4% following Q2 update appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro 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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