Day: 23 May 2022

Well, it’s still hard to believe, but the long and hard six-week federal election campaign is finally over. Australia has a new prime minister and a new government, just as opinion polls predicted.

Although events like an election are typically somewhat ‘priced in’ by markets leading up to it, the incorrect opinion polls covering the 2019 election no doubt still had everyone hanging on the actual result on Saturday night. But unlike last time, the polls were correct.

So today, let’s look at how ASX shares are reacting to the events of the weekend. Specifically, let’s look at the big ASX iron ore miners.

So on the whole, the ASX is having a pretty strong start to the first day of a new government. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has risen by 0.52% and is closing back in on 7,200 points. But what of mining shares?

In elections gone by, the mining industry was a red hot election issue. No doubt there are some readers who will remember the ‘mining tax’ debate of a few years ago. But this election, it’s probably fair to say that mining didn’t play a huge role in the election campaign.

And there doesn’t seem to be a whole lot of difference between the two major parties when it comes to the treatment of the mining industry this time around.

How are ASX mining shares reacting to Labor’s win today?

But let’s see how the ASX 200 iron ore giants are reacting to a new Labor Government today.

So first up, let’s check out BHP Group Ltd (ASX: BHP), the undisputed leader of the ASX 200’s resources sector. It’s a very happy day for BHP shares, with the Big Australian rising by a healthy 2.03% so far today to just over $48 a share.

BHP’s stablemate Rio Tinto Limited (ASX: RIO) is also having a happy day. Rio shares are presently up 1.88% at just over $110 each.

But it’s Fortescue Metals Group Limited (ASX: FMG) that is really basking in the election’s afterglow today. Fortescue shares are currently up a pleasing 3.57% at $20.87 each so far.

However, it’s likely that these moves higher are less about what happened on the weekend, and more about the rising iron ore price we have seen over the past few days. Iron ore is now going for more than US$130 a tonne, which would be doing a lot to boost confidence in the ASX’s biggest miners today.

The post How are ASX 200 mining shares responding to the election outcome? appeared first on The Motley Fool Australia.

More reading

• Why is the Woodside share price having such a strong start to the week?
• Down 15% since early March, is the Rio Tinto share price an ASX mining buy?
• 3 reasons why I plan to own my Fortescue shares for the long term
• Everything you need to know about the upcoming BHP dividend
• Why is the Woodside share price dropping 4% today?

Motley Fool contributor Sebastian Bowen 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 Scott Phillips.

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The Flight Centre Travel Group Ltd (ASX: FLT) share price has been climbing the past week.

Shares in the travel company have gained more than 5% since market close on 13 May and are currently trading at $20.62. That’s 0.15% in the green during midday trade on Monday.

Let’s take a look at what’s impacting the Flight Centre share price.

Travel boost

Flight Centre is not the only ASX travel share to rise in the past week. Qantas Airways Limited (ASX: QAN) shares have jumped 3.78% since market close on 13 May, while Webjet Limited (ASX: WEB) shares have surged 8.4%.

Enthusiasm for travel may be impacting the Flight Centre share price. On Thursday last week, Webjet managing director John Guscic expressed a positive outlook for the travel industry during the company’s full year results briefing. Quoted in the Australian Financial Review, Guscic said:

Guess who’s back? Travel’s back, baby.

As my Foolish colleague James reported, Webjet revenue surged 258% to $138 million in FY 2022.

Flight Centre had some positive news of its own last week. On Monday, the company announced it had retained a New South Wales government travel management contract.

The new contract will continue for a further three years at least and covers 80 agencies within the government.

Commenting on the news, Flight Centre’s travel solutions general manager Melissa Elf said:

We’re delighted to have retained this prestigious account and we’re looking forward to helping the New South Wales government achieve its aims.

Australia’s international borders opened to tourists on 21 February. In April, the country’s biosecurity emergency ended, enabling cruise ships to enter Australia. New Zealand will also open its borders to all tourists from 31 July.

Share price snapshot

Flight Centre shares have soared nearly 35% in the past 12 months, leaping nearly 17% year to date.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has climbed 2% during the past year.

Flight Centre has a market capitalisation of about $4.1 billion based on its current share price.

The post The Flight Centre share price has taken off 5% in a week. Is travel really ‘back, baby’? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Top brokers name 3 ASX shares to buy next week
• Brokers name 3 ASX shares to buy today
• Webjet share price tipped to rise: Broker says it ‘hasn’t wasted a crisis’
• Webjet share price falls on earnings miss, but broker sees ‘results as a positive’

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 recommended Flight Centre Travel Group Limited and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) has started the week on a mildly positive note. The benchmark index is currently up 0.15% to 7,156.8 points.

Here’s what is happening on the ASX 200 today:

Elders’ half-year results impress

The Elders Ltd (ASX: ELD) share price hit a multi-year high on Monday morning. This follows the release of a half-year result that came in well ahead of expectations. The agribusiness company reported a 38% increase in sales revenue to $1,514.8 million and an 80% jump in earnings before interest and tax (EBIT) to $132.8 million. This compares to Goldman Sachs’ estimate of $1,245.2 million and $93.7 million, respectively.

Codan jumps on profit guidance

The Codan Limited (ASX: CDA) share price is rocketing higher today. This follows the release of guidance for FY 2022. According to the release, Codan expects to match its record first-half profit in the second half. This would mean a record full-year profit of $100 million, which represents a year-on-year increase of 56%. Management advised that this strong growth has been supported by its strategy to diversify revenues and profitability.

Incitec Pivot’s half-year results

The Incitec Pivot Ltd (ASX: IPL) share price is tumbling on Monday after the fertiliser and commercial explosives manufacturer’s half-year results disappointed. This was despite the company reporting a 48% increase in revenue to $2,548 and a record half-year profit of $384 million. Incitec Pivot’s revenue appears to have come in ahead of consensus estimates but its earnings fell short.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Monday has been the Codan share price with a 15% gain. This has been driven by its guidance update for FY 2022. Going the other way, the worst performer has been the Block Inc (ASX: SQ2) share price with a 4% decline. This follows a similarly sharp decline by the payments giant’s US-listed shares on Friday night.

The post ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints appeared first on The Motley Fool Australia.

More reading

• Incitec Pivot share price fizzles despite half-year earnings increasing tenfold
• Why the IGO share price is rallying on Monday
• Elders share price jumps 9% on stellar first-half profit growth
• Codan share price jumps 10% amid guidance for ‘record’ FY22 profit
• 5 things to watch on the ASX 200 on Monday

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 positions in and has recommended Block, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Elders Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Today is just like any other Monday on the ASX, or is it? For the first time in nine years, the market is waking up to a Labor Government and that could put pressure on AGL Energy Limited (ASX: AGL) shares.

Saturday’s election was “won and lost on climate”, Mike Cannon-Brookes, AGL’s major shareholder and activist against its planned demerger, was quoted by The Australian as saying.

At the time of writing, the AGL share price is $8.60, 0.41% lower than its previous close.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.41%.

So, what could the change in government mean for AGL shares? Let’s take a look.

Could a change in government pressure AGL shares?

Atlassian Corporation founder and boss, Cannon-Brookes has celebrated the results of 2022’s Federal election. The vote saw unprecedented support for Climate 200-backed ‘teal’ independents and the Greens.

He said such results show Australians and owners of AGL shares want greater action on climate change.

People standing for stronger action on climate is the consistent message tonight – across inner city, suburban & rural seats.

Big swings to the Indies, to the Greens, to Labor over LNP (in two party seats).

An incredible, amazing mandate.

Australia! #AusVotes22

— Mike Cannon-Brookes (@mcannonbrookes) May 21, 2022

https://platform.twitter.com/widgets.js

It was only eight months ago that 55% of the company’s shareholders voted for the company to implement Paris Agreement-aligned emissions targets. And the weekend’s Labor win could increase pressure.

Australia’s goal to reach net-zero by 2050 won’t change alongside the government. However, Labor’s short-term emissions reduction plan differs from that of the outgoing Coalition.

Labor is working to see Australia’s emissions fall 43% by 2030. Meanwhile, an outcry of support for the Greens and climate-focused independents could highlight a demand for stronger targets.  That could be bad news for Australia’s biggest emitter.

“The AGL board should pay attention to its shareholders and the mood of the country,” Cannon-Brookes was quoted by The Australian as saying.

“A demerger plan that is not aligned to Paris targets is not going to fly … Australia has its sights set on a brighter future and the opportunities that decarbonisation will bring.”

The demerger plan

The company’s planned demerger will see it split into energy retailer AGL Australia and energy generator Accel Energy. AGL Australia will aim to reduce its emissions by 50% by 2030 and reach net zero by 2040. Meanwhile, Accel Energy is aiming to ditch coal-fired power generation by no later than 2045.

AGL CEO Graeme Hunt hit back at Cannon-Brookes’ comments. The publication quoted Hunt as saying:

AGL shares the ambition for decisive action on climate, while ensuring affordable energy, and looks forward to working with the Albanese government to achieve this.

[AGL’s decarbonisation] must be done in a way that protects and enhances system stability, affordability, and reliability for customers and shareholder value.

The post What might an ‘election won and lost on climate’ mean for AGL shares? appeared first on The Motley Fool Australia.

More reading

• Here’s why AGL shares hit the headlines again on Friday
• Why have AGL shares been getting so much love on Tuesday?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• AGL share price bounces back amid latest demerger opposition
• How dependant on coal closure is the AGL share price?

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 Scott Phillips.

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The Pointerra Ltd (ASX: 3DP) share price has continued its positive run on Monday.

In morning trade, the geospatial data technology company’s shares are up over 9% to 29 cents.

This means that the Pointerra share price is now up over 50% since last Tuesday.

Why is the Pointerra share price rocketing higher?

The recent gain by the Pointerra share price is a bit of a mystery as there has been no news out of the company since the end of April.

That last piece of news saw the company report a 13% or US$1.9 million increase in quarterly annual contract value (ACV). This brought its total ACV to US$16.28 million as of 29 April 2022.

Management highlighted that its Pointerra3D service is rapidly becoming a “must-have” platform for the US energy utility sector with existing customers advocating adoption of the company’s digital twin solution amongst peer utilities.

This is expected to drive further growth in platform deployment and ACV across Pointerra’s largest sector.

In light of this positive outlook and the Pointerra share price down by over 50% since this time last year, it appears that some investors believe a buying opportunity has been created.

The post Why has the Pointerra share price rocketed 50% in less than a week? appeared first on The Motley Fool Australia.

More reading

• Pointerra share price in the red despite ‘landmark quarter’

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 positions in and has recommended Pointerra Limited. The Motley Fool Australia has recommended Pointerra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you own A2 Milk Company Ltd (ASX: A2M) shares, you may be wondering if the infant formula company could garner some extra sales from the current supply crisis playing out in the United States.

While A2 Milk has yet to step in to help fill the void, some other international companies, like European based Danone, have tripled their exports to the States in recent months,

Why is the US running short of baby formula?

The US produces almost all of its own baby formula for domestic consumption.

But the market is dominated by a few top players. That’s led to some distressing shortages over the past few months, which has investors wondering if A2 Milk shares could receive some helpful tailwinds.

The formula crisis commenced on 17 February, when one of the top formula producers in the country, Abbott Laboratories, shuttered a manufacturing plant after discovering bacteria on site. Abbott then recalled many of its top formulas, sparking a mass shortage of infant formula.

And Abbott’s woes have opened up a window of opportunity for the international competition after the US Food and Drug Administration increased formula imports to stem the shortage.

This is big business in the world’s number one economy, estimated to be worth US$4.8 billion annually.

According to Barclays analyst Warren Ackerman (courtesy of Reuters), “Abbott looks to have lost around 2000 basis points of share, going from 40% share to 20%,” of the US infant formula market.

Can A2 Milk shares benefit?

A2 Milk shareholders hoping to see the Aussie company swoop in for some of that lucrative market share could be disappointed, according to Infant Nutrition Council of Australia and New Zealand CEO Jan Carey.

Carey thinks the window of opportunity for international companies will be “a very short-term opportunity”.

According to Carey (quoted by RNZ News):

It’s incredibly difficult to get products into the market in the United States. The regulation is very hard, there’s a number of hoops that you’ve got to jump through, it’s very difficult.

And it shows. Because it’s so difficult, there aren’t very many infant formula companies in the United States, and so when a supply issue happens, they’re really in a lot of trouble.

If A2 Milk wants part of the action, the company will have to move fast.

“I’ve been in touch with my counterparts in the US and this is a short-term crisis, that should be over in the next six-to-eight weeks,” Carey added.

But not everyone agrees.

A2 Milk shares get broker upgrade on US shortage

A2 Milk shares are up 5.1% in morning trade to $4.50 per share.

With the US shortage in mind the company received an upgrade from Citi to Neutral.

Citi didn’t dismiss lingering downside risks to the infant formula company’s business.

However, the broker said (courtesy of The Australian), “The potential development of a credible US IMF strategy to respond to the current shortage may lead to a re-rating. Further, after underperforming the ASX 200 by about 12% since beginning of April, A2’s share price is now broadly in line with our new target price of $4.64.”

Citi’s target price is some 3% above where A2 Milk shares are currently trading.

The post Can A2 Milk shares benefit from the US baby formula shortage? appeared first on The Motley Fool Australia.

More reading

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• Why is the A2 Milk share price falling today?
• Why A2 Milk, Gold Road, GrainCorp, and Monash IVF shares are dropping
• Which is the better beaten-up buy, Bubs or A2 Milk shares?
• Why A2 Milk, Imugene, Liontown, and Magellan shares are tumbling lower

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 recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

On May 20, the S&P 500 index fell into bear market territory. A bear market is defined as a period when stock values fall 20% or more from a recent high.

This is the first time in over two years that stocks have fallen so sharply. The last decline of this nature happened in March 2020, on the heels of the COVID-19 outbreak. 

Of course, a bear market can be an unsettling thing, even if you’re a seasoned investor. But here’s why you don’t need to start panicking.

1. Bear markets aren’t that unusual

Since World War II, there have been 17 bear or near-bear markets, according to a Morningstar report. That’s not a particularly large number, but it’s also not a small number. So if you’re new to investing, you can rest assured that this sort of thing has happened before.

2. Bear markets don’t always last that long

On average, bear markets last about a year. But that doesn’t always happen. The bear market investors endured in early 2020 was fairly short-lived, and stocks managed to more than recover their value before the end of the year.

Granted, without a crystal ball, it’s impossible to predict how long a given bear market will last. But while the idea of stocks being down for a year might seem terrifying, the reality is that you really only stand to get hurt by a bear market if you liquidate stocks at a loss. If you leave your portfolio alone, you may not lose a dime during a bear market.

3. The stock market has a long history of recovering from bear markets

It’s definitely unsettling to see your portfolio value tank. But it’s important to remember that the stock market has a long history of recovering from downturns. Not only that, but some of the market’s strongest periods of performance have happened on the heels of a bear market.

4. Bear markets can spell opportunity for long-term investors

During a bear market, stock values decline significantly. That’s a bad thing if you’re looking to liquidate stocks. But if you’re looking to buy stocks, it’s actually a good thing.

While timing the market isn’t a recommended investing strategy, buying stocks during a bear market could prove to be quite lucrative. Of course, you don’t want to just buy any old stocks. Rather, focus on the same quality businesses you were buying before market conditions took a turn for the worse (unless there’s a specific reason to stay away from those stocks).

Another good option during a downturn? Invest in the broad market by buying shares of an S&P 500 ETF. That’s an easy way to take guesswork out of the equation at a time when you may be rattled and not in the best position to make analytical decisions.

Try to keep your cool

A bear market can be scary, but the key is to not act impulsively when stock values are down. Instead, find ways to stay calm, whether it’s diving into a hobby or devoting more time to exercise and self-care. At the same time, consider adding to your portfolio when stocks are down to set yourself up for some solid returns down the line. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post US stocks just hit bear market territory, but here’s why you don’t need to worry appeared first on The Motley Fool Australia.

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• Incitec Pivot share price fizzles despite half-year earnings increasing tenfold
• Why is the BrainChip share price rocketing 15% higher today?
• What’s happening with the Newcrest share price on Monday?
• BetMakers share price climbs on multi-year agreement
• Why the IGO share price is rallying on Monday

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 Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Incitec Pivot Ltd (ASX: IPL) share price is trading down on Monday morning after the fertiliser and explosives manufacturer reported a record first-half profit for the six months ending 31 March 2022.

In the first session of the week, Incitec Pivot shares are fetching $3.69. However, shares opened nearly 7.5% higher at $4.02 amid the cracking half-year result. For comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.23% as investors react to the Federal election outcome.

Incitec Pivot share price on fire on explosive half-year result

• Revenue up 48% compared to prior corresponding period to $2,548 million
• Record half-year net profit after tax (NPAT) of $384 million, up 955%
• Earnings per share (EPS) jumped from 1.9 cents to 19.8 cents
• Interim 100% franked dividend to increase tenfold from 1 cent to 10 cents per share
• Intention to split Incitec Pivot into two separate ASX-listed companies

What happened during the first half?

The most recent half-year was lucrative for both fertiliser and explosive business segments. Unsurprisingly, investors are reacting with an increased hunger for Incitec Pivot shares today.

There were a couple of key factors ultimately assisting Incitec to the standout result that it has posted today. According to the company, improved commodity pricing and beneficial foreign exchange rates aided in the result.

Additionally, earnings before interest and tax (EBIT) in the American explosive segment operating as Dyno Nobel Americas improved by 221% to $252 million. Similarly, Incitec’s Fertilisers Asia Pacific division experienced a 237% increase in its EBIT, reaching $257 million.

What did management say?

Commenting on the stellar result, Incitec Pivot’s managing director and CEO Jeanne Johns said:

Our record first half result reflects the quality of our two category-leading businesses and our sharp focus on executing in a high demand, highly disrupted market. Our team has done an excellent job navigating operational complexity to deliver for our customers.

Johns added:

Dyno Nobel’s Americas and Asia Pacific teams delivered solid volume growth, with margins continuing
to reflect our high-value technology. The acquisition of Titanobel gives us additional expertise and
people capability to serve select high-quality markets and customers in Europe and Africa, with growth
being driven by technology and a focus on future-facing minerals

What’s next?

The big future news for the Incitec Pivot share price is the proposed separation of the company. Announced alongside its results this morning, the company intends to create two separate ASX-listed companies — Dyno Nobel and Incitec Pivot Fertilisers.

Notably, the decision follows a strategic review that found declining synergies in ammonia manufacturing as explosives and fertiliser customers hold more unique solution requirements. In addition, management believes the separation will enable shareholders to best capture future value in each area.

When it comes to costs, current estimates outline an expected $80 million to $105 million in one-off costs. Meanwhile, a further $25 million to $35 million per annum in ongoing costs are forecast.

The company will be targeting the official separation of the two businesses in the first half of 2023.

Incitec Pivot share price snapshot

Since March 2020 crash, the Incitec Pivot share price has steadily climbed higher. In March this year, shares in the company reclaimed their pre-pandemic level, surpassing $3.65.

For shareholders, Incitec has been a winner so far this year. On a year-to-date basis, the company’s share price is up 13.9%. Whereas, the ASX 200 index is 3.41% in the red — which means Incitec has outperformed by 17.3%.

The post Incitec Pivot share price fizzles despite half-year earnings increasing tenfold appeared first on The Motley Fool Australia.

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• Macquarie reveals 2 sectors where bargain ASX shares still exist
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Motley Fool contributor Mitchell Lawler 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 Scott Phillips.

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The BrainChip Holdings Ltd (ASX: BRN) share price is starting the week very strongly.

In morning trade, the artificial intelligence (AI) technology company’s shares are up 15% to $1.35.

Why is the BrainChip share price charging higher?

Today’s gain by the BrainChip share price appears to have been driven by a press release relating to the company’s acceptance into a partner program.

According to the release, the company has been accepted into the Arm AI Partner Program. This is an ecosystem of hardware and software specialists enabling developers to deliver the next generation of AI solutions.

Arm is one of the biggest names in AI. It is a UK-based semiconductor company that designs the components of processors for others to ultimately build.

Earlier this year, tech giant Nvidia attempted to acquire Arm for US$40 billion before the deal ultimately collapsed due to regulatory issues.

Arm AI Partner Program

The release explains that Arm’s extensive AI ecosystem simplifies AI deployment by providing best-in-class tools, algorithms, and applications to customers worldwide.

It also creates and nurtures strategic alliances that “empower” its ecosystem to drive innovation, provides technical support and resources, and helps partners reach developers and decision-makers within their target markets.

Mohamed Awad, vice president of IoT and Embedded at Arm, said: “As part of the Arm AI Partner Program, BrainChip will further enable developers to meet the need for high-performance and ultra-low power edge AI inference, unlocking new opportunities for innovation.”

However, it might be a little soon to get overly excited. BrainChip is certainly not the only edge AI-focused company in the program. This serves as a reminder that there’s still a long road ahead for BrainChip and no guarantee of success despite what its $2 billion+ market capitalisation might indicate.

The post Why is the BrainChip share price rocketing 15% higher today? 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 Scott Phillips.

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The Newcrest Mining Ltd (ASX: NCM) share price edged higher in early trade, up 0.3% to $25.58.

It follows the report of a new project management agreement for the S&P/ASX 200 Index (ASX: XJO) gold-mining giant.

Newcrest share price higher on new management agreement

The Newcrest share price started Monday in the green after the miner reported its wholly-owned subsidiary – Newcrest Operations – will take over management of its farm-in agreement with Antipa Minerals Ltd (ASX: AZY) on the Wilki Project, located in Western Australia.

In November Newcrest completed its initial commitment of the agreement, having spent $6 million on exploration activities at the site. Antipa, meanwhile, has finalised the project’s current program of works.

The next stage required for Newcrest to earn a 51% interest in the joint venture (JV) is spending another $10 million on exploration before March 2025. The miner has commenced the next stage of exploration.

Newcrest can then earn a 75% interest in the JV if it spends an additional $44 million on exploration activities by March 2028.

What did management say?

Commenting on Newcrest’s decision to assume management of the Wilki Project, Antipa managing director Roger Mason said:

With our other major partners, Rio Tinto and IGO, already operating our Citadel JV and Paterson Farm-in Projects, respectively, this allows Antipa to dedicate its focus to the rapid advancement of our 100%-owned Minyari Dome Project.

The recent substantial resource upgrade at Minyari, to 1.8 million ounces of gold, readily demonstrates why we are now targeting a stand-alone mining and processing operation at Minyari via the usual evaluation studies.

While the Newcrest share price initially rose 0.3% on the news, Antipa shares gained 4.65%.

Newcrest will take over management of the operations of the Wilki Project on 1 July.

Newcrest share price snapshot

The Newcrest share price has gained 4.5% so far in 2022. By comparison, the ASX 200 is down 5.6% year to date.

The post What’s happening with the Newcrest share price on Monday? appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Monday
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• Why has the Newcrest share price fallen 14% in a month?
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• ASX 200 midday update: Block and Xero rebound, gold miners fall

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 Scott Phillips.

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