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.

What happened

Shares of PayPal (NASDAQ: PYPL) stumbled on Wednesday, falling as much as 6.8%, though the stock recovered a bit, ending the trading day down 4.7%. The catalyst that sent the fintech leader lower were reports that it might be expanding into new markets via a massive acquisition.

So what

Reports surfaced early in the day that PayPal had made overtures to acquire social-media site Pinterest (NYSE: PINS). Bloomberg dropped the story, citing the oft-quoted “people with knowledge of the matter,” which sent Pinterest stock soaring. 

The report had the opposite effect on PayPal. Investors were likely concerned about the proposed acquisition price for Pinterest of roughly $70 per share.

As of Jul. 23, 2021, Pinterest had more than 555 million shares of Class A common stock outstanding and more than 89 million shares of Class B shares, which, taken together, would value Pinterest at more than $45 billion. For context, PayPal currently has a market cap of roughly $300 billion, so an acquisition of this magnitude could have a significant impact on PayPal’s business — particularly if things go south.

The report didn’t specify when these discussions happened, though an updated version of the report said, “Terms of a transaction could still change, and there’s no certainty the talks would lead to an agreement.” 

Now what

PayPal has been looking to expand beyond its digital-payments business and has been working to become a “destination app” as a way to help users take control of their financial lives. Last month, the company added a host of new features and services, taking it one step closer to what some are calling a “super app.”

The added functionality includes a high-yield savings account, in-app shopping tools, up to two-day early access to direct deposit funds, bill pay, and deals and rewards for users. In the coming quarters, PayPal plans to expand its features even more, adding investment capabilities and purchasing with cryptocurrency.

By joining forces with Pinterest, PayPal would establish a sizable beachhead in social commerce, a natural extension of its payments business.

Thus far, neither PayPal nor Pinterest has confirmed the reports. 

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

The post Why PayPal investors got nervous on Wednesday appeared first on The Motley Fool Australia.

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Danny Vena owns shares of PayPal Holdings and Pinterest and has the following options: long January 2022 $85 calls on PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended PayPal Holdings and Pinterest. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended PayPal Holdings and Pinterest. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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The Metalstech Ltd (ASX: MTC) share price is leaping higher in morning trade today. At the time of writing, it is up by 7.14% to 45 cents. However, earlier in the day it was as high as 49 cents, a 16% gain on its previous closing price.

Below we look at the ASX resource explorer’s latest gold update that looks to be spurring investor interest.

What gold update was announced?

The Metalstech share price is surging after the company reported it had identified visible gold at its 100%-owned Sturec Gold Mine, in Slovakia.

The explorer is engaged in phase 2 of a diamond drilling campaign. During geological logging and sampling it said visible gold was identified at 97.6 metres “within a quartz filled vein/stockwork/breccia zone, variably rich in fine to very fine grained sulphides and hosted within variably argillic altered andesite host rock from approximately 75 metres to 120 metres down hole in the drill core…”

The hole in question, UGA-20, was completed to a depth of 140.5 metres.

Metalstech said the core from UGA-20 is currently being sampled and will be dispatched to a lab for analysis “as soon as possible”. The company will provide a market update once those results are in.

October tailwinds for the Metalstech share price

Gold prices have been edging higher in October, up 1.3% so far this month to US$1,782 per troy ounce.

But the Metalstech share price enjoyed an even bigger boost earlier this month from another positive gold announcement out of Sturec.

On 4 October its shares surged 17% intraday after the company reported it had encountered “bonanza gold” at the project.

Following the bonanza gold strike, Metalstech chairman Russel Moran said:

Sturec is shaping up to be an extraordinary deposit with bonanza grade potential … we are hopeful we will continue to hit these incredible mineralised zones, which can expand on and help grow what is already a very exciting and significant gold resource.

Metalstech share price snapshot

The Metalstech share price has been a standout performer over the past full year, up around 180% in 12 months. For comparison, the All Ordinaries Index (ASX: XAO) gained 21% over that same time.

Over the past month, Metalstech shares have gained 12%.

The post Why the Metalstech (ASX:MTC) share price is climbing 7% today appeared first on The Motley Fool Australia.

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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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The Transurban Group (ASX: TCL) share price has been off to a troubling start to commence the walk through October.

At the time of writing, shares in the road toll operator are changing hands at $13.78, a corresponding 0.15% drop from the market open today.

Transurban shares are on the move as the company released its quarterly update for the quarter ending September 30 2021.

Transurban share price slips as average daily traffic pulls back

Key investment takeouts for Transurban coming out of the latest quarter include:

• Significant decrease in overall average daily traffic year on year, due to Government enforced lockdowns
• Melbourne and Brisbane traffic increased, whereas Sydney traffic volumes were 44% down year on year
• Recovery of traffic numbers in some jurisdictions like Montreal and Washington are balanced by uncertainties from the Federal and State Governments in Australia
• WestConnex Tunnel excavation is now basically complete, with 11km of road pavement now laid down
• First cars expected at WestConnex in FY23.

What did Transurban get up to this quarter?

In its report, Transurban explained that overall average daily traffic (ADT) volumes came in 12.4% behind this same time last year and 34.5% when compared to 2019.

The company advised the down-step in ADT is primarily the result of government mandated lockdown restrictions, particularly in Melbourne and Sydney – two cities critical for Transurban’s Australian operations.

This effect was made clear as ADT in Brisbane actually increased this quarter, as case numbers there remained low and restrictions on mobility were light throughout the last three months.

However, irrespective of this, Melbourne ADT actually managed to reclaim 30.7% towards its pre-COVID levels, with a large uptick in weekend/public holiday traffic.

Sydney traffic was the offsetting factor, driven by a 44% decrease in ADT from the year prior, with the shutdown of the construction industry certainly not helping the outcome.

In both Montreal in Canada and the Greater Washington Area in the US, traffic numbers are showing signs of recovery with a 39% increase in ADT this quarter. However, they are still not at pre-pandemic volumes just yet.

Perhaps the key takeout from the quarter was Transurban’s confirmation that its 50% strategically-owned subsidiary, Sydney Transport Partners, will acquire the remaining stake in the WestConnex project.

The 49% stake was purchased from the NSW Government at auction last month after the company successfully raised $4.22 billion from an equity raise to fund the transaction.

As a result of the deal, Sydney Transport Partners is now the 100% owner of WestConnex, meaning Transurban shareholders are also effectively part-owners of the project.

Per the release, tunnel excavation is now 99% complete at the project, whereas 11km of road pavement has now been laid.

The company anticipates the project to accept its first run of cars and be fully operational by FY23.

Transurban share price snapshot

The Transurban share price has had an incredibly difficult year to date, leaving much to be desired for shareholders.

It’s posted a return of just 1.7% since January 1 and is in the red by about 0.4% over the last 12 months.

These results have lagged the S&P/ASX 200 index (ASX: XJO)’s return of around 19% in that time.

The post Transurban (ASX:TCL) share price slides as traffic volumes push lower appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions 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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The Centrex Metals Limited (ASX: CXM) share price is having an incredible day on Thursday.

In morning trade, the phosphate explorer’s shares are up 200% to a record high of 13 cents.

Why is the Centrex share price tripling in value today?

The catalyst for the rise in the Centrex share price on Thursday has been the release of a promising announcement.

According to the release, the company’s wholly owned Agriflex business has executed a conditional term sheet with Samsung C&T Corporation.

Samsung C&T is a subsidiary of global behemoth Samsung and one of the world’s largest traders in fertilisers. It has representatives in 73 offices in 43 countries around the world.

The release explains that the term sheet outlines the appointment of Samsung as its sole and exclusive marketing representative for sales into Korea, Japan, Indonesia, India and Mexico. The initial term is for the first three years of production from the company’s planned 800,000 tonnes per annum at the Ardmore Phosphate Project.

Samsung will provide marketing services for sales of an annual quantity equal to the lesser of 20% of the product from the Project or 160,000MT. In addition, Samsung may also assist the company with sales of any additional quantity of product not taken by other off-takers.

The price to be paid by Samsung will be the market netback price. This is defined as the actual sales price minus direct costs and a marketing service fee.

The conditions precedent for the agreement include Agriflex’s final board approval to proceed with the construction of the Ardmore Phosphate Project’s 800ktpa plant, Samsung’s internal corporate approvals, Agriflex’s financial close in relation to the financing arrangements for the Project, and the commencement of production from the plant.

Centrex also revealed that it is in advanced discussions with a number of other Australian and international potential customers. It intends to keep the market informed as these develop.

The post Centrex (ASX:CXM) share price rockets 200% on Samsung deal 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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The Flight Centre Travel Group Ltd (ASX: FLT) share price has been on a jagged ride lately.

At the time of writing, shares in the travel retailing giant are changing hands at $20.28, down 6.33% on yesterday’s close.

Flight Centre shares are on the move today after the company successfully priced an issue of convertible debt overnight.

What was announced?

Flight Centre advised it had successfully issued an offering of $400 million in senior unsecured convertible debt for maturity in 2028.

The convertible notes (or bonds, as they are also known) will pay a coupon of 1.625% per annum, paid semi-annually.

This means bondholders will receive two payments at an interest rate of 0.8125% on their principal per year.

Flight Centre intends to use the net proceeds – about $393 million – to pay down existing debt and take advantage of the current ultra-low rates on fixed-rate debt financing to help fund its growth vision into the future.

A part of the debt repayment is allocated to the Bank of England Covid-19 Corporate Financing Facility.

This facility was afforded to the company last year and comes due in March 2022.

What is a convertible bond?

A note or bond is a type of debt instrument that is issued by a company to investors in order to raise money.

When executives are faced with financing decisions to grow the company or stay solvent, they generally have three choices: use cash on the balance sheet, issue more or new shares, or undertake a debt load.

Corporate bonds and notes are just a way for investors to lend a company money by purchasing the bonds. They then receive interest payments and their money back in full when the debt matures in 7 years.

Issuers must be of a high credit rating, and also have sufficient operating cash flows to service the debt obligations when they fall due.

Convertible notes are a particular type of bond that has a special option embedded into its fine print.

It allows investors the option to ‘convert’ their debt asset into equity if Flight Centre’s share price hits a certain level.

With this particular note issue, the conversion price is $27.30 per share. At that point, bondholders will have the opportunity – but not the obligation – to obtain Flight Centre shares at that price.

What does it mean for the Flight Centre share price?

Generally, all parties involved are fans of convertible debt.

For companies, it provides a lower-cost financing solution, as investors will accept a lower rate of interest for the chance to convert their bonds to equity later.

Companies also love convertible debt because when bonds convert, the debt is wiped clean off the balance sheet.

For investors, convertible notes are a very cheap way of obtaining equity, whilst providing some cover over the downside risk.

If Flight Centre’s shares don’t perform well, investors don’t have to convert and they will still earn a 1.625% return and receive their principal back in full.

This equates to a gross return of $2,985 at the tenor. However, if the share price does take off, then investors can convert at a ratio of 1:27.50, meaning if the share price hits $40, they can purchase the shares at a 31% discount.

Unlike fixed income, the upside potential in shares is unlimited, meaning the gross return is infinite (in theory).

However, conversion can dilute the holdings of other shareholders, as more individual shares are issued.

Flight Centre share price snapshot

The Flight Centre share price has gained 27% this year to date and 47% over the past 12 months.

This is well ahead of the 19% gain of the S&P/ASX 200 index (ASX: XJO) over 12 months.

The post Why is the Flight Centre (ASX:FLT) share price down 6% today? appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions 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 recommended Flight Centre Travel Group Limited. 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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The SILK Laser Australia Ltd (ASX: SLA) share price is in the red on Thursday morning after the company announced a resilient first-quarter trading update.

At the time of writing, the SILK Laser share price is down 0.75% to $4.61.

SILK Laser share price down as COVID-19 restrictions bite

SILK Laser delivered a resilient performance over the first quarter ended 30 September. Some highlights include:

• Network cash sales adjusted for lost trading days up 14% to $23.5 million;
• Unadjusted network cash sales down 4%;
• Like-for-like sales adjusted for lost trading days up 2% to $20.4 million; and
• Unadjusted like-for-like sales down 14%.

SILK was pleased with its FY22 year-to-date performance considering the lost trading days due to closed clinics during COVID-19 lockdowns. It also comes against the backdrop of an exceptionally strong comparable period last year.

The trading update highlighted strong growth across body and injectable categories, with its overall service mix evolving, as planned.

Online sales for SILK’s skincare brands surged by 700% to about $189,000, although this came off a low base.

Back in September, the company announced it had completed the acquisition of Australian Skin Clinics (ASC), which pushed the SILK Laser share price higher at the time. The company advised the integration of ASC is on track.

ASC’s financial performance was not included in SILK’s Q1 sales metrics given its 4 weeks of ownership.

Management commentary

SILK founder and managing director Martin Perelman commented on the first-quarter results, saying:

We are pleased with how the business has performed over the first three months of FY22. While COVID lockdowns again held back sales growth as clinics were forced to close, on an adjusted basis we saw strong momentum in key growth categories, resulting in overall positive like-for-like sales growth. In particular, SILK experienced strong growth across its body and injectables categories, and exceptional growth in online sales of our skincare brands.

What’s next for SILK?

SILK is positive on its outlook, citing the majority of NSW clinics achieved the equivalent of approximately two weeks’ worth of trading within the first week of opening after lockdowns.

“Cosmetic Injectables, as has happened previously, performed far above expectations driven by strong waitlists and the strength of SILK’s injecting teams.”

Its service and earnings mix is expected to continue to evolve with a growing position in injectable and body categories. SILK said it will continue to roll out these service offerings across its network.

Despite a challenging trading environment so far in 2021, the SILK Laser share price is up 29% year-to-date.

The post SILK Laser (ASX:SLA) share price edges lower on quarterly update appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended SILK Laser Australia Limited. The Motley Fool Australia has recommended SILK Laser Australia Limited. 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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The Bitcoin (CRYPTO: BTC) price just smashed through its previous record high.

The token gained 3% over the past 24 hours and 15% over past 7 days to currently be worth US$66,014 (AU$88,018).

That handily surpasses the previous all-time high of US$64,863, set on 14 April this year. And it’s more than double the recent Bitcoin price lows of US$29,807 on 20 July, when the token came under pressure from China’s crackdown and its massive energy requirements.

Even as it marched to a new record, though, there was plenty of the volatility crypto investors have come to expect.

Over the past 24 hours the Bitcoin price traded as low as US$63,610 and as high as US$$66,930, a range of more than 5%, according to data from CoinMarketCap.

Volatility aside, Bitcoin’s market cap now stands at US$1.24 trillion, representing almost half the total crypto market valuation of some US$2.6 trillion.

Bitcoin price record driven by BITO

A range of factors have been helping drive the Bitcoin price higher. These include investor fears about inflation sapping the value of fiat currency, cashed up households that haven’t been able to spend in their normal way due to the pandemic speculating on the price, and an increasing acceptance by institutional investors.

Most recently, Tuesday’s launch of the first United States listed Bitcoin exchange traded fund (ETF) ProShares Bitcoin Strategy ETF (NYSE: BITO) has been fuelling animal spirits. On its first day of trading, the turnover in BITO was more than US$1 billion, making it the second most heavily traded fund on its debut day.

Yesterday, overnight Aussie time, BITO again lit up the screens, with a turnover of some US$1.2 billion.

(You can get the full scoop on BITO’s launch here.)

What the experts are saying

Addressing the Bitcoin price record and the launch of BITO, Brendan Halfpenny, co-founder of CoinSpot said:

As BTC is steadily hovering around its all-time high, cryptocurrency investors are becoming increasingly varied. With more traditional finance sectors branching into cryptocurrency products, this further adds legitimacy to the space and provides greater access for more investors.

Jesse Proudman, CEO of crypto advisory Makara, added (quoted by Bloomberg), “It’s a validating moment,” “It’s no longer a question of does this asset class continue to exist – I think that’s a really meaningful mark in the history of the broader digital-asset class.”

And according to Leah Wald, CEO of Valkyrie Investments, which is awaiting approval for its own futures-based Bitcoin fund:

Clearly, the launch of a Bitcoin futures ETF in the US has sent prices soaring to these levels. Traders and investors perhaps see this is precursor to the holy grail – a spot Bitcoin ETF – and their optimism is pouring into the largest cryptocurrency at a furious pace, with all money FOMOing into the trade from all corners of the market.

If you’re feeling a bit of FOMO yourself, don’t forget the Bitcoin price can fall just as fast, or faster, than it goes up.

Never invest more than you can afford to lose.

The post Why the Bitcoin (CRYPTO:BTC) price is rocketing to new, all-time highs appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. 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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The AMP Ltd (ASX: AMP) share price is in the green today after the company released an update on its quarterly performance.

Over the third quarter of calendar year 2021, AMP Capital’s assets under management (AUM), which are owned by investors, fell by $7.3 billion.  

In brighter news, AMP’s Australian wealth management unit’s cash outflows dropped after the early release super scheme – designed to support Australians through COVID-19 ­– was scrapped.

Commenting on the company’s future direction, AMP’s CEO Alexis George said: “We have a clear focus on our priorities ahead, including to deliver the demerger of our Private Markets business from AMP in the first half of next year.”

At the time of writing, the AMP share price is $1.165, 4% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) and the All Ordinaries Index (ASX: XAO) are both up around 0.1%.

Let’s take a closer look at how AMP performed over the quarter ended 30 September 2021.

AMP’s mixed quarterly performance

The AMP share price is higher this morning on news of a quarter full of ups and downs.

In the spirit of giving bad news first, AMP Capital’s AUM dropped 4% over the quarter, driven by $12 billion of cash outflows. For context, over the same quarter of 2020 AMP Capital saw cash outflows of just $2.4 billion.

As of 30 September, AMP Capital managed $180.3 billion of investors’ funds.

Additionally, while AMP’s New Zealand wealth management unit saw its AUM boosted by around $300 million to $12.9 billion last quarter, its cash outflows grew by 66%.

Its cash outflows came to $39 million for the period. The increased costs were partly because AMP’s status as a default KiwiSaver provider wasn’t renewed. AMP remains a non-default KiwiSaver provider.

However, AMP’s Australian wealth management saw positive returns and lesser cash outflows. That lead its AUM to end the quarter at $131.2 billion. That’s roughly the same as at the end of the previous period.

The unit’s cash outflows dropped by around $400 million, mostly because it paid no early release super payments after the Australian Government scrapped the scheme late last year.

Over the 3-month period, AMP’s Australian wealth management unit paid out $468 million of regular pension payments to its retired clients.

AMP Bank also saw its loan book increase by around $300 million to $21.3 billion, driven by a competitive owner-occupier housing market. The bank’s total deposits also increased by $1 billion, bringing its deposit-to-loan ratio to 81%.

Finally, the company’s North platform‘s AUM grew by $1.7 billion in the third quarter of 2021, reaching $58.6 billion. The platform’s cash flows came to $991 million, 21% more than in the prior corresponding period.

AMP share price snapshot

The struggles faced by the AMP share price are well known among market watchers. Many will likely be keeping a close eye on it ahead of the planned demerger of its Private Markets business.

Right now, its 25% lower than it was at the start of 2021.

The post AMP (ASX:AMP) share price gains 4% as $7b of funds go down the drain 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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The Catapult Group International Ltd (ASX: CAT) share price has been a positive performer on Thursday.

In early trade, the sports analytics company’s shares are up over 3% to $1.95.

Why is the Catapult share price racing higher?

Investors have been bidding the Catapult share price higher this morning following the release of a strong first half trading update.

According to the release, the company’s Annual Contract Value (ACV) has surged 43% or $17.6 million higher to $58.8 million since this time last year.

Management advised that this was driven largely by demand for its software solutions in its largest vertical of Performance & Health, which grew at 33% annualised for the half to $34.4 million. In addition, the recent acquisition of SBG also gave its ACV a lift. Excluding the SBG acquisition, Catapult’s ACV growth was still a very strong 30% year on year.

The company’s largest market, the Americas region, was a key highlight during the period. Catapult’s Performance & Health ACV in the region grew at an annualised rate of 62% for the first half. This follows a significant strengthening in the operating environment for pro sports in the key market.

Another big positive is that the company’s ACV Churn continued to improve from its already world-class SaaS levels. ACV Churn fell 40% for the year from 6.8% to 4.1%. Management notes that the usage of Catapult’s software products is continuing to prove critical to its customers’ daily workflows.

Also potentially giving the Catapult share price a boost is its unaudited cash balance. At the end of the period, Catapult had $42.1 million of cash at bank. This is an increase of $19.9 million over the previous six months.

Catapult’s CEO, Will Lopes, was pleased with the company’s performance.

He said: “I am very pleased with the results of the last six and 12 months and our ACV growth trajectory. It’s extremely pleasing to see our core Performance & Health vertical continue to grow so strongly, coupled with our continued ability to cross-sell video solutions to those customers.”

“With the addition of SBG to our product mix, we are confident in our ability to expand ACV significantly in the long term. We’re also very pleased to see the large North American market return to strength following the challenges presented by the pandemic,” he concluded.

The post Catapult (ASX:CAT) share price higher on surging annual contract value 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. owns shares of and has recommended Catapult Group International Ltd. The Motley Fool Australia owns shares of and has recommended Catapult Group International Ltd. 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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Newcrest Mining Ltd (ASX: NCM) was in the spotlight at yesterday’s Allan Gray Live webinar.

Newcrest CEO Sandeep Biswas joined Allan Gray’s managing director, Simon Mawhinney, for a candid Q&A session.

Below we look at some of the key takeaways Biswas shared about the company he’s presided over for the last 7 years. A company that now counts as largest gold producer listed on the ASX, and amongst the biggest gold miners in the world.

Why has the Newcrest share price been under pressure?

Addressing the pressured Newcrest share price, Biswas said that was partly driven by “its near-term production decline because of declining grades” at some of its mines.

Grades here means the amount of gold the company can extract from any given tonne of material it digs up.

The pressure on the share price, Biswas added is “also coupled with the fact that we’ve never really given the longer-term outlook, but just the 12 months guidance. Now, as of last week, we do have that longer-term outlook out there. And I think that’s really informed the market a lot better about what our future is.”

(You can find Newcrest’s longer-term outlook, released last week, here.)

Gold prices, margins and production profiles

Biswas also highlighted Newcrest’s low all in sustaining costs (AISC) and its industry leading profit margins. Which, at current gold prices above US$1,770 per ounce, he said means, “We make a lot of money.”

Biswas continued:

But when prices drop… we’ll be there with the best margins in the business. There’s no other gold mining company of scale that has our level of sustaining cost profile. That differentiates us, and it plays to our philosophy of long life plus high margin. Which ultimately, I think, investors will appreciate as less risky to invest in with a better return profile.

Mawhinney then pointed to Newcrest’s pre-feasibility study (PFS) at its Lihir project, which the company says supports gold production growth to 1 million ounces per year commencing in the 2024 financial year.

Asked how confident he is about those production profile figures, given some past operational issues at the project, Biswas replied, “I’m very confident about the profile… It’s one of the few mines in the world where the grade profile, this is the amount of gold per tonne, actually goes up end of the year term.

“A big portion of the increase in gold production from Lihir,” Biswas continued, “is driven not by mining tonnes or mill tonnes, but driven by grade. Which is inherent in the ore body, which we’re very confident about.”

What are Newcrest’s copper plans?

Copper, in high demand for its high conductivity and corrosion resistance as the world moves towards renewable energy, was another focus point of the webinar.

Mawhinney pointed out that, atop the increase in gold production, Newcrest’s PFS studies also indicate its copper production nearly doubling over the next 10 years. “Is that by design?” he asked.

According to Biswas, the ramp up in forecast copper production isn’t really by design, but more related to Newcrest’s industry leading technological knowhow:

Because of our ability with mining bulk underground ore bodies, we explore deeper than most other companies. Because a lot of companies who explore deeply, if they found something, they couldn’t do anything about it. Whereas we can. That in itself leads you to look also for copper gold porphyry and gold copper porphyry deposits…

We haven’t gone out to search for copper specifically, it just happens to come with the geology of these particular assets. And it’s great exposure. The green credentials of copper… If you look at copper today it’s about 5 bucks per pound. Of all the metals, [it has] the brightest future of them all.

“We also have a copper deposit in Fiji, which we haven’t turned minds to for quite some time,” Biswas added. “Because at $3 [per pound] copper it doesn’t give us the double-digit returns. But at $4 or $5 copper, I think that’s also going to be a fantastic opportunity.”

ESG credentials

In today’s world corporations’ environmental, social and governance (ESG) credentials are under intense scrutiny.

And big gold miners like Newcrest are no exception.

Addressing his company’s ESG commitments, Biswas said:

Our new vision incorporates, more than ever before, the goals we’ve got to achieve in the broader ESG dimension. Obviously green house gas is a big focus for us. We had already made a commitment to reduce green house gas emissions intensity by 30% by 2030… I think we’re well placed to get to that target…

We’re also committed to net zero by 2050. Which is meaningful for us because our mines will actually be running in 2050… We’ve got a full-time task force working on mapping how we might get there. Through technology in the first instance. Partnering with others as to how these technologies may develop in that time frame, so we can start deploying them into our businesses.

Will Newcrest enter the crypto space?

With Bitcoin (CRYPO: BTC) again dominating headlines as it toys with setting new all-time highs, Mawhinney quipped, “Gold seems to be so yesteryear. Any bolt-ons on crypto for Newcrest?”

The short answer there was, “No.”

Biswas elaborated, “I think there’s a realisation now that they are very different. Gold is physical. If the internet goes down you still have your gold bar. You can touch it… change its form. And it does have some uses, more and more in electronics and medicines, and jewellery, obviously.”

His recommendation?

“If you have a Bitcoin or crypto portfolio, put a good chunk of gold in there, because it actually reduces your volatility. So, they may ultimately be more complimentary than working against each other.”

The post Newcrest (ASX:NCM) CEO reveals the company’s gold, copper and Bitcoin mining plans appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. 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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