This morning Australia's largest gold miner, Newcrest Mining Limited (ASX: NCM), released its activities report for the March quarter revealing a solid operating result which included increased production and lower costs.
Here are 7 things all shareholders need to know about Newcrest's report.
- Gold production jumped to 610,186oz from 577,110oz in the December Quarter
- Its all-in sustaining cost (AISC) dropped from $963/oz in the prior quarter to just $946/oz
- The average realised gold price was a robust $1,556/oz
- An enviable AISC profit margin of $609/oz was generated
- Full year copper production guidance has been increased by 5,000 tonnes to between 95,000 and 100,000 tonnes.
- Overall AISC is tipped to be at the lower end of previous range between $2.3 billion and $2.5 billion
- Total capital expenditure guidance has been lowered to $585-$625 million.
With strong profit margins and the divestment of half of its stake in fellow ASX-listed gold miner, EVOLUTION FPO (ASX: EVN) for around $106 million earlier this year, Newcrest has been able to continue paying down its debt pile.
"Newcrest continued to pay down debt from free cash flow generated in the period, including the proceeds from the partial sale of our stake in Evolution," Newcrest CEO, Sandeep Biswas, said in the company's ASX announcement.
Should you buy Newcrest Mining shares?
Newcrest's shares have fallen slightly on the release of its quarterly results. Indeed whilst the news bodes well for shareholders in the medium-term, Newcrest is in the process of transforming its balance sheet to focus on its core portfolio of assets in the wake of billions of dollars of write-downs which thrust the company into the media spotlight for all the wrong reasons.
However this (capital-F) Fool continues to believe Newcrest presents as one of the best gold miners on the ASX, given its extremely low cost base and huge reserves. Whilst I'm not rushing out to buy it for my personal portfolio, Newcrest should be – along with Independence Group NL (ASX: IGO), Northern Star Resources Ltd (ASX: NST) and maybe even Evolution – on budding resources sector investors' watchlists.
