Newcrest Mining Limited reports: what you need to know

Newcrest Mining Limited (ASX:NCM) shares rose nearly 3% after their quarterly production report.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of Newcrest Mining Limited (ASX: NCM) have continued to rise today after the gold producer released its December quarterly production report. The shares rose 2.8% to $13.90, up from $12.97 at the beginning of the year.

During the quarter, Newcrest produced more than 620,000 ounces of gold, which was mostly driven by increased production at its Lihir and Telfer projects. Pleasingly, the group's all-in sustaining costs (AISC) also improved by 3.6% during the period to US$757 per ounce, compared to a realised gold price of US$1,100 an ounce during the quarter.

The company also produced 17,518 tonnes of copper during the quarter which was down more than 17% compared to the 21,337 tonnes produced during the September quarter.

Still despite a number of production delays during the first half, Newcrest said it remains on track to achieve full-year guidance of between 2.4 million and 2.6 million ounces of gold. Although production from its Telfer and Hidden Valley projects is expected to be around the bottom end of their ranges, the implications should be offset by Lihir and Bonikro which are tipped to produce at the top end of theirs.

Commenting on the result, the company's Managing Director and CEO, Sandeep Biswas, said: "We have had a good quarter in which we maintained our strong focus on safe production and delivered an increase in gold production and lowered our All-In Sustaining Cost, despite operational challenges at our two largest mines, Cadia and Lihir."

Although it's been a bumpy ride, Australia's gold shares have performed strongly so far in 2016, especially when compared to the S&P/ASX 200's (Index: ^AXJO) (ASX: XJO) 6% decline.

Newcrest itself has risen 7.2%, while EVOLUTION FPO (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) have gained 8.4% and 20.5%, respectively. All three have benefited from a rise in the price of gold since the beginning of the year, combined with a fall in the Australian dollar – both of which should help improve their earnings further.

While the gold miners could continue to rise, investors need to acknowledge any rise will largely depend on whether gold prices continue to appreciate. Indeed, predicting future commodity prices is impossible to do with any accuracy, and a heavy fall could result in significant losses for investors exposed to the sector under those circumstances. The reliance on a strong gold price is one of the reasons I'm steering clear of the sector at this point.

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »