The market may have slipped lower on Thursday, but that hasn't stopped the Newcrest Mining Limited (ASX: NCM) share price from racing higher.
In morning trade the gold mining giant's shares are up a sizeable 5% to $21.04.
Why are Newcrest Mining's shares storming higher?
As well as getting a boost from a rising gold price, this morning the gold miner announced its final quarter and full year production results to the market.
According to the release, Newcrest had a strong finish to the year thanks largely to a record quarter at its Lihir operation. During the quarter Lihir produced a record 307,000 ounces of gold at a record low quarterly all-in sustaining cost (AISC) of US$724 per ounce.
This strong performance helped propel its total quarterly production to 635,000 ounces, which was a 10% increase on the prior quarter.
For the full-year Newcrest achieved gold production of 2,346,000 ounces, 1% lower than the prior year. This was at the upper end of its revised guidance and only 2% below its original guidance.
The year-on-year decline was largely the result of production issues at Cadia earlier on in the year after the collapse of a tailings dam wall.
Pleasingly, the company appears to have moved past that issue now. Its Cadia operation exceeded its 30mtpa full production run rate target in June 2018.
Newcrest finished the year with an average Group AISC of US$835 per ounce and a Group AISC margin of US$473 per ounce.
Should you invest?
I thought that this was an impressive update and once again demonstrated why Newcrest is regarded by many as one of the highest quality gold miners in the world.
However, because it is highly regarded, its shares tend to trade at a significant premium to the rest of its peers.
It is for this reason that I wouldn't be a buyer of its shares if I were looking for exposure to the precious metal. Instead, I would buy more attractively priced gold miners such as Northern Star Resources Ltd (ASX: NST) or OceanaGold Corp (ASX: OGC).
