The Motley Fool

Here’s why I think the Newcrest share price is in the buy zone 

Newcrest Mining Limited (ASX: NCM) is continuing its strategy of acquiring low cost, long life ore bodies with its recent agreement to purchase GJ Copper-Gold Project from Canadian-listed junior miner Skeena Resources Ltd for AU$8.37 million in cash. 

The project adds more than 43,500 hectares containing 93 contiguous mineral claims to Newcrest’s exploration portfolio. It is in the region of Canada known as the Golden Triangle and is approximately 30 kilometres from the 70% Newcrest-owned Red Chris operation, which was acquired in August 2019.

The mineralisation of various regions within the GJ project indicates it may produce one or more Tier 1 gold assets or at the very least low-cost open pit operations with the capability to combine processing. 

The company’s exploration program includes working with small-cap international miners across a range of joint ventures near the Tanami province and in the Pilbara with early results showing a lot of promise.

Newcrest entered the top 20 ASX-listed companies on 13 December 2019 – a reflection of the miner’s transformation under Sandeep Biswas over the past 5 years. The company has achieved a record low all in sustaining cost (AISC) and very strong growth rates across all of the major performance indicators.

Newcrest has also shown the discipline required to cut its  losses. In June 2018, the company reached an agreement with the Indonesian government over taxes for Gosowong and a reduction of its 75% stake to under 49% in favour of Indonesian companies. 

Noting at the time the negative impact this would have on the value of the asset and cash flow, Newcrest announced on 31 January 2020 it would divest Gosowong for AU$90 million incurring a one-off loss of AU$44 million.

Foolish takeaway

Newcrest is a very well managed gold mining company operating in an environment of high gold prices. The company has achieved its FY20 goal of 5 Tier 1 gold-producing assets and has developed a track record of delivering on management commitments.

It has shown the discipline to cut its losses, actively pursues new low cost production sources, and is continually taking steps to reduce its internal costs. 

If you're staying away from the resources sector, here are 3 top income shares to consider instead.

Top 3 Dividend Shares To Buy For 2020

When Edward Vesely -- The Motley Fool Australia's resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 126%) and Collins Food (up 79%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.

In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.

Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.

Click here now to access this free report.

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. 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 Scott Phillips.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.