Why are Newcrest shares slipping on Thursday?

Newcrest shares are down amid wider selling in the gold sector and after two price sensitive announcements this morning.

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Key points
  • Newcrest shares are down 1.5% in early afternoon trade
  • The ASX 200 gold stock has rejected the takeover offer from US gold giant Newmont
  • Newcrest released its half-year results this morning

Newcrest Mining Ltd (ASX: NCM) shares are in the red during the Thursday lunch hour.

Shares in the S&P/ASX 200 Index (ASX: XJO) gold miner closed yesterday trading for $24.31 and are currently trading for $23.93, down 1.52%.

It's not just Newcrest shares under pressure.

Most ASX gold stocks are down today, as witnessed by the 1.6% decline in the S&P/ASX All Ordinaries Gold Index (ASX: XGD).

This follows similar declines in US-listed gold stocks overnight, likely spurred by another small retrace in the gold price. At US$1,835 per ounce, the gold price is down 6% since 1 February.

A man wearing 70s clothing and a big gold chain around his neck looks a little bit unsure.

Image source: Getty Images

What else are ASX 200 investors considering?

ASX 200 investors will be running their slide rules over Newcrest shares following two price-sensitive market releases this morning.

First, as The Motley Fool reported earlier this morning, the gold miner has rejected the takeover proposal lobbed earlier this month by United States-based gold giant Newmont Corporation (NYSE: NEM).

Newmont had offered 0.380 Newmont shares for each Newcrest share held to acquire 100% of the Aussie miner.

At the current Newmont share price of US$46.30 (AU$67.29), that works out to an offer price of $25.57 per share, some 7% above the current Newcrest share price.

In declining the offer, management said it's open to considering better offers, but that the current offer doesn't "represent sufficient value" for shareholders.

What else is impacting Newcrest shares today?

The ASX 200 gold miner also released its half-year results today (1H FY23).

(Note, the figures reported are in US dollars.)

Newcrest reported a 24% increase in revenue from the prior corresponding period to $2.12 billion. Earnings before interest, taxes, depreciation and amortisation (EBITDA) also increased 24% to $919 million.

And income investors should be pleased with Newcrest's interim dividend of 15 US cents per share and a special dividend of 20 US cents per share, both fully franked. The special dividend reflects the full distribution of funds received from Lundin Gold for the early repayment of the gold prepay credit facility.

Meanwhile, the miner's All-In Sustaining Cost (AISC) dropped 8% compared to 1H FY22 to $1,089 per ounce.

The AISC margin increased by 17% to $585 per ounce, despite a 2% reduction in the realised gold price to $1,696 per ounce.

The miner also reported it had completed an extensive safety review at its Brucejack mine following a tragic underground fatality in October.

As at 31 December, the company held $2 billion in cash and committed undrawn bank facilities.

"Newcrest is in an excellent position, and with positive momentum for gold and copper prices continuing into 2023, we look forward to a stronger second half of the year," Newcrest CEO Sherry Duhe said.

How have Newcrest shares been tracking?

As you can see in the chart below, Newcrest shares are off to a great start in 2023, up 16% despite today's retrace.

Motley Fool contributor Bernd Struben 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 Scott Phillips.

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