Newcrest Mining Achieves Strong Performance and Growth Milestones in Q2 2023

In their latest Quarterly Report for the three months ended 30 June 2023, Newcrest Mining Limited (ASX: NCM), a prominent global gold and copper producer, revealed impressive achievements and significant progress towards their growth strategy. The report highlights the group's successful attainment of FY23 gold production and All-In Sustaining Costs (AISC) guidance. They recorded gold production of 556,187 ounces and copper production of 34,978 tonnes for the quarter, resulting in FY23 gold production of 2.1 million ounces and copper production of 133,149 tonnes. The June quarter's AISC was AU$1,196 per ounce, with a margin of AU$706 per ounce. For FY23, the AISC was AU$1,094 per ounce, with a margin of AU$678 per ounce.

Source: Kapitales Research

Safety and sustainability were key focus areas for Newcrest during this period. Lihir achieved a record safety performance with no recordable injuries for the second consecutive quarter. Additionally, Red Chris achieved its lowest annual Total Recordable Injury Frequency Rate (TRIFR) on record in FY23. However, a serious injury occurred at Cadia, which is currently under investigation by the NSW Resource Regulator. Newcrest's growth strategy advanced significantly during the quarter.

A Framework Memorandum of Understanding (MOU) was signed for the Wafi-Golpu project, marking a pivotal milestone towards developing this world-class copper-gold deposit. The Red Chris Block Cave Feasibility Study remained on track for completion in H2 CY235. The Brucejack transformation program continued to progress, showing multiple value-enhancing opportunities. Strong drilling results at Red Chris and Brucejack indicate further upside potential.

In a major development, Newmont entered a binding agreement to acquire 100% of Newcrest's issued shares, subject to various approvals. The combined entity is expected to become a global leader in gold production and enhance exposure to copper. Despite these achievements, Newcrest experienced a serious injury at Cadia, reminding them of the critical importance of safety.

The company reaffirmed its commitment to creating a work environment prioritizing health, safety, and wellbeing for all employees. During the quarter, gold production was 9% higher than the previous period, mainly driven by increased mill throughput at Cadia, Lihir, and Brucejack, along with higher gold head grade at Lihir and Brucejack. However, AISC for the quarter was 20% higher than the prior period, primarily due to increased capital expenditure and a lower realized copper price.

Newcrest continues to work openly and transparently with the NSW Environment Protection Authority (EPA) and the local community regarding air quality and water quality concerns around Cadia. Independent studies and analysis have indicated that the site is compliant with air quality standards, and no evidence links Cadia to lead samples in district rainwater tanks.

Despite challenges, Newcrest Mining's achievements in Q2 2023 demonstrate their strong performance and commitment to growth and sustainability. With the proposed acquisition by Newmont, the company is poised to become a global leader in the gold production industry with a growing presence in copper mining.

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