Newcrest (ASX:NCM) share price down 4% following Q2 update

Newcrest's shares are falling on Friday…

| More on:
man grimaces next to falling stock graph

Image source: Getty Images

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

Key points

  • Newcrest delivers solid production growth in the second quarter
  • Management expects this trend to continue in the second half
  • FY 2022 production guidance has been reaffirmed

The Newcrest Mining Ltd (ASX: NCM) share price is under pressure on Friday morning.

At the time of writing, the gold miner's shares are down 4% to $22.050.

Why is the Newcrest share price falling?

The Newcrest share price is falling today after a pullback in the gold price offset any positives from its second quarter production report.

In respect to the latter, for the three months ended 31 December, Newcrest delivered gold production of 436koz and copper production of 26kt. This was an increase of 10% and 7.7%, respectively, quarter on quarter.

This production growth was driven by its Cadia, Lihir, and Telfer operations, which offset softer performances from the Red Chris and Fruta del Norte operations.

Management notes that Cadia's mill capacity increased during the quarter, with completion of the replacement and upgrade of the SAG mill motor in November resulting in higher gold production. In addition, mill throughput rates were higher at Lihir and Telfer with a reduction in planned and unplanned shutdown activities compared to the first quarter.

Newcrest achieved this production with an all-in sustaining cost (AISC) of $1,127 an ounce, which resulted in an AISC margin of $588 an ounce. The latter was up 45% from $406 an ounce during the previous quarter.

Looking ahead, management expects its production to increase in the third quarter. After which, it believes the company is on track to deliver its full year production guidance of 1,800koz to 2,000koz.

Management commentary

Newcrest's Managing Director and Chief Executive Officer, Sandeep Biswas, was pleased with the company's performance during the quarter.

He said: "We maintained a strong operational focus on maintenance and productivity improvements during the quarter. It was a tremendous achievement for our team to safely complete the replacement and upgrade of the SAG mill motor at Cadia, which is now operating at full capacity. It was also pleasing to receive approval to increase the permitted processing capacity at Cadia from 32Mtpa to 35Mtpa during the period. Across all our operations, we are well positioned for a strong second half and remain on track to meet our FY22 guidance."

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

More on Gold

Gold bars and Australian dollar notes.
Gold

Down 21% in a month, should you buy Newmont shares before they trade ex-dividend?

This gold stock has been battered by the markets.

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Gold

Why is this ASX 300 stock crashing 32% on Monday?

Let's find out why investors are hitting the panic button this morning.

Read more »

A few gold nullets sit on an old-fashioned gold scale representing ASX gold shares
Gold

Are ASX gold shares still worth buying after the US election?

We discuss some expert opinions on where gold is heading to next.

Read more »

Gold nugget with a red arrow going down.
Gold

ASX 200 gold shares dive on US election result

Gold shares are going wild this Thursday.

Read more »

Calculator and gold bars on Australian dollars, symbolising dividends.
Gold

2 of the best ASX gold stocks you could buy now

Bell Potter is bullish on these gold stocks. Let's find out why.

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Gold

Why is this ASX gold share crashing 22% today?

Let's find out why this gold miner is down in the dumps on Tuesday.

Read more »

Gold bars with a share price chart in the background.
Gold

Why ASX 200 gold stocks look 'undervalued' heading into 2025

The ASX Gold Index is up 37% in a year, but gold stocks are still looking undervalued.

Read more »

A mining executive from Red Dirt Metals chats on her mobile phone looking pleased with a mining site and mining truck in the background
Gold

Which soaring ASX gold share now has $200 million more financial firepower?

Funds will be used to expand operations.

Read more »