March quarter production was weaker than Credit Suisse expected. Cost guidance has been lifted to $1225-1275/oz. The company has confirmed production of 850-900,000 ounces in FY19.
Credit Suisse suspects the company’s strategy is likely to use Kalgoorlie toll milling capacity in the June quarter to improve Australian production and cover for the shortfall at Pogo.
The broker notes a change from contract mining to owner operator at Pogo has gone badly, as delays were incurred getting equipment to site. Credit Suisse maintains an Underperform rating and $6.10 target.
Sector: Materials.
Target price is $6.10.Current Price is $8.26. Difference: ($2.16) – (brackets indicate current price is over target). If NST meets the Credit Suisse target it will return approximately -35% (excluding dividends, fees and charges – negative figures indicate an expected loss).
