Morgans assesses a strong fourth quarter, which saw Newcrest Mining attain FY21 production guidance for copper and gold. Higher copper prices and production reduced all-in sustaining costs (AISC), with Cadia and Telfer considered to have strong quarters.
The overall improvement in AISC by 11% quarter-on-quarter was driven by higher copper production and price, strong gold production and the reclassification of capital spending at Red Chris. The broker retains its Add rating and reduces its target price to $30.53 from $30.95.
Copper revenue is growing in importance, and likely to become more important over the next 12 months as gold grades at Cadia begin to decline, notes Morgans.
Target price is $30.53.Current Price is $26.18. Difference: $4.35 – (brackets indicate current price is over target). If NCM meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).