Newcrest Mining Share Price is Up on Gold Miner Resurgence (ASX:NCM)

Newcrest Mining Share Price is Up on Gold Miner Resurgence (ASX:NCM)

The share price of gold mining giant Newcrest Mining Ltd [ASX:NCM] has made a strong about-turn today following the release of its half-year results.

With a profit that is nearly double that of last year’s first results, NCM said it will also double its interim dividend.

At time of writing, Australia’s largest gold miner is up $1.42 or 5.64% to trade at $26.62 per share.

ASX NCM Share Price Chart - Newcrest Mining

Source: Tradingview

Like many of its peers, the NCM share price has been in a strong downwards trend following the runoff in gold price.

But with the gold price steadying, today’s results provide a solid foundation to build momentum in the current half.

Historic gold and copper buoy results

The gold mining giant announced a US$553 million underlying half-year profit that almost doubled last year’s interim result.

A solid result despite the tough operating conditions in the face of COVID-19.

Managing the pandemic came at a cost much higher than the $30–40 million that NCM expected.

REVEALED: What’s Next for Aussie Gold Stock Prices? Learn more.

The company’s all-in-sustaining-costs jumped by 46% during the period to $842 per ounce.

In fact, NCM said pandemic costs could be as high as $60–70 million this year as it seeks to juggle the needs of staff and regulators across Western Australia, Papua New Guinea and New South Wales.

However, the increased revenue from gold and silver sales help right the ship during the current pandemic.

Gold revenue grew by 18% compared to the previous corresponding period.

While copper revenue ballooned by 34% on the back of an eight-year high.

With dividend rebound accelerating across the ASX, NCM is not one to miss the party.

Having posted a record half-year free cash flow of $439 million, the miner announced a new dividend policy that will see 30–60% of annual free cash flow to be paid to investors.

That’s up from the old policy of 10–30%.

Meaning NCM shareholders will pocket 15 US cents per share, fully franked interim dividend.

Aussie gold miners are ready to clash

NCM’s new dividend policy could be in response to one of its biggest competitors, Northern Star Minerals Ltd [ASX:NST].

Tomorrow, NST will formalise its merger with Saracen Mineral Holdings Ltd [ASX:SAR] in their quest to become a two-million-ounces of gold per annum producer.

NST has promised shareholders they will pay 6% of revenue as dividends in future.

And if NST does reach 2Moz per annum by 2027, it could take the title of Australia’s largest gold producer from NCM.

But it’s not just the clash of gold mining giants that are heating up the Aussie gold scene. Our resident gold expert Shae Russell reckons other Aussie gold stocks could be set to spike too as Australia becomes the next ‘gold epicentre’. If you want to learn more, download your free report here.


Lachlann Tierney,

For The Daily Reckoning Australia