Stocks’ Details

Newcrest Mining Limited

Annual General Meeting is to be held on 12 November 2019:Newcrest Mining Limited (ASX: NCM) is into the exploration, development, mining and sale of gold. The market capitalisation of the company stood at ~A$26.5 billion as on September 13, 2019. Recently, the company announced that its Annual General Meeting will be held on 12 November 2019 at The Pavilion, Arts Centre Melbourne, 100 St Kilda Road, Melbourne.  

Financial Highlights for FY19: The company reported decent FY19 results with gold production up by 6% to 2,488koz.Copper production also increased by 36% to 106kt. All-in sustaining cost (AISC) decreased by 12% to $738/oz. In FY19, the company’s free cashflow increased by 34% to $804 million. The company has decreased its leverage ratio from 0.6x in Dec 2018 to 0.2x in June 2019. The company has also reduced its gearing ratio from 12% in 31^st December 2018 to 5% in 30 June 2019.
 

Performance in FY19 (Source: Company Reports)

Continuous Rise in Dividends: The company has been increasing its dividends continuously for the last three years. In FY19, company increased its dividends by 19% to US$0.22/share.The company is targeting a total dividend payment of at least 10-30% of free cash flow.

Guidance for FY20: The company is guiding a total gold production of 2,350-2,500koz for FY20, with the major contribution from Lihir (930-1,030koz).Copper production will be in the range of 110-120kt with Cadia producing around 100kt and Telfer producing around 15kt. The total capex for the year would be $680-780 million.

Stock performance:On the stock performance front, it produced returns of 14.56% and 33.06% in three and six months, respectively. Currently, the stock is trading slightly towards its 52-week high levels of $38.87 with PE multiple of 32.19x. Hence, considering the aforesaid facts and current trading levels, we advise the investors to closely watch the stock at the current market price of A$33.510 per share (down 2.813% on 13 September 2019) nd wait for better entry levels.
 

Saracen Minerals Holdings Limited

FY19 Results Highlights:Saracen Minerals Holdings Limited (ASX: SAR) is into the business of gold production and exploration. The market capitalization of the company stood at A$2.82 billion as on 13^th September 2019.

The company reported a decent set of numbers for FY19 with NPAT up by 22% to A$92.5 million. Underlying NPAT was up by 40% to A$94.2 million. Its EBITDA increased by 11% to of A$219.5 million reflecting record production volumes, lower costs and a strong Australian-dollar gold price. The gold production saw a record growth of 12% to 355,077oz.

Good Financial Position: The company’s cash and cash equivalent increased to A$154.4 million at 30 June 2019 after spending A$216.9 million on exploration and growth. The company has no debt in its balance sheet, which can help it in achieving long-term growth objectives. The strong balance sheet supports ongoing investment in exploration and growth, including increasing Reserves beyond 3.3Moz and production to 400,000oz p.a.
Managing Director Sold One Million Shares: SAR informed that the company’s MD, Raleigh Finlayson has sold one million shares in the company. Mr Finlayson currently holds 3.2 million shares and 2.5 million performance rights.The sale was conducted at an average price of $3.71 per share. These proceeds will be used in part to meet personal taxation obligations arising from the vesting of Mr Finlayson’s FY17 performance rights and other personal commitments.

Guidance for FY20: The company has guided a total production of 350-370,000oz at an AISC of A$1,025/oz to A$1,075/oz (progressive over the 12 months).


 Production ounces (koz) (Source: Company Reports)

Stock Performance:On the stock performance front, it produced returns of 18.51% and 14.43% in the past six months and on YTD basis, respectively. Based on the foregoing, we give a “Buy” recommendation on the stock at the current market price of A$3.330 per share (down 1.77% on 13^th September 2019).
 

Regis Resources Limited

Decent Top-line Growth in FY19:Regis Resources Limited (ASX: RRL) is a gold and mineral exploration company. The market capitalisation of the company stood at A$2.34 billion as on 13^th September 2019. The company reported a total revenue of $654.8 million, up by 8% in FY19. Total gold sale was 369,721ozs up by 2.8%, with an average sale price of $1,765/oz.The company’s NPAT was down by 6.4%, driven by non-cash impairment of capitalised exploration expenditure ($6.7 million) and increased cost of goods sold of $58.4 million (17%). The COGS increased mainly due to 34% increase in BCM’s mined at Duketon South, combined with higher contractor costs and harder ore encountered at Duketon North. The company reported a strong EBITDA margin of 46.8% but EBITDA was slightly down to $306.8 million in FY19 against the prior year.


 Financial Highlight (Source: Company Reports)

Operational Performance: The company reported decent operational performance with record annual production of 363,418ozs at the top end of guidance. The company commenced the development of the first underground operation at Rosemont during the year.

Strategic Tenement Holding Acquired In Duketon Greenstone Belt:The company has acquired a large strategic tenement holding from Duketon Mining Limited (DKM) for $20 million cash and up to $5 million in contingent payments.RRL now controls 90% of the gold rights in the Duketon Greenstone Belt (DGB), tripling it landholdings to around 3,000km², along strike and adjacent to its existing resources and processing plants at Moolart Well, Garden Well and Rosemont.

Stock Performance:On the stock’s performance front, it produced returns of -2.36% and -16.67% in the last three and six months, respectively.  Currently, the stock is trading below the average of 52-week high and low levels of $6.72 and $3.65, respectively. Hence, in view of aforesaid parameters and current trading levels, we have a watch view on the stock at the current market price of $4.55 per share (down 1.302% on 13 September 2019) and suggest that investors should wait for a few more catalysts that may drive the stock.

 
Comparative Price Chart (Source: Thomson Reuters)

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