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Here’s Why Gold Output Dropped for Newcrest Mining

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Newcrest Mining witnessed a drop in quarterly gold production. Management expects production to bounce back.

Gold producer Newcrest Mining (AU:NCM)(TSE:NCM)(NCMGF) witnessed a decline in the output of the shiny yellow metal for the December ended quarter. The company stated that gold production fell about 2.8% on a quarter-over-quarter basis, reflecting a decline in mill throughput at its Lihir mine and a temporary suspension of operations at its Brucejack mine. This decline was offset in part by higher gold production at the Cadia and Telfer mines.

The Australia-based company also stated that its all-in-sustaining cost (AISC) declined by 1%, reflecting a higher amount of lower-cost ounces produced at the Cadia mine and the benefit from the weakening of the Australian dollar. 

While gold production declined in the December quarter, Newcrest’s management remains upbeat and expects the production to bounce back. The company said that production of gold would increase at its Lihir and Brucejack mines in the second half of Fiscal 2023, reflecting higher mill throughput. Further, it reiterated its full-year production guidance. 

Is Newcrest Mining a Good Buy?

An increase in production and higher average realized gold prices would likely support the financials of Newcrest Mining. It has a Moderate Buy consensus rating on TipRanks, reflecting six Buy and four Hold recommendations. Meanwhile, analysts’ average price target of AU$24.63 implies 7.45% upside potential. 

While the upside in Newcrest stock appears limited, investors can benefit from the company’s decent dividend yield of 3.08%. Also, Newcrest Mining sports an Outperform Smart Score of nine on TipRanks. 

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