Monsters of Rock: Newcrest to bounce beyond 2Moz as US$2.8bn Pretium deal nears

Newcrest Mining (ASX:NCM) has cleared the final hurdle to secure its next growth asset in 300,000ozpa Canadian gold miner Pretium Resources after receiving Canadian regulatory approval for the deal.

Newcrest says the Pretium acquisition should close around March 9, adding the large Brucejack mine to its stable.

That will go on top of the roughly 2Mozpa production profile of its Cadia, Lihir, Telfer and Red Chris operations, the latter of which, like Brucejack, is located in British Columbia.

Newcrest has struggled from a production standpoint through the first half of FY2022. It produced just 832,298oz in the first six months of the year, and will be relying on strong production growth through the second half of the year to hit its 1.8-2Moz guidance range.

The Australian gold producer says the Pretium transaction will increase its production rate to well above 2Moz.

The acquisition will ensure Newcrest retains its lead over Northern Star (ASX:NST) as Australia’s biggest gold miner.

The ASX-listed number two gold producer, NST has been quickly closing the gap on its more established rival in recent years with a swag of high profile acquisitions, significantly its purchase of Kalgoorlie’s Super Pit and $16 billion merger with Saracen.

Northern Star sees a pathway to 2Moz by 2026 by organic means at its own operations, but has considered more M & A as well.

Earlier this month the $12 billion gold miner indicated it was not chasing growth at any cost by walking away from a proposed deal to buy half of Osisko Mining’s Windfall project in Quebec.

“Northern Star is disciplined in its review of acquisition opportunities with superior shareholder returns being its first priority,” Northern Star MD Stuart Tonkin said this month.

Both Newcrest and Northern Star were up around 3% as gold prices rose following Russia’s decision to heighten its nuclear alert level.

Newcrest and Northern Star share price today:

New Hope the latest coal miner to see earnings spike

New Hope (ASX:NHC) has already raked in almost double its earnings for the whole of FY2021 in two quarters in FY22.

The Queensland and New South Wales coal miner’s financial reporting calendar is almost perfectly timed to enjoy record thermal coal prices that emerged late last year and spiked again in early 2022, running from August to July.

With Newcastle coal prices closing January at US$248.64/t, New Hope generated underlying EBITDA for the quarter of $310m, with YTD EBITDA of $552m.

It made EBITDA of $367m through all of FY21, suggesting New Hope is well on its way to eclipsing the $79m after tax profit it made last financial year.

New Hope, under new management in CEO Robert Bishop after the shock resignation of former CEO Reinhold Schmidt last month, says it is working through approvals for its New Acland Stage 3 mine after the Queensland Land Court recommended its mining lease and environmental authority amendment applications be approved in December.

Despite lower production impacted by wet weather and the impact of Covid-19, New Hope’s coal sales increased 11.2% year on year for the first half of FY2022 from 4.88Mt in 2021 to 5.43Mt in FY22.