Pic:Photo by Rob Carr/ via Getty Images
Mining
It may not feel like it, but the Australian gold price just hit a 6-month high above $2470/oz. Check this out:
As the US dollar gold price has bounced around the low to mid $US1800/oz level the Aussie dollar has weakened, falling from levels near US78 cents to US73.3 cents.
The feeble local dollar means our gold companies are earning more per ounce (although this has nothing on the US58c mark briefly hit in March last year).
It’s also interesting to note that the last time Aussie gold prices were this high the share prices of major miners Newcrest, Northern Star, Evolution and Regis were 4.2%, 25%, 12% and 30% higher.
Here are some of the local gold miners making mountains of cash right now.
Market Cap: $21.31 billion
FY21 guidance: 1.95 to 2.15 million ounces
The ASX’s biggest gold miner has two operations in Australia – Cadia and Telfer – as well as the emerging tier 1 Havieron discovery.
The world class 680-760,000oz per annum Cadia operation set a new record during the March 2021 quarter, reporting its lowest ever quarterly All-In Sustaining Cost of negative $160/oz (after copper credits).
“This record, along with unit cost reductions at all other sites, delivered a 7% reduction in our All-In Sustaining Cost (AISC) per ounce for the quarter and a strong All-In Sustaining Cost margin of $854/oz,” Newcrest says.
In the first half of FY21, Newcrest paid an interim dividend of US15 cents per share, up 100% on last year.
Its dividend policy is targeting payout of 30-60% of free cash flow for the year (including minimum dividend).
Market Cap: $11.9 billion
FY21 guidance: 1.5 to 1.7 million ounces
Northern Star has three production centres – Yandal and Kalgoorlie in WA, and Pogo in Alaska.
In May, the company was on track to achieve FY21 production guidance (1.5-1.7Moz) at an AISC of $1,390-$1,520/oz.
At current prices, that is a margin of $955 to $1085 per ounce.
The company has a 10-year track record of paying dividends, with the target being 6% of total revenue.
Market Cap: $1.92 billion
FY21 guidance: +380,000oz
Regis has two operations in WA — ~380,000ozpa Duketon and the recently acquired Tropicana (30%).
A local focus means Regis enjoys the full upside of high Aussie gold prices.
Tropicana is a tier-one asset with a production outlook of 380,000oz to 430,000oz in FY21. It has a current 10-year life with additional upside.
The immediate impact of the deal is clear: Regis solidifies its position as a top 5 Aussie gold miner with annual, low-cost production of ~500,000oz per year.
It also lowers all-in sustaining costs to $1,225 per ounce – making Regis one of the world’s lowest cost gold miners and give it a per ounce margin of ~$1250.
Regis has the near term McPhillamy’s project in NSW which could produce up to 200,000ozpa when it comes online.
Market Cap: $7 billion
FY21 production: 681,000oz
Evolution, which has five operations in Australia and one in Canada, wants to be +900,000oz per annum miner by FY24.
Most of this comes from its Australian operations.
For FY21 the miner produced 681,000oz at an AISC of $1,215 per ounce – giving it net mine cash flow of $555million.
It currently boasts cash and liquidity of $815 million.
The FY21 final dividend is expected to be in range of 4c – 6c per share, the company said last week.
Mining
Mining
Mining
Get the latest Stockhead news delivered free to your inbox.
