NCM--Newcrest Mining Ltd

[stolwyk]

Date: 29 July, 2004:
The Consensus forecast is $280 mill for year ending June 30, 2005. ABN has $286 mill. Another Analyst forecasted $335 mill.

Much depends on when the Telfer operation starts.
I believe as mentioned before that a guided compromise number of $300 mill is justified.

Based on 329 mill shares and the current price of $14.04, the E/S= 91 cents and the forward P/E=15.4.

So the market treats it as a commodity.

The Dec 31 P/E of Newmont is about 27.5 but both Barrick and Newmont struck trouble in the March 31 quarter. Barrack got hit hardest:

http://www.hotcopper.com.au/post_thr...d=118555#67436

NEM: http://www.hotcopper.com.au/posts_sp...00&msgno=67648

Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

Aug 10: Readjust for higher share price.

[stolwyk]

The equilibrium has changed now the merger of the Goldfields' property assets outside SA with IamGold has taken place. and a new company: GOLDFIELDS INTERNATIONAL has been formed.

NCM would now be a perfect fit for the enlarged Goldfields International vehicle.

It would probably be a better merger than a takeover by NEWMONT who tends to have problems from time to time.

But of course they could be suitors as well.

Contrary to reports, takeover/ merger activity has not stopped.

One of the most vulnerable could be Wheaton River (WRM) which didn't manage a tie with IAMGOLD.

The urge by others to also merge and become a dominant force has increased with VANGOLD and MERIDIAN GOLD looking to enlarge, I would assume.

We could finish up with some dozen or so large combines (to be whittled down further in time) which will absorp the middle ranked successful companies.

These will be the feed to ensure that the assets which are lost through mining, will be replaced.

Gerry.
Holds WRM Warrants only
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

[stolwyk]

Subject re: ncm and newmont, why the difference?
Posted 29/07/04 15:10 -

The Consensus forecast is $280 mill for year ending June 30, 2005. ABN has $286 mill. Another Analyst forecasted $335 mill.

Much depends on when the Telfer operation starts.
I believe as mentioned before that a guided compromise number of $300 mill is justified.

Based on 329 mill shares and the current price of $14.04, the E/S= 91 cents and the forward P/E=15.4.

So the market treats it as a commodity.

The Dec 31 P/E of Newmont is about 27.5 but both Barrick and Newmont struck trouble in the March 31 quarter. Barrack got hit hardest.

Gerry
____________________________________

Opinion from Bringitere:

Subject ncm currently worth $30+

Posted 10/07/04 21:57 -The ratio of market capitalisation/reserves and resources(in USD/ounce) clearly highlights the huge discount NCM is trading at in comparison to it's North American peers and provides a rough estimate of what they would be prepared to pay for NCM.

Refer to http://www.mineweb.net/mineweb_data/ and the column, market capitalisation/P & P(proven and probable ounces).Clicking on the top of any column, will allow you to see the list in ascending or descending order.

This ratio for Newmont (in USD/oz) is $237/oz, for Barrick $170/oz and for Placer Dome $134/oz.

For NCM the ratio is just USD$64/oz.

The value of NCM is even higher given the fact that the South African gold industry is in a state of crisis due to the strong rand, and gold is set to move higher this week with the release of the PPI, CPI and balance of trade figures in the US.

Persisting high oil prices will ensure the US B of T deficits continue, the US economy will not grow as strongly as required and that inflation continues to grow at an alarming rate.

Highlighting just how ridiculously cheap NCM is relative to the North American gold producers and the importance of learning from the MIM debacle at this time is vital.Newmont has approximately 78m ounces in resources and reserves, Barrick has 68m ounces and Placer Dome 55m ounces.NCM currently has 58m ounces and this is certain to steadily increase as NCM huge exploration success continues.

Given that annual production for Newmont is over 7m ounces and for Barrick 5m ounces, both companies are very eager to add to their resources/reserves and NCM is easily the best prospective acquisition to acieve this.

Newmont, Barrick and Placer Dome must look for suitable acquisitions to bolster their respective fast diminishing resources and reserves, as they cannot achieve the necessary rate of replenishment themselves.This and NCM's low costs are the main reasons why NCM is the envy of the others.

I believe that NCM's long term organic growth and sustainability of it's earnings make it the most undervalued company in the S&P/ASX 50 by a long way, and that someone must very clearly inform the largest NCM shareholders of the huge opportunity that currently exists, to ensure that NCM is not sold out at a ridiculously huge discount to it's true value.

As the USD continues to decline against the AUD, the gold price continues to rise and the NCM share price rises further, it's clearly in the interests of the North Americans to bid for NCM sooner rather than later.All existing institutional investors should currently be aggresively buying more NCM shares so that any bid with even a chance of success must be at closer to $35/NCM share rather than $25/share.

The value of NCM will be significantly more as next year and into 2006(and beyond) as NCM realises huge increases in earnings and will have possibly the largest resouces'reserves of all gold producers globally.

NCM has a very open register and the failure of major shareholders/institutions to pro-actively address this urgent situation is consistent with Australian's propensity to sell out of their most valuable assets for nicks. The North Americans will be all too aware of this and are certain to play on this when attempting to convince NCM shareholders to accept their bid.

Gerry

[stolwyk]

Subject interesting article on Newcrest (NCM)
Posted 12/08/04 07:28

MELBOURNE (Dow Jones)--Australia's biggest gold producer Newcrest Mining Ltd. (NCM.AU) said Tuesday it is missing out on the share valuations enjoyed by some of the world's biggest gold miners.

U.S.-listed majors including Newmont Mining Corp. (NEM), AngloGold Ashanti Ltd. (AU) and Placer Dome Inc. (PDG) have been rewarded with "wonderful premiums" in the short term following acquisition sprees, despite some having downward trends in production profiles, Newcrest Chief Executive Tony Palmer said.

"There is also a disturbing upward trend in the cost of production of these major producers, with the average cost of producing an ounce of gold rising by as much as US$50/ounce over the last two years," Palmer said in a speech to the Committee for Economic Development of Australia.

"To me, this is an indication that the consolidation process was not driven by what might be termed normal business reason - things like synergies might have offered a more competitive cost of production - but rather the pursuit of growth for growth's sake," he said.

Palmer's comments come as the company reiterated its end-September start-up date for its A$1.2 billion Telfer gold project in Western Australia.

Based on a 24-year life, Telfer is forecast to produce on average 800,000 ounces of gold and 28,000 metric tons of copper each year - more than doubling Newcrest's existing production profile.

Surging interest in U.S. gold stocks in recent years has seen some Wall Street-listed majors "rewarded in the short term with wonderful premiums for their fundamental values," he said.

Underpinning this has been concern over the health of the U.S dollar, with investors looking to gold equities as a hedge against the weakening currency.

"While Newcrest does not enjoy the gold premium of stocks listed on the NYSE, we have in fact outperformed every single one of those six major producers in terms of total shareholder return over a one-, three-, five- and 10-year timespan," Palmer said.

If Newcrest attracted similar sorts of premiums the "stock price would more than double", he added.

One of the key reasons behind the lack of premium is a tendency for Australian investors to be more cautious in valuing mining stocks.

Newcrest has been one of the best performing of Australia's major companies, with shares in the group jumping 57% over the past year, outperforming the benchmark S&P/ASX 200 index's 11% gain.

Some analysts also think that with the start-up of the Telfer mine, Newcrest will attract takeover attention from U.S.-listed majors, particularly Newmont.

Shares in Newcrest on Tuesday fell 3 cents to A$14.22.
________________________________________________

26 Aug: Preliminary Final Report:
http://stocknessmonster.com/news-ite...E=ASX&N=223351

Presentation, 2004 results:
http://stocknessmonster.com/news-ite...E=ASX&N=223416
__________________________________
Sept. 3,
Amended Resource and Reserves statement:
http://stocknessmonster.com/news-ite...E=ASX&N=223894

"Extract:
Newcrest Mining Limited has detailed new Mineral Resources and Ore Reserves estimates for the year ended 30 June 2004.

The key points of the 2004 Statement are:
• Another successful year for Newcrest’s reserve replacement strategy with a nominal increase of reserves to 28 million ounces.

• Group resources have increased to 62 million ounces of gold and 5 million tonnes of copper in situ.

• An increase of 8.4 million ounces of gold and 1.2 million tonnes of copper in the Cadia East resource.

• An increase in the Ridgeway reserve of 1.23 million ounces of gold before depletion.

Total Mineral Resources at year end, net of mining depletion, are estimated at 62 million ounces of gold and 5 million tonnes of copper in situ, which is an increase in the resource of 9 million ounces of gold and an increase of 1.2 million tonnes of copper compared with June 2003".

NCM: $A14.94

Gerry
Readers, please do your own research and you de

[stolwyk]

Gold fields bid may spark sector m&a upturn:

http://www.hotcopper.com.au/post_thr...=136990#392847

Extract:

"The weekend move could trigger a fresh wave of consolidation in the gold mining sector, which has not seen any significant acquisitions since AngloGold's takeover of Ghana's Ashanti last year".

[nelehdine]

All-time high today with the shares soaring 100c to 1666. Maybe something is up with regard to takeover activity, or it could be just down to gold breaking into a new uptrend with AU now trading at $424/oz, either way the stock looks great with $20 a real possibility before the year end if gold can head towards $450.

Disc: Hold 425 NCM ( bgt at 1045 )

[stolwyk]

They must be reasonably close to starting up Telfer, I think. Although it is hedged it benefits from POG increases. It is now $425.20.

M&A activity is always possible; don't exclude China.

From my post, 7 Sept.:

Posted 10/07/04 21:57 -The ratio of market capitalisation/reserves and resources(in USD/ounce) clearly highlights the huge discount NCM is trading at in comparison to it's North American peers and provides a rough estimate of what they would be prepared to pay for NCM.

Refer to http://www.mineweb.net/mineweb_data/ and the column, market capitalisation/P & P(proven and probable ounces).Clicking on the top of any column, will allow you to see the list in ascending or descending order.

This ratio for Newmont (in USD/oz) is $237/oz, for Barrick $170/oz and for Placer Dome $134/oz.

For NCM the ratio is just USD$64/oz.
_____________________________________

This is one of the stocks chosen for "A selection of explorers"-See the thread on this site.


Gerry

[nelehdine]

Article in Denver Post ( Newmont's home town ) says that NEM is eyeing up NCM should the Harmony takeover of GoldFields succeed. NEM have a huge chequebook and very highly rated shares , a scrip offer for NCM would be very very cheap for NEM ... even if it valued NCM between $25 & $30 !!

[stolwyk]

On the HC site there is a reference to that. Actually for its size, I prefer NCM. NEM and Barrick often have some negative news.

That takeover Harmony--Goldfields is not certain.

There is of course only 1 NCM as I indicated in my previous post. All the background info is there.


Gerry

[nelehdine]

Agree ... Newcrest is a very exciting prospect over the next few years ... $25 from Newmont may look great, but I'm sure there is a lot more value in NCM than that for the patient !!