Member Info for PaddyGall

I think he'd also allowed for the toll treating charge in that $1K so it wasn't just AISC.

Just read this post on the ADVFN board by Daddy Warbucks - interesting to see what you make of his reasoning on here.

"Just playing with some figures in my head after Paddy's post last evening. If 500k ounces of gold per annum is attributed from Havieron and we are not bought out, then 25% of that figure is 125k ounces. Assuming tolling charges and mining costs are $1000 dollars per ounce, then at today's prices we would have a profit of $800 an ounce, making an annual profit of $ 100 million per annum. The average p/e on the LSE apparently is 15, but Rio Tinto is just over 12.So let's assume a p/E of 10 which would value the company at least $1 billion.These are guesstimates on my part and a little conservative, but you can see that our company is still way undervalued."

ATB - Paddy

The inevitable red start to the day because of the UT trade at 12.6p on Friday - don't panic Captain Mannering - it's all part of the fun at the fair.

GLA - Paddy

I agree Spratt - it was just a little 'tongue-in-cheek' from me.

More activity at Scallywag this morning - getting exciting now.

https://twitter.com/paddygall1/status/1285097805397319680?s=20

Looks like they've moved further East into the London target, wouldn't that be sweet - a monster find at London.

Cheers Paddy

Probably finish back at 12p again today lol :-))))

Don't despair - be patient and our time will come, ATB - Paddy

Well the graph shows zero output attributed to Telfer in the first image which is titled "before exploration results" so I'm guessing that is what this Daniel Morgan from UBS is trying to get across.

There's another paragraph in there that TMT highlighted last night,

But new mines do not come for free; Morgan warned that construction of those assets (and extensions at Cadia) would cost between $US800 million and $US1 billion a year for the next five years, meaning competition for Newcrest's free cash flow will be hot in the near future.

So if there are going to be such big demands on NCM's free cash flow in the coming years they might just be happy to let the Havieron farm-in progress to the JV mining stage??

I originally saw that article yesterday linked to from a Primorus Tweet - when I clicked on it from within the tweet it opened the article so I copied it immediately into Word.
There was a really nice graphic in the article as well - have a look at this tweet I did.

https://twitter.com/paddygall1/status/1284867206782877696?s=20

ATB - Paddy

cont

With Greatland Gold, Newcrest is trying to find gold close enough to the Telfer mine so it can extend the life of the infrastructure that is already built in Western Australia's Great Sandy Desert.

In the past three months analysts have become more optimistic that both goals can be achieved, particularly at Telfer, where drilling results in June showed the nearby Havieron discovery to be larger and contain higher grade gold than previously believed.

This time last year UBS analyst Daniel Morgan was one of several analysts recommending clients "sell" Newcrest shares because of the looming slump in gold production.

But drilling results from Red Chris and Havieron convinced Morgan to upgrade Newcrest to ''neutral'' in May, and by June he ranked the company as a "buy".

Morgan says the June 11 drilling results suggested Havieron had the potential to extend Telfer's life by 10 years and reduce operating costs at the mine by close to 30 per cent.

''The inclusion of these projects [Havieron and Red Chris] challenges market perceptions that production is peaking in fiscal 2021,'' said Morgan in a note to clients.

''Both projects are yet to have a resource or reserve declared. The early and
preliminary nature of our assumptions carries larger risks than our modelling for Newcrest’s existing operations.''

Far from a company that was past its peak, Morgan published graphs in May that implied Newcrest's gold and copper production could be close to 20 per cent higher in fiscal 2029 than it was in fiscal 2020.

That estimate assumed that Wafi-Golpu, Havieron, Fruta Del Norte and Red Chris were all contributing by 2029.

But new mines do not come for free; Morgan warned that construction of those assets (and extensions at Cadia) would cost between $US800 million and $US1 billion a year for the next five years, meaning competition for Newcrest's free cash flow will be hot in the near future.

All the major financial institutions now rank Newcrest as either a ''buy'' or a ''hold'', but levels of enthusiasm vary.

JP Morgan analyst Levi Spry still sees Newcrest's annual gold production slipping below 2 million ounces in fiscal 2023.

But rather than fall below that threshold for a minimum of eight consecutive years, Spry now believes Newcrest's output will be below 2 million ounces for just four years before recovering in fiscal 2027.

He believes Newcrest's gold production will bottom at 1.93 million ounces in 2024; an improvement on his previous estimate of 1.8 million ounces in that year..

''Holding 2 million ounces per year of production is difficult to maintain, and while we have Newcrest's production falling over the next five years we have been revising this upwards,'' he says.

Generational change is under way at Newcrest Mining, challenging investors to determine whether Australia's biggest gold miner is poised for growth or terminal decline.

A fork in the road has emerged in the past year, amid confirmation that two of Newcrest's most important three mines are past their peak.

Newcrest Mining is trying to disprove perceptions its best days are behind it. Erin Jonasson

Just as Australian cricket floundered after stars like Dennis Lillee, Rod Marsh and Greg Chappell retired simultaneously in 1984, analysts had predicted a lean period for Newcrest in the middle of this decade, as its Cadia and Telfer mines started to fade away.

Gold production at Cadia peaked in fiscal 2019, and is expected to halve by about 2025, ending its reign as the nation's most lucrative gold mine.

Cadia's long decline will leave a mighty hole; the NSW mine has provided more than half of Newcrest's revenue and more than 75 per cent of earnings in recent times.

The end of Telfer's life in 2024 is less significant for earnings as the mine has struggled to break even in recent years.

But Telfer still provides about 17 per cent of Newcrest's gold production, and its demise would reduce the company's exposure to further rises in gold prices.

Sovereign risk in Australia's northern neighbours has only added to the challenge; Indonesia's protectionist streak forced Newcrest to sell down its stake in the Gosowong mine, while Papua New Guinea has dragged its feet on approvals for the project that would provide much-needed new blood, Wafi Golpu.

The most optimistic assessment of Wafi-Golpu has first production about five years away.

So while record gold prices have recently driven Newcrest profits and shares to seven and eight-year highs respectively, analyst commentary over the past year has focused on the looming trough in gold production and earnings.

Analysts at Macquarie last year warned that Newcrest's gold output could fall from almost 2.49 million ounces in fiscal 2019 to just 1.5 million ounces by 2025.

Newcrest chief executive Sandeep Biswas has been busy writing cheques over the past two years in a bid to change the narrative, including spending more than $US700 million on multiple types of exposure to Ecuador's Fruta Del Norte mine.

But far more pivotal to Newcrest's future will be two investments made in March 2019; the $US806.5 million acquisition of 70 per cent of Canada's Red Chris mine, and a $US60 million exploration partnership with Greatland Gold.

Both investments require exploration success to be of value to Newcrest, meaning the company has a lot riding on the stream of drilling results that are now coming to light.

At Red Chris, Newcrest is hoping to turn a marginal mine into a cash machine by proving that high-grade copper and gold exists deep below the existing pit.

cont

Just had a brief read through it Schlemiel - nice collage of pictures of Havieron drilling results and cores on page 7 as well.

As you said Havieron has now become the yardstick by which other explorers are measuring themselves - let's see what Scallywag turns up over the next few months.

TMT - there's a lot of sense in that post and even if a buyout of Havieron does come I don't see it happening until NCM have completed the farm-in and the Feasibility Study has been delivered.

I too would be quite happy to receive our payment for the 5% and then see the mining start-up. I think there's a lot of people on here who would prefer the buyout scenario - but the II's would lap up the chance to but into a de-risked high grade gold partner IMO.

GLA - Paddy

All verifiable fact Mr SPrampY,

I'm not the one with the clandestine mates and the secret email list - any word from on high this weekend :-))))

With Greatland Gold, Newcrest is trying to find gold close enough to the Telfer mine so it can extend the life of the infrastructure that is already built in Western Australia's Great Sandy Desert.

In the past three months analysts have become more optimistic that both goals can be achieved, particularly at Telfer, where drilling results in June showed the nearby Havieron discovery to be larger and contain higher grade gold than previously believed.

This time last year UBS analyst Daniel Morgan was one of several analysts recommending clients "sell" Newcrest shares because of the looming slump in gold production.

But drilling results from Red Chris and Havieron convinced Morgan to upgrade Newcrest to ''neutral'' in May, and by June he ranked the company as a "buy".

Morgan says the June 11 drilling results suggested Havieron had the potential to extend Telfer's life by 10 years and reduce operating costs at the mine by close to 30 per cent.

''The inclusion of these projects [Havieron and Red Chris] challenges market perceptions that production is peaking in fiscal 2021,'' said Morgan in a note to clients.

''Both projects are yet to have a resource or reserve declared. The early and
preliminary nature of our assumptions carries larger risks than our modelling for Newcrest’s existing operations.''

Far from a company that was past its peak, Morgan published graphs in May that implied Newcrest's gold and copper production could be close to 20 per cent higher in fiscal 2029 than it was in fiscal 2020.

That estimate assumed that Wafi-Golpu, Havieron, Fruta Del Norte and Red Chris were all contributing by 2029.

But new mines do not come for free; Morgan warned that construction of those assets (and extensions at Cadia) would cost between $US800 million and $US1 billion a year for the next five years, meaning competition for Newcrest's free cash flow will be hot in the near future.

All the major financial institutions now rank Newcrest as either a ''buy'' or a ''hold'', but levels of enthusiasm vary.

JP Morgan analyst Levi Spry still sees Newcrest's annual gold production slipping below 2 million ounces in fiscal 2023.

But rather than fall below that threshold for a minimum of eight consecutive years, Spry now believes Newcrest's output will be below 2 million ounces for just four years before recovering in fiscal 2027.

He believes Newcrest's gold production will bottom at 1.93 million ounces in 2024; an improvement on his previous estimate of 1.8 million ounces in that year..

''Holding 2 million ounces per year of production is difficult to maintain, and while we have Newcrest's production falling over the next five years we have been revising this upwards,'' he says.

Generational change is under way at Newcrest Mining, challenging investors to determine whether Australia's biggest gold miner is poised for growth or terminal decline.

A fork in the road has emerged in the past year, amid confirmation that two of Newcrest's most important three mines are past their peak.

Newcrest Mining is trying to disprove perceptions its best days are behind it. Erin Jonasson

Just as Australian cricket floundered after stars like Dennis Lillee, Rod Marsh and Greg Chappell retired simultaneously in 1984, analysts had predicted a lean period for Newcrest in the middle of this decade, as its Cadia and Telfer mines started to fade away.

Gold production at Cadia peaked in fiscal 2019, and is expected to halve by about 2025, ending its reign as the nation's most lucrative gold mine.

Cadia's long decline will leave a mighty hole; the NSW mine has provided more than half of Newcrest's revenue and more than 75 per cent of earnings in recent times.

The end of Telfer's life in 2024 is less significant for earnings as the mine has struggled to break even in recent years.

But Telfer still provides about 17 per cent of Newcrest's gold production, and its demise would reduce the company's exposure to further rises in gold prices.

Sovereign risk in Australia's northern neighbours has only added to the challenge; Indonesia's protectionist streak forced Newcrest to sell down its stake in the Gosowong mine, while Papua New Guinea has dragged its feet on approvals for the project that would provide much-needed new blood, Wafi Golpu.

The most optimistic assessment of Wafi-Golpu has first production about five years away.

So while record gold prices have recently driven Newcrest profits and shares to seven and eight-year highs respectively, analyst commentary over the past year has focused on the looming trough in gold production and earnings.

Analysts at Macquarie last year warned that Newcrest's gold output could fall from almost 2.49 million ounces in fiscal 2019 to just 1.5 million ounces by 2025.

Newcrest chief executive Sandeep Biswas has been busy writing cheques over the past two years in a bid to change the narrative, including spending more than $US700 million on multiple types of exposure to Ecuador's Fruta Del Norte mine.

But far more pivotal to Newcrest's future will be two investments made in March 2019; the $US806.5 million acquisition of 70 per cent of Canada's Red Chris mine, and a $US60 million exploration partnership with Greatland Gold.

Both investments require exploration success to be of value to Newcrest, meaning the company has a lot riding on the stream of drilling results that are now coming to light.

At Red Chris, Newcrest is hoping to turn a marginal mine into a cash machine by proving that high-grade copper and gold exists deep below the existing pit.

cont

Snap Ady.

Bullish article about Newcrest's prospects going forward courtesy of a Primorus Tweet just now.

https://www.afr.com/companies/mining/ageing-newcrest-s-golden-growth-challenge-20200716-p55ciu

I particularly like this bit -

"With Greatland Gold, Newcrest is trying to find gold close enough to the Telfer mine so it can extend the life of the infrastructure that is already built in Western Australia's Great Sandy Desert.
In the past three months analysts have become more optimistic that both goals can be achieved, particularly at Telfer, where drilling results in June showed the nearby Havieron discovery to be larger and contain higher grade gold than previously believed."

GLA - Paddy

@hydro - I posted this on Friday I think.

https://twitter.com/paddygall1/status/1284082477548658688?s=20

Cheers Paddy

Well guys - I couldn't resist a look at Planet.com earlier and even though today's image was cloudy, on there there was a partial image of Havieron but it was only the East section and showed nothing interesting. I scrolled over to the West and lo & behold I could see the image re-appearing just where the Kraken target was coming into focus.

I had a quick look at the area where AM90 had discovered the possible vehicle tracks on the 15th and sure enough there appears to be quite a bit more activity just there. Is it just ground preparation or have they actually started drilling?

https://vimeo.com/439695211

It shouldn't be too long before we find out, ATB - Paddy