RE: Newcrest article27 May 2020 13:38
Here's the relevant bit about Havieron from the article - they are actually saying that the COMBINED Telfer / Havieron operation could become a Tier 2 operation. That would be because the 'combined' AISC would be materially higher than the AISC of Havieron high grade on it's own IMO.
Havieron
Ord Minnett highlights that both Red Chris and Havieron are brownfield projects and capital expenditure is manageable. Meanwhile, Havieron is looking more likely to UBS. Newcrest is yet to report a resource or reserve, or a mine plan a feasibility study for that matter.
Yet based on current reserves and mine plans Telfer is valued at around US$160m and UBS suspects the addition of 2mtpa of high-grade ore could sustain production at around 400,000 ounces per annum for over 10 years and cut costs to around US$900/oz (AISC).
The combined operation could then turn Telfer into a tier-2 asset. Newcrest defines such a gold asset as more than 200,000 ounces per annum with over 10 years of life at costs of less than US$900/oz.
Meanwhile, Macquarie believes the Fruta del Norte mine, for which the company has recently obtained finance (becoming a subordinated lender to the owner, Lundin Gold, and taking a 32% equity ownership) materially boosts the earnings outlook and should sustain production at over 2m ozpa for the next five years.
On the downside, Newcrest still has the weakest production and earnings growth within the large ASX listed peer group, the broker points out. It also lacks the debt to equity transfer of value expected from peers.
Ord Minnett , too, expects Newcrest will struggle to maintain a production rate of 1.5m ozpa, but calculates that when adding Fruta del Norte, Newcrest could initially maintain 1.8m ozpa before Wafi Golpu comes on board.
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