Hi Moorookamick, Im principally a fundamental investor, here are...

Hi Moorookamick, Im principally a fundamental investor, here are some of my ideas, of course you may not agree with any of them...

...... emphasis should be on the forward prospects of the company, its production, costs, NPAT, EPS and dividends.

I agree, note the costs have been encalating, margins are absolutley no where near original Lihir Takeover/ Merger idea,,,off had combined group was supposed to be a low cost producer, get load of synergies, NCM costs are high, they are no longer the low cost producer they once were,

NPAT has been increasing, naturally, it took over Lihir and its hedge book tax credits are gone,

EPS is growing again on headline, but that is through aquisition and at a huge cost,,,,,have a look at the amount of debt NCM has now compared to when it had its debts paid off and hedgebook trade squared away

Dividends are increasing but the yield for the current share price is very low, you can buy it and lose more than the years dividend in an hour, its a risk stock, traders stock and a risk sector, it is such becasue the value of its underlying asset can be traded up or down radically of late per hour day or week, the AUD can change, governments can introduce carbon taxes etc, or the company can just mis badly its totally over opertimistic production targets....

Newcrest can be worth much more, but in reality it doesnt matter about resources, its really about how much it can consistantly get out of the ground and the prices at the time.

NCM has shown time and again over the last years that when the prices it high, it has a production problem



Production FY 2012 was 2.29 mil ozs AU

This was a lower than expected target, NCM should have already been doing 2013 target and more, targets are exactly that, actual production seems to be a better judge, over time they have been shown to mis or make errors.....

They wasted manay many many millions buying back stock at higher prices last year in an effort to help themselves....

Then they went an borrowed Billions they said they didnt ever need.....

One would assume from past performance, NCM will continue in the same style and miss,,,thier production report said it all last QTR, and like last year they will keep insisting its going meet,,,,,,they are along way off thier own targets now, and they need the increase in production to meet all the new interest payments, and simply becasue POG UAD is lower than last QTR 2012

Forecasts (again P6) says:

2013................2.3 mil - 2.5 mil ozs Au
2014............... 3.1 mil - 3.5 mil ozs Au. ( with coresponding lift in CU prod. )

......This will likely be achieved, IMO, with lower costs due to plant reliability.

Thats what they said before Lihir was taken over and what they forecast, to day hasnt happened, they have not managed this aspect of thier business

.........(this report says that most of the spending on plant repairs and upgrades
has already been done)

YEs they have borrowed Billions in corporate bonds to do it, if its already been expensed, why the mis in production across 4 of 6 of its mines

The 2014 forecast lift in production is very significant and if the POG remains
at where it is or better during the QE3s , then EPS is likely to lift proportional to
production. This could , IMO, be up to 44%
(a lift in production of 1.01 mil ozs over 2012's 2.29 mil ozs)

These are all massive assumptions, USD has been flooding the world with dollars and there is a myth that it will collpase or has, truth is its stronger than it was when gold was 800 lower!, Lots of programs no inflation to be seen, infact they want more programs becasue asset prices are falling and growth very slow, who knows what will happen here...

Look at the Euro action today, heres a block of countries in contraction, all in recession, loads more unemployment, bond buying programs, bigger fiscal dramas, effective default and its gaining 2 cents in 4/5 days?

..........Perhaps those familiar with the fundamentals of the company would like to add further detail re future production, costs, npat, EPS & P/E, divvies etc.

PE 17.12, paying 1.4PC, Asset backing per share 14.70, so its clearly trading at a premium, like its a growth company , not a mature mega producer with continual operational difficulties, Comsec have EPS due to fall in 2013

766Million shares on issue these days, moves can and have always been severe, she is bearly investment grade, has billions in new corporate borrowings, a long history of inconsistant production.........she is not something you just buy and put in the bottom drawer, she has to be watched or she will ripe your face and your investment clean off...........enjoy