NCM - Mining the growth profile Target Price $21-26
We have completed a comprehensive review of NCM's development pipeline and believe there is significant upside potential in the share price. We also think NCM could prove to be a takeover target as it offers a relatively cheap means of incremental growth.
Greater asset utilisation and stronger growth expected We believe Newcrest Mining (NCM) will continue to build on its existing asset base through the ramp-up of Telfer and harvest some of its exploration portfolio to provide incremental growth. The two Cadia Valley treatment plants are likely to be fully utilised for the next 20 years treating Ridgeway Deeps and Cadia East mineralisation. The development of Kencana underground should maintain the highgrade ore feed to the Gosowong mill and continues to offer exploration upside potential. The rebirth of Telfer despite a difficult gestation period is now delivering more upside than the market expected.
