NCM - Newcrest Mining

[Phillip]

Agree with Boggo, I am watching NCM closely and Gold is looking overbought, there are signs of re treat in the FX markets against the USD.

SHould be a good short for two-three trading days in the 34.50-35.00 region if you can get some.

Phillip.

 

[Boggo]

I am keeping a tight stop on this, now moved down to breakeven.

Target is $28.70, a big ask perhaps.

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[Sean K]

I am keeping a tight stop on this, now moved down to breakeven.

Target is $28.70, a big ask perhaps.

(click to expand)

Looks logical to me at this point. I'll be looking to add to long position if it heads to that level and bounces.

 

[Boggo]

Looks logical to me at this point. I'll be looking to add to long position if it heads to that level and bounces.

Agree kennas, high side of $40 is a possibility.
It probably sounds silly but this is an 'uncomfortable' trade, ie. it is swimming against this sea of green hence the tight stop.

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[Sean K]

First bounce after the consolidation around where we thought.

Positive sign to me, but I'm cautious pending overall market next leg down capitulation into the abyss...

 

[Sean K]

OZ in the media announcing that they are accepting offers for Matabe. NCM must be in the mix to pick this up at a bargain which I suspect is the cause for the recent support, along with institutional buying.

DJ Newcrest Joins Queue For OZ Minerals Martabe Proj - Report
14/01/2009 08:05AM

AEST DOW JONES NEWSWIRES

Newcrest Mining Ltd. (NCM.AU) is understood to be one of a number of parties actively engaged in the sale process for OZ Mineral Ltd.'s (OZL.AU) Martabe project in Indonesia, The Australian Financial Review reported in its Street Talk column Wednesday, without citing sources.

It is thought Newcrest is one of a number of groups looking at Martabe, although others could be more advanced, the newspaper said.

 

[Sean K]

Not sure whether to hold this as a long term project or just short term trade.



I consider the US and global economy to be rat sheet, and gold to go up, but not sure how gold companies will go due to costs etc....



Agree with this that Cu is going to be a major effect on NCMs bottom line.....


1141 [Dow Jones] STOCK CALL: Credit Suisse downgrades Newcrest Mining (NCM.AU) to Neutral from Outperform, and cuts target to A$35.00 from A$39.00. Not expecting major surprises out of company's quarterly production numbers, due Jan. 22, says copper price collapse will be reflected in higher reported cash costs for Cadia, Ridgeway and Telfer, while strong September quarter production from Cadia and Kencana is not likely to be repeated. NCM up 6.9% at A$30.94. (LMF)

 

[Sean K]

How did that trade go boggo? Made your target pretty easily, hope you switched to a long.

Gee a few gaps in the chart...

Looks like that support area I identified above held OK now moving back to the key resistance about $34.

Quarterly results out today. Will be interesting to see how much the dehedging and Cu price has effected earnings.

 

[ned_beaty]

Trading halt this morning for NCM??????

Any one know what's up??

Is it to with the purchase from OZL????

 

[Sean K]

Trading halt this morning for NCM??????

Any one know what's up??

Is it to with the purchase from OZL????

Institutional capital raising to 'strengthen balance sheet'. Funny that, because in the Dec Qtrly they said they had a strong balance sheet. lol

Hope it's not at too much of a discount to current price.

Could be to raise funds for an acquisition.

 

[nikemi]

Institutional capital raising to 'strengthen balance sheet'. Funny that, because in the Dec Qtrly they said they had a strong balance sheet. lol

Hope it's not at too much of a discount to current price.

Could be to raise funds for an acquisition.

According to CompareShares:


"Shares in Newcrest Mining Ltd have gone into a trading halt as Australia's biggest gold miner sells new stock to raise money from institutional shareholders.

Newcrest is conducting the share placement to strengthen its balance sheet, enhance financial flexibility and take advantage of growth opportunities, the Melbourne-based miner said in a statement.

The shares will remain in a trading halt until Newcrest makes an announcement or when the market opens on Wednesday, February 4.

Newcrest plans to raise $500 million to repay debt and to fund expansion and potential acquisitions.

The gold producer will sell shares at $27 each, a 12.9 per cent discount to Newcrest's closing price on January 30, to institutional shareholders to raise the equity.

The proceeds of the placement will be used to pay down $364 million of bilateral debt, and fund the expansions of the Cadia East mine in NSW and the Gosowong mine in Indonesia.

Newcrest said the additional funds also would allow the company to pursue "external opportunities" if they arise.

Newcrest, which owns and operates six mines, will offer shareholders the opportunity to participate in a share purchase plan following the fully underwritten institutional placement.

Meanwhile, the gold producer has made a preliminary forecast for its underlying profit after tax for the six months to December 31 to be in the range of $235 million to $245 million.

This compares to $207.9 million for the corresponding period last year.

Shares in the company last traded at $31."

 

[JTLP]

LOL indeed Kennas.

AVO raised $28 mil via institutions when everything was going well and they are producing...now NCM decides to raise $500m to strengthen the balance sheet.

I hold the previous but am quite suspect as to why producing goldies have to raise capital in this sort of environment (booming gold prices)...especially in NCM's case where it was already making a hefty profit

The report didn't sound convincing either...as Kennas said...to shore up the sheet basically.

 

[vincent191]

I dont understand why they need to raise new capital under the present economic climate. Gold prices are high and they claim to be achieving their profit forecast and only very recently claim to have a strong balance sheet.

Why do they need to raise new capital and at a hefty discount and diluting their existing shareholders?

It is bewilding to see $3 to $4 wiped off the value of my shares for no good reason (that I can see).

 

[Sean K]

I dont understand why they need to raise new capital under the present economic climate. Gold prices are high and they claim to be achieving their profit forecast and only very recently claim to have a strong balance sheet.

Why do they need to raise new capital and at a hefty discount and diluting their existing shareholders?

It is bewilding to see $3 to $4 wiped off the value of my shares for no good reason (that I can see).

I think they're scraping together spare cash for Martabe, or PH off OZ.

It looks like you have the option to subscribe for up to $5K worth, which I will.

The stock won't necessarily open at that price when it reopens, but if it did, and things still looked favourable to gold, it may be an opportunity.

 

[M34N]

I think they're scraping together spare cash for Martabe, or PH off OZ.

It looks like you have the option to subscribe for up to $5K worth, which I will.

The stock won't necessarily open at that price when it reopens, but if it did, and things still looked favourable to gold, it may be an opportunity.

I find it interesting that they needed to do some capital raising as well, probably taking advantage of the recent share price strength to cash up and prepare for some possible takeovers? I think some other gold stocks may be of interest here IMO.

 

[Cooks]

From a business perspective, if I were bullish on the outlook of gold in the near future and looking to take advantage of this before gold prices were to reach much higher levels, I would probably look at expanding now hoping to take good advantage of the future opportunities. Perhaps NCM is looking to do the same?

 

[vincent191]

But I am still a bit cheesed off to see 12.5% wiped off the share price (possibily more).

OK I will wait and see what they intend to do with the money. I hope there is a good reason.

Nearly all my portfolio is in the red and to see one of the very few that is in the green turn red....hurts.

 

[Cooks]

But I am still a bit cheesed off to see 12.5% wiped off the share price (possibily more).

OK I will wait and see what they intend to do with the money. I hope there is a good reason.

Nearly all my portfolio is in the red and to see one of the very few that is in the green turn red....hurts.

Well technically yes 12.5% off, but wait till it comes out of the halt and see how the market reacts.... that's the most important thing

If they are looking to expand, I think the stock will have good support over the next few months and then head into a mark up phase

 

[Redwings]

Just saw Julie Lee from Bell Direct on Sky Business saying that it's more like $750m and not just 500m....

 

[M34N]

Just saw Julie Lee from Bell Direct on Sky Business saying that it's more like $750m and not just 500m....

I'd be kind of worried about why NCM would need this kind of money, according to their press release they are repaying $AU364m in debt, so why would they need double that (if true)? They did mention expansions in NSW and Indonesia but my understanding this is only about $150m or so, so where would this other $250m go?

I'm thinking about the $27.00 offer price and where this came from as well, why offer a ~13% discount to your share price if you are doing well and don't need the money other than to reduce debt? Seems like a hefty discount and similar to something CBA did a while back when they announced some write-downs. I have been looking for an entry point to jump in to NCM again but this has made me think twice.