The acquisition of Lihir has helped raise Newcrest Mining’s profits by 63%. The company announced a profit of $908 million in the year to the end of June. In comparison the previous year profits were $557 million.
The price of gold has risen steadily along with increased production and the company recorded an average gold price in the range of $1,409 per troy ounce in the fourth quarter. It has subsequently increased to $1,800 since then. Production costs for 2010 were pegged at $493 per ounce.
On basis of the profits announced the company has declared a final dividend of 20 cents a share and a special dividend of 20 cents per share. Bumper profits were recorded despite the poor weather and disrupted operations at the beginning of the year.
Greg Robinson the chief executive officer of Newcrest Mining said that the sales revenue grew 46 per cent, primarily with the acquisition of Lihir. Gold production and sales increased and gold prices also increased, leading to a 60 per cent increase in gold revenue.
The Melbourne based company saw its production rise by 43% going to 2.5 million ounces of gold in the year ending June 30. The merger with Lihir in September last year contributed in no small manner to the high output for Newcrest Mining. The firm now has a guidance of 2.775 to 2.925 million ounces gold for the fiscal year 2012. They expect the capital expenditure for the period to be between $2 to $2.2 billion.
Newcrest Mining is the sixth largest gold mining company as per the Deutche Bank but as most of its mines are low cost and not located in the high-risk African continent the market capitalization of the company is third after Barrick Gold and Newmont Mining.