Newcrest Mining has increased its investor dividend after delivering a record half-year profit for the six months ending 31 December.

The Australian gold miner today (11 February) reported an underlying profit of $553m – almost doubling the $280m posted during the same period in 2019, after gold prices reached a record high in 2020.

As a result of the strong financial performance, which was recorded in spite of challenges posed by the coronavirus pandemic, Newcrest announced its policy of paying between 10% and 30% of annual free cash flow would be raised to between 30% and 60%.

The miner will now pay investors an interim dividend of $15 per share – double last year’s return.

Newcrest managing director and CEO Sandeep Biswas said: “In 2018 we set ourselves some ambitious targets to ‘forge a stronger Newcrest’. Our progress and achievements over the past three years have put us in a very strong position to not just weather the global uncertainty associated with COVID-19, but to keep our eyes firmly on our future growth agenda.

“We have a fabulous position in our industry, with a long reserve and resource life, a unique set of technical skills, a very strong balance sheet, numerous organic growth options in progress and an exciting exploration pipeline.”


Newcrest looking to unlock “significant value” from its Lihir gold mine

The miner today announced its plan entitled “Forging an Even Stronger Newcrest”, which outlines its aspirations and measures for the next five years in line with its new company purpose, to create a brighter future for its stakeholders through “safe and responsible mining”.

Biswas said: “This year we lived that purpose through our success in managing the COVID-19 risk to our workforce and local communities; through the compensation, relocation and benefits sharing agreements we signed with the landowners at Lihir; through our renewable energy agreement that will help significantly reduce our carbon footprint; and in our progress in developing new mines at Havieron and Red Chris.”

This year Newcrest has leveraged its technical capabilities to establish a pathway to unlock “significant value” from the Lihir gold mine in Papa New Guinea, according to Biswas.

“I am particularly pleased with the work done in the period to better understand and manage the argillic clays together with the finalisation of an optimised mine plan that is expected to reduce the levels of argillic mill feed presentation in the future.

“Our approach to mining Phase 14 has the potential to bring a considerable amount of high-grade mineralisation from resource into production in the very near future, which in turn has the potential to significantly increase gold production and increase profitability and free cash flow.”

The Newcrest boss said the company has an aspiration for Lihir to be a 1 million ounce plus producer each year for about the next 10-12 years from 2023, with milling rates of about 15 million tonnes per annum.