Newcrest Posts Steady Q2 Production

The production numbers announced by NCM were broadly inline with market expectations and the correlation with Spot Gold remains intact.

The mining giant reported Q2 gold production of 613,000 ounces, which is a 17% increase quarter-on-quarter. The cost of production slipped slightly to US 830.00 per ounce.

We added NCM to our Top 50 Model Portfolio on December 13th at $22.10.

Technically, the share price remains tightly correlated to the price of Spot Gold.

As such, we estimate that investors will be able to buy NCM at $22.00 if the price of Spot Gold drifts back to $1320.00

Newcrest Mining

Spot Gold

Fortescue Firms On Lower Production Costs

Shares of Fortescue Metals are trading over 3% higher in early trade after the release of their Quarterly production results.

The report showed that Iron Ore shipments were down 4% to 40.5 million tons and the cost of production fell 4% to US $12.05 per ton, which is a record low overhead cost for the company.

With the mining and processing parts of the report as expected, the stock is firming on the lower cost of production, as well as the prospects that production costs could continue to decline.

FMG is part of our Top 50 Model Portfolio and our ALGO engine triggered a buy signal at $4.70 on May 15th.

Daily charts are showing stiff resistance in the $5.60 area. We suggest that investors who are long FMG work a sell-stop order at $4.95.

Fortesque Metals Group