Newcrest faces tax hit, but tweaks up cash flow outlook
MELBOURNE (Reuters) - Newcrest Mining (NCM.AX) warned on Thursday it faced a tax hit as it had to trim deductions taken in previous years, but said despite the extra tax it was on track to achieve better cashflow than previously flagged.
The tax adjustment is the latest blow to Australia's top gold miner which reported its first loss in more than a decade in August on the back of $6 billion in writedowns following a 25 percent slide in gold prices this year.
It has also faced questions about its disclosure practices.
Newcrest said the tax hit for research and development claims made in 2009 to 2011 would total A$120 million, but thanks to tax losses carried over from previous years, it would have to pay only about A$70 million in cash tax for the 2014 financial year.
The announcement came as Newcrest reported a 27 percent rise in gold output for the September quarter to 586,573 ounces from a year earlier at an all-in cost of A$1,093 an ounce ($1,001 an ounce). Gold last traded at $1,281 an ounce.
"The combination of the first quarter production and cost outcomes and expected business performance for the remainder of the 2014 financial year positions Newcrest to be free cash flow neutral or positive at a lower gold price than the previously stated A$1,450 per ounce," Newcrest said, adding that this took into account the extra cash tax payment.
It reaffirmed that despite gold output in the September quarter beating forecasts, it expects to achieve annual production of 2.0-2.3 million ounces.
Newcrest also said it has lined up new loan facilities of $450 million from two banks to shore up its balance sheet amid the gold downturn.
Shares in Newcrest were trading down 1.5 percent on Friday at A$10.05, not far off a 10-year low struck in June.
(Reporting by Sonali Paul; Editing by Richard Pullin)
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