MELBOURNE Feb 14 Newcrest Mining Ltd,
Australia's biggest gold miner, reported a 36 percent drop in
first-half underlying profit on Friday, hit by the gold price
slump, which also forced it to cut its reserves and resources
Newcrest is emerging from a tough 12 months when gold prices
plunged 28 percent, it suffered problems at some mines, took $6
billion in writedowns, and is now focused on reining in costs
and slowing expansion projects to boost cash flow.
"Subject to market and operating conditions, Newcrest
expects free cash flow to be higher in the second half of the
2014 financial year than the six months ended 31 December
2013," the company said.
Underlying profit slid to A$207 million ($186 million) for
the six months to Dec 31 from A$320 million a year earlier,
however that was better than analysts' consensus forecast around
As expected by the market, it declared no interim dividend,
due to the slump in profit and a rise in its gearing level from
17 percent to 30.5 percent.
With the drop in bullion prices which has made lower grades
of ore uneconomical to produce, Newcrest followed top global
producer Barrick Gold Corp in recalculating its
reserves and resources in the ground.
It cut its ore reserves estimate by 11 percent to 78 milion
ounces and cut its resources estimate by 7 percent to 150
million ounces, largely impacting its Lihir mine in Papua New
Guinea and Telfer mine in Western Australia.
($1 = 1.1133 Australian dollars)
(Reporting by Sonali Paul; Editing by Richard Pullin)