MELBOURNE, Victoria, Aug. 8, 2013 /CNW/ - In its announcement of 7 June
2013, Newcrest indicated that, based on its estimate of carrying values
and the Company's internal indicative valuations, an impairment of the
carrying value of assets in the range of A$5 to A$6 billion was likely
in the 2013 financial year statutory accounts.
The Newcrest Board has further assessed the carrying values of its
assets for the purpose of preparing the 2013 financial year statutory
accounts and compared these to the actual year end balances, and
announces the following expected accounting impairment outcomes by
asset in their respective functional currencies1:
Lihir: US$3,240 million (comprising US$3,240 million of the US$3,643
million of goodwill)
Hidden Valley: US$380 million
West Africa2 : US$480 million (including all of the goodwill of US$188 million)
Telfer : A$1,175 million
Applying the exchange rate prevailing at 30 June 2013 of $A1.00 =
US$0.9275, the total impairment charge for the four assets will be
approximately A$5,595 million (of which approximately A$3,695 million
is goodwill). The A$:US$ exchange rate assumed for the purpose of the 7
June announcement was higher, at approximately A$1.00 = US$0.96.
The abovementioned total impairment charge is after tax and is a
non-cash item with no adverse impact on cashflow.
In addition to the above impairment, the Board has considered the value
at which it will carry its investment in Evolution Mining Limited
(Evolution). Applying the share price of Evolution at 30 June 2013 of
A$0.57 per share, Newcrest's 32.63% shareholding had a value of A$132
million compared with the carrying value of A$405 million. The
difference of A$273 million will be written down. This write-down has
no tax benefit recognised for accounting purposes3, and is a non-cash item. The current share price of Evolution is
significantly above the price at 30 June 2013.
Other assets across the Group are expected to be written down at year
end by a total amount of approximately A$360 million after tax. This
comprises writedowns of fixed assets, inventory, exploration and the
de-recognition of previous tax losses.
The total estimated amount of asset impairments (A$5,595 million),
Evolution writedown (A$273 million) and the writedown of other assets
(A$360 million) aggregates to approximately A$6.2 billion after tax.
All amounts are approximate and remain subject to audit. The ASX
Appendix 4E full year financial results of Newcrest remain expected to
be released to the market on Monday 12 August 2013.
Functional currency refers to the currency of the asset's financial
West Africa comprises Bonikro and Cote d'Ivoire exploration.
Not recognised for accounting purposes, as it is an unrealised capital
loss with no certainty of the tax benefit being able to be realised in
the absence of capital gains.
SOURCE: Newcrest Mining Limited
For further information:
T: + 61 3 9522 5493
T: +61 3 9522 5593
This information is available on our website at www.newcrest.com.au and at www.sedar.com.