Newcrest warns of further impairments
PERTH (miningweekly.com) – Gold miner Newcrest Mining has warned of a non-cash impairment of between A$260-million and A$270-million for the 2018 financial year.
Some A$190-million of the write-off is attributed to the Telfer gold mine, in Western Australia, where the latest life-of-mine plan indicated lower levels of ore mined, and higher levels of waste from the West Dome, lower gold recoveries, higher estimated closure costs and higher operating costs than previously forecast.
There has also been a reduction in the value attributed to a potential future block cave, Newcrest said on Thursday.
A further A$70-milliom impairment is expected from the Namosi operation, where assessment of the potential project configuration has prompted a re-assessment of the appropriateness to continue to carry forward previous study costs.
Newcrest told shareholders that the outcomes of these reviews could potentially impact the reported mineral resources and ore reserves for these assets, which will be assessed in the company’s annual mineral resource and ore reserve estimate to be completed at the end of December.
An infill drilling campaign is currently under way at the Telfer operation to more tightly define the mine’s openpit mineral resource and ore reserve.
Newcrest has previously warned of a non-cash write down of A$8-million on its Gosowong operation, and a A$15-million asset write-down at Bonikro, following the reclassification as ‘held for sale’. The miner also reported a release to profit of A$29-million in foreign exchange gain relating to the sale of Bonikro in March this year.
The miner’s free cash flow at the end of the financial year is expected to be around A$600-million, which includes a net cash proceed of A$48-million from the sale of the Bonikro asset, and after expenditure on growth-focused investments during the financial period.
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