Newcrest Tumbled, Gold Miners Write-down at $17 Billion


Newcrest Mining Ltd (NCM).’s decision to write-down the worthiness of its mines by around $5.5 billion will result in the greatest one-time charge, in gold mining history. In addition, it heralds trouble aimed at participants.

Barrick Gold Corp. (ABX) (the biggest gold bullion producer), Newmont Mining Corp. (NEM) and Gold Fields Ltd. (GFI) maybe next, based on the professor of international business and economics at New York University Jefferies International Ltd. Nouriel Roubini, and referred to as Dr. Doom for predicting trouble ahead of the global financial crisis began in 2008 says gold could decrease to reach $1,000 an ounce by 2015. The metal traded only $1,277.20 in New York today.

Newcrest’s write-down, which Australia’s biggest producer said is a consequence of gold’s decline, is just about the largest total charge announced in the market, said Elliott, who’s been advising producers for over 30 years.

Newcrest (NCM) has tumbled 29% since the business said, it expects to book write-downs on mines in Australia, Papua New Guinea and Ivory Coast in its full-year grades. The disclosure of the expected charge on June 7 is facing scrutiny from regulators over on selective update of analysts.

A Bloomberg Index (BBRSRGLD) of large 14 gold miners, counting Newcrest and Barrick, displays they’ve lost around $164 billion value in the market since gold, currently in a bear market, peaked Sept. 6, 2011. Taking into consideration Newcrest’s predicted costs, gold companies can have documented assets by around $17 billion in the previously 16 months. (Numbers by Bloomberg)