More jobs may be cut Newcrest hit by sudden slump
Newcrest Mining chief Greg Robinson is under pressure to respond to a sudden share price slump that has wiped almost 15 per cent off the value of the company in just 48 hours.
Speculation was rife last night that Newcrest would announce another round of job cuts within days, and may even announce the closure of its Brisbane office.
A number of Australian-based analysts have downgraded the stock in recent days, with most agreeing that three of Newcrest's major gold mines are unprofitable at recent gold prices below $US1400.
Newcrest shares traded as high as $15.68 on Tuesday morning, but had fallen to $13.36 by the close of trading on Thursday.
The slump has exacerbated an extended decline in the share price in which Newcrest shares have more than halved in value since September, dramatically more than the slump in the gold price.
The market suspicion was summed up by Goldman Sachs broker Richard Coppleson in his afternoon report on Thursday.
"Many in the market find this extraordinary that in the last 24 hours, [three] brokers have suddenly downgraded the stock [two] to a sell and [one) to neutral - but what amazes everyone is that there has been no new info from the company," he wrote.
One source said Mr Robinson could announce cuts as early as Friday morning.
The miner has already cut 150 jobs from its Melbourne and Brisbane offices earlier this year, and also runs a corporate office in Perth.
Operating three corporate offices in Australia is looking increasingly untenable in what appears to be the early stages of a lower price environment for gold.
The precious metal has spent most of the past 18 months trading between $US1550 per ounce and $US1900 per ounce, but has spent much of the past two months between $US1320 and $US1470 per ounce.
Newcrest occupies prime real estate in Brisbane's three-year old "400 George Street" building. Newcrest is also believed to be considering cost savings at its troublesome Lihir mine in PNG, and has already flagged that its Hidden Valley mine has been losing money and is under close review.