Newcrest disclosure fallout widens

Gold miner's writedowns to tip $6bn, RBC employees leave firm amid scandal.

Three Royal Bank of Canada employees have left the firm as the fallout from the Newcrest Mining selective disclosure allegations continues, The Australian Financial Review reports.

According to the newspaper, RBC's head of research, Peter Main and two analysts, Geoff Breen and Michael Orphanides, have already left the broker.

The RBC analysts published a note forecasting lower Nerwcrest profit, some weeks before the gold miner announced its strategy shift and lower profit guidance.

The Australian Securities and Investments Commission is investigating accusations that Newcrest Mining (NCM) selectively briefed analysts ahead of the original writedowns announcement, which the miner has officially denied.

Half a dozen broking firms cut their Newcrest gold production estimates in the days leading up to the miner's public announcement, where it disclosed a shift in strategy to lower cost production.

Shortly after the original announcement, law firm Maurice Blackburn said it was considering a class action lawsuit on behalf of shareholders, and it was also reported that Slater & Gordon was considering a class action.

The news comes as Newcrest's asset writedowns blew out by $200 million to $6.2 billion on the falling Australian dollar, two months after the gold miner shocked the market with its original announcement. 

In a statement to the Australian Securities Exchange, the miner flagged $6.2 billion in total writedowns for fiscal 2013, compared with a previous estimate of $5 billion to $6 billion.

The miner's revised estimates are based on the exchange rate of June 30, when one Australian dollar was buying 92.75 US cents, compared with the rate of 96 US cents used for the original June 7 announcement.