Newcrest to cut deeper as share price slumps
Newcrest Mining chief Greg Robinson is under pressure to respond to a sudden slump in the company's share price that has wiped almost 15 per cent off its value in just 48 hours.
Speculation was rife on Thursday night that Newcrest would announce another round of job cuts within days, and might even close its Brisbane office.
A number of analysts have downgraded the stock in recent days, with most agreeing three of Newcrest's major mines were unprofitable at recent gold prices below $US1400 an ounce.
Newcrest shares traded as high as $15.68 on Tuesday but had fallen to $13.36 by Thursday's close.
The slump has exacerbated an extended decline, in which Newcrest shares have more than halved in value since September.
Goldman Sachs analyst Richard Coppleson wrote: "Many in the market find this extraordinary that in the last 24 hours, [three] brokers have suddenly downgraded the stock to a sell and [one] to neutral - but what amazes everyone is that there has been no new info from the company."
The miner has cut 150 jobs from its Melbourne and Brisbane offices this year.
It also runs a corporate office in Perth. Keeping all three is looking untenable in what appears to be the early stages of a lower price environment for gold.
Gold has spent most of the past 18 months trading between $US1550 and $US1900 an ounce but has fallen sharply over the past two months to trade between $US1320 and $US1470 an ounce.
Newcrest is believed to be considering cost savings at its troublesome Lihir mine in Papua New Guinea, and has indicated its Hidden Valley mine has been losing money and is under review.