Newcrest Mining Limited - Expected asset impairment amount and writedowns for the 2013 financial year

Newcrest Mining Limited - Expected asset impairment amount and writedowns for 
the 2013 financial year 
MELBOURNE, Victoria, Aug. 8, 2013 /CNW/ - In its announcement of 7 June 2013, 
Newcrest indicated that, based on its estimate of carrying values and the 
Company's internal indicative valuations, an impairment of the carrying value 
of assets in the range of A$5 to A$6 billion was likely in the 2013 financial 
year statutory accounts. 
The Newcrest Board has further assessed the carrying values of its assets for 
the purpose of preparing the 2013 financial year statutory accounts and 
compared these to the actual year end balances, and announces the following 
expected accounting impairment outcomes by asset in their respective 
functional currencies(1): 

    --  Lihir: US$3,240 million (comprising US$3,240 million of the
        US$3,643 million of goodwill)
    --  Hidden Valley: US$380 million
    --  West Africa(2) : US$480 million (including all of the goodwill
        of US$188 million)
    --  Telfer : A$1,175 million

Applying the exchange rate prevailing at 30 June 2013 of $A1.00 = US$0.9275, 
the total impairment charge for the four assets will be approximately A$5,595 
million (of which approximately A$3,695 million is goodwill). The A$:US$ 
exchange rate assumed for the purpose of the 7 June announcement was higher, 
at approximately A$1.00 = US$0.96.

The abovementioned total impairment charge is after tax and is a non-cash item 
with no adverse impact on cashflow.

In addition to the above impairment, the Board has considered the value at 
which it will carry its investment in Evolution Mining Limited (Evolution). 
Applying the share price of Evolution at 30 June 2013 of A$0.57 per share, 
Newcrest's 32.63% shareholding had a value of A$132 million compared with the 
carrying value of A$405 million. The difference of A$273 million will be 
written down. This write-down has no tax benefit recognised for accounting 
purposes(3), and is a non-cash item. The current share price of Evolution is 
significantly above the price at 30 June 2013.

Other assets across the Group are expected to be written down at year end by a 
total amount of approximately A$360 million after tax. This comprises 
writedowns of fixed assets, inventory, exploration and the de-recognition of 
previous tax losses.

The total estimated amount of asset impairments (A$5,595 million), Evolution 
writedown (A$273 million) and the writedown of other assets (A$360 million) 
aggregates to approximately A$6.2 billion after tax.

All amounts are approximate and remain subject to audit. The ASX Appendix 4E 
full year financial results of Newcrest remain expected to be released to the 
market on Monday 12 August 2013.

  1. Functional currency refers to the currency of the asset's

 financial statements.
  2. West Africa comprises Bonikro and Cote d'Ivoire exploration.
  3. Not recognised for accounting purposes, as it is an unrealised 
 capital loss with no certainty of the tax benefit being able to be 
 realised in the absence of capital gains.

SOURCE  Newcrest Mining Limited 
Investor Enquiries Steve Warner T: + 61 3 9522 5493 
Media Enquiries Kerrina Watson T: +61 3 9522 5593 
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CO: Newcrest Mining Limited
-0- Aug/08/2013 14:32 GMT
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