June 19 (Bloomberg) -- Newcrest Mining Ltd. Chairman Don Mercer should step down after the company this month flagged it will take a writedown of as much as A$6 billion ($5.7 billion), according to the Australian Shareholders’ Association.
“He’s been the chairman for many years, billions of dollars have been lost, he should be held to account,” Stephen Mayne, an association spokesman said today in a phone interview. “He shouldn’t be in charge at this year’s annual general meeting.”
Newcrest, Australia’s largest gold producer, has seen its market value fall more than A$2.6 billion this month to A$8.55 billion today, less than the A$9.7 billion it paid to acquire Lihir Gold Ltd. in 2010. The board needs to find a successor to Mercer, a former chief executive officer of Australia & New Zealand Banking Group Ltd., who shouldn’t seek re-election at the shareholder meeting on Oct. 24, Mayne said.
“Lihir is a quality asset, it is a long life, mid-cost mine,” Newcrest spokeswoman Kerrina Watson said in response to questions about the association’s call for Mercer to stand down. She didn’t offer additional comment on Mercer’s position.
Newcrest, based in Melbourne, said June 7 the expected writedown will include all A$3.6 billion of goodwill for the Lihir mine in Papua New Guinea.
“It’s a straightforward example of accountability for poor performance,” Mayne said. “He was the chairman when the Lihir Gold takeover was done, they’ve now written off billions of dollars related to that.”
The company is now the fifth-largest gold producer by market value, dropping from fourth, the company said in a presentation delivered today by Chief Executive Officer Greg Robinson to a meeting in Canberra. Newcrest closed unchanged at A$11.15 in Sydney. Australia’s benchmark S&P/ASX 200 index rose 1 percent.
The association represents and votes on behalf of small Australian investors in companies, including Newcrest. At the gold producer’s 2012 annual general meeting, it voted on behalf of 277 investors holding 388,288 shares, according to the association’s website. The company has 766.5 million shares outstanding, according to data compiled by Bloomberg.
To contact the reporter on this story: David Stringer in Melbourne at email@example.com
To contact the editor responsible for this story: Jason Rogers at firstname.lastname@example.org