Newcrest Paces Gains as Bernanke Backs Stimulus: Sydney MoverDavid Stringer
Newcrest Mining Ltd. paced gains in Asian gold stocks, rising the most in more than four years, after the U.S. Federal Reserve Chairman Ben S. Bernanke’s comments backing sustained economic stimulus boosted the precious metal.
Newcrest, the worst performer this year among Australia’s 50 biggest stocks, rose 12 percent to A$11.10 at the close in Sydney, the most since Nov. 21, 2008. OceanaGold Corp. advanced 14 percent, Evolution Mining Ltd. surged 20 percent and Beadell Resources Ltd. added 16 percent. Australia’s benchmark S&P/ASX 200 index rose 1.3 percent.
The U.S. will need highly accommodative monetary policy for the foreseeable future, Bernanke said yesterday, leading investors to return to havens including bullion. Gold for immediate delivery rose 2 percent to $1,289.25 an ounce, the highest level since June 21.
“Bullion is popping on the fact that most people are shedding the U.S. dollar and heading back to the yen and back to things like gold,” Evan Lucas, a Melbourne-based market strategist at IG Markets Ltd., a provider of trading services for equities, currencies and commodities, said by phone.
Elsewhere in Asia, Zijin Mining Group Co., China’s biggest gold producer by value, climbed as much as 6.6 percent to HK$1.62 and Zhaojin Mining Industry Co. jumped 13 percent.
Newcrest also said it plans to cut staff and contractors at its Telfer mine as part of a review prompted by falling prices and high operating costs in Australia.
The company is holding talks with 1,800 workers at Telfer in Western Australia and hasn’t finalized the number of job cuts, Jason Mills, a spokesman for Melbourne-based Newcrest said in an e-mailed statement.
Newcrest said last month it’s cutting spending, suspending high-cost operations and closing its Brisbane office. It said it expects to take a charge of as much as A$6 billion ($5.5 billion) for the year ended June 30. Similar reviews are being carried out at the company’s six operating mines in Australia, Papua New Guinea and the Ivory Coast, Mills said.
The producer said June 15 that it would cut as much as 7 percent of the 2,500 workers at its Lihir mine in Papua New Guinea.
Investors also expect the company to seek job cuts at its Hidden Valley mine, also in Papua New Guinea, Lucas said. “They have tackled Lihir, they are tackling Telfer, the next one is Hidden Valley, because it is just too expensive,” he said.
Perennial Investment Partners Ltd. said it had sold its holding in Newcrest last month after the company announced its expected record writedown.