Newcrest Mining Face Probe on Plummeting Share Price
Pending an investigation, Newcrest Mining has promised to give its full cooperation and allow authorities to look into its disclosure record. The probe comes after share price of Newcrest Mining plummets to its all-time low in 30 years last week. The share price decreased by 15 per cent as gold prices dropped as well.
Newcrest Mining is expected to open its books to a formal investigation this week. The announcement of a pending investigation comes before plans of a major restructuring of the company this Friday.
The company plans to reduce its production, dividends and cut hundreds of jobs in the process. Newcrest Mining is also planning to shut down its Brisbane offices. This includes asset write-downs worth $6 billion in USD.
The Australian Securities Exchange has demanded an explanation from Newcrest Mining in the form of a formal letter, while the Australian Securities and Investments Commission declared plans of reviewing the company's records.
Newcrest Mining denies allegations of leaked information before the announcement. The company welcomes any inquiry from regulators. Australian shares of Newcrest Mining suffered from a 21 per cent loss after stock trading closed last Friday. This means local investors experienced a bigger loss than Canadian investors who lost 13 per cent of the company's stock value in the same period.
Trading of Newcrest Mining shares began in the Toronto Stock Exchange in March 2012. The opening of Canadian trading hopes to open new doors for investors in North America. The company's presence in the region will also allow comparisons with big North American mining companies such as Newmont Mining and Barrick Gold.
The company's shares in the Toronto Market 15 months later remain small with a daily average of 543 traded shares compared to Australia's 7 million shares. Continuing to trade in the Toronto stock market may soon be controversial for Newcrest Mining as its Brisbane offices close operations and let go of hundreds of Australian jobs. Newcrest Mining's headquarters is in Melbourne with offices in Perth.
