UPDATE 1-Australia's Newcrest plunges to first annual loss in 11 years

Sun Aug 11, 2013 8:35pm EDT
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* Newcrest underlying profit drops 58 pct, misses forecasts

* Expects to be at least cash flow neutral at A$1,450 an ounce

* Shares jump 5.8 pct on rising gold price

MELBOURNE, Aug 12 (Reuters) - Newcrest Mining, the world's fifth largest gold producer, reported its first annual loss since 2002 on Monday, hit by A$6.2 billion ($5.7 billion) in writedowns it flagged in June after gold prices plunged.

Newcrest and its peers have all been hammered by a 26 percent plunge in gold prices this year, and been forced to book huge writedowns, slow expansion projects and slash costs. Canadian rival Barrick Gold Corp last week announced the biggest writedowns in the gold industry at $8.7 billion.

The Australian gold miner reiterated it would focus on slashing costs and boosting production from its lowest cost mines, as it looks to shore up cashflow and fend off another downgrade in its credit rating.

"At a gold price of A$1,450 per ounce all operations are projected to be free cash flow neutral or positive in the 2014 financial year," Newcrest said. Gold last traded at $1,329 (A$1,447) an ounce.

Rating agency Moody's Investors Service cut Newcrest's credit rating by a notch to Baa3 in July and said it expected the company's debt to earnings ratio to remain under pressure over the next 12 to 18 months.

Newcrest reported a net loss of A$5.78 billion, after wiping A$6.2 billion off the value of its mines, goodwill on its Lihir takeover and its stake in Evolution Mining. The writedown was slightly worse than it warned in June, due to the falling Australian dollar.   Continued...