The shares of Newcrest Mining Ltd, Australia's largest gold miner, fell 5.4% on Friday, the biggest intraday drop in nearly 10 months, after Newmont Corp, a potential buyer of the company, announced a weaker than expected second quarter profit overnight.
Newcrest is being acquired by Newmont for A $26.2 billion (US $17.75 billion). As of 0506 Greenwich Mean Time, its share price fell 5.2% to A $26.20, the lowest level since July 7.
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Newcrest was one of the biggest losers in the ASX 200 Index, which fell 0.2%.
About 2.9 million shares of Newcrest changed hands, higher than the 30 day average of 2.4 million shares.
Due to declining production and rising costs, Newmont, the world's largest gold miner, failed to meet its profit forecast for the second quarter. The company also withdrew its annual outlook for its Penasquito mine in Mexico due to the strike, which resulted in operations still being suspended.
The Denver, Colorado based gold mining company said it expects costs to improve for the rest of this year.