The annual review of asset carrying values is focusing on a review of the operating cost assumptions for Lihir, a review of exchange rate assumptions in the wake of a strong Australian dollar, particularly in relation to Telfer in Western Australia, and an assessment of timing, cost and resource utilisation in relation to Bonikro in Ivory Coast.

Newcrest said the board considered it likely that the review would result in an impairment of the carrying value of the assets of $1.5-2.5 billion after tax, which is in addition to the $47 million write-down of the west African exploration assets from the December 2013 half-year results.

It comes after $6.2 billion in write-downs in its 2013 financial year results.

But the company says there are other assets in its portfolio – namely Cadia Valley, Gosowong and Wafi Golpu – which it believes have a market value much greater than their carrying value.

Newcrest expects the write-down to adversely impact gearing by around 3-6%.

Gearing sat at 30.5% at the end of December.

The company said it remained comfortable with gearing at this level in the short-to-medium term given its near-term cashflow growth outlook and reiterated that it had no intention to raise equity.

Free cashflow for the 2014 financial year is expected to be $130 million.

It comes after a stronger year for the company, topped off with an impressive June quarter.

June quarter production jumped 15% over the March quarter to 636,736 ounces of gold, while copper production increased by 9% to 22,871 tonnes.

All sites recorded improvements aside from Bonikro, with higher gold grades and plant throughput at Gosowong, increased mining rates at Ridgeway, the continued ramp up at Cadia East and higher gold recoveries at Lihir contributing to the result.

All-in sustaining costs dropped 8% to $913 an ounce ($US851/oz), with an average realised gold price of $1382/oz generating a margin of $469/oz.

All mines recorded lower costs except for Telfer, but Newcrest noted that AISC of $1313/oz for Lihir in the June quarter and $1216 for the year was disappointing.

Full-year group gold production jumped 14% to 2.4 million ounces, beating guidance of 2-2.3Moz, while copper production of 86,118t was up 7% and beat guidance of 75,000-85,000t.

AISC were $976/oz, 24% down on FY13, or $2.3 billion, beating guidance of $2.45-2.73 billion.

The group AISC margin of $434/oz was $167/oz higher than FY13, despite a $140/oz lower average realised gold price.

Newcrest CEO Sandeep Biswas, who recently took over from Greg Robinson, said every site achieved production and cost guidance for the year.

“Newcrest is firmly focused on realising the full potential of each of the company’s assets, prioritising operating discipline and maximising cash across all sites,” he said.

“The sustainable generation of strong free cashflow will produce a higher return on invested capital and enable the company to reduce debt and progressively return to paying dividends.

“Growth will be focused on profitable, high return projects.”

Capital expenditure for the year was $843 million, below the guidance range of $895 million to $1.02 billion, while $62 million in exploration expenditure was well below the forecast of $80-90 million.

Last month, Newcrest set preliminary FY15 guidance at 2.2-2.4Moz gold and 75,000-85,000t copper at AISC of $2.3-2.6 billion with capital expenditure of $620-720 million, with around a third going to the development of Cadia East Panel Cave 2, and exploration expenditure of $60-70 million.

September quarter gold production is forecast to be lower with higher costs than June due to expected lower grades at Gosowong and a planned autoclave shutdown at Lihir.

Gold production is expected to be higher in the June 2015 half than in the current period.

Shares in Newcrest dropped 3.8% to $11.05.