he aint the only one that's tossing it in, page-33

Mja:

" Resource rent tax could add glitter for some
DAVID SYMONS
May 21, 2010

WHILE the federal government is learning a daily lesson on how much mining companies and financial markets dislike fiscal instability, it seems the new resource tax may provide surprisingly good news for investors in companies with short mine lives, high capital costs and low margins.

That's the conclusion of analysts from the precious metals team at Credit Suisse, who this week crunched the numbers on the impact of proposed tax changes on Australia's leading gold companies.

While the tax will set a new high-water mark for tax regimes globally and may discourage future investment, it seems valuations of all the country's leading listed gold miners are set to increase. In the case of local industry leader Newcrest, Credit Suisse's valuation would improve by 7 per cent if the proposed taxation changes become law.

The analysis shows Newcrest would be better off in the early years of the tax as royalties that would otherwise cost the company $250 million each year are abolished, while deductable expenses on the company's $3.8 billion capital cost base result in no resource rent tax being payable until 2015.

Even then, the new tax builds slowly and it is not until 2018 that it reaches a level at which the company's annual cash flow will be worse off under the new regime than now.

Credit Suisse modelling is predicated on a gold price of about $US1100 an ounce in 2013. If the gold price is higher than expectations, the benefit of the tax would be reduced."

http://www.theage.com.au/business/resource-rent-tax-could-add-glitter-for-some-20100520-vp7u.html