A.I.S. Resources Announces Grant of Option to Acquire Kingston Gold Project, Victoria Australia

A.I.S. Resources Limited  [ today announced the Company has been granted an option to conduct due diligence and formalize a sale and purchase agreement in respect of the Kingston Gold Project near Navarre,  in north-western Victoria, Australia.  The Company and the Optionor have agreed to use their best endeavours to settle the form of and execute a definitive sale and purchase agreement on or before November 16, …

A.I.S. Resources Limited (TSX: AIS, OTCQB: AISSF) (the “Company” or “AIS”) [http:aisresources.cominvestorsstock-quote] today announced the Company has been granted an option (the “Option”) to conduct due diligence and formalize a sale and purchase agreement in respect of the Kingston Gold Project near Navarre, in north-western Victoria, Australia. The Company and the Optionor (vendor) have agreed to use their best endeavours to settle the form of and execute a definitive sale and purchase agreement on or before November 16, 2020 for the acquisition by the Company of the Optionor’s 100% interest in Exploration Licence 006318, that covers 167 sq kilometres but excluding Prospecting Licence (“PL”) PL007020 contained within the Exploration Licence area, an area of 5 hectares.

The Optionor, ConnorCoote Mining, is a joint venture between Owen Coote and Glenn Connor, both of Victoria, Australia. The Company will pay AUD$35,000, non-refundable to the Optionors for the Option.

The consideration payable by the Company for the Exploration Licence, assuming satisfactory completion of due diligence and settlement of the Sale and Purchase Agreement, is AUD$260,000, 4,000,000 common shares of the Company and 4,000,000 share purchase warrants exercisable at $0.15 for a period of five years. The Optionor will retain a 1% NSR up to a cap of 50,000 oz of gold. The Optionor will also be permitted to carry on mining activities outside of the PL007020 where the shaft started inside the PL, and an agreement has been reached on a 15% revenue share.

The transaction is subject to acceptance by the TSX Venture Exchange.

The Company has granted a total of 450,000 incentive stock options to various consultants of the Company in accordance with the Company’s stock option plan. Each Option is exercisable into one common share of the Company at a price of $0.085 per Share being the closing price of the Shares on the TSX Venture Exchange on September 17, 2020. The Options vested on grant and will expire on September 18, 2025. The stock options granted are subject to the acceptance of the TSX Venture Exchange.

About A.I.S. Resources
A.I.S. Resources Limited is a publicly traded investment issuer listed on the TSX Venture Exchange focused on precious and base metals exploration. The Company is managed by a team of experienced mining and geological professionals, with a track-record of successful capital markets achievements. In July-August 2020, AIS entered into agreements to acquire and develop the Toolleen-Fosterville Gold Project in Victoria Australia and the Yalgogrin Gold Project in central New South Wales, Australia.

On Behalf of the Board of Directors,
AIS Resources Ltd.
Phillip Thomas, President & CEO

Corporate Contact
Phillip Thomas Martyn Element
President & CEO Chairman
T: 747 200 9412, +61433747380 T: 604 220-6266
E: pthomas@aisresources.com E: melement@aisresources.com
Website: www.aisresources.com

ADVISORY: This press release contains forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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Mako Gold Managing Director Peter Ledwidge said the drill program at the Gogbala prospect is shaping up, with wide intersects of 35 metres at 1.9 grams and 20 metres.

Mako Gold (ASX:MKG) has completed its US$10 million raise and is now fully funded to execute a 45,000 metre drill program at Côte d'Ivoire and additional exploration with circa $15 million in cash reserves.

Mako Gold Managing Director Peter Ledwidge said the drill program at the Gogbala prospect is shaping up, with wide intersects of 35 metres at 1.9 grams and 20 metres.

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MKG:AU

Lihir Phase 14A PFS indicates potential for growth and large scale, long life, low cost production Confirms Lihir’s pathway to become a 1Moz+ gold producer for at least 10 years from FY241 $179m investment projected to deliver outstanding return metrics of 37% IRR & 2.6 year payback2,3,4 Increases Lihir’s Ore Reserves by 1 million ounces5 Project implementation to enhance operational flexibility and risk management …

  • Lihir Phase 14A PFS indicates potential for growth and large scale, long life, low cost production
  • Confirms Lihir’s pathway to become a 1Moz+ gold producer for at least 10 years from FY241
  • $179m investment projected to deliver outstanding return metrics of 37% IRR & 2.6 year payback2,3,4
  • Increases Lihir’s Ore Reserves by 1 million ounces5
  • Project implementation to enhance operational flexibility and risk management
  • Potential to deploy Phase 14A mining techniques in other parts of the mine to unlock more value
  • Feasibility Study expected to be completed in the second half of FY226

Newcrest Mining Limited (ASX: NCM) (TSX: NCM) (PNGX: NCM) is pleased to announce that the Newcrest Board has approved the Lihir Phase 14A Pre-Feasibility Study (the Phase 14A Study), enabling the commencement of the Feasibility Study and Early Works Program.

The Study focuses on extending the Phase 14 cutback and safely steepening the walls of the pit utilising civil engineering techniques to access existing Indicated Mineral Resources that would have otherwise been inaccessible through standard mining techniques. The Study integrates Phase 14A’s future mine design and sequence into Lihir’s mine plan and establishes the expected costs, schedule and sustainable production rate.

Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas, said “The findings of our Lihir Phase 14A Pre-Feasibility Study accelerate the realisation of our aspiration for Lihir to be a 1 million ounce plus per annum producer from FY24, which will benefit landowners, all Lihirians and PNG. Phase 14A increases Lihir’s Ore Reserves, brings forward gold production and improves operational flexibility by establishing an additional independent ore source. The Study also highlights the opportunity for Phase14A techniques to be applied to future cutbacks at Lihir, potentially unlocking more value. We have also confirmed the deferral of the need for the Seepage Barrier to Q2 FY26, with the potential to further defer the timing of the barrier.”

Summary of Phase 14A Study Findings2,3,7

The Phase 14A Study has identified the following:

  • Estimated project capital expenditure of $179 million
  • Internal Rate of Return (IRR) of 37% (real, after tax)
  • Payback of 2.6 years4
  • Net Present Value (NPV) of $284 million[8]
  • Mill feed increase of 483koz contained gold, with ~400koz of additional gold produced from FY23 to FY26
  • Additional Life of Mine (LOM) gold production of 965koz

The Feasibility Study is expected to be completed in the fourth quarter of FY226, with the expenditures and study scope expected to include:

  • Early Works expenditure of $47 million for fleet procurement and initial bench establishment
  • Trial works for ground support anchors to validate design, costs and schedule
  • Additional drilling and test work to validate ore deposit knowledge

The Lihir Ore Reserves estimate has been updated to include the conversion of the Phase 14A Indicated Mineral Resource to Probable Ore Reserves, increasing Lihir’s Total Ore Reserves by 1Moz to 23Moz as at 30 June 20215.

Mining of Phase 14A is expected to take place between FY22 and FY26. Ore mined from this Phase will replace lower grade ore feed to the processing plant, with an initial 13Mt of high and medium grade ore from Phase 14A planned to be fed between FY22 and FY26. Lower grade material will be stockpiled and fed progressively over the remaining LOM. This is expected to deliver an additional 965koz of gold production over the LOM.

In addition, Newcrest has completed its Seepage Barrier Feasibility Study, which enables further definition of the expected construction costs and schedule. The findings from the project field trials indicate that the Seepage Barrier can be constructed using hydromill cutters and grouting methods. Approval of the Seepage Barrier Feasibility Study to move to Execution has been deferred until FY23, in line with the findings of the Lihir Mine Optimisation Study (LMOS) which established that the eastern limits of Phases 16 and 17 could be moved further east, deferring the need for the Seepage Barrier by ~18 months to Q2 FY26.

Table 1: Key Phase 14A Study Findings7

Study Outcomes
Area Measure Unit Phase 14A2,3 LOM9
Production Ore milled / milling rate (max) Mtpa 15.5 15.5
Ore milled Mt 310
LOM Years 5[10] 22
Ore mined Mt 20.5 236
Average gold grade g/t 2.4 2.3
Gold produced Moz 1.0 19
Capital Production stripping (capitalised) US$m (real) 111
Sustaining capital US$m (real) 69
Total capital US$m (real) 179
Economic assumptions Gold price US$/oz 1,500
Financials11 NPV8 US$m (real) 284
IRR % (real) 37
Payback period4 Years 2.6

Phase 14A Overview2

In February 2021, Newcrest announced the findings of the LMOS which included the identification of a new, essentially brownfield opportunity called Phase 14A. The Phase 14A Study focused on extending the Phase 14 cutback and safely steepening the walls of the pit by utilising civil engineering techniques to access existing Indicated Mineral Resources which would have otherwise been inaccessible through standard mining techniques. The Phase 14A cutback is expected to provide an additional mining front enabling further flexibility for fresh competent ore feed. The Phase 14A cutback is fully permitted and is within the existing mine lease.

Field trials of the wall support technology are planned for the December 2021 quarter6, with long lead materials to be ordered and the engagement of specialist contractors in progress.

The addition of Phase 14A into the Lihir mine plan accelerates Newcrest’s aspiration for Lihir to be a 1Moz+ per annum producer from FY24.

Mining of Phase 14A is expected to take place from FY22 to FY26 and include:

  • Total ex-pit mining of 34Mt, including 13Mt of high and medium grade ore at an average of 3g/t, which will displace lower grade ore (mostly stockpile) that would otherwise have been processed in the mill
  • An uplift in the total mill feed grade and an additional 483koz of gold in feed and 400koz recovered gold over FY23 – FY263
Material Class Tonnage (Mt) Au Grade (g/t)
High Grade (HG) 4.5 4.5
Medium Grade (MG) 8.5 2.2
Low Grade (LG) 7.5 1.3
Waste 13.5
Total 34
Stripping Ratio (Waste: Ore) 0.66

Table 2: Phase 14A Inventory Summary3

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Figure 1: Phase 14 Mining ore production by financial year3

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Backfilling the cutback will occur after the completion of mining and will act as a buttress supporting long-term stability of the highwall.

A program of infill resource definition drilling and trial installations of the ground anchors is underway and will be completed in FY22. This program is expected to improve resource definition, further reducing project risk.

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Figure 2: Lihir Mine cutbacks including Phase 14A

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The Phase 14A design utilises civil engineering techniques, in conjunction with existing mining practices, to increase pit wall angles. The upper Argillic horizons without ground support typically have an unsupported slope angle of ~45° which has been increased to ~77° using soil anchors to provide stability. The soil anchors will be installed in the upper benches of the cutback to support the steeper wall angles in these areas. The slope angles of the lower benches will be similar to the existing walls in Phase 14. The increase in pit wall angle enables access to ore within the current permitted pit shell.

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Figure 3: Phase 14A design showing current vs supported design slopes

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The soil anchors provide ground support in the form of multi-strand anchors with shotcrete and/or high tensile wire mesh as face support in the Argillic and upper Epithermal zones.

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Figure 4: Phase 14A wall stabilisation design

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To integrate with the civil construction, mining will be conducted by a dedicated mining fleet which will comprise a small excavator and dump trucks mining 3m flitches. The 3m flitches are required to provide a working platform for installation of soil anchors at 3m vertical spacings.

The Lihir base case gold production schedule projects mining rates to increase up to 50Mtpa over the coming years and an average milling rate of 15.5Mtpa9. Ore from Phase 14A is expected to be mined between FY22-26 and will be processed over the LOM.

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Figure 5: Lihir LOM indicative gold production profile9

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Base Case Expit Mining to 50Mtpa

Mining rates for Lihir are expected to increase (as identified in the LMOS) over the coming years through a combination of equipment capacity and mining efficiency projects. Additional mining capacity is expected to be delivered through increased truck availability as a result of a program of truck re-builds and the replacement of primary dig units. This program is currently underway and is scheduled to be completed by December 20216.

Mine efficiency improvements identified in the Study include improved fleet utilisation, which is expected to be achieved by increasing operator availability and improving dispatch tactics to reduce equipment delays.

Process Plant Improvements12

Newcrest is currently implementing numerous throughput improvement initiatives which are targeting the achievement of a process plant throughput rate of 15.5Mtpa from FY24. Lihir has previously demonstrated annualised milling performance rates of ~16Mtpa during Q4 FY18 and Q4 FY19.

Recovery Improvements

Recovery improvements are expected to be achieved through a combination of increasing mill feed grades, improved feed blends and recovery improvement projects that are currently in progress. Phase 14A is expected to provide additional fresh ore to the mill, offsetting lower grade and lower performing recovery material types.

The Front End Recovery project is expected to deliver increased recoveries from the beginning of FY23, with further studies assessing recovery improvements underway.

Project Investment

The Phase 14A Project requires a total capital investment of $179 million and comprises:

Activity $m2,7
Study and trial costs 22
Mining and ancillary fleet
(Excluding contractor ground support equipment)
46
Production stripping cost (capitalised) 111
Total 179

Production Stripping

Pre-production stripping of Phase 14A waste material is expected to commence in the second half of FY226. Due to the initial civil works requirements and available bench space, there is expected to be a ramp up of the mining rate to a peak of ~1Mtpa per month through FY23 and FY24.

Phase 14A has a very low strip ratio of 0.66 and as such will start producing HG and MG ore within six months from the commencement of mining. This is expected to provide significant HG mill feed through FY24 and FY25, lifting intended production rates to 1Moz+ per year from FY24, prior to completion of pre-stripping in Phase 179.

Indicative Mine Production Profile (Includes Phase 14A)9,13,14,15

Year Sources Total Material Movement (Mt)[16] Waste (Mt) Tonnes to Stockpile
(Mt)
Ex-Pit
Tonnes
Fed (Mt)
Stockpile
Tonnes
Fed (Mt)
Plant
Feed
(Mt)
17
Average
Gold Grade (g/t)
FY22-24 Lienetz, medium/low grade stockpiles and pre-strip 200 – 220 100 – 120 15 – 25 25 – 35 10 – 20 40 – 50 2.4 – 2.6
FY25-27 Lienetz, Kapit, medium/low grade stockpiles and pre-strip 210 – 230 90 – 110 25 – 35 25 – 35 10 – 20 40 – 50 2.8 – 3.0
FY28-30 Lienetz, Kapit, low grade stockpiles and pre-strip 160 – 180 80 – 100 5 – 15 10 – 20 30 – 40 40 – 50 2.4 – 3.0
FY31-33 Lienetz, Kapit, Minifie and low grade stockpiles 140 – 160 40 – 60 20 – 30 25 – 35 10 – 20 40 – 50 2.6 – 3.0
FY34-36 Lienetz, Kapit, Minifie and low grade stockpiles 130 – 150 50 – 70 10 – 20 25 – 35 10 – 20 40 – 50 2.0 – 2.3
FY37-39 Minifie and low grade stockpiles 50 – 70 0 – 10 0 – 10 0 – 10 40 – 50 40 – 50 1.3 – 1.5
FY40-42 Minifie and low grade stockpiles 30 – 50 0 – 10 0 – 10 0 – 10 25 – 35 25 – 35 1.2 – 1.3
FY43+ Remaining Reserves subject to ongoing study

Metal Price and Exchange Rate Sensitivity Analysis2,3,7

The IRR of the Phase 14A Project will vary according to the gold prices realised. Base case assumptions include a gold price of $1,500/oz.

The table below outlines how the estimated Base Case Phase 14A Project IRR of 37% varies using different price assumptions:

Scenario Assumption IRR
Gold price ($/oz) 1,200 22%
1,800 51%

Seepage Barrier Feasibility Study Update18

The development of the Kapit orebody requires construction of a seepage barrier to cut off ocean water inflows from Luise Harbour to the open pit as shown in Figures 6 and 7.

The LMOS defined a base case for the Lihir mine plan which found that through further geotechnical analysis, the eastern limits of Phases 16 and 17 could be moved further east, deferring the need for the Seepage Barrier by
18 months to Q2 FY26 to coincide with mining Phase 18.

Additional mining studies are underway to identify further options to delay timing and/or alter the scope for the Seepage Barrier, including:

  • Kapit Pit Slope Optimisation (steepening of pit walls using conventional methods)
  • Installation of a mini seepage barrier to access Phase 18 without the need for the full seepage barrier
  • Combined pit slope steepening with a mini seepage barrier

The Seepage Barrier Feasibility Study has further defined the technical elements, cost and execution of the Seepage Barrier. It has determined:

  • A cut-off wall can be constructed in line with the designed method using standard hydromill cutters and grouting methods with a sea water slurry cooling system and confirmation of the concrete mix
  • An expected capital cost of US$569 million7
  • Construction duration of approximately 72 months

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Figure 6 & 7 – Cut of wall Alignment and Seepage Barrier / Kapit Pit at EOM

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Estimated Development Capital Profile7,18

FY23 FY24 FY25 FY26 FY27 FY28 FY29 Total
Stage 1 – Cut-Off Wall ($m) 30 74 194 52 350
Stage 2 – Seepage Control Berm ($m) 35 95 70 19 219
Total ($m) 30 74 194 87 95 70 19 569

Lihir Mineral Resource19

The Lihir Mineral Resource has been updated for mining depletion to 30 June 2021 from that reported in the Annual Mineral Resources and Ore Reserves Statement as of 31 December 2020. All other assumptions remain unchanged. A summary of material assumptions is included in Appendix 1, JORC Table 1. It is reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 (JORC Code). Mineral Resources are reported inclusive of Ore Reserves. Mineral Resources that are not Ore Reserves do not have demonstrated economic viability.

Mineral Resource Gold
Mt g/t Moz
Measured Mineral Resource 63 2.0 4.0
Indicated Mineral Resource 530 2.3 39
Total Measured and Indicated 590 2.2 43

Mineral Resource Gold
Mt g/t Moz
Inferred Mineral Resource 67 2.3 4.9

Lihir Ore Reserve19

A summary of material assumptions is provided below and included in Appendix 1, JORC Table 1. There are no material differences between the definitions of Probable Ore Reserves under the JORC Code and the equivalent definitions under the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves.

Ore Reserve Gold
Mt g/t Moz
Proved Ore Reserve 63 2.0 4.0
Probable Ore Reserve 250 2.4 19
Total Ore Reserve 310 2.3 23

Material Assumptions for Ore Reserves

Lihir is an operating open pit mine on Lihir Island, and the Study incorporates learnings from operational execution to date. Work is progressing on a Feasibility Study for the Phase 14A cutback and any adjustments to the Ore Reserves statement will be made following the completion of the Feasibility Study.

Ore Reserve Classification

All of the in-situ Probable Ore Reserve is based on Indicated Mineral Resources. The Proved Ore Reserve is based on Measured Mineral Resources defined for known and quantified low grade stockpiles. The in-situ resource classification is based on an assessment of geological confidence as a function of geological and mineralisation continuity.

Mining Method

Current mining activity at Lihir is via conventional truck and shovel operation, with offshore barge disposal of waste rock and land based and in-pit stockpiling and reclaim of lower grade ore.

Ore Processing

Ore processing at Lihir involves the main operations of crushing, grinding, flotation, pressure oxidation, leaching and electrowinning to recover gold from relatively high-grade sulphide feed producing gold doré. The Lihir process plant utilises proven technology that is widely used in the gold industry for this style of mineralisation. The ore processing facility has been operating since it was commissioned in 1996 and upgrades took place during 2011 and 2012. Comminution circuit operating optimisations and minor upgrades are planned to achieve a 15.5Mtpa plant capacity12.

The metallurgical recovery assumption for ore feed to the autoclave is dependent on the gold and sulphide sulphur grades, and dependent on sulphur to calcium ratio and proportion of aged stockpile feed for flotation material. Overall metallurgical recovery is reconciled with historic production data, laboratory test samples for stockpiled ore and reflects a partial oxidation metallurgical operating strategy. Average life of mine gold recovery is modelled to be 81-82%.

Cut-Off Grade

Lihir open pit employs a grade based cut-off, taking into account gold price, metallurgical recovery assumptions and site operating costs. The site operating costs include transport and refining costs, royalty charges, mining and processing costs, relevant site general and administration costs and relevant sustaining capital costs. These costs equate to a break even cut off value of US$38/t milled used to define the ultimate pit shell and a marginal cut off value of US$33/t milled or 1.0 g/t gold used to define ore and waste material within the ultimate pit shell.

The marginal site cost is based on an end of mine life low grade stockpile reclaim strategy, reducing the site activity and long term cost base. The mining cost in the marginal site cost represents the stockpile reclaim cost.

Estimation Methodology

Estimation of the Lihir Ore Reserve involved standard steps of mine optimisation, mine design, production scheduling and financial modelling. Factors and assumptions have been based on operating experience and performance at the Lihir operations. The Ore Reserve has been evaluated through a financial model. All operating and capital costs as well as Ore Reserve revenue factors stated in this document were included in the financial model. A discount factor of 4.5% real was applied. This process demonstrated that the Lihir Ore Reserve has a positive NPV. Sensitivities were conducted on the key input parameters including commodity prices, capital and operating costs, ore grade, discount rate, exchange rate and recovery which confirmed the estimate to be robust.

Material Modifying Factors

The resource estimation process allows for ore dilution and recovery to be built into the resource model based on the assumption of the selective mining unit (SMU) as the block size. The SMU assumption is based on the mining fleet size and is consistent with a high mill throughput/bulk mining strategy. Due to the Localised Uniform Conditioning (LUC) approach adopted in the resource model no additional mining dilution or recovery factors have been applied to the Ore Reserve estimate.

This assumption is supported by the actual reconciliation between resource model and mill performance at Lihir to date being within an acceptable uncertainty range for the style of mineralisation under consideration.

The pit optimisation takes into account Inferred Mineral Resources, however only Measured and Indicated Mineral Resources are reported in the Ore Reserve estimate. The Inferred Mineral Resource represents a small portion of material within the ultimate pit design and both the design and financial model are insensitive to the exclusion of this material.

Civil engineered wall support is required for the Phase 14A cutback to allow access to the orebody. The cutback design also requires mining by a fleet of small equipment owing to the narrow ramp configuration required. Allowances for these activities are included in the preparation of the Ore Reserve estimate.

Other Modifying Factors

Lihir Gold Limited and the Lihir Open Pit are in material compliance with all legal and regulatory requirements. Naturally occurring risks that might have a material impact upon the Lihir ore reserve are discussed in the risks section of Newcrest’s Operating and Financial Review (in the Appendix 4E and Financial Report for the year ended 30 June 2021 which is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile) and include the potential impacts of seismic activity.

Environmental permitting for the Phase 14A Project has been assessed and approved by the Conservation and Environment Protection Authority (CEPA).

The known legal, political, environmental or other risks that could materially affect the potential development of the mineral resources or ore reserves are identified in Sections 3 and 4 of Appendix 1.

Appendix 1

JORC Table 1 – Lihir (100% Newcrest)

Section 1: Sampling Techniques and Data

Criteria Commentary
Sampling techniques Lihir is located in an active geothermal area and procedures have been developed to ensure that all drilling activities are conducted in a safe manner which is appropriate for when zones of high pressure steam are intersected. Data used for the resource estimation is obtained by two main drilling methods – diamond coring and reverse circulation (RC) drilling. All available diamond drill holes are sampled by cutting the core in half with a diamond saw with sample intervals being either 1m or 2m in length. Half the cut core is placed in a calico bag with a sample number and sent to the laboratory for assaying. All RC drilling was sampled at 1m intervals collected via a cyclone and split with a riffle splitter. The riffle split sample size of 4-5kg is placed in a calico bag with a sample number and sent to the laboratory for assaying.
Drilling techniques Drilling is the primary source of data for Mineral Resource estimation at Lihir. Data is obtained from two main drilling methods-diamond coring and RC drilling. The majority of drilling for the resource estimation is diamond drill core (93%), comprising PQ (84.8 mm core diameter), HQ (63.5 mm core diameter) and NQ (47.6 mm core diameter). Very little core orientation is performed on site as the structurally complex and geothermal conditions make it very difficult to obtain accurate orientations. Minor (~7%) of resource drilling is RC (5 1/4′” diameter) completed prior to 2002 used both vertical and angled holes. Since 2002 all resource drilling has been comprised of diamond core. Stockpile drilling is campaigned using an RC rig with a 4″ bit. Hole lengths are routinely 36m.
Drill sample recovery Core recovery is recorded and stored in an acQuire software database. There are only minor zones of core loss or poor core recovery. Core recovery is generally excellent with average core recoveries around 99%. There is no identified relationship between core loss and grade and the style of mineralisation suggests this is unlikely. There are no records of RC sample recovery.
Logging All diamond drill holes are geologically logged. Due to the nature of the intense alteration core is qualitatively logged for lithology and alteration and quantitatively logged for structure and geotechnical parameters. All core is logged and photographed after marking up metre intervals and prior to cutting and sampling. Logging data are entered into the acQuire database via a laptop computer or historically via manual data entry.
Sub-sampling techniques and sample preparation The sampling technique used is considered appropriate for the assessment of Lihir mineralisation. At the completion of drill core logging, the geologist defines which intervals of a drill hole are to be cut for analysis. All recent drilling is analysed on 2m intervals on the metre mark. PQ and HQ sized drill core is sampled by cutting the core in half with a diamond blade saw when intact and competent. The left hand half is placed in a calico bag marked with the appropriate sample number and sent to the assay laboratory for analysis. Where the core is too soft to be cut with a diamond saw, a knife is used to cut the core in the core tray. Where the core is too broken or brittle to be cut by the saw, the fragments are manually sampled. NQ sized core is not cut in half as the entire section is sampled so that sample support is maintained. The standard sampling interval is 2m but has varied over time from 1m to 2m. The remaining half core is stored in the original trays on pallets at the core processing facility.

Lihir has a sample preparation facility at the mine and up to January 2015 there are records for crusher duplicates. Drill core was crushed and RC and blast hole samples were dried and loaded into the pulverisers without laboratory splitting. After 2015 there was a reduction in core sampling and all samples were transferred directly to a bank of 6 * LM5 pulverisers without crushing or splitting. There are two standby jaw crushers with a small single deck riffle splitter which are rarely used.

Sample preparation for analysis is as follows: Samples are crushed if required to 10mm maximum diameter and split to a nominal weight of 2.5 – 3kg using a riffle splitter. Split samples are dried in an oven at 105°C until dry. Each sample is pulverised using a Labtechnics LM5 pulverizing mill to specified grind parameters of 95% passing 106µm. A 200g sub-sample is collected for analysis and submitted to the assay laboratory. Pulp replicates (not duplicates) are routinely undertaken. Crushed and pulp duplicates are collected at the Orange laboratory.

The sample preparation and size is considered appropriate for assessment of bulk tonnage mineral deposits of this type.

Quality of assay data and laboratory tests The Lihir onsite laboratory has been the primary laboratory used for assaying, with some more recent assaying completed at the Newcrest Services laboratory (Orange, NSW).

Samples are routinely assayed for gold and sulphur. Gold analysis is by fire assay with 25g charge and Atomic Absorption Spectroscopy (AAS) finish and detection limit of 0.01ppm (g/t), which is considered complete. Sulphide sulphur is by Labfit method where the sample is ignited at high temperature in a stream of oxygen. The resulting sulphur dioxide is measured by an infra-red detector using a Carbon/Sulphur analyser.

A detailed Quality Assurance/Quality Control (QAQC) program is in place for on-going assessment of sampling and analytical procedures. The process currently involves analysis of blind submissions of certified reference material (standards) to Lihir laboratory, duplicates from the LM5 pulveriser pulp, assayed during the same batch, blind resubmission of pulps to Lihir laboratory, replicate submissions of pulps to an alternative laboratory for analysis, submission of coarse blank samples (non-Lihir Island barren rock samples), checks on grind and crush size from the sample preparation steps and laboratory inspections and monthly QA/QC meetings. A monthly report is prepared detailing QA/QC performance to support the Mineral Resource estimate. There have been 30 standards used, not all of which were certified for sulphur. The first 16 standards were commercially available standards. Since 2008, there have been 14 standards used, all matrix-matched.

Data suggests that during the period between 2007 and 2012 there was a positive bias of between 5 and 20% in sulphide sulphur analysis conducted at Lihir laboratory data acquisition compared to standards reference materials. This suggests the Lihir method during this period reflects a total sulphur assay rather than the sulphide sulphur of the certified reference materials. In 2013 alternative sulphide sulphur techniques were introduced at Lihir which have improved the method accuracy. A further sulphide sulphur methodology improvement was implemented in 2016, with the installation of the Leco Infrared combustion analytical equipment.

Verification of sampling and assaying All data and interpretative inputs to Mineral Resource estimates are checked and verified in accordance with a range of Newcrest standard operating procedures. Procedures were also in place for all historical drilling programs at Lihir. Diamond drill core samples are processed in-house using a dedicated core processing facility, sample preparation and analytical laboratory. All resource logging data is automatically uploaded to the resource database via logging notebook computers. Newcrest employs a centralised resource drill hole database team to check, verify and validate new data and to ensure the integrity of the total resource database. Day-to-day management of the resource data is undertaken by the database administrator on site using the acQuire database system. Prior to resource estimation a centralised resource team conducts further data checks to ensure data integrity prior to estimation.

Regular internal and external reviews of all geological and Mineral Resource estimation processes are conducted to check the quality and integrity of these procedures. No adjustments have been made to assay data.

Location of data points The grid applied is a local Mine Grid that has it based on AMG Zone 56.

The original topography surface is a Light Detection and Ranging (LIDAR) surface created pre-mining. Mining activities are surveyed each month and incorporated into a topographic surface model for depletion purposes.

All completed drill hole collars are surveyed by the mine surveyors.

A variety of methods have been used to measure down hole deviation (dip and azimuth), including conventional borehole camera, electronic single shot and gyroscopic methods. The majority of the holes have been surveyed using conventional borehole camera methods.

Data spacing and distribution Historical drilling has been nominally on 35m eastings, but noting the orebody is generally insensitive to drill orientation due to complex mineralisation events.

The Mineral Resource has been classified into Indicated and Inferred Mineral Resource after assessing the following factors: drill hole spacing (only areas drilled to 70m x70m drill density have been classified as Indicated Resource), style of mineralisation and geological continuity, data quality and associated QA/QC, grade continuity and proposed mining selectivity and scale of mining. Refer Section 3 Resource Classification for further details.

The data spacing and distribution is sufficient to establish geological and grade continuity appropriate for Mineral Resource estimation and classification and supported by historical reconciliation with actual production results.
Samples for estimation purposes have been taken, but no physical compositing of samples has occurred during the analysis process.

Orientation of data in relation to geological structure Gold mineralisation in the Luise Caldera is hosted within volcanics, intrusives, and breccias which have undergone extensive alteration. Two major alteration episodes have been identified which have destroyed much of the original host rock lithologies, and due to this an “ore type” classification has been developed based largely upon various combinations of alteration, hardness, the degree of brecciation and/or leaching of matrix material, and the presence of late stage anhydrite veining. The deposit is generally sub-horizontal.

The nature of the mineralisation distribution is such that it is insensitive to drill orientation with a wide variety of orientations having been used. Diamond holes prior to 2002 are predominantly vertical, with angled holes used subsequently to define the Mineral Resource. RC holes completed prior to 2002 used both vertical and angled holes.

Sample security Samples were transported from drill site to core shed and to site laboratory, all within the operational security zone of the mine. Sample dispatches are reconciled against Laboratory samples received and discrepancies reconciled by geology staff.
Audits or reviews An independent review of assaying and QAQC in September 2012 concluded: “The historic assay bias for gold has now been rectified at Lihir, sulphur from sulphide has not been assayed correctly at Lihir laboratory during some stages of the life of operation. Assaying precision for gold is considered consistent with industry standards but lacking for sulphide sulphur. Overall the quality of the Lihir laboratory is now well controlled.”

Section 2: Reporting of Exploration Results

Criteria Commentary
Mineral tenement and land tenure status Mining and ore processing operations at Lihir are conducted pursuant to a mining development contract with the State of Papua New Guinea and the related special mining lease, and a series of granted mining leases, exploration licenses, leases for mining purposes and mining easements, and associated environmental and other approvals. The granted tenements and permits cover all infrastructure in the immediate vicinity of the mine site, including the open pit, accommodation, plant site, power station, waste-rock and tailings disposal, and bore fields. All infrastructure is in place for the continued operation of Lihir.

Current tenements granted under the PNG Mining Act comprise Special Mining Lease (SML) 6, two granted Mining Leases (MLs) and one granted Exploration Licence (EL), plus a number of miscellaneous mining purpose and easement leases. The total area under lease/licence is approximately 250 km2. The Mineral Resource lies entirely within SML 6. The registered holder for all tenure is Lihir Gold Limited, a wholly-owned subsidiary of Newcrest Mining Limited since late 2010. SML 6 expires 16 March 2035 and EL485 expired on 31 March 2020. Process for a new renewal from 1 April 2020 to 31 March 2022 was delayed by COVID-19 restrictions and will be lodged for EL485. The two MLs are current to July 2025.

Exploration done by other parties The first systematic mineral exploration in the area was by the PNG Bureau of Mineral Resources and the Geological Survey of PNG between 1969 and 1974. In their report (which was released in 1982), it detailed the hydrothermal alteration and thermal activity on Lihir Island and suggested that it was a favourable geologic environment for epithermal gold mineralisation.

The Ladolam gold deposit was initially discovered in 1982 by joint venture between Kennecott Exploration and Niugini Mining. A feasibility study was completed by Kennecott Mining in March 1992. In the mid 1990’s a joint venture was formed between Kennecott Mining and Rio Tinto. Lihir Gold Limited (LGL) was subsequently formed to hold the Mining Development Contract, the Special Mining Lease and associated tenure. Mining operations commenced at Lihir in 1997.

In 2005 Rio Tinto sold its interest in LGL, then, in late 2010, Newcrest Mining Limited acquired LGL by scheme of arrangement.

Geology Exploration has identified several adjacent and partly overlapping mineral deposits in the Luise Caldera, which are collectively called the Ladolam Deposit. The principal component deposits are called Lienetz, Minifie, Coastal and Kapit. Gold mineralisation in the Luise Caldera is contained in a hydrothermally-altered porphyry gold system with the gold hosted in volcanic, intrusive and breccias within the caldera. Two major alteration episodes have been identified which have destroyed much of the original host rock lithologies, and due to this an “ore type” classification has been developed based largely upon various combinations of alteration, hardness, the degree of brecciation and/or leaching of matrix material, and the presence of late stage anhydrite veining. The majority of the gold is contained in sulphides.

The limits of the mineralisation have not been completely defined and the deposit remains are open at depth, along strike and to the east (currently limited by the Pacific Ocean).

Drill hole Information No exploration has been reported in this release, therefore there is no drill hole information to report. This section is not relevant to this report on Ore Reserves and Mineral Resources.

Comments relating to drill hole information relevant to the Mineral Resource estimate can be found in Section 1 – “Sampling techniques”, “Drilling techniques” and “Drill sample recovery”.

Data aggregation methods No exploration has been reported in this release, therefore there are no drill hole intercepts to report. This section is not relevant to this report on Ore Reserves and Mineral Resources.

Comments relating to data aggregation methods relevant to the Mineral Resource estimate can be found in Section 1 – “Sampling techniques”, “Drilling techniques” and “Drill sample recovery”.

Relationship between mineralisation widths and intercept lengths No exploration has been reported in this release, therefore there are no relationships between mineralisation widths and intercept lengths to report. This section is not relevant to this report on Ore Reserves and Mineral Resources.
Diagrams No exploration has been reported in this release; therefore no exploration diagrams have been produced. This section is not relevant to this report on Ore Reserves and Mineral Resources.
Balanced reporting No exploration has been reported in this release, therefore there are no results to report. This section is not relevant to this report on Ore Reserves and Mineral Resources.
Other substantive exploration data Previously reported drilling results have confirmed the extension of geological and grade continuity beyond the current Mineral Resource seaward constraint.
Further work A concept study of mining beyond the current seaward constraint of the Mineral Resource is required to assess the reasonable prospects for eventual economic extraction of identified mineralisation outside the current Mineral Resource seaward constraint.

Section 3: Estimation and Reporting of Mineral Resources

Criteria Commentary
Database integrity Data is stored in a SQL Server database known as acQuire. Assay and geological data are electronically loaded into acQuire and the database is replicated in Newcrest’s centralized database system. Regular reviews of data quality are conducted by site and corporate teams prior to resource estimation, in addition to external reviews.
Site visits The Competent Person for the Lihir Mineral Resource is part of the operational management team for Lihir Mine.
Geological interpretation Gold mineralisation in the Luise Caldera is hosted within volcanics, intrusives, and breccias which have undergone extensive alteration. Two major alteration episodes have been identified; an earlier and deeper “porphyry style” event resulting in potassic alteration grading laterally into propylitic alteration, and a later and higher level epithermal event producing argillic, advanced argillic, phyllic, and lower temperature potassic alteration. This intensive alteration has destroyed much of the original host rock lithologies, and due to this an “ore type” classification has been developed based essentially upon various combinations of alteration, hardness, the degree of brecciation and/or leaching of matrix material, and the presence of late stage anhydrite veining. The ore types are roughly sub-horizontal in occurrence and form a fairly consistent vertical sequence of clay-rich rock, grading into white mica-feldspar rock, then feldspar-biotite and, at depth, into feldspar-biotite-anhydrite rock. Within and at the boundaries of the ore types, geological structure is also a major influence on the localization of higher gold grades in the orebodies.
Dimension The maximum extent of the Mineral Resource is 3km x 1km x 350m. The deposit is generally sub-horizontal with the reporting of the Mineral Resource extent limited by a seaward constraint. An exploration target known as Kapit North East is a seaward extension outside the Mineral Resource.
Estimation and modelling techniques The Lihir resource estimate contains estimates for gold, arsenic, silver, copper, carbonate, molybdenum and sulphide sulphur. Gold is the primary economic metal with sulphur and carbonate estimates required for autoclave feed management. Estimates of minor elements are required to assist with overall plant performance management.

The estimation for each element was undertaken using the non-linear estimation method of Localised Uniform Conditioning (LUC) and is based on an underlying ‘diffusion’ model, where, in general, grade tends to trend from lower to higher values and vice versa in a relatively continuous way. Raw data was composited to 12m intervals for gold and all other elements. Uniform Conditioning (UC) was used to estimate gold and sulphide sulphur within 100x100x12m panels. The UC model was converted to a LUC model into 20m x 20m x 12m blocks that define the selective mining unit (SMU). Ordinary Kriging (OK) was used for the local estimation of density into the SMU blocks. All other elements (arsenic, silver, copper, carbonate, molybdenum and calcium) were estimated into the SMU. All elements are estimated independently of each other.

In 2017 the estimation domains were updated for geologically interpreted fault blocks as well as geometallurgical domains. These were assessed and validated using contact analysis. Nine estimation domains were used for gold (used also for sulphide sulphur, carbonate, silver, arsenic, copper and molybdenum). Top cutting of extreme values for each element was done on a domain basis by examining the histogram of data such that the top 1% samples were cut so that they contained approximately 10% or less of total metal (for example this ranged from 4 to 30 g/t for gold domains).

The resource estimate is validated via visual, geostatistical and production reconciliation methods.

The December 2017 model is the basis of the Lihir December 2020 Mineral Resource.

Moisture All tonnages are calculated and reported on a dry tonnes basis.
Cut-off parameters Lihir open pit employs a grade based cut-off, taking into account metallurgical recovery assumptions, transport costs, refining charges and royalty charges. The site operating costs include mining cost, processing cost, relevant site general and administration costs and relevant sustaining capital costs. These costs equate to a break even cut off value of US$40/t milled used to define the ultimate pit shell and a marginal cut off value of US$35/t milled or 1.0 g/t gold used to define ore and waste material within the ultimate pit shell.

The marginal site cost is based on an end of mine life low grade stockpile reclaim strategy, reducing the site activity and long term cost base. The mining cost in the marginal site cost represents the stockpile reclaim cost.

Mining factors or assumptions The Mineral Resource estimate is reported within a constraining notional pit shell. The Lihir deposit is extracted via a large Open Cut. Consequently, some aspects of the model construction reflect the proposed bulk mining method of open pit mining on 12 m benches with a 20m x 20m selective mining unit.
Metallurgical factors or assumptions Gold extraction is by pressure oxidation of ore from a combination of direct feed and flotation feed sources depending on sulphur levels. The target sulphur content in slurry to the autoclave is in the range 5-10% to ensure auto-thermal operation of the autoclave. Ore blending and flotation plant operation is undertaken in a manner to maintain feed sulphur content in this range. Metallurgical test work and operating experience at site has shown that there are four main rock /alteration domain groups identified as: Argillic Clay, Advanced Argillic, Epithermal and Porphyry.

Gold recoveries recognise float recovery differences between in-situ and stockpile material, and overall neutralisation cyanidation adsorption (NCA) recovery formulae reflect oxidation intensity.

Environmental factors or assumptions Lihir operations comprise an open pit mine, ore processing plant, and associated supporting infrastructure. Higher-grade ore is processed via pressure oxidation and carbon-in-leach cyanidation methods, with lower grade ore stockpiled for later processing. Lihir uses deep sea tailings placement (DSTP). In view of the heavy rainfall typically experienced on Niolam Island, the lack of suitable area for a tailings storage facility and the high seismicity of the region, DSTP was the preferred tailings placement method for Lihir. The plant tailings are premixed with sea water within the confines of the mining lease before being placed offshore. Baseline studies were undertaken prior to the approval by PNG environmental authorities and commencement of the DSTP. Regular monitoring is undertaken to verify the operational performance of the system and is subject to the regulatory criteria established by the PNG CEPA. Waste rock from the mine is either used for construction purposes or transported in barges for off-shore submarine disposal. Submarine disposal is carefully planned and controlled to achieve a continuous rill slope along the steeply dipping sea floor and to prevent uncontrolled slumping triggering a rise in water levels.

The Mineral Resource assumes the continued use of these waste management processes.

Bulk Density All bulk density measurements are carried out in accordance with site standard procedures for Specific Gravity. The physical determination of bulk density is undertaken on solid pieces of core, 10cm in length. Intervals for bulk density determination are selected according to lithology or alteration / mineralisation type (to best represent certain intervals as defined by the geologist). The measurements are performed on site (as part of the logging process), by geological assistants. Measurements are generally taken at 50m intervals down hole, or more frequently if required. This is a dry air method of analysis.

Ordinary Kriging (OK) was used for the local estimation of density into the nine geometallurgical domains.

Classification The in-situ Mineral Resource has been classified into Indicated and Inferred based on grade continuity assessments using the criteria of slope of regression (SOR) and the variogram weighted distance (WTD). For Indicated classification a guideline of SOR > 0.7 and WTD 0.65 and WTD
Audits or reviews The current Mineral Resource estimate has been externally reviewed by SRK in December 2017 and there were no issues or concerns with the Mineral Resource inputs, process and execution. SRK concluded that the Mineral Resource estimate was suitable for reporting in accordance with the requirements of the JORC Code (2012).
Discussion of relative accuracy/ confidence For an Indicated Resource it is considered reasonable for the relative uncertainty to be +/- 15% in tonnage, grade and metal (exclusive of each other, i.e., each variable has to satisfy the criteria) for an annual production volume at a 90% confidence level. Geostatistical evaluations indicate that based on the annual processing throughputs from the pits this criteria is satisfied globally within the deposit. Relative uncertainties and confidence level estimates are only considered for gold as it is the primary economic contributor.

Detailed monthly mine reconciliations have been maintained since production commenced. The mine reconciliations since 2012 confirm that the in-situ tonnage, grade and metal variances are well within the Indicated Resource relative uncertainty band, globally.

Section 4: Estimation and Reporting of Ore Reserves

Criteria Commentary
Mineral Resource Estimate for conversion to Ore Reserves A technical description of the Mineral Resource estimate that provided the basis for the December 2020 Lihir Ore Reserve estimate is presented in the preceding sections to this table.

The Ladolam gold deposit is located within the Louise Caldera, on the eastern side of Lihir Island, New Ireland Province, Papua New Guinea. Gold mineralisation in the Luise Caldera is hosted within volcanics, intrusives, and breccias that have undergone extensive alteration. The ore body is contained in a hydrothermally-altered porphyry gold system with the gold hosted in volcanic, intrusive and breccias within the caldera. The majority of the gold is contained in sulphides.

The Measured and Indicated Mineral Resources reported in the Mineral Resource report are inclusive of those Mineral Resources modified to produce the Ore Reserves Estimate herein.

Site Visits The Competent Person for the Ore Reserve estimate is an employee of Newcrest Mining Limited and at the time of Phase 14A Ore Reserve preparation was the Senior Specialist – Long Term Planning. The CP was based on site from 2015 to 2020 providing long term and strategic planning support for operations and technical studies. This experience has been used to validate technical and operating assumptions used in the preparation of this Ore Reserve estimate.
Study Status Production at Lihir commenced in 1996 and it is now a mature and stable operation with well-established mining and processing performance.
Cut-off Parameters Lihir open pit employs a grade based cut-off, taking into account gold price, metallurgical recovery assumptions and site operating costs. The site operating costs include transport and refining costs, royalty charges, mining and processing costs, relevant site general and administration costs and relevant sustaining capital costs. These costs equate to a break even cut off value of US$38/t milled used to define the ultimate pit shell and a marginal cut off value of US$33/t milled or 1.0 g/t gold used to define ore and waste material within the ultimate pit shell.

The marginal site cost is based on an end of mine life low grade stockpile reclaim strategy, reducing the site activity and long term cost base. The mining cost in the marginal site cost represents the stockpile reclaim cost.

Mining factors or assumptions Estimation of the Lihir Ore Reserve involved standard steps of pit optimisation, mine design, production scheduling and financial modelling. Factors and assumptions have been determined as part of a prefeasibility level study completed in 2020, or are based on operating experience and performance.

Current mining activity at Lihir is via conventional truck and shovel operation, with offshore barge disposal of waste rock and land based and in-pit stockpiling and reclaim of lower grade ore. The current mining activities demonstrate the appropriateness of this mining method as the basis of the Ore Reserve estimate.

Phase 14A design parameters are tabled below:

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Geotechnical slope parameters are based on the detailed analysis of ground conditions and other factors which influence geotechnical performance within the Phase 14A cutback. The Phase 14A slope design parameters are also based on the assumption that a comprehensive system of soil nails, cable anchors, mesh, shotcreting and depressurisation is used to provide additional support to the final wall configuration during cutback development, and that a backfill buttress is used to provide long term support after cutback completion. The design parameters are based on current geotechnical experience and a prefeasibility level study for the cutback mining area.

The Lihir Resource Model utilises LUC to estimate block gold content. This process allows for ore dilution and recovery to be built into the resource model based on the assumption of the selective mining unit (SMU) as the block size. The SMU assumption (20m x 20m x 12m) is based on the mining fleet size and is consistent with a high mill throughput/bulk mining strategy. Due to the LUC approach adopted in the resource model no additional mining dilution or recovery factors have been applied to the Ore Reserve estimate. This assumption is supported by the actual reconciliation between resource model and mill performance at Lihir project to date being within an acceptable uncertainty range for the style of mineralisation under consideration.

The pit optimisation takes into account Inferred Mineral Resource, however only Measured and Indicated Resource is reported in the Ore Reserve estimate. The Inferred Resource represents a small portion of material within the ultimate pit design and both the design and financial model are insensitive to the exclusion of this material.

The selected mining method requires civil engineered wall support as described above to allow access to the Phase 14A orebody. The cutback design also requires mining by a fleet of small equipment owing to the narrow ramp configuration required. Allowances for these activities are included in the preparation of the Ore Reserve estimate.
A backfill buttress required for long term support of the final cutback wall prevents mining of some existing Reserves inventory.

Metallurgical factors or assumptions The Ore Reserve estimate is based on a maximum 15.5Mtpa comminution rate plant producing gold doré. Ore processing at Lihir involves the main operations of crushing, grinding, flotation, pressure oxidation, leaching and electrowinning to recover gold from relatively high-grade sulphide feed. The Lihir process plant utilises proven technology that is widely used in the gold industry for this style of mineralisation.

The ore processing facility has been operating since it was commissioned in 1996 and upgrades took place during 2011/2012. Comminution circuit operating optimisations and minor upgrades are planned to achieve a 15.5Mtpa plant capacity.

The metallurgical recovery assumption for ore feed to the autoclave is dependent on the gold and sulphide sulphur grades, and dependent on sulphur to calcium ratio and proportion of aged stockpile feed for flotation material. Overall metallurgical recovery is reconciled with historic production data, laboratory test samples for stockpiled ore and reflects a partial oxidation metallurgical operating strategy. Average life of mine gold recovery is modelled to be
81-82%.

The potential impact of the presence of low concentrations of copper on leaching efficiency and cyanide consumption has been assessed and is not considered an issue for the Ore Reserve estimate. Copper levels are generally below 500ppm, and historical performance indicates that levels below 1000ppm show no material impact.

Environmental Lihir open pit is an operating mine and has been granted an environmental permit for the mining of the Phase 14A cutback.
Infrastructure The Lihir operation is an operating mine and has the necessary infrastructure in place for its continued operation.
Costs Capital and operating costs have been determined as part of the prefeasibility study based on estimated operating costs for a drilling, shotcreting and cable bolt installation program. Reserve cost estimates are considered to be pre-feasibility level. Provision has also been made for capital expenditure required for a fleet of smaller mining equipment suited to the cutback access configuration. Life of cutback non-sustaining capital is estimated in the range of US$60-70 million.

No cost impact is expected from deleterious elements. It has therefore not been necessary to include additional costs relating to minor elements when preparing the Ore Reserve estimate.

Transport and refining charges have been developed from first principles consistent with the application and input assumptions for these costs used by the current operation. Refining charges and transport costs are estimated to average US$2.24/oz of gold.

A royalty of 2.0% of gold revenue (net of refining and transport costs) is divided between federal, provincial governments and local level governments and landowners. A mining levy of 0.5% (net of refining and transport costs) is also applied in the preparation of this reserve estimate.

Revenue factors Long term metal prices and exchange rate assumptions adopted in the December 2020 Reserve estimation process are US$1,300/oz for gold at a AUD:USD exchange rate of 0.75. These assumptions are consistent with Newcrest metal price guideline for December 2020 Ore Reserve period.
Market assessment Newcrest is a price taker and gold is sold on the open market and subject to price fluctuations. Supply and demand for gold from Lihir is not a constraint in the estimation of the Ore Reserve.
Economic The Ore Reserve has been evaluated through a financial model. All operating and capital costs as well as revenue factors stated in this document were included in the financial model. This process demonstrated the Lihir Ore Reserve to have a positive NPV.

Sensitivities have been conducted on the key input parameters of costs and recovery which confirm the estimate to be robust. The NPV range has not been provided as Newcrest considers this to be commercially sensitive information.

Social Engagement with landowners for affected blocks within the cutback footprint and the local community was undertaken through a series of meetings in conjunction with the Mineral Resources Authority (MRA). Approval for the project has been endorsed by block executives as documented in the engagement meeting minutes.

Environmental permitting for the Phase 14A Project has been assessed and approved by CEPA.

Other Lihir Gold Limited and the Lihir Open Pit are in material compliance with all legal and regulatory requirements.

Naturally occurring risks that might have a material impact upon the Lihir ore reserve are discussed in the risks section of Newcrest’s Operating and Financial Review (in the Appendix 4E and Financial Report for the year ended 30 June 2021 which is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile) and include the potential impacts of seismic activity.

Classification All of the in-situ Ore Reserve is currently derived from Indicated Resources. This classification is based on the density of drilling, the ore body experience and the mining method employed. The only Proved Ore Reserves derived from Measured Resources are those reported in known and quantified stockpiles.

It is the Competent Person’s view that the classifications used for the Ore Reserves are appropriate.

Audits or reviews Golder Associates Pty Ltd (Golder) was commissioned in 2020 to conduct an independent review of the Ore Reserve estimation processes and results that did not include Phase 14A.

Golder concluded that the Ore Reserve had been prepared using accepted industry practice and is considered suitable and reported in accordance with the JORC Code, 2012 Edition.

A competent independent review of the Phase 14A Ore Reserve estimate has been undertaken by Newcrest group planning with no non-compliances or material issues.

Discussion of relative accuracy/ confidence The accuracy of the estimates within this Ore Reserve is mostly determined by the order of accuracy associated with the geotechnical slope parameters, the Mineral Resource model and the cost factors used.

The Competent Person views the Lihir Ore Reserve a reasonable assessment of the global estimate.

Forward Looking Statements

This document includes forward looking statements and forward looking information within the meaning of securities laws of applicable jurisdictions. Forward looking statements can generally be identified by the use of words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, “continue”, “objectives”, “targets”, “outlook” and “guidance”, or other similar words and may include, without limitation, statements regarding estimated reserves and resources, certain plans, strategies, aspirations and objectives of management, anticipated production, study or construction dates, expected costs, cash flow or production outputs and anticipated productive lives of projects and mines. Newcrest continues to distinguish between outlook and guidance. Guidance statements relate to the current financial year. Outlook statements relate to years subsequent to the current financial year.

These forward looking statements involve known and unknown risks, uncertainties and other factors that may cause Newcrest’s actual results, performance and achievements or industry results to differ materially from any future results, performance or achievements, or industry results, expressed or implied by these forward-looking statements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which Newcrest operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation. For further information as to the risks which may impact on Newcrest’s results and performance, please see the risk factors included in the Operating and Financial Review in the Appendix 4E and Financial Report for the year ended 30 June 2021 which is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile.

Forward looking statements are based on Newcrest’s good faith assumptions as to the financial, market, regulatory and other relevant environments that will exist and affect Newcrest’s business and operations in the future. Newcrest does not give any assurance that the assumptions will prove to be correct. There may be other factors that could cause actual results or events not to be as anticipated, and many events are beyond the reasonable control of Newcrest. Readers are cautioned not to place undue reliance on forward looking statements, particularly in the current economic climate with the significant volatility, uncertainty and disruption caused by the COVID-19 pandemic. Forward looking statements in this document speak only at the date of issue. Except as required by applicable laws or regulations, Newcrest does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in assumptions on which any such statement is based.

Non-IFRS Information

Newcrest’s results are reported under International Financial Reporting Standards (IFRS). This document includes non-IFRS financial information within the meaning of ASIC Regulatory Guide 230: ‘Disclosing non-IFRS financial information’ published by ASIC and within the meaning of Canadian Securities Administrators Staff Notice 52-306 – Non-GAAP Financial Measures. Such information includes: ‘Free Cash Flow’ (calculated as cash flow from operating activities less cash flow related to investing activities and ‘AISC’ (All-In Sustaining Cost) as per updated World Gold Council Guidance Note on Non-GAAP Metrics released November 2018. AISC will vary from period to period as a result of various factors including production performance, timing of sales and the level of sustaining capital and the relative contribution of each asset. These measures are used internally by Newcrest management to assess the performance of the business and make decisions on the allocation of resources and are included in this document to provide greater understanding of the underlying performance of Newcrest’s operations. The non-IFRS information has not been subject to audit or review by Newcrest’s external auditor and should be used in addition to IFRS information. Such non-IFRS financial information/non-GAAP financial measures do not have a standardised meaning prescribed by IFRS and may be calculated differently by other companies. Although Newcrest believes these non-IFRS/non-GAAP financial measures provide useful information to investors in measuring the financial performance and condition of its business, investors are cautioned not to place undue reliance on any non-IFRS financial information/non-GAAP financial measures included in this document. When reviewing business performance, this non-IFRS information should be used in addition to, and not as a replacement of, measures prepared in accordance with IFRS, available on Newcrest’s website, the ASX platform and SEDAR.

Ore Reserves and Mineral Resources Reporting Requirements

As an Australian Company with securities listed on the Australian Securities Exchange (ASX), Newcrest is subject to Australian disclosure requirements and standards, including the requirements of the Corporations Act 2001 and the ASX. Investors should note that it is a requirement of the ASX listing rules that the reporting of ore reserves and mineral resources in Australia is in accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and that Newcrest’s ore reserve and mineral resource estimates comply with the JORC Code.

Newcrest is also subject to certain Canadian disclosure requirements and standards, as a result of its secondary listing on the Toronto Stock Exchange (TSX), including the requirements of National Instrument 43-101 (NI 43-101). Investors should note that it is a requirement of Canadian securities law that the reporting of Mineral Reserves and Mineral Resources in Canada and the disclosure of scientific and technical information concerning a mineral project on a property material to Newcrest comply with NI 43-101. Newcrest’s material properties are currently Cadia, Lihir, Red Chris and Wafi-Golpu. Copies of the NI 43-101 Reports for Cadia, Lihir and Wafi-Golpu, which were released on 14 October 2020, are available at www.newcrest.com and on Newcrest’s SEDAR profile. The Red Chris NI 43-101 report is expected to be submitted within 45 days of the date of this market release.

Competent Person’s Statement

The information in this document that relates to Lihir Ore Reserves is based on and fairly represents information compiled by
Mr David Grigg. Mr David Grigg is the Senior Specialist Long Term Planning and a full-time employee of Newcrest Mining Limited. He is a shareholder in Newcrest Mining Limited and is entitled to participate in Newcrest’s executive equity long term incentive plan, details of which are included in Newcrest’s 2021 Remuneration Report. He is a Member of the Australasian Institute of Mining and Metallurgy. Mr David Grigg has sufficient experience which is relevant to the styles of mineralisation and types of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the JORC Code. Mr David Grigg consents to the inclusion of material of the matters based on his information in the form and context in which it appears.

The information in this document that relates to Lihir Mineral Resources is based on and fairly represents information compiled by Mr Benjamin Likia. Mr Likia is the Manager – Mining and a full-time employee of Newcrest Mining Limited. He is entitled to participate in Newcrest’s executive equity long term incentive plan, details of which are included in Newcrest’s 2021 Remuneration Report. He is a Member of the Australian Institute of Mining and Metallurgy. Mr Likia has sufficient experience which is relevant to the styles of mineralisation and types of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the JORC Code. Mr Likia consents to the inclusion of material of the matters based on his information in the form and context in which it appears.

Technical and Scientific Information

The technical and scientific information contained in this document relating to Lihir (including the Mineral Resource and Ore Reserve) was reviewed and approved by Craig Jones, Newcrest’s Chief Operating Officer Papua New Guinea, FAusIMM and a Qualified Person as defined in NI 43-101.

Authorised by a Newcrest Board Committee

For further information please contact

Investor Enquiries
Tom Dixon
+61 3 9522 5570
+61 450 541 389
Tom.Dixon@newcrest.com.au

Ben Lovick
+61 3 9522 5334
+61 407 269 478
Ben.Lovick@newcrest.com.au

North American Investor Enquiries
Ryan Skaleskog
+1 866 396 0242
+61 403 435 222
Ryan.Skaleskog@newcrest.com.au

Media Enquiries
Tom Dixon
+61 3 9522 5570
+61 450 541 389
Tom.Dixon@newcrest.com.au

This information is available on our website at www.newcrest.com

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Consistent strategic focus on maximising cashflow from long life, low cost, high margin assets All four organic growth options have PFS’s estimated to deliver an IRR of 16% or higher1 Projected 50% reduction in Group All-In Sustaining Cost per ounce over the next decade2,4 Material growth in copper production, sourced exclusively from Tier 1 jurisdictions2,4 Lihir projected to become a 1Mozpa+ gold producer for at …

  • Consistent strategic focus on maximising cashflow from long life, low cost, high margin assets
  • All four organic growth options have PFS’s estimated to deliver an IRR of 16% or higher1
  • Projected 50% reduction in Group All-In Sustaining Cost per ounce over the next decade2,4
  • Material growth (+37%) in copper production, sourced exclusively from Tier 1 jurisdictions2,4
  • Lihir projected to become a 1Mozpa+ gold producer for at least 10 years from FY242,3
  • Projected multi-decade asset lives at Cadia, Lihir and Red Chris
  • Newcrest intends to fund all four projects through operating cash flow and existing liquidity

Newcrest Mining Limited (ASX: NCM) (TSX: NCM) (PNGX: NCM) is pleased to announce that the Newcrest Board has approved the progression of all the Pre-Feasibility Studies (PFS) referred to in the releases listed below to the Feasibility Stage:

  • “Red Chris Block Cave Pre-Feasibility Study confirms Tier 1 potential”, release of 12 October 2021
  • “Havieron PFS Stage 1 delivers solid returns and base case for future growth”, release of 12 October 2021
  • “Lihir PFS supports gold production growth to 1Mozpa+ from FY24”, release of 12 October 2021

In addition, on 19 August 2021 the Company released “Cadia PC1-2 Pre-Feasibility Study delivers attractive returns”

Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas, said, “Newcrest is in an enviable position with four exciting PFS-stage organic growth projects. The projections generated by the PFS studies for these projects indicate compelling rates of return and a material improvement in operating margin and cash flow. These projects target a 37% increase in copper output and a reduction in our already low All-In Sustaining Cost per ounce by more than 50% over the next decade, with the majority of new investment in Tier 1 jurisdictions.”

“The progression of these studies is consistent with our long term strategy of pursuing profitable growth in a safe and sustainable manner from a portfolio of long-life, high-quality assets optimised through innovation and creativity. Our ability to identify and maximise value from these organic growth options is supported by our best-in-class technical expertise, especially in deep underground mining where we have a strong track record.”

“The projected growth profile of our copper production is particularly exciting and would allow us not just to advance our own sustainability objectives, but to participate in the potential opportunities presented by a global shift to decarbonisation. While Newcrest is primarily a gold company, we will continue to have a substantial and increasing exposure to copper, a commodity we believe has a compelling growth outlook.”

“Beyond the base case projections generated by the PFS studies released today, we continue to evaluate and progress opportunities to extract the full potential of these growth projects. An example of this is East Ridge at Red Chris, which is not included in the current Red Chris PFS but could be incorporated into later studies. At Havieron, the PFS is based on Ore Reserves of 14Mt and does not consider 37Mt of Inferred Mineral Resource, so there is considerable upside potential for a larger scale operation of more than 3 million tonnes per annum from further exploration success, and the ongoing assessment of higher throughput rate options. We will also progress other organic projects in the portfolio, such as the potential for further open pit and underground opportunities at Telfer to extend its life and supplement production from Havieron in FY24 and beyond, the development of Wafi-Golpu and potentially Namosi. All of these options, and further exploration success elsewhere, represent upside potential to the base case outlook presented today.”

“We intend to fund and deliver each project through internal cash flow and prudent use of our strong balance sheet, and our dividend policy remains unchanged, said Mr Biswas.”

Newcrest’s pathway to 2030 – significant improvement in unit costs, sustained gold output and growing copper production in Tier 1 jurisdictions

The findings of the Red Chris, Havieron, Lihir Phase 14A and Cadia PC1-2 studies, combined with the base case projected performance of Newcrest’s existing operations, create a pathway for future production from Newcrest’s four operating assets. The key findings of the four PFS-stage studies in the context of Newcrest’s existing operations are as follows:

  • Significant reduction in Newcrest’s AISC per ounce
    • AISC anticipated to decline by more than 50%, reaching less than $500/oz in FY302,4,5,8
    • Low cost Cadia ounces joined by low cost ounces from Red Chris, Havieron and Lihir
    • AISC profile assisted by the expected material increase in copper by-product credits
  • Strong gold production of approximately 2Moz per annum until at least FY302,4,8

  • Outstanding copper production growth
    • Projected to reach >175ktpa in FY30(which is an increase of 37% on FY21)2,4,8
    • 100% of copper growth to be generated from Tier 1 jurisdictions (Australia and Canada)
    • Further upside potential from future development of Golpu and Namosi (not included above)
  • Initial Ore Reserve estimates for:
    • Havieron: 14Mt @ 3.7 g/t Au and 0.54% Cu for 1.6Moz Au and 73kt Cu6
    • Red Chris: 480Mt @ 0.52g/t Au and 0.45% Cu for 8.1Moz Au and 2.2Mt Cu7
  • Attractive economics and value accretion projected across all projects, with total estimated Net Present Value (NPV) of $3.2bn2,8,9, assuming a gold price of US$1,500/oz, copper price of US$3.30/lb, an AUD:USD exchange rate of 0.75 and a CAD:USD exchange rate of 0.80, as follows2,8:
Measure (NCM Share) Unit Red Chris
BC
10,11
Havieron12,13 Cadia
PC1-214,15,16
Lihir
Ph14A
17,18
Total
NPV9,19 $m 1,278 160 1,486 284 3,208
Internal Rate of Return (IRR) % (real) 17 16 22 37

  • These financial outcomes improve when viewed at prevailing metal prices and exchange rates, with the table below showing the outcomes assuming a gold price of US$1,750/oz, copper price of US$4.15/lb, an AUD:USD exchange rate of 0.73 and a CAD:USD exchange rate of 0.80, as follows2,8:
Measure (NCM Share) Unit Red Chris
BC
10,11
Havieron12,13 Cadia
PC1-214,15,16
Lihir
Ph14A
17,18
Total
NPV9,19 $m 2,013 349 2,339 365 5,058
IRR % (real) 22 26 28 47

These PFS findings are the result of significant technical assessments to date. Each study will be progressed to the Feasibility Stage, where a number of opportunities to further enhance the financial and operational aspects of the projects will be assessed.

Newcrest is also pursuing a number of additional growth options over and above the growth options included in the above-described PFS-stage studies, including:

  • potential upside at Red Chris with early mining of high-grade pods and the East Ridge discovery along strike;
  • the Havieron deposit is still open in multiple directions with strong potential to increase the scale and life of the project as well as presenting the opportunity to adopt alternative, lower cost, mining methods; and
  • a number of Open Pit and Underground extensions at Telfer are now being assessed with a view to add gold production in FY24 and FY25

Indicative AISC/oz profile sees Newcrest moving even further down the cost curve2,4,5,8,9,20

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Indicative base case gold production profile to 20302,4,8,9

The indicative base case gold production is generated from the PFS-stage outcomes released today (and the Cadia PC1-2 outcomes released on 19 August 2021) and does not include the potential upside from further optimisation and extensions through other organic growth options (as summarised on page 2 and page 5), in particular the potential Telfer Open Pit and Underground extensions which have the potential to increase production in FY24 and beyond.

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The indicative base case gold and copper production provided in this market release does not constitute guidance. The indicative production profiles are based on the outcomes of PFS level studies and projections in relation to existing operations. The actual production will be subject to market and operating conditions and all necessary permits and approvals; and medium term mine plans are reviewed, optimised and updated on at least an annual basis. Newcrest will continue to provide annual guidance for the financial year ahead and update it during the financial year as necessary.

Indicative base case copper production from exclusively Tier 1 jurisdictions2,4,8,9

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Estimated project capex profile of the four PFS projects and Cadia Expansion Project (CXP) ($m)2,8,9,11,13,15,18,21,22

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$m FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 Total
Cadia CXP 356 83 33 37 19 528
Cadia PC1-2 69 123 161 261 151 139 38 2 944
Red Chris Block Cave23 86 225 234 289 189 85 22 1,130
Havieron 65 155 57 277
Lihir Ph14A 101 78 179
Total 677 664 485 587 359 224 60 2 3,058

Guidance Update

The total of the Early Works and Feasibility Study expenditures approved by the Board and announced today in respect of the three PFSs results in a change in Lihir and Group Guidance for FY22 as follows26:

Lihir Group
Original Phase 14A Updated Original Phase 14A Updated
AISC – Includes production stripping (sustaining) and sustaining capital
AISC – $m 950 – 1,040 120 1,070 – 1,160 1,720 – 1,920 120 1,840 – 2,040
Capital Expenditure ($m)
– Production stripping (sustaining) 105 – 115 35 140 – 150 130 – 140 35 165 – 175
– Production stripping (non-sustaining) 50 – 70 50 – 70
– Sustaining capital 100 – 120 50 150 – 170 390 – 440 50 440 – 490
– Major projects (non-sustaining) 105 – 135 105 – 135 890 – 990 890 – 990
Total Capital
Expenditure
310 – 370 85 395 – 455 1,460 – 1,640 85 1,545 – 1,725

Ongoing projects with potential for further upside24

Each of these exciting growth projects exceeds Newcrest’s required investment return hurdle rates. Importantly, they are based only on Ore Reserves representing a discrete component of the potential total Mineral Resource endowment at each respective project.

As these studies progress to the Feasibility Stage, Newcrest has identified a number of optimisation opportunities within the project areas and across the broader business that will continue to be progressed to unlock further value.

A summary of these opportunities at Red Chris, Havieron and Telfer is as follows:

Red Chris:

  • The PFS is considered by Newcrest to represent a “Stage 1” case for Red Chris’ long term future, being based solely on the initial Mineral Resource as currently defined
  • Upside exists from further exploration success and definition of the deposit, including East Ridge, with the mineralisation open in both directions as shown below25:

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  • An area of current focus is the potential acceleration of mining of the high grade pods at Red Chris, which is subject to a separate study
  • Further analysis of the inclusion of next generation mining systems, including Single Pass Cave Establishment, and the use of electric power to offset diesel in the mining process will be undertaken

Havieron:

  • The PFS is considered to represent a conservative interim, or “Stage 1”, case as:
    • The Havieron PFS currently considers only the Indicated Mineral Resource, which is a small portion of the existing resource inventory and excludes Inferred Mineral Resources. Ongoing infill drilling as well as further study work is expected to increase this
    • With continued exploration success the project could increase in scope and scale from 2Mtpa. An enhanced development option for Havieron considers increasing mining and milling rates to 3Mtpa or higher compared to the 2Mtpa assumption upon which the PFS has been based
    • Further resource growth might also support the use of alternative mining methods which may lower operating costs
  • Some of the upside potential of Havieron is illustrated by the diagram below that shows the current initial Mineral Resource on which the PFS is based relative to the total mineralisation and target exploration areas. This does not include some of the potential associated with Breccia zones and other, new zones recently intercepted.

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Telfer:

  • Other than a very small amount in FY24, from FY24 onwards the production profiles in this release and the Havieron PFS release show Havieron feed only and do not include ongoing ore feed from Telfer. There is potential for other ore sources at or near Telfer to supplement the Havieron ore feed in FY24 and beyond.
  • Newcrest remains focused on extending the Telfer mines’ current life beyond FY24. Building on the recent commencement of the West Dome Stage 5 cutback, further Open Pit extensional opportunities are being assessed.
  • In addition, a number of near mine extensional underground targets are being drilled. There is also work underway to test whether there is a potential caving opportunity for a lower grade stockwork area between the existing sublevel cave and the Western Flanks mine area. Specific areas of interest include:
    • an extension of West Dome Stage 5 towards the east and at depth
    • other potential incremental cutbacks in the West Dome pit
    • diamond drilling to extend existing mine areas around the M-Reefs and A-Reefs
    • drilling the area around the recently identified Lower Limey Unit South East mineralisation to further extend the resource and reserve
    • assessment of a stockwork target area known as “Kylo” for potential cave mining
    • drilling of the Vertical Stockwork Corridor below the current sub-level caving operation to determine amenability to bulk underground mining methodologies
  • Newcrest has exploration farm-ins and joint ventures with parties who have prospective tenements proximate to Telfer, namely the Wilki Project (with Antipa Minerals) and the Juri Juri JV (with Greatland Gold), in respect of which an exploration programme is in progress.

Financial capability

Newcrest’s financial objectives are to meet all of its financial obligations, maintain a strong balance sheet to withstand cash flow volatility, be able to invest capital in value-creating opportunities and to provide returns to shareholders.

Newcrest is in an excellent position to progress execution of these projects, if and when approved to execution following completion of the Feasibility Stage, given its strong balance sheet and access to liquidity.

At 30 June 2021, Newcrest was in a $176m net cash position, comprising $1,873m of cash holdings, less $1,635m of capital market debt and lease liabilities of $62m. Newcrest’s next scheduled capital market debt repayment, of $650m, is not due until FY30. Newcrest has committed unsecured bilateral bank lending facilities with 13 bank lenders for a total of US$2bn which were undrawn on 30 June 2021. Newcrest targets maintaining an investment grade credit rating and is currently rated investment grade by S&P (BBB/Stable) and Moody’s (Baa2 stable).

Subject to market and operating conditions, Newcrest expects its projected total operating cash flow over the period FY22-30 to exceed its projected total investing cash flows (including the Major Project capital expenditures associated with the PFS’s) over the same period. If required, Newcrest will draw on its cash balances and/or bank facilities as necessary. Current projections suggest that this draw down of cash and/or bank balances will be limited in both amount and duration.

Finally, Newcrest reiterates that its dividend policy remains unchanged, targeting a dividend payment in respect of each financial year of at least 30-60% of that year’s free cashflow, with a minimum dividend of US 15 cents per share. This provides shareholders with a dividend return while maintaining reinvestment options and balance sheet strength.

Key milestones and estimated timing26

An indicative summary of key expected milestones within each project is summarised as follows:

Red Chris Block Cave – Key Project Milestones Date
Gating Feasibility Study to Execution 2H FY23
First Ore 2H FY26
First Production of Gold/Copper FY27

Havieron – Key Project Milestones Date
Gate Feasibility Study to Execution Q2 FY23
First Ore 1H FY24
First Production of Gold/Copper 2H FY24
Lihir Ph 14A – Key Project Milestones Date
Early Works commence Dec 2021
Feasibility Study completed Q4 FY22
First Ore Q4 FY22

APPENDIX:

Key findings from each PFS (in 100% terms)2,8,9

The following table should be read in conjunction with the specific releases relating to each of the underlying PFS’s, namely:

  • “Red Chris Block Cave Pre-Feasibility Study confirms Tier 1 potential”, dated 12 October 2021
  • “Havieron PFS Stage 1 delivers solid returns and base for future growth”, dated 12 October 2021
  • “Lihir PFS supports gold production growth to 1Mozpa+ from FY24”, dated 12 October 2021
  • “Cadia PC1-2 Pre-Feasibility Study delivers attractive returns”, dated 19 August 2021
Area Measure Unit Red Chris
BC
PFS
10,11
Havieron
PFS12,13
Cadia
PC1-2 PFS14,15,16
Lihir
Ph14A
PFS
17,18
Production Ore milled / milling rate (max) Mtpa 13.6 2.1 24.6 15.5
Life of Mine / Project Years 31 9 17 527
Ore mined Mt 406 14 258 20.5
Average gold grade g/t 0.56 3.72 0.50 2.4
Average copper grade % 0.46 0.54 0.28
Gold produced Moz 4.9 1.4 3.5 1.0
Copper produced Mt 1.5 0.1 0.7
Average annual gold production koz 158 160 205 8028
Average annual copper production kt 48.5 6.9 39
Capital Project capital $m (real) 2,10629 39730,31 942 179
Financials NPV19 $m (real) 1,826 228 1,486 284
IRR % (real) 17 16 22 37
Payback period32 Years 3.2 4.0 4.4 2.6

Having completed the PFS, Newcrest is now entitled to a 70% interest in the Havieron joint venture (increased from its previous entitlement of 60%). The Havieron PFS has been prepared on the basis that Havieron is the sole ore feed for the Telfer plant and does not assume any potential upside from extension of Telfer’s mine life.

Forward Looking Statements

This document includes forward looking statements and forward looking information within the meaning of securities laws of applicable jurisdictions. Forward looking statements can generally be identified by the use of words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, “continue”, “objectives”, “targets”, “outlook” and “guidance”, or other similar words and may include, without limitation, statements regarding estimated reserves and resources, certain plans, strategies, aspirations and objectives of management, anticipated production, study or construction dates, expected costs, cash flow or production outputs and anticipated productive lives of projects and mines. Newcrest continues to distinguish between outlook and guidance. Guidance statements relate to the current financial year. Outlook statements relate to years subsequent to the current financial year.

These forward looking statements involve known and unknown risks, uncertainties and other factors that may cause Newcrest’s actual results, performance and achievements or industry results to differ materially from any future results, performance or achievements, or industry results, expressed or implied by these forward-looking statements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which Newcrest operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation. For further information as to the risks which may impact on Newcrest’s results and performance, please see the risk factors included in the Operating and Financial Review included in the Appendix 4E and Financial Report for the year ended 30 June 2021 which is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile.

Forward looking statements are based on Newcrest’s good faith assumptions as to the financial, market, regulatory and other relevant environments that will exist and affect Newcrest’s business and operations in the future. Newcrest does not give any assurance that the assumptions will prove to be correct. There may be other factors that could cause actual results or events not to be as anticipated, and many events are beyond the reasonable control of Newcrest. Readers are cautioned not to place undue reliance on forward looking statements, particularly in the current economic climate with the significant volatility, uncertainty and disruption caused by the COVID-19 pandemic. Forward looking statements in this document speak only at the date of issue. Except as required by applicable laws or regulations, Newcrest does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in assumptions on which any such statement is based.

Non-IFRS Information

Newcrest’s results are reported under International Financial Reporting Standards (IFRS). This document includes certain non-IFRS financial information within the meaning of ASIC Regulatory Guide 230: ‘Disclosing non-IFRS financial information’ published by ASIC and within the meaning of Canadian Securities Administrators Staff Notice 52-306 – Non-GAAP Financial Measures. Such information includes: ‘Free Cash Flow’ (calculated as cash flow from operating activities less cash flow related to investing activities and ‘AISC’ (All-In Sustaining Cost) as per the updated World Gold Council Guidance Note on Non-GAAP Metrics released November 2018. AISC will vary from period to period as a result of various factors including production performance, timing of sales and the level of sustaining capital and the relative contribution of each asset. These measures are used internally by Newcrest management to assess the performance of the business and make decisions on the allocation of resources and are included in this document to provide greater understanding of the underlying performance of Newcrest’s operations. The non-IFRS information has not been subject to audit or review by Newcrest’s external auditor and should be used in addition to IFRS information. Such non-IFRS financial information/non-GAAP financial measures do not have a standardised meaning prescribed by IFRS and may be calculated differently by other companies. Although Newcrest believes these non-IFRS/non-GAAP financial measures provide useful information to investors in measuring the financial performance and condition of its business, investors are cautioned not to place undue reliance on any non-IFRS financial information/non-GAAP financial measures included in this document. When reviewing business performance, this non-IFRS information should be used in addition to, and not as a replacement of, measures prepared in accordance with IFRS, available on Newcrest’s website, the ASX platform and SEDAR.

Ore Reserves and Mineral Resources Reporting Requirements

As an Australian Company with securities listed on the Australian Securities Exchange (ASX), Newcrest is subject to Australian disclosure requirements and standards, including the requirements of the Corporations Act 2001 and the ASX. Investors should note that it is a requirement of the ASX listing rules that the reporting of ore reserves and mineral resources in Australia is in accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and that Newcrest’s ore reserve and mineral resource estimates comply with the JORC Code.

Newcrest is also subject to certain Canadian disclosure requirements and standards, as a result of its secondary listing on the Toronto Stock Exchange (TSX), including the requirements of National Instrument 43-101 (NI 43-101). Investors should note that it is a requirement of Canadian securities law that the reporting of Mineral Reserves and Mineral Resources in Canada and the disclosure of scientific and technical information concerning a mineral project on a property material to Newcrest comply with
NI 43-101.

Newcrest’s material properties are currently Cadia, Lihir, Red Chris and Wafi-Golpu. Copies of the NI 43-101 Reports for Cadia, Lihir and Wafi-Golpu, which were released on 14 October 2020, are available at www.newcrest.com.au and on Newcrest’s SEDAR profile. The Red Chris NI 43-101 report is expected to be submitted within 45 days of the date of this market release.

Competent Person’s Statement

The information in this document that relates to Telfer and Cadia (other than for Cadia East) Ore Reserves has been extracted from the release titled “Annual Mineral Resources and Ore Reserves Statement – as at 31 December 2020” dated 11 February 2021 (the original MR & OR release) and has been prepared in accordance with the requirements of Appendix 5A of the ASX Listing Rules by Competent Persons.

The information in this document that relates to Havieron Ore Reserves has been extracted from the release titled “Havieron PFS Stage 1 delivers solid returns and base for future growth”, dated 12 October 2021 (the original Havieron release) and has been prepared in accordance with the requirements of Appendix 5A of the ASX Listing Rules by Competent Persons.

The information in this document that relates to Red Chris Ore Reserves has been extracted from the release titled “Red Chris Block Cave Pre-Feasibility Study confirms Tier 1 potential” dated 12 October 2021 (the original Red Chris release) and has been prepared in accordance with the requirements of Appendix 5A of the ASX Listing Rules by Competent Persons.

The information in this document that relates to Ore Reserves at Cadia East has been extracted from the release titled “Cadia PC1-2 Pre-Feasibility Study delivers attractive returns” dated 19 August 2021 (the original Cadia East release), which has been prepared in accordance with the requirements of Appendix 5A of the ASX Listing Rules by Competent Persons.

The information in this document that relates to Ore Reserves at Lihir has been extracted from the release titled “Lihir PFS supports gold production growth to 1Mozpa+ from FY24” dated 12 October 2021 (the original Lihir release), which has been prepared in accordance with the requirements of Appendix 5A of the ASX Listing Rules by Competent Persons.

The original MR&OR release, the original Havieron release, the original Red Chris release, the original Cadia East release and the original Lihir release (together, the original releases) are available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile. Newcrest confirms that it is not aware of any new information or data that materially affects the information included in the original releases referred to above and that all material assumptions and technical parameters underpinning the estimates in the original releases continue to apply and have not materially changed. Newcrest confirms that the form and context in which the competent person’s findings are presented have not been materially modified from the original releases.

Technical and Scientific Information

The technical and scientific information contained in this document relating to Lihir was reviewed and approved by Craig Jones, Newcrest’s Chief Operating Officer Papua New Guinea, FAusIMM and a Qualified Person as defined in NI 43-101.

The technical and scientific information contained in this document relating to Cadia and Red Chris was reviewed and approved by Philip Stephenson, Newcrest’s Chief Operating Officer Australia and Americas, FAusIMM and a Qualified Person as defined in NI 43-101.

Reliance on Third-Party Information

The estimates contained in this document that relate to production and AISC for Fruta del Norte have been derived from sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This document should not be relied upon as a recommendation or forecast by Newcrest.

Authorised by a Newcrest Board Committee

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Endnotes

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Gold isn't all that glitters in the land down under — silver in Australia is a major industry, and the country is home to both large and small players.

When it comes to precious metals, Australia has long punched above its weight — the nation was born riding the wave of a gold rush.

Gold isn't all that glitters through — Australia is also a major global producer of silver. It's among the 10 top producers, and was ranked seventh in 2020, with 1,300 tonnes coming from the many operational mines in the country. By comparison, the world's top producer, Mexico, produced 6,300 tonnes that same year.

Other key players in the silver market are Peru, China and Russia, which produce more silver than Australia, and the US, Argentina and Bolivia, which produce less.


Australia is sitting on quite a lot of the precious metal, with the world's second largest reserves, behind only Peru.

According to Geoscience Australia, one of the country's first mines was a silver-lead mine near Adelaide. Since then, the entire continent has been combed over with a fine-toothed comb, with deposits identified in every state and territory and active mines in every jurisdiction but one (Victoria).

Overall, Australia is well explored when it comes to silver, and since the mid-1800s it's had a constant stream of silver production. Aside from that, the country boasts metals-processing facilities in South Australia that separate the precious metal from its commonly mined counterpart metals, lead and zinc.

Silver companies in Australia

Those looking at the Australian silver market have options. There are plenty of big players with interests in Australian silver, and many smaller players for investors to consider researching too.

Most silver comes from mines dedicated to other metals — Glencore's (LSE:GLEN,OTC Pink:GLCNF) Mount Isa in Queensland produces mainly copper, zinc and lead, but silver is separated by the company's integrated processing streams. Glencore also operates the McArthur mine in the Northern Territory, which is primarily zinc, but between its copper and zinc assets, Glencore produced 7,404,000 ounces of silver in Australia in 2020 — over 200 tonnes.

Elsewhere, BHP (ASX:BHP,NYSE:BHP,LSE:BLT) produces a lot of silver as well at the Olympic Dam operation in South Australia. Perhaps best known for the production of uranium and copper, it also yields significant silver resources to the tune of 984,000 ounces in 2020 (or almost 28 tonnes).

According to Geoscience Australia data from 2016, over 20 mines in Australia produced silver in that year, while there are dozens of other resources identified in each state.

A primary producer of silver is the Cannington mine in Queensland, where South32 (ASX:S32,OTC Pink:SHTLF), a company that was spun off from BHP in 2015, mines silver and lead. Cannington is a big one, producing 11,792,000 ounces in 2020, or 334 tonnes of silver.

Tasmania boasts the Rosebery mine, which has seen 85 years of continuous operations and is currently owned by MMG (ASX:MMG,HKEX:1208). Rosebery, like all the others here, is polymetallic, and besides silver also produces copper, zinc, lead and gold. MMG also has the Dugald River mine in Queensland which also produced silver.

Getting into smaller companies, there are those like New Century Resources (ASX:NCZ) which restarted the Century mine in the Northern Territory for zinc and silver.

The future of silver in Australia

So, you get the picture — there's a lot of silver to be mined in Australia by way of mining everything else.

It's worth noting that because silver operates both as a precious and an industrial metal, and is mined most often alongside base metals, it can be pulled in many directions. However, it traditionally follows (and lags behind) its precious metal sibling, gold, making it a valuable investment commodity to keep an eye on.

Looking forward, the future of the commodity in the land down under — especially given Australia's significant reserves and operator diversity — is as bright as you'd like it, and depends on what investors are most interested in, given the by-product nature of the metal.

Don't forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Australia took a stand against Facebook and Google earlier this year, and the move could have long-term implications for tech investors.

It was a ban that sent Australians wild and had the whole world watching.

Back in February, Facebook (NASDAQ:FB) stopped users in Australia from posting news in a week-long blackout, reacting to proposed legislation that would have forced the social media behemoth to pay publishers for content.

What prompted Facebook to "friend" Australia again, and what are the potential long-term implications of the squabble? Read on to learn what tech-focused investors in Australia should know about the situation.


Australia squares off against Facebook

On February 25 of this year, Australia's federal government passed the News Media and Digital Platforms Mandatory Bargaining Code. It was developed after extensive analysis by the Australian Competition and Consumer Commission, and is aimed at ensuring that news media businesses are fairly remunerated for their content.

It stipulates that digital platforms such as Facebook and Google (both named in the documentation) must pay news outlets whose content they feature — for example, if content is shared on Facebook or shows up in Google search results. The idea is that this will help to sustain journalism in Australia.

Unsurprisingly, Facebook and Google didn't react well to the code, which was first introduced in 2020.

Google didn't make any moves after it passed, but Facebook quickly made it impossible for Australian users to share news content, and pages for both local and international news organisations went blank — a major concern given the COVID-19 and wildfire concerns that were circulating at the time.

Australian Prime Minister Scott Morrison was scathing about Facebook's decision — which he ironically shared in a Facebook post — declaring the tech giant's actions "as arrogant as they were disappointing." He added, "These actions will only confirm the concerns that an increasing number of countries are expressing about the behaviour of BigTech companies who think they are bigger than governments and that the rules should not apply to them."

Despite strong feelings from both Australia and Facebook, the dispute was resolved fairly quickly, with the country agreeing to make four amendments to the legislation and Facebook restoring Australian's access to news.

Implications for Big Tech and news organisations

Both Australia and Facebook have claimed victory in the dispute, with a Facebook representative saying the company will be able to decide if news appears on the platform — meaning it won't automatically have to negotiate with any news businesses. Changes were also made to the arbitration process.

Tech experts have pointed out that larger news companies may ultimately benefit from the changes, but smaller ones could be pushed to the side. Major publishers that have struck agreements with tech giants, such as News Corp, Nine Entertainment (ASX:NEC,OTC Pink:NNMTF), Seven West Media (ASX:SWM) and Guardian Australia, may be able to increase their market share while smaller independent players lose out.

A business that is in full support of the laws is Microsoft (NASDAQ:MSFT). During the conflict, President Brad Smith came out loudly in favour of Australia's law, and advised that his company is willing to step up with search engine Bing should Google and/or Facebook pull out of the Australian market.

"In Australia, Prime Minister Scott Morrison has pushed forward with legislation two years in the making to redress the competitive imbalance between the tech sector and an independent press. The ideas are straightforward. Dominant tech properties like Facebook and Google will need to invest in transparency, including by explaining how they display news content," he said in a blog post.

"The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press. It should copy it instead."

Global reach and tech investor impact

Six months down the road from Australia's landmark legislation, it's tough to say what the long-term impact may be.

That said, market watchers do believe the country is part of a new precedent of forcing Big Tech into paying for journalism — something giants Facebook and Google are not used to.

Countries looking to pursue similar legislation include Canada, where Facebook agreed in May to pay 14 publishers to link to their articles on its COVID-19 and climate science pages, as well as other unspecified use cases. Canada is pursuing other avenues too. Meanwhile, in France, Google said it will pay publishers for news content after the country took up new EU copyright laws that make digital platforms liable for infringements.

For investors, the takeaway is perhaps that while companies like Facebook and Google may seem too big too fail, they too can fall subject to new regulations that can change how they do business. As nations around the world look to take back control from these mega companies, it's important to be aware of possible effects on their bottom lines.

Don't forget to follow @INN_Australia for real-time updates!

Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.

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