Top News

Newcrest Mining Limited – Cadia PC1-2 Pre-Feasibility Study Delivers Attractive Returns

Newcrest Mining Limited PNGX: NCM) is pleased to announce that the Newcrest Board has approved the Cadia PC1-2 Pre-Feasibility Study enabling the commencement of the Feasibility Stage and Early Works Program. The Study updates and defines a significant portion of Cadia’s future mine plan, with the development of PC1-2 accounting for ~20% of Cadia’s current Ore Reserves. The approved commencement of the Early Works …

Newcrest Mining Limited (ASX: NCM) (TSX: NCM) PNGX: NCM) is pleased to announce that the Newcrest Board has approved the Cadia PC1-2 Pre-Feasibility Study (the Study), enabling the commencement of the Feasibility Stage (the Feasibility Study) and Early Works Program.

The Study updates and defines a significant portion of Cadia’s future mine plan, with the development of PC1-2 accounting for ~20% of Cadia’s current Ore Reserves. The approved commencement of the Early Works Program will allow critical infrastructure to be established in parallel with the Feasibility Study, before the commencement of the Main Works program in the second half of CY22. A$120 million (~US$90 million) of funding has been approved for this Early Works Program which is expected to commence in the December 2021 quarter.

Summary of Study Findings1,2,3,4

  • The PC1-2 Pre-Feasibility Study has the following key findings:
    • Estimated total capital expenditure of ~A$1.3 billion (~US$0.9 billion)
    • Real, after-tax Internal Rate of Return (IRR) of 21.5%
    • Net Present Value (NPV) of A$2.0 billion (US$1.5 billion)[5]
    • ~17 year mine life from first production, at an average of 15mtpa
    • Total ore production of 258mt producing 3.5moz of gold and 660kt of copper
    • Average All-In Sustaining Cost (AISC) of A$54/oz (US$41/oz)
    • Enhanced footprint design and productivity allowing:
      • Deferral of ~25% of the previously required footprint into a future PC1-3 project
      • A$150 million (US$112 million) reduction in the initial capital spend
      • Enhanced average gold and copper grades in the medium term
  • Early Works Program of critical path activities for the establishment of PC1-2 is expected to commence in the December 2021 quarter
  • Feasibility Study has now commenced

Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas, said, “The development of the PC1-2 cave is the next step in Cadia’s block caving journey. The Study underpins an optimised mine design which we expect will deliver higher gold and copper grades and enable the deferral of capital expenditure in the medium term. We have significant financial headroom to fund the construction of PC1-2, together with our other organic growth options, from our expected cash flow generation over the development period and our strong balance sheet.”

“This project, together with the expansion project currently in progress, is expected to sustain Cadia’s position as one of the largest, lowest cost and long life gold mines in the world. The team at Cadia is passionately committed to building on this world class asset, driving employment and other benefits for the local community and other stakeholders, and maintaining a focus on innovation, continuous improvement and sustainable development,” said Mr Biswas.

Table of Key Study Findings1,4,6

Study Outcomes
Area Measure Unit PC1-23 Cadia LOM7
Production Average ore milled / throughput mtpa 15 34
LOM years 17 ~38
Ore mined mt 258 1,300
Average gold grade g/t 0.50 0.43
Gold produced moz 3.5 14
Average annual gold production koz 205 370
Average copper grade % 0.28 0.29
Copper produced mt 0.66 3.2
Average annual copper production kt 39 85
Gold recoveries % 83.6 80.6
Copper recoveries % 90.7 86.8
Capital Project capital A$m (real) 1,256
Sustaining capital A$m (real) 1,177
Total life of mine capital A$m (real) 2,434
Operating AISC A$/oz sold 54
Economic assumptions Gold price US$/oz 1,500
Copper price US$/lb 3.30
AUD:USD exchange rate 0.75

Cadia’s indicative production profile1,6,7,8

Cannot view this image? Visit: https://orders.newsfilecorp.com/files/7614/93683_newcrest1_550.jpg

To view an enhanced version of this image, please visit:
https://orders.newsfilecorp.com/files/7614/93683_newcrest1.jpg

Cannot view this image? Visit: https://orders.newsfilecorp.com/files/7614/93683_newcrest2_550.jpg

To view an enhanced version of this graphic, please visit:
https://orders.newsfilecorp.com/files/7614/93683_newcrest2.jpg

Mine development and sequence1,6,7

Panel Cave Start Construction First Production Ore (mt)
PC2-3 In Progress FY23 128
PC1-2 FY22 FY26 258
PC1-3 FY31 FY32 137
PC3-1 FY34 FY37 168
PC2-4 FY37 FY39 115
PC1-4 FY43 FY45 156
PC2-5 FY46 FY47 22
PC5001 FY48 FY50 80

Total capital expenditure for the development of PC1-2 is estimated to be ~A$1.3 billion (~US$0.9 billion), with first production expected in CY25. The timing of PC1-2’s development is expected to ensure that, in conjunction with the already approved PC2-3 project, the total Cadia mine production rate is sustained at ~35-36mtpa as production from the operational PC1 and PC2 caves begins to decline from FY24.

The PC1-2 Pre-Feasibility Study includes enhancements over previously published mine designs, which include:

  • Optimised North/South footprint configuration to debottleneck extraction drives and boost production intensity by ~90% compared to previous designs
  • Gold and copper production brought forward by prioritising PC1-2 higher grades
  • Optimised pre-conditioning to enhance operator safety, mine schedules and reduce the underground development scope
  • Crusher productivity and ventilation enhancements with the addition of a fifth tipping location and dedicated ventilation exhaust

It is planned to bring PC1-2 into production across two stages:

  • Stage 1
    • Execute a 12 month Early Works Program to establish ventilation systems and other critical path development. This is expected to commence in the December 2021 Quarter and has an estimated cost of A$120 million (US$90 million)
    • Completion of the Feasibility Study will run concurrently with the Early Works Program and has an estimated cost of A$14 million (US$11 million)
  • Stage 2
    • Execute the PC1-2 Main Works Program following the conclusion of the Feasibility Study in the second half of CY22. The Main Works Program is expected to cost A$1.12 billion (US$0.84 billion) and is expected to be completed by CY29

The PC1-2 cave is expected to take approximately six years to reach its maximum production capacity from the time of the blasting of the first drawbell.

Cannot view this image? Visit: https://orders.newsfilecorp.com/files/7614/93683_8662700b049ee8d6_006.jpg

PC1-2 Extraction Level Design

To view an enhanced version of this image, please visit:
https://orders.newsfilecorp.com/files/7614/93683_8662700b049ee8d6_006full.jpg

Cannot view this image? Visit: https://orders.newsfilecorp.com/files/7614/93683_8662700b049ee8d6_007.jpg

Location of Planned Cadia East Caves in Schematic Section View

To view an enhanced version of this image, please visit:
https://orders.newsfilecorp.com/files/7614/93683_8662700b049ee8d6_007full.jpg

Cannot view this image? Visit: https://orders.newsfilecorp.com/files/7614/93683_8662700b049ee8d6_008.jpg

Indicative ore production profile1,6,7

To view an enhanced version of this image, please visit:
https://orders.newsfilecorp.com/files/7614/93683_8662700b049ee8d6_008full.jpg

Indicative mine production profile1,6,7

Period Ore Source Total Material
Movement
(mt)
Plant
Feed (mt)
Average
Gold Grade
(g/t)
Average
Copper
Grade (%)
FY22 – 24 PC1, PC2, PC2-3 ~101 ~99 0.7 0.4
FY25 – 27 PC1, PC2, PC2-3, PC1-2 ~105 ~105 0.4 0.3
FY28 – 30 PC1, PC2, PC2-3, PC1-2 ~107 ~107 0.5 0.4
FY31 – 33 PC2-3, PC1-2, PC1-3 ~107 ~107 0.5 0.3
FY34 – 36 PC2-3, PC1-2, PC1-3 ~107 ~107 0.5 0.3
FY37 – 39 PC2-3, PC1-2, PC1-3, PC3-1, PC2-4 ~107 ~107 0.5 0.3
FY40 – 42 PC1-2, PC1-3, PC3-1, PC2-4 ~107 ~107 0.5 0.3
FY43 – 45 PC1-3, PC3-1, PC2-4, PC1-4 ~107 ~107 0.4 0.3
FY46 – 48 PC1-3, PC3-1, PC2-4, PC1-4, PC5001 ~107 ~107 0.3 0.3
FY49 – 51 PC3-1, PC2-4, PC1-4, PC5001, PC2-5, PC1 ~107 ~107 0.4 0.2
FY52 – 54 PC3-1, PC2-4, PC1-4, PC5001, PC2-5, PC1 ~107 ~107 0.4 0.2
FY55+ Remaining Reserves subject to ongoing studies

Metal Price and Exchange Rate Sensitivity Analysis1,2,3,4

The actual IRR of the Project will vary according to the gold and copper prices realised. Base case assumptions include a gold price of US$1,500 per ounce, copper price of US$3.30 per pound, and an AUD:USD exchange rate of 0.75.

The table below outlines how the estimated Base Case Project IRR of 21.5% varies using different price assumptions:

Scenario Assumption (US$) IRR (%)
Gold price (per ounce) 1,200 18.0
Gold price (per ounce) 1,650 23.1
Copper price (per lb) 2.72 18.6
Copper price (per lb) 4.00 23.6

Permitting & Tailings

Cadia presently holds a major Project Approval for the Cadia East Project until CY31 (inclusive of the permit to develop PC1-2).

Newcrest is currently engaging with the NSW Department of Planning, Industry and Environment (DPIE) with respect to Newcrest’s request for a modification to the existing approval to allow for an increased production rate above 32mtpa.

Further approvals will be required to continue mining operations beyond the existing approved mine life of CY31.

Estimated project capital expenditure profile1,4

FY22 FY23 FY24 FY25 FY26+ Total
Stage 1 Capital Expenditure (A$m) 92 42 134
Stage 2 Capital Expenditure (A$m) (in Feasibility Study) 122 214 348 438 1,122
Total Project Capital Expenditure (A$m) 92 164 214 348 438 1,256
Total Project Capital Expenditure (US$m) 69 123 161 261 329 942

Technology and value breakthrough strategies

Through the Feasibility Study, Newcrest will investigate the application of single pass caving, mechanical excavation and remote production during the execution of PC1-2, in line with its Next-Gen Caving strategy. These have not been assumed in the Study findings to date and represent upside opportunities.

Cadia East Mineral Resource9

The Cadia East Mineral Resource has been updated from that reported in the Annual Mineral Resources and Ore Reserves Statement as of 31 December 2020. The update includes mining depletion to 30 June 2021 and the incorporation of a revised resource estimate. A summary of material assumptions is outlined below and included in JORC Table 1 included in the Appendix (JORC Table 1 – Sections 1 to 3).

Mineral Resources are reported inclusive of Ore Reserves.

Mineral
Resource
Gold Copper Silver Molybdenum
mt g/t moz % mt g/t moz ppm mt
Total Measured and Indicated 2,700 0.36 30 0.26 6.9 0.64 55 66 0.17
Measured Mineral Resource
Indicated Mineral Resource 2,700 0.36 30 0.26 6.9 0.64 55 66 0.17

Mineral
Resource
Gold Copper Silver Molybdenum
mt g/t moz % mt g/t moz ppm mt
Inferred Mineral Resource 500 0.24 3.8 0.17 0.86 0.47 7.5 25 0.012

Summary of Mineral Resource

Geology and Geological Interpretation
The Cadia gold copper deposits are hosted by a late Ordovician to early Silurian shoshonitic volcano-intrusive complex which forms part of the larger zone of arc-related volcanic and associated intrusive rocks in the eastern Lachlan Fold Belt. Mineralisation at Cadia is hosted by the mid to late Ordovician Forest Reefs Volcanics and the underlying Weemalla Formation and by the late Ordovician early Silurian Cadia Intrusive Complex. Post-mineral cover comprises Silurian Cadia Coach Shale and a relatively thin capping of Tertiary basalts and gravels in some areas. Recognised structural controls include the regional northwest corridor – dilation zone thought to control the emplacement of the Cadia Intrusive Complex and post-mineral faulting in two dominant orientations striking northwest and north-south.

The Cadia East deposit is hosted within the Forest Reef Volcanics and porphyry intrusions. A north-east trending mass of narrow sheet like dykes of monzonitic to dioritic compositions intrude the lower parts of the FRV at Cadia East. These intrusives are largely restricted to the eastern half of the deposit although some narrow dykes and isolated bodies of monzonite have been recognised in the western end. At the upper western end of the deposit immediately underneath the Gibb Fault, isolated narrow intersections have been identified with south dipping mineralised quartz veining. These occurrences are interpreted to be the Cadia Hill Monzonite.

Mineralisation at Cadia East can be divided into two broad overlapping zones: an upper, copper rich disseminated zone and a deeper gold-rich zone associated with sheeted veins. The upper zone forms a relatively small cap to the overall mineralised envelope and has a core of disseminated chalcopyrite, capped by chalcopyrite-pyrite mineralisation. The upper zone mineralisation is stratigraphically controlled within the volcaniclastic unit. This zone is transitional to the deeper vein style mineralization. The deeper zone is localised around a core of steeply dipping sheeted quartz-calcite-bornite-chalcopyrite-molybdenite, with the highest gold grades associated with the bornite-bearing veins. Copper and molybdenite form a mineralised blanket above and to the east of the higher-grade gold envelope.

The geology model for the Cadia East deposit includes lithology, alteration, and structural faults. Modelling of the fault planes and lithological boundaries comprises data obtained from drill core and underground mapping. The major faults are used as estimation domains, with semi-soft boundaries. The factor most influencing grade continuity is that Cadia East is a porphyry copper-gold mineralisation exhibiting properties of the diffusion model.

Drilling Techniques
The Cadia East deposit has been diamond drilled with core sizes ranging from NQ3 (45.1 mm core diameter), HQ3 (61.1 mm core diameter) and PQ (85 mm core diameter). Triple tube is used to maximise core recovery. Most drill holes are collared as PQ or HQ for accurate and safe drilling. All recent drilling is orientated.

Sampling and Sub-Sampling
Data used for resource estimation is obtained from drill core, which is sampled and assayed on 2.0 metre intervals. Drill core is sampled by cutting the core in half with a diamond saw. The left hand of the cut core is placed in a calico bag, marked with the appropriate sample number and sent to the laboratory for assaying. The remaining half-core is stored in the original tray on a pallet at the core processing facility for an unspecified period and then moved to storage at the Cadia Core Farm. Sample preparation is conducted at the Newcrest Laboratory facility located in Orange and all routine drill core samples are processed on site. Pulp replicates and crushed coarse reject duplicates are routinely undertaken.

Sample Analysis Methods
Samples are routinely assayed for gold by fire assay, copper, silver, molybdenum, lead, zinc, sulphur by ICP-OES analysis with additional cyanide-soluble copper analysis. Comprehensive QA/QC procedures have been in place since drilling and sampling programs at Cadia East began. These processes are undertaken at both the laboratory and site that includes a combination of check samples (blind reference material, random blanks, duplicates, repeats, replicates, and second lab checks), meetings, visits, and external audits. Various primary laboratories located on Orange have been used including Newcrest Services Laboratory since June 2010, ALS-Chemex between May 2004 and May 2010, and AMDEL prior to May 2004.

Estimation Methodology
Ordinary Kriging of copper, gold, sulphur, silver, molybdenum and fluorine are undertaken directly into 20 m x 20 m x 20 m blocks. Estimation domains (based on structural interpretation) have been revised and simplified for the 2021 resource model for Au, Cu, Ag, Mo and S. Semi-soft boundaries were used between all estimation domains. The 0.1% copper grade shell was used to constrain estimation as a global domain. All elements are estimated independently of each other. Copper and gold grades are not capped. The resource model is validated via visual, geostatistical and production reconciliation methods. Bulk density has been estimated in the 2021 model using Inverse Distance, which is a change from the previous estimate where bulk densities were assigned by lithology.

Mineral Resource Classification
The Cadia East Mineral Resource consists of majority Indicated Mineral Resource and a portion of Inferred Mineral Resource. Classification is based on an assessment of geological confidence as a function of geological and mineralisation continuity. Grade continuity and drill hole density is assessed using Extension Variance methods, whilst the reported resources were constrained within a ‘value’ shell representing the limit to eventual economic extraction.

Cut-off Grade
A value algorithm is used to calculate the net smelter return (NSR) for each block using revenue and cost assumptions as of 31 December 2020. The NSR calculation takes into account Mineral Resource revenue factors, metallurgical recovery assumptions, and site operating costs. Site operating costs include mining cost, processing cost, relevant site general & administration costs. The breakeven cut off value equates to approximately A$18.00/t milled.

Mining and Metallurgical Methods and Parameters and Other Modifying Factors
No mining or environmental factors have been incorporated into the estimation. Metallurgical factors have been incorporated into the value algorithm which constrains the Mineral Resource classification.

Cadia East Ore Reserve10

The study has updated the Cadia East Ore Reserve from that reported in the Annual Mineral Resources and Ore Reserve Statement as at 31 December 2020. The update includes:

  • Mining depletion to 30 June 2021
  • Incorporation of a revised resource model
  • Updated metallurgical recovery assumptions
  • Updated metal price and break-even cost assumptions
  • Removal of contained metal within unclassified material from the Ore Reserve
  • Revised PC1-2 mining footprint

A summary of the material assumptions is outlined below and included in the Appendix (JORC Table 1 – Section 4).

Ore Gold Copper Silver Molybdenum
mt g/t moz % mt g/t moz ppm mt
Total Ore Reserve 1,300 0.43 18 0.29 3.7 0.71 29 83 0.11
Proved Ore Reserve
Probable Ore Reserve 1,300 0.43 18 0.29 3.7 0.71 29 83 0.11

Summary of Ore Reserve

Material Assumptions for Ore Reserves
The Cadia East Panel Cave is an operating mine in the Cadia Valley province, which incorporates learnings from operational execution to date. Work is progressing on a Mining Feasibility Study for the PC1-2 mining block and is anticipated to be completed in CY22. If required, any adjustment to the Ore Reserves statement will be made following the completion of this study.

Ore Reserve Classification
The Probable Ore Reserve is based on Indicated Mineral Resources and diluting material. No Measured Mineral Resources are stated for this deposit. The resource classification is based on an assessment of geological confidence as a function of geological and mineralisation continuity.

Mining Method
Mining studies and current underground cave mining activities at Cadia East support the appropriateness of the selected mining methods as the basis of the forward Ore Reserve estimate. Ongoing geotechnical studies and monitoring utilising experience and data from the current underground operations provide ongoing key direction for stability, design, and schedule sequence parameters.

Ore Processing
Processing of the Cadia East underground ore stream will be through the Cadia Valley Operations Ore Treatment Plant Concentrators 1 & 2. Metal recovery is through gravity and conventional flotation to a copper/gold concentrate. This circuit processes Cadia East material with similarly styled material to future ore sources. Cadia East is the sole source of feed for both Concentrator 1 and Concentrator 2. Production of up to 36mtpa11 is anticipated to be produced through the concentrators. While the scale of the processing is expected to position the operation amongst the world’s largest gold mines, the technology associated with the ore processing is industry standard for this style of deposit and is already custom and in practice at Cadia Valley Operations.

An update to the process plant infrastructure and metallurgical recovery assumptions were completed during the Cadia Expansion Feasibility Study (2019) and Cadia Expansion Project – Stage 2 (2020) including proposed upgrades to the circuit to boost throughput and metallurgical recovery. These assumptions have been validated to at least a Feasibility Study level through detailed analysis, laboratory testwork and the baseline confirmed as representative by reconciliation of production parameters to date of Cadia East ore through the currently installed processing plant. Metallurgical recoveries for gold are anticipated to range between approximately 75% and 85% and metallurgical recoveries of copper are expected to range between approximately 80% and 90% through the life of the project.

The molybdenum plant is currently in commissioning, with first production expected by the end of September 2021. The plant will produce a molybdenum concentrate sold as a separate saleable product with revenue from molybdenum included in the Ore Reserve estimation process. Fluorine is the key deleterious element for the gold/copper concentrate product with smelter penalties incurred on the basis of fluorine content. The PC1-2 Pre-Feasibility Study has made allowance for additional regrind capacity to remove fluorine from the final concentrate.

Cut-Off Grade
The Cadia East Ore Reserve employs a value-based cut-off by determining the NSR value equal to the relevant site operating cost. The NSR calculation takes into account Ore Reserve revenue factors, metallurgical recovery assumptions, transport costs and 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. This cost equates to a break even cut off value of approximately A$19.80/t milled.

Estimation Methodology
Estimation of the Cadia East 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 in Cadia caving 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 Cadia East 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
All development has mining factors for dilution and mining recovery applied to accurately represent the expected mined tonnes. PCBC™ software is used for cave production scheduling and estimation of grade for material drawn from the block caves. The resource estimate includes internal dilution and external dilution is included as part of the draw model, with no mining recovery factors applied to the Ore Reserve estimate. These assumptions are supported by the actual reconciliation between the reserve estimate and mill performance for the project to date being within acceptable uncertainty ranges for the style of mineralisation and mining method under consideration.

Other Modifying Factors
Modifications to this Project Approval under the NSW Environmental Planning and Assessment Act 1979 (EP&A Act) will be required over the life of the Ore Reserves period with the storage of tailings and efficient recovery of water a key consideration. Studies to finalise the engineering approach to the repair of the current tailings storage facilities and to determine the long-term tailings storage beyond the current facilities are ongoing and will be submitted for further approval as required over the life of the asset. Studies that look to improve water recovery from tailings, including the use of alternative technologies, are also ongoing.

Appendix 1
JORC Table 1 -Cadia East

Section 1: Sampling Techniques and Data

Criteria Commentary
Sampling techniques The data used for resource estimation is obtained from drill core (PQ, HQ, NQ), which is sampled and assayed on 2.0 metre intervals. Drill core is sampled by cutting the core in half with a diamond saw; this ensures sample representivity. The left hand of the cut core is placed in a calico bag, marked with the appropriate sample number (generated in acQuire) and sent to the laboratory for assaying. The remaining half-core is stored in the original tray on a pallet at the core processing facility for an unspecified period and then moved to storage at the Cadia Core Farm.
Drilling techniques The Cadia East deposit has been diamond drilled with core sizes ranging from NQ3 (45.1 mm core diameter), HQ3 (61.1 mm core diameter) and PQ (85 mm core diameter). Triple tube is used to maximise core recovery. Most drill holes are collared as PQ or HQ for accurate and safe drilling. All recent drilling is orientated.
Drill sample recovery Triple tube is used whilst drilling to maximise core recovery. Core recovery is routinely recorded by geologists and core technicians through measuring the drill run against the actual core in tray. Core recovery is stored in an acQuire software database. Analysis of recovery against grade show no apparent biases. Across the Cadia East orebody, there are 75 occurrences with less than 80% recovery and nominally > 1 g/t Au or > 0.5%, spread over 56 holes. This analysis shows there are no material problems with core recovery.
Logging The majority of diamond drill holes are geologically and geotechnically logged. The geological log includes lithology, alteration, structure, mineralisation and geotechnical parameters. All core is logged and photographed after marking up metre intervals and prior to cutting and sampling. Logging data is entered into the acQuire database via a laptop computer or historically via manual data entry. Logging intervals have been 1 m historically for various drilling programmes from 1993 to 2000. Subsequent to these programmes lithology has been logged with intervals derived from combinations of rock type, alteration, structure, and mineralization.

Hyperspectral imaging of selected drill core for type sections have been undertaken to assist in alteration modelling.

Sub-sampling techniques and sample preparation Core samples are half core. Sample preparation is conducted at the Newcrest Laboratory facility located in Orange and all routine drill core samples are processed on site.

Sample preparation for analysis is as follows: Samples are dried in an oven at 105C for several hours. All of the samples are crushed to 2 mm maximum diameter by a Boyd crusher and split to a weight of ~2.5 kg using a rotary sampler. Each sample is pulverised using a Labtechnics LM5 pulverizing mill to specified grind parameters of 95% passing 106 m. A 250g sub-sample is collected for analysis and submitted to the assay laboratory. From the 250 g sample, a 30g or 50g sample is used for fire assay and ~0.5gm for ICP-OES analysis. Pulp replicates and crushed coarse reject duplicates are routinely undertaken (1 in 20 samples). The sampling protocols are adequate to ensure representivity of porphyry copper-gold type mineralisation.

Quality of assay data and laboratory tests Since June 2010 Newcrest Services Laboratory (Orange, NSW) has been the primary laboratory used for assaying. Prior to this ALS-Chemex (Orange) was used between May 2004 and May 2010. AMDEL (Orange) was used as the primary laboratory for assaying till May 2004. ALSChemex (Orange) is now the second laboratory for check assaying of samples. Check assays have also been completed at Genalysis (Townsville) and ALS-Chemex (Townsville) in the past.

Samples are routinely assayed for gold, copper, silver, molybdenum, lead, zinc, sulphur and cyanide-soluble copper. Gold analysis is by fire assay with 30g or 50g charge and Atomic Absorption Spectroscopy (AAS) finish and detection limit of 0.01 ppm (g/t). Copper, silver and molybdenum analysis is by Inductively Coupled Plasma (ICP) or Multi Element Two Acid Digest (Aqua Regia) Optical Emission Spectroscopy (ME2ADOES) and detection limit of 5ppm, 0.2ppm and 0.2ppm respectively.

Newcrest resource development QA/QC procedures have been in place since drilling and sampling programs at Cadia East began. All data received are checked and verified in accordance with the Newcrest Resource Management QA/QC and database management procedures. A monthly report is created to highlight current successes and issues. This report is issued to the laboratory and Newcrest management.

The laboratory QA/QC currently involves analysis of the following:

  • Blind reference material (standards) at a rate of one in twenty samples or one per batch, whichever is more.
  • Random Blank samples (Silurian samples or quartz pebbles sourced from local landscape suppliers).
  • Duplicates from the Boyd crusher coarse splits.
  • Duplicates from the LM5 pulveriser pulp.
  • Checks on grind and crush size from the sample preparation stage.
  • Replicate submissions of pulps to an alternate laboratory for analysis.
  • Visits to the laboratory and laboratory audits to confirm procedures are in place and applied/executed correctly.
  • Monthly QA/QC meetings with laboratory personnel to discuss results, procedures, issues arising.
  • Analysis of received sample weights.
  • External audits of QA/QC.

From 2005, five standards manufactured from Cadia East material and prepared by Ore Research have been used. Three new standards were generated and certified in 2015 for gold, copper, silver, molybdenum, and sulphur. In 2021, three new CRMs were purchased from Ore Research, certified for gold, copper, silver, molybdenum, and sulphur in addition to a full 4-Acid digest suite.

Duplicates show around 60% of the gold population has a relative paired difference (RPD) below 10%, unlike copper that has in excess of 95% below 10%.

Repeat assays at 1 in 20 from the Boyd crusher are regularly analysed for gold, copper and sulphur. No issues are observed in the repeat assay analysis.

Second laboratory pulp check sample assays were undertaken based on primary assays above 0.2g/t Au
(20 times detection limit). Two despatches (Holes UE524 to UE537) of PC 1-2 pulps were sent to ALS Orange in 2020.

Verification of sampling and assaying Cadia East is a bulk underground producing mine with relatively low grade variability (copper-gold porphyry) and there is no independent verification of significant intersections or use of twinned holes.

All data and interpretative inputs to Mineral Resource estimates are checked and verified in accordance with a range of Newcrest standard operating procedures. 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 on site by geologists using the acQuire database system. Prior to resource estimation a centralised resource team conducts further data checks to ensure data integrity prior to estimation. The 2012 resource estimate flagged issues with Ag assays and detection limits for a range of drill holes. The 2016 resource estimate addressed these issues by validating the database against the original hard copy results. This saw the removal of negative values, correction of values below detection limit and correction of the raw assay values in the database to reflect that of the original hard copy. In addition, a campaign of re-assaying of stored pulps for silver was undertaken to bring the precision levels for silver assays to industry standard for the current Mineral Resource estimate.

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 Cadia East grid and coordinate system is consistent with all Cadia Valley Operations. The grid is aligned at 30 degrees to the east of true north and at 19 degrees to the east of magnetic north. Local RL is sea level +5000 metres.
Surface topography across the Cadia East area is based on a combination of theodolite surveyed ground pick-ups and air photogrammetry. Photogrammetry is levelled by ground surveyed points. The data are considered accurate to within 500mm.

Drill hole collars positions are determined by mine surveyors. Drill holes were surveyed downhole using a Axis Champ Gyro Navigator system, with single shot surveys completed at 15m intervals downhole. Holes with a dip between +15 degrees from horizontal and -15 degrees from horizontal are surveyed using continuous survey method, producing a relative survey from collar. Previously, drill holes were surveyed using a combination of electronic and gyroscope survey tools. Normally single shot surveys using the Ranger EMS system are completed at 30m intervals downhole. This system provides a rudimentary control on the drill hole path. Multi Shot EMS Surveys using the Reflex system are conducted at end of hole.

Where drilling angles have permitted, recent holes have been gyroscope surveyed as close to the end of hole as possible. Where Gyro surveys were not taken due to poor access or unavailability, the Multishot surveys are checked, edited if required and smoothed with a 5 point smoothing formula.

Data spacing and distribution The data spacing varies from 20 m x 20 m to 250 m x 250 m. In current caving operations the drill hole spacing is 60 m x 60 m. Cadia East is a copper-gold porphyry deposit mined on a bulk underground scale with grade distributions characterised by low nugget effects and long variogram ranges. As such the data spacing is sufficient to establish the degree of geological and grade continuity appropriate for Indicated Mineral Resource classification.

Drill hole data are 10 m downhole composited for grade estimation. No other type of samples (e.g. grabs) nor compositing has been applied.

Orientation of data in relation to geological structure Gold and copper mineralisation at Cadia East is predominately hosted in a sheeted quartz vein system that strikes East-West and dips 75 towards the north. Majority of the drill programs conducted prior to 2012 are surface drill holes and drilled orthogonal to the vein system orientation (North to South or South to North).

Drill holes since 2012 are underground sub-vertical primarily for preconditioning of Panel Cave 1 Stage 1 and Panel Cave 2 Stage 1. These holes are assayed and used in resource estimates. In addition, horizontal infill holes are drilled occasionally from underground to map major structures and provide grade confidence for production reliability.

There does not appear to be any bias between drilling orientation and assay results.

Sample security Samples are transported from drill site to the core shed by the drilling contractor. On completion of cutting the core, the samples are dispatched by courier to the Newcrest Laboratory in Orange. Sample dispatches are reconciled against Laboratory samples received and discrepancies reconciled by geology staff.
Audits or reviews Independent external reviews of sampling techniques have been undertaken in the past with no fatal flaws identified.

Section 2: Reporting of Exploration Results

Criteria Commentary
Mineral tenement and land tenure status The Cadia East copper-gold deposit is located approximately 20 km southwest of Orange in central NSW.
Six granted mining leases (ML) comprise the Cadia Valley Operations and cover a total area of 5,223 hectares. The leases are owned by Cadia Holdings Pty Ltd, a subsidiary of Newcrest Mining Limited.

Cadia East is situated within ML1405, granted 5th Oct 1996 and covering 3116 ha. Leases are wholly owned by Newcrest. Infrastructure relating to mining of the deposit is also contained within ML1481, granted 8th March 2001 covering 584.1 ha., ML1689, granted 11 Sept 2012 covering 153.6 ha., and ML1690, granted 10 Sept 2013 covering 70.4 ha.

Exploration done by other parties Gold was discovered in the Cadia Valley in 1851. Little Cadia was discovered and excavated by Samuel Stutchbury (Government Geologist) in May 1851. Mining occurred by the Canobolas Copper Mining Company from 1856 to 1861. Activity commenced in 1856 at the Cadiangullong Mine. The Scottish Australian Mining Company leased the land in July 1861. Mining commenced in October 1861. The erection of a smelter established a focus for the mine and a village arose for the mine and smelter workers. During the period from the 1870s to the turn of the century, the local population was largely sustained by small scale gold mining and brief periods of copper mining but never on a scale similar to the 1860s. In 1899 the Scottish Australian Mining Company turned to possible exploitation of the iron ores at Big Cadia. The lease at Big Cadia was confirmed in November 1907, but required the construction of a branch rail line from Spring Hill to Cadia. In February 1908, Carne reported that the principal focus of the Syndicate was to exploit the secondary copper ore under the Big Cadia (Iron Duke) iron lode. Other lodes in the area were being mined for sulphide ore for fluxing. Mining peaked during 1913 but closed down in 1914 when WW1 broke out. Intermittent mining was carried out until 1917 when the mine was permanently closed.

Modern era exploration at Cadia was prompted by its proximity to the Cadia mineralised district, and in particular by the recognition of magnetic features, which can easily be interpreted as westward extensions or repetitions of the magnetic anomaly over the magnetite skarn at Big Cadia. In 1985, Homestake Australia drilled two percussion holes to a depth of 95 metres to test a magnetic anomaly with poor results.

The Cadia area was acquired by Newcrest in 1991. After initially exploring the Big Cadia (Iron Duke) skarn, the focus changed to Cadia Hill. The recognition of the porphyry-style system, partially obscured by post mineral Silurian sediment cover, resulted in a core drilling programme with the discovery hole being drilled in 1992. At the same time an extensive halo of low grade mineralisation was delineated to the northwest of the deposit confirming the northwest southeast alignment of mineralisation.

Geology The Cadia gold copper deposits are hosted by a late Ordovician to early Silurian shoshonitic volcano-intrusive complex which forms part of the larger zone of arc-related volcanic and associated intrusive rocks in the eastern Lachlan Fold Belt. Mineralisation at Cadia is hosted by the mid to late Ordovician Forest Reefs Volcanics and the underlying Weemalla Formation and by the late Ordovician early Silurian Cadia Intrusive Complex (CIC). The CIC is a multi-phase alkalic intrusive suite petrographically ranging from gabbro to syenite with volumetric dominance by monzonite and diorite. All mineralisation in the Cadia area is thought to be related to igneous and hydrothermal fluids derived from this complex of intrusive rocks. Post-mineral cover comprises Silurian Cadia Coach Shale and a relatively thin capping of Tertiary basalts and gravels in some areas.

Recognised structural controls include: the regional northwest corridor and post-mineral faulting. The NW corridor is a dilation zone thought to control the emplacement of the CIC. The post mineral faulting is in two dominant orientations – northwest striking faults (including the PC40 fault through the Big Cadia skarn deposit and the North Fault at Ridgway) and north-south faults typically west over east thrust systems (including Cadiangullong and Gibb Fault).

The Cadia East deposit is hosted within the Forest Reef Volcanics (FRV) and porphyry intrusions. A north-east trending mass of narrow sheet like dykes of monzonitic to dioritic compositions intrude the lower parts of the FRV at Cadia East. These intrusives are largely restricted to the eastern half of the deposit although some narrow dykes and isolated bodies of monzonite have been recognised in the western end. At the upper western end of the deposit immediately underneath the Gibb Fault, isolated narrow (10 m) intersections have been identified with south dipping mineralised quartz veining. These occurrences are interpreted to be the Cadia Hill Monzonite.

Mineralisation at Cadia East can be divided into two broad overlapping zones: an upper, copper rich disseminated zone and a deeper gold-rich zone associated with sheeted veins. The upper zone forms a relatively small cap to the overall mineralised envelope and has a core of disseminated chalcopyrite, capped by chalcopyrite-pyrite mineralisation. The upper zone mineralisation is stratigraphically controlled within the volcaniclastic unit. This zone is transitional to the deeper vein style mineralization. The deeper zone is localised around a core of steeply dipping sheeted quartz-calcite-bornite-chalcopyrite-molybdenite, with the highest gold grades associated with the bornite-bearing veins. Copper and molybdenite form a mineralised blanket above and to the east of the higher grade gold envelope.

Drill hole Information No exploration results are reported in this release, therefore this section is not relevant.

The treatment of drill data has been articulated in Section 1.

Data aggregation methods No exploration results are reported in this release, therefore this section is not relevant.

Drill hole data are downhole composited to 10 m and used in the Mineral Resource estimate in entirety.

Relationship between mineralisation widths and intercept lengths No exploration results are reported in this release, therefore this section is not relevant.

Drill hole data are downhole composited to 10 m and used in the Mineral Resource estimate in entirety.

Diagrams No exploration results are reported in this release, therefore this section is not relevant.
Balanced reporting No exploration results are reported in this release, therefore this section is not relevant.
Other substantive exploration data No exploration results are reported in this release, therefore this section is not relevant.
Further work A resource definition program is in concept stages with the objective of testing mineralisation located on the periphery of the Cadia East deposit.

Section 3: Estimation and Reporting of Mineral Resources

Criteria Commentary
Database integrity Data are stored in an SQL acQuire database. Assay and geological data are electronically loaded into acQuire and the database is replicated in Newcrest’s centralised database system in Melbourne. 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 Mineral Resource estimate is an employee of Newcrest and is based on site.
Geological interpretation The geology model for the Cadia East deposit includes lithology, alteration and major structural faults. The structural interpretation was updated from the 2016 model, combining CA-LA North fracture zone, Cat Fault and Church Fault, reclassification of the SF3 Lower Porphyry to the Carbonate 2 Fault, reduction in size of the CA-LA Central fault, and an updated interpretation of the Eastern basin-bounding P faults. Modelling of the fault and lithological boundaries/planes relies on data obtained from drill core and underground mapping.

Alteration and lithology are not used as estimation domains. Statistical testing does not give any convincing evidence of either being a major control on mineralisation so they have not been required to date.

The major faults are used as estimation domains, with semi-soft boundaries implemented where geostatistical testing warranted. The factor most influencing grade continuity is that Cadia East is a porphyry copper-gold mineralisation exhibiting properties of the diffusion model, which adds high confidence in the geological interpretation.

Dimensions The Cadia East deposit occupies a mineralised zone 2.3 km in a strike length (East West), 1.1 km in width and 1.8 km in a vertical extent. The deposit does not outcrop as it is overlain by between 80 and 200 metres of post mineralisation sandstones and shales.
Estimation and modelling techniques Geostatistical testing of the gold and copper grade distributions showed that the Cadia East mineralization exhibits classical diffusion properties (where the grades transgress from the high-grade core to lower-grade peripheries in a systematic and controlled manner).

Variogram models for copper and gold also exhibit low nuggets and long ranges. The coefficient of variation of copper and gold are relatively low indicating that grade estimation will not be problematic.

Cadia East is a bulk mining (block cave) operation, and the SMU is the whole panel footprint divided vertically into yearly draw increments. However, individual draw point dimensions are taken into account for local estimation precision (the mineralisation style allows so).Ordinary Kriging of copper, gold, sulphur, silver, molybdenum and fluorine are undertaken directly into 20 m x 20 m x 20 m blocks.

Prior to 2012 estimation domains were defined based on grade shells. Domain boundaries were treated as hard contacts. The 2012 and 2016 resource estimates were domained utilising structural surfaces for gold, copper, silver, molybdenum and sulphur. Semi-soft boundaries (20 m) were used between the Ca-La Crunch faults while the lower porphyry surface was treated as a hard boundary. The 0.1% copper grade shell was used to constrain estimation as a global domain. The February 2021 resource estimate is based on updated structural model and incorporates new drill information within Panel Cave 1-2 and Panel Cave 2-3 localities up to the 1st February 2021. The structural domains used in the 2016 resource estimate have been revised and simplified for the 2021 resource estimate for Au, Cu, Ag, Mo and S. Semi-soft boundaries (20 m) were used between all estimation domains. The data constraint wireframe (appearance of first copper sulphide dominance and/or 0.1% Cu grade shell) used for the 2016 remained for the 2021 model, as changes were relatively minor, and the geometry and dimensions are similar.

All elements are estimated independently of each other regardless of the degree of correlation, as each element has its own grade continuity characteristics which are not necessarily reflected in the correlations.

The decision to apply (or not) grade caps were based on a combination of factors;

  • Metal contained in the top percentile of the declustered population;
  • Continuity of the distribution in histograms;
  • Mean and variance plots;
  • Historical production reconciliation.

Capping was only applied to selected elements and domains. Copper and gold grades are not capped as analysis indicates that 10m composites are representative of the mineralisation style. A high-yield restriction was applied to molybdenum in the eastern estimation domain to bring the estimated block model grade to the declustered composite grade.

Bulk density has been estimated in the 2021 model using Inverse Distance (squared). This is a change from the 2016 resource estimate where bulk densities were assigned to lithology followed by gold grade bins.

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

Moisture All tonnages are calculated and reported on a dry tonnes basis.
Cut-off parameters A value algorithm is used to calculate the net smelter return (NSR) for each block using revenue and cost assumptions as of 31 December 2020.

The NSR calculation takes into account Mineral Resource revenue factors, metallurgical recovery assumptions, and site operating costs. The site operating costs include mining cost, processing cost, relevant site general & administration costs. This cost equates to a break even cut off value of approximately AUD18.00/t milled.

Blocks with a value above AUD18.00/t are eligible to qualify for Mineral Resource reporting.

Mining factors or assumptions As Cadia East is a bulk mining operation employing panel caving, the Mineral Resource reporting does not allow a block by block classification. Instead a shell is generated using AUD18.00/t as the value cut-off and the contents of the shell are reported in its entirety as the Mineral Resource, provided they also meet continuity and data density requirements to be classified as either Indicated and/or Inferred Mineral Resources.
Metallurgical factors or assumptions Metallurgical amenability is derived from current operating Cadia Plant performance. Metallurgical factors have been incorporated into the value algorithm which constrains the Mineral Resource classification. These include metallurgical recovery formulas for gold, copper, silver and molybdenum.
Environmental factors or assumptions No environmental factors were deemed necessary for the resource estimate.
Bulk Density All bulk density measurements are carried out in accordance with site standard procedures for Specific Gravity. Intervals for bulk density determination are selected according to lithology/ alteration/mineralisation type to best represent certain intervals as defined by the geologist. The measurements are performed on site by geologists or geological assistants as part of the logging process. Measurements are generally taken at 20 metre to 50 metre intervals down hole.

Bulk density has been estimated in the 2021 model using Inverse Distance (squared). This is a change from the 2016 resource estimate where bulk densities were assigned to lithology followed by gold grade bins.

Classification The Cadia East Mineral Resource consists of majority Indicated Mineral Resource and a portion of Inferred Mineral Resource. There are no in situ Measured Mineral Resources at Cadia East.

Newcrest utilises a resource classification approach that must assess and satisfy two criteria;

  • Geological and grade continuity, and;
  • Reasonable prospects for eventual economic extraction (RPEEE).

Mineralisation at Cadia East is a very large, diffuse, low to moderate grade porphyry related gold-copper-silver-molybdenum deposit. Aside from the Gibb Fault, structural dismemberment is negligible and does not affect continuity. The geological continuity is satisfied by restraining the resource model to an interpretation that encompasses first appearance of copper dominated sulphides and/or a 0.1% copper grade cut-off. The grade continuity component is confined to gold, as gold has lesser grade continuity than copper, and if gold grade continuity is satisfied than the copper grade continuity is automatically satisfied. Gold also contributes the most revenue in the core of the deposit. Both gold and copper become equal revenue contributors in the peripheries of the mineralization. Revenue contribution from molybdenum and silver are not material in the global scheme. Newcrest’s guidelines are that for an Indicated Mineral Resource, the relative error for an annual production increment is less than 15% on a 90% Confidence Interval (CI). For an Inferred Mineral Resource, the relative error for Cadia East is deemed to be approximately 30% on a global basis. The classical Extension Variance technique is used for assessing drill spacing error for an annual production increment. The drill density must satisfy a 90% CI on an annual production basis for a drilling grid over each individual domain. A drilling grid can be thought of as the average drillhole spacing in the domain (and/or deposit). A variogram weighted distance is used to estimate the average weighted drillhole spacing, as nugget effects are low and the ranges relatively long at Cadia East.

For the RPEEE criteria, an NSR value algorithm was developed comprising of metal price, metallurgical recovery, and cost assumption. A NSR value calculation is used to generate working Indicated and Inferred shells from the block model. The working Indicated and Inferred shells are manually re-interpreted to form smooth classification shapes which are subsequently used to stamp the resource model with the final classification.

The resource classification methodology has been tested with geostatistical evaluations, and appropriately confirms the Competent Persons view of the deposit.

Audits or reviews Derisk Geomining Consultants (Derisk) has conducted an independent review of the Cadia East Mineral Resource estimate and concluded that the estimate has been prepared using accepted industry practice, has been completed in accordance with the JORC Code guidelines, and is suitable for preparing a public report documenting the Mineral Resource estimate. There were no material concerns identified by Derisk.
Discussion of relative accuracy/ confidence Newcrest’s guidelines are that for an Indicated Mineral Resource, the relative error for an annual production increment is less than 15% on a 90% CI. For an Inferred Mineral Resource, the relative error for Cadia East is deemed to be approximately 30% on a global basis. Geostatistical evaluations indicate that based on the annual processing throughput this criteria is satisfied. Relative uncertainties and confidence level estimates are considered for both gold and copper.

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

The reserve estimate to mill reconciliation for FY21 was 99% tonnes, 96% gold and 102% copper.

Section 4: Estimation and Reporting of Ore Reserves

Criteria Commentary
Mineral Resource Estimate for conversion to Ore Reserves Cadia East is a large low to moderate grade, porphyry related gold and copper deposit that is located immediately east of Cadia Hill and separated by a major thrust fault (the Gibb Fault). Known mineralisation extends approximately 2.3 kilometres east-west, 1.1 kilometres north-south and 1.8 kilometres vertically. The deposit does not outcrop as it is overlain by between 80 and 200 metres of post mineralisation sandstones and shales. The mineralisation can be divided into two broad overlapping zones; an upper, copper-rich, disseminated zone and, a deeper gold-rich zone associated with sheeted veins.

The Mineral Resource grades were estimated with Ordinary Kriging of 10 m composites for six elements: gold, copper, silver, molybdenum, sulphur, and fluorine. The grades were estimated directly into 20 m x 20 m x 20 m blocks.

The Mineral Resource consists of majority Indicated Mineral Resource and a portion of Inferred Mineral Resource. Classification is based on an assessment of geological confidence as a function of geological and mineralisation continuity, with reported resources constrained within a ‘value’ shell representing the limit for a reasonable prospect of eventual economic extraction.

The reported Cadia East Mineral Resources are inclusive of Ore Reserves.

Site Visits The Competent Person for the Ore Reserve estimate is an employee of Newcrest and has visited site frequently over the past 12 months.
Study Status The PC1-2 Pre-Feasibility Study completed in 2021 is the supporting basis for the Cadia East Ore Reserve estimate. Cadia East is an operating mine for the Cadia province and the PC1-2 Pre-Feasibility Study incorporates learnings from operational execution to date. The PC1-2 Pre-Feasibility Study shows that the mine plan is technically achievable and economically viable taking into consideration all material Modifying Factors.
Cut-off Parameters The Cadia East Ore Reserve employs a value based cut-off determined from the Net Smelter Return (NSR) value equal to the site operating cost included within the PC1-2 Pre-Feasibility Study.

The NSR calculation takes into account Ore Reserve revenue factors, metallurgical recovery assumptions, transport costs, refining charges, and royalty charges. The site operating costs include mining cost, processing cost, relevant site general & administration costs and relevant sustaining capital costs. This cost equates to a break even cut off value of approximately AUD19.80/t milled.

Mining factors or assumptions Estimation of the Cadia East 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 of the existing Cadia caving operations. The basis of the analysis is considered at Pre-Feasibility Study level or higher.

Ongoing geotechnical studies and monitoring utilising experience and data from the current underground operations provide ongoing direction for key Mine Design Parameters, including:

  • Undercut design and Strategy – High Post Undercut
  • Extraction Level Layout – El Teniente
  • Extraction Spacing – 32m x 20m
  • Maximum Draw Column Height – 1350m (PC1), 1400m (PC2), 850m (PC2-3), 1350m (PC1-2), 600m (PC1-4), 800m (PC5001) and 650m (PC3-1).

The following Modifying Factors have been applied:

  • All development has mining factors for dilution and recovery applied to accurately represent the expected mined tonnes; and
  • PCBC software is used for estimation of material grades as material is progressively drawn from the block caves. Grade control and reconciliation processes are undertaken regularly at Cadia East. The parameters used for material mixing within the software and supported by the actual reconciled metal production against forecast metal production project to date being within an acceptable range for the style of mineralisation and mining method under consideration.

No additional mining modifying factors have been applied to the Ore Reserve estimate.

The resource estimate has been classified as Indicated and Inferred Mineral Resources. The Ore Reserve estimate is based on Indicated Mineral Resources only with additional external dilution included in the draw models.

The remaining mining blocks for Cadia East are brownfields projects and will require the following mining infrastructure to support the extraction level development of each block:

  • Ventilation fans and refrigeration equipment;
  • Materials handling systems extensions;
  • Additional crushing and conveying equipment; and
  • Underground workshop, service and personnel facilities.
Metallurgical factors or assumptions Processing of the Cadia East underground ore stream will be through Cadia Valley Operations Ore Treatment Plant concentrators 1 & 2. Metal recovery is through gravity and conventional flotation to a copper/gold concentrate. This circuit currently processes Cadia East material with a similarly styled material to future ore sources. Cadia East is the sole source of feed for both Concentrator 1 and Concentrator 2. Production of up to 36mtpa12 is anticipated to be produced through the concentrators. While the scale of processing will position the operation among the world’s largest gold mines, the technology associated with the ore processing is industry standard for this style of deposit and is already custom and practice at Cadia with many years of operational experience.

The process plant infrastructure and metallurgical recovery assumptions used to determine the Ore Reserve are supported by the PC1-2 Pre-Feasibility Study. The baseline metallurgical recovery performance is supported by reconciliation of Cadia East ore through the currently installed processing plant to date. Process plant upgrades are currently in progress as part of the Cadia Expansion Project – Stage 2 the completion is expected late FY22. The Expansion Project includes upgrades to the circuit to boost throughput and metallurgical recovery. Metallurgical recoveries for gold are anticipated to range between 70% and 85% with a life of mine average of approximately 81%. Metallurgical recoveries of copper are expected to range between 80% and 90% with a life of mine average of approximately 87%. Metallurgical recoveries of molybdenum are expected to range between 65% and 75%.

The construction of a molybdenum plant is currently in progress. The molybdenum plant is planned to create a specific molybdenum concentrate sold as a separate saleable product with revenue from molybdenum included in the Ore Reserve estimation process. This plant is likely to be commissioned during calendar year 2021.

Fluorine is the key deleterious element for the gold/copper concentrate product with smelter penalties incurred on the basis of fluorine content. The PC1-2 Prefeasibility study has made allowance for additional regrind capacity to remove fluorine from the final concentrate.

Environmental Cadia presently holds a Project Approval for the Cadia East Project under both NSW and Commonwealth legislation until 30 June 2031. Minor amounts of waste will be generated from the Cadia East mine and these will be stored within existing waste storage facilities.

Modifications to this Project Approval under the NSW Environmental Planning and Assessment Act 1979 (EP&A Act) will be required over the life of the Ore Reserves period with the storage of tailings a key consideration. Studies to determine the long term tailings storage beyond the current facilities are ongoing and will be submitted for modification as required over the life of the asset.

Infrastructure A majority of the surface infrastructure is now complete for the Cadia East mine. Additional surface infrastructure planned for the future includes:
  • Additional circuit crushing & grinding capacity,
  • Ventilation Infrastructure; and
  • Additional tailings storage capacity.

Underground infrastructure will continue to operate over the mine life as additional mining blocks are established to maintain the mill rate. Both surface and additional underground infrastructure requirements are dictated by the production schedule.

Provision has been made in the Ore Reserves estimate for future capital expenditure requirements relating to infrastructure during the life of the mine based on most recent estimates.

Costs The PC1-2 Pre-Feasibility Study (2021) and the PC2-3 Feasibility Study (2019) form the basis of the capital and operating costs supporting the Ore Reserve.

Capital cost estimates are based on multiple market prices across all technical disciplines and include processing upgrade and mine development costs along with associated infrastructure, project establishment and sustaining capital costs. These provisions have been allowed for during the life of the mine based on most recent Pre-Feasibility plan estimates. Contingency has also been factored into the project capital cost estimate consistent with the level of accuracy of the study.

The operating cost estimate is based on the current operating cost base modified for changing activity levels and reasonable cost base reductions over the life of the mine. The operating costs include the mining cost, processing cost, relevant site general and administration costs. Ore Reserve cost estimates have been reviewed as part of the study execution, are reviewed annually and are considered to be to a Pre-Feasibility Study level.

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. These included charges for deleterious elements, e.g. fluorine where applicable.

Royalties are calculated as 4% of block revenue less all off site realisation costs (TCRCs), less ore treatments costs and less one third of site general and admin cost.

Revenue factors The financial assessment of the Ore Reserve estimate is based on long term metal prices and exchange rate assumptions of US$1,300/oz for gold, US$$3.00/lb for copper, US$18/oz for silver and US$8/Ib for molybdenum at a USD:AUD exchange rate of 0.75. These Ore Reserve revenue factors are consistent with Newcrest metal price guideline for the December 2020 Ore Reserve reporting.

The NSR calculation considers the Ore Reserve revenue factors, metallurgical recovery assumptions, transport costs and refining charges and royalty charges.

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 Cadia is not a constraint in the estimation of the Ore Reserve.

Cadia has sold copper concentrate for its operational life into the world concentrate markets, current market conditions are assumed to continue. Concentrate volume forecasts were derived from the Pre-Feasibility Study production schedule.

Economic 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 the Cadia East Ore Reserve to have 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. The NPV range has not been provided as it is commercially sensitive.

Social Socio-economic evaluations of Cadia incorporating community and stakeholder surveys and engagement activities and regional economic impact assessments, has shown positive impacts on employment, income, business turnover and Gross Regional Product (GRP).

Cadia regularly consults and this continued engagement with the community and developing and maintaining one-on-one relationships with key stakeholders, will be vital to the maintenance of a social licence to operate.

Other Cadia Holdings Pty Ltd (CHPL) holds six current mining leases covering Cadia. Cadia has a number of legal and marketing arrangements related to its ongoing operational requirements. None of these arrangements are likely to materially impact upon the Cadia East Ore Reserve estimate. Cadia are in material compliance with all legal and regulatory requirements.

The Cadia East deposit is located in an area which has been seismically active both prior to and subsequent to mining. These events can produce seismic loading at the site and this risk is taken into account in the design of the infrastructure.

The storage of tailings and the efficient recovery of water during tailings placement is a requirement for the Ore Reserve. Cadia experienced a failure of one of its tailings storage facilities, the Northern Tailings Storage Facility (NTSF) in 2018. Studies to determine the storage of tailings beyond the current facilities, including components that seek to improve the recovery of water are being progressed in line with the requirements identified in the Pre-Feasibility Study and the recommendations of the NTSF Independent Technical Review Board. Modifications to the current site operating permits and licence will be submitted once these studies are complete and as required over the life of the asset. These elements of the plan represents a risk to the Ore Reserves.

The central west of NSW has recently experienced a period of prolonged drought. During that period sufficient water was in place for uninterrupted production at the Cadia mine site. A risk to the Ore Reserve is present if future periods of prolonged drought are worse than those recently experienced and if suitable quantities of water cannot be obtained during those periods.

Classification The Probable Ore Reserve is based on Indicated Mineral Resources. No Measured Mineral Resources are stated for this deposit. The resource classification is based on an assessment of geological confidence as a function of geological and mineralisation continuity, with reported resources constrained within a ‘value’ shell representing the limit for a reasonable prospect of eventual economic extraction.

It is the Competent Persons view that the classifications used for the Ore Reserves are appropriate.

Audits or reviews An independent review has been conducted of the Cadia East Ore Reserves estimate and concluded that the estimate has been completed in accordance with the JORC Code reporting guidelines using industry accepted practices. There were no material concerns identified by the independent reviewer.
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 Mineral Resource estimate, the geotechnical input and the cost factors used.

The Competent Person views the Cadia East Ore Reserve a reasonable assessment of the global estimate. Some risk and opportunity is associated with the Ore Reserve process due to the prolonged operating life of the mine. Key opportunity and risk areas are associated with:

  • Cost base assumptions rely on current technology and macroeconomic factors. Changes to these assumptions will have an impact on the Ore Reserve estimate.
  • The Modifying Factors (key inputs) for Ore Reserve estimation rely upon the geology and geotechnical data inherent to the orebody. This data, such as geological structures and rock mass properties, is to the appropriate definition and have been applied within Pre-Feasibility Study, however further orebody data is required to confirm the geological and geotechnical information and is planned as part of the Forward Works Programme.

Overall reconciled performance of the Cadia East Ore Reserve estimate for FY21 was 99% tonnes, 96% gold metal and 102% copper metal when reconciled to mill production.

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 Annual Information Form dated 13 October 2020 lodged with ASX and SEDAR and 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 and Wafi-Golpu. Copies of the NI43-101 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.

Competent Person’s Statement

The information in this document that relates to Cadia East Ore Reserves is based on and fairly represents information compiled by Mr Ian Austen. Mr Ian Austen is the Mining Study Manager 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 Fellow of the Australasian Institute of Mining and Metallurgy. Mr Ian Austen 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 and as a Qualified Person under NI 43-101. Mr Ian Austen approves the disclosure of scientific and technical information contained in this document and 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 Cadia East Mineral Resources is based on and fairly represents information compiled by Mr Luke Barbetti. Mr Luke Barbetti is the Principal – Cadia Integrated 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 Australian Institute of Geoscientists. Mr Luke Barbetti 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 and as a Qualified Person under NI 43-101. Mr Luke Barbetti approves the disclosure of scientific and technical information contained in this document and consents to the inclusion of material of the matters based on his information in the form and context in which it appears.

Authorised by the Newcrest Disclosure 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.


1 The Pre-Feasibility Study has been prepared with the objective that its findings are subject to an accuracy range of ±25%. The findings in the Study and the implementation of the PC1-2 Project are subject to all the necessary approvals, permits, internal and regulatory requirements and further works. The Study estimates are indicative only and are subject to market and operating conditions. They should not be construed as guidance.
2 The production targets underpinning the Study estimates are contained in the column titled “PC1-2” in the table on Page 2 under the heading “Table of Key Study Findings”.
3 The production targets are based on the utilisation of ~20% of the total Cadia East Ore Reserves as set out on Page 9, which has been prepared by a Competent Person in accordance with Appendix 5A of the ASX Listing Rules.
4 As Cadia’s functional currency is AUD, the Study has been assessed in AUD. The outcomes in this release have been converted to USD using an exchange rate of 0.75.
5 Using a discount factor of 4.5% (real).
6 As described in the section titled “Permitting and Tailings”, further approvals will be required for the throughput rate on which this is based and operations after 2030.
7 The production targets are based on the utilisation of 100% of the total Cadia East Ore Reserves as set out on Page 9, which has been prepared by a Competent Person in accordance with Appendix 5A of the ASX Listing Rules.
8 Assumptions for gold equivalent calculations include: Gold price of US$1,500/oz, copper price of US$3.30/lb, AUD:USD exchange rate of 0.75. Recovered Gold & Copper Production as provided in the charts as indicative of the forward metal sales profile. Gold-equivalent production (by-product basis) = Recovered Au oz + (Cu Price $US/lb) x 2204 / (Au Price US$/oz) x (Recovered copper tonnes as provided in the chart above, as indicative of the forward production profile). Gold grades are as set out in the indicative mine production profile on page 5. Based on LOM Au recovery of approximately 81% and approximately 87% for Cu. In the Company’s opinion, all elements included in the metal equivalents calculation have a reasonable potential to be recovered and sold.
9 Data is reported to two significant figures to reflect appropriate precision in the estimate and this may cause some apparent discrepancies in totals.
10Data is reported to two significant figures to reflect appropriate precision in the estimate and this may cause some apparent discrepancies in totals.
11 Subject to permitting and regulatory approvals.
12 Subject to permitting and regulatory approvals.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/93683

News Provided by Newsfile via QuoteMedia

Featured
Exceptional Exploration Results at Linderos

The Board of Titan Minerals Limited (ASX: TTM) (Titan or the Company) is pleased to present the following update on surface exploration at its Linderos Project in Southern Ecuador. The focus of these programs has been the two main prospects currently known to exist at Linderos being the Mesta Gold Prospect and the Copper Ridge Prospect located <1km to its south. Some very exciting assay results from surface works are beginning to filter through with the key highlights so far being:

read more Show less
TTM:AU
mako gold managing director peter ledwidge

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.

read more Show less
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

Cannot view this image? Visit: https://orders.newsfilecorp.com/files/7614/99289_498f7c99e4a7bb50_003.jpg

Figure 1: Phase 14 Mining ore production by financial year3

To view an enhanced version of Figure 1, please visit:
https://orders.newsfilecorp.com/files/7614/99289_498f7c99e4a7bb50_003full.jpg

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.

Cannot view this image? Visit: https://orders.newsfilecorp.com/files/7614/99289_498f7c99e4a7bb50_004.jpg

Figure 2: Lihir Mine cutbacks including Phase 14A

To view an enhanced version of Figure 2, please visit:
https://orders.newsfilecorp.com/files/7614/99289_498f7c99e4a7bb50_004full.jpg

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.

Cannot view this image? Visit: https://orders.newsfilecorp.com/files/7614/99289_498f7c99e4a7bb50_005.jpg

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

To view an enhanced version of Figure 3, please visit:
https://orders.newsfilecorp.com/files/7614/99289_498f7c99e4a7bb50_005full.jpg

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.

Cannot view this image? Visit: https://orders.newsfilecorp.com/files/7614/99289_newcrestfigure4_550.jpg

Figure 4: Phase 14A wall stabilisation design

To view an enhanced version of Figure 4, please visit:
https://orders.newsfilecorp.com/files/7614/99289_newcrestfigure4.jpg

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.

Cannot view this image? Visit: https://orders.newsfilecorp.com/files/7614/99289_newcrestfigure5_550.jpg

Figure 5: Lihir LOM indicative gold production profile9

To view an enhanced version of Figure 5, please visit:
https://orders.newsfilecorp.com/files/7614/99289_newcrestfigure5.jpg

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

Cannot view this image? Visit: https://orders.newsfilecorp.com/files/7614/99289_newcrestfigure6_550.jpg

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

To view an enhanced version of Figure 6 & 7, please visit:
https://orders.newsfilecorp.com/files/7614/99289_newcrestfigure6.jpg

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:

Cannot view this image? Visit: https://orders.newsfilecorp.com/files/7614/99289_newcresttable1_350.jpg

To view an enhanced version of this graphic, please visit:
https://orders.newsfilecorp.com/files/7614/99289_newcresttable1.jpg

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

read more Show less

There are many big Australian gold stocks, but these are the five top companies in the sector by market cap.

Australia is the fourth largest producer of gold worldwide, and this past year has brought ups and downs for the commodity. The precious metal hit its 2021 high point early on and fell soon after.

Lately, gold has been resting at a strong price of around US$1,800 per ounce, and it seems like it will exit the year that way. It may even be in for a serious price hike if inflationary pressures continue on their current trajectory.

Read on to learn more about Australia’s five top gold companies by market cap. All market cap and share price information was obtained on November 25, 2021, using TradingView's stock screener.


1. Newcrest Mining

Market cap: AU$19.54 billion; current share price: AU$24.14

Newcrest Mining (ASX:NCM) operates a portfolio of gold mines across Australia, Canada and Papua New Guinea. These include its New South Wales-based Cadia mine and its Western Australia-based Telfer and Havieron mines.

In November 2021, Newcrest agreed to purchase British Columbia-based Pretium Resources (TSX:PVG,NYSE:PVG) for C$3.5 billion, marking the company’s expansion into Western Canada.

2. Kirkland Lake Gold

Market cap: AU$14.57 billion; current share price: AU$54.99

Kirkland Lake Gold (ASX:KLA) has mining operations in Australia and Canada, both of which are low-risk, gold-rich countries. The company’s Fosterville mine is based in Victoria, Australia, and as of December 31, 2018, its mineral reserves stood at 2.7 million ounces. It produced 640,467 ounces in 2020.

In September 2021, Kirkland Lake Gold and Agnico Eagle Mines (TSX:AEM,NYSE:AEM), a Canadian gold miner, announced a “merger of equals." The new company will go by the name Agnico Eagle Mines, and the companies expect the transaction to close in late 2021 or early 2022.

3. AngloGold Ashanti

Market cap: AU$12.43 billion; current share price: AU$5.83

AngloGold Ashanti (ASX:AGG) is a global gold miner formed in 2004. It has two Australia-based operations, both of which are based in Western Australia’s northeastern goldfields: Sunrise Dam and Tropicana. Sunrise Dam is 100 percent owned, while Tropicana is 70 percent owned, with the remaining 30 percent owned by Regis Resources (ASX:RRL,OTC Pink:RGRNF). In 2020, these operations produced 554,000 ounces of gold.

In Q3 2021, AngloGold Ashanti reported total gold production of 613,000 ounces at a total cash cost of US$927 per ounce. This represents a 5 percent quarter-over-quarter increase in production, though a year-to-date decrease.

4. Northern Star Resources

Market cap: AU$11.39 billion; current share price: AU$9.66

Northern Star Resources (ASX:NST) is an Australian gold-mining company with projects throughout Western Australia and North America at its Kalgoorlie, Yandal and Pogo production centres. In the 2021 fiscal year, Northern Star experienced a 40 percent revenue increase and a 10 percent cash earnings hike.

In late November 2021, Northern Star announced an agreement to buy Newmont Australia’s power business for US$95 million. The company paid US$25 million for the option to purchase this business, an opportunity it was given through its recent 50 percent acquisition of Kalgoorlie Consolidated Gold Mines.

5. Evolution Mining

Market cap: AU$7.53 billion; current share price: AU$4.12

Australian gold miner Evolution Mining (ASX:EVN) has projects throughout New South Wales, Queensland and Western Australia, as well as in Ontario, Canada. Evolution Mining produced 680,788 ounces of gold in the 2021 fiscal year at an all-in sustaining cost of AU$1,215 per ounce.

In 2019, Evolution Mining became one of only two Australian gold companies to be included in the Dow Jones Sustainability Index (INDEXDJX:W1SGI). In 2020 and 2021, the company made several strategic acquisitions and divestments, including its high-value purchases of the Red Lake and the Kundana operations.

This is an updated version of an article originally published by the Investing News Network in 2018.

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

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

What are the largest Australian copper companies? These five ASX copper stocks are the biggest on the exchange by market cap.

Last year, pandemic restrictions forced copper mines to shut down across the world, driving down global production and causing the 10 largest copper-mining companies to suffer dramatic losses.

But in 2021, copper hit an all-time high of US$10,700 per tonne, and stayed over US$9,000 for much of the year.

The three top copper-producing countries globally are Chile, Peru and China, with Australia coming in at number six. Still, there are plenty of untapped resources in the land down under, and Australia is making a name for itself as an up-and-coming producer of this important base metal.


Read on to learn more about the top five Australian copper companies on the ASX, ranked by market cap. All market cap and share price information was obtained on November 26, 2021, from TradingView.

1. BHP

Market cap: AU$192.56 billion; current share price: AU$38.03

BHP (ASX:BHP) is a top global producer of copper, nickel, potash, iron ore and metallurgical coal, with copper production centralised at its South Australia-based Olympic Dam mine.

The company, whose headquarters are in Melbourne, Australia, emphasises copper’s function in renewable energy systems and the metal’s critical role in reducing carbon dioxide emissions.

Recently, BHP has focused its attention on its energy assets. In late November, the company merged its oil and gas portfolio with Woodside Petroleum, a deal that was originally struck in August of the same year. On the mineral side of its operations, BHP was looking to acquire Noront Resources (TSXV:NOT,OTC Pink:NOSOF), a Canada-based nickel, copper, chrome and platinum company, but decided not to match a superior offer.

2. OZ Minerals 

Market cap: AU$8.77 billion; current share price: AU$25.70

OZ Minerals (ASX:OZL) is a South Australia-based copper-mining company founded in 2008. Its operations include the Carrapateena project, where construction was completed in 2019, and the upcoming Malu underground mine, which was commissioned in 2015.

In a November press release, OZ Minerals reported a year-to-date 5 percent increase in group ore reserve copper metal tonnes. In its third quarter results, the company reported guidance of between 120,000 and 145,000 tonnes of copper for the year.

3. Sandfire Resources

Market cap: AU$2.59 billion; current share price: AU$6.11

Sandfire Resources (ASX:SFR) owns 7,189 square kilometres in the Bryah Basin region of Western Australia, including its DeGrussa and Monty operations. Both of these are 100 percent owned and produce copper and gold.

The company released its third quarter results in October, reporting total copper production of 15,946 tonnes. Sandfire expects output of between 64,000 and 68,000 tonnes of copper in 2022.

4. 29Metals

Market cap: AU$1.29 billion; current share price: AU$2.63

Australia-based mining company 29Metals (ASX:29M) has the Golden Grove mine in Western Australia and the Capricorn copper mine in Queensland, along with several promising new growth opportunities lined up. 29Metals focuses on copper production, though it also mines for zinc, gold and silver.

According to an October release from the company, production was weaker than expected at Golden Grove during the September quarter. However, the asset's quarter-on-quarter decline of about 10 percent was largely offset by a strong performance at Capricorn.

5. Copper Mountain Mining

Market cap: AU$804.96 million; current share price: AU$3.81

Copper Mountain Mining (ASX:C6C) is a Canadian and Australian copper miner, with its flagship Copper Mountain operation in British Columbia, Canada, and its Eva and Cameron copper projects in Queensland, Australia.

In the third quarter, Copper Mountain Mining reported total output of 22.4 million pounds of copper at its Copper Mountain mine, representing a 12.1 percent quarter-over-quarter decline in production. The company still reported positive cash flow, with strong construction and exploration gains made at its Eva and Cameron projects.

This is an updated version of an article first published by the Investing News Network in 2018.

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

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