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Newcrest Mining Limited – FY21 Full Year Results

Newcrest  delivers record profit and free cash flow and a 129% increase in final dividend,,, Creating a brighter future for people through safe and responsible mining Zero fatalities and life-changing injuries, underpinned by industry-leading low injury rates Goal of net zero carbon emissions by 2050 Cadia renewable energy contract signed – on track for 30% reduction in Group emissions intensity by 2030 Strong …

(figures are in US$ except where stated)

Newcrest (ASX: NCM) (TSX: NCM) delivers record profit and free cash flow and a 129% increase in final dividend(1),(2),(3),(4)

  • Creating a brighter future for people through safe and responsible mining
  • Zero fatalities and life-changing injuries, underpinned by industry-leading low injury rates(5)
  • Goal of net zero carbon emissions by 2050(6)
  • Cadia renewable energy contract signed – on track for 30% reduction in Group emissions intensity by 2030(7)
  • Strong operating performance and higher prices translate to record profit and free cash flow
  • Gold production of 2.1 million ounces(8), with record copper production of 142.7 thousand tonnes
  • Record Statutory and record Underlying profit of $1.2 billion(9),(10), up 80% and 55% respectively
  • Record annual free cash flow of $1.1 billion(10)
  • All-In Sustaining Cost (AISC) of $911/oz(8),(10),(11), delivering a record AISC margin of 49% or $876/oz(10),(11),([12])
  • Record mine and mill performance at Cadia, underpinning record copper production and its lowest reported annual AISC of negative $109/oz
  • Strong balance sheet is well positioned for growth
  • Net cash position of $176 million as at 30 June 2021
  • Significant liquidity with $3.9 billion in cash and committed undrawn bank facilities
  • Early repayment of 2022 Corporate Bonds and renegotiation of bilateral bank debt facilities
  • Next corporate bond debt repayment not due until May 2030
  • Advancing multiple organic growth options
  • Exploration decline development works progressing well at Red Chris and Havieron
  • First production from Cadia Molybdenum Plant expected by the end of September 2021([13])
  • Board approves Cadia PC1-2 Pre-Feasibility Study to Feasibility Stage
  • Board approves Telfer WDS5 cutback
  • Sixth consecutive year of increased dividends
  • Final fully franked dividend of US 40 cps, 129% higher than the prior year
  • Record total dividends for FY21 of US 55 cps, equal to a 41% payout of FY21 free cash flow
  • Earnings per share of 142.5 cents, 71% higher than prior year

Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas, said, “Newcrest has delivered a strong operational and financial performance for the 2021 financial year, producing 2.1 million ounces of gold at an AISC of $911 per ounce. Together with the benefit of higher gold and copper prices, this translated into a record statutory and underlying profit of $1.2 billion and a record free cash flow of $1.1 billion.”

“At Newcrest our Purpose of Creating a brighter future through safe and responsible mining is core to how we run our business. We are now nearly six years free of fatalities and life-changing injuries and have reported a 12% improvement in injury rates compared to the prior year. Notwithstanding the challenges brought by COVID-19, our extensive precautionary measures and focus on safety has enabled us to achieve our full year guidance. At the same time, we were also able to contribute our expertise to assist local governments and our host communities with their response to the virus.”

In May 2021 we announced our goal of net zero carbon emissions by 2050. We have made solid progress implementing our sustainability objectives throughout our business and continue to target improvements in water usage, biodiversity and emissions reductions.”

“The Board has approved the Cadia PC1-2 Pre-Feasibility Study to the next stage, the Feasibility Study stage. The Study updates and defines a significant part of Cadia’s future mine plan. The Board also approved the Early Works program to establish critical infrastructure in parallel with the Feasibility Study. PC1-2 has an attractive rate of return and is expected to help sustain Cadia’s position as a Tier 1, low-cost producer for decades to come.”

Mr Biswas noted that Newcrest’s strong financial position enables its investment in attractive growth projects. “We have significant financial capacity to fund our pipeline of attractive organic growth options, both from the expected cash flow generation over the development period and our strong balance sheet.”

On the increase in shareholder returns, Mr Biswas said “Our dividend policy targets total dividends for a financial year to be in the range of 30-60% of that financial year’s free cashflow, with a minimum annual dividend of US 15 cents per share. Given our record free cash flow generation for FY21, strong balance sheet and positive outlook the Board has approved a final dividend of US 40 cents per share, which is 129% higher than last year’s final dividend. This equates to a record total full year dividend of US 55 cents per share which represents a 41% payout of FY21’s free cashflow and marks our sixth consecutive year of increasing dividends to shareholders.”

“In the coming months we look forward to finalising key Pre-Feasibility Studies for Red Chris, Havieron and Lihir. We are striving to bring Havieron and the Red Chris block cave into production as soon as possible. Phase 14A at Lihir represents further upside from the current mine plan and brings forward our aspiration for Lihir to be a 1 million ounce plus annual producer” said Mr Biswas.

Summary of Operating and Financial Results

For the 12 months ended 30 June


Endnote UoM 2021 2020 Change Change %
TRIFR 14 mhrs 2.3 2.6 (0.3) (12%)
Group production – gold
8 oz 2,093,322 2,171,118 (77,796) (4%)

– copper
t 142,724 137,623 5,101 4%
Revenue
$m 4,576 3,922 654 17%
EBITDA 10 $m 2,443 1,835 608 33%
EBIT 10 $m 1,770 1,191 579 49%
Statutory profit 9 $m 1,164 647 517 80%
Underlying profit 10 $m 1,164 750 414 55%
Cash flow from operating activities
$m 2,302 1,471 831 56%
Free cash flow* 10 $m 1,104 (621) 1,725 278%
EBITDA margin 10 % 53.4 46.8 6.6 14%
EBIT margin 10 % 38.7 30.4 8.3 27%
All-In Sustaining Cost 8,10,11 $/oz 911 862 49 6%
All-In Sustaining Cost margin 10,11,12 $/oz 876 668 208 31%
Realised gold price 15 $/oz 1,796 1,530 266 17%
Realised copper price 15 $/lb 3.66 2.57 1.09 42%
Earnings per share (basic)
US$ cents 142.5 83.4 59.1 71%
Earnings per share (diluted)
US$ cents 142.1 83.1 59.0 71%
Dividends paid per share
US$ cents 32.5 22.0 10.5 48%
Cash and cash equivalents
$m 1,873 1,451 422 29%
(Net cash) or net debt
$m (176) 624 (800) (128%)
Leverage ratio 10 times (0.1) 0.3 (0.4) (133%)
Gearing
% (1.8) 6.8 (8.6) (126%)
ROCE 10 % 18.5 13.8 4.7 34%

*Free cash flow in the prior period includes the acquisition of Red Chris (70%) for $769 million, the acquisition of Fruta del Norte finance facilities for $460 million, further investments in Lundin Gold of $79 million, net proceeds from divesting Gosowong of $20 million and $3 million for an interest in Antipa Minerals Ltd.

Refer to the Company’s “ASX Appendix 4E and Financial Report” released on 19 August 2021, and the Operating and Financial Review in particular, for more detail on the Company’s financial results.

FY21 Final Dividend

Newcrest looks to pay ordinary dividends that are sustainable over time having regard to its cash flow generation, its reinvestment options in the business and external growth opportunities, its financial policy metrics and its balance sheet strength. Newcrest targets a total annual dividend payout of 30-60% of free cash flow generated for the financial year, with the annual total dividends being at least US 15 cents per share on a full year basis.

Having regard to the above-mentioned considerations, the Newcrest Board has determined that a final fully franked dividend of US 40 cents per share will be paid on Thursday, 30 September 2021. The final dividend is 129% higher than the final dividend for FY20 and marks the sixth consecutive year of increasing dividend payments to shareholders.

The record date for entitlement is Friday, 27 August 2021. The financial impact of the FY21 final dividend amounting to $327 million has not been recognised in the Consolidated Financial Statements for the year. The Company’s Dividend Reinvestment Plan remains in place.

COVID-19 Update

To date, Newcrest has not experienced any material COVID-19 related disruptions to production or to the supply of goods and services.

At the date of this report, the number of COVID-19 cases at Lihir remains at low levels that are within the capability of the care and treatment and isolation facilities, with the majority of these cases continuing to be asymptomatic. Newcrest continues to strengthen its COVID-19 controls at Lihir, focusing on containment through extensive contact tracing and isolation procedures. Charter flights with restricted capacity are operating between Papua New Guinea and Australia, as are limited commercial flights between Port Moresby and Brisbane.

There were no material COVID-19 related events impacting gold production at Lihir during the financial year. However, as advised in the March 2021 quarterly report, the ability to attract labour, travel restrictions, contact tracing and associated isolation requirements has impacted total material mined. Delays have also been experienced on development projects (including Phase 14A ground support trials) and shutdown performance due to difficulty in mobilising and accommodating labour. There remains a risk of COVID-19 impacting production at Lihir and this continues to be closely managed.

All of Newcrest’s operations have business continuity plans and contingencies in place which strive to minimise disruptions due to the pandemic and to best position the operations to continue producing. Should any material impacts arise, Newcrest will inform the market in line with its continuous disclosure obligations.

In FY21, Newcrest incurred ~$70 million in COVID-19 management costs, of which $53 million related to Lihir. Costs associated with managing COVID-19 risks in FY21 were around $30 million higher than anticipated due to more extensive testing, longer quarantining periods, additional accommodation, rostering and other labour costs, and other preventative actions. Elevated costs related to the pandemic are expected to continue throughout FY22.

Newcrest established a A$20 million Community Support Fund in April 2020 to support host communities and jurisdictions in their response to the COVID-19 pandemic. In FY21, the Fund supported a range of initiatives in Australia, Papua New Guinea, British Columbia and Ecuador including the provision of emergency medical equipment, food supplies, mental health support, support for small businesses, and vaccine rollout.

Summary of Full Year Financial Results

Statutory profit and Underlying profit was a record $1,164 million in the current period.

Underlying profit of $1,164 million was $414 million (or 55%) higher than the prior period primarily driven by higher realised gold and copper prices, favourable fair value adjustments recognised on copper derivatives and Newcrest’s investment in the Fruta del Norte finance facilities and record copper production from Cadia. These benefits were partially offset by lower gold sales volumes driven by lower production, increased income tax expense as a result of the Company’s improved profitability in the current period, the unfavourable impact on operating costs (including depreciation) from the strengthening of the Australian dollar against the US dollar, additional costs associated with COVID-19 measures, higher treatment, refining and transportation costs and higher price-linked costs such as royalties.

Underlying profit

For the 12 months ended 30 June
US$m 2021 2020 Change Change %
Gold revenue 3,584 3,278 306 9%
Copper revenue 1,137 778 359 46%
Silver revenue 26 16 10 63%
Less: treatment and refining deductions (171) (150) (21) (14%)
Total revenue 4,576 3,922 654 17%
Operating costs (2,155) (1,946) (209) (11%)
Depreciation and amortisation (650) (622) (28) (5%)
Total cost of sales (2,805) (2,568) (237) (9%)
Corporate administration expenses (143) (117) (26) (22%)
Exploration expenses (69) (64) (5) (8%)
Share of profit/(losses) of associates 26 (37) 63 170%
Other income 185 55 130 236%
Net finance costs (102) (102) 0%
Income tax expense (504) (338) (166) (49%)
Non-controlling interest (1) 1 100%
Underlying profit 1,164 750 414 55%

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Free cash flow

Newcrest’s record free cash flow of $1,104 million was $1,725 million higher than the prior period, with the prior period also characterised by a net cash outflow of $1,291 million relating to M&A growth investments, compared to $21 million outflow in the current period.

‘Free cash flow before M&A activity’ was $455 million (or 68%) higher than the prior period, with higher operating cash flows only partially offset by an increased investment in major capital projects at Cadia, Lihir, Red Chris and Havieron, higher sustaining capital at all continuing operations and increased production stripping activity at Lihir and Red Chris.

In the current period, Newcrest received net pre-tax cashflows of $92 million from finance facilities acquired from Lundin Gold Inc, relating to the Fruta del Norte mine. This is reflected within the cash flow statement as $54 million in operating cash flow (interest payments received) and $38 million in investing cash flow (primarily principal repayments received).

For the 12 months ended 30 June
US$m 2021 2020 Change Change %
Cash flow from operating activities 2,302 1,471 831 56%
Production stripping and sustaining capital expenditure (524) (422) (102) (24%)
Major capital expenditure (non-sustaining) (595) (273) (322) (118%)
Total capital expenditure (1,119) (695) (424) (61%)
Reclassification of capital leases 11 4 7 175%
Exploration and evaluation expenditure (115) (113) (2) (2%)
Net receipts from Fruta del Norte finance facilities 38 1 37 3,700%
Proceeds from sale of property, plant and equipment 8 2 6 300%
Free cash flow (before M&A activity) 1,125 670 455 68%
Acquisition payment for a 70% interest of Red Chris (769) 769 100%
Acquisition of Fruta del Norte finance facilities (460) 460 100%
Payment for investment in Lundin Gold (8) (79) 71 90%
Payment for investment in SolGold (10) (10)
Payment for investment in Antipa Minerals (3) (3) 0%
Proceeds from sale of Gosowong, net of cash divested 20 (20) (100%)
Free cash flow 1,104 (621) 1,725 278%

Balance Sheet

US$m As at
30 Jun 2021
As at
30 Jun 2020
Change Change %
Assets
Cash and cash equivalents 1,873 1,451 422 29%
Trade and other receivables 289 305 (16) (5%)
Inventories 1,505 1,573 (68) (4%)
Other financial assets 641 546 95 17%
Current tax assets 3 1 2 200%
Property, plant and equipment 9,788 8,809 979 11%
Goodwill 19 17 2 12%
Other intangible assets 32 24 8 33%
Deferred tax assets 54 65 (11) (17%)
Investment in associates 442 386 56 15%
Other assets 68 65 3 5%
Total assets 14,714 13,242 1,472 11%
Liabilities
Trade and other payables (577) (520) (57) (11%)
Current tax liability (107) (23) (84) (365%)
Borrowings (1,635) (2,017) 382 19%
Lease liabilities (62) (58) (4) (7%)
Other financial liabilities (110) (274) 164 60%
Provisions (735) (623) (112) (18%)
Deferred tax liabilities (1,364) (1,114) (250) (22%)
Total liabilities (4,590) (4,629) 39 1%
Net assets 10,124 8,613 1,511 18%
Equity
Equity attributable to owners of the parent 10,124 8,613 1,511 18%
Total equity 10,124 8,613 1,511 18%

Summary of Full Year Results by Asset(16)

For the 12 months ended 30 June 2021
UoM Cadia Lihir Telfer Red
Chris(17)
Fruta del
Norte
(8),(11)
Other Group
Operating
Production
Gold koz 765 737 416 46 129 2,093
Copper kt 106 13 23 143
Silver koz 643 38 149 114 945
Sales
Gold koz 766 773 411 46 120 2,116
Copper kt 105 13 23 141
Silver koz 638 38 149 111 936
Financial
Revenue $m 2,180 1,425 725 246 4,576
EBITDA $m 1,615 590 137 79 22 2,443
EBIT $m 1,416 313 33 9 (1) 1,770
Net assets $m 3,169 4,125 (59) 1,003 1,886 10,124
Operating cash flow $m 1,796 621 151 114 (380) 2,302
Investing cash flow $m (564) (300) (69) (151) (114) (1,198)
Free cash flow $m 1,232 321 82 (37) (494)* 1,104
AISC(11) $m (83) 1,076 606 103 91 135 1,928
$/oz (109) 1,391 1,473 2,248 753 911
AISC Margin(11) $/oz 1,905 405 323 (452) 876

* Free cash flow for ‘Other’ includes:

  • A net inflow of $20 million relating to other investing activities (comprising net receipts from Fruta del Norte finance facilities of $38 million, proceeds from the sale of property, plant and equipment of $3 million, offset by $21 million relating to payments to maintain Newcrest’s existing interests in associates),
  • income tax paid of $233 million,
  • exploration expenditure of $79 million,
  • corporate costs of $105 million,
  • other capital expenditure of $57 million,
  • net interest paid of $46 million, and
  • net working capital inflows of $6 million.

Refer to the Company’s “ASX Appendix 4E and Financial Report” released on 19 August 2021, and the Operating and Financial Review in particular, for an operational overview for the year.

Guidance(3),(16),(18)

Newcrest provides the following guidance for FY22, subject to market and operating conditions.

The production guidance numbers for FY22 assume no COVID-19 related interruptions. However, the AISC expenditure guidance for FY22 includes an estimate for additional costs associated with managing the business in a COVID-19 context (including on matters such as flights, transport, rosters, leave, screening and testing, and disbursements from the Community Support Fund) in the order of $35-45 million.

Guidance for the 12 months ending 30 June 2022


Cadia Lihir Telfer Red Chris Fruta del Norte(a) Havieron Other(b) Group
Production
Gold – koz 540 – 610 700 – 800 390 – 440 40 – 42 120 – 135

1,800 – 2,000
Copper – kt 85 – 95
~15 23 – 25


125 – 130
All-In-Sustaining Cost (AISC) – Includes production stripping (sustaining) and sustaining capital
AISC – $m (100) – 30 950 – 1,040 600 – 680 (25) – 15 100 – 104
135 – 145 1,720 – 1,920
Capital Expenditure ($m)
– Production
stripping (sustaining)

105 – 115 25 – 35



130 – 140
– Production
stripping (non-sustaining)



50 – 70


50 – 70
– Sustaining
capital
160 – 180 100 – 120 50 – 60 65 – 70

15 – 20 390 – 440
– Major projects
(non-sustaining)
580 – 650 105 – 135
110 – 130
65 – 85 6 – 8 890 – 990
Total Capital expenditure 740 – 830 310 – 370 75 – 95 225 – 270
65 – 85 21 – 28 1,460 – 1,640
Exploration and Depreciation ($m)
Exploration expenditure 150 – 160
Depreciation and amortisation (including depreciation of production stripping) 700 – 750

(a) The Fruta del Norte guidance represents Newcrest’s 32% interest in the annualised production and AISC for Fruta del Norte based on Lundin Gold’s market release on 8 December 2020. This release estimated gold production for the 2021 calendar year to be in the range of 380koz to 420koz at an AISC of $770/oz to $830/oz

(b) Other includes major project expenditure (non-sustaining) in relation to Wafi-Golpu

Creating a brighter future for people through safe and responsible mining

Improved Safety Performance

Newcrest’s Safety Transformation Plan continues to yield benefits, with nearly six years free of fatalities and life changing injuries, and a 12% reduction in injury rates (TRIFR) compared to the prior period.

Red Chris delivered a standout safety performance for the financial year, reporting a 48% reduction in injury rates compared to the prior period. This remarkable achievement highlights the success of Newcrest’s NewSafe program in transforming on-site safety behaviours combined with the significant investments that Newcrest has made to improve on-site working conditions.

Lihir and Telfer also delivered a 50% and 14% reduction respectively in injury rates compared to the prior period. Both operations have successfully integrated Newcrest’s NewSafe program over the last six years and have demonstrated how visible safety leadership, proactive hazard reporting and a workforce committed to improving the safety culture at their workplace can deliver improvements to their safety performance.

Goal of Net Zero Carbon Emissions

Newcrest recognises that is has a responsibility to do its part to reduce the impact of climate change. As previously announced, Newcrest has set a goal of net zero carbon emissions by 2050 which relates to its operational (Scope 1 and Scope 2) emissions. Additionally, Newcrest intends to work across its value chain to reduce its Scope 3 emissions.

This goal is in addition to the target set in June 2019 to reduce Newcrest’s greenhouse gas emissions (GHG) intensity by 30% by 2030(7).

Newcrest has developed GHG Management Plans for each of its managed operating sites to understand, define and action abatement opportunities and has linked senior executive incentive payments directly to the achievement of these objectives. The measurement of GHG emissions across the full value chain is progressively improving, the use of renewable energy sources is increasing, and Newcrest is well advanced in assessing the risks and opportunities for the business under selected climate change scenarios in line with the Paris Agreement goals and its commitment to progressive Task Force on Climate-Related Financial Disclosures reporting.

Reducing Greenhouse Gas Emissions

As announced in December 2020, Newcrest has entered into a 15-year renewable Power Purchase Agreement (PPA) with a wind farm developer for an amount of energy which represents a significant portion of Cadia’s future projected energy requirements. The PPA will act as a partial hedge against future electricity price increases and will provide Newcrest with access to large-scale generation certificates which Newcrest intends to surrender to achieve a reduction in its greenhouse gas emissions. The PPA, together with the forecast decarbonisation of electricity generation in New South Wales, is expected to help deliver a ~20% reduction in Newcrest’s greenhouse gas emissions and is a significant step towards the achievement of Newcrest’s targeted 30% reduction by 2030(7).

Lihir Landholder Agreements

On 22 December 2020, Newcrest announced that it had signed new compensation, relocation and benefits sharing agreements with the mining lease area landholders at Lihir. It is expected that these new agreements will enhance socio-economic development outcomes for mining lease area landholders and enable benefits to be distributed directly to their intended beneficiaries. The agreements also enable the efficient and transparent distribution of compensation and benefits without a material increase in quantum.

Growing copper exposure

Newcrest reported record copper production of 142.7kt in FY21, which represents 22% of its total net revenue for the year. Newcrest expects that its copper contribution will continue to increase at Cadia, together with the potential growth in contribution from its development projects at Red Chris, Havieron and Wafi-Golpu. For FY22 Newcrest expects to produce 125-130kt of copper.

Advancing multiple organic growth options

Telfer West Dome Stage 5 Cutback

Newcrest announced on 12 August 2021 that it will proceed with the West Dome Stage 5 cutback (the cutback) at its Telfer operation in Western Australia. The cutback underpins the continuity of operations at Telfer, with further mine life extension opportunities to be assessed within the open pit and underground.

Telfer is strategically well positioned in the highly prospective Paterson Province, with its existing infrastructure and processing capacity providing benefits to the nearby Havieron Project (operated by Newcrest under a Joint Venture Agreement with Greatland Gold) and Newcrest’s other exploration projects in the region.

The Newcrest Board has approved A$246 million (~US$182 million(19)) of funding for the cutback, of which approximately one third will be in the form of capitalised production stripping, and Newcrest has entered into a contract for the works to be undertaken. The cutback is located between West Dome Stage 2 and West Dome Stage 4, both of which will continue to be mined in conjunction with Stage 5.

Drilling in the area between the Stage 2 and Stage 5 boundary has also returned positive results to date, providing further opportunities to extend the life of the West Dome. No additional permits, licences or regulatory approvals will be required for the cutback. There is no intention to undertake any further gold price hedging in relation to this cutback investment.

Production stripping for the Stage 5 cutback will commence in September 2021, with first ore production expected to be delivered to the Telfer mill in March 2022.

Cadia Molybdenum Plant

Newcrest expects to achieve first production from the Molybdenum Plant by the end of September 2021(13). The Molybdenum Plant is expected to deliver an additional revenue stream for Cadia in the form of molybdenum concentrate which will be recognised as a by-product credit to AISC.

Cadia PC1-2 Pre-Feasibility Study

The Newcrest Board has approved the Cadia PC1-2 Pre-Feasibility Study (the Study) to the Feasibility Stage, 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$120 million (~$US90 million) of funding has been approved for this Early Works Program which is expected to commence in the December 2021 quarter.

Pre-Feasibility Study key findings for PC1-2:(20),(21),(22)

  • Estimated total capital expenditure of ~A$1.3 billion (~US$0.9 billion)

  • Real, after-tax internal rate of return of 21.5%

  • Net Present Value of A$2.0 billion (US$1.5 billion)

  • ~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 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

The findings of the Study will be progressed in a Feasibility Study which Newcrest expects to complete in Q3 CY22.

See separate release titled “Cadia PC1-2 Pre-Feasibility Study delivers attractive returns” dated 19 August 2021 for further information.

Cadia Expansion Project

Cadia is currently undergoing a previously-approved, significant expansion project which is expected to help sustain its position as one of the largest, lowest cost and long life gold mines in the world.

The Expansion Project is in two stages(23):

  • Stage 1 comprises the development of the next block cave, PC2-3, and an increase to the nameplate capacity of the process plant to 33mtpa

  • Stage 2 is focused on increasing the plant processing capacity from 33mtpa to 35mpta as well as delivering life of mine gold and copper recovery improvements and reducing unit costs

Execution of the works for both stages of the Project remain on track(13).

Lihir Phase 14A Pre-Feasibility Study

In February 2021, Newcrest announced the findings of its Lihir Mine Optimisation Study which included the identification of a new opportunity called Phase 14A. This opportunity is currently being progressed in a separate Pre-Feasibility Study (‘Phase 14A PFS’) which Newcrest expects to release by the end of September 2021.

The Phase 14A PFS is 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 PFS work to date has identified approximately 20Mt at 2.4g/t Au (including 13Mt at 3g/t Au) of Indicated Mineral Resource(24) that could be accessed.

Additionally, the cutback would open a separate mining front, providing further flexibility for fresh competent ore feed. The cutback is fully permitted and is within the existing mine lease.

Site field investigation is underway, including geotechnical drilling and preparation for contractor mobilisation for trial works. Field trials of the wall support technology are planned for FY22 with long lead materials ordered and the mobilisation of specialist contractors in progress.

Newcrest is currently assessing whether applying steep wall engineering techniques to its other cutbacks at Lihir could enable access to additional high grade mill feed and potentially further defer construction of the full Seepage Barrier, which is currently subject to a Feasibility Study.

Havieron Project

The Havieron Project is located 45km east of Newcrest’s Telfer operation and is operated by Newcrest under a Joint Venture Agreement with Greatland Gold plc. Newcrest announced on 30 November 2020 that it had met the Stage 3 expenditure requirement (US$45 million) and is entitled to earn an additional 20% joint venture interest (in addition to its existing 40% interest), resulting in an overall joint venture interest of 60% (Greatland Gold 40%).

Newcrest can earn up to a 70% joint venture interest through total expenditure of US$65 million and the completion of a series of exploration and development milestones (including the delivery of a Pre-Feasibility Study) in a four-stage farm-in over a six year period that commenced in May 2019. Newcrest may acquire an additional 5% interest at the end of the farm-in period at fair market value.

The Joint Venture Agreement also includes tolling principles reflecting the intention of the parties that, subject to a successful exploration program, Feasibility Study and a positive decision to mine, the resulting joint venture mineralised material will be processed at Telfer.

In FY21, Newcrest announced several key milestones for the Project, including:

  • the completion of infill drilling and the commencement of an extensive growth drilling campaign

  • an initial Inferred Mineral Resource estimate

  • the commencement of early works construction activities

Newcrest commenced its exploration drilling program in June 2019 and has progressively increased its drilling activities such that eight drill rigs are currently operational. Results from Newcrest’s infill drilling program at Havieron continue to support the geological and grade continuity for Newcrest’s ongoing studies and continue to confirm Newcrest’s previously reported drilling results.

Exploration activities are also focused on an extensive growth drilling program across several key targets. In June 2021, Newcrest announced a number of new high grade extensions to the South East Crescent zone, located outside of the initial Inferred Mineral Resource estimate. These results support the potential for incremental resource extensions with additional drilling.

In December 2020, Newcrest announced its initial Inferred Mineral Resource Estimate for the Project of 52Mt @ 2.0g/t Au and 0.31% Cu for 3.4Moz Au and 160kt Cu(25),(26),(27). Mineralisation remains open in multiple directions outside of the initial Inferred Mineral Resource, which indicates the possibility that the resource could continue to grow over time with Newcrest’s planned drilling activity.

In the second half of the FY21 financial year, Newcrest announced that it had commenced its early works program. Subsequent to the completion of the box cut and portal, Newcrest commenced construction of the exploration decline in May 2021 which is critical to achieving first production from the Project in the next two to three years(28).

Works to progress the necessary approvals and permits that are required to commence the development of an operating underground mine and associated infrastructure at the Project are ongoing(29).

Newcrest expects to release its Havieron Pre-Feasibility Study in the second half of CY21.

Red Chris

Red Chris is a joint venture between Newcrest (70%) and Imperial Metals Corporation (30%). Newcrest acquired its interest in, and operatorship of, Red Chris on 15 August 2019.

Over FY21, Newcrest announced several key milestones in relation to Red Chris, including:

  • discovery of East Ridge – a new zone of higher grade mineralisation

  • its initial Mineral Resource estimate for Red Chris

  • the commencement of early works construction activities

Since acquisition, Newcrest has undertaken a significant drilling campaign that was focused on the delivery of Newcrest’s initial Mineral Resource estimate for Red Chris. In addition, Newcrest has a brownfields exploration program at Red Chris that is concentrated on the discovery of additional zones of higher grade mineralisation within the Red Chris porphyry corridor (including targets outside of the initial Mineral Resource estimate).

To date, Red Chris’ brownfield exploration program has delivered considerable exploration success, including the discovery of East Ridge which is a new zone of higher grade mineralisation located outside of Newcrest’s initial Mineral Resource estimate. In July 2021, Newcrest reported its highest grade intercept to date from this zone, supporting the potential for resource growth over time.

In FY20, Newcrest reported the existence of multiple discrete ‘pods’ of higher grade mineralisation in the East Zone. Newcrest is currently evaluating options to ‘early mine’ these pods with the aim of generating cash flows prior to the completion of a block cave development at Red Chris.

As announced in March 2021, Newcrest released its initial Mineral Resource estimate(27),(30),(31) for Red Chris which comprised:

  • A Measured and Indicated Mineral Resource estimate of 980Mt @ 0.41g/t gold and 0.38% copper for 13Moz contained gold and 3.7Mt contained copper

  • An Inferred Mineral Resource estimate of 190Mt @ 0.31g/t gold and 0.30% copper for 1.9Moz contained gold and 0.57Mt contained copper

Newcrest’s initial Mineral Resource estimate is expected to support the development of a high margin underground block cave(32) and is a key input into the Red Chris Block Cave Pre-Feasibility Study which Newcrest expects to release by the end of September 2021.

Newcrest commenced construction of the exploration decline in June 2021 following the receipt of the necessary regulatory and funding approvals and the completion of the box cut and other surface infrastructure. The commencement of the exploration decline underpins Newcrest’s objective of having a block cave in operation at Red Chris within the next five to six years(28).

Wafi-Golpu Project

In December 2020 an Environment Permit for the Wafi-Golpu Project was granted.

As previously advised, subsequent to the grant of the Environment Permit, the Governor of Morobe Province and the Morobe Provincial Government commenced legal proceedings in the National Court in Papua New Guinea seeking judicial review of the decision to issue the Environment Permit. The participants in the Wafi-Golpu Joint Venture (including Newcrest) are not defendants to the proceedings. The National Court is yet to determine this judicial review application. At this stage, project and permitting activities can still progress.

Newcrest, together with its Wafi-Golpu Joint Venture partner Harmony, is currently engaging with the State of Papua New Guinea to progress permitting of the Wafi-Golpu Project and has commenced discussions with the State in relation to the Special Mining Lease.

Capital Structure

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

On 2 March 2021, Newcrest renewed its unsecured bilateral bank lending facilities with its existing 13 bank lenders, extending the maturity dates. Each bank has committed approximately US$154 million in facilities for an overall unchanged quantum of US$2 billion on similar commercial terms for Newcrest.

These facilities have tenors of three or five years, the aggregate of which is as follows:

  • US$1,077 million of facilities maturing in FY24

  • US$923 million of facilities maturing in FY26

On 28 April 2021, Newcrest completed the mandatory redemption and cancellation of the outstanding US$380 million owing of its 4.200% Senior Guaranteed Notes, otherwise maturing 1 October 2022.

These refinancing and bond buyback transactions underpin Newcrest’s objective of having a strong balance sheet, considerable liquidity and financial flexibility at low cost.

Newcrest’s net cash as at 30 June 2021 was $176 million. This comprises $1,873 million of cash holdings, less $1,635 million of capital market debt and lease liabilities of $62 million.

At 30 June 2021, Newcrest had liquidity coverage of $3,873 million, comprising $1,873 million of cash and $2,000 million in committed undrawn bilateral bank debt facilities with tenors ranging from 2024 to 2026.

Newcrest’s financial policy metrics and its performance against them are as follows:

Metric Policy ‘looks to’ As at
30 Jun 2021
As at
30 Jun 2020
Credit rating (S&P/Moody’s) Investment grade BBB/Baa2 BBB/Baa2
Leverage ratio (Net debt to EBITDA) Less than 2.0 times (0.1) 0.3
Gearing ratio Below 25% (1.8%) 6.8%
Cash and committed undrawn bank facilities At least $1.5bn, of which
~1/3 is in the form of cash
$3.87bn
($1.87bn cash)
$3.45bn
($1.45bn cash)

Telfer Gold Hedging

No new hedging in relation to Telfer was undertaken in the current period.

The total outstanding volume and prices of gold hedged for future years at Telfer and in total for Newcrest are:

Financial Year Ending Gold Ounces Hedged Average Price A$/oz
30 June 2022 204,615 1,902
30 June 2023 137,919 1,942
Total 342,534 1,918

The current period included 216,639 ounces of Telfer gold sales hedged at an average price of A$1,864 per ounce, representing a net revenue loss of $99 million for the current period. At 30 June 2021, based on gold forward curves, the unrealised mark-to-market loss of the remaining hedges was $110 million.

Approximately 90% of Newcrest’s sales in the period were unhedged and therefore benefitted from the strong gold prices in the period.

Newcrest’s decision in the prior period to cease its program of hedging the impacts of copper and gold price movements during the quotational period resulted in a net fair value gain in other income in the current period of $124 million, driven by the increase in gold and copper prices in the current period.

Dividend Dates, Currency & Dividend Reinvestment Plan

The Newcrest Board has determined that a final fully franked dividend of US 40 cents per share is to be paid on
30 September 2021. The key dates in relation to the final dividend are set out in the table below.

Action Date
Ex-Dividend Date Thursday, 26 August 2021
Record Date and Currency Conversion Date Friday, 27 August 2021
Election Date – final date to elect to participate in DRP and receive foreign currency Monday, 30 August 2021
VWAP period begins for DRP Tuesday, 31 August 2021
VWAP period ends for DRP Monday, 6 September 2021
Payment/Issue Date Thursday, 30 September 2021

The subscription amount for shares allotted under the DRP will be an amount in cents that is the arithmetic average

of the daily volume weighted average sale price for Newcrest shares sold on the ASX during the VWAP period
(31 August – 6 September 2021) rounded down to the nearest full cent.

Payment Currencies

The currencies in which dividend payments will be made are included in the table below:

Currency to
be paid
Shareholders
Australian dollars All shareholders who will not be paid US dollars, PNG kina or NZ dollars in accordance with the circumstances set out below.
US dollars Shareholders who have nominated a US dollar bank account domiciled in the US by 5:00pm (AEST) Monday, 30 August 2021, being the Election Date.
Papua New Guinea kina Shareholders:
  • who have nominated a PNG kina bank account domiciled in PNG by 5:00pm (AEST) Monday, 30 August 2021, being the Election Date; or
  • with a registered address in PNG who have not nominated an Australian dollar bank account domiciled in Australia, or a US dollar bank account domiciled in the US, by 5:00pm (AEST) Monday, 30 August 2021, being the Election Date.
NZ dollars Shareholders:
  • who have nominated a NZ dollar bank account domiciled in New Zealand by 5:00pm (AEST) Monday, 30 August 2021, being the Election Date; or
  • with a registered address in New Zealand who have not nominated an Australian dollar bank account domiciled in Australia, or a US dollar bank account domiciled in the US, by 5:00pm (AEST) Monday, 30 August 2021, being the Election Date.

Payments made in Australian dollars, Papua New Guinea kina and New Zealand dollars will be converted from
US dollars at the prevailing exchange rate on 27 August 2021, being the Record Date.

Dividend Reinvestment Plan

The Dividend Reinvestment Plan (DRP) will apply to the final dividend. The DRP allows eligible shareholders to reinvest part or all of their dividends into Newcrest shares. No discount will be applied to allotments made under the DRP. A copy of the DRP Rules is available on the Company’s website at http://www.newcrest.com/investors.

Full Year Financial Results Call

We invite you to join our investor webcast from Melbourne at 9:30am on Thursday, 19 August 2021. Please register prior to this broadcast on the Newcrest website.

http://www.newcrest.com/investors/reports/financial/

Should you be unable to join us, the webcast can be viewed on our website following the live presentation.

Authorised by the Newcrest Board Executive 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

Endnotes
______________________

1 All figures in this document relate to businesses of the Newcrest Mining Limited Group (Newcrest’ or the Group) for the 12 months ended 30 June 2021 (current period) compared with the 12 months ended 30 June 2020 (prior period), except where otherwise stated. All references to ‘the Company’ are to Newcrest Mining Limited.

2 Technical and scientific information: The technical and scientific information contained in this document relating to Wafi-Golpu and Lihir was reviewed and approved by Craig Jones, Newcrest’s Chief Operating Officer PNG, FAusIMM and a Qualified Person as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101). The technical and scientific information contained in this document relating to Cadia was reviewed and approved by Philip Stephenson, Newcrest’s Chief Operating Officer Australia and Americas, FAusIMM and a Qualified Person as defined in NI 43-101.

3 Disclaimer: 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”, “continue”, “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. The Company 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 the Company’s actual results, performance, and achievements 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 the Company 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 the Company’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 the Company’s good faith assumptions as to the financial, market, regulatory and other relevant environments that will exist and affect the Company’s business and operations in the future. The Company 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 the Company. 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, the Company 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.

4 The information in this document that relates to Mineral Resources or Ore Reserves (other than for Cadia East, Havieron and Red Chris) has been extracted from the release titled “Annual Mineral Resources and Ore Reserves Statement – 31 December 2020” dated 11 February 2021 which is available to view at www.asx.com.au under the code “NCM” (the original release) and has been prepared in accordance with the requirements of Appendix 5A of the ASX Listing Rules by Competent Persons. Newcrest confirms that it is not aware of any new information or data that materially affects the information included in the original release and, in the case of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the original release continue to apply and have not materially changed. Newcrest confirms that the form and context in which the competent person’s findings are presented have not been materially modified from the original release.

5 Injury rates are lowest quartile when compared to the International Council on Mining & Metals report titled “Safety Performance – Benchmarking progress of ICMM company members in 2020”.

6 Relating to Newcrest’s operational (Scope 1 and Scope 2) emissions. Newcrest intends to work across its value chain to reduce its Scope 3 emissions.

7 Kg CO2-e per tonne of ore treated and compared to a baseline of FY18 emissions. Refer to market release titled “Newcrest signs renewable energy PPA to help deliver ~20% reduction in greenhouse gas emissions” dated 16 December 2020 which is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile.

8 Group gold production, gold sales and AISC includes Newcrest’s 32% attributable share of Fruta del Norte (commercial production commenced in the March 2020 quarter) through its 32% equity interest in Lundin Gold Inc. The gold production, gold sales and AISC outcomes for Fruta del Norte are sourced from Lundin Gold’s news releases and have been aggregated to reflect the twelve month period ended 30 June 2021. For further details refer to the Company’s “ASX Appendix 4E and Financial Report” released on 19 August 2021, and Section 6.7 of the Operating and Financial Review in particular.

9 Statutory profit is profit after tax attributable to owners of the Company.

10 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:

  • ‘Underlying profit’ (profit or loss after tax before significant items attributable to owners of the Company);
  • ‘EBITDA’ (earnings before interest, tax, depreciation and amortisation, and significant items);
  • ‘EBIT’ (earnings before interest, tax and significant items);
  • ‘EBITDA Margin’ (EBITDA expressed as a percentage of revenue);
  • ‘EBIT Margin’ (EBIT expressed as a percentage of revenue);
  • ‘ROCE’ is ‘Return on capital employed’ and is calculated as EBIT expressed as a percentage of average total capital employed (net debt and total equity);
  • ‘Leverage ratio (net debt to EBITDA)’ (calculated as net debt divided by EBITDA for the preceding 12 months);
  • ‘Free cash flow’ (calculated as cash flow from operating activities less cash flow related to investing activities. Free cash flow for each operating site is calculated as Free cash flow before interest, tax and intercompany transactions);
  • ‘Free cash flow before M&A activity’ (being ‘Free cash flow’ excluding acquisitions, investments in associates and divestments);
  • ‘AISC’ (All-In Sustaining Cost) and ‘AIC’ (All-In 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; and
  • AISC Margin reflects the average realised gold price less the AISC per ounce sold.

These measures are used internally by 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 financial 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 and the ASX and SEDAR platforms.

11 Subsequent to the release of the June 2021 quarterly report, the FY21 AISC outcome for the Group and Lihir has been restated due to a change in the classification of Phase 16 production stripping costs at Lihir. In addition, Group gold sales and the Group AISC outcome for FY21 have been restated to include Newcrest’s 32% share of Fruta del Norte’s June 2021 quarterly results which Lundin Gold Inc released on 11 August 2021.

12 Newcrest’s AISC margin for the current period has been determined by deducting the All-In Sustaining Cost attributable to Newcrest’s operations of $920 per ounce from Newcrest’s realised gold price of $1,796 per ounce. For further details refer to the Company’s “ASX Appendix 4E and Financial Report” released on 19 August 2021, and Section 6.7 of the Operating and Financial Review in particular.

13 Subject to market and operating conditions and potential delays due to COVID-19.

14 Total Recordable Injury Frequency Rate per million hours worked.

15 Realised metal prices are the US dollar spot prices at the time of sale per unit of metal sold (net of Telfer gold production hedges), excluding deductions related to treatment and refining costs and the impact of price related finalisations for metals in concentrate. The realised price has been calculated using sales ounces generated by Newcrest’s operations only (i.e. excluding Fruta del Norte).

16 All data relating to operations is shown at 100%, with the exception of Red Chris which is shown at 70% and Fruta del Norte which is shown at 32%.

17 Newcrest acquired its 70% interest in the Red Chris mine and became the operator on 15 August 2019.

18The guidance stated assumes weighted average copper price of $4.20 per pound, AUD:USD exchange rate of 0.75 and CAD:USD exchange rate of 0.80 for FY22.

19 Converted to USD using the spot AUD:USD exchange rate of 0.74.

20 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 estimates are indicative only and are subject to market and operating conditions. They should not be construed as guidance.

21 The production targets underpinning the Study estimates are 3.5Moz gold and 660kt copper over PC1-2’s expected 17 year mine life. The production target is based on the utilisation of ~20% of the total Cadia East Ore Reserves, being 18Moz Probable Ore Reserves as at 30 June 2021 (see release titled “Cadia PC1-2 Pre-Feasibility Study delivers attractive returns”, dated 19 August 2021 (the original Cadia East release) which have been prepared by a Competent Person in accordance with Appendix 5A of the ASX Listing Rules and is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile), but is subject to depletions for the period since 1 July 2021. The reserves for Cadia East comprise a portion of the reserves for the Cadia operations. The estimates included in the original Cadia East release supersede the estimates for Cadia East that are included in Newcrest’s release titled “Annual Mineral Resource and Ore Reserves Statement – 31 December 2020” dated 11 February 2021 (which is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile). Newcrest confirms that it is not aware of any new information or data that materially affects the information included in the original Cadia East release and that all material assumptions and technical parameters underpinning the estimates in the original Cadia East release continue to apply and have not materially changed. Newcrest confirms that the form and context in which the competent person’s findings are presented have not been materially modified from the original Cadia East release.

22 As Cadia’s functional currency is AUD, the Study has been assessed in AUD. The outcomes presented have been converted to USD using an exchange rate of 0.75.

23 While the targeted capacity of the process plant under the Expansion Project is 33mtpa in Stage 1 and 35mtpa in Stage 2, the actual milling rate will be subject to regulatory and permitting approvals.

24 The estimate of ~20Mt of Indicated Mineral Resource has been prepared in accordance with the requirements in Appendix 5A of the ASX Listing Rules by a Competent Person. For further information as to the total Indicated Mineral Resources for Lihir of which the 20Mt of Indicated Mineral Resources is part, see the release titled “Annual Mineral Resources and Ore Reserves Statement – 31 December 2020” (the original MR&OR release) which is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile. profile. Newcrest confirms that it is not aware of any new information or data that materially affects the information included in the original MR&OR release and that all material assumptions and technical parameters underpinning the estimates in the original MR&OR release continue to apply and have not materially changed. Newcrest confirms that the form and context in which the competent persons’ findings are presented have not been materially modified from the original MR&OR release. Newcrest makes no assurances that these Indicated Mineral Resources can be converted to Ore Reserves.

25 The information in this document that relates to Havieron Mineral Resources has been extracted from the release titled “Initial Inferred Mineral Resource estimate for Havieron of 3.4Moz of gold and 160kt of copper” dated 10 December 2020 which is available to view at www.asx.com.au under the code “NCM” (the original Havieron release) and on Newcrest’s SEDAR profile and has been prepared in accordance with the requirements of Appendix 5A of the ASX Listing Rules by Competent Persons. Newcrest confirms that it is not aware of any new information or data that materially affects the information included in the original Havieron release and that all material assumptions and technical parameters underpinning the estimates in the original Havieron release continue to apply and have not materially changed. Newcrest confirms that the form and context in which the competent person’s findings are presented have not been materially modified from the original Havieron release.

26 The Inferred Mineral Resource estimate is presented on a 100% basis. As announced on 30 November 2020, Newcrest has now met the Stage 3 expenditure requirement (US$45 million) and is entitled to earn an additional 20% joint venture interest in addition to its existing 40% interest, resulting in an overall joint venture interest of 60% (Greatland Gold 40%).

27 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 are reported in accordance 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.

28 From commencement of the box cut and exploration decline. Subject to market and operating conditions, Board and regulatory approvals and any potential delays due to COVID-19 impacts.

29 The development of any underground mine at the Havieron Project will also be subject to the completion of a successful exploration program and further studies, market and operating conditions, Board approvals, and a positive decision to mine.

30 The Measured and Indicated Mineral Resource estimate is presented on a 100% basis. Newcrest’s equity interest in the Mineral Resource is 70%.

31 The information in this document that relates to Mineral Resources for Red Chris has been extracted from the release titled “Newcrest announces its initial Mineral Resources estimate for Red Chris” dated 31 March 2021 which is available to view at www.asx.com.au under the code “NCM” (the original Red Chris release) and on Newcrest’s SEDAR profile and has been prepared in accordance with the requirements of Appendix 5A of the ASX Listing Rules by Competent Persons. Newcrest confirms that it is not aware of any new information or data that materially affects the information included in the original Red Chris release and that all material assumptions and technical parameters underpinning the estimates in the original Red Chris release continue to apply and have not materially changed. Newcrest confirms that the form and context in which the competent persons’ findings are presented have not been materially modified from the original Red Chris release.

32 The development of a block cave mine at the Red Chris project is subject to the completion of a successful exploration program and further studies, market and operating conditions, regulatory approvals and Board approvals.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/93684

News Provided by Newsfile via QuoteMedia

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

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

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

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

Summary of Phase 14A Study Findings2,3,7

The Phase 14A Study has identified the following:

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

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

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

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

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

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

Table 1: Key Phase 14A Study Findings7

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

Phase 14A Overview2

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

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

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

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

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

Table 2: Phase 14A Inventory Summary3

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Figure 1: Phase 14 Mining ore production by financial year3

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

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

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Figure 2: Lihir Mine cutbacks including Phase 14A

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

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

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

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Figure 4: Phase 14A wall stabilisation design

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

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

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Figure 5: Lihir LOM indicative gold production profile9

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Base Case Expit Mining to 50Mtpa

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

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

Process Plant Improvements12

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

Recovery Improvements

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

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

Project Investment

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

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

Production Stripping

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

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

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

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

Metal Price and Exchange Rate Sensitivity Analysis2,3,7

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

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

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

Seepage Barrier Feasibility Study Update18

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

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

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

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

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

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

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

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Estimated Development Capital Profile7,18

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

Lihir Mineral Resource19

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

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

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

Lihir Ore Reserve19

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

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

Material Assumptions for Ore Reserves

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

Ore Reserve Classification

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

Mining Method

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

Ore Processing

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

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

Cut-Off Grade

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

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

Estimation Methodology

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

Material Modifying Factors

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

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

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

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

Other Modifying Factors

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

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

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

Appendix 1

JORC Table 1 – Lihir (100% Newcrest)

Section 1: Sampling Techniques and Data

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 2: Reporting of Exploration Results

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

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

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

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

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

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

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

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

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

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

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

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

Section 3: Estimation and Reporting of Mineral Resources

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 4: Estimation and Reporting of Ore Reserves

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

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

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

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

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

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

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

Phase 14A design parameters are tabled below:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Forward Looking Statements

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

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

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

Non-IFRS Information

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

Ore Reserves and Mineral Resources Reporting Requirements

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

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

Competent Person’s Statement

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

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

Technical and Scientific Information

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

Authorised by a Newcrest Board Committee

For further information please contact

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

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

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

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

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

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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.

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