Quarterly Report Newcrest Mining Limited For the three months ending 30 September 2009 (These figures are unaudited)

Transcription

1 Quarterly Report Newcrest Mining Limited For the three months ending 30 September 2009 (These figures are unaudited) Overview Gross cash costs fell 2% to $450/oz and net cash costs fell 8% to $436/oz during the September quarter. Gold production of 377,084oz was 5% lower than the previous quarter. Lower grade at Gosowong and slower commissioning at Hidden Valley were the main contributors with Telfer and Cadia Valley producing at rates in line with their plan profiles of increasing output levels as the financial year progresses. The faster than planned commissioning of the Gosowong expansion required the processing of lower grade stockpiles to maintain higher mill throughput rates whilst additional underground mining locations were brought online. At Hidden Valley heavy rain and plant commissioning issues, including a mill gearbox failure, reduced planned production levels by approximately 15,000 ounces. As planned, copper production was 21,289t. Guidance Full year production and cost guidance is maintained for each site. Key Points Operations Quarterly gold production 377,084oz (397,826oz). Gross cash costs $450/oz ($459/oz) and net cash costs $436/oz ($476/oz) were lower primarily due to a reduction in the cost profile at Cadia Hill and Ridgeway. Costs also declined at Cracow. Projects & Exploration Gosowong Expansion Project is on schedule, under budget and throughput is exceeding plan. Ridgeway Deeps production ramp up is on schedule. Cadia East feasibility study remains on schedule for approval in the March 2010 quarter. Hidden Valley processing plant commissioning and production ramp up was slower than planned. Resource definition drilling continued at O Callaghans, Telfer. (Numbers in brackets reflect the comparable figures for the June 2009 Quarter unless otherwise specified.) 1

2 Production Highlights Production Highlights September 2009 Quarter June 2009 Quarter September 2008 Quarter Group production - gold oz 377, , ,978 - copper t 21,289 23,659 21,550 Cadia Valley production - gold oz 99, , ,367 - copper t 12,912 14,400 13,854 Telfer production - gold oz 162, , ,309 - copper t 8,376 9,259 7,696 Gosowong production - gold oz 90, , ,495 Cracow production - gold oz 20,285 20,245 17,806 Hidden Valley production 1 - gold oz 3, Gross Cash Cost (after by-product credits) 2 A$/oz Net Cash Cost (after by-product credits) 2 A$/oz Total Costs (after by-product credits) A$/oz Achieved gold price A$/oz 1,143 1, Achieved copper price A$/lb Note: (1) Hidden Valley production is treated as commissioning production. Costs associated with these ounces have been excluded from the cost calculations throughout this report. (2) Gross, Net Cash and Total Costs exclude $8.6M in FY09 related to the net impact after insurance proceeds of the June 2008 Varanus Island incident. Refer Gold Production Summary (page 7) definitions. Achieved metal prices are the A$ spot price per unit of metal sold and exclude the impact of price related finalisations on metals in concentrate. Operations Cadia Valley, NSW Cadia Hill s September quarter performance was 52,316 ounces of gold and 6,610 tonnes of copper at a gross cash cost of $546 per ounce. This compares with the June quarter performance of 49,294 ounces of gold and 7,251 tonnes of copper at a gross cash cost of $754 per ounce. Cadia Hill s gold production increased, reflecting marginally higher grades and improved recovery performance. This was partially offset by an additional mill shutdown during the period. Mining activities during the quarter continued to focus on Cutback 3. Waste mining from the open pit is planned to be completed by the end of the December 2009 quarter as mining moves deeper in the pit. Gold grade will progressively increase over the 2010 Financial Year as mining transitions from waste to ore mining. Copper production declined as lower throughput more than offset the increased recovery. Cadia Hill s site operating costs declined reflecting the impact of business improvement programs focusing on a more efficient use of consumables, extending tyre life and reduction in the use of contractors and contract services. The unit cost decrease was accentuated by higher gold and copper production. Cadia Hill s gross cash costs declined 28% but net cash costs declined 61% mainly due to the planned increase in ore inventory. Ridgeway s September quarter performance was 47,418 ounces of gold and 6,302 tonnes of copper at a gross cash cost of $(97) per ounce. This compares with the June quarter performance of 53,427 ounces of gold and 7,149 tonnes of copper at a gross cash cost of $52 per ounce. The combined Ridgeway & Ridgeway Deep s gold and copper production declined as planned with mining of lower grade ore and reduced mill throughput. Lower grade ore was sourced from the final sublevel cave horizons and a higher portion of Ridgeway Deeps ore. The September quarter was the first full period of mill operation utilising the two vertimills and secondary crusher installed in the June quarter. The new equipment will improve recovery and reduce grind size as the plant processes the harder Ridgeway Deeps ore. Gross unit cash costs declined due to higher achieved copper prices. Net costs increased due to higher advanced development charges for the quarter as Ridgeway reaches the end of the cave. As planned, depreciation increased with the higher proportion of Ridgeway Deeps production which carries a higher unit depreciation cost. 2

3 Telfer, WA Telfer s September quarter performance was 162,929 ounces of gold and 8,376 tonnes of copper at a gross cash cost of $639 per ounce. This compares with the June quarter performance of 164,871 ounces of gold and 9,259 tonnes of copper at a gross cash cost of $599 per ounce. Gold production declined marginally as lower recoveries were partially offset by higher mill throughput. Copper production declined due to lower grade. Underground ore production decreased 5% during the quarter due to planned replacement of the hoist ropes. Mining continued on the 4600 and 4575 levels (third and fourth levels beneath the undercut) and began on the 4550 level (fifth level). Development continued on the 4575 and 4550 levels and commenced on the 4490 level (new primary ventilation drive). Underground grades increased slightly. Open pit mining operations continued in Stage 3 of the Main Dome pit. Material movement increased 7% with the continued focus on operational efficiencies and improved fleet utilisation. A greater portion of weathered enriched ore (WEN) was encountered in the open pit than planned. WEN is softer ore with a higher clay content which needs to be blended with harder ore for processing. The blending of harder, lower grade stockpiles with the WEN material resulted in higher mill throughput but lower recoveries for the quarter. Gross unit cash costs increased due to additional maintenance costs attributable to a longer mill shutdown than the previous quarter and the underground hoist rope replacement. Gosowong, Indonesia Gosowong s September quarter performance was 90,968 ounces of gold at a gross cash cost of $337 per ounce. This compares with the June quarter performance of 109,764 ounces of gold at a gross cash cost of $314 per ounce. Gold production declined due to lower grade. This was partially offset by higher mill throughput and improved recovery performance. Mining continued in both the K1 and K2 orebodies. Mine production was less than the previous quarter due to the ground conditions and establishment of new production areas. The first long hole open stoping (LHOS) trial was successfully completed during the quarter. LHOS is a lower cost mining technique than the existing under hand cut and fill method and will continue to be trialled in areas of the orebody containing more competent rock. Mill throughput increased 21% with the first full quarter of vertimill operation and ongoing mill optimisations. Lower grade ore was processed due to the combined 3 impact of accessing lower grade zones within the orebodies and processing lower grade stockpiles. Additional lower grade stockpiled ore supplemented the higher mill throughput rates. Site cash costs declined reflecting lower labour costs from the transition to owner mining on 1 July partly offset by higher diesel prices. Unit cash costs increased as a result of the lower production level. Gold production during the remainder of Financial Year 2010 will increase with mining of higher grade areas of the orebody. Cracow, QLD (70%) Cracow s September quarter performance was 20,285 ounces of gold at a gross cash cost of $460 per ounce. This compares with the June quarter performance of 20,245 ounces of gold at a gross cash cost of $465 per ounce. Gold production was in line with the June quarter and unit cash costs declined marginally with gross unit cash costs down 1% and net unit cash costs down 4%. Project Development Cadia Valley, NSW Cadia East The Cadia East Underground feasibility study continued to plan and at 81% complete, remains on schedule for completion at the end of calendar Full project approval is anticipated in the March quarter The Environmental Impact Assessment and approval process continued with comments received from the public and responses forwarded to the Minister for consideration. The base case mine design is complete and an independent technical review has confirmed the robustness of the project. The exploration decline development progressed well during the quarter. The project has identified a viable business case for the early procurement of an additional ball mill for the low grade concentrator. This will improve throughput and recoveries for Cadia Hill ore prior to commissioning of the Cadia East Underground project. Ridgeway Deeps The project remains on schedule and budget with project development 82% complete. Both underground crushers, the surface works and infrastructure are all complete. Mine development continued with 50% of the block cave undercut completed by the end of the quarter. Best practice development rates were achieved during

4 July and August as the development ramp up continued ahead of draw bell construction. The cave is propagating to plan with stresses and anticipated seismic events all within expectations. Draw bell production commenced in the June 2009 quarter and continued to progressively increase during the current quarter. Ore production from Ridgeway Deeps is planned to reach full production in the March 2010 quarter. The project s focus has turned to commissioning the four electric automated loaders that have arrived at site and completing the fit-out of the Remote Operations Centre located on the surface. Gosowong, Indonesia The Gosowong Expansion Project is on schedule and under budget with all major process plant, power station and infrastructure components committed, 50% of total planned expenditure is committed. Mill debottlenecking work and the first full quarter of vertimill operation have resulted in throughput and recovery improvements continuing to exceed plan. Mine development continued on schedule with more than 50% of the K2 ventilation shaft completed during the quarter. Total project capital is forecast to be below the original capital estimate as a result of lower equipment prices. Namosi, Fiji (69.94%) Newcrest now has a 69.94% interest in the joint venture with partners Mitsubishi and Nittetsu. The pre-feasibility study progressed on schedule and budget during the quarter and remains on track for completion by the end of March Morobe Mining Joint Venture, PNG (50%) Hidden Valley Project construction and process plant commissioning activities were delayed during the quarter. Exceptionally heavy rain during July (exceeding a 1 in 20 year event) and the premature failure of a mill gearbox and plant modifications in September significantly impacted commissioning production. Newcrest s 50% share of production for the quarter was 3,168 ounces. Mill utilisation and throughput rates after the gearbox repairs and Carbon-in-Leach (CIL) plant modifications were ramping-up satisfactorily. Overland conveyor construction was similarly impacted by wet weather and is behind schedule. Construction should be substantially complete by the end of November. Production will not be impacted by the conveyor delay as higher grade ore from the Hamata pit (located adjacent to the processing plant) is to be processed first. Work continues with establishment and management of waste dumps as well as a continued focus upon community engagement, employment and training of local employees. The engineering and design contract for the Hidden Valley expansion project was awarded during the quarter. Initial work will focus on identifying and completing early wins based upon data and process information obtained during the ongoing plant commissioning. Wafi-Golpu The integrated geological model for Wafi-Golpu was used to target the ongoing drilling program. A desktop study has identified a potential mining concept for the Golpu porphyry deposit. The block cave concept in conjunction with a small open pit mine remains the preferred route pending confirmation of drilling results. O Callaghans, WA Concept study work continued on the O Callaghans deposit near Telfer, Western Australia during the quarter. The deposit is a polymetalic skarn containing Tungsten, Zinc, Lead and Copper. The study includes extensive additional drilling and metallurgical testwork as well as detailed market analysis to determine the most economic mining and processing strategy. 4

5 Exploration Gosowong (82.5%) Drilling within the Toguraci Corridor, north of the exhausted open pit mine, focussed on defining the continuity of the mineralisation reported previously within the Damar and Yahut Structures. Also at Gosowong, drill testing of the potential south east strike extent of Kencana mineralisation was ongoing. Telfer Resource definition infill drilling on a 200m x 200m spacing over the O Callaghans area was completed. A total of 22 holes (OC09004 to OC09025) were drilled for a total of 8,973m. Sulphide skarn was intersected in all holes drilled in this program, with skarn thicknesses being in line with expectations and confirming continuity within the central part of the skarn unit. Up to 10% sphalerite has been observed within the skarn zones of these holes, suggesting potential for a continuous zone of zinc mineralisation on the (grid) east side of the O Callaghans project. Assay results for holes OC09004 to OC09022 were received during the quarter, with significant results tabulated below. Drill-Hole Number Metres Down Hole Grades From Length WO3% Cu% Zn% Pb% OC OC OC OC OC OC <0.01 OC OC OC Morobe Mining JV (50%) A fleet of 6 diamond drilling rigs were operating on MMJV tenements in the quarter with three testing targets in and around Hidden Valley and three at Wafi- Golpu. At Wafi, exploration focussed on drill testing the Miapilli porphyry target and the highly prospective northern margin of the central diatreme. Three holes were completed and three in progress for a total of 2754m for the period. At Miapilli a broad zone of stockwork veining was intersected that is interpreted to be analogous to porphyry related mineralisation seen at nearby Nambonga. Assay results for this are: WR315: 0.75g/t Au and 0.15% Cu from 387m including 1.2g/t Au and 0.29%Cu from 426m Two drill holes were completed on the Northern margin of the diatreme. Drill hole WR316 collared within the diatreme and drilled towards the east intersected anomalous gold, copper and silver mineralisation associated with supergene enrichment of epithermal mineralisation overprinting an earlier porphyry event. WR316: 0.60g/t Au, 0.60%Cu from 80.5m and 21.4 g/t Ag from 46m. Corporate Stephen Creese has been appointed to the position of Executive General Manager, Corporate Services. Mr Creese has been with Rio Tinto for over 29 years. His most recent role was Managing Director Rio Tinto Australia. I Smith Managing Director and Chief Executive Officer OC OC Cracow JV (70%) At Cracow testing of the near mine Kilkenny and Killarney structures was ongoing. Within the Killarney structure, drill-hole CBK274, designed to test 200m above CBK222 2g/t Au), intersected 2m (1.09m g/t Au from 592.7m. Follow up drilling is planned to determine the potential of a new shoot within the Killarney Structure. Drilling from underground targeting depth extensions to the northern Kilkenny shoot also intersected a wide zone of mineralisation totalling 49.3m (14m 1 4.1g/t Au including 9.0m ( g/t Au (KKU002). This result improves the potential of increasing the Kilkenny resource, follow up drilling is planned. 1 Estimated true width 5

6 Gold Production Summary September 2009 Quarter Mine Production (t 000 s) Tonnes Treated (000 s) Head Grade (g/t Au) Gold Recovery (%) Gold Production (oz) Gross Cash Cost (A$/oz) Net Cash Cost (A$/oz) Total Costs (A$/oz) Cadia Hill 9,536 4, , Ridgeway 1,478 1, ,418 (97) Telfer Open Pit 12,651 3, , Telfer Underground 1,481 1, , Telfer Dump Leach , Total Telfer 1 14,132 5, , Gosowong , Cracow (70%) , Hidden Valley 2 (50%) , Total 29,261 11, , Notes: (1) Telfer & Total costs exclude the impact of the additional costs associated with the Varanus Island gas disruption ($38.6M or $24/oz on a Group basis for FY09) (2) Hidden Valley production is treated as commissioning production. Costs associated with these ounces have been excluded from the cost calculations throughout this report. Gross Cash, Net Cash and Total Costs include the impact of realised and unrealised quotation period adjustments. All figures are 100% Newcrest Mining Limited unless stated otherwise. Mine production for open pit includes ore and waste. Underground includes only ore production. Copper Production Summary September 2009 Quarter Copper Grade % Copper Recovery % Concentrate Produced (tonnes) Metal Production (tonnes) Cadia Hill ,768 6,610 Ridgeway ,906 6,302 Telfer Open Pit ,533 3,671 Telfer Underground ,509 4,705 Total Telfer ,042 8,376 Total ,717 21,289 6

7 Cost Per Ounce of Gold Produced 3 months to 30 September 2009 $/oz 12 months to 30 June 2009 $/oz Note Cadia Cracow Ridgeway Telfer Gosowong Hidden Valley Group Cadia Cracow Ridgeway Telfer Gosowong Group(4) Gold Production Mining Milling oz 52,316 20,285 47, ,929 90,968 3, , ,889 69, , , ,220 1,631, Administration and other Third party smelting, refining and transporting costs Royalties By product credits Gross Cash Costs Stripping & ore inventory adjustments Net Cash Cost Depreciation & Amortisation Total Costs Adjustments to Cash Costs Net Cash Costs Additional Telfer gas disruption costs (1) (2) (3) (877) (9) (918) (374) (14) - (405) (597) (10) (790) (337) (18) (356) (97) (53) (248) (18) (14) 92 (11) 49 1 (3) (4) (4) Effective Net Cash Costs (4) Notes (1) Represents adjustment for the cost of waste removal at life-of-mine stripping ratio rates, share of advanced development costs and ore inventory movements. (2) Depreciation and amortisation of mine site assets is determined on the basis of the lesser of the asset s useful economic life or the life of the mine. Life-of-mine assets are depreciated according to unit of production and the remainder on a straight line basis. (3) Telfer s cash costs were higher by $8.6M in FY09 related to the net impact after insurance proceeds of the June 2008 Varanus Island incident. (4) Production includes 225 ounces from Hidden Valley which is capitalised for cost calculations and profit and loss reporting. 7

8 Corporate Information Board Members Don Mercer Ian Smith Greg Robinson Vince Gauci Richard Knight Rick Lee Tim Poole John Spark Bernard Lavery Non-executive Chairman Managing Director and CEO Director Finance Company Secretary Registered & Principal Office Level 9, 600 St Kilda Road Melbourne, Victoria, Australia 3004 Telephone: +61 (0) Facsimile: +61 (0) Website: Stock Exchange Listings Australian Stock Exchange New York ADR s (Ticker NCM) (Ticker NCMGY) Forward Shareholder Enquiries to Link Market Services Level 1, 333 Collins Street Melbourne, Victoria, 3000 Australia Telephone: (0) Facsimile: +61 (0) registrars@linkmarketservices.com.au Website: Substantial Shareholder(s) at 30 September 2009 Commonwealth Bank of Australia 10.75% Blackrock 10.47% Fidelity 10.14% The Bank of New York Mellon Corporation 5.24% Issued Share Capital At 30 September 2009 issued capital was 483,353,279 ordinary shares. Quarterly Share Price Activity High Low Last $ $ $ July - Sept Competent Persons Statement The information in this report that relates to Exploration Results is based on information compiled by C. Moorhead, EGM Minerals for Newcrest Mining Limited who is a Member of The Australasian Institute of Mining and Metallurgy, and a full-time employee of Newcrest Mining Limited. Mr Moorhead has sufficient experience which is relevant to the styles of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Moorhead consents to the inclusion in the report of the matters based on this information in the form and context in which it appears. For details of exploration reports refer to Newcrest website. Disclaimer These materials include forward looking statements. Forward looking statements inherently involve subjective judgement and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside of the control of, and may be unknown to, the company. Actual results and developments may vary materially from expressed in these materials. The types of uncertainties which are relevant to the company may include, but are not limited to, commodity prices, political uncertainty, changes to the regulatory framework which applies to the business of the company and general economic conditions. Given these uncertainties, readers are cautioned not to place undue reliance on such forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, the company does not in providing this information undertake any obligation to publicly update or revise any of the forward looking statements or any change in events, conditions or circumstances on which any such statement is based. For further information, please contact: Investor Enquiries Media Enquiries Karen McRae Daryl Corp T: T: E: karen.mcrae@newcrest.com.au E: daryl.corp@newcrest.com.au This information is available on our website at 8