September 2013 Quarterly Results. Greg Robinson Managing Director and Chief Executive Officer

Transcription

1 September 2013 Quarterly Results Greg Robinson Managing Director and Chief Executive Officer

2 Disclaimer Forward Looking Statements These materials include forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as may, will, expect, intend, plan, estimate, anticipate, continue, and guidance, or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs. Forward looking statements inherently 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. 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 licenses 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. Forward looking statements are based on the company and its management s good faith assumptions relating 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 on which forward looking statements are based will prove to be correct, or that the company s business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the company or management or beyond the company s control. Although the company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the company. Accordingly, readers are cautioned not to place undue reliance on 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, in providing this information 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 events, conditions or circumstances on which any such statement is based. 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 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 comply with the 2004 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 was until recently listed on the Toronto Stock Exchange ( TSX ) but ceased that listing on 4 September Newcrest will continue to be subject to certain Canadian disclosure requirements and standards, including the requirements of National Instrument Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ( NI ) until it ceases to be an Ontario Securities Commission registrant, Until that date, Newcrest will continue in accordance with NI , to report its ore reserves and mineral resources estimates in compliance with the JORC Code, along with a reconciliation to the material differences between the JORC Code and the applicable definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM Definition Standards). In relation to the December 2012 Resources and Reserves Statement, the reconciliation is set out in Newcrest s Canadian News Release dated 8 February 2013, and is available at and at Newcrest s website Except as otherwise noted in that document, there are no material differences between the definitions of Measured, Indicated and Inferred Mineral Resources, and Proven and Probable Reserves, under the CIM Definition Standards and the equivalent or corresponding definitions in the JORC Code. Competent Person s Statement The information in this presentation that relates to Exploration Results and other scientific and technical information is based on information compiled by C. Moorhead, EGM Minerals for Newcrest who is a Fellow of The Australasian Institute of Mining and Metallurgy, and a full-time employee of Newcrest. 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 JORC Code and is a Qualified Person within the meaning of NI Mr Moorhead consents to and has approved the inclusion in this presentation of the matters based on this information in the form and context in which it appears including sampling, analytical and test data underlying the results. For details of exploration reports refer to the Newcrest website at 2

3 Key points Operational performance for quarter Gold production 586,573 ounces; copper production 19,632 tonnes All-In Sustaining Cost 1 of A$1,093/oz (US$1,001/oz) Average realised gold price of A$1,442/oz; margin A$349/oz Production ramp up at Cadia East and Lihir in line with expectations Project progress Cadia East Panel Cave 2 on schedule Lihir flotation expansion commissioned Exploration results 16 rigs drilling, brownfield focus Positive drilling results at Gosowong and Namosi 1 All-In Sustaining Cost per World Gold Council Guidance Note on Non-GAAP Metrics, released 27 June

4 Key points (continued) Guidance Gold production guidance of 2.0 to 2.3 million ounces unchanged Original copper production, cost and capital guidance maintained Production performance first quarter better than plan Continued strong focus on maximising free cash flow Progress evident on cost reduction initiatives Ongoing focus over coming quarters Board and Executive changes Ensure an orderly Chairman and CEO succession process Further strengthen leadership team Increase in bank facilities Voluntary amendment to R&D claims 4

5 All-In Sustaining Cost (AISC) All-In Sustaining Cost 1 (September 2013 Qtr) All-in Sustaining Cost (A$/oz) Gold price A$1,442 per ounce A$1,152 A$973 Lihir A$379 Gosowong A$1,296 Telfer A$1,715 A$1,889 Hidden Valley Bonikro All-In Sustaining Cost for quarter A$1,093 (US$1,001) per ounce Lower at all sites except Gosowong Average AISC for 92% of sales of A$980 (US$898) per ounce Cadia Valley Sales (koz) All-In Sustaining Cost 1 (September 2013 Qtr) AUD/oz Gold sales (oz) 2 570,709 Adjusted operating costs (including by product credits) 779 Corporate and administration costs 42 Rehabilitation accretion & amortisation 13 Exploration expenditure (sustaining) 5 Capitalised stripping & underground development 136 Capital expenditure (sustaining) 119 All-In Sustaining Cost $1,093 Average realised gold price of A$1,442 per ounce Cost reduction focus ongoing; material improvements targeted for Hidden Valley and Bonikro Quarterly AISC profile expected to vary from quarter to quarter 1 Cost metrics per World Gold Council Guidance Note on Non-GAAP Metrics, released 27 June Includes gold sales from pre-commissioning and development production at Cadia East. Costs associated with these sales have been excluded 3 Excludes gold sales from Hidden Valley and Bonikro 5

6 Cadia Valley and Lihir performance Cadia East ramping up in line with plan Panel Cave 1 ore production increased 18% compared with the June quarter Panel Cave 2 development on plan Ridgeway ore production consistently above 8Mtpa Lihir plant reliability increasing New flotation plant commissioned 18% increase in plant throughput compared with the June quarter 80% stockpile feed to the mill for the quarter (mining cost sunk ) Plant refurbishment program continued Cadia East Mine Production kt mined per quarter 1,876 1, Dec 12 Mar 13 Jun 13 Sep 13 kt into plant per quarter Lihir Plant Throughput 2,565 2,003 2,183 1,593 Dec 12 Mar 13 Jun 13 Sep 13 6

7 Other operating asset performance Operation Quarter Highlights Telfer Lower gold production; increased proportion of open pit feed Lower gold grade and mill throughput Underground hoist system repairs completed All-In Sustaining Cost ~ A$400/oz lower than FY13 Gosowong Planned lower gold production due to mine sequencing (grade) Higher mill throughput Higher All-In Sustaining Cost than FY13 due to lower grade Production expected to be higher in 2 nd half of FY2014 Hidden Valley Increased gold and silver production over June 2013 quarter Higher mill throughput and recoveries Overland conveyor and crusher ramping up minor configuration improvements through Q2 All-In Sustaining Cost ~ A$500/oz lower than FY13 Still needs to improve Bonikro Lower gold production due to mine sequencing (grade) All-In Sustaining Cost slightly lower than FY13 Production and costs expected to improve in 2 nd half of FY2014 7

8 Exploration 16 Drill Rigs Active Gosowong Salut vein drill testing Near mine exploration drilling focus Wafi Golpu and Morobe Exploration Resource Definition Drilling supporting the studies Exploration drilling for epithermal gold targets and porphyry copper gold targets CÔTE D IVOIRE BOUAFLE BONIKRO AFRICA BOUAKE Yamoussoukro Abidjan 100 km GOSOWONG INDONESIA MANUS IS JV WAFI GOLPU /MOROBE EXPL JV PAPUA NEW GUINEA LIHIR HIDDEN VALLEY Bonikro and Côte d Ivoire Exploration Exploration activities focused on near mine targets FIJI Telfer Drilling targeting Telfer Deeps below the Sub Level Cave O CALLAGHANS TELFER AUSTRALIA NAMOSI JV Namosi Drilling at Wainaualo has intersected significant higher grade CADIA VALLEY 1000 km Operation Advanced Project Exploration Project 8

9 Indonesia, Gosowong TOGURACI CORRIDOR KENCANA GOSOWONG CORRIDOR Ngoali SCHEMATIC PROJECTION VIEW LOOKING NORTH At surface INDONESIA ~500m Jakarta 1000 km Toguraci pit Gosowong AUSTRALIA Toguraci K1 Kencana K2 1km Sesewet Tobobo Toguraci Toguraci SW Upper Imur Batu Api / Matat Gosowong Plant Gosowong Cutback Schematic Projection Kencana LEGEND NEWCREST TENEMENT Contract of Work Area of active exploration Operation Drilling target Drilling continues to expand the Salut Vein. A program of near mine exploration drilling has also commenced targeting extensions and repetitions of the known mineralisation. Salut Contract TSD053 of Work 5.0m 7.9 g/t Au TSD g/t Au TSD g/t Au 2 km 9

10 Fiji, Namosi SCHEMATIC SECTION Looking North 200mRL NVD % Cu, 0.03g/t Au -200mRL NWK % Cu, 0.02g/t Au Waisoi Wainabama WAIVAKA CORRIDOR 5 km PORPHYRY SYSTEM NVD040 (1) 0.56% Cu, 0.05g/t Au incl. 0.71% Cu, 0.07g/t Au WAISOI CORRIDOR Wainaulo NAMOSI FIJI Viti Levu Higher grade intercept returned from Waivaka Corridor 0.31g/t Au and 1.5% Cu including 1.0g/t Au and 4.1% Cu. NVD % Cu, 0.07g/t Au Higher Grade increasing with depth 0.1% Cu 800m Demonstrates potential for higher grade target at depth. -600mRL NVD % Cu, 0.04g/t Au incl. 1.5% Cu, 0.31g/t Au Higher Grade Target Wainaulo Resource % Cu and 0.12g/t Au (2010) 200 m (1) Final result reported. Preliminary result reported in Quarterly Release period ending December 31, 2011 Refer Newcrest website. 10

11 Liquidity update Context: September Quarter average realised gold price = A$1,442/oz September Quarter All-in Sustaining Cost = A$1,093/oz Capital spend trending below budget Addition of two new bilateral banks: providing liquidity headroom of US$450 million, expertise and diversity smooths and extends debt maturity profile out to 2018 assists ability to refinance 2015 maturities All Newcrest debt facilities: no near term maturities no gearing covenants no ratings triggers financial covenants comfortably satisfied 11

12 Voluntary Taxation Amendment Relates to Australian Research & Development claims in the tax years Context of voluntary taxation amendment: Recent tribunal decisions regarding other R&D claims Newcrest review Voluntary taxation amendment of 2009 to 2011 tax returns Impact of voluntary taxation amendment to past income tax returns: Increase in income tax expense ~A$120m in FY14 Income tax payment ~A$70m (following utilisation of tax losses) Increase in franking account ~ A$62m Status of other claims: Tax benefit recognised on other claims made = ~ A$115m No further adjustments by Newcrest proposed 12

13 Outlook for remainder of 2014 financial year Production delivery Q1 ahead of plan; second successive quarter at or better than expectation Cadia East and Lihir plant expansion ramp-up in line with expectations Lihir has transitioned to lower mining activity and higher stockpile processing Continuing to implement operational changes at other sites Guidance unchanged Wide production guidance range reflects risks associated with project rampup, planned maintenance and implementation of operational changes during 2014 financial year Risks reducing over time; still expect a stronger second half year production Refurbishment of original Lihir plant expected to continue for remainder of 2014 financial year 13

14 Outlook for remainder of 2014 financial year All-In Sustaining Cost 1 (AISC) 15% reduction in AISC for the quarter from FY13 as seek to maximise free cash flow Ongoing cost reduction programs at Hidden Valley and Bonikro AISC will vary from quarter to quarter with: Timing of sustaining capital expenditure Timing of stripping expenditure Volatility of exchange rates and by-product prices (copper and silver) Lihir stockpile processing brings an inventory charge into AISC which has no impact on cash flow (mining cost sunk ) 1 All-In Sustaining Cost per World Gold Council Guidance Note on Non-GAAP Metrics, released 27 June

15 Summary Good production and All-In Sustaining Cost performance for the quarter FY14 gold production guidance unchanged Progress of cost reduction initiatives becoming evident Cadia and Lihir production in line with Company expectations Cadia East Panel Cave 2 development on track Board and Executive changes announced Increase in bank facilities 15