2012 Annual Stockbrokers Conference Crown Promenade, Melbourne 31 May - 1 June Greg Robinson Managing Director & CEO

Transcription

1 2012 Annual Stockbrokers Conference Crown Promenade, Melbourne 31 May - 1 June 2012 Greg Robinson Managing Director & CEO Newcrest Mining Limited

2 Disclaimer Forward Looking Statement 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 companys 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 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. 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 t will exist and affect the company s business and operations in the future. The company does not give any assurance thatt the assumptions on which h forward looking statements t t 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 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 any change in events, conditions or circumstances on which any such statement is based. Investment or financial product advice The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. In this regard, this presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any person. 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 comply with 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. As a company listed on the Toronto Stock Exchange ( TSX ), Newcrest is 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 ). In accordance with NI , Newcrest reports its ore reserves and mineral 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. Competent Persons 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 Mining Limited who is a Fellow 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 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 com and to SEDAR at Exploration Target The potential quantity and grade related to Exploration Targets in this presentation is conceptual in nature as there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource. Refer to Newcrest s detailed exploration report on our website at and on SEDAR at 2

3 Overview Gold Demand Fundamentals Gold Supply Fundamentals Gold as an Asset Class Newcrest Mining 3

4 Principal Areas of Demand Deman nd (tonnes s) Other Jewellery & Fabrication Bar Investment Official Purchases Year 4 Source: Thomson Reuters GFMS Gold Survey

5 Gold as a Percentage of Official Reserves 90% 80% 70% 60% $438 $183 $132 $131 $33 50% 40% 30% 20% 10% 0% $56 $48 $4 $41 $57 $17 $4 Value of Reserves in US$bn also shown 5 Source: World Gold Council

6 Supply Fundamentals World mine supply is relatively static Gold exploration spend has been increasing: US$8.3Bn Discovery rates have been decreasing Mining grades decreasing Mining depth increasing Emerging economies becoming more important 6

7 Principal Sources of Supply Supply (tonnes) )Recycled 3500 Gold Net Official Sector Sales Mine Production Year 7 Source: Thomson Reuters GFMS Gold Survey

8 Major Gold Producers in Ghana 212 Russia 71 Uzbekistan 111 Indonesia 371 China 62 PNG 108 Canada 233 USA 87 Mexico 188 Peru 198 South Africa 258 Australia Tonnes Gold Production Average Total Cash Cost 2011: US$643/oz Average Total Production Cost 2011: US$809/oz 8 Source: Thomson Reuters GFMS Gold Survey

9 Mined and Discovered Grades are Decreasing Average grade of gold mined USA, Canada, Australia & South Africa` Grade Au g/t Average grade of gold discovered globally 4 (3 Year rolling average, discoveries i > 1Moz) Average grade of gold mined globally Year 9 Source: MinEx Consulting

10 Gold as an Asset Class Every currency exchangeable into gold Total gold production ~169kt 51kt in reserves* Liquidity 2,800t p.a. produced 1,500t per day traded US$1.1 trillion gold equities traded p.a. US$23.4 trillion physical gold traded p.a. Gold Inventory (Thousand Tonnes) kt 20 m 20 m 20 m 10 *Source: USGS

11 Comparative Market Values Market Value (US$B) Global Gold Apple US SGold Reserve Global Mining Sector Global Financials Aggregate Gold Produced 0 1, ,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10, Source: Bloomberg

12 Diversification and Risk A currency without a country World Gold Council Credit Risk: risk of default Unlike bonds this risk does not exist for gold Liquidity Risk: risk that no buyer can be found low risk deep market Market Risk: fall in price due to poor market conditions low-medium m risk, gold has continually outperformed gold has low correlation with equities and bonds 12

13 Store of Value 3,000 o 100 in Rebased t 2,500 2,000 1,500 1, Gold US CPI Dow Jones IndustrialAverage Since its free float in 1973, gold has consistently beaten inflation 13 From 01 to 04, a period where inflation fell from 2.8% to 1%. Gold rallied >50%. Gold, as a hoarding vehicle has a scarcity factor that can see its price appreciate significantly. Even in a deflationary period. Merrill Lynch Jan 2009 Source: Bloomberg

14 Gold Companies Should Correlate with Gold Prices Gold Gold Correlation - 1 year 1 Year Gold Gold Correlation Correlation - 10 year 10 Year (0.20) (0.03) 0.00 (0.20) Analyst price forecasts remain substantially below spot gold price 14 Source: Bloomberg. Time periods: 1 Year = 1 January 2011 to 31 December year = 1 January 2002 to 31 December 2011

15 Why Some Diversification into Gold Makes Sense US$ remains the global currency but faces devaluation: US National Debt approaching $16 trillion US gold reserve US$450B US Federal Reserve continuing to ease monetary policy Pay debt through tax and devaluation of US$ European economies in poor shape Recapitalisation of Government and Bank debt Future of the Euro currency? Capital surplus to the emerging economies Where to invest excess money? Political tensions continue 15

16 Newcrest Mining: Long Life, Low Cost, Organic Growth Delivery Focus: Reliable Predictable Operations Cadia East Project Tandai Gosowong Manus Lihir Wafi-Golpu Hidden Valley Lihir MOPU Project Wafi Golpu to Feasibility Gold Equivalent Resource Moz Telfer Namosi Namosi Cadia Valley Bonikro Operation Project Exploration Project 16 1 Gold Equivalent Resource: Refer Newcrest Annual Statement of Mineral Resources & Ore Reserves to December 31, 2011 on the Newcrest website Resource figures quoted on 100% basis. Gold price US$1100/oz, Copper price US$2.70/lb, Silver price $20/oz.

17 Financial Highlights Record Profits continue into H1 FY12 Strong EBIT Margin Statutory Profit Underlying Profit 32% 30% 40% 38% 17% FY07 FY08 FY09 FY10 FY Progressive Dividend Growth FY07 FY08 FY09 FY10 FY11 FY12 Half YTD Year Interim Dividend Final Dividend Special Dividend 17 AUD shown.

18 Focus on Reliable Predictable Performance Gosowong Consistent production ~400koz pa Development and extension of Toguraci Exploration focus to extend reserve life Telfer Hidden Valley Sustainable production koz pa for 10 yrs Simplify pit material movement Exploration focus on underground Stabilise production ~300koz pa Regional exploration continues Bonikro Consistent production at 100koz pa Growth potential to 250koz Côte d Ivoire exploration program ramping up Bonikro 18

19 Organic Growth Program Lihir Path: Gold from 650kozpa to 1.2Mozpa Plant reliability improvement Open pit dewatering capacity increase MOPU project completion and commissioning Flotation capacity expansion to increase production to 1.2Mozpa Medium term objective remains to lift production to over 1.2Mozpa Path: Gold from 500kozpa to 800kozpa+, Copper to 90ktpa Cadia Cadia East project completion and commissioning Valley Cadia East footprint expansion Ridgeway underground continuous improvement Completion of Cadia Hill open pit mining Wafi Golpu Path: Gold kozpa, Copper ktpa Progress from Pre-Feasibility to Feasibility First production expected around

20 Lihir MOPU Project In Construction Project Capex: US$1.3 billion As at 31 Dec 2011 Contained Lifts annual gold production to 1.0Moz Gold Commissioning in December 2012 quarter Project 82% complete Remains on schedule & budget Upcoming Milestones: Crushing circuit completion Oxygen plant: June quarter Milling circuit: September quarter Autoclave: September quarter Resource Reserve 56.6Moz 31.5Moz 20 End cap of new SAG mill Resource and Reserve: Refer Newcrest Annual Statement of Mineral Resources & Ore Reserves to December 31, 2011 on the Newcrest website

21 Cadia East Project In Construction Establishment Capex: A$1.9 billion Medium term production target of 800koz gold and 90kt copper 1st quartile cash costs First commercial production in December 2012 quarter Project 75% complete June quarter commissioning milestones: Flotation plant, regrind vertimill, HPGR circuit Conveying system As at 31 Dec 2011 Contained Contained Gold Copper Resource 33.1Moz 6.58Mt Reserve 22.2Moz2M 3.67Mt 21 Resource and Reserve: Refer Newcrest Annual Statement of Mineral Resources & Ore Reserves to December 31, 2011 on the Newcrest website

22 Wafi-Golpu, PNG In Pre-Feasibility Study (PFS) PFS completion June quarter 2012 Project partners to assess thereafter Wafi/Golpu Hill Expected Initial Capex ~A$3-5 billion 1 Indicative annual production range 1 : Gold koz Copper kt Ramp-up over 5 years 1st quartile cash costs Expected first production FY17 22 Dependent on cave depth starting point Permitting and Community support critical Leverage Cadia East development approach As at 31 Dec % basis. Resource and Reserve: Refer Newcrest Annual Statement of Mineral Resources & Ore Reserves to December 31, 2011 on the Newcrest website Contained Gold Contained Copper Resource Moz 9.0Mt

23 Delivering Shareholder Value Stick with gold Reliable predictable performance Newcrest Focus Deliver Cadia East Deliver Lihir expansion and improve Deliver Wafi Golpu Drive costs lower Maintain long inventory 23 Focus on licence to operate and people