Denver Gold Forum. 11 September Finance Director & Chief Financial Officer

Transcription

1 Denver Gold Forum 11 September 2012 Gerard Bond Finance Director & Chief Financial Officer

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 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 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 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. 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 for any material differences between the JORC Code and the applicable definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM Definition Standards). 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 Persons Information contained in this presentation that relates to Mineral Resources and Ore Reserves for the Wafi-Golpu project is based upon and accurately reflects reports prepared p by the respective Competent Persons as follows: Golpu Mineral Resource, Wafi Mineral Resource and Nambonga Mineral Resource James Francis; Golpu Ore Reserve German Flores. These persons are full-time employees of Newcrest Mining Limited. Each Competent Person consents to the inclusion of the material in the form and context in which it appears. All Competent Persons named are members of The Australasian Institute of Mining and Metallurgy and/or The Australian Institute of Geoscientists and possess relevant experience in relation to the mineralisation being reported on or by them to qualify as Competent Persons as defined by the JORC Code. Qualified Person The information in this presentation that relates to Mineral Resources, Ore Reserves, Exploration Results and other scientific and technical information is based on information compiled by or under the direction of Colin 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 JORC Code and a Qualified Person within the meaning of NI Mr Moorhead consents to and has approved the inclusion in this release 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 Exploration Target The potential quantity and grade related to any Exploration Targets referred to 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 summary on our website at and on Enhanced Production Case Note that the Lift 3 Tonnes production profile for Golpu used in the graph on page 15 of this presentation comprises a projected tonnage from the zone beneath Lifts 1 and 2, as well as overdrawn volumes from Lifts 1 and 2. To the extent that the production profile relates to the former, it is noted that this quantity is conceptual only, and there is no certainty that Ore Reserves to support this production will be defined in the future. Accordingly there is no demonstrated economic viability for tonnages other than those produced from Lift 1 and 2. However, based on results and studies to date, Newcrest considers that the projected tonnage for this zone is appropriate and justified as a component of the Enhanced Production Case. 2

3 Newcrest strategy Key elements Bonikro Gold focus Australia and Asia Pacific region Tandai Gosowong Wafi-Golpu Long-life e/ low-cost assets Consistent moderate growth of 5-10%pa Manus Is Unhedged, low gearing Lihir Is People and technical capability focus Hidden Valley Progressive dividend growth Telfer Namosi JV Asset portfolio Growth from large resource, low-cost assets Cadia Valley Drive predictable performance from all Non-core assets divested Gold Equivalent Resource 1 Explore and capture new provinces +50Moz 20-50Moz 0-20Moz 3

4 Financial results: 12 months to June 2012 Record profit and strong cash flow Statutory Profit 1 up 23% to A$1,117m Underlying Profit 2 up 2% to A$1,084m Operating cash flow of A$1,726m EPS 3 up 16% to A$ 146cps Significant investment in growth Capital expenditure of A$2,556m 83% invested in major projects Exploration expenditure of A$158m 1 Profit after tax and non-controlling interest 2 Profit after tax and non-controlling interest before hedge restructure and other significant items 3 Statutory Profit Earnings Per Share (basic) 4

5 Dividend growth through period of peak capex Ordinary Dividends increased 250% since FY08 A$ cps Healthy dividend payout ratio The above excludes the special dividend of 20 cents per share paid in respect of the FY11 year Dividends declared on underlying profit relating to period 1 July 2011 to 30 June 2012 Objective remains to return capital to shareholders h 5

6 FY13 gold production guidance FY13 gold production range = 2.3 to 2.5Moz Production increases at three operations: Lihir, Bonikro, Hidden Valley Two operations sustain FY12 production levels: Cadia Valley, Telfer Lower production at Gosowong due to lower grade Lower first quarter production; growth projects deliver in the second half Gold production ranges by site Gold production by country 400 to 500kozs 700 to 900kozs 500 to 600kozs 375 to 425kozs 100 to 110kozs 100 to 120kozs FY13 production range: gold bar designates up to low end of range, blue signifies high end of range FY12 actual production 6

7 Past investment will deliver near term growth Gold production Gold 5-year production growth of 35% to 50% 2.29 Moz 2.3Moz to 2.5Moz 3.1Moz to 3.5Moz Past investments drive future growth Cadia East = 30 to 40% of 5 year growth Lihir = 50 to 70% of 5 year growth Other growth option studies continue Copper production Copper 5-year production growth of 20% to 30% 76kt 75kt to 85kt 100kt to 110kt Copper growth is delivered by Cadia East ramp-up Telfer production declines to 25ktpa from FY14 Annual production range: gold bar designates up to low end of range, blue signifies high end of range 7

8 Milestones to deliver 5-year growth Projects in the 5 year outlook Milestones: committed projects in execution FY13 FY14 FY15 Cadia East commercial production Lihir MOPU project completed Lihir reliability program Hidden Valley crusher installed Cadia East Lift 2 production commences Lihir flotation expansion commissioned Bonikro mill expansion to 3.5mtpa commissioned Only depicts projects that have passed the pre-feasibility study tollgate 8

9 Other growth options exist but not committed Projects not currently in the 5 year outlook Potential delivery within 5 years Lihir plant expansion (to ~1.4Moz pa) Cadia mill expansion Further Bonikro plant expansions Namosi open pit mine Delivery beyond 5 years Wafi-Golpu Telfer underground success Gosowong exploration success Côte d Ivoire exploration success O Callaghans tungsten mine Hidden Valley plant expansion Multiple project options at various stages of evaluation Early study phase not yet Board approved We expect our exploration efforts to be successful 9

10 Cadia East project A$1.9 billion project Underground panel cave mine Plant expansion to 26Mtpa capacity Increases annual production to: 700 to 800koz gold (up from ~ 500koz) 90kt copper (up from ~ 75kt) Lowest quartile cash costs Province life of at least 30 years Project >80% complete as at 30 June 2012 On schedule for first commercial production December 2012 quarter Project cost within 10% of budget 10

11 Lihir expansions Lihir MOPU project US$1.3 billion plant expansion Increases annual gold production to around 1 million ounces Project >90% complete as at 30 June 2012 Reserve life of at least 30 years On schedule for project commissioning December 2012 quarter Project remains on budget Lihir flotation expansion follows Increase production to 1.2 to 1.3Moz per year Planning continues on 1.4Moz per year delivery within 5 years 11

12 The growth of a leading copper-gold deposit Golpu reserve of 12.4Moz gold and 5.44Mt copper announced Selected SE Asia porphyry copper-gold deposits Cu (wt %) 1.30 Oyu Tolgoi Moz Golpu Moz Grasberg 1.00 Golpu Moz 329 Moz 0.90 Ok Tedi 0.80 Golpu 2012 Tampakan 20 Moz 69 Moz Moz Northparkes Moz Namosi Moz Ridgeway Didipio Frieda River Batu Hijau Cadia Valley 37 Moz 11 Moz 83 Moz 125 Moz 5 Moz 0.40 Kingking g 24 Moz 0.30 Dexing 16 Moz Au (g/t) In production Project Golpu as at 2007 and 2010 Golpu as at 2012 Sourced from Company Reports and Wood Mackenzie Database (accessed 28/06/2012). Bubble size represents total resource gold-equivalent ounces, based on USD 1250/oz gold, USD 3.10/lb copper on an in-situ basis 12

13 Newcrest s next major investment Process Plant Ventilation Shafts Surface Conveyor Portal Surface profile above section Golpu PFS base case estimates Lift 1 Lift 2 Twin Declines Main Access + Conveyor Lift mrl Extraction level below surface 700m 1.45km Lift 2 Access + Conveyor Declines Indicated Inferred Lift 2 Lift mrl 3850 mrl Column height 250m 750m First production Exploration OPEN 500 mrl Two block cave lifts: sequential mining of lifts Rock mass preconditioning by hydraulic fracturing and conditioning techniques To be further optimised in Feasibility Study Golpu deposit remains highly prospective Latest drilling suggests upside for Lift 1 Lift 2 remains open to the east Remains open at depth; good potential for Lift 3 13

14 Golpu optimisation considerations Pre-feasibility study Latest t drilling Feasibility study World-class l outcome Reserve 12Moz Expands Lift 1 Evaluate Lift 3 Reserve 12Moz + Mine life 26 years Base case defined Better metallurgy outcomes in Lift 1 Improve Lift 1 Optimise mine development plan Mine life 26 years+ Enhanced value creation Metallurgical improvement Further drilling Infrastructure decisions Lift 3 potential, high grade below Lift 2 Reduce capital Extensions to lifts Further province success can leverage off Golpu development Reserve quoted on 100% basis, Newcrest share is 50% 14

15 Golpu objective Development of Lift 1,2 and 3 Mine life of 30+ years Gold recovery improvement to ~70% Annual production of up to 720koz of gold and 380kt of copper 15Mtpa process plant, later expanded to 25Mtpa First quartile cash and production costs Potential lift 3 3 Enhanced production case estimates Mining method Processing method Mill capacity Annual gold production 1 Annual copper production 1 Unit cash cost 2 Unit depreciation cost Unit production cost 2 Block cave Crush, grind, flotation 15 to 25Mtpa 580koz 300kt Negative US$1,900 per ounce US$150 to 200 per equivalent ounce Negative US$1,200 per ounce Figures quoted on 100% basis, Newcrest share is 50% 1 For the years 2025 to Assumes copper price of USD3.10/lb 3 Refer to the disclaimer for important additional information Lift 1 Tonnes Copper produced Lift 2 Tonnes Gold produced Lift 3 Tonnes 15

16 Wafi-Golpu zone remains highly prospective Plan view Miapilli Plan view ZIMAKE Zenapu 4.6g/t Au 1.0g/t Au 3.2g/t Au 9.1g/t Au 0.75g/t Au, 0.15% Cu Bavaga Nambonga 1.0Moz Au 0.1Mt Cu 6.4g/t Au Western Zone 10g/t Au 7.0g/t Au 500 m M Zone Northern Margin Northern Zone 1.5g/t Au & 1.1g/t Au Diatreme Wafi 7.2Moz Au Golpu 20.3Moz Au 9.0Mt Cu Eastern Margin 20,000mE WR g/t Au Dokaton South 1.9g/t Au 721,000mN 720,000mN local mine grid Zenapu Nambonga Miapilli Golpu Wafi Hekeng KESIAGO Pekumbe Mt Tonn 4 km 2012 WAFI-GOLPU RESOURCE 28.5Moz Au & 9.1Mt Cu Copper/gold target area Wafi Transfer Zone: 25km+ porphyry corridor Multiple known prospects New zones of mineralisation emerging Figures quoted on 100% basis, Newcrest share is 50% 16

17 Exploration program ~ A$150M in FY13 Tandai, Manus Island and Mt Andewa JVs: A$10 to 15m Grassroots exploration PHILIPPINES Gosowong: A$20 to 25m Step out drilling around Toguraci and Kencana Regional grassroots exploration within the CoW Manus Is JV Bonikro and Côte d Ivoire: A$25 to 30m Exploration around Bonikro Mine Accelerated regional exploration program Wafi-Golpu and Morobe: A$35 to 40m Wafi-Golpu project Wafi Transfer Zone discovery exploration Regional exploration PAPUA NEW GUINEA AFRICA CÔTE D IVOIRE MANKONO BOUAFLE BONIKRO Yamoussoukro Abidjan 100 km Tandai JV INDONESIA Wafi Golpu/ Morobe Mt Andewa JV Lihir: A$10 to 15m Resource and Reserve drilling Offshore exploration Telfer: A$20 to 25m West Dome advanced exploration Hidden Valley FIJI AUSTRALIA Cadia Valley Namosi: A$5 to 10m Discovery exploration in Namosi SPL 1000 km Indicative spends shown, Newcrest share Operation Advanced Project Exploration Project 17

18 A strong balance sheet and liquidity position Low gearing in peak capex year Headroom available to fund project expenditure 8.2% 1.9% -4.5% 42% 4.2% 12.5% US$2.5 billion Bilateral Facility US$3.73 billion facilities as at 3 September Jan-08 Jun Jan-09 Jun Jan-10 Jun Jan-11 Jun Jan-12 Jun 12 US$2.45 billion debt drawn at 30 June 2012 Gearing peaks in FY13 around 15% Undrawn debt facilities of US$780m at 30 June 2012 Bilateral debt facilities renewed and increased US$1bn corporate bonds due 2021 & 2041 Operating cash flow expected to cover capital expenditure US$1 billion Corporate Bonds US$230m Private Placement 18

19 Cash Flow Capacity Company objectives: grow profit and cash flow maintain conservative balance sheet spend within means return surplus funds to shareholders Current expansions at Lihir and Cadia Valley largely complete Gearing remains conservative, below 15% Golpu capital continues to be reviewed Newcrest free cash flow headroom FY12 operating cash flow: A$1.7 billion FY16 Wafi Golpu capital 1 Major projects: CE and MOPU Other projects capital Development capital Sustaining capital 1 Cash flow expected to be well in excess of capital commitments 1 Assumes an exchange rate of AUD:USD

20 Focused on delivering shareholder value Stick with gold Reliable predictable performance Drive costs lower Deliver Cadia East Deliver Lihir expansion and improve Deliver Wafi Golpu Maintain long life mineral inventory Focus on licence to operate and people 20