2017 ANNUAL REPORT “NEWCREST’S VISION IS TO BE THE MINER OF CHOICE TO“ ALL OUR STAKEHOLDERS. SANDEEP BISWAS MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER MINER OF CONTENTS 2 CHOICE FORGING A STRONGER 4 NEWCREST KEY ACHIEVEMENTS 10 6 FOR FY17 Value ASSET 8 OVERVIEW VALUE 10 PROPOSITION CHAIRMAN’S 14 REPORT 20 MANAGING Safety DIRECTOR’S 15 REVIEW THE 16 BOARD SAFETY, SUSTAINABILITY 20 & DIVERSITY 23 MINERAL RESOURCES & Sustainability 28 ORE RESERVES CORPORATE GOVERNANCE 36 STATEMENT DIRECTORS’ 38 REPORT FINANCIAL 97 REPORT CORPORATE 153 DIRECTORY 1 OUR VISION To be the Miner of Choice. We will lead the way in safe, responsible, efficient and profitable mining. OUR MISSION To deliver superior returns from finding, developing and operating gold/copper mines. Realise full Deliver profitable potential of our organic growth existing assets Explore and Invest in people Focus on strong acquire where and technology balance sheet and value accretive shareholder return EXTERNAL MINER OF CHOICE STAKEHOLDERS INCLUDE: FORGING A STRONGER NEWCREST INVESTORS COMMUNITIES GOVERNMENT KEY ACHIEVEMENTS ACHIEVEMENTS KEY FOR FY17 ASSET OVERVIEW VALUE VALUE PROPOSITION To achieve our Mission of delivering Newcrest’s mining and exploration We believe Newcrest’s activities superior returns from finding, developing activities have significant potential to positively contribute to the economies CHAIRMAN’S REPORT and operating gold/copper mines, impact the communities where we operate. of the jurisdictions where we operate we look to: A planned, transparent and constructive including through tax, royalties and approach to community engagement and other socioeconomic benefits at the • Optimise performance at each phase development is critical to maintaining community level. of the mining value chain. This value MANAGING DIRECTOR’S REVIEW Newcrest’s social licence to operate chain spans exploration, development Newcrest recognises the importance of and ensuring that communities benefit and the operation of gold and gold- developing meaningful relationships with from Newcrest’s operations. We are copper mines. all levels of government to our long-term also conscious of the need to balance THE BOARD success. We strive to proactively engage with • Build a portfolio of gold opportunities community expectations against a project’s governments in the jurisdictions where we to convert into operating mines. ability to deliver benefits throughout the operate, or seek to operate in the future, to Opportunities to grow the business life of the mine. In the longer term, we also understand views about, and expectations of, include brownfield and greenfield need to ensure that we do not create undue our activities, and to share Newcrest’s track exploration; early entry farm-in, community dependence upon our mining record. To strengthen community services alliances and equity arrangements, and operations that is unsustainable once the SAFETY, SUSTAINABILITY & DIVERSITY and support capacity building, Newcrest also merger and acquisition activity. operations reach the end of their lives. • Apply our Performance Edge works through a range of partners, including improvement program and technical Newcrest’s presence provides many direct local governments. and indirect benefits to the countries expertise across all our assets and Newcrest acts with integrity and honesty and communities in which we operate. opportunities. when conducting business, in a manner These benefits can potentially include: MINERAL RESOURCES & ORE RESERVES that promotes transparency in business • Improved access to employment, dealings. Newcrest is a Supporting Member health, education and training of the Extractive Industries Transparency opportunities; Initiative (EITI), a global coalition of • Investment in community infrastructure governments, companies and civil society and services, e.g. road access and working together to improve openness CORPORATE GOVERNANCE STATEMENT maintenance, electricity and clean and accountable management of revenues water supply; from natural resources. As part of this • Income-generating activities, e.g. local commitment, Newcrest publishes the level business development, goods and Annual Tax Contribution Report, which DIRECTORS’ DIRECTORS’ REPORT services supply and support for local includes mining royalties and taxes paid across all our operating jurisdictions. agricultural businesses; and • Improved community lifestyle, e.g. We also actively engage both directly religious and sporting facilities and and indirectly, through industry groups, REPORT sponsorship of both local and regional with government and other stakeholders FINANCIAL events and activities. on policy and regulatory reform. Proper consultation processes are critical to any reform process and Newcrest seeks to participate and contribute on relevant DIRECTORY CORPORATE CORPORATE issues to assist with informed discussion and consideration. 3 FORGING A STRONGER NEWCREST The health and safety of our WE VALUE... workforce is a core value for Newcrest. Our clear focus remains on eliminating fatalities and life-changing Caring about Integrity and injuries from our business, people honesty while striving to make continual progress on reducing all injuries and health impacts. Working Innovation and High- We believe that a strong commitment to health and safety together problem solving performance improvement will yield benefits for our workforce and for overall business performance. OUR EDGE WE ACHIEVE SUPERIOR A high performance, RESULTS THROUGH... no-nonsense culture focussed on: Safety Employee Personal Bottom-up involvement ownership innovation Operational discipline Cash Inspirational Profitable growth Operational Shared discipline vision leaders We deliver on our commitments. Talent development 4 MINER OF CHOICE FORGING A STRONGER NEWCREST KEY ACHIEVEMENTS ACHIEVEMENTS KEY FOR FY17 ASSET OVERVIEW VALUE VALUE PROPOSITION CHAIRMAN’S CHAIRMAN’S REPORT MANAGING MANAGING DIRECTOR’S REVIEW THE BOARD SAFETY, SAFETY, SUSTAINABILITY & DIVERSITY MINERAL RESOURCES & ORE RESERVES CORPORATE CORPORATE GOVERNANCE STATEMENT DIRECTORS’ DIRECTORS’ REPORT REPORT FINANCIAL DIRECTORY CORPORATE CORPORATE 5 KEY ACHIEVEMENTS Four years of meeting or FOR FY17 exceeding Group production, Delivering on operational and total capital expenditure and financial commitments cost guidance. ACHIEVE PRODUCTION & COSTS GUIDANCE • Met Group production guidance All operating sites • Within or below Group guidance on total capital expenditure and costs free cash flow RECORD MILL THROUGHPUT & PRODUCTION AT LIHIR • Achieved 13mtpa mill throughput rate target by end December 2016 positive • Record annual gold production LOW COST POSITION $ (1) AISC 787/oz GENERATE FREE CASH FLOW (FCF) $ 739m FCF in FY17 REDUCE NET DEBT Reduced by $608m in FY17 WITHIN TARGET FINANCIAL METRICS • Investment grade rating • Leverage ratio of 1.1x • Gearing of 16.6% • Strong cash & liquidity position PROGRESS PROJECTS & STUDIES • Cadia East Panel Cave 2 footprint completed • Wafi-Golpu Feasibility Study progressed DIVIDEND Total dividends of 15 cents per share (1) For this reference and other references to non-IFRS financial measures throughout this annual report, refer to the information in the Operating and Financial Review in the Directors’ Report regarding non-IFRS financial measures. 6 MINER OF CHOICE GROUP GOLD THOUSAND CASH FLOW FROM PRODUCTION OUNCES EBITDA(1), (2), (3) $ MILLION OPERATING ACTIVITIES(1), (2) $ MILLION FY13 2,110 FY13 1,507 FY13 1,148 FORGING A STRONGER NEWCREST FY14 2,396 FY14 1,386 FY14 965 FY15 2,423 FY15 1,385 FY15 1,280 FY16 2,439 FY16 1,292 FY16 1,241 FY17 2,381 FY17 1,408 FY17 1,467 KEY ACHIEVEMENTS ACHIEVEMENTS KEY FOR FY17 GROUP COPPER THOUSAND PRODUCTION TONNES EBIT(1), (2), (3) $ MILLION FREE CASH FLOW(1), (2), (3) $ MILLION FY13 80 FY13 765 FY13 (1,484) FY14 86 FY14 748 FY14 136 ASSET OVERVIEW FY15 97 FY15 811 FY15 854 FY16 83 FY16 594 FY16 814 FY17 84 FY17 719 FY17 739 VALUE VALUE PROPOSITION ALL-IN SUSTAINING COST(1), (3) $/OUNCE UNDERLYING PROFIT(1), (2), (3) $ MILLION NET DEBT TO EBITDA(1), (3), (4) TIMES FY13 1,318 FY13 459 FY13 2.6 FY14 897 FY14 393 FY14 2.7 FY15 780 FY15 424 FY15 2.1 CHAIRMAN’S REPORT FY16 762 FY16 323 FY16 1.6 FY17 787 FY17 394 FY17 1.1 MANAGING MANAGING DIRECTOR’S REVIEW 12 months to 12 months to % FY17 RESULTS AT A GLANCE(1), (3) 30 June 2017 30 June 2016 Change Gold produced (ounces) 2,380,630 2,438,994 (2%) THE BOARD Copper produced (tonnes) 83,941 83,070 1% Realised gold price ($ per ounce) 1,263 1,166 8% Realised copper price ($ per pound) 2.44 2.21 10% Average exchange rate (AUD:USD) 0.7541 0.7285 4% Sales revenue ($ millions) 3,477 3,295 6% SAFETY, SAFETY, SUSTAINABILITY & DIVERSITY EBITDA(3) ($ millions) 1,408 1,292 9% EBIT(3) ($ millions) 719 594 21% Statutory profit(5) ($ millions) 308 332 (7%) Underlying profit(3), (6) ($ millions) 394 323 22% Cash flow from operating activities ($ millions) 1,467 1,241 18% Net cash outflow from investing activities ($ millions) 728 427 70% MINERAL RESOURCES & ORE RESERVES Free cash flow(3) ($ millions) 739 814 (9%) Return on capital employed (ROCE)(3), (7) (percent) 7.9 6.2 27% Net debt to EBITDA(3), (4) (times) 1.1 1.6 (31%) Gearing(3), (8) (percent) 16.6 22.8 (27%) Total Dividends (cents per share) 15.0 7.5 100% CORPORATE GOVERNANCE STATEMENT (1) All financial data presented in this report is quoted in US dollars unless otherwise stated. (2) Comparative 2013 information has been restated to reflect the adoption of Interpretation 20 – Stripping Costs in the