Newcrest Mining Annual Report 2004

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FY2004 Annual Report · Newcrest Mining

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Newcrest

Newcrest Mining Limited
Concise Annual Report 2004

Telfer will be the largest gold mine in Australia,
with projected annual production of more than
800,000 ounces of gold and 30,000 tonnes of
copper for 24 years, positioning Newcrest as a
significant and profitable Australian-based
resources business.

Section 5
Sustainability and People
Health and Safety
Environment
Human Resources

Section 6
Corporate Governance
Board of Directors
Corporate Governance

Section 7
Financials
Directors’ Report
Management Discussion and Analysis
of the Financial Statements
Statement of Financial Performance
Statement of Financial Position
Statement of Cash Flows
Notes to the Concise Financial Report
Directors’ Declaration
Independent Audit Report

Shareholder Information
Five Year Summary
Corporate Directory

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43

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46

49
50

56
58
59
60
61
68
69

70
72
IBC

Newcrest – The Sustainable
Resource Business

Section 1
Our Results
Performance in Brief
Chairman’s Review
Managing Director and
Chief Executive Officer’s Report
Newcrest Senior Management
Financial Report

Section 2
Operations
Cadia Valley Operations

Ridgeway Gold/Copper Mine
Cadia Hill Gold/Copper Mine

Toguraci Gold Mine

Section 3
Projects
Telfer Gold/Copper Project
Cracow
Cadia East
Boddington Expansion Project

Section 4
Exploration
Strategy and Review
Mineral Resources and Ore Reserves

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Newcrest Mining Limited
ABN: 20 005 683 625

Notice of Meeting

Notice is hereby given that the 24th Annual General
Meeting will be held at the Hyatt Regency Hotel,
99 Adelaide Terrace, Perth, Western Australia on
Wednesday 27 October 2004 at 9.30am.

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Newcrest

Newcrest Mining Limited
Concise Annual Report 2004

Section 5
Sustainability and People
Health and Safety
Environment
Human Resources

Section 6
Corporate Governance
Board of Directors
Corporate Governance

Shareholder Information
Five Year Summary
Corporate Directory

38
40
42
43

44
45
46

49
50

56
58
59
60
61
68
69

70
72
IBC

Newcrest – The Sustainable
Resource Business

Section 1
Our Results
Performance in Brief
Chairman’s Review
Managing Director and
Chief Executive Officer’s Report
Newcrest Senior Management
Financial Report

Section 2
Operations
Cadia Valley Operations

Ridgeway Gold/Copper Mine
Cadia Hill Gold/Copper Mine

Toguraci Gold Mine

Section 3
Projects
Telfer Gold/Copper Project
Cracow
Cadia East
Boddington Expansion Project

Section 4
Exploration
Strategy and Review
Mineral Resources and Ore Reserves

2
2
4

5
10
11

12
14
14
16
19

22
24
26
28
29

30
32
34

Newcrest Mining Limited
ABN: 20 005 683 625

Notice of Meeting

Notice is hereby given that the 24th Annual General
Meeting will be held at the Hyatt Regency Hotel,
99 Adelaide Terrace, Perth, Western Australia on
Wednesday 27 October 2004 at 9.30am.

4420 Newcrest Cover 04 6pp 16/9/04 9:52 AM Page 1

Telfer

Corporate Directory

Investor Information
Registered and Principal Office
Newcrest Mining Limited
Level 9
600 St Kilda Road
Melbourne, Victoria 3004
Australia
Telephone: +61 (0)3 9522 5333
Facsimile: +61 (0)3 9525 2996
Email: corporateaffairs@newcrest.com.au
Internet: www.newcrest.com.au

Company Secretary

Bernard Lavery
Level 9
600 St Kilda Road
Melbourne, Victoria 3004
Australia
Telephone: +61 (0)3 9522 5371
Facsimile: +61 (0)3 9521 3564
Email: laveryb@newcrest.com.au

General Manager Corporate Affairs

Peter Reeve
Level 9
600 St Kilda Road
Melbourne, Victoria 3004
Australia
Telephone: +61 (0)3 9522 5339
Facsimile: +61 (0)3 9510 3416
Email: reevep@newcrest.com.au

Stock Exchange Listings
Australian Stock Exchange
(Ticker NCM)
New York ADRs
(Ticker NWCNY)

Share Registry
ASX Perpetual Registrars Limited
Level 4
333 Collins Street
Melbourne, Victoria 3000
Australia
Telephone: 1300 554 474

+61 (0)3 9615 9947
Facsimile: +61 (0)3 9615 9900
+61 (0)3 8614 2909*
*For faxing of Proxy Forms only.

Email: registrars@asxperpetual.com.au
Internet: www.asxperpetual.com.au

ADR Depositary
The Bank of New York
101 Barclay Street
New York, NY 10286
United States of America
Telephone: +1 (212) 815 2218
Facsimile: +1 (212) 571 3050

Other Offices

Brisbane
Exploration Office
Newcrest Mining Limited
Level 2
349 Coronation Drive
Milton, Queensland 4064
Australia
Telephone: +61 (0)7 3858 0858
Facsimile: +61 (0)7 3217 8233

Perth
Exploration Office &
Telfer Project Group
Newcrest Mining Limited
Hyatt Business Centre
Level 2
30 Terrace Road
East Perth, Western Australia 6004
Australia
Telephone: +61 (0)8 9270 7070
Facsimile: +61 (0)8 9221 7340

Company Events

27 October 2004
Annual General Meeting at 9.30am
Hyatt Regency Hotel
99 Adelaide Terrace
Perth, Western Australia

Visit our website at www.newcrest.com.au to view
our key features; current share price; key dates;
market releases; annual, quarterly and financial reports;
operations, project and exploration information; corporate,
shareholder, hedging, employment and sustainability
information, visit the photo gallery or contact us.

Concise Annual Report
This is the Company’s
Concise Annual Report for
2004. The full Financial
Report and Auditor’s Report
are available to members
free of charge upon a request
in writing.

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4420 Newcrest Cover 04 6pp 16/9/04 9:52 AM Page 1

Telfer

Corporate Directory

Company Secretary

Bernard Lavery
Level 9
600 St Kilda Road
Melbourne, Victoria 3004
Australia
Telephone: +61 (0)3 9522 5371
Facsimile: +61 (0)3 9521 3564
Email: laveryb@newcrest.com.au

General Manager Corporate Affairs

Peter Reeve
Level 9
600 St Kilda Road
Melbourne, Victoria 3004
Australia
Telephone: +61 (0)3 9522 5339
Facsimile: +61 (0)3 9510 3416
Email: reevep@newcrest.com.au

Stock Exchange Listings
Australian Stock Exchange
(Ticker NCM)
New York ADRs
(Ticker NWCNY)

Share Registry
ASX Perpetual Registrars Limited
Level 4
333 Collins Street
Melbourne, Victoria 3000
Australia
Telephone: 1300 554 474

+61 (0)3 9615 9947
Facsimile: +61 (0)3 9615 9900
+61 (0)3 8614 2909*
*For faxing of Proxy Forms only.

Email: registrars@asxperpetual.com.au
Internet: www.asxperpetual.com.au

ADR Depositary
The Bank of New York
101 Barclay Street
New York, NY 10286
United States of America
Telephone: +1 (212) 815 2218
Facsimile: +1 (212) 571 3050

Other Offices

Brisbane
Exploration Office
Newcrest Mining Limited
Level 2
349 Coronation Drive
Milton, Queensland 4064
Australia
Telephone: +61 (0)7 3858 0858
Facsimile: +61 (0)7 3217 8233

Company Events

27 October 2004
Annual General Meeting at 9.30am
Hyatt Regency Hotel
99 Adelaide Terrace
Perth, Western Australia

Concise Annual Report
This is the Company’s
Concise Annual Report for
2004. The full Financial
Report and Auditor’s Report
are available to members
free of charge upon a request
in writing.

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Newcrest – The Sustainable Resource Business

Who we are:
Newcrest explores for, develops and operates gold and copper mines. Using a combination of
technical skills and mining experience, we focus on the fundamental elements of resource projects to
ensure strong financial returns. Newcrest’s Board and Executives are a diverse and experienced team
with a strong knowledge of the mining industry. They aim to deliver growth opportunities and ultimately
sustainable financial returns to Newcrest’s shareholders.

What we do:
Newcrest maintains a strategy of developing low-cost, long-life mines and also smaller high-margin
mines. We aim to operate projects in the lowest cost quartile in order to maximise profitability and
minimise the impact from commodity price variation. Exploration remains the key plank of our business
building strategy.

How we performed:
During the 2003/04 year, Newcrest delivered a profit of $122.9 million, rising 33 percent, with Ridgeway
and Toguraci performing strongly. Cadia Hill’s contribution underperformed budget. With the
completion of the large Telfer gold/copper and smaller Cracow gold mines, Newcrest will continue
its strong record in project delivery – from exploration through development to operations.

Newcrest Mining Concise Annual Report 2004 1

Performance in Brief

section1

• Full year after tax profit was A$122.9 million
• A 5 cent fully franked final dividend declared
• 761,780 ounces of gold and 84,758 tonnes of copper produced
• Group cash costs further reduced to A$119 per ounce reflecting the

good operational result and the strong by-product copper contribution

• Total costs reduced to A$268 per ounce
• Ridgeway performed strongly with 438,026 ounces of gold and

47,378 tonnes of copper produced

• Mining production at Toguraci commenced in February 2004 under

challenging conditions

• The Telfer project continued through the construction phase and

is nearing completion

• The Cracow development commenced in September 2003
• The Newcrest hedge book was comprehensively simplified and

copper hedged to maintain strong by-product revenue

• Overall safety performance improved, but a fatality at Toguraci marred

the Group’s safety performance

03 04

our results

2 Newcrest Mining Concise Annual Report 2004

Group Gold Production

thousand
ounces

1,000

3
7
7

5
4
6

4
1
7

2
6
7

up 7%

750

500

250

Group NAGIS Cash Cost

$ per ounce

0
9
2

3
5
2

7
1
2

9
1
1

down 45%

400

300

200

100

Profit/(Loss) after tax

$ million

140

2
.
8
3

)
0
.
3
5
(

2
.
2
9

9
2
2
1

up 33%

-40

Group Cash Margin

$ per ounce

1
2
3

9
9
2

6
4
3

4
5
4

up 31%

600

450

300

150

Gold produced

Copper produced

Gold price realised

Sales revenue

Earnings before significant items, borrowing costs, tax,
depreciation and amortisation

Net profit after tax attributable to members of the Company

Capital expenditure (cash flow basis including exploration)

Basic earnings per share

Return on capital employed (ROCE) excluding significant items
(EBIT before significant items/average capital employed)

Net debt/net debt plus equity

(All $ are Australian denominated unless stated otherwise.)

(ounces)

(tonnes)

($ per ounce)

($ million)

(cents per share)

(percent)

12 months to
30 June 2004

12 months to
30 June 2003

761,780

84,758

714,377

67,738

579

711.4

292.9

122.9

753.4

37.5

9.0

48.9

567

607.2

195.9

92.2

265.3

29.6

6.6

30.3

Newcrest Mining Concise Annual Report 2004 3

Chairman’s Review

During 2003/04, Newcrest re-affirmed and built upon the Company’s long-term strategy – operating as a responsible, efficient
and low-cost gold and copper producer.

The commissioning of the Telfer project in Western Australia and the smaller but higher grade Cracow project in Queensland will
reinforce Newcrest’s strategy even further. Together, the two projects will almost double the Company’s current level of
production and substantially add to Newcrest’s financial strength.

As foreshadowed in my report to shareholders last year, the successful start-up of the Telfer project will represent a further step
change in the Company’s development. As with the Cadia Hill, Gosowong and Ridgeway projects before it, the impact of the
major capital investment in Telfer will have an immediate effect, generating substantial revenue as Telfer builds up production.

The Company’s improving financial strength will be directed to optimising debt levels and maintaining strong returns to
shareholders. We expect the high capital returns of the past years gradually to give way to an increased flow of dividends as
debt is reduced.

The merit of Newcrest’s strategy and the success of its implementation were broadly endorsed by the sharemarket with a strong
re-rating of the Company’s share price during the past year. Newcrest is now firmly placed in the ASX Top 50.

The Company’s sharemarket performance results directly from its preferred strategy of organic growth by the discovery and
efficient development of world-class gold and copper operations. This strategy has reduced the Company’s requirement for
upfront capital, while at the same time delivering a higher margin with better returns and lower risk.

Your Board remains committed to growing the Company further. In the current world gold environment, organic growth through
successful exploration will remain a key component of that plan. The Board has already committed to a progressive step-up of
both brownfields and greenfields exploration during the coming years.

The Cadia Valley and Telfer regions are now firmly established as major gold districts, with each region expected to support
several large mines for many years to come. Developments at Gosowong and Cracow demonstrate clear potential for each
to emerge as an important new gold district. Newcrest will continue to target exploration in these areas. At Boddington
evaluation studies are continuing.

Brownfields exploration in these regions is the most efficient use of capital for Newcrest’s growth. It enhances the prospects for
success and shortens the time needed to bring new discoveries to production. This approach has served Newcrest well in the
past and the Board is committed to maintaining it.

During the past year, the Company’s corporate governance practices have been extensively reviewed, particularly in light of the
ASX Corporate Governance Council Principles of Good Corporate Governance and Best Practice Recommendations. Newcrest’s
practices, which demonstrate a high level of compliance with the ASX Principles, are reported in detail later in this Annual Report.

In addition to satisfying the formal requirements of the ASX, Newcrest’s Board and management have developed an extensive
framework for assessing and managing key risks and threats to Newcrest’s future prosperity. The aim is to improve the
consistency of the delivery of key outcomes for the Company’s shareholders in the future. The recent simplification of the
Company’s gold and foreign exchange hedge book is clear evidence of that approach.

The successful implementation of the Company’s strategy is due to the hard work and commitment of the people at Newcrest.
The Board will continue to ensure that the Company makes an appropriate investment in its people so that they can achieve
their full potential. This will enable Newcrest to continue to deliver on its long-term strategy and produce acceptable outcomes
to all stakeholders.

Ian Johnson

Chairman

4 Newcrest Mining Concise Annual Report 2004

Managing Director and Chief Executive Officer’s Report

The 2003/04 year was a period of substantial progress for
Newcrest, on a number of fronts.

Overview
Financially, our much improved profit figure was due to
a very strong performance at the Ridgeway mine and the
commencement of gold production from the high-grade
deposit at Toguraci. The robust performance at these
locations offset the disappointing third quarter at the Cadia
Hill open pit operation. The much stronger copper price in
the second half of the year made a strong impact, lowering
further the cash costs per ounce of production from an
already very low level in the first half of the year.

Newcrest’s hedging program also added significant value to
the Company’s profit by achieving a gold price higher than
the average spot price for the year. With the Australian dollar
well above US$0.64 cents for most of the year minimal foreign
exchange losses were incurred. At year end, we made some
significant changes to the Company’s hedge book. I expand
on these changes later.

I outline below the significant progress on other objectives set
by the Board for the 2003/04 year:

1. Occupational Health and Safety. We launched a major

new initiative called Target Zero – the long-term aim of this
initiative is to eliminate injuries from the Newcrest
workplace.

2. Corporate citizenship. At each of our sites, we focussed
on maintaining and improving Newcrest’s reputation as a
good corporate citizen.

3. Rehabilitation. The efforts at planning and undertaking

rehabilitation of our operational sites has been an area of
considerable focus. Newcrest’s ability to obtain permits in
the future will in part be determined by our record on this
front.

4. Management structure. We improved the management

structure in the important areas of technical support, human
resources and IT with the aim of facilitating a culture of
continuous improvement.

5. Exploration. We increased Newcrest’s exploration spend

with the intention of fully understanding the potential of our
brownfields sites and at the same time improving our
chances of further greenfields success.

Operations
The Ridgeway mine in the Cadia Valley continued to perform
strongly during the year. Ridgeway production is now highly
predictable and is in line with mine plans. We increased the
production rate to an annualised tonnage of 5.6 million tonnes,
which exceeds the feasibility study’s nominal design capacity.

Ridgeway’s cash flow continues to be strong and within
its first two years the mine had returned all capital invested
in both exploration and development. This outcome is
outstanding for an underground mine the size of Ridgeway.

Ongoing deep exploration drilling from underground at
Ridgeway was successful in increasing the reserve and
resource base of the orebody beneath its current limits. We
plan to commence the necessary development so this depth
extension to be brought into production in due course.

The Cadia Hill open pit mine provided some operational
challenges in the third quarter of the 2003/04 year. The mine
considerably underperformed due to reduced availability of
the two main shovels. We devoted a lot of time to improving
outcomes in this vital maintenance area and by year end,
shovel availability had returned to planned levels and total
rock movement had returned to normal levels. Due to the
underperformance of the mining fleet, we were unable to
access the higher grade areas of the pit. This resulted in
ore from the low grade stockpiles being treated through the
concentrator and lowered the overall gold production and
increased costs.

At Toguraci, which is located two kilometres from the existing
Gosowong plant on the island of Halmahera in Indonesia,
pre-stripping of the orebody commenced in October 2003
with the first gold pour taking place in February 2004. The
results from Toguraci have been good with the orebody
performing slightly in excess of expectations to date.

During the 2003/04 year, the Toguraci operation dealt with
heightened security issues arising from an influx of illegal
miners. These security issues caused a cessation of mining
for a period of six weeks. The temporary suspension of
operations was necessary to ensure the safety of our own
people and that of the illegal miners. Various claims were
made questioning PT Nusa Halmahera Mineral’s (PTNHM)
right to mine the Toguraci deposit. PTNHM has at all times
complied with Indonesian law and we have consulted
extensively with both the local and the central governments
on this issue. All necessary approvals were received by
PTNHM for its mining activities.

Newcrest Mining Concise Annual Report 2004 5

Managing Director and Chief Executive Officer’s Report (continued)

section1

Projects
Throughout the 2003/04 year, we focussed on the vital task of
delivering the first stage of the Telfer project. In late March, the
program was set back when Cyclone Fay (considered a
1-in-200 year rain event) deposited 360 millimetres of rain on
the site in just over 24 hours. Whilst no material damage
occurred on site, we experienced some significant delays,
especially in relation to the installation of the gas pipeline from
Port Hedland.

At the time of writing, the first stage of the project was in the
final stages of construction with only pipe fitting and electrical
wiring being key tasks remaining to be done before
production commences.

The second stage of the project is progressing well – the
shaft sink is now well advanced and work on the underground
infrastructure is in line with expectations.

The Telfer project will have a major beneficial impact on
Newcrest and we eagerly await the commencement of
production.

At Cracow, the underground development is proceeding
smoothly and we have made a good start on the work
required to refurbish the CIP plant. We anticipate that the first
gold will be poured before the end of the 2004 calendar year.

The Boddington project studies continued during the year
with progress made in the areas of geology, metallurgy and
design. All joint venture partners continue to work towards
achieving a finished study in 2005.

Exploration
Our commitment to Newcrest’s exploration remains strong.
We believe that our ongoing exploration success will be vital
to Newcrest’s ability both to maintain production levels and to
grow into the future.

Newcrest’s exploration program involves two categories of
exploration – brownfields and greenfields.

We have made excellent progress in brownfields exploration
– Cadia East, Ridgeway Deeps, Cracow, Kencana and
underground at Telfer – in our quest to fully understand the
mineral endowment of those areas. Clearly each of these
sites offers the opportunity to extend the life of the operating
mines that already exist, or are planned, in these areas.
Exploitation of these new resources will only require
incremental capital which in turn will mean a greater
overall return on capital.

Our commitment to Newcrest’s greenfields exploration
continued throughout the 2003/04 year. Unfortunately, flood
waters at Ashburton and the area surrounding Telfer, due to
Cyclone Fay, brought an early end to the drilling season in the
second half of the year – very little exploration was possible
from late March until year end. This delay was particularly
frustrating as progress in both these key areas had been
encouraging up until that time. Fortunately exploration
in both Ashburton and Telfer has now recommenced.

Greenfields exploration also continued in the Yilgarn, in
Eastern Australia and in North America. We plan to resume
modest exploration in South America, notably in Peru, in the
not too distant future.

Finance
Newcrest reported an after tax profit of $122.9 million for
the 2003/04 year, which compares with $92.2 million in the
previous year – an increase of 33 percent. Profit after tax
but before significant items, which provides a better indication
of the underlying business profitability, was $119.3 million
($66.3 million) up 80 percent.

Basic earnings per share of 37.5 cents per share for the
2003/04 year is an increase of 7.9 cents from last year’s result
of 29.6 cents per share.

Our improved profit figure is due to the lower cost of
production, in conjunction with strong copper prices in the
second half of the year. Co-product costing is shown in the
Five Year Summary on page 72. Other positives for Newcrest
were the strong copper production from Cadia Valley and the
commissioning of the Toguraci mine.

6 Newcrest Mining Concise Annual Report 2004

Sustainability
The concept of sustainability is an important element in
Newcrest’s development of successful operations. We are
committed to developing long-term beneficial relationships
with our key stakeholders as the foundation of a sustainable
future.

We have a number of key stakeholder groups – from our
shareholders to local communities to our own employees
and contractors. The degree to which we are able to satisfy
the needs of this diverse group of stakeholders is a clear
measure of Newcrest’s success in establishing sustainable
operations.

Since Newcrest became a signatory to the Australian Mining
Industry Code for Environmental Management, we have
shown a steady increase in environmental performance as
measured by the Annual Implementation Survey. In the 2003
calendar year, we delivered a further increase in our annual
survey score to 69 percent. Our score rose from 43 percent
in 2000 to 64 percent in 2002. Under the modified scoring
system used to assess implementation of the Code, 80
percent indicates that the systems represented by the Code
have been fully implemented and integrated. At 69 percent,
Newcrest’s score indicates that we have the necessary
systems and processes in place and are well advanced in
integrating these elements into our overall business functions.
Throughout this period each of our operations has shown
steady improvement, which we are confident will continue
into the future.

While the number of reported environmental incidents rose
slightly compared with the previous year (22 in 2003/04
compared with 15 in 2002/03), we believe this was still a good
performance given the increase in construction activity at
Telfer and Cracow. A more accurate year-on-year comparison
is using the number of hours worked during the year as an
indicator of overall Group activity. On this basis we had a
decline in environmental incidents per million hours worked
from 3.46 in 2002/03 to 2.93 in 2003/04.

Newcrest’s hedge book performed well for the Company
during 2003/04 – the achieved gold price was $33 higher than
the average spot price for the year. Nevertheless, the highlight
for Newcrest in recent times was the restructure of our hedge
book, which we announced on 5 July 2004. Newcrest’s book
now consists only of simple vanilla gold derivative products in
line with the Company’s hedging policy.

As a result of the higher copper prices in the second half of
the 2003/04 year, we decided to lock in these much improved
copper prices for most of the planned copper production over
the next two years. Our plans to mine the supergene copper
zone at Telfer over the first two years of the open cut operation
will result in enhanced copper production. Newcrest’s
hedging strategy to maintain strong copper revenue through
that period will provide a substantial boost to the Company’s
performance during that period.

Occupational Health and Safety
Newcrest’s management has set itself the task of attaining
world’s best practice for a resource company in the area of
occupational health and safety. The initiative is called Target
Zero and we have hired DuPont consultants to help design
the various training initiatives that we need. DuPont has a
long-established reputation for international leadership in
this field and we are delighted to be able to draw on their
expertise.

The number of lost time accidents at Newcrest per million
man hours fell from 3 in 2002/03 to 1.9 in the 2003/04 year.
We hope to reduce the accident statistics to less than
0.5 per million man hours in the near future with an aspiration,
over time, to eliminate work accidents that cause lost time
altogether. To achieve this aspiration, we require a substantial
commitment from all of our people and from our contractors.
This challenge will be all the greater because of the substantial
number of new people who will come on board at Telfer and
Cracow in the near future.

I regret to report that one of our people was killed at our
Indonesian operation during the year, despite our efforts and
hopes in eliminating work fatalities. Pak Patrsino was driving
a Caterpillar 966 loader when it rolled over resulting in Pak
Patrsino’s death. All of us at Newcrest offer our sincerest and
deepest sympathy to Pak Patrsino’s family.

We have completed a comprehensive investigation reviewing
the cause of the accident in the hope that we can avoid a
repeat of this tragedy.

Newcrest Mining Concise Annual Report 2004 7

Throughout the 2003/04 year
we focussed on the vital task of
delivering the first stage of the
Telfer project . . . the Telfer project
will have a major beneficial impact
on Newcrest.

8 Newcrest Mining Concise Annual Report 2004

Managing Director and Chief Executive Officer’s Report (continued)

Objectives for 2004/05
The key challenge for the 2004/05 year will be to bring the
Telfer and Cracow projects on-stream successfully. The boost
to production, as a result of these projects, has been much
anticipated by our shareholders, the Board and management
of the Company.

In addition to the positive outlook for Newcrest’s operations,
there are some Key Performance Indicators (KPIs) that we set
for the 2004/05 year:

1. Actively encourage all of our people to embrace Target

Zero.

2. Enhance Newcrest’s reputation as a good corporate citizen

among our stakeholders both in Australia and in the
countries in which we operate.

3. Continue to place a real emphasis on the continuous

improvement culture within Newcrest and to encourage
behaviour among our staff and contractors consistent with
and reflective of the highest ethical standards.

4. Improve the financial performance of the Company.

5. Sustain the Company’s gold reserve and resource inventory

through brownfields exploration, continue to support
greenfields exploration and the people who undertake this
exploration.

As you would expect, Newcrest’s KPIs are similar to the list
we provided last year. All of our people at Newcrest realise
that there is no easy way to success and these KPIs (even if
the detail varies slightly over time) will reappear year after year
regardless of how successful we may be in the future.

Our people
Newcrest is going through a period of substantial growth
and as a result we will welcome many new faces in the next
12 months.

In any period of substantial change, the existing members of
an organisation must ensure that growing pains are kept to a
minimum. The 2003/04 year is an example of such dynamic
change, which has been a particularly challenging year for the
management of Newcrest.

We have achieved what we set out to do in 2003/04 and
we looking forward to bringing both Telfer and Cracow into
production and at the same time achieving our other 2004/05
objectives.

I am confident that Newcrest’s management team and all
employees will continue to rise to the occasion and enhance
Newcrest’s reputation and I thank all of them for their
contribution to date. It is certainly an exciting time to work
at Newcrest.

Tony Palmer
Managing Director and Chief Executive Officer

Newcrest Mining Concise Annual Report 2004 9

Newcrest Senior Management

Bruce Price

Tony O’Neill

Dan Wood

Bernard Lavery

Jeff Smith

Peter Reeve

Matthew Butlin

The Newcrest Senior Management team is responsible for the development, management and implementation of corporate
business plans and the development of longer term strategies.The team draws strongly on the operating team and external
input in bi-monthly meetings to fulfil its objectives. The team meets with the Board of Directors during the year to review
progress of strategy discussions and the formulation of the Company budget.

Bruce Price
Executive General Manager
Project Development, responsible
for Telfer development, previously
built Gosowong and Ridgeway.
Prior to that, over 10 years with
Normandy Mining.

Tony O’Neill
Executive General Manager
Operations and Marketing,
responsible for Group operations,
previously held senior operational
and business roles at KCGM and
WMC.

Dan Wood
Executive General Manager
Exploration, a geologist with over
37 years’ experience in a diverse
range of commodities, both in
Australia and overseas, including
with BHP.

Bernard Lavery
Executive General Manager
Corporate Services, a lawyer by
training with a wide experience in
corporate law, previously with
WMC and Ashton Mining.

Jeff Smith
Executive General Manager
Finance, previously held senior
positions at WMC in accounting,
taxation and strategic planning.

Peter Reeve
General Manager Corporate
Affairs, a metallurgist with strong
corporate finance and market
experience at JBWere & Sons, the
Shell/Billiton Group and CRA Ltd.

Matthew Butlin
Executive General Manager
Organisational Effectiveness.
Previously with The Empower
Group, and CRA in various senior
organisation effectiveness roles.

10 Newcrest Mining Concise Annual Report 2004

Financial Report

Summary of year’s results
Due to the funding requirements for the Telfer project, the
2003/04 year was a significant year for effectively managing
Newcrest’s finances. The Telfer funding plan relied heavily on
the Cadia Valley mines to generate the cash flows needed at
the beginning of the year.

We also established Ridgeway as a quality mine. In less than
two years, on an undiscounted basis, cash flow from Ridgeway
has fully repaid the capital invested.

By June 2004, the Company’s credit position had been
transformed with our effective credit rating and capacity
increased dramatically. Newcrest is now well positioned
to contemplate a restructure of its existing debt to take
advantage of better credit conditions and to establish debt
maturities that are more reflective of the long-life reserve
profile of the Company. Conditions in key capital markets are
presently very favourable and we expect to examine benefits
of a debt restructure in the current financial year.

The financial highlights for the 2003/04 year are summarised
in the following table. Refer to the Discussion and Analysis of
the Financial Statements on page 56 for a detailed review of
the current year results.

Capital management plan
Proposals to restructure existing debt form part of Newcrest’s
larger corporate capital management plan which will address
such matters as dividend policy, gearing targets and liquidity.

2004

2003

Net profit after tax before significant items

$119.3 million

$66.3 million

Net profit after tax

$122.9 million

$92.2 million

Basic earnings per share

37.5 cents

29.6 cents

Return on capital employed

9.0 percent

6.6 percent

Return on members’ equity

18.1 percent

10.6 percent

Gearing – net debt/net debt + equity

48.9 percent

30.3 percent

Dividend

5 cents

Net profit after tax before significant items rose substantially
for the 2003/04 year. This measure is considered to be
the best indication of the profitability of the underlying
businesses. Newcrest’s increase in profit resulted principally
from higher production and lower cash costs assisted by
strong copper by-product revenue. Earnings per share and
return on equity both rose accordingly.

The commissioning of the Telfer project in the first half of the
2004/05 year will result in significant increases in earnings
per share and return on equity for the whole of 2004/05.

Key strategic issues
The financial standing of Newcrest changed dramatically
during 2003/04 with the Company positioning itself well for
the future with long-life operations, low on the cost curve
which will provide stable cash flows for many years.

Particular items of note are as follows:
Due to the relative importance of the Telfer project to Newcrest
the financing for the Telfer project necessarily contained some
elements of a project financing. This project financing style
prevailed due to the perceived completion risks associated
with the project and the significant contribution Telfer will
make to the overall Group. The financing was completed in
March 2003.

The Board’s intention is to increase the dividend payout ratio
once Telfer is operating at full capacity. Our aim is to establish
a sustainable dividend level and to regularly monitor cash
availability. We can then determine whether returns to
shareholders above the sustainable dividend level can be
made, depending on cash availability and investment
opportunities.

Current gearing levels remain manageable and gearing has
risen as a result of funding the Telfer project. We intend to
reduce our gearing to more modest levels and cash flow
predictions suggest this can be achieved in a relatively short
timeframe. We are seeking to minimise Newcrest’s cost of
capital in this process. Once target debt levels are determined
we will seek an appropriate mix of long and short-term debt to
reflect a repayment profile that complements our business plans.

Restructure of hedge book
A critical piece of our plan to develop the Company’s long-
term financial strategy was the restructure of the hedge book,
which was completed immediately after year end. We now
have a hedge book consisting entirely of vanilla hedging
instruments. This restructure now aligns the entire book with
the Company’s hedging policy approved by the Board in
2002 and should enable our derivative positions to qualify as
hedges under international accounting standards which
become effective in 2005.

Newcrest’s hedging policy is to hedge to ensure the return
on new capital invested and to ensure that we can meet the
Company’s financial commitments in times of low commodity
prices. In the next few years, therefore, hedging levels based
on annual production rates will remain high whilst debt levels
remain high and development opportunities are pursued.
Our expectation, however, is that overall, hedging levels will
reduce over time commensurate with a reduction in gearing.

Newcrest Mining Concise Annual Report 2004 11

Operations

12 Newcrest Mining Concise Annual Report 2004

Toguraci Gold Mine

section2

Newcrest Mining Concise Annual Report 2004 13

Operations

section2

CADIA VALLEY OPERATIONS

Ridgeway Gold/Copper Mine
The Ridgeway underground mine performed strongly
throughout 2003/04 with production of 438,026 ounces
of gold (377,539 ounces) and 47,378 tonnes of copper
(45,024 tonnes).

The unit cash costs of production were a low $19 per ounce
($85 per ounce) with a total unit cost of production of $172
per ounce ($239 per ounce). The costs were lower in 2003/04
primarily due to the higher by-product revenue resulting from
the stronger copper price in the second half of the financial
year.

During the initial part of the year, Ridgeway’s production
rates were consolidated at 5 million tonnes per annum.
Ridgeway then conducted trials to maximise the mine and
mill throughput rates to assess the viability of the operation
sustaining a higher production rate. An optimal production
rate of 5.6 million tonnes per annum was implemented,
taking into consideration grind and recovery parameters.

The sub-level cave development, ore handling system and
high grade concentrator have all performed extremely well
during the year. Production from the sub-level cave has
become highly predictable and is in accordance with the
mine plan. Head grades mined and milled continued to show
a strong correlation with the reserve model. The early stages
of mine development provided ore grades above the reserve
model and over the next two years these will revert closer to
the average reserve grade.

The outlook for 2004/05 is to consolidate production at
5.6 million tonnes per annum and focus on the potential
to increase recoveries in the concentrator with the
commissioning of a new concentrate regrind circuit
in the first quarter. The introduction of an owner-operated
underground mining fleet will be complete by April 2005.

14 Newcrest Mining Concise Annual Report 2004

Central NSW

Underground Gold/Copper Mine

Nominal Treatment Rate 5 million tonnes pa

2004 Gold Production 438,026 ounces

2004 Copper Production 47,378 tonnes

Cash Cost $19 per ounce

Total Cost $172 per ounce

Ridgeway Production
thousand
ounces

8
2
1

7
7
3

1
5

8
3
4

500

400

300

200

100

01 02 03 04

The delineation of the Ridgeway orebody was extended
during the year with an updated resource and an initial
reserve defined for the Ridgeway Deeps mineralisation.
Feasibility studies are underway based on the continuation
of sub-level cave at depth, installation of a new crusher
300 metres below the existing crusher and extension of the
underground conveyor system.

Development of Ridgeway Deeps is due to commence during
2004/05 with the planned advance of the existing Ridgeway
decline. This development will allow additional drilling to be
undertaken deeper into the orebody and establish the
infrastructure required to produce from the orebody in
future years.

Ridgeway’s performance in 2004
established it as one of the most
efficient gold and copper mines in
the world.

feature2

Newcrest’s involvement in the International Caving Study (ICS) helps the Company
maintain its position at the forefront of mining technology – aiding the delivery
of high quality projects.

Newcrest is actively involved in an International Caving Study (ICS) involving major international mining
companies, equipment manufacturers and explosives suppliers supported by leading research organisations.
Newcrest is a member company of the ICS Group along with companies well practised at caving such as Codelco
(Chile), DeBeers (South Africa), LKAB (Sweden), Rio Tinto and other companies such as WMC and Sandvik
Tamrock. Research has been conducted by the sponsors – University of Queensland’s Julius Kruttschnitt Mineral
Research Centre (JKMRC), CSIRO Petroleum and the Itasca Consulting Group based in Minnesota, USA.

Newcrest’s involvement in the project further extends our underground mining competencies to sustainably mine
large, lower-grade, deeper deposits by the application of low-cost mass-mining methods.

The ICS Group focusses on approaches to achieve continuous caving processes, fragmentation, broken rock flow,
mine design, risk assessment and operational management for underground caving methods. The Group shares
resources to extend these competencies and provides a forum for international knowledge sharing with other
leading underground caving operators.

The impetus for funding this project was the application of caving operations in stronger rock and geotechnical
environments outside current experience. Led by Codelco, Rio Tinto and CSIRO, the ICS developed new
approaches to assess cave propagation and fragmentation, and conducted industrial trials on blasting and
hydraulic fracturing techniques (from the petroleum industry) to engineer the rock before mining. These
techniques have the potential to enable caving of strong rock and significantly reduce underground mining costs.
This will allow lower-grade mineralisation to be economically mined, generate increased profit from existing
deposits and lower environmental impacts.

Newcrest also leads research initiatives by conducting industrial tests at Ridgeway to produce a step change in the
industry’s knowledge of flow of broken rock in sub-level cave mining. These tests have enabled Ridgeway to
increase draw and bring forward substantial future cash flows. The strong relationships developed between ICS
members has also enabled one of Newcrest’s mining engineers to work at the Palabora mine in Africa and review
Rio Tinto’s operating systems over a six-month period. This secondment helped Newcrest increase its in-depth
understanding of Panel and Block Cave mine operations with potential application to new projects the Company
has in the pipeline.

During the ICS, Newcrest visited and developed a working understanding of technical designs and operating
practices at: LKAB’s Kiruna mine in Sweden; Codelco’s Chuquicamata mine in Salvador; Andina and El Teniente
mines in Chile; Rio Tinto’s Palabora Mine in Africa; DeBeers’ Premier, Finsch and Koffiefontein mines in South
Africa; and WMC’s Leinster operations in Australia. Most of the sponsors have in turn visited Ridgeway and
complimented Newcrest on the mine’s ‘rock factory’ manufacturing style operations.

Newcrest Mining Concise Annual Report 2004 15

Operations

The Cadia Hill mine overcame
substantial equipment reliability
issues to produce 244,261 ounces
of gold and 37,380 tonnes of
copper during 2004.

section2

Central NSW

Open cut Gold/Copper Mine

Nominal Treatment Rate 17 million tonnes pa

2004 Gold Production 244,261 ounces

2004 Copper Production 37,380 tonnes

Cash Cost $263 per ounce

Total Cost $435 per ounce

Cadia Hill Production
thousand
ounces

9
9
2

9
5
2

0
0
3

4
4
2

400

300

200

100

01 02 03 04

Cadia Valley – other initiatives
Cadia Valley Operations distributed more than $300,000 in
community grants through Cadia Valley Operations’ strategy
of supporting the organisations which support the local
communities. The principal recipient in 2003/04 was the
Canobolas Zone of the Rural Fire Service, which received
$100,000 to assist with establishment of a Centre for Training
Excellence. The Centre will provide specialised fire fighting
training for volunteer brigades and a host of kindred
organisations. Other major recipients for the year were
Careflight, Orange Base Hospital, Red Cross, Orange
Community Transport, the Salvation Army and the Smith Family.

Every year, Cadia Valley Operations offers two tertiary
education scholarships in mining industry disciplines to local
secondary school students. The scholarships are offered to
students residing in the local government areas of Blayney
Shire, Cabonne Shire, and Orange City Council and who are
enrolling in a mining industry related discipline.

CADIA VALLEY OPERATIONS

Cadia Hill Gold/Copper Mine
The Cadia Hill mine produced 244,261 ounces of gold
(298,848 ounces) and 37,380 tonnes of copper (22,714 tonnes)
during the 2003/04 year.

The cash costs of production were $263 per ounce
($344 per ounce) with a total cost of production of $435 per
ounce ($483 per ounce). The costs were primarily lower due
to the higher by-product revenue resulting from the stronger
copper price.

Open cut ore during the year was sourced from the Cadia
Extended pit and the main Cadia Hill pit. The Cadia Extended
pit ore contained higher copper than the main pit, resulting in
a significant increase in copper production during 2003/04.
Mining of the Cadia Extended pit was completed by year
end and the North Wall Cutback and Cutback 1 advanced
strongly over the period. Material moved over the year was
76.6 million tonnes.

The 2003/04 year has been challenging for open pit mining
with material movement below plan due to reliability issues with
the face shovels. Some of the resulting mill feed was sourced
from low-grade stockpiles which adversely impacted grades
and metal production. The equipment reliability issues were
resolved by year end with availability rates returning to normal.

The low-grade concentrator consolidated increased throughput
rates associated with the Mine to Mill project and the
optimisation of the regrind circuit. Trials were conducted to
demonstrate the benefits of blending ore to reduce grade
variation through the mill and on new collectors to improve
recoveries. The results of these trials have been very
encouraging, and with recovery increases of up to 10 percent
achieved the program has been implemented on an ongoing
basis.

16 Newcrest Mining Concise Annual Report 2004

Cadia Valley seedlings initiative
with Landcare Groups

feature2

In 2003 Cadia Valley Operations commenced a progressive five year revegetation program on its agricultural
farms. Other farmers in the district were briefed about the program and strong feedback was received on a
number of aspects of the program. The strategy focuses on establishment of a network of vegetation corridors
across the valley, protecting and enhancing remnant vegetation, providing habitat for threatened species and
endangered ecological communities; and riparian restoration to protect creek banks, remove willow trees and
improve water quality.

Obviously programs of this type are more effective when done on a broader community basis and in order to
encourage participation from other landholders in the district, Cadia Valley Operations offered to assist local
residents to establish similar complementary programs by providing free seedlings to members of the Panuara
and Springside Landcare Groups.

Cadia Valley Operations undertook to provide all Landcare members with 50 free seedlings every season for the
duration of the revegetation program. The seedlings are purchased from a local supplier and are native to the
Cadia district. More than 1,500 seedlings were distributed during the 2003/04 year.

A side benefit to this initiative has been renewed interest and membership in the local Landcare groups. In
response to expressions of interest from the Forest Reefs district, Cadia Valley Operations has undertaken to
support the formation of a new Landcare Group for Flyers Creek.

Newcrest Mining Concise Annual Report 2004 17

Operations

feature2

Newcrest copper
concentrate sales

During 2003/04, Newcrest’s operations produced 761,780 ounces of gold. Cadia Valley’s copper-gold concentrate
contained 682,287 of these gold ounces. In addition to the gold-in-concentrate, Cadia Valley also produced 328,791
tonnes of copper-in-concentrate.

The majority of Cadia Valley’s copper-gold concentrate is sold under long-term contract to copper smelters in Japan.
Newcrest sells the majority of Cadia Valley’s copper concentrate output to Pan Pacific Copper Co Ltd, a joint-venture
between Japan’s Nippon Mining & Metal Co Ltd and Mitsui Mining & Smelting Co Ltd. Pan Pacific Copper purchases
copper concentrate feed for the Saganoseki Smelter and Refinery on Japan’s southernmost island, Kyushu and the Hibi
Smelter on Japan’s Inland Sea. Other customers include Japan’s Mitsubishi Materials Corporation and Dowa Mining
Company. Newcrest also sells concentrate to trade merchants, who deliver the material under their own contracts to a
variety of regional smelters.

Using both pyrometallurgical and hydrometallurgical processes, the smelters extract the copper and gold from
the copper concentrate, as well as silver. The sulphur in the concentrate is used as fuel in the autogenous flash-smelting
process, with residual sulphur being captured and processed into sulphuric acid, which is then in turn used for
applications such as fertiliser.

Once the copper and gold processes are complete, the smelters have produced copper metal to 99.9 percent purity and
gold bullion to 99.99 percent purity. These high quality products are then sold into Asia’s metal markets or used in the
smelters’ own downstream operations.

The Japanese smelters operate under strict environmental protocols. For example, the Saganoseki Smelter and Refinery
has co-existed for about 90 years with the local fishing industry – fishing boats moor near the smelter’s own wharves.

18 Newcrest Mining Concise Annual Report 2004

TOGURACI GOLD MINE

Toguraci is located 2 kilometres south-west of the original
Gosowong pit on Halmahera Island in Indonesia. The project
is operated by a joint venture company Pt Nusa Halmahera
Minerals (PTNHM) which is 82.5 percent owned by Newcrest
and 17.5 percent owned by PT Aneka Tambang.

The Toguraci open pit produced 79,493 ounces of gold during
2003/04 at a cash cost of production of $223 per ounce with
a total cost of $280 per ounce.

Development of the mine commenced in July 2003 upon
approval of the feasibility study and environmental impact
statement by the Indonesian Minister of Mines. Site
preparation, construction of the access road and pre-stripping
activities were undertaken during the first six months, with
mining of ore commencing and first gold production in
February 2004. The orebody has performed in accordance
with the geological model and all capital necessary to
develop the project has been repaid.

Between late October and December 2003 up to 2,000 illegal
miners occupied the Toguraci mine site. PTNHM suspended
pre-stripping to ensure the safety of both staff and illegal
miners. An Indonesian government committee was appointed
to independently assess the occupation and PTNHM’s right
to mine the deposit. The committee endorsed PTNHM’s right
to mine and ordered the Indonesian police to remove the
illegal miners.

Halmahera Island, Indonesia

Open cut Gold Mine

Nominal Treatment Rate 0.25 million tonnes pa

2004 Gold Production 79,493 ounces

Cash Cost $223 per ounce

Total Cost $280 per ounce

*Gosowong Area Projects include the depleted
Gosowong mine, Toguraci and the Kencana
resource.

Gosowong Area Projects*
thousand
ounces

2
3
2

7
2
2

9
7

8
3

300

225

150

01 02 03 04

Since the operation commenced in 1998, PTNHM has
maintained an ongoing commitment to various community
development programs. During the year PTNHM provided
funds for health care, educational support, training and
fostering the establishment of local businesses.

The future of the Gosowong field lies in the Kencana project.
At this stage, the Kencana project contains 1.1 million ounces
of resource in high-grade mineralisation that remains open
at depth and to the south. The project is 1 kilometre south of
the existing mill and the mine is likely to be an underground
operation. Kencana is expected to provide significant life to
the Gosowong operations and to maintain continuous
benefits to the surrounding region for a number of years.

Newcrest Mining Concise Annual Report 2004 19

Operations

section2

MAY 2001

JULY 2004

The rehabilitation of Gosowong’s waste dump and mined-out pit commenced immediately after mining was
completed. In 2000, progressive rehabilitation of the waste dump began and currently about 45 percent has been
revegetated.

The primary objective of the rehabilitation is to stabilise landforms quickly by establishing revegetation.
The long-term objective is to re-establish a forest ecosystem similar to the original, limited production forest.

Rehabilitation success depends on several critical factors: correctly designed and constructed drainage, genuine
stability, placement of clean subsoil and topsoil and maintenance after planting.

Three types of rehabilitation works are implemented: stabilisation, final rehabilitation and maintenance and repair.

As each part of the waste dump reaches its final form the surface is covered with approximately 20 centimetres of
topsoil. Rapid site stabilisation can be achieved through the establishment of grasses and legumes.

20 Newcrest Mining Concise Annual Report 2004

A commitment to the highest
standards of environmental
monitoring and rehabilitation
continues at Newcrest’s projects
in the Gosowong area.

feature2

The rapid establishment of ground cover and, over a longer period, a forest ecosystem, must be achieved in final
rehabilitation. Planting is a two-stage process. Initially the priority is to establish a canopy cover (using pioneer
tree species) to minimise erosion from rain and to provide a microclimate amenable to the establishment of
rainforest tree species (native local species). The planting density is approximately 1,000 trees per hectare.
Exotic legumes used as cover crop are chosen for their rapid growth and proven beneficial effects on soil fertility.
Within 12 months the canopy development is usually sufficient to plant rainforest plants.

The monitoring of rehabilitation areas is undertaken to measure growth rates and establishment success of the
species used. Monitoring can show that end-use criteria have been met and that the rehabilitated area is suitable
to hand back to the Government and community.

Newcrest Mining Concise Annual Report 2004 21

Cracow

22 Newcrest Mining Concise Annual Report 2004

section3

Projects

Newcrest Mining Concise Annual Report 2004 23

Projects

section3

TELFER GOLD/COPPER PROJECT

Development of the Telfer project proceeded generally
on schedule during the year. Open pit preproduction
development progressed ahead of schedule and the
remaining site infrastructure development continued. By
year end various stages of commissioning were under
way in the processing area and the power station.

The construction progress of Telfer has again validated the
‘Owners Team’ approach to large-scale project development
where Newcrest maintains responsibility for key contractor
selection and overall management of the project schedule.

In the case of Telfer over 2004, the key aspects of the
development program were:
• Ordering of long lead-time items in 2003
• Early establishment of mining operations in the open pit
• Staged delivery of the open pit and underground stages

of the project

• Continual risk assessment and ongoing development of

contingency plans for unforeseen circumstances.

During 2004 project development proceeded ahead of
schedule with construction ramp up exceeding planned targets.

Development was impacted by rains associated with Cyclone
Fay over Easter 2004. Rain in the order of 360 millimetres on
the plant site and 500 millimetres on the access road fell in a
48 hour period inundating many of the project areas.

The plant site recovered well, however, the access road flooding
receded more slowly than expected. As a result a 6 kilometre
causeway was constructed over the affected area to allow
normal site access during the peak period of construction.

Construction of the pipeline to provide gas for the power
station was also impacted by the rain and subsequent
flooding. At year end 275 kilometres of the total 450
kilometres had been laid. Construction is now expected to
be completed by November, however, the power station is
designed to also operate on diesel fuel if necessary without
material cost impact.

North-west Western Australia – 450 kms inland from Port Hedland

Project construction underway

Annual Project Output: 800,000 ounces gold and 30,000 tonnes copper

Ore Reserve: 18.4 million ounces gold, 690 kilotonnes copper

Mineral Resource: 26 million ounces gold, 960 kilotonnes copper

During the year the open pit mine performed strongly with
41 million tonnes of material moved. This mining exposed
significant quantities of ore and by year end around 1 million
tonnes of broken ore was stockpiled ready for processing.

The underground development continued generally according
to plan with the sinking of the haulage shaft completed down
to 235 metres by year end. In the present plan the final depth
of the shaft is 1,100 metres.

The underground development contract was awarded to
mining contractor Eroc in July and development for the
sub-level cave will proceed allowing for commissioning of the
underground mining operations by mid 2005.

The workforce on site peaked at year end at around 1,500
people and of the 620 full-time employees required to operate
the project, around 80 percent were employed.

Key statistics for the Telfer construction are:
• In the concentrator at completion

– 32,000 tonnes of concrete poured
– 5,000 tonnes of structural steel erected
– 60 kilometres of pipe installed
– 420 kilometres of electrical cable installed
– The mill tower is 42 metres high (14 storey building)

• The starter tailings dam is 2.5 kilometres in diameter,
8 kilometres in circumference and required 12 million
tonnes of material to complete. The tailings dam wall will
ultimately be 60 metres high.

• The open pit will eventually be 3 kilometres long,
1.5 kilometres wide and 650 metres in depth.

• Over the current life of mine of 24 years 1.8 billion tonnes

of material will be moved from the Telfer mine.

24 Newcrest Mining Concise Annual Report 2004

Engagement with the communities
in which we operate remains
important before, during and after
project development.

feature3

Newcrest Mining has sponsored eight Martu people in a basic hospitality training course as part of the Company’s
contribution towards enhancing the skills of indigenous people and improving their chances of gaining employment
through the Telfer project.

The course, a joint effort between the Martu, Newcrest Mining, the Pilbara College of TAFE and the Department
of Employment and Workplace Relations, is designed to help prepare personnel for work in the hospitality
industry.

The course emphasises those skills required by companies such as ESS, which supports the mining industry with
camp management and catering services.

The trainees learned skills in kitchen work, catering, housekeeping, cleaning and laundry services. They also
undertook practical studies in occupational health and safety, personal development, basic computing and senior
first aid.

Six Martu women and two men enrolled in the 18 week pilot course. They undertook two weeks work experience
at Port Hedland based establishments including ESS’s Wedgefield camp, the Port Hedland Regional Hospital and
local prepared-food outlet, Sue’s Place.

At the end of the course, the students prepared and served a luncheon for those involved in the industry to show
off their newly acquired skills with a view to attracting new employment opportunities.

Newcrest Mining Concise Annual Report 2004 25

Projects

section3

Central Queensland

Project construction underway

Project Output: 675,000 ounces over 7 years*

Mineral Resource: 800,000 ounces*

*100 percent project basis

CRACOW

The Cracow project, which is a joint venture between
Newcrest Mining (70 percent) and Sedimentary Holdings
(30 percent) which aims to develop an underground gold
mine, commenced in September 2003. This commenced
with the establishment of the portal and development of the
decline that will allow access to the Royal and Crown
orebodies.

At year end the portal was established and decline developed
to 1,000 metres.

Access development off the decline for the three upper levels
at the top of the Royal deposit (2216RL down to 2183RL) to
allow progressive in-fill drilling and early access to this zone
was partially completed.

The progress of the mill refurbishment program advanced
well and the key items of mills and tankage were on schedule.

With the establishment of the camp and key infrastructure,
the project remains on target for commissioning in the
December quarter 2004.

In the broader community, agreement was reached with the
relevant landowners for the installation of a new water
pipeline. The Banana Shire Council continues to provide
support for the development of the project and relationships
with the local Aboriginal communities are maintained with
regular Aboriginal Liaison Committee meetings.

26 Newcrest Mining Concise Annual Report 2004

With a strong mining heritage
and a small local community,
the development of the Cracow
project requires particular attention
to the needs of all stakeholders.

feature3

The Cracow area is subject to two separate Native Title claims, one by the Wulli Wulli People and one by the
Iman #1 People. In order for the project to proceed, a Cultural Heritage Management Plan was agreed to in
January 2001. This agreement enabled cultural heritage clearance work to be carried out for both exploration
activity and the mine development.

In order to obtain mining leases an Indigenous Land Use Agreement was negotiated with the Wulli Wulli People
and the Iman #1 People and agreed to in November 2002. This agreement provides a range of benefits to both
Aboriginal groups throughout the life of the mine.

A Liaison Committee, bringing together all parties involved, has been working to implement the benefits of this
agreement. This Liaison Committee meets four times each year. Signatories to the agreement include the Wulli
Wulli People and the Iman #1 People, the Gurang Land Council, Sedimentary Holdings and Newcrest
Operations Limited.

Newcrest Mining Concise Annual Report 2004 27

Projects

section3

CADIA EAST

Cadia East is a project in the Cadia Valley within the discovery
corridor incorporating the prospect formerly known as Cadia
Far East.

The mineralisation which consists of both open pit and
underground zones has the following resource inventory:

Cadia East Open Pit

Cadia East Underground

300 million tonnes at 0.46 grams
per tonne gold and 0.37 percent
copper
530 million tonnes at 0.81 grams
per tonne of gold and 0.33
percent copper

During the 2003/04 year, substantial exploration drilling
was undertaken in order to define both the limits of the
mineralisation and the grade in certain zones which enables
more detailed mining studies to be undertaken.

Long section of Cadia East mineralisation

6,000 mRL

Central New South Wales

Adjacent Cadia Hill

Mineral Resource: 18 million ounces gold and 2,900 kilotonnes copper

With 830 million tonnes of mineralised material already
identified and strong prospectivity for further increases,
we anticipate the extensive Cadia East project will make a
long-term contribution to Newcrest.

Initial studies have highlighted the potential for large-scale
mining on the mineralisation. We have also studied other
options including sub-level cave or Panel Cave mining.

During 2005 we will commence a decline access in order to
conduct more exploration, define rock characteristics and
better sample the material.

Cadia Hill Open Pit

Gibb Fault

E
m
0
0
0
4
1

5,000 mRL

4,000 mRL

Legend

Cadia East $650/ounce
Pit Outline Containing Resource

5,150 mRL

Indicated
Underground
Resource
Boundary

Inferred
Underground
Resource
Boundary

E
m
0
0
0
7
1

E
m
0
0
0
5
1

E
m
0
0
0
6
1

Value Contour Legend

Cadia East Broadly Mineralised Domain (0.1% Cu)

Cadia Hill Broadly Mineralised Domain (0.2 g/t Au)

Cadia East Drilling

Interpreted Faults

A$9/t

A$11/t

A$16/t

A$25/t

A$35/t

28 Newcrest Mining Concise Annual Report 2004

South-west Western Australia

Care and maintenance

Ore Reserve: 2.4 million ounces gold*

Mineral Resource: 4.4 million ounces gold*

*22.2 percent project basis

BODDINGTON EXPANSION PROJECT
(22.2 PERCENT)

In 2001, mining and processing of oxide resources at
Boddington ended. Since that time the project has
remained on care and maintenance while project studies and
exploration activities continue.

Boddington hosts a substantial basement mineral resource
containing 20 million ounces of gold and 800 kilotonnes of
copper and ore reserves containing in excess of 10 million
ounces of gold (100 percent terms) within existing mining
leases. These resources form the basis of the Boddington
Expansion Project.

A Study Team was established for the purpose of reviewing,
optimising and updating the earlier feasibility study completed
in 2000.

Along with our joint venture partners, Anglogold/Ashanti
and Newmont Mining, review of the work of the Study Team
continued during 2004 with the aim of completing the
updated study in 2005.

During the year Newcrest also conducted additional reviews
of various aspects of the Boddington Expansion Project
feasibility including:
• A review of the geological controls and assumptions

underlying the resource estimate

• A review of key components of the ore processing flow

sheet; and

• A broad review of the potential impact of these on

project scope.

The Boddington Expansion Project is situated in a
geographically favourable location. Key permitting is
already established for the project, and Newcrest, like its
partners, wishes to progress the project as quickly as
practicable.

Newcrest Mining Concise Annual Report 2004 29

Telfer

30 Newcrest Mining Concise Annual Report 2004

section4

Cracow

Exploration

Newcrest Mining Concise Annual Report 2004 31

Exploration

section4

Exploration and long-term reserve
replacement are core elements of
any successful mining business.

STRATEGY AND REVIEW

Strategy
Exploration discovery remains Newcrest’s key driver for value
adding growth and for maximising shareholder returns over
the long term. A key objective of our exploration strategy
is to control large mineral districts with the aim of securing
sustainable long-life mining operations whilst enhancing the
potential for repeat discoveries.

The principal targets for Newcrest’s exploration are porphyry
gold-copper, epithermal gold and sediment-hosted gold
deposits. Operationally, our continued emphasis is on
minimising fixed overhead costs and maximising funds
available for drilling.

Newcrest’s exploration strategy is biased towards exploring
recognised mining or mineral districts and focusses on
deeper drilling. Our approach continues to acknowledge
the importance of time and patience in the discovery process
and the need for reliable and consistent exploration funding.

Newcrest’s exploration remains predominantly Australian-
focussed with a brownfields emphasis. Internationally,
we have broadened our area of search with initial efforts
concentrated in the USA and Peru, to complement exploration
in Indonesia.

The Newcrest Board recognises that continued strong
support for the exploration program is essential to the
Company’s future sustainability. To ensure viability of the
reserve replacement program and the potential to make
ongoing discoveries, the exploration budget will be
progressively increased over the next four years.

2003/04 year in review
The success of our exploration activities is demonstrated by
Group Mineral Resources increasing in 2003/04 by 9 million
ounces to 62 million ounces of gold and by 1.2 million tonnes
copper to 5 million tonnes of copper. Ore Reserves remained
at 28 million ounces of gold and copper increased by
39 thousand tonnes to 1,439 thousand tonnes during
the year, after mining depletion.

Annual exploration expenditure for the year was $45.4 million,
a large part of which was spent on drilling programs at
Ridgeway Deeps, Cadia East, Cracow, Kencana and
Toguraci. Our exploration expenditure is forecast to increase
to $52 million in the 2004/05 year.

Mine area exploration
Cadia District, New South Wales

Cadia East
At Cadia East further deep drilling and pre-feasibility mining
studies enabled the release of an upgraded audited Mineral
Resource estimate in February 2004 and a further increase
at 30 June 2004. The new estimate is an increase of 8.4
million ounces of gold and 1.2 million tonnes of copper over
the June 2003 estimate, resulting in a Mineral Resource of
18 million ounces of gold and 2.9 million tonnes of copper.
The resource consists of:

• An open pit Mineral Resource (Inferred) of 300 million

tonnes at 0.46 grams per tonne of gold and 0.37 percent
copper, and

• An underground Mineral Resource (Inferred and Indicated)
of 530 million tonnes at 0.81 grams per tonne of gold and
0.33 percent copper.

Cadia East is a gold-copper porphyry style of deposit which
is presently estimated to extend to a depth of more than
1,500 metres below surface. The deeper underground
resource remains open to the east, west and at depth.
Surface drilling is continuing on the underground
mineralisation to evaluate a possible western extension
of a high-grade zone and the surrounding lower-grade
mineralisation. It is anticipated that additional drilling will
increase the size of the underground resource.

Ridgeway
At Ridgeway, further deep drilling increased the pre-mining
resource by 270,000 ounces of gold and 17,000 tonnes of
copper when compared to the 2002/03 result, but after mining
depletions, the overall change in the Ridgeway resource is a
decrease of 230,000 ounces of gold and 34,000 tonnes of
copper.

The newly identified mineralisation is located immediately
below the existing Ridgeway orebody and extends the
deposit to 1,300 metres below surface. Deeper drilling is
continuing as the deposit remains open at depth.

32 Newcrest Mining Concise Annual Report 2004

Total Exploration Expenditure
$45.4M

Greenfields Exploration Expenditure
$19.3M

Definition Drilling $15.2M

Mine Exploration $10.9M

Greenfields $19.3M

Western Australia $5.6M

Eastern Australia $4.4M

Asia $0.3M

Americas $6.6M

Other $2.4M

Junction Reefs (earning 51 percent)
In the Junction Reefs joint venture area, along strike of the
Cadia discoveries, drilling continued at the Warrengong
prospect.

A long interval of modest but encouraging mineralisation was
recorded. Additional drilling is planned for 2004/05.

Gosowong, Indonesia (82.5 percent)

Gosowong Extended (Kencana Shoot)
Kencana is a body of epithermal gold mineralisation located
one kilometre south of the Gosowong pit. The first audited
Mineral Resource estimate for the prospect was released in
February 2004.

A combined Indicated and Inferred Mineral Resource of
0.69 million tonnes at 41 grams per tonne of gold for
0.92 million ounces has been estimated for Newcrest’s share
of the north-western, more closely drilled part of the deposit.

The mineralisation remains open to the south-east and at
depth. Drilling is currently focussed on investigating the
south-eastern extension of the mineralisation and on defining
its lower and upper boundaries. Significant high-grade
intersections have been recorded 200 metres south-east
of the resource envelope.

Toguraci
An updated resource was estimated for Toguraci. This
resource includes gold mineralisation in the Kayu Manis
and Damar structures.

Telfer District, Western Australia

Telfer Regional Exploration
Telfer’s regional exploration was focussed on Trotman’s
Dome, which has the most extensive evidence of gold
mineralisation outside of Telfer Dome. Trotman’s Dome is
located approximately 30 kilometres south-east of Telfer.
Planned fieldwork for the latter part of 2003/04 was delayed
due to the impact of Cyclone Monty and Cyclone Fay.

Drilling in the first half of 2003/04 was concentrated on the
Backdoor prospect and indicated that the mineralised breccia
thins to the west but remains open to the east, where it
appears to be better developed at depth. Drilling in the latter
part of the 2003/04 year was planned to investigate the effect
of sample type and size on drilling results, but this program
was delayed by adverse weather conditions. The results of
this investigation when completed in 2004/05 will influence the
future direction of exploration at Backdoor, although deeper
core drilling is planned to investigate the eastern part of the
breccia.

Discovery exploration drilling for 2004/05 will be focussed on
Connaughton’s Dome, Tim’s Dome and in the Grace and
Parallel Range areas.

Cracow, Queensland (70 percent)
The strategy of identifying gold-mineralised structures with
widely spaced discovery drilling, whilst mine development
proceeded, led to the discovery of mineralisation in the
Sterling structure. Gold mineralisation for future resource
definition drilling has now been identified in the Sterling,
Klondyke North, Roses Pride, Sovereign, Empire and Phoenix
structures; in addition to the Royal and Crown shoots.The
Sterling structure is located about 300 metres to the west of
the Empire structure. Additional drilling is continuing on
Sterling to broadly outline the mineralisation. Drilling results
from the Sovereign structure indicated possible
enhancements to this mineralisation. Further broadly spaced
drilling is needed before systematic resource definition drilling
is undertaken on the additional six identified gold mineralised
structures.

Discovery drilling for additional gold mineralised structures
will continue in 2004/05 on areas surrounding the Crown and
Royal shoots, and on identified targets in the eastern part of
the Cracow goldfield.

Newcrest Mining Concise Annual Report 2004 33

Exploration

section4

Greenfields Exploration
Ashburton, Western Australia
In the Ashburton district the search for ‘Carlin’ style
sediment-hosted gold mineralisation continued. Over the
past five years widely spaced discovery drilling has identified
numerous gold anomalies in oxidised sediments scattered
over a 200 kilometre distance.

During the year Newcrest increased its interest in the
Ashburton joint ventures with Sipa Resources Limited from
70 percent to 80 percent, by carrying Sipa funding
contributions during exploration. In addition Newcrest secured
access to the Mt Olympus mine area, where deep drilling has
not been conducted previously.

Field work in the second half of 2003/04 was disrupted by
cyclones Fay and Monty. Prior to this interruption additional
elevated gold values in oxidised sediments were recorded
from drilling at the Electric Dingo, Cleopatra North, Romulus
and Merlin prospects. These results included 18 metres at
3.0 grams per tonne of gold from 70 metres at Cleopatra
North and 17 metres at 3.2 grams per tonne of gold from
64 metres at Romulus.

Moderate gold grades were recorded in unoxidised
sediments at the Anthiby Well prospect and this was
encouraging in the search for primary (unoxidised) gold
mineralisation. Results include 8 metres at 3.1 grams per
tonne of gold and 5 metres at 4.3 grams per tonne of gold
from depths below surface of less than 100 metres.

Deeper drilling at Anthiby Well and other prospects, including
the Mt Olympus mine, is planned for 2004/05.

Americas
Drilling continued at a number of project areas in Nevada.

A small exploration office was opened in Lima, Peru, to
progress a modest discovery exploration program in the
region.

Outlook
Exploration in 2004/05 will continue to be focussed on a small
number of projects domestically and offshore.

Resource definition drilling programs will continue at Cadia
East, Ridgeway Deeps, Telfer Deeps and Kencana. Discovery
drilling will continue at Cracow, Telfer District and Ashburton
and on greenfields projects elsewhere in Australia and the
Americas.

MINERAL RESOURCES AND ORE RESERVES
Total in situ Mineral Resources at year end for the Group, net
of mining depletion, are estimated at 62 million ounces of
gold and 5 million tonnes of copper, which is an increase in
the resource of 8.4 million ounces of gold and an increase of
1.2 million tonnes of copper compared with June 2003.

There was a major increase in Mineral Resources at Cadia
East Underground with the addition of 8.4 million ounces of
gold and 1.2 million tonnes of copper in situ.

Ore Reserves are estimated at 28 million ounces of gold and
1.4 million tonnes of copper in situ.

Mineral Resources and Ore Reserves conform to the
Australasian Code for Reporting of Mineral Resources and
Ore Reserves (The Joint Ore Reserves Committee Code).
Ore Reserves are a sub-set of Mineral Resources. External
and internal audits are conducted on completed estimates.
All costs and prices are in Australian dollars unless stated
otherwise. Relevant information on the methods and
parameters used to estimate Mineral Resources and Ore
Reserves are presented in the Newcrest Supplementary
Information Booklet located in the Annual Report section
on the Company’s website at www.newcrest.com.au.

Cadia Hill
The Cadia Hill Mineral Resource and Ore Reserve were
depleted by 14.5 million tonnes during the period. This was
partially offset by a 6.1 million tonne increase due to copper
recovery improvements. A reduction of 12.3 million tonnes to
the Cadia Hill Ore Reserve was also made by removing
marginal material that will not be processed. Reconciliation
of production results continue to show very good correlation
with the Mineral Resource and Ore Reserve models.

Cadia Extended
The open pit mining at Cadia Extended was completed and
the associated Ore Reserve was depleted during the year.
The Mineral Resource has been depleted by mining and the
remaining Mineral Resource is being evaluated.

Cadia Stockpiles
Open pit stockpiles increased by 4.5 million tonnes during the
period. This change is net of mining reclaim, new material
added and metallurgical adjustments.

Ridgeway
Continued drilling of Ridgeway Deeps has resulted in an
addition to the Mineral Resource. This was offset by mining
depletion resulting in a net reduction of 1.5 million tonnes to
the Mineral Resource during the period.

34 Newcrest Mining Concise Annual Report 2004

2004
Gold: 62 million ounces Copper: 5.0 million tonnes

2004
Gold: 28 million ounces Copper: 1.4 million tonnes

Growth in Resources

Gold Resource
million ounces

Copper Resource
million tonnes

Growth in Reserves

Gold Reserve
million ounces

6.0

5.0

4.0

3.0

2.0

1.0

0.0

Copper Reserve
million tonnes

3.0

2.5

2.0

1.5

1.0

0.5

0.0

At Ridgeway Underground there was a net increase in Ore
Reserves after mining depletion of 0.7 million ounces of gold
and 0.09 million tonnes of copper in situ. An increase in
reserves of 1.23 million ounces and 0.15 million tonnes of
copper defined from the Ridgeway Deeps zone and other
extensions was offset by Ridgeway mining depletions to arrive
at the net outcome.

Cadia East Open Pit
The Mineral Resource for the open cut component to the
Cadia East deposit remains unchanged. Resource definition
drilling is planned to upgrade this resource in 2004/05.

Cadia East Underground
The underground component of the Cadia East Mineral
Resource (formerly known as Cadia Far East) increased
by 400 million tonnes during the period. The resource is
predicated on bulk underground extraction methods and
has been reported within conceptual mining outlines.

An updated Mineral Resource estimate was published in a
market release in February 2004. Subsequent drilling has
significantly expanded the deposit further to the west resulting
in increased tonnes in the Inferred category. Mineralisation
remains open at depth and to the west.

Telfer
The Telfer Mineral Resource and Ore Reserve Statements
remain unchanged since June 2003.

Open Pit
Open Pit mining commenced late 2003 and this material was
stockpiled, according to ore type, in preparation for milling
which will commence in the December quarter 2004. Total
grade control production reconciliation to the reserve remains
in line with the feasibility estimates.

Telfer Deeps
Drilling and bulk sampling exploration activity continued in
the western flank of the feasibility sub-level cave operation.
Bulk sampling results within the sub-level cave are in line with
feasibility estimates.

The Telfer Open Pit ore reserve is constrained within pit
designs based on optimisation shells generated using the
profit algorithm approach.

The Telfer Deeps ore reserve is based on a sub-level cave
mining method designed using a series of break even
boundaries for each production level.

Studies continue to evaluate mining strategies for the potential
extensions to the Telfer Deeps mineralisation.

Boddington
The Boddington Expansion Mineral Resource and Ore
Reserve estimates and the Basement Mineral Resource
estimate are the same as those reported last year. A revision
of the resource estimate is in progress and will incorporate
revisions of cost assumptions arising from the Feasibility
Study Update currently in progress.

Toguraci
Net of mining depletion the Toguraci Ore Reserve increased
by approximately 5 percent during the year to 0.22 million
ounces contained gold. Resource additions at Kayu Manis
replaced mining depletion. The Toguraci Mineral Resource
therefore remained unchanged at 0.30 million ounces.

Material changes during the period included the addition of a
new resource at Kayu Manis, subsequent redesign of the pit
and depletion due to the commencement of mining.

The Kayu Manis vein is located immediately to the south of
Damar and represents a natural extension of the pit in that
direction. The net contribution of Kayu Manis to the Mineral
Resource was 0.05 million ounces and the Toguraci pit was
re-optimised to include Kayu Manis.

Mining focussed on the Damar and Midas veins where a total
of 0.06 million ounces was depleted. Strong grade over-
performance at Damar and contributions from cross-cutting
mineralised structures resulted in a net production of 0.07
million ounces. Significant open pit upside remains with the
likely inclusion of the BoD veins located to the west of Damar.

Gosowong Extended (Kencana)
The first Mineral Resource estimate for the Kencana discovery
was released in February this year. The Gosowong Extended
Project team has commenced to progress studies into the
feasibility of developing the Kencana Shoot as a new high
grade ore source at Gosowong.

Cracow
The Royal and Crown Mineral Resources remain unchanged.

Underground drilling commenced which will provide data
on geology and grade continuity for the location of the initial
ore drives and for stoping block outlines in the upper levels.
Remodelling of the upper part of the Royal will then be
completed and this will permit an update of the Royal
Resource in 2004/05.

Newcrest Mining Concise Annual Report 2004 35

Exploration

section4

2004 MINERAL RESOURCES

Measured
Resource

Indicated
Resource

Inferred
Resource

Gold
In situ

Copper Competent
In situ

Person

Gold and Copper
Resources

Dry

Gold Copper
Tonnes Grade Grade
(million) (g/t Au) (% Cu)

Dry

Gold Copper
Tonnes Grade Grade
(million) (g/t Au) (% Cu)

Dry

Gold Copper
Tonnes Grade Grade
(million) (g/t Au) (% Cu)

(million
ounces)

(kilo-
tonnes)

Cadia Hill

Cadia Extended

Cadia Stockpiles

Ridgeway

210

0.1

Ridgeway Stockpiles

0.076

Cadia East Open Pit

Cadia East Underground

0.71

0.36

0.41

2.0

2.9

0.16

0.20

0.16

0.66

0.87

Telfer

Open Pit

Underground

Satellites

Stockpiles

Subtotal

Boddington

Basement

Boddington Expansion

Subtotal

Toguraci Open Pit

Gosowong Extended

170

1.3

0.17

170

1.3

0.17

0.081

1.8

0.93

0.11

Toguraci Stockpiles

0.014

Gosowong Stockpiles 0.071

2.7

0.59

0.40

0.16

0.22

4.0

0.39

0.17

2.1

0.67

1.4

0.54

210

1.0

0.38

300

320

0.46

0.69

0.37

0.30

0.13

0.52

0.06

0.14

0.20

0.12

200

0.72

3.1

250

0.12

0.23

0.25

1.7

2.8

4.2

0.83

1.9

2.1

0.83

1.7

1.1

2.0

2.6

0.12

0.41

0.08

110

1.2

0.15

0.091

0.022

0.10

0.44

9.0

0.8

Cracow

1.7

400

480

0.66

1100

1800

670

290

1.9

4.4

960

180

5.6

0.51

0.20

4.5

0.007

4.3

4.8

0.24

0.08

0.02

4.4

0.30

0.92

0.013

0.0063

0.55

Total Gold and Copper Resources

5,000

1. C. F. Moorhead, 2. G. R. Howard, 3. K. P. Gleeson, 4. S. Williams, 5. G. N. Petersen, 6. J. F. Leckie/P. Creenaune
Rounding, conforming to the JORC Code, may cause some computational discrepancies and total gold has been rounded to two significant figures. The gold and copper grade totals in
the resources are weighted averages.
Information in this report which relates to Mineral Resources is based on and accurately reflects reports prepared by the Competent Person named beside the information. All these
persons are full-time employees of Newcrest Mining Limited or the relevant subsidiary, except K. P. Gleeson, who is a full-time employee of Boddington Gold Mine Management
Company Pty Ltd and S. Williams, who is a full-time employee of Newmont Australia Limited, and consent to the inclusion of material in the form and context in which it appears.
Mr J. F. Leckie, Chief Geologist Mining and Development, Newcrest Mining Limited, is the Competent Person who has compiled this resource report. All the Competent Persons are
Members or Fellows of The Australasian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists and have the relevant experience in relation to the mineralisation
being reported on by them to qualify as Competent Persons as defined in the Australasian Code for Reporting of Mineral Resources and Ore Reserves.
Newcrest has retained Mr Peter Stoker of Hackchester Pty Ltd to act as an external auditor for the Newcrest Mineral Resources where Newcrest is the operator. Mr Stoker has
progressively audited these Mineral Resources and has stated that he is not aware of any issues which materially affect the reported Mineral Resources. Mr Stoker is a geologist with
35 years’ experience in mine geology, Mineral Resource and Ore Reserve estimation, feasibility studies, project evaluation and mineral exploration.

36 Newcrest Mining Concise Annual Report 2004

2004 ORE RESERVES

Proved
Reserve

Probable
Reserve

Gold
In situ

Copper Competent
In situ

Person

Gold and Copper
Reserves

Dry

Gold Copper
Tonnes Grade Grade
(million) (g/t Au) (% Cu)

Dry

Gold Copper
Tonnes Grade Grade
(million) (g/t Au) (% Cu)

(million
ounces)

(kilo-
tonnes)

Cadia Hill

Stockpiles

Subtotal

Ridgeway

Underground

Stockpiles

Subtotal

Telfer*

Main Dome

West Dome

Telfer Deeps

Subtotal

Boddington

Expansion

Subtotal

Gosowong

Toguraci Pit*

145

160

0.08

130

0.81

0.41

0.77

2.0

2.9

2.0

1.3

1.0

0.18

0.16

0.17

0.66

0.87

0.66

0.21

0.08

167

1.3

0.18

3.2

0.41

0.19

3.2

0.41

0.19

1.7

0.56

1.7

0.56

120

210

1.5

1.1

2.7

1.6

0.15

0.08

0.50

0.20

0.94

0.12

0.84

0.13

3.8

0.2

4.0

3.5

0.01

3.5

3.0

3.4

2.4

0.22

0.01

0.24

260

284

360

0.7

360

430

200

685

110

1,439

Toguraci Stockpiles

Gosowong Stockpiles

Subtotal

0.01

0.07

0.08

27.0

2.7

6.0

Total Gold and Copper Reserves

0.18

1. C. F. Moorhead, 2. G. Dunstan, 3. M. Staples, 4. A. Pratt, 5. S. Williams, 6. G. N. Petersen
Rounding, conforming to the JORC Code, may cause some computational discrepancies and total gold has been rounded to two significant figures.
Information in this report which relates to Ore Reserves is based on and accurately reflects reports prepared by the Competent Person indicated beside the information. All these
persons are full-time employees of Newcrest Mining Limited or the relevant subsidiary, except S. Williams, who is an employee of Newmont Australia Limited and M. Staples, who was
an employee of Australian Mining Consultants Pty Ltd contracted to Newcrest Mining Limited, who has consented to the inclusion of material in the form and context in which it appears.
Mr A. S. Logan, Manager Business Improvement, Newcrest Mining Limited, is the Competent Person who has compiled this reserve statement. All the Competent Persons are members
of The Australasian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists and have the relevant experience in relation to the mineralisation being reported on
by them to qualify as Competent Persons as defined in the Australasian Code for Reporting of Mineral Resources and Ore Reserves.
AMC Consultants Pty Ltd was engaged to conduct audits on the process used for Ore Reserve estimation for Cadia Hill, Ridgeway and Gosowong. AMC Consultants is not aware of any
issues with the process used which may materially affect these reported Ore Reserves. Reserves quoted for Telfer and Boddington are unchanged from the 2003 report.
*A small proportion (approximately 5 percent) of the Telfer and Toguraci open pit reserves fall within pit increments which are dependent on the inclusion of Inferred Resources to meet
the economic criteria for production. Newcrest has every expectation that additional drilling that is planned will upgrade these Inferred Resources.

Newcrest Mining Concise Annual Report 2004 37

Sustainability
and People

38 Newcrest Mining Concise Annual Report 2004

section5

Newcrest Mining Concise Annual Report 2004 39

Sustainability and People

section5

HEALTH AND SAFETY

Newcrest’s key priority is to provide a safe and healthy
workplace for employees and contractors. Our belief is that
all injuries are preventable and the ultimate goal is to have
zero injuries across all areas of the business.

Target Zero
During 2003/04, Newcrest embarked on a major safety and
health strategy named Target Zero. This strategy is designed
to ensure we achieve world best practice in safety and health
across all areas of our business. The central theme of the
strategy is that all injuries are preventable.

The motivation for introducing our new strategy was that
during the 2003/04 year we identified that improvements in
our key safety performance measures had reached a plateau
and were becoming resistant to our long-term improvement
trend. In order to redress this situation, we required a new
approach to health and safety in the workplace. To be
successful in our endeavours of improving performance we
recognised that the responsibility for safety has to be shared
more broadly within the organisation and that systems
development and polices alone are not sufficient. Real and
sustainable improvements in safety are achieved only with
sustained behavioural and attitudinal change within all
employees.

The Target Zero program commenced in October 2003 with
external health and safety experts undertaking benchmark
audits of some key business units. The audit results were
assessed against standards for world’s best practice. The
results highlighted the areas in which we need to improve our
performance. This information in conjunction with the results
from Company workshops were developed into strategies.
Key aspects include:
• Establishment of reduction targets in injury frequency rates
and inclusion of targets in business plans and individual
goals

• Involvement of a broader cross-section of employees, line

managers and contractors in the safety management process

• Implementation of training for all line managers in safety
leadership, highlighting the importance of behaviour and
commitment to achieving our goal of zero injuries
• Implementation of training for all employees in risk

awareness and safety skills to improve their knowledge in
how to work safely, and

• Introduction of a safe behaviour observation (SBO)

program throughout the organisation to give line managers
new skills in the process of behavioural change.

Targets have been established for improvements in our key
performance measures with the ultimate goal of zero injuries.
Action plans and training programs that align the strategies
and the ultimate goal are being implemented Company wide.

2003/04 health and safety performance
We have applied considerable effort in pursuing our goal of
zero injuries in the workplace, however, we still have some
way to go. Regrettably, a fatality occurred at the Gosowong
operation in May 2004. Pak Patrsino, a PTNHM employee,
was killed when the loader he was operating rolled over. A
comprehensive investigation was conducted into the causes
of the incident with the learnings being applied at Gosowong
and other Newcrest operations, with the aim of preventing any
further incidents of this nature.

Newcrest’s overall key health and safety performance
indicators have shown general improvement compared to last
year’s performance:
• Lost Time Injury Frequency Rate (LTIFR) improved to

1.9 per million exposure hours from 3.0 in the previous year.
While this indicator still compares favourably to the most
recent industry benchmark (Australian Metalliferous Mining
Industry LTIFR of 6 for 2002/03), we believe our
performance is not acceptable for Newcrest.

• Total Recordable Injury Frequency Rate (TRIFR) reduced to

14.7 from a previous 28.4.

• Serious Potential Incidents (SPIs) increased to 17 from a

previous 15.

Significant achievements and activities during the year were:
• Establishment of a workplace risk assessment tool at

Cadia Valley Operations to recognise changed conditions
and new hazards in the workplace.

• Commencement of the Safety Leadership Training

programs for the executive, exploration, Cadia Valley
Operations and Telfer management groups.

• Formation of the Executive Central Safety Group and Safety

Working Groups and their replication on site.

Our approach for the coming year is to:
• Roll-out the Target Zero program across the Group and

further develop the program.

• Provide Company-wide training and development in the

Target Zero program.

• Maintain an innovative approach to safety improvement.

40 Newcrest Mining Concise Annual Report 2004

Newcrest’s commitment to
improved safety prompted the
creation of the Target Zero program
– a Company-wide effort to prevent
all injuries.

LTIFR – Total Group

TRIFR – Total Group

Site Safety Performance

9
.
3

6
.
4

4
.
2

0
.
3

9
1

9
.
7
3

7
.
3
3

2
.
6
1

1
.
8
2

7
.
4
1

LTIFR

TRIFR

Site

Cadia Hill

Ridgeway

Gosowong

Telfer Project

Boddington

Exploration

Total Newcrest

This
Year

0.0

3.8

0.8

2.6

15.3

3.8

1.9

Previous
Year

0.9

1.8

1.3

6.5

0.0

4.0

3.0

This
Year

13.4

22.8

12.8

14.6

15.3

20.3

14.7

Previous
Year

22.6

23.3

11.4

55.9

16.5

27.7

28.1

02 03 04

LTIFR
Industry Benchmark
(2000-02 AMMI,
2003 MCA Estimate)

Newcrest Mining Concise Annual Report 2004 41

Sustainability and People

section5

ENVIRONMENT

During the 2003/04 year we obtained permits for both the
Cracow and Toguraci projects. Over the past five years,
Newcrest has successfully permitted a number of major
projects, including Cadia Hill, Gosowong, Ridgeway and Telfer.

Managing stakeholder relationships
At Newcrest, successful permitting is not just about obtaining
permission to construct and operate projects. A thorough
understanding of the environmental, social and economic
setting of a project enables us to maximise the benefits and
minimise any adverse elements.

Developing a mine is a partnership between Newcrest
and our key stakeholders – shareholders, employees,
government and the local community. No two situations are
alike; for example, compare the temperate central tablelands
of New South Wales with the arid tropics of Western Australia,
or the wet tropics of Indonesia.

Getting it right is important and we believe that our success is
measured in the positive contribution Newcrest makes to both
the social and economic fabric of the local communities in
which we operate.

Environmental highlights
Highlights of the year’s activities include:
• Reported environmental incidents. The number of

reported environmental incidents rose compared with the
previous year (22 in 2003/04 compared with 15 in 2002/03).
This was still a good performance given the increase in
construction activity at Telfer and Cracow. To provide a
more accurate year-on-year comparison we have used the
number of hours worked during the year as an indicator of
overall Company activity. On this basis there was a decline
in environmental incidents per million hours worked to 2.93
in 2003/04 from 3.46 in 2002/03.
Unfortunately, we had a Category IV environmental incident
this year. Following an audit in February 2004, the Western
Australian Department of Environment and Protection
raised concerns regarding the level of fauna mortality
during construction of the Telfer Gas Pipeline. While the
fauna rescue plan was the responsibility of our contractors,
Newcrest retained ultimate environmental responsibility for
the infrastructure corridor. We responded by immediately
placing our own full-time environmental observer with the
pipeline to monitor compliance with the fauna rescue plan.
This has resulted in significant improvement.

• Sustainability. Newcrest continues to promote the concept
of sustainability, embracing a balance between economic
prosperity, environmental quality and social responsibility.
We released our second Sustainability Report in October
2003 and a fresh report will be issued in October 2004.
We recognise the importance of informing our stakeholders
of our environmental and social performance and commit
to increase the breadth of coverage in future reports.
Increasingly we will incorporate relevant elements of the
Global Reporting Initiative in our reporting. The Company’s
Sustainability Reports can be viewed on its website at
www.newcrest.com.au.

• AMI Code Implementation Survey. In keeping with our
commitment under the AMI Code for Environmental
Management, Newcrest completed its fourth Code
Implementation Survey during the 2003/04 year. This
survey measures the success of individual operations in
implementing the various principles of the Code. Both of
our operations showed significant improvement over the
scores obtained in the 2002 survey. The results for each
site (and the Group consolidated score) are shown in the
table below. Under the modified scoring system used to
assess implementation of the Code, 80 percent indicates
that the systems represented by the Code have been fully
implemented and integrated. At 69 percent, Newcrest’s
score indicates that we have the necessary systems and
processes in place and are well advanced in integrating
these elements into our overall business functions.

Operation

Implementation
2003 (percent)

Implementation
2002 (percent)

Cadia Valley Operations

Gosowong

Newcrest

• Rehabilitation. We are committed to progressive

rehabilitation and the planned and orderly closure of our
operations. All of our operations have closure plans and
provision is made in the Company accounts for the costs
of closure on an annual basis. Our commitment is
demonstrated by our work at Gosowong, where during the
care and maintenance phase, pending the commissioning
of Toguraci, over 80 percent of the area we disturbed in the
Gosowong operations was successfully rehabilitated.

42 Newcrest Mining Concise Annual Report 2004

HUMAN RESOURCES

Developing our people
Our people are the key element of Newcrest’s business strategy
and we have enshrined this principle in our corporate strategy.

In particular, the Company is committed to building Newcrest
into an organisation that will support the business strategy
through attention to leadership, technical capability and the
talent needed to deliver business outcomes on an ongoing
basis.

People development initiatives
Over the past year, we have introduced many initiatives to
further build the organisation (culture, capability, leadership
and people resources) necessary to deliver Newcrest’s
business strategy in an effective risk-managed way. These
initiatives include:
• Development of organisation values. We developed our
organisation values in October 2003 via a workshop with
senior managers and executives. Since then, the values
have been explored and understood by all personnel in the
Company’s head office in Melbourne. The values are being
rolled out throughout the Company. Newcrest’s values are:
– We act with integrity and honesty
– We seek high performance in ourselves and others
– We work together
– We value innovation and problem-solving
– We care about people.

• Development and Training Matrix. Construction of a

Development and Training Matrix to ensure the continued
development of employees at all levels across the
business, in technical and non-technical skills.

• Improvement in key areas. Managers and employees
continued the improvement work identified through the
employee opinion survey conducted during 2002/03.
Improvements have been implemented in areas such as
remuneration, communication, training and development,
and health and safety.

• Review of remuneration policy. Our remuneration policy
has been reviewed to develop a design more in keeping
with the Company’s growth and standing. The policy
elements include:

– A base salary based on total employee cost, augmented

by a short-term incentive that is determined by
performance against agreed objectives, and

– A redesigned long-term incentive for middle, senior and
executive managers that is intended to better align the
behaviour and actions of management with the interests
of shareholders.

• Redevelopment of procedures and policies. Newcrest’s
people procedures and policies have been redeveloped in
line with the requirements of our business and alignment
with the Company’s culture and strategy.

• Skills assessment and staff retention programs.
Implementation of systems to enable the timely
understanding of the skills and people needed across the
business and strategies for attracting and retaining the
employees essential for current and future operations.
• Introduction of new leave policy. We have implemented
a new leave policy. A key feature is our new policy for
parental leave that puts Newcrest at the cutting edge for
the resources industry. Newcrest’s parental leave policy
provides:
– Up to 14 weeks paid parental leave for the primary carer
– Provision for early return by agreement between

Newcrest and the employee, and

– Up to 52 weeks leave.

Telfer recruitment
At Telfer, all senior operations management and senior
professional appointments have been filled and Telfer now
has an operational workforce in excess of 460 people
including project support personnel. The Telfer open pit is fully
manned and operational. Telfer is currently in the process of
bringing on the ore processing and maintenance operational
workforce in preparation for commissioning and operation
of the concentrator. In addition, the on-site construction
workforce at Telfer has peaked at more than 1,500 personnel.

Employee Statistics

Employees

Contractors

2003

2004

932

1,498

1,010

1,705*

*Includes temporary construction workforce at Telfer.

Total

1,942

3,203

Newcrest Mining Concise Annual Report 2004 43

section6

Corporate
Governance

44 Newcrest Mining Concise Annual Report 2004

Board of Directors

Ian R. Johnson

Anthony J. Palmer

R. Bryan Davis

Ronald C. Milne

Michael A. O’Leary

Ian A. Renard

Nora L. Scheinkestel

Ian R. Johnson
Non-Executive Chairman
Bachelor of Science (Hons) from
the University of New England.
Former Chief Executive Officer of
Newcrest Mining Limited. Former
Group Executive of CRA Limited.
Fellow of AusIMM and a Fellow
of the Australian Institute of
Company Directors. Appointed to
the Board on 2 September 1998
and elected Chairman on
28 October 1998. A member
of the Remuneration and
Nomination, Governance and
Ethics Committees.
Other Directorships:
Director of John Holland Group
Pty Ltd.

Ronald C. Milne
Non-Executive Director
Member of Certified Practising
Accountants Australia. Appointed
to the Board in November 1995
with a management career
extending through the
manufacturing, merchant banking
and oil exploration industries.
A member of the Remuneration,
Audit, Finance and Safety, Health
and Environment Committees.
Other Directorships:
Director of Brambles Industries
Limited, Brambles Industries PLC
and J. Capital Pty Ltd.

Anthony J. Palmer
Managing Director and Chief
Executive Officer
Bachelor of Engineering (Hons)
from the University of NSW.
Former General Manager with
WMC Ltd including responsibility
for Olympic Dam project. Former
Managing Director of Normandy
Mining Ltd. and Danae
Resources. Commenced as CEO
and MD of Newcrest on
1 December 2001. Member of
AusIMM. A member of the
Remuneration Committee.
Other Directorships:
Director of Australian Mines
& Metals Association Inc.

R. Bryan Davis
Non-Executive Director
Bachelor of Science Technology
(Mining) from the University of
NSW. Former Executive Director of
Pasminco Limited. Fellow of
AusIMM and a member of the
Australian Institute of Company
Directors. Appointed to the Board
in March 1998. A member of the
Audit, Remuneration and Safety,
Health and Environment
Committees.
Other Directorships:
Chairman of Bendigo Mining
Limited, Indophil Resources N.L.
and Director of Coal & Allied
Industries Ltd.

Michael A. O’Leary
Non-Executive Director
Bachelor of Science (Technology)
from the University of NSW.
Former Chairman and Managing
Director of Argyle Diamond Mines
and Hamersley Iron. Former
Director of CRA Limited and Rio
Tinto plc. Fellow of AusIMM and
Fellow of the Australian Institute of
Company Directors. Appointed to
the Board in September 2003.
A member of the Remuneration,
Finance and Safety, Health and
Environment Committees.
Other Directorships:
Director of Santos Limited and
Director and Deputy Chairman of
Bank West Ltd.

Ian A. Renard
Non-Executive Director
Bachelor of Arts and Master of
Laws Degrees from the University
of Melbourne. Consultant of Allens
Arthur Robinson. Fellow of the
Australian Institute of Company
Directors. Appointed to the Board
in May 1998. A member of the
Remuneration, Audit and
Nomination, Governance and
Ethics Committees.
Other Directorships:
Deputy Chancellor of the
University of Melbourne. Director
of CSL Limited, Hurstmead
Pastoral Company Pty Ltd and
Hillview Quarries Pty Ltd.
Chairman of Melbourne Theatre
Company.

Nora L. Scheinkestel
Non-Executive Director
Bachelor of Laws (Hons) and PhD
from the University of Melbourne.
Fellow of the Australian Institute of
Company Directors. Appointed to
the Board in August 2000 with
a management background in
international banking and project
finance. An Associate Professor
at the Melbourne Business School
at the University of Melbourne.
A member of the Remuneration,
Nomination, Governance and
Ethics and Finance Committees.
Other Directorships:
Director of PaperlinX Ltd and
AMP Limited and AMP Capital
Investors Ltd. Chairman of
South East Water Ltd.

Newcrest Mining Concise Annual Report 2004 45

Corporate Governance

Set out below is an overview of the Company’s corporate
governance practices including those matters required
to be addressed in the annual report by the ASX Corporate
Governance Council Principles of Good Corporate
Governance and Best Practice Recommendations. Additional
information is available on the Company’s website. 1

The Board considers that the Company is in compliance in
all substantial respects with the Principles and Best Practice
Recommendations.

Board Role
On behalf of the shareholders, the Board:
• sets the Company’s strategic goals and objectives.
• oversees the management and performance of the

Company’s business.

• determines broad issues of policy.
• sets an appropriate framework of corporate governance

for management.

These and other functions of the Board and by exception the
functions of management, have been formalised through the
adoption of a formal Board Charter.

Board Composition
Newcrest’s Board currently comprises seven Directors, six of
whom are Non-Executive including the Chairman of Directors
and one of whom is the Managing Director. Details of each
Director’s skills, experience and relevant expertise are set out
on page 45.

The Board has determined that all Non-Executive Directors,
including the Chairman, are independent and free of any
relationship which might conflict with the interests of the
Company. In doing so the Board adopted the definition
suggested in the ASX Best Practice Recommendations and
formed the view that the materiality thresholds set out in the
ASX definition would be breached only if a Director received,
as a consultant to the Company, fees exceeding $250,000
per annum or was a principal or partner of a professional
adviser that billed more than $3 million per annum during the
last three years, or was a Director or Officer of a supplier or
customer that held contracts with the Company for value
exceeding 10 percent of Newcrest’s annual revenue. Although
Mr Johnson acted in the role of Executive Chairman for a
period of three months during 2001, pending the appointment
of a new Managing Director, the Board considers that the
interim nature and shortness of that appointment has not
compromised his independence. The Board will monitor the
independence of each Director and the appropriateness of
the thresholds of independence that it has set, on an ongoing
basis, to ensure that they remain appropriate to the
Company’s circumstances.

The Board regularly reviews its membership to ensure that it
provides the range of business skills and expertise demanded
by the Company’s operations.

When a Board position becomes vacant or additional
Directors are required, candidates are identified with the
assistance of professional advice and are considered, at
first instance, by the Nomination, Governance and Ethics
Committee of the Board and finally by the full Board.
Directors are selected for their specialist skills and business
backgrounds in order to create appropriate skill balance on
the Board. In the case of the appointment or resignation of
the Managing Director, decisions are made by the full Board,
with professional advice sought, as required. All Board
appointments are subject to shareholder approval. As a
general rule, a Non-Executive Director who has served on the
Board for 12 or more years will not seek re-election.

All Directors of the Newcrest Board are required, as a matter
of Board Policy, to own a minimum of 3,000 shares in the
Company. In addition, all Non-Executive Directors are
required to direct at least 10 percent of their Director’s fees to
purchase shares in the Company (at market prices) through
the Non-Executive Directors’ Share Plan, which was approved
by shareholders at the Company’s 1999 Annual General
Meeting. Directors’ shareholdings are subject to the
Company’s Share Trading Policy which restricts the times
when a Director can purchase or sell Company stock and
also prohibits short-term trading.

Board Function
The Board meets monthly and at such other times as the
business of the Company requires. Each year at least one
Board Meeting is held at one of the Company’s mine sites.

At each regular meeting the Board reviews the performance
of the Company, with particular emphasis on safety and
environmental matters. As well as considering any major
strategic or investment decisions, the Board reviews in detail
principal aspects of the Company’s operations and
performance. This process involves receiving detailed
presentations from management about key components of
the Company’s business.

The Board periodically reviews the Company’s strategic
direction and each year, together with senior management,
conducts a structured strategic review of the Company’s
activities and its future direction.

To enhance the Board’s capacity to monitor the full range of
the Company’s operations and to increase Directors’
exposure to them, a number of Board Committees have been
put in place.

The Committees can, where necessary, also provide a forum
for more detailed consideration of issues of special
importance.

1 This Corporate Governance section and items shown underlined can
be found at www.newcrest.com.au under ‘Corporate Governance’.

46 Newcrest Mining Concise Annual Report 2004

The current Committee structure is:

Audit Committee
Ensures compliance with all accounting and financial
reporting obligations of the Group and reviews internal
financial controls, the role of the internal and external auditors,
including the independence of the external auditors and the
Company’s risk management activities.

Remuneration Committee
Deals with all matters relating to the Company’s remuneration
policy, executive and employee remuneration levels and
remuneration matters generally.

Finance Committee
Formulates and monitors policies and procedures for treasury
practices and considers the Company’s funding
requirements.

Nomination, Governance and Ethics Committee
Considers candidates for the Board, reviews corporate
governance, compliance processes and human resource
(but not remuneration) and monitors the ethical standards of
the Company.

Safety, Health and Environment Committee
Ensures that the Company has in place appropriate policies
and monitors the Company’s practices in the areas of safety,
health and environmental management.

Each Committee is comprised of selected Non-Executive
Directors, one of whom acts as Committee Chairman except
the Remuneration Committee which is comprised of all
Directors. Memberships and attendance at meetings are
detailed in the Directors’ Report on page 51. Each Committee
acts pursuant to a separate formal charter also approved by
the Board. All Board Committee deliberations are reported to
the Board at the earliest opportunity and, where necessary,
recommendations of a Committee are submitted to the
Board for a decision.

The Managing Director, although formally only a member of
the Remuneration Committee, is invited to attend all other
Committee meetings. Other non-Committee Board members
are also free to attend any Committee meeting if they wish to
do so.

Directors of the Company have direct access to the
Company’s senior managers. The Board has adopted a
formal policy which ensures that Directors also have access
to independent external advisers where necessary. All
Directors are encouraged to visit the Company’s operating
sites annually.

The Board has in place a formal process for evaluating its
own performance. Through a combination of a written
evaluation and interview process with each Director
individually, as well as a collective Board review of the
outcomes of that process, individual Director and
Board performance are measured in key areas and
opportunities identified where performance can be improved.
The Company also receives each year a confidential market
report of Board and Company performance and standing,
relative to a peer group.

Board Remuneration
Total annual remuneration paid to all Non-Executive Directors
may not exceed the maximum amount authorised by the
shareholders in a general meeting (currently $1,000,000).
Also each Non-Executive Director appointed prior to 2003
entered into a deed with the Company which provides that,
upon retirement, that Director will be eligible to receive a
retirement benefit being an amount equivalent to the fees paid
to that Director during their preceding three years. The Board
has determined that the practice of providing retirement
benefits will be discontinued and all benefits accrued as at
December 2003 will be frozen as at that date.

Remuneration of the Non-Executive Directors is fixed, rather
than variable, and is determined with regard to the need to
maintain Board membership of an appropriate calibre and
remuneration trends in the marketplace. Remuneration levels
and trends are assessed with the assistance of professional
independent remuneration consultants. The Board has
adopted a policy that each Director must personally hold a
minimum of 3,000 shares in the Company. In addition to the
minimum shareholding, each Director is required to
participate in the Non-Executive Directors’ Share Plan
pursuant to which at least 10 percent of each Director’s
annual remuneration must be used to buy shares in the
Company, on market and at pre-determined times. Both of
these measures strongly align Directors’ personal interests
with shareholders’ interests.

From time to time individual Directors may be asked by the
Board to devote extra time or undertake extra duties, usually
involving their specialist skills or knowledge, to assist the
Board monitor, review or direct key aspects of the business.
As any Director who undertakes such extra duties does so
only at the request and direction of the Board, rather than
management, no conflict of interest or loss of independence
arises.

Newcrest Mining Concise Annual Report 2004 47

Corporate Governance (continued)

Executive Remuneration
The Board has in place a formal Remuneration Policy which
defines and directs the Company’s remuneration practices
for management. The Policy recognises the different levels
of contribution within management to the short-term and
long-term success of the Company. A key element of
the Remuneration Policy is the principle of reward for
performance with a significant proportion of each senior
manager’s remuneration placed ‘at risk’ to both personal and
Company performance. Every employee undergoes a formal
performance appraisal each year which is used, in part, to
determine that employee’s remuneration in the year ahead.

The ‘at risk’ component of management remuneration is
made up of a short-term incentive plan and a long-term
incentive plan. Under the short-term incentive plan a
component of a senior manager’s cash remuneration is
only deliverable upon certain pre-determined personal
performance criteria being satisfied. The long-term incentive
component is comprised of fully paid ordinary shares issued
under the Performance Share Plan which was introduced in
July 2004. In line with legislative and regulatory requirements
the Plan has not been presented to shareholders for approval.
The Plan, like the discontinued Executive Option Plan before
it, incorporates the use of performance hurdles and
progressive vesting mechanisms, both of which are reflective
of contemporary remuneration practices and which align a
proportion of management’s remuneration with the level of
returns to shareholders.

The Board has established with the Managing Director
appropriate and specific personal and corporate performance
objectives for the short and long term. The performance
of the Managing Director is formally assessed against these
objectives annually. The assessment is used to determine,
in part, the level of ‘at risk’ remuneration paid to the
Managing Director.

The extent to which ‘at risk’ remuneration is delivered to
senior management or to the Managing Director varies,
dependent upon among other factors, the performance of
the Company’s share price and overall shareholder returns,
measured against its peer group of listed Australian gold
companies. The Board is reviewing the future structure and
operation of the ‘at risk’ component of management
remuneration.

Risk Management and Compliance
The Board recognises that risk management and compliance
are among its key responsibilities and are fundamental to the
sound management of the business. The Company has a
formal Risk Policy approved by the Board and a
comprehensive reporting system which seeks to identify,
at the earliest opportunity, any significant business risks.

The Company also has in place specific reporting and
control mechanisms to manage significant risks and a formal
compliance program to monitor compliance levels across a
range of key areas. An internal audit function, which reviews
and reports to the Board on the effectiveness of those
mechanisms, is also maintained.

These reporting and control mechanisms underpin written
certifications given by the Managing Director and
Chief Financial Officer to the Board each half year that the
Company’s financial reports fairly reflect its financial condition
and operational results and are in accordance with relevant
accounting standards and that the risk management and
internal compliance and control system is operating efficiently
and effectively in all material respects.

Ethics
The Company has a formal Code of Ethics which all
Newcrest Directors, employees and contractors are required
to observe as well as a comprehensive range of corporate
policies which detail the framework for acceptable corporate
behaviour. These set out procedures that employees are
required to follow in a range of areas including share trading,
employment practices and compliance. The Company
policies are reviewed periodically.

Communication with Stakeholders
The Board recognises the importance of keeping the
market fully informed of the Company’s activities and of
communicating openly and clearly with all stakeholders.
A formal Continuous Disclosure Policy is in place to ensure
that information which might be relevant to the market is
brought forward. Company information considered to be
material is announced immediately through the Australian
Stock Exchange. Key presentations given by Company
personnel to investors and institutions are also lodged with
the Australian Stock Exchange. Every effort is made to ensure
that communications are clear and complete and that they
address shareholders’ needs for information.

All key communications are placed immediately on the
Company website and, where necessary, are mailed directly
to all shareholders. General and historical information about
the Company and its operations is also available on the
website.

The Company has adopted the practice of alternating the
location of its Annual General Meeting to facilitate the
maximum possible attendance by shareholders. At each
meeting the Company’s auditors are available to answer
questions relating to the auditing of the Company’s financial
statements.

48 Newcrest Mining Concise Annual Report 2004

section7

56
58
59
60
61
68
69
70
72

Financials

Newcrest Mining Concise Annual Report 2004 49

Directors’ Report

The Directors present their report together with the Financial
Report of Newcrest Mining Limited (‘the Company’) and of the
Consolidated Entity, being the Company and its controlled
entities, for the year ended 30 June 2004 and the auditor’s
report thereon.

Directors
The Directors of the Company at any time during or since the
end of the financial year are:
Ian R. Johnson Non-Executive Chairman
Anthony J. Palmer Managing Director and
Chief Executive Officer
R. Bryan Davis Non-Executive Director
Ronald C. Milne Non-Executive Director
Ian A. Renard Non-Executive Director
Nora L. Scheinkestel Non-Executive Director
Michael A. O’Leary Non-Executive Director
(appointed 19 September 2003)

Appointment and Qualifications of Directors
All Directors held their position as a Director throughout the
entire year and up to the date of this Report unless otherwise
stated. Details of the Directors’ qualifications, experience and
special responsibilities appear in the Corporate Governance
section on page 45.

Principal Activities
The principal activities of the Consolidated Entity during the
year were exploration, development, mining and the sale of
gold and gold/copper concentrate. There were no significant
changes in those activities during the year.

Consolidated Result
The profit of the Consolidated Entity for the year ended
30 June 2004 after income tax and outside equity interest
amounted to $122,870,000 (2003: $92,147,000).

Dividends
The following dividends of the Consolidated Entity have been
paid, declared or recommended since the end of the
preceding year:
• Final fully franked dividend for 30 June 2003 of 5 cents per
share, amounting to $16,375,000 was paid on 17 October
2003.

• Final fully franked dividend for 30 June 2004 of 5 cents per
share, amounting to approximately $16,428,000 has been
declared and will be paid on 15 October 2004 to
shareholders registered by close of business on
24 September 2004 (refer Note 7).

Review of Operations
Information on the operations of the Group during the year
and the results of those operations are set out in this Concise
Annual Report.

50 Newcrest Mining Concise Annual Report 2004

Environmental Regulation
The operations of the Consolidated Entity in Australia are
subject to environmental regulation under the laws of the
Commonwealth and the States in which those operations
are conducted. The operation in Indonesia is subject to
environmental regulation under the laws of the Republic of
Indonesia and the Province in which it operates. It is the
policy of the Consolidated Entity to comply with all relevant
environmental regulations in all countries in which it operates.

Each mining operation is subject to particular environmental
regulation specific to the activities undertaken at that site as
part of the licence or approval for that operation. There is also
a broad range of industry specific environmental laws which
apply to all mining operations and other operations of the
Consolidated Entity. The environmental laws and regulations
generally address the potential impact of the Consolidated
Entity’s activities in relation to water and air quality, noise,
surface disturbance and the impact upon flora and fauna.

The Consolidated Entity has a uniform internal reporting
system across all sites. All environmental events, including
breaches of any regulation or law, are ranked according to
their actual or potential environmental consequence. Five
levels of incident are recognised (based on Australian
Standard AS4360): I (insignificant), II (minor), III (moderate),
IV (major) and V (catastrophic). Data on Category I incidents
are only collected at a site level and are not reported in
aggregate for the Consolidated Entity.

The number of events reported in each category during
the year are shown in the accompanying table. In all cases
environmental authorities were notified of those events where
required and remedial action undertaken.

Category

2004 – No. of incidents

2003 – No. of incidents

III

–

The Managing Director reports to the Board at all meetings on
all environmental, health and safety incidents. The Board also
has a Safety, Health and Environment Committee which
reviews the environmental and safety performance of the
Consolidated Entity. The Directors are not aware of any
environmental matter which would have a materially adverse
impact on the overall business of the Consolidated Entity.

Significant Changes in the State of Affairs
Significant changes in the state of affairs of the Consolidated
Entity that occurred during the financial year were as follows:
(i) Total revenue increased 17 percent principally due to the
increased contribution from copper by-product revenue.
(ii) The mark to market of derivative financial instruments at

30 June 2004 was negative $451.6 million (2003: positive
$84.8 million). Including gold loan swap contracts the
mark to market position was negative $478.4 million
(2003: positive $38.7 million).

(iii) Expenditure on the Telfer project incurred and accrued in

the financial year was $631.3 million.

(iv) $639.9 million of proceeds from borrowings were drawn
down under debt facilities to fund the Telfer project.

Subsequent Events
Subsequent to 30 June 2004, Newcrest Mining Limited
announced that it had completed a comprehensive simplification
of its gold and foreign currency hedging positions.

The assessed mark to market value inherent in the existing
hedge book has been embedded into the price of the new
forwards and gold lease rate transactions resulting in the
restructure being completed without any cash outflow, except
for a minor credit fee. Refer to the Subsequent Event Note 11
for details of the revised hedging tables and impact of this
restructure.

There are no other matters or circumstances which have
arisen since 30 June 2004 that have significantly affected or
may significantly affect the operations of the Consolidated
Entity, the results of those operations or the state of affairs of
the Consolidated Entity in subsequent financial years.

Likely Developments and Expected Results
Further information about likely developments in the
operations of the Consolidated Entity and the expected
results of those operations in future financial years has not
been included in this report because disclosure of the
information would be likely to result in unreasonable
prejudice to the Consolidated Entity.

Directors’ Meetings
The number of Directors’ meetings (including meetings of
committees of Directors) and number of meetings attended
by each of the Directors of the Company during the financial
year are:

Director

I. R. Johnson

A. J. Palmer

N. L. Scheinkestel

R. B. Davis

R. C. Milne

I. A. Renard

M. A. O’Leary

Directors’
Meetings

Audit
Committee
Meetings

Remuneration
Committee
Meetings

Finance
Committee
Meetings

Nomination,
Governance &
Ethics Committee
Meetings

Safety, Health &
Environment
Committee
Meetings

–

Column A – Indicates the number of meetings attended.
Column B – Indicates the number of meetings held whilst a Director.
Column C – Indicates the number of meetings held whilst a member.

The details of the functions and memberships of the Committees of the Board are presented in the Statement of
Corporate Governance.

Newcrest Mining Concise Annual Report 2004 51

Directors’ Report (continued)

Directors’ and Senior Executives’ Emoluments
The Remuneration Committee, consisting of all Directors,
is responsible for making recommendations to the Board on
remuneration policies and practices generally, and specifically
on remuneration packages and other terms of employment
applicable to Executive Directors, Senior Executives and Non-
Executive Directors of the Company. The broad remuneration
policy objective is to ensure remuneration packages properly
reflect employees’ duties and responsibilities and that
remuneration is competitive in attracting, retaining and
motivating people of the highest quality.

Executive remuneration and other terms of employment are
reviewed annually by the Remuneration Committee having
regard to performance against goals set at the start of the
year, relevant comparative information and independent
expert advice. Executive remuneration is made up of fixed
and variable remuneration. Fixed remuneration includes
monthly salary, superannuation, fringe benefits and
resignation and retirement entitlements (where applicable).
Executives may also receive variable remuneration payments
based on the achievement of specific financial and non-
financial performance hurdles. These variable remuneration
payments, which represent remuneration at risk, include
annual incentive payments made under the Company’s
short-term incentive plan and participation in the Company’s
Executive Share Option Plan. The ability to exercise options
is conditional on the Consolidated Entity achieving certain
performance hurdles.

Directors’ and Senior Executives’ Remuneration

Remuneration and other terms of employment for the
Managing Director and certain Senior Executives are
formalised in service agreements.

Remuneration of Non-Executive Directors is fixed, rather than
variable and is determined with regard to the need to maintain
Board membership of an appropriate calibre and
remuneration trends in the market place. The total amount
paid to all Non-Executive Directors may not exceed the
maximum amount authorised by the shareholders in a
general meeting (currently $1,000,000). Non-Executive
Directors do not receive any performance related
remuneration and are not entitled to participate in the
Company’s Executive Share Option Plan but are required to
hold a minimum amount of 3,000 shares. Each Director is
required to participate in the compulsory Non-Executive
Director Share Plan pursuant to which a minimum 10 percent
of each Director’s annual remuneration must be used to buy
shares in the Company on market at the prevailing market
price (with no discount). Non-Executive Directors are also
entitled to retirement benefits in accordance with a
shareholder approved deed. During 2003, the Board made a
decision to discontinue the practice of paying Directors a
retirement allowance. This means the provision of retirement
benefits will not be continued in the case of any new Directors
(including Mr O’Leary). Each of the existing Directors, whose
retirement benefits are contractually established in their formal
terms of engagement with the Company, has agreed to have
those benefits frozen with effect from 31 December 2003 in
respect of the service they have provided up to that date.

252,500

20,455

38,430

–

195

311,580

–

330,000

445,144

33,862 1,615,506

Directors

Directors’
Base Fee/
Salary
$

Superannuation
Contributions
$

Other
Services
$

Retirement
Benefit
Provision (ii)

Short-Term
Incentive
Payments
$

I. R. Johnson
Non-Executive Chairman

A. J. Palmer
Managing Director

R. B. Davis
Non-Executive Director

R. C. Milne
Non-Executive Director

I. A. Renard
Non-Executive Director

N. L. Scheinkestel
Non-Executive Director

M. A. O’Leary
Non-Executive Director

842,500

112,500

90,833

–

9,116

31,537

9,566

5,000 (i)

16,749

9,116

7,360

–

16,749

31,537

–

Long-Term
Incentive
Payments
(Options

Other

Valuation) (iv) Benefits (iii)

Total
$

–

195

153,348

195

144,010

195

138,560

195

153,348

152

98,345

Executive Officers are those directly accountable and responsible for the operational management and strategic direction
of the Company. The five most senior positions with the most authority are disclosed over the page. Also disclosed is John
Blake (General Manager Gosowong Mine) as he falls within the top five remuneration category due to the site and housing
allowances associated with this position.

52 Newcrest Mining Concise Annual Report 2004

Executive Officers

Fixed
Remuneration
(including
Superannuation)
$

Site,
Housing
& Rental
Allowances
$

Short-Term
Incentive
Payments
$

Long-Term
Incentive
Payments
(Options
Valuation) (iv)

Other
Benefits (iii)

Total
$

J. Smith
Executive General Manager Finance
and Chief Financial Officer

B. Price
Executive General Manager
Project Development

D. Wood
Executive General Manager
Exploration

T. O’Neill
Executive General Manager
Operations and Marketing

B. Lavery
Executive General Manager
Corporate Services

J. Blake
General Manager Gosowong Mine

532,617

15,175

240,000

37,835

18,767

844,394

473,100

28,679

150,000

104,485

27,203

783,467

430,850

426,900

404,675

–

208,000

104,485

3,076

746,411

130,000

97,835

4,621

659,356

112,500

104,485

4,621

626,281

242,600

278,455

68,778

80,484

15,453

685,770

(i) Comprises a payment of $5,000 for duties performed as Chairman of the Superannuation Policy Committee.
(ii) The amounts disclosed in Director’s remuneration represent the provision recorded in the current year to maintain the Director’s full entitlement on

the above terms.

(iii) Other benefits mainly comprise travel, parking, insurance and applicable fringe benefits tax payable on benefits.
(iv) The Company has adopted the fair value measurement provisions of AASB 1046 ‘Director and Executive Disclosures’ prospectively for all options

granted to Directors and relevant executives which have not vested as at 1 July 2003. The fair value of such grants is being amortised and disclosed
as part of Director and executive emoluments on a straight-line basis over the vesting period. No adjustments have been or will be made to reverse
amounts previously disclosed in relation to options that never vest (i.e., forfeitures).
The fair value of the options is calculated at the date of grant using a Black-Scholes model and binomial methodologies, and allocated to each
reporting period evenly over the period from grant date to vesting date. The value disclosed above is the portion of the fair value of the options
allocated to this reporting period. The fair value methodology adopted and details of performance hurdles are discussed in further detail below.

• To take into account the performance hurdles and forfeiture
conditions attached to the options, a discount factor based
on the probability estimate that the options will vest, was
then applied to arrive at an estimate of the number of
options expected to vest. This is the best estimate available
of the cost to the Company of awarding the options. The
above valuation has been applied as follows in respect to
the 2 separate option series granted:

– For options granted to the Managing Director, it has been

assumed that the service period requirements and
performance hurdles will be fully met and therefore no
discount has been applied.

– For the options granted to all Executives, it has been

assumed that the service period requirements have an
80 percent probability of being met and that performance
hurdles have a 75 percent probability of being met.

Share Options – Valuation Methodology
The Directors’ assessment of the fair value of options granted,
for the purpose of reporting emoluments of Directors and
Executive Officers is based upon independent advice.

The methodology used in valuing the options was as follows:
• The options were valued on the date of grant based on the

relevant market parameters applying at that time.

• The options were first valued as if they were unrestricted,

freely tradable options using an option pricing model which
combines both Black-Scholes and binomial methodologies.
It is on this basis that the Board determines this element of
remuneration levels.

• The following factors and assumptions were used in

determining the fair value of options granted during the year:
2 December 2003
Grant date

Share price on grant date

Exercise price

Expected volatility

Historical volatility

Risk-free interest rate

Dividend yield

Expected life of the option

$12.75

$12.29

37 percent

6.33 percent

0.39 percent

5 years

These factors resulted in a fair value per option of $5.48.

Newcrest Mining Concise Annual Report 2004 53

Directors’ Report (continued)

Executive Share Option Plan
‘Share Options’ in the case of the Company refers to those
options granted to senior management, including the
Executive Director, pursuant to the Newcrest Executive Option
Plan. No person entitled to exercise any of the options had or
has any right, by virtue of the options, to participate in any
share issue of any other body corporate.

The Newcrest Executive Option Plan provides for the
allocation of five year options with performance hurdles and
exercise conditions. Under the Plan, options issued to senior
management may not be exercised until after the second
anniversary of the grant date and can only be exercised to a
maximum of 25 percent of the options granted in each
subsequent year to the exercise date, subject always to the
performance hurdles being satisfied. Where the previous

Total Share Options Granted During the Financial Year

year’s maximum entitlement was not exercised, accumulated
entitlements to that anniversary date may be exercised. The
exercise price at which these options are issued is based on
the weighted average of the prices at which the Company’s
shares were traded on the Australian Stock Exchange during
the one week period prior to issue date.

Options issued to the Executive Director have specific
performance hurdles relating to the development of Telfer.
Refer below for the specific performance hurdle relating to
options granted in the current year.

Detailed information on the movements in options on issue
under the Newcrest Executive Option Plan during the financial
year and the balance exercisable under the Newcrest
Executive Option Plan at balance date are detailed in Note 21
to the full Financial Report of Newcrest Mining Limited.

Executive Directors

A. Palmer
Managing Director and Chief Executive Officer

All other Executives

Total Options Granted

Number of
Options
Granted

Exercise
Price
$

Grant
Date

Expiry
Date

250,000

2,415,000

2,665,000

12.29

2 December 2003

2 December 2008

2 December 2003

2 December 2008

2 December 2003

2 December 2008

Share Options Granted to Executive Directors and Most Highly Remunerated Executives During the Financial Year
During or since the end of the financial year, the Company granted options over unissued ordinary shares to the following
Executive Directors and Executive Officers as part of their remuneration. All options granted to Executive Officers during the
financial year were granted under the Newcrest Executive Option Plan. No options have been granted since the end of the
financial year.

Number of
Options
Granted

Exercise
Price
$

Expiry
Date

Fair Value
$

Number of Equity
Instruments

Expected to Vest(i)

Executive Directors

A. Palmer
Managing Director and Chief Executive Officer

Other Executive Officers

J. Smith
Executive General Manager Finance

B. Price
Executive General Manager Project Development

D. Wood
Executive General Manager Exploration

T. O’Neill
Executive General Manager Operations and
Marketing

B. Lavery
Executive General Manager Corporate Services

J. Blake
General Manager Gosowong Mine

250,000

12.29

2 December 2008

5.48

250,000

100,000

12.29

2 December 2008

100,000

12.29

2 December 2008

100,000

12.29

2 December 2008

100,000

12.29

2 December 2008

100,000

12.29

2 December 2008

70,000

12.29

2 December 2008

5.48

60,000

42,000

(i) Vesting conditions are not taken into account in determining the fair value. Instead the vesting conditions are taken into account by adjusting the
number of equity instruments expected to vest and this amount is included in measurement of the transaction value. Refer above section ‘Share
Options – Valuation Methodology’ for the assessment of vesting conditions.

54 Newcrest Mining Concise Annual Report 2004

Share Options – Performance Hurdles
250,000 share options were granted to the Managing Director
and Chief Executive Officer during the financial year subject to
the following performance hurdle:

‘The successful development and construction, under
Mr Palmer’s supervision, of the Telfer Underground Mine
operation and the commissioning of that operation at an
annual rate of 4 million tonnes per annum in the timeframe
and within the budget approved by the Board for that
development.’

Share options granted in the financial year to Executive
Officers and senior management are subject to the following
performance hurdle:

‘50 percent of options granted vesting upon the Total
Shareholder Return (‘TSR’) growth of Newcrest Mining
Limited (‘Newcrest’) meeting the TSR growth of the
median of companies in the ASX 100 and increasing
proportionately to 100 percent of options granted vesting
upon the TSR growth of Newcrest meeting or exceeding
the TSR growth of the 75th percentile of companies in the
ASX 100.’

Shares Issued on the Exercise of Options
During the year an aggregate of 1,351,500 options were
exercised, resulting in the issue of 1,351,500 ordinary shares
of the Company at an aggregate consideration of $4,234,000.

Directors’ Interests
The relevant interest of each Director in the share capital of
the Company, as notified by the Directors to the Australian
Stock Exchange in accordance with Section 235 (1) of the
Corporations Act 2001, at the date of this Report, is as
follows:

The Newcrest Non Executive Directors’ Share Plan was
approved by Shareholders on 28 October 1999. The Board
adopted a policy which requires Non-Executive Directors to
receive at least 10 percent of their annual remuneration by
way of on market acquired shares in the Company with no
discount. Shares acquired by a Non-Executive Director under
the Plan may not be sold for a period of three years after they
are acquired, except if the Director retires from the Board or
if the Board permits earlier sale.

Indemnification and Insurance of Directors and Officers
Pursuant to Article 103 of its Constitution, the Company
insures and indemnifies its Directors and Officers, against
liabilities to another person (other than the Company or a
related body corporate) that may arise from their position
as Directors and Officers of the Company and its controlled
entities, except where the liability arises out of conduct
involving a lack of good faith.

Each Director named on page 50 of this Report and the
Secretary, has entered into a Deed of Indemnity with the
Company on these terms.

Insurance Premiums
During or since the financial year the Company has paid an
insurance premium in respect of a contract insuring against
liability of Directors and Officers in accordance with the
Company’s Constitution and the Corporations Act 2001.

The contract of insurance prohibits disclosure of the amount
of the premium and the nature of the liability insured against.
Each Director of Newcrest Mining Limited has paid the
insurance premium in respect of cover which may apply in
relation to liabilities of the type referred to in Section 199B of
the Corporations Act 2001.

I. R. Johnson

A. J. Palmer

R. B. Davis

R. C. Milne

I. A. Renard

N. L. Scheinkestel

M. A. O’Leary

Chief Entity or Related
Body Corporate

Number of
Ordinary Shares

Nature of
Interest

Newcrest Mining Limited

38,127

11,060

14,658

8,501

15,871

70,635

5,775

Direct and Indirect

Direct

Direct and Indirect

Direct

Direct and Indirect

Direct

Number of
Options Over
Ordinary Shares

–

1,000,000

–

Rounding of Amounts
The Company is of a kind referred to in Class Order 98/0100 issued by the Australian Securities and Investments Commission
dated 10 July 1998 and in accordance with that Class Order, amounts in the financial report have been rounded to the nearest
thousand dollars, unless otherwise stated.

Signed in accordance with a resolution of the Directors.

Ian R. Johnson
Chairman

31 August 2004, Melbourne

Anthony J. Palmer
Managing Director and Chief Executive Officer

Newcrest Mining Concise Annual Report 2004 55

Management Discussion and Analysis of the Financial Statements

This discussion and analysis is provided to assist readers
in understanding the Concise Financial Report. The Concise
Financial Report has been derived from the full 2004 Financial
Report of Newcrest Mining Limited.

The Newcrest Mining Limited Consolidated Entity consists
of Newcrest Mining Limited and its controlled entities.
The principal activities of the Newcrest Mining Limited
Consolidated Entity during the financial year comprised
exploration, development, mining and the sale of gold and
gold/copper concentrate.

Summary of Year’s Results
The 2003/04 year was a significant year for the Consolidated
Entity’s financial management with the need to fund the Telfer
project. The funding plan placed strong reliance on the Cadia
Valley mines to generate the cash flows expected at the
beginning of the year. It was also the year that Ridgeway
established itself as a quality mine. On an undiscounted
basis, cash flow from Ridgeway has fully repaid the capital
invested in less than two years.

The financial highlights of the 2003/04 year are summarised
in the following table:

Net profit after tax before
significant items

Net profit after tax

Basic earnings per share

Return on members equity
(EBIT before significant items)

Return on members equity
(Net profit after tax)

Gearing (net debt/net debt
+ equity)

2004

2003

$119.3 million

$122.9 million

37.5 cents

$66.3 million

$92.2 million

29.6 cents

18.1 percent

10.6 percent

12.4 percent

10.5 percent

49 percent

30 percent

Profit after tax but before significant items rose substantially
in 2003/04. This measure is considered to be the better
indication of the profitability of the underlying businesses.
The increase in profit resulted principally from higher
production and lower cash costs assisted by strong copper
by-product revenue. Earnings per share and return on equity
both rose accordingly.

The commissioning of the Telfer project in the first half of the
current year will result in significant increases in these
measures for the whole of 2004/05.

Statement of Financial Performance
Net profit after tax attributable to shareholders for the year
was $122.9 million (2003: $92.2 million). The profit after tax
but before significant items also increased significantly to
$119.3 million (2003: $66.3 million).

Major factors impacting the result for the current year are:
Revenue
• Total gold revenue increased by $26.0 million due to an
increase in sales ounces and the achieved gold price
received was $579 per ounce (2003: $567 per ounce).
Gold hedging gains contributed $25.3 million to the Group
result, reflecting the strength of the Australian dollar during
the year relative to the Newcrest foreign exchange hedge
book.

• Total sales ounces were 754,745 (2003: 724,584).

This increase of 30,161 ounces was mainly as a result of:
– increase from Ridgeway, 56,147 ounces;
– decreased throughput at Cadia Hill, 63,095 ounces;
– increase in Indonesia of 37,221 ounces. Commencement

of operations at Toguraci contributed 75,948 ounces
compared to the prior year completion at the Gosowong
pit which produced 38,727 ounces.

• By-product revenue significantly increased by $77.5 million

to $270.3 million as a result of copper tonnes sold
increasing to 84,231 tonnes (2003: 68,604 tonnes). Copper
hedging contributed $3.8 million resulting in an achieved
copper price of $1.44 per pound (2003: $1.28 per pound).

Costs
• Gross mine costs (excluding copper by-product revenue)
increased due to higher production volume, however per
unit cash costs were lower compared to the prior year.
• Borrowing costs expensed of $12.1 million are net of the

borrowing costs capitalised to the Telfer project of
$36.6 million.

• Other expenses mainly comprise Gosowong and

Boddington care and maintenance.

Significant Items
• Surplus foreign currency contracts in excess of anticipated
net US dollar receipts were provided for in the prior year.
During the year, the appreciation of the Australian dollar
resulted in a write-back to profit on this provision of
$10.3 million. All surplus contracts have now lapsed and
this provision is now finalised.

• The Consolidated Entity has adopted natural hedge

accounting for its US dollar loan. A foreign exchange gain
of $4.7 million was made which matched the loan
repayment profile.

• Ongoing treatment of prior year hedging restructures
involving gold, copper and gold lease rate contracts
resulted in an expense of $9.8 million. $0.5 million has
been released to operating revenue in the period resulting
in a net increase to the provision of $9.3 million.

56 Newcrest Mining Concise Annual Report 2004

Other
• The net profit after tax translates to a basic and diluted

earnings per share of 37.5 cents and 37.0 cents per share
respectively and a return on equity of 12.4 percent.

• On 26 August 2004 the Directors declared a fully franked

Statement of Cash Flows
Group cash balances for the year have increased by
$55.9 million for the year to $157.0 million, reflecting higher
cash flows from operating activities and debt raisings to meet
cash flows from investing activities.

• Cash flows from operating activities were $67.8 million

higher than 2003 due mainly to increase in sales receipts
and by-product revenue.

• Net cash used in investing activities amounted to
$753.4 million. Major areas of expenditure include:
– Telfer project of $666.7 million. (Includes Telfer Deeps

and Pre-Strip Mine costs)

– Exploration and evaluation expenditure of $45.4 million
– Cadia Valley Operations expenditure of $17.7 million
– Cracow expenditure of $17.0 million

Capital expenditure programs were largely financed by debt
raisings. Major movements in the cash flows from financing
activities include:
• Drawdown from financing facilities of:

– Telfer syndicated loan note facility $554.9 million
– Unsecured bank loan $85.0 million
• Repayment of borrowings consisted of:

– $49.1 million gold loan
– $15.4 million finance lease principal
– $22.8 million from US dollar loan.

dividend of 5 cents per share.

Other factors which will impact future results:
• Subsequent to 30 June 2004 Newcrest Mining Limited
announced that it had completed a comprehensive
simplification of its legacy gold and foreign currency
hedging positions. The hedge book, following the
restructure, consists simply of a series of Australian and
US dollar gold forward contracts. The resulting gains and
losses on these contracts have been deferred and will be
recognised over the years of 2005 to 2011 in line with the
underlying production. Refer to the attached subsequent
events Note 11 for more detail.

Statement of Financial Position
The Group is in a sound financial position having completed
the funding required for Telfer. At 30 June 2004 total assets
have increased to $2.6 billion, an increase of $727 million.
The majority of this increase represents the capital
expenditure associated with the Telfer project.

Total liabilities at 30 June 2004 were $1.6 billion, an increase
of $612 million. The Consolidated Entity completed its
drawdown under Telfer funding facilities during the year
resulting in proceeds from borrowings of $554.9 million from
the syndicated loan facility, $85.0 million unsecured bank loan
and $73.1 million increase in finance lease liabilities. Newcrest
Mining Limited concluded the year with gearing (measured
as net debt to net debt-plus-equity) at 49 percent.

Contributed equity increased by $7.2 million during the year
from the issue of shares on conversion of employee options
and the dividend reinvestment plan.

Newcrest Mining Concise Annual Report 2004 57

Statement of Financial Performance

For the year ended 30 June 2004

Note

Sales revenue

Cost of sales

Gross profit

Other revenues from ordinary activities

Exploration costs

Corporate administration costs

Borrowing costs

Net foreign exchange gain/(loss)

Other expenditure

Written down value of assets sold

Provision for surplus foreign exchange contracts

Foreign exchange gain on US dollar borrowing

Provision for hedging contract restructures

Profit from ordinary activities before income tax expense

Income tax expense relating to ordinary activities

Profit from ordinary activities after related income tax expense

Net (profit)/loss attributable to outside equity interest

Net profit attributable to members of the parent entity

Total share issue expenses attributable to members of the parent entity recognised
directly in equity

Total changes in equity other than those resulting from transactions with owners
as owners attributable to members of the parent entity

Basic earnings per share (cents per share)

Diluted earnings per share (cents per share)

Consolidated

2004
$’000

711,389

(474,523)

2003
$’000

607,222

(452,282)

236,866

154,940

5,069

(32,050)

(20,332)

(12,054)

969

(7,535)

(1,042)

10,252

4,673

(9,795)

175,021

(51,090)

123,931

(1,061)

122,870

5,966

(26,760)

(18,960)

(14,975)

(13,001)

(3,738)

(102)

23,951

24,681

(11,681)

120,321

(29,236)

91,085

1,062

92,147

–

(2,714)

122,870

89,433

37.5

37.0

29.6

29.3

The Statement of Financial Performance is to be read in conjunction with the discussion and analysis on page 56 and the notes to the
financial statements set out on pages 61 to 67.

58 Newcrest Mining Concise Annual Report 2004

Statement of Financial Position

At 30 June 2004

CURRENT ASSETS

Cash assets

Receivables

Other financial assets

Inventories

Deferred foreign exchange contract loss

Other

Total Current Assets

NON-CURRENT ASSETS

Receivables

Inventories

Property, plant and equipment

Exploration, evaluation and development

Deferred foreign exchange contract loss

Other

Total Non-Current Assets

TOTAL ASSETS

CURRENT LIABILITIES

Payables

Interest bearing liabilities

Foreign exchange contract liabilities

Provisions

Other

Total Current Liabilities

NON-CURRENT LIABILITIES

Interest bearing liabilities

Foreign exchange contract liabilities

Deferred tax liabilities

Provisions

Other

Total Non-Current Liabilities

TOTAL LIABILITIES

NET ASSETS

EQUITY

Contributed equity

Retained profits

Total parent entity interest

Total outside equity interest

TOTAL EQUITY

Consolidated

2004
$’000

2003
$’000

157,013

109,848

349

40,156

10,774

20,538

101,065

69,009

134

16,808

24,481

26,455

338,678

237,952

34,571

7,863

537,876

1,365,016

30,835

250,748

39,853

8,851

562,042

761,595

65,117

163,606

2,226,909

1,601,064

2,565,587

1,839,016

159,703

181,215

86,229

10,774

8,075

3,342

83,703

35,477

7,800

7,127

268,123

313,322

1,027,592

401,405

30,835

100,699

57,275

81,291

1,297,692

1,565,815

999,772

791,494

200,293

991,787

7,985

999,772

65,117

50,797

49,820

71,528

638,667

953,989

885,027

784,305

93,798

878,103

6,924

885,027

The Statement of Financial Position is to be read in conjunction with the discussion and analysis on page 56 and the notes to the
financial statements set out on pages 61 to 67.

Newcrest Mining Concise Annual Report 2004 59

Statement of Cash Flows

For the year ended 30 June 2004

CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts in the course of operations

Cash payments in the course of operations

Interest received

Borrowing costs paid

Income taxes paid

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment

Proceeds from sale of non-current assets

Exploration and evaluation expenditure

Payments in respect of mine development

Payments in respect of mines under construction

Feasibility expenditure

Borrowing costs paid capitalised to development projects

Payments of research and development costs

Net cash (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings:

• Bank loan note

• Bank loan

Repayment of borrowings:

• US dollar loan

• Loans from bullion banks

• Gold loan

Repayment of foreign exchange contracts

Repayment of finance lease principal

Proceeds from share issues

Share and option issue costs paid

Dividends paid

Net cash provided by financing activities

Net increase in cash held

Cash at the beginning of the financial year

Effects of exchange rates to cash

Cash at the end of the financial year

Consolidated

2004
$’000

2003
$’000

697,710

(419,672)

2,450

(12,127)

(1,552)

608,266

(380,835)

4,860

(15,019)

(18,265)

266,809

199,007

(19,110)

1,940

(45,375)

(9,419)

(647,804)

(17,981)

(15,647)

–

(21,316)

440

(33,340)

(6,449)

(151,425)

(49,706)

(2,895)

(658)

(753,396)

(265,349)

554,862

85,000

(22,755)

–

(49,137)

–

(15,385)

4,234

–

(13,420)

–

(4,178)

(58,262)

(14,153)

(10,415)

256,516

(2,714)

(13,752)

543,399

153,042

56,812

101,065

(864)

86,700

14,365

–

157,013

101,065

The Statement of Cash Flows is to be read in conjunction with the discussion and analysis on page 56 and the notes to the financial
statements set out on pages 61 to 67.

60 Newcrest Mining Concise Annual Report 2004

Notes to the Concise Financial Report

Note 1 Accounting Policies
This Concise Financial Report has been derived from the Consolidated Entity’s full 2004 Financial Report which complies
with the Corporations Act 2001, Australian Accounting Standards and Urgent Issues Group Consensus Views. This Concise
Financial Report has been prepared in accordance with Accounting Standard AASB1039 ‘Concise Financial Report’ and the
relevant provisions of the Corporations Act 2001.

The Concise Financial Report does not and cannot be expected to provide as full an understanding of the financial
performance, financial position and financing and investing activities of the Consolidated Entity as the full Financial Report.

It has been prepared on the basis of historical costs and except where stated, does not take into account changing money
values or fair values of non-current assets.

A full description of the accounting policies adopted by the Consolidated Entity may be found in the Consolidated Entity’s
full Financial Report. These accounting policies have been consistently applied by each entity in the Consolidated Entity and,
except where there is a change in accounting policy as set out in Note 2, are consistent with those of the previous year.

Note 2 Changes in Accounting Policies
The accounting policies adopted are consistent with those of the previous financial year except as follows:

Tax Consolidation

Newcrest Mining Limited is the head entity in the tax consolidated group comprising all the Australian wholly-owned
subsidiaries. The implementation date for the tax consolidated group is 1 July 2003. The head entity recognised all of the
current and deferred tax assets and liabilities of the tax consolidated group (after elimination of intragroup transactions).

The tax-consolidated group has entered into tax sharing and tax funding agreements. The tax consolidated legislation
specifies that unless tax sharing agreements are entered into the head entity and wholly-owned subsidiaries become jointly
and severally liable for the group’s income tax liability. Therefore, Newcrest has elected to enter into a tax sharing agreements
between the head entity and the wholly-owned subsidiaries whereby they are not jointly and severally liable for the group’s
income tax liability resulting in each company being liable for its share of the group’s income tax liability based on a notional
income tax calculation. The effect of the tax sharing agreement is subject to the terms of a Deed of Cross Guarantee, pursuant
to which the Company and subsidiaries party to the Deed have guaranteed any deficiency which might arise in relation to the
Company or any of the subsidiaries party to the Deed on winding up of that entity.

The tax funding agreement requires wholly-owned subsidiaries to make contributions to the head entity for:

• deferred tax balances recognised by the head entity on implementation date, including the impact of any relevant reset tax

cost bases; and

• current tax assets and liabilities and deferred tax balances arising from external transactions occurring after the

implementation of tax consolidation.

Under the tax funding agreement, the contributions are calculated on a ‘stand alone basis’ so that the contributions are
equivalent to the tax balances generated by external transactions entered into by wholly-owned subsidiaries. The contributions
are payable as set out in the agreement and reflect the timing of the head entity’s obligations to make payments for tax
liabilities to the relevant tax authorities. The assets and liabilities arising under the tax funding agreement are recognised as
intercompany assets and liabilities with a consequential adjustment to income tax expense/(benefit).

Newcrest Mining Concise Annual Report 2004 61

Notes to the Concise Financial Report (continued)

Note 3 Revenue from Ordinary Activities

Sales revenue
Sale of gold bullion

Sale of gold/copper concentrate

Total sales revenue

Other revenues
Interest from other persons

Less: interest income capitalised

Gross proceeds from sale of non-current assets

Joint venture management fees

Other revenue items

Total other revenues

Total revenue from ordinary activities

Consolidated

2004
$’000

2003
$’000

144,510

566,879

711,389

3,422

(1,051)

1,940

158

600

5,069

716,458

121,410

485,812

607,222

4,928

–

440

–

598

5,966

613,188

Note 4 Expenses and Losses Included in Profit from Ordinary Activities Before Income Tax Expense

Depreciation of:

Property, plant and equipment

Amortisation of:

Plant and equipment under finance leases

Mine development

Mine leases

Deferred mining

Cadia royalty

Other

(Less)/add: capitalised to inventory on hand

Total depreciation and amortisation

Borrowing costs:

Bank loans

Finance charges on capitalised leases

Other borrowing costs

Less: Capitalised borrowing costs

Total borrowing costs expensed

Other Items:
Operating lease rentals

Government royalties

Research and development expenditure

Provision for:

Employee benefits

Restoration and rehabilitation

Stores obsolescence

Other

Gains/(losses):

Net foreign exchange gain/(loss)

Sales of assets
Sales of assets have given rise to the following profits:

Proceeds from sale of property, plant and equipment

Carrying value of property, plant and equipment sold

Profit on sale of property, plant and equipment

62 Newcrest Mining Concise Annual Report 2004

Consolidated

2004
$’000

2003
$’000

62,816

56,800

8,084
38,974
279
906
975
14
(1,188)

110,860

28,593
6,980
13,033
(36,552)

12,054

7,546
17,748
425

5,395
3,144
363
1,619

6,640

31,936

292

949

966

1,921

99,519

11,726

1,656

4,488

(2,895)

14,975

3,359

15,603

658

6,377

3,454

931

143

969

(13,001)

1,940
(1,042)

898

440

(102)

338

Note 5 Individually Significant Items (Charged)/Credited in Operating Profit from Ordinary Activities Before

Income Tax Expense

Foreign exchange gain on the naturally hedged US dollar (i)

Liability for surplus foreign currency contracts (ii)

Liability for hedging contract restructures (iii)

Total significant items before tax expense

Tax effect of significant items

Total significant items after tax expense

(i) Realised gain on unhedged US dollar loan which was designated as a natural hedge and revalued to a
hedged exchange rate of 0.6902. Unrealised gains and losses upon subsequent revaluation of the loan
to the period end exchange rate are deferred and will be released to profit in line with the payments and
matched against anticipated hedged concentrate sales.

(ii) Opening surplus foreign currency contract provision

Amounts paid in the current year on contracts that matured
Provision written back during the year

Closing surplus foreign currency contracts provision

(iii) Opening balance of hedge restructure provision

Losses recognised during the year
Provision released to income on maturity of contracts

Closing balance of hedge restructure provision

Consolidated

2004
$’000

4,673

10,252

(9,795)

5,130

(1,539)

3,591

4,673

(10,996)
744
10,252

–

(35,656)
(9,795)
501

(44,950)

2003
$’000

24,681

23,951

(11,681)

36,951

(11,085)

25,866

24,681

(76,300)
41,353
23,951

(10,996)

(25,000)
(11,681)
1,025

(35,656)

Note 6 Income Tax
The prima facie tax, using tax rates applicable in the country of operation on profit differs from the income tax provided in the
financial statements as follows:

Income tax expense

Prima facie tax on profit from ordinary activities at 30 percent (2003: 30 percent)

Tax effect of permanent differences:

Overseas exploration

Non-deductible depreciation and amortisation

Non-deductible foreign exchange losses

Other non-deductible items

Research and development allowance

(Over)/under provision for deferred tax liability

Income tax expense attributable to ordinary activities

Consolidated

2004
$’000

52,506

–

136

(840)

(867)

51,090

2003
$’000

36,096

1,027

(1,707)

(6,366)

29,236

Tax Consolidation
Effective 1 July 2003, for the purposes of income taxation, Newcrest Mining Limited and its wholly-owned Australian
subsidiaries have formed a tax consolidated group (refer Note 2).

Newcrest Mining Concise Annual Report 2004 63

Notes to the Concise Financial Report (continued)

Note 7 Dividends

Dividends recognised in the current year by the Company are:

2004 – Dividend paid during the year

Final – ordinary

2003 – Dividend paid during the year

Final – ordinary

Subsequent events

Dividend proposed and not recognised as a liability:(i)

Since the end of the financial year, the Directors declared the
following dividends:

Cents per
share

Total
amount
$’000

Franked/
unfranked

Date of
payment

5.0

16,375

Franked

17 Oct 2003

15,931

Franked

18 Oct 2002

Final – ordinary

5.0

16,428

Franked

15 Oct 2004

(i) The financial effect of this dividend has not been brought to account in the financial statements for the year ended 30 June 2004 and will be

recognised in subsequent financial reports. Dividends proposed will be fully franked at the tax rate of 30 percent (2003: 30 percent).

Dividend franking account
30 percent franking credits are available to shareholders of Newcrest Mining Limited of $10,181,672 (2003: $15,834,290).
The above available amounts are based on the balance of the dividend franking account at year end adjusted for:

(a) franking credits that will arise from the payment of any current tax liability;

(b) franking debits that will arise from the payment of dividends recognised as a liability at year end;

(c) franking credits that will arise from the receipt of dividends recognised as receivables by the tax consolidated group at

year end; and

(d) franking credits that the entity may be prevented from distributing in subsequent years.

The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends. The
dividend declared for 30 June 2004 will be fully franked and utilise approximately $7,041,000 of the franking account balance.

Tax Consolidation legislation
On 1 July 2003, Newcrest Mining Limited and its wholly-owned subsidiaries adopted Tax Consolidation legislation which
requires a tax consolidated group to keep a single franking account. The amount of franking credits available to shareholders
of the parent entity (being the head entity in the tax consolidated group) disclosed at 30 June 2004 has been measured under
the new legislation as those available from the tax consolidated group.

Note 8 Earnings Per Share

Basic earnings per share (cents per share)

Diluted earnings per share (cents per share)

The following reflects the income and share data used in the calculations of basic and diluted earnings per share:

Net profit after income tax

Adjustments:

Net profit/(loss) attributable to outside equity interest

Earnings used in calculating basic earnings per share

Consolidated

2004

37.5

37.0

2003

29.6

29.3

Consolidated

2004
$’000

123,931

(1,061)

122,870

2003
$’000

91,085

1,062

92,147

Weighted average number of ordinary shares used in calculating basic earnings per share:

327,919,903

311,423,514

No. of shares No. of shares

Effect of dilutive securities:

Share options

4,015,926

2,793,263

Adjusted weighted average number of ordinary shares used in calculating diluted earnings per share

331,935,829

314,216,777

64 Newcrest Mining Concise Annual Report 2004

Note 9 Financial Instruments
The Consolidated Entity uses derivative financial instruments in the normal course of business for the purpose of hedging
its future production and sales and managing its commodity, foreign currency and interest rate exposures.

On 5 July 2004, Newcrest Mining Limited announced that it had completed a comprehensive simplification of its gold
and foreign currency hedging positions. The restructure included the elimination of the entire foreign currency book and all
contingent products in the gold hedging book. Please refer to the disclosures in the Subsequent Events Note 11 for the hedge
book position of the Consolidated Entity after the restructuring subsequent to year end.

Refer to the 2004 full Financial Report for the full financial instruments note of the Consolidated Entity as at 30 June 2004.

The Aggregate Net Fair Values of Derivative Financial Instruments as at 30 June 2004

Net fair value of all derivative financial instruments

Gold hedge contracts (i)

Copper hedge contracts (ii)

Foreign currency contracts (iii)

Gold loan swap contracts (iv)

Total

2004
$’000

2003
$’000

(357,800)

182,300

(42,900)

(50,900)

(26,800)

(478,400)

(6,800)

(90,700)

(46,100)

38,700

(i) Gold hedge contracts have been designated against future production and are employed to secure future commodity prices in either A$ or US$

terms. The net fair value includes the fair value of gold lease rate contracts and the associated cumulative gain.

(ii) Copper hedge contracts have been designated against future production and are employed to secure future commodity prices in A$ terms.
(iii) Foreign exchange hedge contracts have been designated against:

• future production and are entered into to secure anticipated future net US$ income into A$; and
• future capital expenditure and are entered into to eliminate exposure to movements in US$ and Euros.

(iv) Gold loan swap contracts are designated against the gold loan and have been entered into to minimise exposure to gold lease rates.

The net unrealised loss positions of the hedge contracts reflect the opportunity cost of the financial instruments relative
to the prevailing market as at balance date. The unrealised loss also reflects the estimated cost of unwinding the financial
instruments in the event that production does not occur as planned, again relative to the prevailing market as at balance date.
Unrealised losses will change over time as underlying market rates change.

Note 10 Segment Information

Geographical Segments (Primary Reporting Format based on location of mine sites)

Telfer (iii) Boddington (ii)
$’000

$’000

Group &
Cracow (v) Unallocated
$’000

$’000

2004

Sales revenue (i)

Other revenue

Total segment revenue

Segment result (i)

Income tax expense

Net profit/(loss)

Segment assets

Segment liabilities

Acquisition of segment assets

Depreciation and amortisation of
segment assets

Other non-cash expenses

Significant revenues/(expenses)
(refer Note 5)

Cadia Valley
Operations
$’000

639,676

639,758

188,312

965,000

445,000

28,875

105,057

7,151

Gosowong (iv)

$’000

42,590

180

42,770

20,279

47,000

7,000

13,972

4,239

289

4,673

–

1,285

–

1,278,000

839,000

631,303

–

523

–

9,000

18,000

1,281

–

(5)

–

23,000

4,000

20,310

–

2004
Total
$’000

711,389

5,069

716,458

175,021

(51,090)

123,931

2,566,000

1,566,000

718,595

29,123

2,999

32,122

(33,570)

(51,090)

(84,660)

244,000

253,000

23,034

1,564

3,086

110,860

10,521

457

5,130

Newcrest Mining Concise Annual Report 2004 65

Notes to the Concise Financial Report (continued)

Note 10 Segment information (continued)

Geographical Segments (Primary Reporting Format based on location of mine sites) (continued)

2003

Sales revenue (i)

Other revenue

Total segment revenue

Segment result (i)

Income tax expense

Net profit/(loss)

Segment assets

Segment liabilities

Acquisition of segment assets

Depreciation and amortisation of
segment assets

Other non-cash expenses

Significant revenues/(expenses)

(refer Note 5)

Cadia Valley
Operations
$’000

579,092

579,096

149,023

976,400

523,800

39,186

95,933

8,131

24,681

Gosowong (iv)

$’000

23,418

198

23,616

2,183

37,900

4,200

4,350

276

1,482

–

420

–

557,400

166,500

328,094

–

Group &
Telfer (iii) Boddington (ii) Unallocated
$’000
$’000
$’000

252

312

8,600

18,500

569

–

(227)

4,652

5,092

9,744

(30,923)

(29,236)

(60,159)

258,716

240,989

25,883

1,389

1,519

2003
Total
$’000

607,222

5,966

613,188

120,321

(29,236)

91,085

1,839,016

953,989

398,082

97,598

10,905

–

12,270

36,951

(i) Segment sales revenue and segment results by mine location includes gold and copper sales at spot prices. Mine results do not include allocation

of hedging and interest costs.

(ii) Operations at Boddington were suspended in November 2001 and the mine was placed on care and maintenance. The Wandoo feasibility study is

currently being updated.

(iii) Operations at Telfer were suspended in September 2000 and this mine was placed on care and maintenance. During the current and prior financial

year, the Telfer mine has been under redevelopment.

(iv) Operations at Gosowong were suspended in April 2003 and this mine was placed on care and maintenance until the development of Toguraci which

recommenced production in February 2004.

(v) There are no operating results or prior period comparatives for Cracow as the mine commenced development during the current financial year.

Geographical Segments (based on location of customers)

Australia – Bullion

Other Asia – Bullion

Japan – Concentrate

Korea – Concentrate

Hedge gains included in revenue

Total Sales Revenue

Sales Revenue from
External Customers

2004
$’000

96,040

42,590

482,913

60,723

29,123

711,389

2003
$’000

97,992

23,418

369,855

111,305

4,652

607,222

Business Segments (Secondary Reporting Format)
The Consolidated Entity operates predominately in one business segment being the gold mining industry and derives its
revenue from the sale of gold and gold/copper concentrate.

66 Newcrest Mining Concise Annual Report 2004

Note 11 Subsequent Events
Subsequent to 30 June 2004, Newcrest Mining Limited announced that it had completed a comprehensive simplification of its
gold and foreign currency hedging positions. The financial effect of this event has not been recognised in the financial
statements.

The restructure of the hedge book included elimination of the entire foreign currency book and all contingent products in the
gold book. The overall purpose of the restructure is to provide greater revenue certainty and to facilitate greater understanding
of the Consolidated Entity’s total business. The assessed mark to market value inherent in the existing hedge book has been
embedded into the price of the new forwards and gold lease rate transactions resulting in the restructure being completed
without any cash outfow, except for a minor credit fee.

The hedge book following the restructure is detailed in Table 1 and consists simply of a series of Australian dollar forwards
and a series of US dollar forwards. The gold loan remains in place. The restructure brings the hedge book into compliance
with the Board policy of using only vanilla hedging instruments. It is also expected the restructured hedge book will meet the
hedge effectiveness criteria of the Australian equivalent of International Reporting Financial Standards dealing with financial
instruments AASB 139 ‘Financial Instruments: Recognition and Measurement’.

The quantity of ounces and the forward prices shown in the new hedge table are fixed. These are the definitive prices that will
be delivered according to the schedule shown and subject only to movement in the floating lease rates.

The accounting treatment of the hedging restructure requires the original hedging products to be accounted for based on their
original maturity dates. As a result an annual adjustment will be required to the Statement of Financial Performance over the
period of the original hedge book. The adjustments are fixed and are of a one-off nature. The schedule of the annual
adjustments is shown in Table 2.

The tables below replace the tables shown in the full Financial Report as at 30 June 2004 in the Financial Instruments
Note 25 (a) Commodity Contracts. Note 25 (b) Foreign Exchange Contracts is now nil as these foreign exchange contracts
have been completely eliminated and no new foreign exchange hedging contracts were entered into.

Table 1 – New Hedge Book

GOLD

04/05

05/06

06/07

07/08

08/09

09/10

10/11

TOTAL

A$ Forwards (ounces)

1,040,002 1,111,998 1,062,002

789,980

615,001

495,001

260,001 5,373,985

A$/ounce

592

594

603

588

636

619

599

US$ Forwards (ounces)

67,500

285,000

344,000

333,000

383,000

277,500

160,000 1,850,000

US$/ounce

333

330

350

341

355

379

413

355

Total Gold Hedging (ounces)

1,107,502 1,396,998 1,406,002 1,122,980

998,001

772,501

420,001 7,223,985

Gold Loan (ounces)

A$/ounce

84,000

68,000

119,000

52,000

527,000

488

Approximately 50 percent of the forwards from July 2006 are subject to floating gold lease rates with an allowance of
1 percent to Newcrest.

COPPER

04/05

05/06

06/07

A$ copper forwards (tonnes)

97,008

94,100

36,000

A$/tonne

3,792

3,138

2,646

Table 2 – Annual Accounting Hedge Book Adjustment to Net Profit

Year

2005
A$M

2006
A$M

2007
A$M

2008
A$M

2009
A$M

2010
A$M

2011
A$M

2012
A$M

Adjustment from hedge book restructure

Adjustment from prior years restructures

Net accounting adjustment

(11)

(6)

(17)

(22)

(11)

(12)

(1)

–

There are no other matters or circumstances which have arisen since 30 June 2004 that have significantly affected or may
significantly affect the operations of the Consolidated Entity, the results of those operations or the state of affairs of the
Consolidated Entity in subsequent financial years.

Newcrest Mining Concise Annual Report 2004 67

Directors’ Declaration

In the opinion of the Directors of Newcrest Mining Limited:

The Concise Financial Report of the Consolidated Entity for
the year ended 30 June 2004 is in accordance with

(a) Accounting Standard AASB 1039 ‘Concise Financial

Reports’;

(b) The financial statements and specific disclosures

included in this Concise Financial Report have been
derived from the full Financial Report for the year ended
30 June 2004;

Company will be able to pay its debts as and when they
become due and payable and the companies and the
parent entity to the Deed of Cross Guarantee described
in Note 30 of the full Financial Report, will together be
able to meet any obligations or liabilities to which they
are, or may become, subject by virtue of the Deed of
Cross Guarantee dated 6 November 1992; and

(d) The financial statements and notes are in accordance
with the Corporations Act 2001, including Sections 296
and 297.

This statement has been made in accordance with a
resolution of the Directors.

Ian R Johnson
Chairman

Anthony J Palmer
Managing Director and Chief Executive Officer

31 August 2004
Melbourne

68 Newcrest Mining Concise Annual Report 2004

Independent Audit Report

To the members of Newcrest Mining Limited

Scope
The Concise Financial Report and Directors’ Responsibility
The Concise Financial Report comprises the Statement
of Financial Position, Statement of Financial Performance,
Statement of Cash Flows, Accompanying Notes to the
Financial Statements and the Directors’ Declaration for
Newcrest Mining Limited (the Company) and the
Consolidated Entity, for the year ended 30 June 2004. The
Consolidated Entity comprises both the Company and the
entities it controlled during the year.

The Directors of the Company are responsible for preparing
a Concise Financial Report that complies with Accounting
Standard AASB 1039 ‘Concise Financial Reports’, in
accordance with the Corporations Act 2001. This includes
responsibility for the maintenance of adequate accounting
records and internal controls that are designed to prevent
and detect fraud and error and for the accounting policies
and accounting estimates inherent in the Concise Financial
Report.

Audit Approach
We conducted an independent audit on the Concise
Financial Report in order to express an opinion on it to the
members of the Company. Our audit was conducted in
accordance with Australian Auditing Standards in order to
provide reasonable assurance as to whether the Concise
Financial Report is free of material misstatement. The nature
of an audit is influenced by factors such as the use of
professional judgement, selective testing, the inherent
limitations of internal control and the availability of persuasive
rather than conclusive evidence. Therefore, an audit cannot
guarantee that all material misstatements have been
detected.

We performed procedures to assess whether in all material
respects the Concise Financial Report is presented fairly in
accordance with Accounting Standard AASB 1039 ‘Concise
Financial Reports’. We formed our audit opinion on the basis
of these procedures, which included:

• testing that the information in the Concise Financial Report

is consistent with the full Financial Report, and

• examining, on a test basis, information to provide evidence
supporting the amounts, discussion and analysis and other
disclosures in the Concise Financial Report that were not
directly derived from the full Financial Report.

We have also performed an independent audit of the full
Financial Report of the Company for the year ended
30 June 2004. Our audit report on the full Financial Report
was signed on 31 August 2004 and was not subject to any
qualification. For a better understanding of our approach to the
audit of the Full Financial Report, this report should be read in
conjunction with our audit report on the full Financial Report.

Independence
We are independent of the Company, and have met the
independence requirements of Australian professional ethical
pronouncements and the Corporations Act 2001. In addition
to our audit of the full and Concise Financial Reports, we
were engaged to undertake the services disclosed in the
notes to the financial statements of the full Financial Report.
The provision of these services has not impaired our
independence.

Audit opinion
In our opinion, the concise Financial Report of Newcrest
Mining Limited complies with Accounting Standard AASB
1039 ‘Concise Financial Reports’.

Ernst & Young

P I Buzzard
Partner

Melbourne
31 August 2004

Newcrest Mining Concise Annual Report 2004 69

Shareholder Information

Capital
Share capital comprised 329,107,931 shares on 31 August 2004.

Shareholder Details
At 31 August 2004 the Company had 22,247 ordinary shareholders.

There were 414 shareholdings with less than a marketable parcel of $500 worth of ordinary shares (based upon a market price
of $14.90 as at 31 August 2004).

Shareholder Breakdown
At 31 August 2004 the shareholder breakdown consisted of the following:

The shareholder base continued to evolve over the year with the international
component of the register growing from 50.3 percent to 52.4 percent. This occurred
as Newcrest transformed its business into one which competes strongly with
its globally based gold peer group.

Newcrest Top 20 Shareholders at 31 August 2004

Name

National Nominees Limited

Westpac Custodian Nominees Limited

JP Morgan Nominees Australia Limited

ANZ Nominees Limited

Citicorp Nominees Pty Limited

HSBC Custody Nominees (Australia) Limited

AMP Life Limited

Queensland Investment Corporation

Cogent Nominees Pty Limited

Westpac Financial Services Limited

IAG Nominees Pty Limited

Cogent Nominees Pty Limited

RBC Global Services Australia Nominees Pty Limited

Citicorp Nominees Pty Limited

Cogent Nominees Pty Limited

Government Superannuation Office

Citicorp Nominees Pty Limited

Westpac Life Insurance Services Limited

Citicorp Nominees Pty Limited

Victorian Workcover Authority

Substantial Shareholders at 31 August 2004

Merrill Lynch Investment Managers

Investor Categories
Ranges

1–1000

1,001–5,000

5,001–10,000

10,001–100,000

100,001 and Over

Total

Investors

13,602

7,664

553

354

22,247

70 Newcrest Mining Concise Annual Report 2004

Units

86,555,952

55,699,862

55,146,703

21,012,149

16,640,152

5,960,310

5,876,954

5,352,351

4,841,676

4,171,222

3,079,959

2,390,615

2,248,342

1,522,094

1,495,000

1,457,101

1,407,145

1,235,974

1,148,372

1,127,012

278,368,945

21,473,122

Securities

5,843,405

15,807,041

3,965,439

8,624,575

294,867,471

329,107,931

Domestic Institutions 30.6%

International Institutions 52.4%

Retail 3.6%

Other 13.4%

Issued Capital %

26.30

16.92

16.76

6.38

5.06

1.81

1.79

1.63

1.47

1.27

0.94

0.73

0.68

0.46

0.45

0.44

0.43

0.38

0.35

0.34

84.59

6.5

Issued Capital %

1.78

4.80

1.21

2.62

89.60

100.00

Voting Rights
Each ordinary shareholder is entitled to one vote for each
share held.

The Company encourages shareholders to express their
views on the conduct of business by speaking at shareholder
meetings or by writing to the Chairman of the Board of
Directors.

Dividends
The Company has declared a fully franked divided of
5 cents per share. The dividend is payable to shareholders
on 15 October 2004. Shareholders registered as at the close
of business on 24 September 2004 will be eligible for the
dividend. A Dividend Reinvestment Plan at market price will
be offered to shareholders.

Share Registry Information
You can do so much more online
Did you know that you can access and even update
information about your holdings in Newcrest Mining Limited
via the internet.

Visit ASX Perpetual’s website www.asxperpetual.com.au
and access a wide variety of holding information, make some
changes online or download forms. You can:
• Check your current and previous holding balances
• Choose your preferred annual report option
• Update your address details
• Update your bank details
• Confirm whether you have lodged your Tax File Number
(TFN), Australian Business Number (ABN) or exemption

US Investor Information
Newcrest may also be traded in the form of American
Depositary Receipts (ADRs). Each ADR represents one
Newcrest ordinary share. The program is administered on
behalf of the Company by The Bank of New York and
enquiries should be directed in writing to: The Bank of
New York, 101 Barclay Street, New York, NY 10286.

ADR holders are not members of the Company but may
instruct The Bank of New York as to the exercise of voting
rights pertaining to the underlying shareholding.

During the year the net movement for ADRs was negative
158,964 and at year end a net 3,490,944 ADRs were
outstanding.

Reporting to Shareholders
Newcrest is committed to clear reporting and disclosure of
the Company’s activities to our shareholders.

• Check transaction and dividend history
• Enter your email address
• Check the share prices and graphs
• Download a variety of instruction forms
• Subscribe to email announcements

You can access this information via a security login using
your Securityholder Reference Number (SRN) or Holder
Identification Number (HIN) as well as your surname (or
company name) and postcode (must be the postcode
recorded on your holding record).

Don’t miss out on your dividends
Dividend cheques that are not banked are required to be
handed over to the State Trustee under the Unclaimed Monies
Act. You are reminded to bank cheques immediately.

Better still, why not have us bank your dividend payments
for you
How would you like to have immediate access to your
dividend payment? Your dividend payments can be credited
directly into any nominated bank, building society or credit
union account in Australia.

Not only can we do your banking for you, but dividends paid
by direct credit hit your account as cleared funds, thus
allowing you to access them on payment date.

Contact Information
You can also contact the Newcrest Mining Limited share
registry by calling 1300 554 474 or from outside Australia
+61 3 9615 9947.

Share Registry contact details are contained in the Corporate
Directory of this report on the inner back cover.

Newcrest Mining Concise Annual Report 2004 71

Five Year Summary

Gold Production (ounces)
Cash costs ($ per ounce)
Total costs ($ per ounce)
Net profit after tax ($’000)
Return on Capital Employed (percent)

761,780
119
268
122,870
9.0

714,377
217
356
92,147
6.6

644,626
253
414
(53,033)
3.7

773,352
290
439
38,154
7.2

998,615
295
441
3,394
11.3

For the 12 months ending 30 June

2004

2003

2002

2001

2000

Gold Production – Newcrest Share (ounces)
Ridgeway
Cadia Hill
Gosowong
Toguraci
Telfer
New Celebration
Boddington

Total

Costs per ounce
By-product basis (NAGIS)

Cash costs ($ per ounce)
Total costs ($ per ounce)

Co-product basis

Gold cash costs ($ per ounce)
Copper cash costs ($ per lb)
Total gold costs ($ per ounce)
Total copper costs ($ per lb)

Expenditure ($’000)
Exploration
Capital

Profit and Loss ($’000)
Sales revenue
Cash flow from operations
Depreciation and amortisation
Income tax (expense)/benefit
Net profit after tax
Basic earnings per share (cents per share)
Dividend paid (cents per share)

Financial Position ($’000)
Total assets
Total liabilities
Shareholders’ equity

438,026
244,261
–
79,493
–
–
–

761,780

119
268

289
0.77
379
1.01

377,539
298,848
37,878
–
–
–
112

714,377

217
356

331
0.75
426
0.96

127,665
258,834
232,297
–
–
–
25,830

644,626

253
414

330
0.86
449
1.17

50,688
300,255
226,900
–
58,374
86,379
50,756

773,352

290
439

349
1.00
466
1.33

9,015
326,035
274,943
–
267,039
70,506
51,077

998,615

295
441

323
0.80
448
1.12

45,375
638,303

38,840
366,127

44,832
210,540

51,421
144,733

65,426
109,011

711,389
266,809
(110,860)
(51,090)
122,870
37.5
5

607,222
199,007
(97,598)
(29,236)
92,147
29.6
5

479,667
90,324
(101,515)
21,383
(53,033)
(19.2)
5

581,306
136,025
(111,733)
(12,087)
38,154
15.6
5

697,487
202,525
(141,413)
7,085
3,394
1.4
5

2,565,587
1,565,815
999,772

1,839,016
953,989
885,027

1,375,989
836,427
539,562

1,216,728
768,529
448,199

1,131,509
718,862
412,647

Return on Capital Employed (percent)

9.0

6.6

3.7

7.2

11.3

Issued Capital (million shares)
Weighted average

Gold Inventory (million ounces)
Reserves
Resources

72 Newcrest Mining Concise Annual Report 2004

328.6

311.4

276.7

244.4

242.5

28
62

28
53

10.4
42

11.4
31

4420 Newcrest Cover 04 6pp 16/9/04 9:52 AM Page 1

Telfer

Corporate Directory

Company Secretary

Bernard Lavery
Level 9
600 St Kilda Road
Melbourne, Victoria 3004
Australia
Telephone: +61 (0)3 9522 5371
Facsimile: +61 (0)3 9521 3564
Email: laveryb@newcrest.com.au

General Manager Corporate Affairs

Peter Reeve
Level 9
600 St Kilda Road
Melbourne, Victoria 3004
Australia
Telephone: +61 (0)3 9522 5339
Facsimile: +61 (0)3 9510 3416
Email: reevep@newcrest.com.au

Stock Exchange Listings
Australian Stock Exchange
(Ticker NCM)
New York ADRs
(Ticker NWCNY)

Share Registry
ASX Perpetual Registrars Limited
Level 4
333 Collins Street
Melbourne, Victoria 3000
Australia
Telephone: 1300 554 474

+61 (0)3 9615 9947
Facsimile: +61 (0)3 9615 9900
+61 (0)3 8614 2909*
*For faxing of Proxy Forms only.

Email: registrars@asxperpetual.com.au
Internet: www.asxperpetual.com.au

ADR Depositary
The Bank of New York
101 Barclay Street
New York, NY 10286
United States of America
Telephone: +1 (212) 815 2218
Facsimile: +1 (212) 571 3050

Other Offices

Brisbane
Exploration Office
Newcrest Mining Limited
Level 2
349 Coronation Drive
Milton, Queensland 4064
Australia
Telephone: +61 (0)7 3858 0858
Facsimile: +61 (0)7 3217 8233

Company Events

27 October 2004
Annual General Meeting at 9.30am
Hyatt Regency Hotel
99 Adelaide Terrace
Perth, Western Australia

Concise Annual Report
This is the Company’s
Concise Annual Report for
2004. The full Financial
Report and Auditor’s Report
are available to members
free of charge upon a request
in writing.

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4420 Newcrest Cover 04 6pp 16/9/04 9:52 AM Page 2

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Newcrest

Newcrest Mining Limited
Concise Annual Report 2004

Section 5
Sustainability and People
Health and Safety
Environment
Human Resources

Section 6
Corporate Governance
Board of Directors
Corporate Governance

Shareholder Information
Five Year Summary
Corporate Directory

38
40
42
43

44
45
46

49
50

56
58
59
60
61
68
69

70
72
IBC

Newcrest – The Sustainable
Resource Business

Section 1
Our Results
Performance in Brief
Chairman’s Review
Managing Director and
Chief Executive Officer’s Report
Newcrest Senior Management
Financial Report

Section 2
Operations
Cadia Valley Operations

Ridgeway Gold/Copper Mine
Cadia Hill Gold/Copper Mine

Toguraci Gold Mine

Section 3
Projects
Telfer Gold/Copper Project
Cracow
Cadia East
Boddington Expansion Project

Section 4
Exploration
Strategy and Review
Mineral Resources and Ore Reserves

2
2
4

5
10
11

12
14
14
16
19

22
24
26
28
29

30
32
34

Newcrest Mining Limited
ABN: 20 005 683 625

Notice of Meeting

Notice is hereby given that the 24th Annual General
Meeting will be held at the Hyatt Regency Hotel,
99 Adelaide Terrace, Perth, Western Australia on
Wednesday 27 October 2004 at 9.30am.