Newcrest Mining Annual Report 2005

FY2005 Annual Report · Newcrest Mining

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Newcrest Mining Limited Concise Annual Report 2005

Contents

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

Section 2 Operations
Telfer Gold/Copper Mine
Ridgeway Gold/Copper Mine
Cadia Hill Gold/Copper Mine
Toguraci Gold Mine
Cracow Gold Mine

Section 3 Projects
Telfer
Ridgeway Deeps
Cadia East
Kencana
Boddington

Section 4 Exploration
Exploration Strategy and Review
Mineral Resources and Ore Reserves

Section 5 Sustainability
Health and Safety
Environment
Human Resources

Section 6 Corporate Governance
Board of Directors
Corporate Governance

Section 7 Financials
Directors’ Report
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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IBC

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Annual General Meeting
The 25th Annual General Meeting of Newcrest Mining Limited will be held at
the Hotel InterContinental, 117 Macquarie Street, Sydney, New South Wales
on Thursday 27 October 2005 at 10.00am.

Newcrest Mining Limited
ABN: 20 005 683 625

Newcrest Locations

Gosowong

Toguraci

Kencana

Nevada

Antaña

Americas

Telfer

Ashburton

Boddington

Operations

Projects

Exploration

Mt Leyshon/Fenian

Cracow

Cadia District
Ridgeway Deeps

Cadia East
Cadia Hill
& Ridgeway

Melbourne

Newcrest Positioning
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.

Strategy
Newcrest maintains a strategy of developing low-cost, long-life and small 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 element of our business building strategy.

04 05

Performance in Brief

• 1,157,520 ounces of gold and 96,785 tonnes of copper produced

• Group cash costs steady at A$124 per ounce

• Total costs reduced to A$245 per ounce

• Telfer project constructed and commissioned

• Cracow project development completed and commissioned

• Ore Reserves increased by 18 percent to 33 million ounces of gold

• Kencana Mineral Resource expanded and project development approved by the Board

• Full year after tax profit was A$136.1 million

• A 5 cent partially franked final dividend declared

• Comprehensive debt restructure completed

• Group overall safety performance deteriorated slightly

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 2005

1,157,520

96,785

576

985.5

379.1

136.1

686

41.3

9.9

12 months to
30 June 2004

761,780

84,758

579

711.4

297.6

122.9

753.4

37.5

9.6

Section 1 Our Results
Newcrest Mining
Concise Annual Report 2005

Group Gold Production
52% Increase

Group Copper Production
14% Increase

Group NAGIS Cash Cost
4% Increase

thousand ounces

thousand tonnes

$ per ounce

3
7
7

5
4
6

4
1
7

2
6
7

8
5
1
1

1,200

1,000

800

600

400

200

100

4
3

0
4

8
6

5
8

7
9

0
9
2

3
5
2

7
1
2

9
1
1

4
2
1

300

250

200

150

100

Profit/(Loss) After Tax
11% Increase

EBIT
35% Increase

$ million

2
.
8
3

)
0
.
3
5
(

2
.
2
9

9
.
2
2
1

1
6
3
1

140

100

-20

-60

8
.
1
8

7
.
3
4

3
.
8
9

7
.
6
8
1

8
2
5
2

300

250

200

150

100

Return on Capital Employed
3% Increase

percent

2
.
7

7
.
3

6
.
6

6
.
9

9
9

Chairman’s Report

The 2004–05 period was another important year for Newcrest
as the Company continued to grow. The commissioning of
two new mining operations, further exploration successes
and the continued re-rating of the Company by the
sharemarket were particular highlights.

After almost two years under construction, the large Telfer
project in Western Australia returned to production in
February 2005. The smaller Cracow mine in Queensland was
also commissioned in November 2004. In combination with
the Company’s existing Cadia Hill and Ridgeway mines in
New South Wales and the Toguraci mine in Indonesia, those
new operations are expected to lift Newcrest’s annual gold
production to around 1.7 million ounces of gold in 2005–06.
This will rise to just under 2 million ounces in 2006–07 when
the Telfer underground and Kencana mines are expected to
become fully operational. Annual copper production is also
expected to reach more than 100,000 tonnes during that time
before settling back under 100,000 tonnes as mining passes
through the initial high-grade copper zones at Telfer.

Ongoing exploration activities during the year also delivered
opportunities to extend further the life of some of the
Company’s existing mines, and potential for further growth
in the future. The Kencana deposit at Gosowong and Cadia
East deposit in the Cadia Valley and some modest
exploration success at the Cracow project all added to the
Company’s gold inventory. Estimated reserves increased from
28 to 33 million ounces of gold, after depletion, and estimated
resources declined from 62 to 61 million ounces of gold.

The Company’s long-term strategy of operating as a
responsible, efficient and low-cost gold and copper producer
has been maintained. Organic growth – bringing new mining
operations into existence through successful exploration and
development rather than the acquisition of existing mines or
companies – which has served Newcrest so well in recent
years will remain key in our strategy.

Key indicators of the success of the Company’s strategy
have been a sustained reduction in its cost of production
and a marked increase in its gold reserves. Newcrest is now
one of the lowest-cost gold producers in the world, and its
gold Ore Reserves place it amongst the ranks of the world’s
major gold companies.

The exploration successes of the past year will ensure that
the Company maintains a pipeline of new projects for the
future. Your Board recognises that the replenishment and
sustaining of existing operations are just as important as
growing through the start-up of new operations. The use of
brownfields exploration in areas where the Company already
has production facilities enables it to bring in incremental or
replacement production with minimum additional capital and
new deposits to be brought into production more quickly
than would be the case at a greenfields site. The Kencana
deposit at Gosowong, which is expected to be in production
by April 2006, is a clear example of that approach. In time,
the Ridgeway Deeps and Cadia East deposits will ensure
continuity as the Ridgeway and Cadia Hill mines move into
their final phases, although that is still some years away.

The Company will increase progressively its expenditure on
exploration over the next few years to maximise the potential
for new discoveries to be made.

Efforts to improve the Company’s financial position are
continuing but have been hampered by a number of factors,
including the current strong resources cycle which has
created a steady upward pressure on costs, and this has
been in clear evidence at the Telfer project. Newcrest has
benefited to a limited extent through improved prices for
copper, but during the same period the gold price, although
generally strong, has remained relatively flat in Australian
dollar terms. Some cost overruns and delays in bringing that
project into production have resulted in the Company
carrying a higher debt burden than had been expected.

Section 1 Our Results
Newcrest Mining
Concise Annual Report 2005

The Company’s long-term strategy of
operating as a responsible, efficient and
low-cost gold and copper producer has
been maintained.

Relative Share Price Performance Index – 5 Year (A$)

NCM Limited

Philadelphia Stock Exchange Gold & Silver Index

ASX 200

500

400

300

200

100

June 00

June 01

June 02

June 03

June 04

June 05

A key aspect of Newcrest’s financial strategy is now to
reduce its debt levels as a matter of priority, but this will
impact in the short-term on the capacity of the Company
to increase dividends.

The strength of the resources sector in Australia has also
resulted in a skills shortage in a number of areas and the
Company is having to work hard to attract and retain people
of an appropriate calibre. Your Board has recognised the
importance of the Company’s human capital and has
strongly endorsed a strategy to retain and enhance the
technical and management skills that have been built up at
Newcrest. A number of initiatives have been introduced
during the year to also attract young people and graduates
to Newcrest. This represents a further investment in the
Company’s future.

Without the continuing efforts and commitment of all people
at Newcrest the progress and achievements of the last few
years could not be sustained. Your Board of Directors
acknowledges and thanks all of the people at Newcrest
for their efforts during the past year.

Ian Johnson
Chairman

Managing Director and Chief Executive Officer’s Report

Overview
In 2004–05, Newcrest became a world-class gold producer
with improving performances in gold and copper production
and an increase in net profit after tax. We continued to
expand our operating platform with the commissioning of the
Telfer and Cracow mines, and our gold reserves inventory
increased by 18 percent to 33 million ounces.

As we look to the year ahead, we remain focussed on our
vision to be a low-cost producer of gold and copper. We will
continue to create shareholder wealth and, at the same time,
maintain our commitment to employees, and to the
communities and the environments in which we operate.

Finance
For the year to 30 June 2005, net profit after tax was up
11 percent to $136.1 million. Net profit after tax, but before
significant items, which provides a better indication of the
underlying business profitability, was up 21 percent to
$148.2 million. The increased profit was primarily as a result
of the start of production at Telfer and Cracow, assisted by
strong copper by-product revenue from Cadia Valley
Operations (CVO). Basic earnings per share increased by
3.8 cents to 41.3 cents.

By year end, our corporate debt restructuring was largely
complete with improved terms and maturity profiles that
better align with Newcrest’s business plan.

Operations
Newcrest now has five operating mines: Cadia Hill,
Ridgeway, Toguraci, Telfer and Cracow, located in four
distinct mineral provinces. Our continuing exploration for
repeat projects in those areas places Newcrest in an
excellent position for strong low-cost gold and copper
production in the future.

We reached an important milestone during the year with the
commencement of commercial production of the large,
redeveloped gold/copper Telfer mine on 1 February 2005.
The commissioning of the two processing trains at Telfer was
delayed, starting in November 2004 for the first train and
February 2005 for the second train. The delay reduced the
expected output for the year, however, the plant is now
achieving expected throughput with metallurgical
performance still being optimised.

Issues relating to metallurgical performance at Telfer are
being addressed through interim measures including reagent
additions and adjustments to the processing plant flow
sheet. Run-of-mine feed to the processing plant is currently
being managed to maintain concentrate quality and this
involves feeding lower-grade ore to the mill. This strategy will
continue until the pyrite circuit is commissioned in January
2006 constraining production.

In Queensland, with our joint venture partner Sedimentary
Holdings, we successfully commissioned the smaller but
higher-grade underground Cracow mine on time and on
budget. The operation began in November 2004 and
production ramped up progressively during the remainder
of the period.

Our three established mines continued to perform well.
The world-class Ridgeway sub-level cave underground mine
again achieved a high productivity level and low cash costs
and continues to be a strong cash contributor to the Group.
Cadia Hill’s robust gold production result was the second
highest in the mine’s seven-year history. After three years of
significantly higher material movement, the North Wall
Cutback is essentially complete. Toguraci, our Indonesian
mine, achieved its first full year of operation and continued
its strong operating performance.

Section 1 Our Results
Newcrest Mining
Concise Annual Report 2005

Newcrest is now positioned as a world-
class gold producer. This has been
achieved through many years of hard
work and dedication on the part of our
management team and workforce.

Project development and growth
Newcrest made significant progress in project development
and growth in 2005 with the commissioning of the
redeveloped Telfer project now well underway and decisions
taken to proceed with three new projects.

Development of the Telfer underground mine has been
slower than anticipated and has been compounded by
labour shortages. By June 2005, development rates were at
levels that should allow the first stoping ore to be produced
in the fourth quarter of 2005–06 and the ramp-up to a full
production rate of 4 million tonnes per annum by December
2006.

The discovery of a third orebody, Kencana, at our Indonesian
operation has added to the longevity of the Gosowong
district. In January 2005, the Board approved development
of an underground mine to exploit the high-grade gold
mineralisation, and development began in the latter part of
the year. First production is expected in the fourth quarter of
2006 and will make a strong financial contribution to the
Group in subsequent years.

The potential to extend Kencana’s mine life beyond its
current six-year estimate looks promising as the deposit
remains open at depth and to the south. Exploration drilling
surrounding the resource envelope has identified
encouraging high-grade intersections.

As knowledge of the Cadia East field increases, Cadia Valley,
which comprises the existing Cadia Hill and Ridgeway mines,
is continuing to emerge as a significant world-class mining
province. Cadia East has the potential to host a large open
pit and underground mine with more than 18 million ounces
of gold and 2.9 million tonnes of copper being estimated as
a Mineral Resource and an initial underground Ore Reserve
estimated at 6.0 million ounces of gold and 0.63 million
tonnes of copper. During 2005 the Board approved the

commencement of the feasibility stage of the underground
portion of this project and mining studies for the open cut
portion.

In December 2004, the Board approved the Ridgeway Deeps
project which is an extension of the Ridgeway orebody.
Development of this project has commenced.

In August 2005, we announced our intention to consider
divestment options for our 22.22 percent interest in the
Boddington Expansion project. Newcrest remains positive
about the future outcomes of the project, however, we prefer
to concentrate our future efforts on projects that we own
100 percent or in which we have majority control.

Exploration and province planning
We remain committed to exploration which we believe is
crucial to sustaining current production levels and future
growth. Brownfields exploration successes, particularly at
Kencana and Cadia East, were the most significant
examples of the success of this strategy during the year.

Newcrest exploration has had great success with resource
discovery throughout the provinces we operate in and we will
continue to focus on maximising the value of the mineral
endowment in these provinces. These endowments include
both existing identified resources and advanced exploration
properties.

To ensure the exploitation of our mineral endowment is
optimised, we have developed a Province Planning strategy
which focusses on:

• converting existing Mineral Resources into Ore Reserves

• the development of potential options for mineral

endowments at existing provinces in order to optimise their
development opportunities.

We plan to convert a significant amount of our Mineral
Resources base into Ore Reserves over the next three years.

Managing Director and Chief Executive Officer’s Report

• sustain and grow the Company’s resource and reserve
inventory by providing adequate funding for brownfields
and greenfields exploration activities

• continue to place real emphasis on continuous

improvement and high achievement consistent with the
Company’s values.

There is no doubt as we enter the 2006 financial year that
Newcrest is now positioned as a world-class gold producer.
This has been achieved through many years of hard work
and dedication on the part of our management team and
workforce. I have great confidence in the future of the
Company and acknowledge the fine contribution of all our
employees who have demonstrated their ability to take on
significant challenges and make a strong and ongoing
contribution in this exciting business.

Tony Palmer
Managing Director and Chief Executive Officer

Sustainability – people and environment
Newcrest is committed to the management and
development of our people, particularly in the areas of
Company values and leadership training. We have
formulated and adopted five key values, which are the
foundation for our business. These values are an important
guide for our employees in the daily conduct of the
Company’s activities.

We are strongly committed to safety and health in the
workplace. Target Zero, the belief that injuries and lost time
are totally preventable, has the ultimate goal of zero injuries
across the business. The Company made significant
progress during the current year, and Target Zero has now
been adopted as a key priority across the Company. Safety
and health is fundamental to our business and I believe we
all have to actively participate in this initiative to ensure zero
injuries becomes a reality.

As a successful resource business it is imperative that we
develop positive, ongoing relationships with our employees,
contractors and the local communities in which we operate,
and that we recognise our responsibility to take a leadership
role in protecting the environment. We have continued our
commitment to integrating sound and responsible
environmental management and reporting into the overall
business culture. In December 2004, we released our first
Sustainability Report in accordance with the Global Reporting
Initiative principles. We intend to develop and refine reporting
in the coming years to address the requirements of our key
stakeholder groups.

Looking to the future

There are a number of major challenges for Newcrest in the
year ahead on which we will maintain a strong focus. We
must complete and commission the remaining stages of the
Telfer project, and consolidate our position following the
recent period of major capital development for the Company.
In particular, we will:

• continue to instil the principles of Target Zero across the

Company

• progressively implement the principles and elements
embodied in the sustainability code endorsed by the
Minerals Council of Australia and known as Enduring
Value, and publicly report our performance against them

• realise the financial returns from recent major capital

development projects

• responsibly manage the Company’s financial position and
manage its cash resources in the most productive manner

Section 1 Our Results
Newcrest Mining
Concise Annual Report 2005

Left: Bernard Lavery,
Tony O’Neill and
Matthew Butlin.

Below left: Dan Wood
and Peter Reeve.

Below right: Jeff Smith
and Paul Hallam.

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

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

Dan Wood
Executive General Manager Exploration, a geologist with over 38
years’ experience in a diverse range of commodities, both in Australia
and overseas, including with BHP.

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

Peter Reeve
General Manager Corporate Development, 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.

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

Paul Hallam
Executive General Manager Development and Projects, has extensive
experience in operational and project development roles in the gold
and metals industries, including a number of years in senior roles with
Battle Mountain, North Limited and Alcoa Limited.

Financial Report

Summary of year’s results
The financial highlights for 2004–05 are summarised in the
following table. Refer to the Discussion and Analysis of the
Financial Statements on page 74 for a detailed review of the
current year results.

Capital management strategy
Newcrest regularly reviews its Capital Management Plan
which addresses issues such as the funding mix and
strategy, available liquidity, dividend policy, gearing and
other financial targets.

During this period Newcrest took the opportunity to
significantly restructure its borrowings to provide more
flexible, lower-cost and longer-dated facilities as well as
increase the amount of liquidity available to the Company.

Net profit after tax before
significant items

2005

2004

$148.2 million

$122.6 million

Net profit after tax

$136.1 million

$122.9 million

Basic earnings per share

41.3 cents

37.5 cents

Return on capital employed

9.9 percent

9.6 percent

Return on members’ equity
(EBIT before significant items)

Return on members’ equity
(net profit after tax)

Gearing
(net debt/net debt + equity)

22.1 percent

18.6 percent

12.1 percent

12.4 percent

55 percent

49 percent

Dividend

5 cents

Net profit after tax increased by 11 percent to $136.1 million
and increased by 21 percent to $148.2 million when measured
before significant items. This latter measure is considered to
be the better indicator of the profitability of the underlying
businesses. Newcrest’s increase in profit resulted principally
from commencement of production at Telfer and Cracow,
assisted by strong copper by-product revenue. Earnings per
share also rose, but return on equity remained at a similar
level.

The financial standing of Newcrest changed substantially
during 2004–05. The Company is positioning itself for the
future with long-life operations low on the cost curve. This will
provide stable cash flows for many years. However, Newcrest
now has a higher level of gearing than anticipated, primarily
due to the delay in start-up of the Telfer project. The focus in
the short term on the capital management strategy is the
reduction of Newcrest’s debt to long-term target levels.

The 2005 Capital Management Plan addressed a number
of important issues.

(a) Restructure of hedge book

A critical part of Newcrest’s long-term financial strategy
was the restructure of the hedge book, which was
completed immediately after the commencement of
the year. The restructure facilitated a number of other
initiatives which have significantly transformed the
structure of Newcrest’s funding.

The hedge book is now made up of simple gold and
copper forwards, gold lease rate swaps and a gold loan
that (except for the gold lease rate swaps) will qualify as
hedges under international accounting standards that
are effective as of 1 July 2005.

The restructure aligned the hedge book with Newcrest’s
Hedging Policy approved by the Board in 2002. This
policy states that hedging is only required to ensure that
Newcrest can meet its financial commitments in times of
low commodity prices, or to ensure the return on a major
capital investment. Therefore, hedging as a percentage
of annual production rates will remain high during the
initial years of production from Telfer but is expected to
reduce over time commensurate with the reduction in
gearing.

Following the hedge book restructure, Newcrest’s focus
switched to ensuring adequate liquidity was in place at
the lowest cost for the completion of the Telfer project
and other capital commitments.

(b) Bilateral loan facilities

Prior to the end of 2004–05 Newcrest completed the
negotiation of a total of US$844 million in five-year
facilities with Australian and foreign banks. These are
bilateral facilities which can be repaid and redrawn at
any time.

Section 1 Our Results
Newcrest Mining
Concise Annual Report 2005

The facilities were the subject of a separate negotiation
with each bank but have similar terms and conditions.
Project style obligations seen in previous Newcrest
financings were removed and replaced by a simple set
of corporate financial covenants.

A number of additional such facilities were completed
after the end of the financial year, making a total of
US$969 million raised with 14 Australian and foreign
banks.

In May 2005, Newcrest issued US$350 million of senior
notes into the North American private placement debt
market. This issue was notable on two accounts – it
was Newcrest’s first venture into the capital markets
as well as its first debt issue in the US. US$325 million
of the notes provide Newcrest with low-cost, long-term
funding over periods between seven and 15 years at
fixed rates of interest averaging approximately
5.6 percent. The balance of US$25 million is for seven
years at floating rates.

The terms and conditions of the issue are similar to
those seen in the Bilateral Loan Facilities.

(d) Repayment and cancellation of existing facilities

Newcrest used the funds raised from the US private
placement debt issue and drawdowns under the bilateral
facilities to repay a number of higher cost funding
facilities. These include the A$575 million Loan Note
Subscription Agreement used to provide the initial
funding for the Telfer project and the A$85 million Loan
Facility Agreement with HSBC Australia, used to fund the
new power generating equipment at Telfer.

(e) Dividends

The Board of Newcrest reviews the results of the
Company each half-year and determines an appropriate
level of dividend, taking into account the level of profits
for the half-year and cash available for payment of the
dividend. The Board also takes into account any
anticipated cash commitments.

Following the achievement of stable cash flows from
Telfer, the intention of the Board is to manage its cash
resources in the most productive manner possible with

a view to establishing a sustainable dividend level. The
Board will then determine in any year whether returns to
shareholders above the sustainable dividend level can
be made, depending on cash availability, debt reduction
requirements and reinvestment opportunities.

Summary
With the five-year bank bilateral facilities and longer-dated US
private placement issue, a more appropriate mix of long and
short-term debt has been achieved. The repayment profile of
this debt complements Newcrest’s business plans. The
majority of Newcrest’s debt is now in US dollars, which
matches the currency in which the Company receives its
revenues.

The successful completion of the funding restructure has
seen:

• a reduction in the margin paid by Newcrest on its funding

• the maturity profile on Newcrest’s debt increased with

bullet maturities between five and 15 years

• the transformation of Newcrest’s banking covenants away
from project style covenants to more general corporate
covenants

• an increase in available liquidity in the medium term

• a diversification of Newcrest’s sources of funding including
banks and capital markets in Australia, the US, Europe and
Japan.

Over the next few years the focus of the capital management
strategy will be on finding the right mix between reinvestment
in existing development projects, reduction of debt and
returns to shareholders.

Direction Commitment Execution

Significant Project Pipeline

A strong focus on replacement and increasing reserves by conversion of existing
resources.
Kencana will commence production in 2006 with low cash costs and producing strong
cash flows.
Cadia East project has potential to be a large-scale, long-life mine utilising established
infrastructure.

Commitment to Building Shareholder Wealth

Value-generating organic growth remains our principal focus.
Improve return on capital employed by optimising the value of existing infrastructure.
A strong commitment to growth that enhances shareholder value.

Focussed and Consistent Strategy

A consistent strategy of organic growth of large-scale, long-life, low-cost operations.
Sustainable resource business maximising returns to shareholders by focussing
on capital efficient growth.
People are key to our strategy.

Skilled and Experienced Management and Board

Extensive mining experience in exploration, project development and operations.
An experienced Board with depth and vision.

Exploration Expertise

Exploration discovery remains our key driver for value-adding growth and for maximising
shareholder returns over the long-term.
A strong track record of discovery.
An objective is to control a number of mining districts to maximise the potential for repeat
discoveries.

Sustainable Development and Management

Safety is paramount – our belief is that all injuries are preventable.
Operation of existing mines and development of new mines in line with best
environmental practice.
A strong commitment to local communities around our operations.

Section 1 Our Results
Newcrest Mining
Concise Annual Report 2005

2Section

Operations

Telfer Gold/Copper Mine Operations

Top: The newly constructed
Telfer processing facility.

Above: Gold/Copper ore at
Telfer being dumped into a
primary crusher.

Right: High-grade gold/copper
concentrate ready for shipment
from Telfer.

Page 13: Milling Tower at the newly
commissioned Telfer project.

Section 2 Operations
Newcrest Mining
Concise Annual Report 2005

Both processing trains have
continued to perform well
mechanically and have
consistently exceeded
nameplate capacity.

The Telfer mine produced 217,740 ounces of gold and 24,628
tonnes of copper. The unit cash costs of production were $135
per ounce with a total cost of production of $266 per ounce.

In 2005–06, the focus for the open pit mine will be on
increasing production rates by expanding the mobile mining
fleet to ensure throughput rates are maintained in the
processing plant. The fleet will be increased by an additional
nine trucks, five of which will be sourced from Cadia Hill.
In the processing plant an emphasis will be placed on
optimising the gravity circuit, improving the quality of
concentrate and the commencement of dump leach irrigation.

Telfer Gold/Copper Mine
The redeveloped Telfer mine was officially opened by the
Premier of Western Australia, the Hon. Dr Geoff Gallop, on
28 July 2005, after the commissioning of two processing
trains in November 2004 and February 2005.

Open pit mining continued to perform strongly during the year
with mobile fleet equipment reliability and productivity rates
maintained at high levels. The movement of 41.7 million
tonnes of material was according to plan. In the earlier part of
the year activity focussed on stockpiling and exposing ore in
preparation for production. In the later part of the year
operations focussed on feeding ore directly to the crusher
and transferring stockpiled material to the crusher. Strong fleet
performance enabled additional waste material to be
delivered to the tailings storage facility for use in the
construction of the tailings dam.

The first processing train was successfully commissioned in
November 2004, only one month after the date nominated in
the original feasibility study schedule. The mechanical
operation of the plant performed well with nameplate
throughput capacity quickly achieved. The second processing
train was successfully commissioned in February 2005. Both
processing trains have continued to perform well mechanically
and have consistently exceeded nameplate capacity.

Some of the ore types treated contained elevated levels of
pyrite which were unable to be depressed in the processing
circuit until a temporary solution was implemented in June
2005. The inability to depress pyrite resulted in the gold feed
grade being maintained at a low level while higher grade ore
was stockpiled. A permanent solution will be implemented
when the pyrite plant is commissioned in January 2006.

Telfer Gold Production
thousand ounces

300

250

200

150

100

2005 Telfer Statistics

Location
Mine type
Material mined
Nominal treatment rate
Tonnes treated
Grade

– gold
– copper
– gold
– copper

Recovery

Production – gold

– copper

Cash cost
Total cost

North-west Western Australia
Open cut
41.7 million tonnes
17.0 million tonnes pa
8.8 million tonnes
0.90 grams per tonne
0.45 percent
85.1 percent
62.3 percent
217,740 ounces*
24,628 tonnes*

$135 per ounce
$266 per ounce

* Includes commissioning production of 31,541 ounces of gold and 2,202 tonnes of
copper. Cash and total costs are calculated excluding commissioning production.

Ridgeway Gold/Copper Mine Operations

Top: A gold pour at Ridgeway.

Right: 4.6km underground conveyor
system for the Ridgeway mine.

Section 2 Operations
Newcrest Mining
Concise Annual Report 2005

Ridgeway Gold/Copper Mine
The Ridgeway underground mine continued its strong
operational performance with high production levels and low
cash costs. The gold and copper mine produced 382,034
ounces of gold (2004: 438,026 ounces) and 42,907 tonnes
of copper (2004: 47,378 tonnes).

The compelling business
case for owner mining is the
estimated reduction in unit
operating costs.

Production rates in the mine and processing plant were
consolidated at 5.6 million tonnes per annum. Business
improvement initiatives implemented included the
commissioning of a high-grade concentrator regrind mill
in the first quarter, which has resulted in a 3 percent
improvement in concentrate grades.

It is anticipated that production rates at 5.6 million tonnes
per annum will be maintained during 2005–06. As expected,
grade will decline with increasing depth. Business
improvement projects will continue with an emphasis
on continued trials to further improve recoveries in the
concentrator and the identification of owner mining
cost-reduction initiatives.

The unit cash costs of production were negative $82 per
ounce (2004: $19 per ounce) with total unit costs of
production of $84 per ounce (2004: $172 per ounce).
Cash costs were negative primarily due to the high by-
product revenue resulting from high copper prices
experienced throughout 2004–05.

Underground ore was sourced from three production levels
within the sub-level cave. The lowest production level is RL
5,155, which is situated 750 metres below the surface. Gold
and copper head grades mined declined as expected with
the increased depth of the orebody. An improved sub-level
cave draw model, which better reflects the draw performance
of the cave, was implemented in the fourth quarter and has
been adopted for all mine planning.

Owner mining commenced on 1 April 2005. The successful
transition involved the acquisition of a mobile underground
fleet and the implementation of a major recruitment and
training program, which resulted in an increase of 120
employees. The compelling business case for owner mining
is the estimated reduction in unit-operating costs combined
with the opportunity to open up a major cost component to
business improvement initiatives.

Ridgeway Gold Production
thousand ounces

500

400

300

200

100

2005 Ridgeway Statistics

Location
Mine type
Material mined
Nominal treatment rate
Tonnes treated
Grade

– gold
– copper
– gold
– copper

Recovery

Production – gold

– copper

Cash cost
Total cost

Central New South Wales
Underground
5.55 million tonnes
5.60 million tonnes pa
5.59 million tonnes
2.55 grams per tonne
0.86 percent
83.4 percent
89.4 percent
382,034 ounces
42,907 tonnes

negative $82 per ounce
$84 per ounce

Cadia Hill Gold/Copper Mine Operations

Top: The Cadia Hill mine moves
around 100 million tonnes of material
each year in haulage such as this.

Right: Cadia Hill crushed ore
stockpile and feed conveyor to
the low-grade processing plant.

Section 2 Operations
Newcrest Mining
Concise Annual Report 2005

Cadia Hill Gold/Copper Mine
The Cadia Hill mine had strong production results following
two years of significant material movements associated with
the North Wall Cutback. The gold and copper mine produced
308,516 ounces of gold (2004: 244,261 ounces) and 29,250
tonnes of copper (2004: 37,380 tonnes).

The unit cash costs of production were $269 per ounce
(2004: $263 per ounce) with total unit costs of production
of $393 per ounce (2004: $435 per ounce). Cash costs were
in line with the previous year because higher by-product
revenue resulting from high copper prices was offset by
increased diesel fuel and steel prices. Lower total unit costs
were the result of lower depreciation charges resulting from
the inclusion of the Cadia East mining reserve into the life-of-
mine depreciation calculation.

Open cut ore was sourced from the main Cadia pit during the
year. The North Wall Cutback and Cutback 1 were completed
while Cutback 2 commenced and advanced strongly over the
period. Material movement of 77.1 million tonnes was below
plan due to primary loading unit and haul-truck availability and
reliability issues. By year end these issues were resolved and
availability returned to contracted levels.

The low-grade concentrator throughput decreased because
of increased unplanned downtime due to higher wear rates,
power failures and processing of harder ore. Trials of a new
collector in the processing circuit resulted in a gold
recovery improvement of 7 percent on a like-for-like basis.

Gold production was
significantly higher due to the
increased grade and recovery
which was partially offset by
lower throughput rates.

Gold production was significantly higher due to the
increased grade and recovery, which was partially offset by
lower throughput rates. Copper production was significantly
lower as ore was sourced solely from the main pit and
contained lower grades than Cadia Extended, which was
mined during 2003–04.

With the completion of the North Wall Cutback, a significant
reduction in tonnes mined in 2005–06 is anticipated. Gold
production is expected to decline as Cutback 2 requires the
treatment of lower-grade stockpiles.

The implementation of a new life-of-mine plan allows for the
smoothing of material mined in the open pit without affecting
total metal production. The continuous business improvement
program will focus on the pursuit of greater efficiencies and
productivity in the open pit.

Cadia Hill Gold Production
thousand ounces

400

300

200

100

2005 Cadia Hill Statistics

Location
Mine type
Material mined
Nominal treatment rate
Tonnes treated
Grade

– gold
– copper
– gold
– copper

Recovery

Production – gold

– copper

Cash cost
Total cost

Central New South Wales
Open cut
77.1 million tonnes
17.0 million tonnes pa
16.5 million tonnes
0.75 grams per tonne
0.21 percent
78.1 percent
85.7 percent
308,516 ounces
29,250 tonnes

$269 per ounce*
$393 per ounce*

* Cost differences compared to June 2005 Quarterly Report are due to year end

adjustments.

Toguraci Gold Mine Operations

Midas and Damar/Kayu Manis pits which
will be rehabilitated on completion.

Section 2 Operations
Newcrest Mining
Concise Annual Report 2005

The discovery and establishment
of a resource at the Kencana
prospect has assured the
longevity of this operation.

Mining from Toguraci will continue until May 2006, with milling
of ore completed by June 2006. The Gosowong mill will
continue with the Toguraci feed gradually being replaced by
the Kencana feed when mining commences in 2006.

PTNHM is active in maintaining strong relationships with
government bodies and the local community. An ongoing
commitment to the local community is maintained with
community development funding of various health,
educational and local business ventures.

Toguraci Gold Mine (Pt Nusa Halmahera Minerals
(PTNHM) a joint venture company owned 82.5 percent
Newcrest and 17.5 percent PT Aneka Tambang)
Toguraci performed strongly in its first full year of operation
with 223,102 ounces of gold (2004: 79,493 ounces)
produced. The cash cost of production was $238 per ounce
(2004: $223 per ounce) with total costs of $270 per ounce
(2004: $280 per ounce). Cash costs were in line with the
mine plan. Toguraci is the second mine to be established
at the Gosowong site.

The Toguraci mine plan outlines the mining of two discrete
pits that exploit four high-grade epithermal shoots. Mining
from the initial Midas pit was completed in September 2004.
The focus during the remainder of the year was on mining the
Damar/Kayu Manis pit. This is the larger pit and involves two
cutbacks, both of which commenced during the year. In order
to minimise disturbance to the area, some of the waste from
the cutback was used to backfill the completed Midas pit.

An additional high-grade shoot was defined to the west of
Damar at Bod during the year and incorporated into the mine
plan. Toguraci is now expected to produce approximately
500,000 ounces of gold during the life of the mine.

The discovery and establishment of a resource at the
Kencana prospect has assured the longevity of this
operation. The Kencana prospect was discovered in 2003
and is located 1 kilometre south of the original Gosowong
pit. The life-of-mine plan is six years but the deposit is open
at depth and to the south, which should further extend the life
of the mine.

Gosowong Area
Gold Production
thousand ounces

300

250

200

150

100

2005 Toguraci Statistics

Location
Mine type
Material mined
Nominal treatment rate
Tonnes treated
Grade – gold
Recovery – gold
Production – gold
Cash cost
Total cost

Halmahera Island, Indonesia
Open cut
15.0 million tonnes
0.25 million tonnes pa
0.25 million tonnes
28.11 grams per tonne

97.8 percent
223,102 ounces

A$238 per ounce
A$270 per ounce

Information stated in the table is on a 100 percent basis.

Cracow Gold Mine Operations

Top: Ore haulage at the Cracow mine.

Above: Roche Mining Jumbo Operator,
Des Motlap, boring an ore development
heading at the Cracow underground mine.

Right: Process Technicians, Kevin Clancy
and Joe Lingley, on the upper mill feed
platform at the Cracow processing plant.

Section 2 Operations
Newcrest Mining
Concise Annual Report 2005

Cracow Gold Mine (a joint venture owned 70 percent
Newcrest and 30 percent Sedimentary Holdings)
Following the exploration success of Newcrest geologists
and a number of years of evaluation, the Cracow project
commenced operation during the year. The epithermal
vein-style gold mineralisation will support a high-grade mine.
First gold was poured at Cracow on 24 November 2004 after
project construction and commissioning were completed
successfully on time and on budget.

During the year decline development totalled 2,047 metres,
with the Royal decline advancing 1,342 metres and the Crown
decline advancing 705 metres.

Access development of the Royal orebody continued
with development ore reached in August 2004 and the first
stope mined in February 2005. Over the year a total of
142.6 kilotonnes of ore was mined comprising 120 kilotonnes
from development and 22.6 kilotonnes from stoping. The
head grades mined and milled showed a good correlation to
the mine plan.

The mill refurbishment program was completed in time for wet
commissioning in October 2004. Key infrastructure items –
the tailings dam, water supply and power line – were
completed in time for the commissioning.

Cracow produced 26,128 ounces of gold during 2004–05 for
Newcrest at a cash cost of production of $363 per ounce with
a total cost of $483 per ounce. Unit costs are expected to
reduce when full mining capacity is reached during 2005–06.

Unit costs are expected to
reduce when mining capacity
is reached during 2005–06.

A revised life-of-mine plan was completed during the year and
now incorporates the Royal, Crown and Sovereign orebodies
with Klondyke North being reviewed. Further delineation
drilling is being carried out on an additional five mineralised
structures. The incorporation of the Sovereign orebody
increased output in the mine plan by 155,000 ounces to over
900,000 ounces of gold and the revised mine plan gives
consideration to increasing mine and mill throughput rates to
360,000 tonnes per annum. The current mine life is nine
years, but identified mineralised structures, in close proximity
to the mine, could provide a source of additional resources
and mine life.

Cracow Gold Production
thousand ounces

2005 Cracow Statistics

Location
Mine type
Material mined
Nominal treatment rate
Tonnes treated
Grade – gold
Recovery – gold
Production – gold
Cash cost
Total cost

Central Queensland
Underground
0.14 million tonnes
0.30 million tonnes pa
0.13 million tonnes
9.68 grams per tonne
89.7 percent
26,128 ounces*

$363 per ounce
$483 per ounce

All numbers are on 100 percent basis except for production and costs which reflect
Newcrest’s 70 percent interest.

* Includes commissioning production of 274 ounces of gold. Cash and total costs

are calculated excluding commissioning production.

Commitment to the Community Gosowong

Above and above right: Assisting local farmers to improve their crops and farming methods.

In 1999, PTNHM’s Special Projects group formed to develop
a community development strategy for the area of the mine’s
influence. In 2001, the Company began specific projects to
help the local villagers develop sustainable business and
infrastructure.

Initially the programs focussed on rebuilding schools,
hospitals and government buildings. These programs also
involved providing teaching aids, text books, desks and
chairs and medical supplies.

To assist in stimulating the local business and economy,
an ongoing system of micro-loans was introduced. These
provide home-based enterprises with interest-free loans and,
in the first 12 months, more than 400 businesses ranging
across fishing, farming, retail and transportation were set up.

More recently the Special Projects group has participated in
the Indonesian Government’s Rice for the Poor (Rashkin)
program, which has been operating for the past nine
months. The Government supplies rice at a greatly reduced
cost, which the Company buys and supplies to local villages.
There are a total of 64 villages in the area and every family
receives approximately 60 kilograms of rice every three
months.

The Company has also been looking at ways of offering
assistance that will provide long-term benefits. As a way of
encouraging local communities to work together, PTNHM has
funded the purchase of four processing plants used in the
production of virgin palm oil. These plants will be set up in
the Malifut and Kao districts and run on a cooperative basis.
The aim is to supply all local needs as well as selling into
other markets in the region.

PTNHM recognises the importance of supporting civil works
as well as stimulating economic development. Two sporting
complexes, which will include facilities for playing soccer,
basketball, volley ball and tennis, as well as indoor sports,
are currently under construction. Another part of this program
involves the upgrading and repair of many of the roads to the
remote villages in the district. This will enable villagers to gain
access to public transport, which has not been available in
the past due to bad road conditions.

PTNHM has an ongoing commitment to working with local
communities to improve infrastructure, support local
businesses, provide venues for leisure activities and create
and support opportunities for further development.

Section 2 Operations
Newcrest Mining
Concise Annual Report 2005

3Section

Projects

Telfer Project

Above: Telfer pyrite plant
currently under construction.

Right: Raisebore Driller,
Cliff Altus, with Raisebore
machine at Telfer.

Far right: Underground
Surveyor, Paul Mitchell, checking
levels at Telfer.

Page 25: Underground Production
Superintendent, Chris Sawyer,
inspecting the excavation hole for
the underground crusher at Telfer.

Section 3 Projects
Newcrest Mining
Concise Annual Report 2005

Telfer Project
A key project development milestone was achieved during
the year with the completion of the first stage of the Telfer
redevelopment. The successful commissioning of the
concentrator marked the start of commercial production from
the open pit mine and will enable Telfer to become one of
Australia’s largest gold mines.

Development work in the second half of the year focussed
on the second stage of the project with construction of the
pyrite plant and ramping up of development on the
underground mine.

Construction of the pyrite plant, which will recover gold from
ore containing elevated levels of pyrite, began in the March
2005 quarter. By year end, work was progressing on schedule
and commissioning was expected by January 2006.

The underground mine is being developed as a sub-level
cave, the optimal mining method for the Telfer Deeps
deposit, to deliver low unit operating costs and the flexibility
to accommodate increased production. The production rate
from the mine at full capacity is expected to be 4 million
tonnes of ore per annum with ore haulage from the mine via
a dedicated shaft.

During the year, development of the underground mine and
a new access decline continued, although development was
adversely affected by the shortage of skilled mining and
maintenance labour. Development rates were below
schedule despite significant efforts to secure the appropriate
resources. By year end, development rates were at levels
that will allow the underground mine to produce first ore in
the fourth quarter of 2005–06.

On 26 May 2005, a fire broke out near an explosives
magazine in a tunnel off the main access decline. While an
explosion caused localised damage to underground
services, all personnel were evacuated safely. Underground
development activities were interrupted for a short period
prior to restoration of underground services.

The major development activities undertaken during the year
for the underground mine were:

• mining of all underground infrastructure excavations for the
crusher, shaft-loading facilities and underground pump
station

• completion of all mine ventilation and refrigeration facilities

• completion of the vertical shaft sinking and lining to the
target depth of 1,127 metres and establishment of shaft
access to the excavations for the underground crushing
and loading stations

• completion of all work equipping the shaft with power,
steelwork and piping for the mine pumping system

• commencement of construction of the winder house and

sky shaft, which is on schedule for the start of the
underground operation.

The total capital of the project, to the completion of the
underground mine, is approximately $1.4 billion. This
increase over the original feasibility estimate was the result
of external influences such as the effects of Cyclone Fay, the
labour shortage resulting from the high levels of construction
activity in the Australian resources sector, and increases to
key material input costs, particularly structural steel.

Location
Ownership
Status
Mineral Resource

Ore Reserve

North-west Western Australia, 450 kilometres inland from Port Hedland
100 percent Newcrest Mining Limited
Project construction underway

26 million ounces gold
0.93 million tonnes copper
18.4 million ounces gold
0.64 million tonnes copper

Ridgeway Deeps Project
The Ridgeway Deeps project involves development of the
mineralised resource below the current Ridgeway mine. The
Board approved the progressive development in December
2004 and construction commenced in early 2005.

The project will extend the depth of the original Ridgeway
mine by up to 300 metres to 1,300 metres below the surface.
This may extend the life of the combined Ridgeway/
Ridgeway Deeps mine to 2018.

Development work has begun on extending the decline and
upgrading the existing ventilation system. An underground
mining contractor has been appointed to continue the
decline development.

The optimal development route in terms of mining method,
scheduling and infrastructure requirements is yet to be
determined. Only development work that is common to all
options is currently being undertaken. During the second
quarter of 2005–06 the pre-feasibility study will be completed,
which will determine the optimal development route to be
further considered in the definitive feasibility study to be
completed in 2006–07.

Ridgeway Deeps Underground Diagram

E
m
0
0
5
0
1

E
m
0
5
2
1
1

E
m
0
0
0
2
1

5,600m RL

5,070m RL Crusher Level

Location

Ownership
Status
Mineral Resource

5,000m RL

Ore Reserve

Central New South Wales, below
existing Ridgeway mine
100 percent Newcrest Mining Limited
Pre-feasibility stage and construction

2.5 million ounces gold
0.28 million tonnes copper
2 million ounces gold
0.23 million tonnes copper

Cadia Valley Province Section

4,400m RL

Ridgeway
73Mt
@
1.75 g/t Au
0.61% Cu

Ridgeway Deeps
5,100m RL
to 4,800m RL

Additional Mineral
Resources Below
Ridgeway Deeps
Mining Block

Existing

Element 1

Element 2

Ridgeway
Deeps

1 km

2 km

Schematic Longitudinal Projection

Section 3 Projects
Newcrest Mining
Concise Annual Report 2005

Cadia East Project
Cadia East is a project located on the eastern flank of the
Cadia Hill mine, within the Cadia mineralised corridor, where
it is proposed that a large open pit and underground gold-
copper mine will be developed. During the year the Board
approved commencement of the feasibility stage of the
project.

The Cadia East deposit is a porphyry zone of gold-copper
mineralisation adjacent to the eastern edge of the Cadia Hill
orebody and extending up to 2.5 kilometres east. The system
is up to 600 metres wide and extends to 1.9 kilometres
below the surface.

The Mineral Resources estimate is 18 million ounces of gold
and 2.9 million tonnes of copper. The resource comprises two
zones – an open pit and an underground. An initial Ore
Reserve estimate for the underground zone of 6 million
ounces of gold and 0.63 million tonnes of copper was
released in June 2005. These estimates are supported by
over 165 kilometres of drilling from more than 168 holes.
The underground zone remains open to the east, west and
at depth.

Mining studies have indicated the potential for an open pit
mine for the large, low-grade deposit near the surface and
an underground mine from 700 metres to 1,500 metres for
the remainder of the deposit, which has a large high-grade
core and lower-grade halo.

The Board approval to spend over $100 million on feasibility
study work is principally for the following areas:

• development of a 7 kilometre underground decline to

access the orebody and 6 kilometres of other development

• additional diamond drilling totalling more than

45 kilometres

• data collection and studies covering geotechnical and
metallurgical areas in order to determine the optimal
mining and processing methods.

There has been a significant increase in activity on-site in the
second half of the year with mobilisation of an owner mining
fleet, recruitment of staff and completion of the box cut and
portal. The decline development started in May 2005 and by
year end had progressed 112 metres.

The proposed development of the Cadia East deposit is a
strong endorsement of the Newcrest strategy of controlling
large mineral districts in order to secure long-life mining
operations and efficiently use the existing infrastructure and
capital.

Location

Ownership
Status
Mineral Resource

Ore Reserve

Central New South Wales, adjacent
to Cadia Hill
100 percent Newcrest Mining Limited
Feasibility stage
18 million ounces gold
2.9 million tonnes copper
6 million ounces gold
0.63 million tonnes copper

Cadia Extended
40Mt
@
0.40 g/t Au
0.22% Cu

Cadia Hill
229Mt
@
0.69 g/t Au
0.16% Cu

Cadia East Open
Pit
300Mt
@
0.46 g/t Au
0.37% Cu

Cadia East
Underground
530Mt
@
0.81 g/t Au
0.33% Cu

Cadia East
Decline

3 km

4 km

5 km

6 km

Mineral Resource Inventory 30 June 2005

Kencana Project
The Kencana project, operated by joint venture company
PT Nusa Halmahera Minerals (PTNHM), is 1 kilometre south
of the original Gosowong open pit. Development of this
deposit will represent the third mine at the Gosowong site.

Studies undertaken during the year indicated the viability of
the underground mine and strong project returns. The Board
approved a phased project implementation subject to
detailed engineering and permitting approvals.

The Kencana project involves underground development of
the high-grade, epithermal gold deposit 125 metres below the
surface. The mineralisation is based on a 2.2 million ounce
Mineral Resource and 0.86 million ounce Ore Reserve.

The proposed cut-and-fill selective mining method is
preferred because of the ground conditions and the higher
recovery rates this method allows. A final decision on the
mining method will be made once the decline is
established and the conditions of the orebody are fully
assessed. Ore will be processed through the existing
processing plant. The initial mine plan envisages recovery
of 1.6 million ounces of gold over six years.

Key activities undertaken during the year include:

• completion of mining studies

• completion of preliminary mine designs

• construction of the access road to the portal

• selection and mobilisation of the underground mining

contractor to the site

• completion of the box cut and initial access decline works.

Total capital cost to first production is estimated at
US$44 million and includes underground development,
mining equipment, decline establishment and construction
of additional infrastructure. First gold production is expected
in the fourth quarter of 2006.

The area surrounding the Mineral Resource and Ore Reserve
boundary remains highly prospective with the resource
remaining open to the south and at depth. The discovery of
additional resources has the potential to significantly extend
the mine’s life.

The Kencana project involves
underground development of
the high-grade, epithermal
gold deposit 125 metres below
the surface.

Location
Ownership

Status

Mineral Resource
Ore Reserve
Project Output

* 100 percent basis.

Halmahera Island, Indonesia
PT Nusa Halmahera Minerals (PTNHM)
82.5 percent owned by Newcrest
Mining Limited
17.5 percent owned by PT Aneka
Tambang
Phased project implementation
underway

2.2 million ounces gold*
0.86 million ounces gold*

1.6 million ounces over six years*

Right: Initial decline works with
ventilation at the Kencana
underground mine in Indonesia.

Section 3 Projects
Newcrest Mining
Concise Annual Report 2005

Boddington Project
At the end of 2001, mining and processing of oxide
resources at the Boddington open pit gold mine ceased.
Since that time the project has remained on care and
maintenance as exploration activities continue.

The substantial bedrock resource beneath the depleted
oxide pits forms the basis of the Boddington Expansion
project. After reassigning management of the project to the
jointly owned BGM Management Company Pty Ltd, a study
team was set up in 2003 to update the feasibility study
completed in 2000.

During the year significant progress was made on key
aspects of mining, geology and ore processing. The Phase II
study (pre-feasibility level) was completed in March 2005.
The Phase III study (feasibility level) commenced early in
2005 and is due for completion in November 2005. A
decision by the joint venture partners to proceed with the
development is expected early in 2006.

Key recent project work includes:

• refinement of an updated process flow sheet

• preparation of detailed capital and operating cost

estimates

• progress towards identification of a suitable EPCM

(engineering, procurement and construction management)
contractor with the objective of commencing early
engineering design work

• identification of strategies to manage long lead items

• assessment and costing of the most appropriate mining

fleet combination.

An active program of consultation with local communities has
been progressing well.

On 5 August 2005, Newcrest announced that it was
considering divestment options for its 22.22 percent interest
in the Boddington Expansion project. Newcrest remains
positive about the project’s future, but wishes to concentrate
on the Company’s wholly- or majority-owned development
projects. The sale process is not expected to delay the
development decision for the project.

On 5 August 2005, Newcrest
announced that it was
considering divestment
options for its 22.22 percent
interest in the Boddington
Expansion project.

Location
Ownership

Status
Mineral Resource

Ore Reserve

* Newcrest share.

130 kilometres south-east of Perth

22.22 percent Newcrest Mining Limited
44.44 percent Newmont Australia Ltd
33.33 percent AngloGold Ashanti
Australia Ltd
Care and maintenance

4.4 million ounces gold*
0.18 million tonnes copper*
2.4 million ounces gold*
0.11 million tonnes copper*

The Local Community Telfer

Community Relations creates opportunities
Building positive relationships with local Indigenous
communities is an important part of Telfer’s focus, and during
the last 12 months significant progress has been made.

Martu Consultative Committee
Consultation is a key component of Newcrest’s commitment
to enhance its relationships with local communities. In 2003,
the Martu Consultative Committee (MCC) was established to
monitor agreements between Newcrest and the Martu and to
consider and recommend ways to develop their relationship.

The Committee meets four times a year to discuss cultural
programs, community development, education and training,
and employment. The MCC’s recommendations provide
crucial community input into the Company’s community
relations initiatives and programs and its contribution is
highly valued.

Skills Register
Telfer’s Community Relations team made the creation of
training and employment opportunities for Indigenous men
and women a priority during the last year. The development
of a Skills Register recording those people who have
indicated an interest in working at the mine has been
initiated. The Register, which already includes 150 names,
lists CVs, education levels and acquired skills and is
constantly updated.

Almost all our Indigenous workforce were initially identified as
prospective employees through the register. There are
currently 25 Indigenous men and women at Telfer, employed
by the Company or various contractors, working in hospitality
and mine operations.

Warren Nardi, a bobcat driver at Telfer, is
sitting in the concentrator’s control room,
where banks of graphics and information-
laden computer screens present the
experienced operators with a wealth of
instant feedback on the status of the gold
production process.

Concentrator Production Supervisor, Chris
Power, likens the tasks at hand to those of
air traffic controllers. ‘It involves intense
mental work, dealing simultaneously with
many operators and sections of the plant.
We often have up to a dozen people all
calling for guidance and assistance at the
same time.’

If Warren is interested in pursuing a career
in this area, training is available. ‘We have
a well-based training package and
prospective operators undertake a three-
month training program which includes
completion of a competency assessment
workbook,’ Chris explains.

Warren is undaunted by the prospect of
what is involved. ‘More study doesn’t scare
me,’ he said. ‘You’ve got to grab an
opportunity when it’s there. And it’s good
to know there’s so much support for me if
I decide to give it a go. It would be a great
job.’

Section 3 Projects
Newcrest Mining
Concise Annual Report 2005

Exploration drilling in
the Gosowong area.

4Section

Exploration

Exploration Strategy and Review

Strategy
Exploration discovery is the key driver for Newcrest’s value-
added growth and to maximise long-term shareholder
returns. The Company’s exploration objective is to control
significant productive mining districts where the economic
benefit of having more than one operating mine can be
realised. It seeks to achieve this by focussing its main
exploration effort on old mining and mineral districts where
the anticipated time to make a discovery can be reduced.

In the 1990s, Newcrest pursued an innovative approach in
Australia – applying well-established porphyry copper mining
concepts and principles to gold exploration. This resulted in
the discovery and development of the Cadia Hill and
Ridgeway deposits, the discovery of the large Cadia East
deposit and, more recently, the redevelopment of Telfer. This
innovative discovery approach continues to be an important
element of the Newcrest exploration strategy.

The advancing mineral discovery maturity of much of the
Western world will have considerable impact on gold and
copper discovery opportunities. Many future mineral
discoveries will be made at depths which typically preclude
open pit mining. Large-scale underground mining techniques
practised in the porphyry copper industry for many years are
likely to be applied at Cadia East and will be utilised in order
to develop future discoveries.

This shift to considering deeper deposits for development
has been acknowledged for some time in Newcrest’s
exploration strategy, which has highlighted since the early
1990s the importance of drilling deep holes.

The focus of Newcrest’s exploration continues to be in
Australia with an emphasis on brownfield regions.
A measured increase in the Americas will continue and
exploration in Indonesia will concentrate on Gosowong.

The Newcrest Board strongly supports the exploration strategy
and acknowledges that time and patience are important
elements of the discovery process and reliable and consistent
exploration funding is a prerequisite for success.

2004–05 Year in Review
The continued success of the Newcrest exploration strategy
was evidenced by the discovery of new prospects. The
highlight was the doubling in size of the high-grade gold
Mineral Resource at Kencana, Indonesia.

Annual exploration expenditure for the year was $46 million, a
significant part of which was spent on brownfields exploration.

Mine Area Exploration

Cadia District, New South Wales

Cadia East
At Cadia East, 4.3 million ounces of gold and 1.1 million
tonnes of copper in an Inferred Mineral Resource category
have been identified as a potential open pit component in
the north-western part of the deposit.

Closer-spaced drilling of this shallower part of the deposit is
providing better definition of the potential open pit Mineral
Resource and will enable the completion of an upgraded
Mineral Resource estimate for this part of the deposit.

Ridgeway
At Ridgeway, further deep drilling was conducted to
investigate the eastern margin of the Inferred Mineral
Resource. Information obtained from this drilling provided
a better understanding of geological structures in this part
of the deposit. The first of several holes was started to
investigate high-grade gold-copper mineralisation
(18m @ 9.6g/t Au and 3.2% Cu) previously recorded below
the mineral resource envelope.

Junction Reefs (earning 51 percent)
Discovery drilling continued at the Junction Reefs joint
venture area, which is located immediately east of
Newcrest’s Cadia tenements in the Cadia mineralised
corridor. Investigations focussed on the Gooley’s and
Warrengong prospects.

Drilling at the Warrengong prospect intersected a long
interval of modest grade, gold-copper mineralisation which
is being investigated by shallower drilling.

Gosowong, Indonesia (82.5 percent)

Gosowong Extended (Kencana Shoot)
The Kencana epithermal gold mineralisation is located
1 kilometre south of the Gosowong open pit.

Discovery and resource definition drilling continued to extend
the Kencana mineralisation to the south-east where it appears
to divide into several mineralised structures. High-grade gold
mineralisation has been intersected in holes extending over a
distance of 650 metres, of which the presently defined Mineral
Resource occupies 400 metres. The mineralisation remains
open to the south-east and at depth.

An updated Mineral Resource of 1.40 million tonnes at
41 grams per tonne of gold for 1.82 million ounces has been
estimated for Newcrest’s share of the north-western, more
closely drilled part of the deposit.

Other Gosowong
Resource definition drilling resulted in a small increase in the
size of the Mineral Resource at Toguraci as a result of the
inclusion of additional mineralisation defined within the Bod
structure located to the west of the existing Damar structure.

Exploration activities in the Contract of Work area north of
Gosowong have been re-established after the easing of local
unrest and illegal mining activities which prevented access
from 1999 until this year.

Telfer District, Western Australia

Telfer regional exploration
Efforts to enhance Newcrest’s resource position around the
redeveloped Telfer mine continued with the exploration

Section 4 Exploration
Newcrest Mining
Concise Annual Report 2005

Greenfields Exploration Expenditure
$23.1M

Total Exploration Expenditure
$46.0M

Western Australia $6.0 million

Eastern Australia $6.9 million

Asia $0.6 million

Americas $6.9 million

Other $2.7 million

Definition Drilling $10.0 million

Mine Exploration $12.9 million

Greenfields $23.1 million

program at Trotman’s Dome. The focus was on two
prospects, Coltrane and Dolphy, which are located
approximately 30 kilometres south-east of Telfer.

Core and reverse circulation percussion drilling programs
were used to investigate several geophysical targets,
including a large IP anomaly at Coltrane, north-west of the
Backdoor prospect, and a possible depth extension to the
previously discovered, higher-grade gold-copper
mineralisation at Dolphy, south of Backdoor.

The first of several holes to investigate the Coltrane anomaly
intersected a narrow, gold-mineralised interval.

The discovery exploration program in 2005–06 will include
ongoing drilling and survey work at Trotman’s Dome and
on the Bemms shear zone at the Grace prospect.

Cracow, Queensland (70 percent)
The strategy of using widely-spaced drilling to discover gold-
mineralised structures was maintained as mine development
continued. This led to the discovery of the Kilkenny structure
under more than 100 metres of cover sediments about 400
metres west of the Crown shoot. The continuing success of
this strategy is leading to an understanding of the distribution
of gold-mineralised structures within 2 kilometres of the
present mine workings.

Resource definition drilling on the Royal and Sovereign
shoots resulted in an upgraded classification for the Royal
Mineral Resource estimate and an initial resource estimate
for the Sovereign. Gold mineralisation for future resource
definition drilling has been identified in the Sterling, Klondyke
North, Roses Pride, Empire, Phoenix and Kilkenny structures.

Exploration expenditure in 2005–06 is expected to be
divided between discovery drilling and resource definition.
The discovery drilling component will continue the strategy
of seeking to identify new gold-mineralised structures.

Greenfields Exploration

Ashburton, Western Australia (earning up to 80 percent)
At Ashburton, the search for economic, sediment-hosted
gold mineralisation continued with exploration focussed on
the Merlin prospect and the Mt Olympus mine in the
Zeus/Styx area. Merlin is in the north-western part of the joint
venture area. Zeus/Styx is in the south-eastern part of the
exploration area, nearly 200 kilometres from Merlin.

Widely-spaced discovery drilling at Merlin identified moderate
gold grades from weathered sediments in several holes. As
has been the case previously, the near surface mineralised
intervals appear to be isolated occurrences. Further drilling
of this prospect is planned for 2005–06.

During the final quarter of 2004–05, IP geophysical surveys
over the Zeus/Styx prospect identified three chargeability IP

anomalies. Reverse circulation percussion drilling will be
undertaken to investigate these targets in 2005–06.

The distribution of identified gold anomalies in the Ashburton
area is scattered over a distance of 200 kilometres.
Newcrest’s strategy is to continue the widely-spaced
discovery drilling of specific prospects while assessing
targets with economic potential that need to be investigated
with a localised, closer-spaced drilling program.

Mt Leyshon/Fenian, Queensland (earning 70 percent)
The Mt Leyshon joint venture was secured during the year
and is adjacent to the existing Fenian joint venture property.
Prior to the cessation of mining at Mt Leyshon, drilling had
identified gold mineralisation below the open pit and in
adjacent areas that warrant further investigation. There is
also scope to investigate the large Mt Leyshon intrusion-
breccia complex.

Discovery deep drilling is being conducted adjacent to the
Mt Leyshon open pit and in the Fenian area. Low-grade gold
mineralisation was intersected in a hole drilled into the
margin of the Mt Leyshon breccia.

Nevada, United States
Newcrest has a number of early-stage exploration projects in
recognised gold districts in Nevada. Discovery drilling
continued at several of these. Possibly significant reverse
circulation percussion drill hole results from the Redlich
epithermal prospect near Tonopah included 4.5m @ 11g/t Au
and 70m @ 0.7g/t Au. Further drilling will continue in 2005–06.

Antaña, Peru (earning 80 percent)
During the year, the first exploration property in South
America was secured with the agreement to earn into the
Antaña gold property in the Puno district of southern Peru.
Discovery reverse circulation percussion drilling began on the
property in late May 2005 to investigate known low-grade
gold mineralisation in rhyolite intrusions. The objective of this
drilling program is to broadly determine the extent of the gold
mineralised alteration system. Follow-up core drilling is
anticipated in 2005–06.

Outlook
The budget strategy for 2005–06 seeks to maintain the
discovery momentum built by Newcrest over the past 15
years. As part of this, a prudent focus on gradually expanding
exploration into high gold-copper resource potential areas in
Australia and the Americas will be continued.

The information in this Report that relates to Exploration results is based on information
compiled by Dan Wood, Executive General Manager Exploration for Newcrest Mining
Limited who is a Member of The Australasian Institute of Mining and Metallurgy and is a
full-time employee of Newcrest Mining Limited. Mr Wood has sufficient experience relevant
to the styles of mineralisation and types of deposits under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of
the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves. Mr Wood consents to the inclusion in the Report of the matters based
on this information in the form and context in which it appears.

Mineral Resources and Ore Reserves

Total in situ Mineral Resources at year end for the Group, net
of mining depletion, is estimated at 61 million ounces of gold
and 4.9 million tonnes of copper, which is a decrease in the
resource of 1 million ounces of gold and 0.1 million tonnes of
copper compared with June 2004.
There were significant increases in the Mineral Resources at
Kencana of 0.91 million ounces of gold and at Telfer in the
Telfer Deeps Western Flank of 0.44 million ounces of gold
in situ.
Total in situ Ore Reserves at year end for the Group, net of
mining depletion, is estimated at 33 million ounces of gold
and 2 million tonnes of copper, which is an increase in the
reserve of 5 million ounces of gold and 0.5 million tonnes of
copper compared with June 2004.
An initial Ore Reserve at Cadia East Underground was
identified with 6 million ounces of gold and 0.63 million
tonnes of copper in situ. There was an increase in reserves
of 0.71 million ounces of gold at Kencana and an increase
of 0.21 million ounces of gold at Cracow.
Mineral Resources and Ore Reserves conform to the
Australasian Code for Reporting Exploration Results, Mineral
Resources and Ore Reserves December 2004 (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 is presented
in the Newcrest Supplementary Information Booklet located
in the Annual Report section on the Company’s website at
www.newcrest.com.au.

Cadia Valley Operations

Cadia Hill
The Cadia Hill Mineral Resource and Ore Reserve were
depleted by 15 million tonnes during the period. A further
9 million tonnes were removed from the Ore Reserve following
an update of the pit design based on revised geotechnical
parameters and updated metallurgical recoveries, metal price,
exchange rate and realisation cost assumptions.
Reconciliation of production results with the Mineral
Resource and Ore Reserve models continues to be in line
with expectation.
The net result of depletions and the pit re-optimisation is a
reduction in the Ore Reserve by 520,000 ounces of gold and
39,000 tonnes of copper.

Cadia Extended
Open pit mining of Cadia Extended is complete. There have
been no changes to the Mineral Resource from the previous
year and evaluation of the remaining Mineral Resource is in
progress.

Cadia Stockpiles
There was a net reduction in the Cadia stockpiles during the
period of 2.8 million tonnes for contained 30,000 ounces of
gold and 6,000 tonnes of copper. This result is net of mining
additions and material reclaimed for processing.

Ridgeway Underground
An updated Ridgeway resource and reserve model was
generated in April 2005 to incorporate additional diamond
drilling recently completed. Diamond drilling within and
around the deposit continues to increase the level of
confidence of the resource estimate. The model includes an
updated comprehensive geological interpretation, updated
metallurgical assumptions and current long-term business
plan assumptions for metal price, exchange rate and
concentrate treatment costs.

The Mineral Resource and Ore Reserve have been depleted
by mining.

A sub-level cave draw simulation model was used to
calculate the material within the Ore Reserve. The draw
simulator has been calibrated against sub-level cave
performance observed to date and full-scale draw marker
trials conducted over the past four years.

Reconciliation of production results with the Mineral
Resource and Ore Reserve models continues to be in line
with expectation.

Cadia East Open Pit
The Mineral Resource remains unchanged for the period. A
significant resource definition drilling program is planned to
upgrade this resource estimate in 2005–06.

Cadia East Underground
No additional drilling or resource work has been completed
in the underground portion of the Cadia East resource during
the year. A decline to provide access for geological and
mining studies was commenced to provide a platform for
future work and to improve the level of confidence in the
resource and reserve estimates.

The Mineral Resource was re-evaluated using updated
pricing assumptions. The Mineral Resource estimate remains
unchanged from June 2000 as only marginal variations were
identified. The resource is predicated on bulk underground
extraction methods and has been reported within conceptual
mining outlines.

An initial Ore Reserve estimate of 6 million ounces gold and
0.63 million tonnes of copper was released to the market in
June 2005. This Ore Reserve is based on pre-feasibility level
mining studies that indicate panel caving is an appropriate
extraction method. The Ore Reserve is based on conversion
of a proportion of the Indicated Resource. Mineralisation
remains open at depth and to the west.

Section 4 Exploration
Newcrest Mining
Concise Annual Report 2005

2005
Gold: 61 million ounces Copper: 4.9 million tonnes

2005
Gold: 33 million ounces Copper: 2 million tonnes

Growth in Mineral Resources

Growth in Ore Reserves

Gold Resource
million ounces
60

Copper Resource
million tonnes

Gold Reserve
million ounces

Copper Reserve
million tonnes

6.0

5.0

4.0

3.0

2.0

1.0

0.0

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Telfer
The Telfer Mineral Resource estimate is a total resource of 26
million ounces of gold and 0.93 million tonnes of copper, net
of mining depletions and an addition to Mineral Resources
from Telfer Deeps.

Open Pit
Mineral Resources and Ore Reserves include Main Dome
and West Dome.

Open pit Ore Reserve is constrained within pit designs based
on optimisation shells generated using the profit algorithm
approach and is net of mining depletion.

The processing of open pit ore commenced in November
2004. However, processing has not yet reached a steady-
state condition with sections of the concentrator still to be
commissioned. Hence no re-evaluation of the Ore Reserve
has taken place since the feasibility study.

Reconciliation between the Ore Reserve and open pit grade
control has been in line with expectation.

Detailed metallurgical sampling and test work is currently
underway to complete the reconciliation between open pit
production and the Ore Reserve.

Underground
Drilling and bulk-sampling exploration and evaluation
continued in the Western Flank of the feasibility study
sub-level cave mine and resulted in an increase to the
underground resource base of 0.44 million ounces of gold
and 0.016 million tonnes of copper.

The Telfer Deeps Ore Reserve is based on the sub-level cave
mining method designed using a series of break even
boundaries for each production level. The Ore Reserve
remains unchanged.

Reconciliation between the Ore Reserve and grade control
from the development has been in line with expectation.

Studies continue to evaluate mining strategies for the
potential extensions to the Telfer Deeps mineralisation in the
Western Flank and below the sub-level cave.

Grade control reconciled production is currently in line with
feasibility study Ore Reserves.

Boddington
The Boddington Expansion Mineral Resource and Ore
Reserve estimates and the Basement Mineral Resource
estimate remain unchanged from the previous year. A
revision of the resource and reserve estimates is currently in
progress and will incorporate amended cost assumptions
arising from the feasibility study update currently in progress.

Gosowong
An updated statement of the Gosowong Province Mineral Resource
and Ore Reserves estimated to 31 December 2004 was released in
March 2005. This release included an initial Ore Reserve estimate for
the underground mine at Kencana and increases in both the
Toguraci Mineral Resource and corresponding open pit Ore Reserve.
Since that time the only material change is restricted to mining
depletion of the Toguraci deposit.

During the 12 months ending 30 June 2005, Newcrest equity of the
Toguraci Ore Reserve was depleted by approximately 215,000
ounces of gold, partially offset by an increase of 135,000 ounces
with the addition of the Bod shoot and remodelling of the Damar
and Kayu Manis shoots. The remaining Ore Reserve is estimated to
be 165,000 ounces of gold including run-of-mine stockpiles. The
remaining resource is to be re-evaluated.

At Kencana no further changes have been made to the Mineral
Resource and Ore Reserve estimates previously stated in March
2005. Drilling is planned from an exploration decline in the near
future to upgrade the Kencana shoot Ore Reserve. Exploration
drilling to the south-east continues to give encouragement that the
Kencana Mineral Resource has strong potential for significant
increases.

Cracow
Remodelling of the Royal and Crown shoots and resource additions
at Sovereign and Klondyke North resulted in an increase in the
Cracow Mineral Resources of 0.12 million ounces, net of mining
depletion, to 0.67 million ounces.

The Sovereign shoot is located 400 metres north of the Crown shoot
and the contribution of Sovereign was 0.14 million ounces.

The additional underground diamond drilling and ore drive
development in the upper part of the Royal shoot has resulted in
minor changes to the global resource figure and a much greater
confidence in the resource estimate. The bulk of the resource has
been converted to an Indicated category, with a Measured Resource
reported for the area bound by the ore development drives from the
2,150mRL to the 2,220mRL where stoping has commenced. Minor
Inferred blocks still remain in under-drilled areas on the orebody
margins.

Reconciliation data from the mine production to the mill estimate
gold production is within 4 percent.

An initial Ore Reserve of 210,000 ounces of gold is based on the
Measured and Indicated Resource of the Royal shoot.

The Ore Reserve is based on budget costs. Early information on
grade, recovery and dilution from the first ore mining areas shows
the Ore Reserve is robust.

2005 Mineral Resources

Measured Resource

Indicated Resource

Inferred Resource

Gold
In situ

Copper Competent
In situ

Person

Gold and Copper
Resources

Dry
Tonnes
(million)

Gold
Grade
(g/t Au)

Copper
Grade
(% Cu)

Dry
Tonnes
(million)

Gold
Grade
(g/t Au)

Copper
Grade
(% Cu)

Dry
Tonnes
(million)

Gold
Grade
(g/t Au)

Copper
Grade
(% Cu)

(million
ounces)

(kilo-
tonnes)

Cadia Valley Operations

Cadia Hill Open Pit

Open Pit Stockpiles

Cadia Extended

190

0.14

Ridgeway Underground

Underground Stockpiles 0.056

Cadia East Open Pit

Cadia East Underground

–

0.71

0.44

0.36

1.9

2.2

–

0.16

0.15

0.20

0.66

0.77

–

Subtotal

Telfer

Open Pit

Telfer Deeps Underground

Satellites

Open Pit Stockpiles

240

0.88

0.24

150

1.3

0.15

–

7.5

160

–

1.0

1.3

–

0.19

0.15

Subtotal

Boddington

Basement

–

210

310

200

0.57

0.60

0.16

–

0.40

1.8

–

0.22

0.62

–

1.0

0.38

–

4.0

–

300

320

–

0.39

1.3

–

0.46

0.69

–

0.17

0.49

5.2

0.17

0.52

4.1

–

0.0039

0.37

0.30

0.93

0.35

640

0.59

0.34

1.6

2.9

4.2

0.13

0.54

0.027

3.2

0.86

0.18

1.7

–

1.1

2.4

0.12

0.44

2.6

0.080

–

250

1.9

0.21

110

1.2

0.15

0.081

1.8

–

0.12

2.1

–

0.022

Boddington Expansion

Subtotal

0.93

0.11

0.93

0.11

0.83

0.12

0.83

0.12

9.0

0.8

–

0.091

0.8 0.091

Gosowong

Toguraci Open Pit
(Inc Stockpiles)

0.038

7.0

Kencana Underground

–

Subtotal

0.038

Cracow

All Resources

Subtotal

0.024

–

7.0

Total Gold and Copper

–

0.17

0.54

0.71

0.55

–

0.035

0.86

0.90

1.4

9.6

–

370

450

0.43

1,100

1,800

3,800

610

300

1.5

930

–

180

–

4.3

5.3

0.22

0.33

0.02

4.4

0.22

1.8

2.0

0.67

61 4,900

1. D. Fredericksen, 2. G. R. Howard, 3. K. P. Gleeson, 4. S. Williams, 5. C. F. Moorhead, 6. G. N. Petersen.

Rounding, conforming to the JORC Code, may cause some computational discrepancies. The gold and copper grades 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 Exploration
Results, Mineral Resources and Ore Reserves.

Newcrest has retained Mr Peter Stoker of Hackchester Pty Ltd to act as 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.

Section 4 Exploration
Newcrest Mining
Concise Annual Report 2005

2005 Ore Reserves

Gold and Copper
Reserves

Cadia Valley Operations

Cadia Hill Open Pit

Open Pit Stockpiles

Ridgeway Underground

Underground Stockpiles

Cadia East Underground

Subtotal

Telfer*

Open Pit

Telfer Deeps Underground

Open Pit Stockpiles

Subtotal

Boddington

Boddington Expansion

Subtotal

Gosowong

–

0.0039

Proved Reserve

Probable Reserve

Dry
Tonnes
(million)

Gold
Grade
(g/t Au)

Copper
Grade
(% Cu)

Dry
Tonnes
(million)

Gold
Grade
(g/t Au)

Copper
Grade
(% Cu)

120

0.056

–

0.82

0.44

1.7

2.2

–

0.18

0.15

0.62

0.77

–

160

0.95

0.25

150

1.3

0.16

–

7.5

150

–

1.0

1.3

–

0.19

0.16

2.4

0.43

0.19

–

165

200

170

–

1.5

0.53

1.1

0.38

1.20

0.41

1.4

2.7

–

0.13

0.50

–

210

1.6

0.20

0.94

0.12

0.94

0.12

0.84

0.13

0.84

0.13

Toguraci Open Pit (Inc Stockpiles)

0.038

Kencana Underground

Subtotal

Cracow

Royal Shoot (Inc Stockpiles)

Subtotal

–

0.04

0.02

7.0

–

7.0

–

0.12

0.53

0.65

0.53

–

Total Gold and Copper

Gold
In situ

(million
ounces)

3.3

0.17

3.1

6.0

3.4

0.24

2.4

0.17

0.71

0.88

0.21

Copper Competent
In situ

Person

(kilo-
tonnes)

220

350

0.43

630

1,200

430

200

640

110

–

2,000

1. K. Smith, 2. G. Dunstan, 3. A. Logan, 4. G. R. Howard, 5. A. G. L. Pratt, 6. S. Williams, 7. J. Woodward, 8. C. F. Moorhead.

Rounding, conforming to the JORC Code, may cause some computational discrepancies. The gold and copper grades totals in the reserves are weighted averages.

Information in this Report which relates to Ore Reserves 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 S. Williams, who is an employee of Newmont Australia Limited, and
consent to the inclusion of material in the form and context in which it appears. P. W. Thompson, Group Technical Manager, 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 Exploration Results, 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, Cadia East Underground, Telfer open
pit depletion, Toguraci, Kencana and Cracow. AMC Consultants is not aware of any issues with the process used which may materially affect the reported Ore Reserve.
Ore Reserves quoted for Telfer Deeps and Boddington are unchanged from the 2004 Report.

* Copper grades and in situ copper tonnes are for concentrator ore only whereas dry tonnes, gold grades and in situ gold ounces also include dump leach ore. A small
proportion (approximately 5 percent) of the Telfer 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 further drilling that is planned will upgrade these Inferred Resources.

Water a Valuable Commodity

Left: Drilling a water
bore at Telfer.

As the remote Telfer mine, in north-western Australia, is
located in the Great Sandy Desert, obtaining sufficient water
for its needs is a significant challenge. The site uses an
average of 37 megalitres per day. The main water consumers
are the processing plant, which uses approximately
53 percent of the daily requirement, dust suppression
around the mine, underground mining and power station
water supply.

A comprehensive groundwater monitoring program has been
established at Telfer to monitor and manage the impact of
groundwater extraction and mining. Its focus is to assess the
drawdown effects of groundwater extraction and to ensure
that groundwater quality is not changing from its original
condition. Studies are also being undertaken to ensure that
sufficient groundwater is identified and available to meet raw
water demands.

Almost all of the raw water required by the mining operation
is obtained from a combination of groundwater, collection
and recycling of inflows into the underground mine and
recycled water from the tailings dam.

The groundwater at Telfer, which is the principal source of the
mine’s raw water, generally lies 40 to 60 metres below the
surface and is accessed via 47 bores located around the
mine site. Bore water is pumped from the production bores
and stored in holding dams and storage tanks.

Groundwater is a finite resource so minimising its use is
imperative to the longevity of the Telfer operation. A strategy
of maximising the use of internal water through recycling
ensures that most of the tailings dam water is returned to the
processing plant. Despite significant evaporation, it is
currently estimated that recycling provides approximately
15 percent of the mine’s daily requirement.

Newcrest has been managing the use of the groundwater
resources in the Telfer area since mining began in 1977.
The monitoring program has revealed no adverse impacts
on the environment, other groundwater users, or the
vegetation in the local area. Water levels in the majority
of the groundwater (aquifer) system have continued to rise
in response to recharges associated with the higher than
average rainfall in recent years, particularly Cyclone Fay in
2004. Groundwater studies have found that the levels have
remained relatively stable with only a slight decline since the
processing plant began operation in November 2004.

Telfer has a sustainable groundwater resource that not only
is essential to Telfer’s operation, it is being managed to
ensure that it lasts beyond the mine’s life by controlling
abstraction rates, minimising water use and recycling of
tailings dam water.

Section 4 Exploration
Newcrest Mining
Concise Annual Report 2005

5Section

Sustainability

Health and Safety

Newcrest continues to make the provision of a safe and
healthy workplace a key priority for employees and
contractors. Our belief is that all injuries are preventable so
our ultimate goal is to have zero injuries across all areas of
the business.

Target Zero – Strategy
Newcrest embarked on the Target Zero initiative during
2003–04 to ensure that we achieve world’s best practice in
health and safety. It was recognised that responsibility for
safety had to be shared broadly within Newcrest with the
involvement of all employees if we were to improve our
performance. It was clear that systems development and
policies alone were not sufficient. Real and sustainable
improvements in safety are achieved only with ongoing
commitment to a change in behaviour and attitude by
every employee and contractor.

Target Zero – Implementation
The Target Zero project has now been fully implemented
across the Group with the following key components of the
strategy implemented at our sites over the last 12 months:

• establishing firm reduction targets for total recordable

injury frequency rates

• training all line managers in safety leadership to highlight

the importance of behaviour and commitment to achieving
our goal

Newcrest’s commitment to
improved safety continued
with the implementation of
Target Zero during 2005.

2004–05 Health and Safety Performance
Newcrest’s Target Zero initiatives are not fully reflected in all
safety and health performance indicators. Improvement
against some indicators was recorded but there was
deterioration against other indicators.

• Most importantly there were no fatalities at any Newcrest

operation during the last 12 months.

• Lost Time Injury Frequency Rate (LTIFR) increased slightly
from 1.9 to 2.2 LTIs per million exposure hours. While this
indicator still compares favourably to the most recent
industry benchmark (Australian Metalliferous Mining Industry
LTIFR of 5 for 2003–04), it is not acceptable to Newcrest.

• training all employees in safety skills designed to improve

• Total Recordable Injury Frequency Rate (TRIFR) reduced

their knowledge of how to work safely

from 14.7 to 13.6.

• introducing a safe behaviour observation program to give
line managers new skills in how to manage the process of
behavioural change

• establishing a safety working group structure to involve a
broader cross-section of employees, line managers and
contractors in improving safety performance

• formulating a new contractor management program for

roll-out during the coming year

• developing a program to increase the reporting of

significant potential near miss incidents.

An essential focus of the program this year has been to
equip our line managers, employees and contractors with
the skills and structures necessary to attain ongoing
improvements in our safety performance.

• The number of Serious Potential Incidents (SPIs) increased
from 18 to 31. This was substantially due to the reporting
of a number of significant potential near miss incidents and
the increase in activity at Cracow, Gosowong and Telfer.

The following key initiatives identified in the Target Zero
strategy will continue to be implemented during the coming
year:

• establish robust safety management systems at our newer

operations – Telfer, Cracow and Kencana

• drive a substantial development in employee and line
management involvement through the safety working
group structures to improve safety performance

• establish a Company-wide safety improvement recognition

program

• roll out the new contractor safety management program to

line managers.

Page 41: Adrian Bullen,
Trainee, Day Crew at Telfer.

Section 5 Sustainability
Newcrest Mining
Concise Annual Report 2005

Above: Frank Reid and Sam Booth inspect the Semi-Autogenous Grinding Mill at Telfer.

LTIFR – Total Group

TRIFR – Total Group

6
4

4
2

0
3

2
2

7
.
3
3

2
.
6
1

1
.
8
2

7
.
4
1

6
3
1

Industry Benchmark
(2000–04 AMMI)

Site Safety Performance

Site

2005

2004

2005

2004

LTIFR

TRIFR

Cadia Valley Operations

1.8

Cracow

Gosowong

Telfer

Exploration

Total Newcrest

7.8

0.0

3.3

1.2

2.2

1.1

0.8

2.6

3.8

1.9

16.1

39.2

8.1

10.5

28.9

13.6

15.8

12.8

14.6

20.3

14.7

In late 2004, the Minerals Council of Australia decided to
replace the Code for Environmental Management with a
more comprehensive code called Enduring Value. Enduring
Value is a sustainability code based on the International
Council on Mining and Metals (ICMM) Framework for
Sustainable Development. Enduring Value adopts the ICMM
Framework principles and elements and provides
implementation guidance in an Australian context. It reflects
the three pillars of sustainability (economic, social and
environmental), with a strong governance framework.
Newcrest became a signatory to Enduring Value in May
2005. As a signatory we have three commitments:

• progressive implementation of the ICMM principles and

elements

• public reporting of site level performance at least once a

year, with reporting metrics self-selected from the GRI, the
GRI Mining and Metals Sector Supplement or self-
developed

• assessment of the systems used to manage key

operational risks.

We have continued our commitment to progressive
rehabilitation. Our Cadia Valley Operations have progressed
to the point where there are significant areas available for
rehabilitation, and this work is currently underway. We have
also commenced rehabilitation trials on a representative area
of tailings. At Gosowong, rehabilitation on the original
Gosowong pit and waste dump is over 80 percent complete,
and rehabilitation has commenced on the Toguraci waste
dumps. In recognition of this excellent work, Gosowong was
given an award for environmental performance by the
Indonesian Departemen Energi dan Sumber Daya Minerals
(Department of Energy and Minerals Resource of the
Republic of Indonesia).

Environment

Newcrest is proud of its environmental performance. We
have integrated care of the environment into our business
culture; it is part of the way we work. However, it is not
enough that we perform to high environmental standards, we
must also make sure that our key stakeholders are aware
that this is the approach at Newcrest. Historically, public
sustainability reporting has not been our strength. This began
to change last year when we produced our first Global
Reporting Initiative (GRI)-based Sustainability Report.

The GRI is a multi-stakeholder process and independent
institution whose mission is to develop and disseminate
globally applicable sustainability reporting guidelines. The
guidelines are for voluntary use by organisations for reporting
on the economic, environmental and social dimensions of
their activities, products and services. The GRI incorporates
the active participation of representatives from business,
accountancy, investment, environmental, human rights,
research and labour organisations from around the world.

Our first GRI-based Sustainability Report covering the
2003–04 financial year was released at the end of 2004.
The Report is hosted on our website and provides a
comprehensive overview of our economic, social and
environmental performance. We chose to present our Report
in electronic format so that we could provide links to
important additional material necessary for an understanding
of our overall performance. We are committed to public
sustainability reporting, and will continue to develop and
refine the Report in coming years to cater for the diverse
requirements of our key stakeholder groups.

Significant Aspects of the Year’s Activities
The number of reported environmental incidents rose
significantly compared with the previous year (71 in 2005;
22 in 2004). A large number of the incidents (28) were
relatively small process spills at Telfer during the
commissioning of the process plant. As we move from
commissioning to operations we are seeing a reduction in
these incidents. There were no Category IV or V incidents in
2005. A more accurate year-on-year comparison can be
made by using the number of hours worked during the year
as an indicator of overall Group activity. On this basis there
was an increase in environmental incidents per million hours
worked from 2.93 in 2004 to 7.12 in 2005.

Section 5 Sustainability
Newcrest Mining
Concise Annual Report 2005

Top: Sediment pond at the toe of the
rehabilitated Gosowong waste dump.

Above: Bird nesting on a marker pole
in the sediment pond.

Left: Seedling planting at Toguraci is
undertaken to return disturbed ground
to its natural state.

Human Resources

Overview
Our people are fundamental to the achievement of
Newcrest’s long-term business strategy.

People play a critical role in Newcrest’s ongoing evolution,
which has seen the development of the current portfolio of
mines and a large increase in the value of the Company in
recent years. Our people have a track record of doing
difficult things well and, as a result, have built a reputation for
excellence and innovation in exploration, development and
operations.

The past year has seen a significant change in the workforce
with a 30 percent increase in the number of employees and
a 9 percent reduction in contractors. The major drivers for
this changing profile were:

• commissioning of the Telfer open pit operation, which

necessitated an increase in the Company’s operational
workforce

effort has built on our highly productive relationship with our
employees, which in turn is built on flexible and efficient
workplace arrangements. In November 2004, the Executive
Committee developed the Newcrest’s People Framework,
which outlines what is fundamental to the Company’s values
and its relationship with its employees – ethically-based
leadership, Newcrest’s values, a focus on the right work at
every level and clearly defined roles.

This approach and the following actions continue the work of
shaping the Company’s culture and organisation to sustain
the implementation of Newcrest’s business strategy.

Embedding Company Values
The Newcrest values were originally developed by
employees at Cadia Valley Operations and have found
strong acceptance around the rest of the Company. The
values are central to the cultural change the Company is
making. The Newcrest Values are:

• demobilisation of a major proportion of the Telfer

• We act with integrity and honesty

construction team

• commencement of owner mining at Ridgeway in April
2005, which resulted in a significant increase in the
number of employees and a corresponding reduction
in the number of contractors

• commencement of the Kencana underground project,
which necessitated an increase in both employees and
contractors at Gosowong.

These changes to the workforce have been made in the
context of the resources sector boom, which has been
fuelled by China’s strong demand growth for raw materials,
and so demand for labour in exploration, mining and projects
has risen sharply. Supply in these areas is relatively fixed, at
least in the short-term, with significant shortages in trades
and in the professions of mine engineering, metallurgy,
geology and geotechnical disciplines.

People Strategy
Newcrest aspires to have the best trained, coordinated and
led staff, all acting in line with Newcrest’s values and all
engaged in delivering the Company’s business strategy. The
people strategy that supports the business strategy is based
on two foundations:

• engaging with and organising our staff to deliver the
business strategy that will release the Company’s full
potential

• having the right people with the appropriate talent and

skills when the Company needs them.

Engaging Our People
Over the year, engagement with Newcrest employees has
focussed on Company values, leadership and ensuring that
roles in Newcrest are clearly defined and add value. This

• We seek high performance in ourselves and others

• We work together

• We value innovation and problem solving

• We care about people.

The values have been reflected in many initiatives, especially
in the priority given to health and safety in the Target Zero
program. The work of extending the values throughout
Newcrest continues.

Implementing Newcrest’s People Framework
The following initiatives accelerated the implementation of the
framework in the second half of 2004–05:

• the Newcrest Leadership Program, a four-day

development course for all leaders and professional staff,
which focussed on Newcrest’s values, Company strategy,
key people systems, leadership and leadership tools. The
program commenced with the Executive Committee
in March 2005 and by August 2005 all General Managers,
Managers, Superintendents and people in senior
professional roles had undertaken the course. The
program will eventually cover all Supervisors

• the redesigned Work Performance System as an online

tool for improving performance through work planning and
feedback

• approval from Newcrest’s Board for a redesigned

remuneration system that reinforces the direction of
Newcrest’s ethically-based high performance culture and
improves retention. These changes, which will take full
effect in 2005–06, will create a much stronger link between
personal work performance and remuneration, including a
closer timing between performance appraisal and pay
adjustments.

Section 5 Sustainability
Newcrest Mining
Concise Annual Report 2005

Having the Right People
Employing people with the appropriate talent and skill sets
within the current labour market has proved challenging. In
some respects Newcrest is in a slightly better position than
companies embarking on major investment projects at a
time when the resources investment boom is intensifying.
Meeting this challenge has focussed close attention on
retention and recruitment. Additional actions taken include:

• implementing a systematic approach to identifying and

investing in the Company’s talent

• ensuring remuneration, working conditions and career

development and opportunities are attractive and
competitive, and that Newcrest’s employees are the
Company’s best advocates

• ramping up Newcrest’s graduate program, following a

successful first year in 2004

• establishing a scholarship program for university students

in the third year of their degree

• increasing the number of apprentices.

Employee Statistics

Employees

Contractors

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

3,503

1,556

1,947

3,203

1,705

1,498

2004

2005

Top left: Marcia Lac, Principal
Business Improvement Advisor
at CVO.

Top centre: Nedra Burns,
Community and Environmental
Liaison Officer at CVO.

Top right: Terry Pilch, Manager
External Services at Gosowong
with Rachel Benton, Project
Manager, Gosowong Exploration.

Bottom left: Marco Zolezzi,
Telfer General Manager.

Bottom centre: Noel Rollo,
Manager Mining at Gosowong.

Bottom right: Don Runge,
Cracow General Manager.

6Section

Section 6 Corporate Governance
Newcrest Mining
Concise Annual Report 2005

Corporate Governance

Board of Directors

Ian R. Johnson
Non-Executive Chairman
Bachelor of Science (Hons) from
the University of New England.
Mr Johnson is a former Chief
Executive Officer of Newcrest
Mining Limited and former Group
Executive of CRA Limited. A Fellow
of AusIMM and a Fellow of the
Australian Institute of Company
Directors, Mr Johnson was
appointed to the Board on
2 September 1998 and elected
Chairman on 28 October 1998. He
is Chairman of the Remuneration
Committee and a member of the
Nomination, Governance and
Ethics Committee.
Other Directorships:
Director of Leighton Holdings
Limited from September 1997
to June 2004.

Anthony J. Palmer
Managing Director
and Chief Executive Officer
Bachelor of Engineering (Hons)
from the University of NSW.
Mr Palmer is a former General
Manager with WMC Ltd with
responsibility for the Olympic Dam
project and former Managing
Director of Normandy Mining Ltd
and Danae Resources. He
commenced as MD and CEO of
Newcrest on 1 December 2001
and is a member of the
Remuneration Committee. Mr
Palmer is a member of the
Australian Institute of Company
Directors, a member of AusIMM
and President of Australian Mines
& Metals Association Inc.

R. Bryan Davis
Non-Executive Director
Bachelor of Science Technology
(Mining) from the University of
NSW.
Mr Davis is a former Executive
Director of Pasminco Limited. A
Fellow of AusIMM and a member of
the Australian Institute of Company
Directors, Mr Davis was appointed
to the Board in March 1998. He is
Chairman of the Safety, Health and
Environment Committee and a
member of the Audit and
Remuneration Committees.
Other Directorships:
Chairman of Bendigo Mining
Limited from September 2004,
Director of OneSteel Limited from
December 2004 and Director of
Coal & Allied Industries Ltd from
September 2000. Previously
Chairman of Indophil Resources
N.L. from November 2000 to April
2005.

Ronald C. Milne
Non-Executive Director
Member of Certified Practising
Accountants Australia.
Mr Milne was appointed to the
Board in November 1995 with a
management career extending
through the manufacturing,
merchant banking and oil
exploration industries. He is
Chairman of the Finance
Committee and a member of the
Remuneration, Audit and Safety,
Health and Environment
Committees.
Other Directorships:
Director of Brambles Industries
Limited from June 1985 to
November 2004 and of Brambles
Industries plc from August 2001 to
November 2004.

Michael A. O’Leary
Non-Executive Director
Bachelor of Science (Technology)
from the University of NSW.
Mr O’Leary is a former Chairman
and Managing Director of Argyle
Diamond Mines and Hamersley
Iron and former Director of CRA
Limited and Rio Tinto plc. A Fellow
of AusIMM and Fellow of the
Australian Institute of Company
Directors, he was appointed to the
Board in September 2003.
Mr O’Leary is a member of the
Remuneration, Finance and Safety,
Health and Environment
Committees.
Other Directorships:
Director of Santos Limited from
October 1996 and former Director
and Deputy Chairman of Bank
West Ltd from May 1996 to
September 2004.

Ian A. Renard
Non-Executive Director
Bachelor of Arts and Master of
Laws Degrees from the University
of Melbourne.
Mr Renard is Chancellor of the
University of Melbourne. A Fellow
of the Australian Institute of
Company Directors, he was
appointed to the Board in May
1998. Mr Renard is Chairman of
the Audit Committee and a
member of the Remuneration and
Nomination, Governance and
Ethics Committees.
Other Directorships:
Director of CSL Limited from
August 1998, Hillview Quarries Pty
Ltd from August 1998 and SP
Australia Networks (Transmission)
Pty Ltd and SP Australia Networks
(Distribution) Pty Ltd from June
2005. Past Director of AMP Limited
from August 1998 to August 2003.

Nora L. Scheinkestel
Non-Executive Director
Bachelor of Laws (Hons) and PhD
from the University of Melbourne.
Dr Scheinkestel is an Associate
Professor at the Melbourne
Business School at the University
of Melbourne and a Fellow of the
Australian Institute of Company
Directors. She was appointed to
the Board in August 2000 with a
management background in
international banking and project
finance. Dr Scheinkestel is
Chairman of the Nomination,
Governance and Ethics Committee
and a member of the
Remuneration and Finance
Committees.
Other Directorships:
Director of PaperlinX Limited since
February 2000, AMP Ltd since
September 2003 and Mayne Group
Limited since July 2005. Former
Chairman of South East Water Ltd
from July 2002 to August 2005.

Corporate Governance

Newcrest’s vision is to maintain its position as a leading
producer of gold and copper, creating shareholder wealth
in a manner that also benefits our employees and the
communities and environment in which we operate. The
Newcrest Board believes that adherence by the Company
and its people to the highest standards of corporate
governance is critical in order to achieve this vision.

Following is a summary of Newcrest’s corporate governance
practices during the year to 30 June 2005, in accordance
with the Principles of Good Corporate Governance issued by
the Australian Stock Exchange (ASX).

Principle 1 – Lay Solid Foundations for Management
and Oversight
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.

The Board Charter defines the Board’s role and responsibilities
in relation to strategic, financial, operational and governance
matters. It makes it clear that the role of the Board is not to
manage the Company but to set, on behalf of the owners, the
strategic direction of the Company and to review, oversee and
monitor the management and performance of the business by
the Company’s management team.

To facilitate the execution of its responsibilities, the Board’s
Committees provide a forum for a more detailed analysis of
key issues. All Directors receive all Committee papers and
minutes. Each Committee reports its deliberations to the next
Board Meeting. The current Committees of the Newcrest
Board, their membership and functions are as follows.

Audit Committee

Members: Ian A. Renard (Chairman), R. Bryan Davis,
Ronald C. Milne
Function: ensures compliance with all accounting and
financial reporting obligations of the Group and reviews
internal financial controls and the role of the internal
and external auditors, including the independence of
the external auditors, and the Company’s risk
management activities.

Remuneration Committee

Members: Ian R. Johnson (Chairman), all Directors
Function: deals with all matters relating to the Company’s
remuneration policy, executive and employee remuneration
levels and remuneration matters generally.

Finance Committee

Members: Ronald C. Milne (Chairman),
Nora L. Scheinkestel, Michael A. O’Leary
Function: formulates and monitors policies and
procedures for treasury practices and considers the
Company’s funding requirements.

Nomination, Governance and Ethics Committee

Members: Nora L. Scheinkestel (Chairman),
Ian R. Johnson, Ian A. Renard
Function: considers candidates for the Board, reviews
corporate governance, compliance processes and
human resources (excluding remuneration) and monitors
the ethical standards of the Company.

Safety, Health and Environment Committee

Members: R. Bryan Davis (Chairman), Ronald C. Milne,
Michael A. O’Leary
Function: monitors the Company’s safety, health and
environmental management practices and ensures that
the Company has appropriate policies in place.

Charters for all Board Committees can be found at
www.newcrest.com.au//corporate.asp.

Section 6 Corporate Governance
Newcrest Mining
Concise Annual Report 2005

The Managing Director, although a member of the
Remuneration Committee, absents himself from all
discussions relating to his remuneration. He is invited to
attend all other Committee meetings. All Directors are
welcome to attend any Committee meetings.

All Directors 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 when necessary. All Directors are
encouraged to visit the Company’s operating sites annually.

Principle 2 – Structure the Board to Add Value
Newcrest’s Board currently comprises seven Directors – the
Managing Director and six Non-Executive Directors. Details
of each Director’s skills, experience and relevant expertise
are set out on page 49.

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, 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 an aggregate value
exceeding 10 percent of Newcrest’s annual revenue. Although
Mr Johnson acted in the role of Executive Chairman for 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 continue monitoring the
independence of each Director and the materiality thresholds
that it has set to ensure that they remain appropriate.

The Board regularly reviews its membership to ensure that it
offers 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
professional advice taken if necessary. Candidates are
initially considered by the Nomination, Governance and
Ethics Committee and then by the full Board. Appointment
of the Managing Director is made by the full Board, with
professional advice taken if necessary. All Board
appointments are subject to shareholder approval. As a
general rule, a Non-Executive Director who has served on
the Board for 12 years or more 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 allocate at least 10 percent of their Director’s fees to the
purchase of Company shares at market prices. The Newcrest

Directors are also permitted to seek independent professional
advice as reasonably required at the expense of the Company.

Principle 3 – Promote Ethical and Responsible
Decision-making

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

Newcrest has formulated and adopted five key values to guide
its employees in the conduct of the Company’s activities.

• 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.

An extensive training program has been conducted to
educate employees in the Newcrest values and to
encourage them to do the right thing in accordance with
these values.

Directors’ and employees’ shareholdings are subject to the
Company’s Share Trading Policy, which restricts the times
when a Director or employee can purchase or sell Company
stock and prohibits short-term trading.

Principle 4 – Safeguard Integrity in Financial Reporting
Newcrest’s Chief Executive Officer and Executive General
Manager Finance provide written statements to the
Newcrest Board, in relation to the half year to 31 December
and the financial year, that the Company’s financial reports
present a true and fair view of the Company’s financial
condition and operational results and are in accordance
with relevant accounting standards. The Audit Committee is
given further assurance regarding the integrity of the
Company’s control systems by the internal audit team, led
by the General Manager Risk and assisted by KPMG, who
provide a majority of the internal audit reports.

The Newcrest Audit Committee comprises three Non-
Executive independent Directors. The Committee’s Charter
is set out on the Company’s website.

Ernst & Young provides the Audit Committee with a
confirmation of its independence for each financial year.
During the reporting year Ernst & Young did not perform any
non-audit services. The Newcrest policy on auditor
independence sets out guiding principles to avoid
circumstances where the independence of the Company’s
auditors may be impaired, namely where:

Corporate Governance

Principle 4 – Safeguard Integrity in Financial Reporting
(continued)
• the non-audit services would normally be subject to

scrutiny as part of the external audit process

• the fees for the non-audit services would be considered

significant compared to the audit fees

• the non-audit services could be considered to be in

conflict with the role of the external auditor, by their nature
or by their means of compensation.

Principle 5 – Make Timely and Balanced Disclosure
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
this occurs. Company information considered to be material
is announced immediately through the ASX. Key
presentations given by Company personnel to investors and
institutions are also lodged with the ASX.

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

Principle 6 – Respect the Rights of Shareholders
Newcrest’s General Manager Corporate Development
is charged with the responsibility to ensure effective
communication with shareholders. This is achieved through:
• complying with ASX listing rules and reporting

requirements

• webcasting half year and full year financial results and

quarterly report presentations
• ensuring continuous disclosure
• holding an accessible and informative Annual General

Meeting

• posting on the Company’s website all other ASX
announcements including analysts’ briefings and
presentations by the Company to public forums.

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. The Newcrest Chairman encourages shareholder
questions at the Company’s Annual General Meeting and
shareholders unable to attend are given the opportunity to
submit questions to the Chairman prior to the meeting.

Principle 7 – Recognise and Manage Risk
The Board recognises that risk management and compliance
are fundamental to sound management and that oversight of
such matters is a key responsibility of the Board. The
Company has a formal Risk Management Policy approved by
the Board and a comprehensive reporting system which
seeks to identify, at the earliest opportunity, any significant
business risks.

Section 6 Corporate Governance
Newcrest Mining
Concise Annual Report 2005

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

These reporting and control mechanisms underpin written
certifications given by the Managing Director and Executive
General Manager Finance to the Board each half year that
the Company’s financial reports fairly reflect its financial
condition and operational results, 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.

Principle 8 – Encourage Enhanced Performance
The Company has in place a performance appraisal and
remuneration system for Executives designed to encourage
performance. Further details regarding the Newcrest
performance management system for the period 2004–05
are set out in the Remuneration Report on pages 59–72.
The Company also receives an annual confidential market
report benchmarking Board and Company performance
and standing, relative to a peer group.

Principle 9 – Remunerate Fairly and Responsibly

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).
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
determined that the practice of providing retirement benefits
be discontinued, and that all benefits accrued as at
December 2003 were frozen at that date.

Remuneration of the Non-Executive Directors is fixed rather
than variable. It is determined so that Board membership of
an appropriate calibre is maintained and is in accordance
with 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 align Directors’ personal interests with
shareholders’ interests.

From time to time individual Directors may be asked by the
Board to undertake extra duties, usually involving their
specialist skills or knowledge, to assist the Board to
monitor, review or direct key aspects of the Company’s
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.

Executive Remuneration
The Board has a formal Remuneration Policy in place which
defines and directs the Company’s remuneration practices.
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 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.

Details of these policies are set out in the Remuneration
Report on pages 59–72.

Principle 10 – Recognise the Legitimate Interest of
Stakeholders
Newcrest has a formal Code of Conduct which sets out 12
standards for appropriate ethical and professional behaviour
for employees and Directors of the Company, and which
confirms the values that underpin all of Newcrest’s
relationships with stakeholders.

Sustainability is an important part of Newcrest’s vision to
develop successful mining operations through balancing
economic prosperity, environmental quality and social
responsibility. Newcrest is a signatory to the AMI Code for
Environmental Management (2000). A Sustainability Report
detailing the Company’s environmental and social performance
is prepared each year. A copy of the Report can be found on
the website at www.newcrest.com.au//sus_report.asp.

The Corporate Governance section and the underlined items can be
found at www.newcrest.com.au//corporate.asp.

Concise Financial Report
For the year ended 30 June 2005

Directors’ Report

Remuneration Report

Auditor’s Independence Declaration Statement
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

55
59
73

74
76
77
78
79
88
89

The 2005 Concise Financial Report has been derived from Newcrest
Mining Limited’s 2005 full Financial Report. The financial statements
included in the Concise Financial Report cannot be expected to provide
as full an understanding of Newcrest Mining Limited’s performance,
financial position and financing and investing activities as provided by
the 2005 full Financial Report. A copy of the full Financial Report,
together with the Independent Audit Report, is available to all
shareholders upon request.

Section

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

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 2005 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
Acting Chairman since 1 August 2005

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. Details of the
Directors’ qualifications, experience and special
responsibilities appear in the Corporate Governance section
on page 49.

Company Secretary
Bernard J. Lavery – Bachelor of Laws and Bachelor of
Jurisprudence.

Mr Lavery has been the Company Secretary of Newcrest
Mining Limited for nine years.

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 2005 after income tax and outside equity interest
amounted to $136.1 million (2004: $122.9 million).

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 2004 of 5 cents per
share, amounting to $16.5 million was paid on 15 October
2004.

• Final dividend franked to 49 percent for 30 June 2005 of
5 cents per share, amounting to approximately $16.5
million has been declared and will be paid on 14 October
2005 to shareholders registered by close of business on
23 September 2005 (refer Note 6).

Operating and Financial Review

Overview
The 2004–05 year marked the transition of Newcrest to a truly
world-class gold producer with the Company’s future
production now underpinned by two long-life and low-cost
centres, Cadia Valley and Telfer, supported by the higher
grade Cracow and Gosowong fields. Importantly, Newcrest
moved to a larger operating platform with the commencement
of commercial production from the Telfer open pit mine and
the Cracow mine.

As foreshadowed last year, significant additions were made
to Newcrest’s Ore Reserves inventory. Year end gold
reserves stood at 33 million ounces, an increase of 18
percent as compared with corresponding gold reserves this
time last year.

Corporate debt restructuring is largely complete with much
improved terms and debt maturities aligned with Newcrest’s
business plans.

Directors’ Report

Operating Results for the Year
Large capital investment in the lead-up to the commissioning
of the Telfer project and the initial copper concentrate sales
were important milestones for Newcrest in 2004–05. During
this period Newcrest took the opportunity to significantly
restructure its borrowings to provide more flexible, lower-cost
and longer-dated facilities as well as increase the amount of
liquidity available to the Company.

The financial highlights for 2004–05 are summarised in the
following table. Refer to the Discussion and Analysis of the
Financial Statements in the Concise Accounts for a detailed
review of the current year results.

Net profit after tax
before significant items

2005

2004

$148.2 million

$122.6 million

Net profit after tax

$136.1 million

$122.9 million

Basic earnings
per share

Return on members
equity (EBIT before
significant items)

41.3 cents

37.5 cents

22.1 percent

18.6 percent

Return on members
equity (Net profit after tax)

Gearing
(net debt/net debt + equity)

12.1 percent

12.4 percent

55 percent

49 percent

Net profit after tax increased by 11 percent to $136.1 million
and increased by 21 percent to $148.2 million when
measured before significant items. This latter measure is
considered to be a good indicator of the profitability of the
underlying businesses. Newcrest’s increase in profit resulted
principally from commencement of production at Telfer and
Cracow, assisted by strong copper by-product revenue.
Earnings per share also rose but return on equity remained
at a similar level.

Further information on the operating results are included in
the Chairman’s Report, Managing Director and Chief
Executive Officer’s Report and the Financial Review section
of the Annual Report.

Review of Financial Condition
The financial standing of Newcrest changed substantially
during 2004–05. The Company is positioning itself for the
future with long-life operations low on the cost curve. This will
provide stable cash flows for many years. However Newcrest
now has a higher level of gearing than anticipated primarily
due to the delay in the start up of the processing plant at
Telfer. The Capital Management Plan focus in the short-term is
on reducing debt to long-term target levels. With the five-year
bank bilateral facilities and longer-dated US private placement
issue, a more appropriate mix of long-term and short-term
debt has been achieved. The repayment profile of this debt
complements Newcrest’s business plans. The majority of
Newcrest’s debt is now in US dollars, which matches the
currency in which the Company receives its revenues.

The successful completion of the funding restructure has
seen:

• a reduction in the margin paid by Newcrest on its funding

• the maturity profile on Newcrest’s debt increased with

bullet maturities between five and 15 years

• the transformation of Newcrest’s banking covenants away
from project style covenants to more general corporate
covenants

• an increase in available liquidity in the medium term

• a diversification of Newcrest’s sources of funding including
banks and capital markets in Australia, the US, Europe
and Japan.

The various financings that occurred during 2004–05
demonstrate that Newcrest’s credit position had substantially
improved to a sustainable investment grade rating. The key
to maintaining this credit standing will be a reduction in
gearing levels to the more modest levels being targeted by
the Company. This should be achievable given the strong
cash flow forecast from Telfer and other operations. Over the
next few years the focus of the Capital Management Plan will
be on finding the right mix between reinvestment in existing
development projects, reduction of debt and returns to
shareholders.

Further information on the financial condition of the Company
is included in the Financial Report section of the Annual
Report and the discussion and analysis section in the
Concise Accounts.

Likely Developments, Business Strategies and Future
Prospects
The consolidated entity will see the benefits of the
commissioning of the Telfer project having a material impact
with significant increases in key financial results and
measures expected for the 2005–06 full financial year. The
most significant areas of development, strategies and
prospects for Newcrest are:

• Commissioning of Telfer is an ongoing process and the

rate at which metallurgical performance can be optimised
will have an effect on the anticipated level of production
and the results for 2005–06. The pyrite plant is expected
to be commissioned by January 2006 and the Telfer
underground is expected to commence production in
the fourth quarter of 2005–06.

• Kencana is expected to commence production in the

fourth quarter of the 2005–06 financial year.

• Cracow production ramp-up will continue.

• Cadia Valley Operations production rates are expected to

decline due to grade profile changes at depth at Ridgeway
and a reduction in tonnes mined at Cadia Hill and resultant
treatment of lower-grade stockpiles.

• Feasibility and development work to continue at Cadia

East and Ridgeway Deeps.

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

• Commitment to exploration activities to continue.

• The assessment of a divestment of Newcrest’s 22.22

percent interest in the Boddington Gold Mine Joint Venture
will be performed.

Further information in likely developments and future
prospects in the operations of Newcrest known to the date
of this Report have also been covered in further detail in the
Chairman’s Report and the Managing Director and Chief
Executive Officer’s Report which are included in the Annual
Report. Any further information of this nature has been
omitted as it would unreasonably prejudice the interests
of the consolidated entity if this report were to refer to such
matters.

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:

• The 2004–05 financial year was a significant year with the
operating results including sales from Telfer since the
commencement of commercial production on 1 February
2005. The operating results exclude initial production from
the Telfer mine. Revenue and operating costs incurred
during the pre-commissioning phase which were
necessary to bring the Telfer plant and equipment to a
stage for its intended use are included in the capital cost
of construction.

• On 5 July 2004 the Company announced that it had

completed a comprehensive simplification of its gold and
foreign currency hedging positions. The restructure of the
hedgebook included elimination of the entire foreign
currency book and all contingent products in the gold
book. The overall purpose of the restructure was to provide
greater revenue certainty and to facilitate greater
understanding of the Company’s total business. At 30 June
2005 the mark to market of derivative financial instruments
was negative $582.9 million (2004: negative $478.4 million).

• Total expenditure capitalised on the Telfer project in the

financial year was $519.6 million.

• During the year there was a significant debt restructure as
part of the Group’s overall Capital Management Plan. The
Company completed its funding requirements for Telfer
with the successful issue of US$350 million of long-term
senior unsecured notes to the North American private
placement debt market. US$844 million of available
revolving bilateral debt facilities with Australian and foreign
banks was also completed. These facilities were used to
repay the A$575 million Telfer multi-currency syndicated
loan note and other short-term debt facilities. This revised
debt position has aligned Newcrest capital structure by
ensuring an appropriate mix of long-term and short-term
debt.

Subsequent Events
Subsequent to 30 June 2005, Newcrest Mining Limited
announced that it is assessing a divestment of its 22.22
percent interest in the Boddington Gold Mine Joint Venture.

There are no other matters or circumstances which have
arisen since 30 June 2005 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.

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 the other 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 are
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 incidents 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. There was a
significant increase in Category II (minor) incidents compared
with the previous year. Most of these incidents were small
process spills which occurred during the commissioning of
the process plant at Telfer.

Category

2005 – No. of incidents

2004 – No. of incidents

III

–

Directors’ Report

The Managing Director reports monthly to the Board on all environmental and 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.

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.

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:

I. R. Johnson

A. J. Palmer

R. B. Davis

R.C. Milne

I. A. Renard

Chief Entity or
Related Body Corporate

Newcrest Mining Limited

N. L. Scheinkestel

Newcrest Mining Limited

M. A. O’Leary

Newcrest Mining Limited

Number of
Ordinary
Shares

44,679

11,097

15,668

9,462

16,886

72,836

12,737

Nature of Interest

Number of Rights/
Options Over
Ordinary Shares

Direct and Indirect

–

Direct

Direct and Indirect

Direct

Direct and Indirect

Direct

533,537

–

Shares, Rights and Options
During the year an aggregate of 1,819,500 options were exercised, resulting in the issue of 1,819,500 ordinary shares of the
Company at an aggregate consideration of $8.5 million.

At the date of this Report there were 6,516,783 unissued shares under rights and options (7,255,056 at reporting date).

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

Remuneration Report

About this Report
This Report outlines the overall remuneration strategy,
framework and practices for the Company. Included are
specific details of the remuneration arrangements for the
Company’s Directors and senior Executives in accordance
with the Corporations Act.

The Remuneration Committee
The Remuneration Committee (Committee) is responsible for
overseeing the implementation of Newcrest’s remuneration
policies and practices. The Committee holds the full
delegated authority of the Board, including the power of
decision-making, in relation to the duties and responsibilities
set out in its Charter. The Charter is available on the
Company’s website at www.newcrest.com.au.

References in this Report to matters considered or decided
by the Committee should be taken as matters considered or
decided by the Board.

The key duties and responsibilities of the Committee are to
consider and make decisions in relation to:

• the broad remuneration strategies of the Company

• the remuneration of Executive officers on an annual basis,

including incentive schemes

• the implementation and administration of major

components of the Company’s remuneration strategy such
as superannuation, share plans, incentive and bonus
payments

• performance management practices and outcomes

• the remuneration policies and practices of the Company

including contract terms, retirement and termination
entitlements of Executive officers

• the remuneration framework for Directors.

The Committee is comprised of all Non-Executive Directors
and the Managing Director and is chaired by the Chairman
of the Board. Other usual attendees at meetings include the
Executive General Manager, Organisation Effectiveness and
the Company Secretary (Committee Secretary). The
Managing Director does not participate in any Committee
deliberations or decisions in relation to his own position or
remuneration. A minimum of two-thirds of the Committee
members are required for a quorum.

The Committee meets at least three times a year to review
the structure and implementation of the Company’s
remuneration strategy including fixed remuneration, Short
Term Incentive (‘STI’) plans, Long Term Incentive (‘LTI’) plans
and other bonus arrangements. Each of these components
of remuneration is described later in this Report.

Specified Directors and Specified Executives

Specified Directors
Specified Directors include the Managing Director and
Non-Executive Directors.

The remuneration of the Managing Director comprises fixed
remuneration, and at risk remuneration. At risk remuneration
includes both short-term and long-term incentives.

The remuneration of Non-Executive Directors comprises fees,
of which a minimum of 10 percent must be directed to the
purchase of Company shares under the Non-Executive
Directors’ Share Plan, and mandatory superannuation
contributions. No short-term or long-term incentives are paid
to Non-Executive Directors.

Specified Executives
Specified Executives include the six Executive General
Managers who are members of the Company’s Executive
Committee. Executive General Managers, together with the
Managing Director, exercise the greatest control over the
management and strategic direction of the Group and are
also the highest paid individuals in both the parent entity and
Consolidated Entity.

The remuneration of Specified Executives comprises fixed
remuneration and at risk remuneration. At risk remuneration
includes both short-term and long-term incentives.

Non-Executive Directors’ Remuneration
Under the Company’s Constitution each Director, other than
the Managing Director, is required to retire by rotation every
third year, at a minimum. A Director retiring by rotation is
eligible to stand for re-election if he or she chooses to do so.

As a general rule, a Non-Executive Director who has served on
the Board for 12 or more years will not seek re-election.

Non-Executive Directors, including the Chairman, are paid
fees for their services to the Company. The Company also
pays, in addition to those fees, a 9 percent superannuation
contribution. The level and structure of fees is based upon
the need for the Company to be able to attract and retain
Non-Executive Directors of an appropriate calibre, the
demands of the role and prevailing market conditions. The
Committee also obtains guidance from external advisers
specialising in remuneration for Non-Executive Directors.

The aggregate amount of fees paid is within the overall
amount approved by shareholders in general meeting. The
last determination made was at the Annual General Meeting
held on 29 October 2003, where shareholders approved an
aggregate amount of $1,000,000 per annum.

Non-Executive Directors do not receive any performance
related remuneration and are not entitled to participate in the
Company’s Executive Share Option Plan or the Executive
Performance Share Plan. Each Director is required to

Directors’ Report

participate in the compulsory Non-Executive Director Share
Plan pursuant to which a minimum 10 percent of each
Director’s fees must be used to buy shares in the Company
on market at the prevailing market price (with no discount).
All Directors, including the Managing Director, are required to
hold a minimum of 3,000 shares in the Company.

Non-Executive Directors do not receive any additional fees or
allowances for Committee work, except that Mr Milne was
paid an additional amount of $5,000 per annum for acting as
Chairman of the Company’s Superannuation Policy
Committee. Under the Company’s Constitution, Directors
may be remunerated for extra services, for example, if they
undertake specialist or consulting work on behalf of the
Company outside the scope of their normal Director’s duties.

During 2003 the Board made a decision to discontinue, as
from 31 December that year, the practice of paying Directors
a retirement benefit. Each of the Directors in office at that
time, 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. Retirement benefits will not be
provided to any new Director, nor to Mr O’Leary who was
appointed in September 2003 after the decision had been
taken. All Directors will receive on retirement any
superannuation entitlements that have accrued to them at
that time. Any retirement benefit payable to a retiring Director
by the Company will be reduced by the amount of their
Company paid superannuation entitlement as at that date.
The superannuation entitlement is paid out by the
Superannuation Fund.

Executive Reward Strategy
As part of the Company’s overall remuneration strategy, the
Company’s Executive Reward Strategy deals with Newcrest’s
approach to remuneration for its senior managers. It covers
all employees at the level of Manager, General Manager,
Executive General Manager and Managing Director. The
structure of remuneration arrangements for the Specified
Executives and the Managing Director are in broad terms no
different than for other senior managers in the Company. The
main differences relate to the weighting and trigger points for
the receipt of different components of their remuneration.

In formulating the Company’s Executive Reward Strategy the
Committee has recognised that Newcrest operates in a
competitive environment, where the key to achieving
sustained improvements in Newcrest’s performance is
through its people.

The key principles of the Executive Reward Strategy during
2004–05 were to:

• provide market competitive levels of remuneration to

employees having regard both to the level of work and
to the effectiveness of employees in performing their
assigned roles

• allocate rewards to employees on the basis of merit and

performance

• adopt performance measures for the allocation of rewards
that align the interests of employees with the interests of
shareholders

• adopt a remuneration structure that provides the

appropriate balance in ‘risk and reward sharing’ between
the employee and the Company.

Executive Reward Structure
During 2004–05, Newcrest operated a total remuneration
system that comprised policies and programs under two
general categories. The remuneration system is designed to
strike an appropriate balance between fixed and variable
remuneration.

• Fixed remuneration. This is commonly referred to as Total

Employment Cost (TEC) and includes cash salary,
superannuation and any benefits (and associated fringe
benefits tax) provided under a salary sacrifice
arrangement.

• Variable remuneration. This is commonly referred to as at
risk remuneration and consists of two components: STI
and LTI. Both are tied to various personal and corporate
performance measures and, depending upon whether
those performance measures are met or exceeded, are
therefore at risk.

Fixed remuneration
Fixed remuneration is a level of fixed reward calculated on a
total cost-to-company basis, and includes compulsory
superannuation contributions.

The Committee reviews and determines the TEC for the
Managing Director. The Managing Director annually reviews
and recommends to the Committee the TEC for Specified
Executives. The Specified Executives annually review and in
turn recommend to the Managing Director the TEC for other
senior executives, according to the annual cycle of
performance review and salary adjustment specified under
Newcrest’s Work Performance System and Remuneration
System.

Fixed remuneration for each employee is set by reference
to appropriate industry benchmark information, taking into
account an individual’s responsibilities, performance, and
experience. For 2004–05, Newcrest’s broad objectives were
to ensure that:

• For senior executives and middle managers, TEC was set at

around the 62.5th percentile of the benchmark group.
However, total targeted remuneration (TEC plus STI) for the

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

Managing Director, Specified Executives and other
managers eligible to receive STI, was targeted at the
75th percentile of the benchmark group

• For other employees, TEC was set at the 75th percentile

of the benchmark group.

For 2004–2005 the benchmark group was a group of
comparable companies, including those companies used in
the comparator group for the LTI. Management drew on the
services of independent remuneration consultants in
formulating recommendations on TEC to the Committee for
the Managing Director, Specified Executives and other senior
managers to the Committee. Where appropriate, further
sector specific information was obtained where necessary
from specialist remuneration consultants.

Variable remuneration
Variable remuneration comprises the STI and LTI. The
Committee takes the view that these are important elements
of employee remuneration that provide tangible incentives for
employees to improve Newcrest’s performance in both the
short term and the long term, for the benefit of shareholders.
These plans are designed to encourage superior
performance in employees with their level of personal reward
directly linked to the interests of shareholders. A further
objective, stimulated by the sharp tightening of labour
markets in the resources sector, has been to retain highly
productive and capable employees in the face of external
employment opportunities.

The percentage of variable remuneration which is earned is
determined under a formula based on personal performance
and Newcrest’s relative performance against a comparator
group of companies. The Committee considers external
benchmarking data to assess Newcrest’s relative
performance. A particular challenge in recent years has been
the disappearance of Australian gold producers of a size and
complexity similar to Newcrest. This has meant the
comparator group largely comprises Australian companies of
broadly similar size to Newcrest, only some of which operate
in the energy and resources sector. The 2004–05 peer group
is set out under the ‘Company performance criteria’ heading
in the ‘Long Term Incentive’ section.

Short Term Incentive

How the STI is awarded
The STI is an annual cash award contingent on successful
achievement of Company performance criteria and individual
performance criteria.

The extent to which Company performance and individual
performance combine to determine a STI award varies
according to the employee’s role and capacity to influence
Company performance. For the Managing Director,
Company performance and individual performance is given
equal weighting. However, for Specified Executives less
weighting is given to Company performance as those
managers are considered less able to individually influence
Company performance directly.

Company performance criteria
The Company performance criteria require a pre-determined
target, measured as performance relative to a designated
comparator group, to be met or exceeded. The performance
criteria is based on the Total Shareholder Returns (TSR)
earned by the Company over the prior year period compared
with the TSR earned over the same period by comparator
companies. TSR is defined as the growth in the Company’s
share price over the performance period plus dividends
notionally reinvested.

Individual performance criteria
The individual performance criteria are determined by the
Committee at the start of the financial year and are set in
terms of the employee’s personal contribution towards the
performance of the business.

The criteria are measured against a matrix of personal work
objectives and key performance indicators (KPIs) were
chosen as they link directly to the Company’s business
strategy. These measures include specific business
outcomes as well as performance against safety and other
Company priorities.

Rationale
Company and individual performance criteria were chosen so
that each eligible employee has a clear incentive to strive for
high personal performance and to contribute to high Company
performance. This provides a clear alignment between the
interests of shareholders and the level of reward for eligible
employees. TSR was chosen as the performance hurdle
because it was considered by the Committee as the most
appropriate means of measuring Company performance, as
it incorporates capital returns as well as dividends.

Amount
The potential amount of STI is as follows:

Percentage of fixed remuneration

Level

Managing Director

Specified Executives

Target(i)

50%

25%

Maximum(ii)

70%

40%

(i) Target performance requires either fourth quartile Company

performance relative to the comparator group, in combination with
fully competent individual performance; or third quartile Company
performance relative to the comparator group, in combination with
superior individual performance.

(ii) Maximum performance requires fourth quartile Company performance

relative to the comparator group and outstanding individual
performance.

If Company performance or individual performance falls
below target levels, then the amount of STI awarded is
progressively reduced. If individual performance is
unsatisfactory then no STI can be awarded. STI is paid in
October each year in respect of the preceding financial
year’s performance.

Directors’ Report

Long Term Incentive
Since 1997 the Company has had in place a LTI
arrangement which has sought to align executive
performance, and therefore remuneration, with the
long-term interests of shareholders.

LTI in 2004–05
In August 2004 the Committee approved a new LTI plan
known as the Executive Performance Share Plan. This plan
better suited the evolving needs of the Company and was
reflective of contemporary standards of corporate
governance. The plan was implemented for the first time in
November 2004 and covers all permanent employees in
roles at Manager, General Manager, Executive General
Manager and Managing Director levels in the Company.

How the LTI is awarded
Each year, eligible employees are issued with a conditional
entitlement (a performance right) to a fully paid ordinary
share in the Company. The entitlement is contingent on
achieving a performance hurdle over a performance period.
The performance hurdle and period is determined by the
Board at the time of issue. The conditional entitlements are
issued after each Annual General Meeting.

At the end of the performance period, the performance
hurdle is tested. To the extent that the performance hurdle is
achieved each conditional entitlement can be converted into
an ordinary share. If the performance hurdle has not been
achieved at the end of the performance period, the
entitlements lapse. There is no ability to retest after the
performance period.

Company performance criteria
The performance hurdle is based on the Total Shareholder
Returns (TSR) earned by the Company over the three-year
period compared with the TSR earned over the same period
by comparator companies. TSR is defined as the growth in
the Company’s share price over the performance period plus
dividends notionally reinvested.

The comparator group for the 2004–05 LTI plan is
comprised of:

Australian Gas Light

Coal and Allied Industries

CSR

Iluka

Leighton Holdings

Lihir Gold

Mirvac Group

Orica

Oxiana

Santos

Smorgon Steel

Transurban

Boral

CSL

Gunns

James Hardie

Lend Lease

Lion Nathan

Oil Search

Origin Energy

PaperlinX

Sims Group

Toll Holdings

In relation to previous LTI options or grants, and in respect of
which rights remain current, the relevant comparator group or
index is set out in Table 8.

Rationale
TSR was chosen as the performance hurdle because it was
considered by the Committee as the most appropriate
means of measuring Company performance, as it
incorporates capital returns as well as dividends. This has
been considered a more appropriate measure of
performance than any earnings-based measure during the
strong growth and redevelopment stage that the Company
has been in since 1998.

The comparator group has been selected by the Committee
as being a group of companies of broadly similar size to
Newcrest, including several that are engaged in industries
that bear some relation to the activities of the Company.
These activities include mining, exploration, construction and
commodity marketing. The Committee will review the
comparator group from time to time to ensure that it remains
adequate and relevant to the purposes to which it is applied.

For previous grants, the Committee selected the relevant
comparator group or index on the basis that it appropriately
represented a group of companies either broadly similar in
size to Newcrest, competing for capital with Newcrest or
engaged in industries relevant to the activities of the Company.

Measuring performance criteria
The TSR results are obtained by an independent third party,
Equity Strategies Pty Ltd, from data provided by Standard &
Poor’s who measure Newcrest’s TSR performance over the
relevant period against the comparator group.

Providing all the above criteria prescribed by the Board are
met, the performance hurdle provides a sliding scale for
converting the conditional entitlements into ordinary shares
according to:

• zero percent conversion if Newcrest TSR are below the

threshold 50th percentile of the comparator group

• 50 percent conversion if Newcrest TSR are at the 50th

percentile of the comparator group

• 100 percent conversion when 75th percentile performance

is achieved

• straight line conversion between 50th and 75th percentile.

Lapsing of entitlements
Where the performance criteria have not been satisfied, the
entitlements will lapse.

Entitlements will generally lapse on resignation or dismissal.
The LTI plan provides for the preservation of the conditional
entitlements on a pro-rata basis in circumstances of
incapacity due to ill-health, retirement or retrenchment.

In the case of a change of control of the Company, the Board
shall, notwithstanding any other provisions of the rules of the
LTI plan, determine whether the performance hurdle would

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

have been satisfied over the period ending at a date when
the Board considers that change of control is likely to occur.

Amount
The potential amount of LTI is based on a percentage of
fixed remuneration. The table below details these
percentages.

Level

Percentage of fixed remuneration

Managing Director

Specified Executives

75%

30%

The number of conditional entitlements is determined by the
value of the LTI component of the employee’s remuneration
package divided by the prevailing Company share price at
the time of issue of the conditional entitlement.

LTI in prior years
Between 1997 and 2003 the LTI arrangement for the
Company’s senior managers was known as the Executive
Option Plan (‘EOP’). Under the EOP eligible managers, which
included Specified Executives and the Managing Director,

were allocated five year options with performance hurdles
and exercise conditions. Options issued 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. There is no retesting of performance hurdles.

Details of the performance hurdles for those options are set
out at Table 1.

Details of the vesting of options are set out in Tables 7 and 8.
Options from tranches that vested during 2004–05
comprised:

• 25 percent tranche of option grant of 3 November 2000

• 25 percent tranche of option grant of 2 April 2001

• 25 percent tranche of option grant of 8 November 2001

(Parcels A and B)

• 25 percent tranche of option grant of 6 February 2003.

In each of the above cases the performance hurdles for the
tranches were met.

Table 1: Executive share/option plan performance hurdles 1999–2004

Year

2004

Grant Date

Performance Hurdle

5 Nov 2004

The performance hurdle is based on the TSR Ranking of Newcrest. If at a Performance Date the TSR
Ranking of Newcrest is:

(a) less than the 50th percentile, the number of rights which vest is zero.

(b) equal to the 50th percentile, the number of rights which vest is 50 percent of the rights comprised in

the grant.

comprised in the grant.

(d) greater than the 50th percentile and less than the 75th percentile, then in addition to the rights

exercisable under paragraph (b) above, further rights vest the number being calculated on the basis that
for each whole percentile point above the 50th percentile a further 2 percent of rights comprised in the
parcel vest.

2003

2 Dec 2003
6 Feb 2003

The performance hurdle is based on the TSR Ranking of Newcrest. If at a Performance Date the TSR
Ranking of Newcrest is:

(a) less than the 50th percentile, the number of options comprised in the relevant tranche which may be

exercised is zero.

(b) equal to the 50th percentile, the number of options which may be exercised is 50 percent of the total

number of options comprised in the relevant tranche.

of the total number of options comprised in the relevant tranche.

(e) greater than the 50th percentile and less than the 75th percentile, the number of options which may be
exercised is calculated on a pro rata, straight line basis between 50 percent to 100 percent of the total
number of options comprised in the relevant tranche.

Parcel ‘A’ Options – TSR growth of Newcrest Mining Limited (‘Newcrest’) must have at least equalled the
median TSR growth of the companies in the group of companies (excluding Newcrest) at the Grant Date
comprised in the S&P/ASX 200 and classified in the Global Industry Classification Standard Gold Sub-
Industry within the Materials Accumulation Index (‘Gold Index’). Any company removed from the Gold Index
at any time after Grant Date shall not thereafter be included in the comparator group.

Parcel ‘B’ Options – TSR growth of Newcrest over the period from Grant Date to the Performance Date
must exceed 10 percent per annum compound growth.

2001

8 Nov 2001(A)
8 Nov 2001(B)

1999–
2001

2 Apr 2001
3 Nov 2000
7 Sep 1999

TSR growth of Newcrest must have at least equalled the median TSR Growth of companies in the
group of companies (excluding Newcrest) included in the Gold Accumulation Index published by the
Australian Stock Exchange (ASX) (‘Comparator Group’).

Directors’ Report

Relationship of Incentives to Newcrest’s Financial
Performance
Both the STI and the LTI outcomes are tied to Company
performance. Over the period from June 2001 to June 2005
Newcrest has created substantial value for shareholders by
defining, developing and bringing into operation a
succession of new mining projects. This wealth creation has
been financed by a combination of internal cash flow and
borrowings. Over this period of rapid growth, the
performance of the Company has most appropriately been
measured by TSR and Table 2 shows the strong
performance in TSR. STI and LTI outcomes for eligible
executives have been aligned to this TSR performance.

Whilst the Committee has relied upon TSR as a measure of
Company performance for the purpose of assessing
entitlement to STI and LTI components of remuneration, other
measures of financial performance over the same period
reinforce the view that the Company has achieved a
substantial increase in shareholder wealth over that
timeframe. Details of those other measures for the period
are also shown in Table 2.

Table 2: Newcrest financial performance

Year Ended 30 June

2001

2002

2003

2004

2005

Basic EPS* (cents)

15.6

(19.2)

29.6

Dividends (cents)

5.0

Share Price Increase** ($)

(0.01)

3.09

5.0

0.07

37.5

5.0

6.13

41.3

5.0

3.60

Total Shareholder
Returns^ (%)

1.8

49.2

16.5

82.4

32.8

* Basic EPS is calculated as net profit after tax divided by the weighted

average number of ordinary shares.

** Share price movement during the financial year.

^ Defined as the growth in the share price over the financial year ending

30 June plus dividends notionally reinvested. The share price is
measured as the volume weighted average share price for the six
months ending 30 June compared with the same period a year earlier.

During the period June 2001 to June 2005 the Company’s
TSR performance (relative to the comparator group or index
chosen for each financial year) was better than average for
the comparator group or index.

Consequently, awards were made under the STI Plan and the
amount of STI awarded varied according to a combination of
individual and Company performance criteria.

In relation to LTI, the TSR performance achieved and the
percentage of options vested is set out in Table 8.

Historically for the STI, Company performance has been
measured using the TSR relative to the Australian Gold Index.
However, since the delisting of Normandy Mining following its
takeover by Newmont in 2003, the Australian Gold Index has
been discontinued. Accordingly in late 2004 the Committee
reviewed a wide range of measures of relative company
performance for 2003–04, and agreed on TSR of the
Company compared with a designated group of comparator
companies for STI. This group is the same group of
comparator companies used for the 2004–05 LTI Plan.

In 2004–05, Newcrest’s performance was in the third quartile
of the comparator performance (i.e. between the 50th and
the 75th percentiles), which meant for Specified Executives
that the STI award for fully competent performance was 20
percent of TEC rising to a maximum of 30 percent of TEC
for outstanding personal performance.

Managing Director’s Remuneration
The Managing Director, Mr Tony Palmer, commenced his
employment with the Company on 1 December 2001.

Service Agreement
Upon his appointment he entered into a Service Agreement
with the Company. The Agreement, which is not fixed term,
outlines:

• duties and responsibilities

• remuneration arrangements upon appointment

• LTI entitlement for his first three years of service

• requirements in relation to any external activities and

directorships

• entitlements upon termination

• other customary provisions.

Under the Agreement, in the event of termination by the
Company with notice, Mr Palmer is entitled to 24 months’
notice or payment in lieu of notice. Under the Agreement
Mr Palmer must give the Company not less than six months’
written notice. Other than his entitlement to be paid in lieu of
notice and to receive any superannuation benefits due to
him, Mr Palmer is not entitled to any additional termination
payments under the Agreement.

STI
In relation to the 2004–05 period, Mr Palmer was awarded an
STI of $440,000 being an amount equivalent to 55 percent of
his STI at target performance. This payment will be paid in
October 2005. In making the award, the Committee
assessed Mr Palmer’s performance against his individual
objectives and Company performance for the 2004–05
period. The Committee recognised the Company
performance was impacted by the delay in the
commencement of the Telfer project.

LTI
Mr Palmer’s initial remuneration arrangements were structured
by the Committee to provide a clear incentive to oversee the
timely and proper delivery into production of the large Telfer
project, by way of granting him options under the EOP during
the first three years of his employment. When Mr Palmer was
appointed, the timely and proper delivery of the Telfer project
was a fundamental strategic requirement for the Company.

In March 2005 the Board formed the view that the
development, construction and commissioning of the first
stage of the Telfer project, namely the open pit mining
operation, had not been achieved within the timeframe and
budget that had been approved for that development.

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

Service Agreements
Newcrest has entered into a service contract with the
Managing Director and each Specified Executive. The
contracts are not fixed term and generally provide for the
following:

1. remuneration and employment conditions

2. powers and duties

3. external activities

4. a requirement that the Company provides two years’

written notice of termination (except in matters covered
by summary termination)

6. a requirement that the employee provides three months’

written notice of termination.

In addition to any entitlements conferred on them by their
service contract, the Managing Director and each Specified
Executive are also entitled to receive on termination of
employment their statutory entitlements of accrued annual
and long service leave together with any superannuation
benefits. The Managing Director and each Specified
Executive are not entitled to receive any other additional
termination payments, other than those previously
mentioned.

As a consequence the Board advised Mr Palmer that the
performance hurdle for 500,000 of the one million options
granted to him could not be considered to have been
achieved, and therefore those options lapsed. Full details
of the options held by the Mr Palmer, and the performance
hurdles applicable to them, are set out in Table 7.

Review of arrangements
At the time of Mr Palmer’s appointment the Company had
a market capitalisation of $1.2 billion and was ranked lower
than 80th on the ASX All Ordinaries Index.

By late 2004 the Company’s market capitalisation had risen
to $5.8 billion and it was firmly ranked amongst Australia’s
Top 50 listed companies. As a result, the Committee
undertook a complete review of the structure and the amount
of Mr Palmer’s remuneration. As part of the review the
Committee considered research from an external specialist
remuneration consultant to ensure Mr Palmer’s remuneration
remained appropriate for a company of Newcrest’s
increased size and complexity and in line with market trends.

As a result of that review Mr Palmer’s fixed remuneration
(TEC) was increased, with effect from 1 January 2005, from
$1.1million to $1.6 million per annum. It was also recognised
that contemporary remuneration practice indicated a higher
proportion of at risk remuneration was warranted. The
Committee determined the level of STI payment for
Mr Palmer should be increased from 30 percent to
50 percent of TEC for ‘at target’ performance and the value
of his annual LTI participation should be increased from
50 percent to 75 percent and is to be applied to the year
ending 30 June 2005.

At the same time the Board recognised that during the
previous three years, since Mr Palmer had taken up his
appointment, a number of substantial and long-term
improvements had been achieved at Newcrest under his
leadership, resulting in significant growth in the value of the
Company as reflected in the share price. Customarily some
component of Mr Palmer’s LTI arrangements would have
given scope for recognition of those achievements and
would have resulted in the conferring of some benefit upon
him over and above his annual remuneration.

In Mr Palmer’s case the LTI provided to him during his first
three years of service had been structured so that they were
solely based on the delivery of the Telfer project. The
Committee recognised that certain long-term achievements
in areas other than Telfer, and as reflected in Newcrest’s
financial performance over this period (refer Table 2), had not
been adequately recognised in Mr Palmer’s remuneration. On
that basis the Committee resolved to pay Mr Palmer a one-off
cash bonus of $2 million in the 2004–05 period to recognise
his contribution to the growth in shareholder value during the
period from 2001–02 to 2004–05.

Directors’ Report

Remuneration Details

Specified Directors
Details of the nature and amount of each major element of the remuneration of each Specified Director of Newcrest is as
follows:

Table 3: Specified Directors’ Remuneration

$’000

2004–05

Executive Director
A. J. Palmer
(Chief Executive Officer
and Managing Director)

Non-Executive Directors
I. R. Johnson
(Chairman)

R. B. Davis

R. C. Milne

I. A. Renard

N. L. Scheinkestel

M. A. O’Leary

2003–04

Executive Director

A. J. Palmer

Non-Executive Directors

I. R. Johnson

R. B. Davis

R. C. Milne

I. A. Renard

N. L. Scheinkestel

M. A. O’Leary

Primary Benefits

Post Employment

Equity Compensation

Salary/
Base
Fee
(A)

Short
Term
Incentive
(B)

Cash
Bonus
(C)

Other
Benefits/
Services
(D)

Movement
in Accrued
Superannuation Retirement
Provision
(F)

Contributions
(E)

Value of
Value of Performance
Rights
Options
(H)
(G)

Total

Equity
Compensation
Value %
(I)

1,338

440

2,000

313

125

–

2,276

440

2,000

832

330

253

113

–

1,628

330

–

380

4,254

10.6

–

344

138

150

136

141

380

5,299

n/a

445

–

1,652

26.9

311

154

145

139

154

2,653

n/a

136

445

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

Specified Executives
Details of the nature and amount of each major element of remuneration for Newcrest’s Specified Executives in 2004–05 is
as follows:

Table 4: Specified Executives’ Remuneration

Primary Benefits

Short
Non-
Term Monetary
Remuneration Incentive Benefits
(D)

Base

(B)

(A)

Post
Employment

Equity
Compensation

Other
Benefits

Superannuation
Contributions
(E)

Value of
Value of Performance
Rights
Options
(H)
(G)

Termination
Payment
(J)

$’000

2004–05
J. Smith
Executive General Manager Finance

T. O’Neill
Executive General Manager Operations
and Marketing

D. Wood
Executive General Manager Exploration

B. Lavery
Executive General Manager
Corporate Services

M. Butlin
Executive General Manager Organisation
Effectiveness (Commenced 3 May 2004)

B. Price
Executive General Manager
Development and Projects
(Employment ceased 10 December 2004)

P. Hallam
Executive General Manager
Development and Projects
(Commenced 14 February 2005)

2003–04
J. Smith
T. O’Neill
D. Wood
B. Lavery
B. Price

602

157

520

136

520

136

448

458

–

255

–

194

2,997

666

522
416
420
394
462

2,214

240
130
208
113
150

841

34
5
3
5
56

103

11
11
11
11
11

Total

875

836

835

719

589

–

2,138

2,600

–

273

144

–

144

–

658

116

2,138

6,727

38
98
104
104
104

448

–
–
–
–
–

–

–
–
–
–
–

–

845
660
746
627
783

3,661

Equity
Compensation
Value %
(I)

11.9

19.6

22.4

2.9

5.5

7.3

n/a

4.5
14.8
13.9
16.6
13.3

n/a

Notes to Tables 3 and 4:
(A) Base remuneration comprises cash salary and available salary package options grossed-up by related fringe benefits tax where applicable. Newcrest’s

superannuation contributions made on behalf of Specified Executives are disclosed separately.

(B) The short-term incentive relates to the Managing Director’s and Specified Executives’ performance in the 30 June 2005 year and for comparatives, the

30 June 2004 year.

Includes travel, parking, insurance and applicable fringe benefits tax payable on benefits.
Includes superannuation in accordance with applicable legislation.

(E)
(F) Represents amounts accrued during the year in respect of Non-Executive Directors’ retirement benefits.
(G)(H) The total value of options and rights included in remuneration for the year is calculated in accordance with Accounting Standard AASB 1046 ‘Director and

Executive Disclosures by Disclosing Entities’ as amended by Accounting Standard AASB 1046A. This required the following:
• The fair value of options is calculated at the grant date using an option pricing model which combines both Black-Scholes and binomial methodologies.

To determine the amount disclosed as remuneration, the fair value is allocated evenly over the period from the grant date to the vesting date.

• The fair value of rights, comprising rights over unissued shares, granted under the Executive Performance Share Plan has been valued as American call

options using a Monte Carlo simulation option pricing model and binomial tree models. To determine the amount disclosed as remuneration, the fair value
is allocated evenly over the period from the grant date to the vesting date.

• The following factors and assumptions were used in determining the fair value of options and rights on the grant date:
Rights – Nov 2004
$10.55
–
33%
5.25%
0.40%
3 years

Fair value
Exercise price
Estimated volatility
Risk-free interest rate
Dividend yield
Expected life of award/option

Options – Dec 2003
$4.11
$12.29
37%
6.33%
0.39%
5 years

Options – Feb 2003
$2.06
$6.62
43%
4.97%
0.75%
5 years

Options – Nov 2001
$0.70
$3.36
46%
4.80%
1.5%
5 years

(I) Represents the value of options and rights included in remuneration as a percentage of total remuneration.
(J) Termination payment includes payment in lieu of notice and applicable STI and LTI payments statutory and accrued annual leave and long service leave

entitlements.

Directors’ Report

Options and Rights Held by Specified Directors and Specified Executives

Options
All options refer to options over ordinary shares of Newcrest, which are exercisable on a one-for-one basis under the Executive
Share Option Plan.

The movements during the year in the number of options over ordinary shares in Newcrest, held directly, indirectly or
beneficially, by each Specified Director and Specified Executive, including their personally related entities are as follows:

Table 5: Movement in Options for Specified Directors and Specified Executives 2004–05

Movement During the Year

Specified
Director/
Executives

Grant
Date

Expiry
Date

Exercise
Price

A. Palmer

8-Nov-01 8-Nov-06

6-Feb-03 6-Feb-08

$3.36

$6.62

2-Dec-03 2-Dec-08

$12.29

Total

Balance
at
1 July
2004

500,000

250,000

1,000,000

J. Smith

2-Dec-03 2-Dec-08

$12.29

100,000

$3.36

100,000

T. O’Neill

8-Nov-01
Parcel A 8-Nov-06

8-Nov-01
Parcel B 8-Nov-06

6-Feb-03 6-Feb-08

2-Dec-03 2-Dec-08

$12.29

Total

50,000

100,000

350,000

100,000

D. Wood

7-Sep-99 7-Sep-04

3-Nov-00 3-Nov-05

8-Nov-01
Parcel A 8-Nov-06

8-Nov-01
Parcel B 8-Nov-06

6-Feb-03 6-Feb-08

2-Dec-03 2-Dec-08

$12.29

Total

Options
Exercised

Amount
Paid to
Exercise
Options

–

$3.36

$6.62

$3.73

$3.87

$3.36

$6.62

$3.73

$3.87

$3.36

$6.62

25,000

(25,000)

$93,250

$3.36

100,000

50,000

(10,000)

$33,600

100,000

–

475,000

(35,000) $126,850

100,000

(100,000) $373,000

$3.36

100,000

50,000

100,000

–

B. Lavery

7-Sep-99 7-Sep-04

3-Nov-00 3-Nov-05

8-Nov-01
Parcel A 8-Nov-06

8-Nov-01
Parcel B 8-Nov-06

6-Feb-03 6-Feb-08

2-Dec-03 2-Dec-08

$12.29

Total

550,000

(100,000) $373,000

B. Price

7-Sep-99 7-Sep-04

3-Nov-00 3-Nov-05

8-Nov-01
Parcel A 8-Nov-06

8-Nov-01
Parcel B 8-Nov-06

6-Feb-03 6-Feb-08

$3.73

$3.87

25,000

75,000

(25,000)

$93,250

(75,000) $290,250

$3.36

100,000

(100,000) $336,000

$3.36

$6.62

50,000

(50,000) $168,000

100,000

(100,000) $662,000

2-Dec-03 2-Dec-08

$12.29

100,000

(100,000)$1,229,000

Total

450,000

(450,000)$2,778,500

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

Options
Lapsed

Balance at
at 30
June 2005

375,000

125,000

–

250,000

500,000

100,000

Options
Vested
During
the Year

Vested and
Exercisable
at 30
June 2005

–

Non-
Vested

125,000

250,000

500,000

100,000

–

100,000

25,000

50,000

100,000

350,000

12,500

25,000

–

25,000

75,000

–

100,000

62,500

100,000

250,000

–

100,000

25,000

75,000

25,000

100,000

25,000

50,000

40,000

100,000

440,000

12,500

25,000

–

15,000

25,000

75,000

–

100,000

87,500

165,000

275,000

–

100,000

25,000

75,000

25,000

100,000

25,000

50,000

100,000

450,000

12,500

25,000

–

25,000

75,000

–

100,000

87,500

175,000

275,000

–

Rights
All conditional entitlements refer to rights over ordinary shares of Newcrest, which are exercisable on a one-for-one basis
under the Executive Performance Share Plan. The movements in the year in the number of rights over ordinary shares in
Newcrest, held directly, indirectly or beneficially, by each specified Director and Specified Executive, including their personally
related entities are as follows:

Table 6: Movement in Performance Rights for Specified Directors and Specified Executives 2004–05

Specified
Director/Executives

Share
Balance at
Price at
1 July 2004 Grant Date Grant Date

Rights
Granted

Rights
Exercised

Rights
Lapsed

Vested and
Balance Exercisable
at 30
June 2005

at 30
June 2005

A. Palmer

J. Smith

T. O’Neill

D. Wood

B. Lavery

M. Butlin

P. Hallam

B. Price

–

5-Nov-04

$17.30

33,537

10,976

9,512

8,232

9,942

10,976

–

(3,658)

33,537

10,976

9,512

8,232

9,942

7,318

–

Non-
Vested

33,537

10,976

9,512

8,232

9,942

7,318

Performance Conditions for Options and Rights
Performance conditions for options and rights are set out in Tables 7 and 8.

Table 7: Managing Director – Options and Rights Granted between 8 November 2001 and 2 December 2003,

and during the year ended 30 June 2005

Grant
Date

Expiry
Date

Performance
Hurdle

Strike
Price

Performance
Date

Percentage
Exercisable

Performance
Achieved

Percentage
Vested

5 Nov 2004

5 Nov 2009

2 Dec 2003

2 Dec 2008

6 Feb 2003

6 Feb 2008

8 Nov 2001

8 Nov 2006

Select Group referred
to in the performance
condition
(TSR ranking on
sliding scale)

Single Event
(development of Telfer
underground on time
and on budget)

Two Events
(development of Telfer
open pit on time and
on budget (tranche 1)
and underground on
time and on budget
(tranche 2)

Nil

5 Nov 2007

100%
(33,537)

To be determined

n/a

$12.29

Date condition
precedent to
exercise met

$6.62

Date condition
precedent to
exercise met

$3.36

Date condition
precedent to
exercise met

100%
(250,000)

50%
(125,000)
50%
(125,000)

75%
(375,000)
25%
(125,000)

To be determined

n/a

Not achieved

Nil

To be determined

n/a

Not achieved

Nil

To be determined

n/a

Directors’ Report

Table 8: Specified Executives – Options and Rights granted between 3 November 2000 and 2 December 2003,

and during the year ended 30 June 2005

Grant
Date

Expiry
Date

Comparator
Group

5 Nov 2004

5 Nov 2009

2 Dec 2003

2 Dec 2008

Select Group referred to in the
performance condition
(TSR ranking on sliding scale)

S&P/ASX 100 Index
(TSR ranking on sliding scale)

6 Feb 2003

6 Feb 2008

S&P/ASX 100 Index
(TSR ranking on sliding scale)

8 Nov 2001
Parcel B

8 Nov 2006

Newcrest TSR
(compound growth per annum)

$12.29

$6.62

$3.36

8 Nov 2001
Parcel A

8 Nov 2006

S&P/ASX 200 GICS gold companies
(TSR growth vs comparator group)

$3.36

2 Apr 2001

2 Apr 2006

ASX Gold Index
(TSR growth vs comparator group)

$3.72

3 Nov 2000

3 Nov 2005

ASX Gold Index
(TSR growth vs comparator group)

$3.87

Strike
Price

Performance
Date

Performance
Achieved

Percentage
Vested

Nil

5 Nov 2007

To be determined

n/a

2 Dec 2005
2 Dec 2006
2 Dec 2007
4 Sep 2008

6 Feb 2005
6 Feb 2006
6 Feb 2007
9 Nov 2007

8 Nov 2003
8 Nov 2004
8 Nov 2005
10 Aug 2006

2 Apr 2003
2 Apr 2004
2 Apr 2005
4 Jan 2006

3 Nov 2002
3 Nov 2003
3 Nov 2004
5 Aug 2005

To be determined
To be determined
To be determined
To be determined

>75th percentile
To be determined
To be determined
To be determined

>75th percentile
>75th percentile
To be determined
To be determined

>75th percentile
>75th percentile
>75th percentile
To be determined

n/a
n/a
n/a
n/a

100%
n/a
n/a
n/a

100%
100%
n/a
n/a

100%
100%
100%
n/a

Table 9: Value of Options and Performance Rights

Specified Director/
Executives

Value at Grant Date
$’000

Value at Exercise Date
$’000

Value at Lapse Date
$’000

Total of Columns A–C
$’000

(A)

(B)

(C)

(D)

A. Palmer

J. Smith

T. O’Neill

D. Wood

B. Lavery

M. Butlin

P. Hallam

B. Price

354

116

100

105

116

–

428

1,049

–

4,622

(6,618)

(6,264)

–

(58)

116

100

528

1,136

105

4,680

Table 9 shows the total value of any performance rights or options granted, exercised and lapsed in the year in relation to Specified Directors and
Executives based on the following assumptions.

(A) The value of performance rights granted in the year reflects the value of a performance right (determined in accordance with AASB 1046

‘Director and Executives disclosures by Disclosing Entities’) times the number of performance rights granted during 2005.

(B) The value at exercise date has been determined by the share price at the close of business on the exercise date less the option exercise price times

the number of options exercised during 2005.

(C) The value at lapse date has been determined by the share price at the close of business on the date the performance right or option lapsed less the

exercise price times the number of performance rights or options that lapsed during the year.

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

Table 10: Short Term Incentive and allocation of the 2005 Equity Grant

Specified Director/
Executives

A. Palmer

J. Smith

T. O’Neill

D. Wood

B. Lavery

M. Butlin

P. Hallam

Short Term Incentive
(A)
(as a percentage of Target)

Percentage
Awarded

Percentage
Forfeited

100

–

Long Term Incentive
(B)
(Estimates of the maximum remuneration amounts which could be
received under the 2005 performance rights grants in future years)

2005–06
$’000

118

2006–07
$’000

118

2007–08
$’000

Maximum Total
$’000

277

(A) To have been awarded an STI of 100 percent an Executive has to have met target performance.

(B) The maximum value in future years has been determined in relation to the grant of performance rights in 2005 based on the valuation performed at

grant date and amortised in accordance with applicable accounting standard requirements. The minimum value of the grant is $nil if the
performance conditions are not met. No options were granted in 2005.

Shares Held by Specified Directors and Specified Executives

Table 11: Specified Directors’ Shareholdings

Specified Directors

A. J. Palmer

I. R. Johnson

R. B. Davis

R. C. Milne

I. A. Renard

N. L. Scheinkestel

M. A. O’Leary

Total

Balance at
1 July 2004

Received as
Remuneration

Acquired
Pursuant to
Non-Executive
Directors’
Share Plan

Options
Exercised

11,060

38,127

14,658

8,501

15,871

70,635

5,775

164,627

–

1,750

780

1,562

6,432

–

Net
Change
Other

4,145

–

1,240

5,038

10,563

Balance at
30 June 2005

11,097

44,022

15,487

9,281

16,705

72,655

12,375

181,622

See page 58 of the Directors’ Report for the Directors’ shareholdings as at the date of this Report.

Table 12: Specified Executives’ Shareholdings

Specified Executives

J. Smith

T. O’Neill

D. Wood

B. Lavery

M. Butlin

P. Hallam

B. Price

Total

Balance at
1 July 2004

Received as
Remuneration

Acquired
on Exercise
of Options

Net
Change
Other

Balance at
30 June 2005

–

86,325

18,438

–

100,000

204,763

–

100,000

–

1,450

–

(100,000)

–

86,325

118,438

1,450

–

100,000

(98,550)

206,213

Directors’ Report

The Way Forward – 2005–06
A key feature of organisational initiatives in 2004–05 has been the redevelopment and implementation of management
systems to lift performance through active planning, review and appraisal and also to strengthen the Company’s succession
and talent development. These initiatives increase the attention paid to managing for performance and emphasise the
importance of a remuneration system that encourages and rewards performance.

A further consideration has been the continued external environment of sustained excess demand across the world for skilled
and capable mining employees. The difficulty of attracting new employees has increased significantly, especially in mining
professions and experienced mining management. These labour market conditions are unlikely to change significantly in the
medium term, and for a company like Newcrest with a relatively small workforce, retention of capable employees is a
strategically important matter for the overall performance of the Company.

Against the background of these circumstances, the Committee is completing a review of the Company’s remuneration
system to ensure that it remains appropriate to the Company’s evolving needs. One element of the new remuneration system
will be the introduction of a bonus incentive scheme, which will replace the previous long-term incentive arrangements that
operated in the 2004–05 period.

As a matter of good corporate governance shareholder approval of the proposed new bonus incentive scheme will be sought
at the 2005 Annual General Meeting. Shareholder approval will also need to be obtained at the Meeting for any grant of shares
or rights under the new scheme to the Managing Director. Details of the new bonus incentive scheme are being finalised and
will be set out in the 2005 Notice of Annual General Meeting.

Auditor Independence and Non-Audit Services
A copy of the auditor’s independence declaration as required under section 370C of the Corporations Act 2001 is attached.
There were no non-audit services provided by the auditor during the financial year.

Indemnification and Insurance of Directors and Officers
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.

Rounding of Amounts
Newcrest Mining Limited is a company of the kind referred to in the Australian Securities and Investments Commission class
order 98/100, dated 10 July 1998 and issued pursuant to section 341(1) of the Corporations Act 2001. As a result, amounts in
this Financial Report are rounded to the nearest $100,000, except where otherwise indicated.

This Report is signed in accordance with a resolution of the Directors.

Michael A. O’Leary
Acting Chairman

6 September 2005
Melbourne

Anthony J. Palmer
Managing Director and Chief Executive Officer

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

Auditor’s Independence Declaration Statement to the Directors
of Newcrest Mining Limited

In relation to our audit of the financial report of Newcrest Mining Limited for the financial year ended 30 June 2005, to the best
of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations
Act 2001 or any applicable code of professional conduct.

Ernst & Young

P I Buzzard
Partner

Melbourne
6 September 2005

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 2005
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 Consolidated Entity during the
financial year comprised exploration, development, mining
and the sale of gold and gold/copper concentrate.

Summary of Year’s Operating Results
The 2004–05 year was a significant year for the Consolidated
Entity with operating results including sales from Telfer since
the commencement of commercial production on 1 February
2005 and the requirement to raise additional funding for the
Telfer project. The Telfer funding plan also relied heavily on
the Cadia Valley mines to generate significant cash flows.
Ridgeway continued to perform strongly with the higher
copper price assisting in the provision of substantial cash
flows to the Group.

The operating results exclude initial production from the
Telfer mine. Revenue and operating costs incurred during
the pre-commissioning phase have been offset against the
capital cost of construction. The commencement of
commercial production from Telfer will result in a significant
increase in key financial measures for the 2005–06 full year.

The financial highlights of the 2004–05 year are summarised
in the following table:

2005

2004

Net profit after tax before
significant items

$148.2 million

$122.6 million

Net profit after tax

$136.1 million

$122.9 million

Basic earnings per share

41.3 cents

37.5 cents

Return on members’ equity
(EBIT before significant items)

Return on members’ equity
(net profit after tax)

Gearing (net debt/net debt
+ equity)

22.1 percent

18.6 percent

12.1 percent

12.4 percent

55 percent

49 percent

Profit after tax but before significant items increased
$25.6 million in 2004–05. This measure is considered
a good indicator of the profitability of the underlying
businesses. The increase in profit resulted principally from
higher production from the new Telfer mine, Toguraci’s first
full year of operations and continued low cash costs assisted
by strong copper by-product revenue.

Statement of Financial Performance
Major factors impacting the operating result for the current
year are:

Gold Sales Revenue
• Total gold revenue increased by $173.6 million to
$610.9 million due to an increase in sales ounces.
The achieved gold price received was $576 per ounce
(2004: $579 per ounce). Gold hedging gains included in
revenue contributed $16.2 million to the Group result and
the hedge book delivered as expected according to the
restructure undertaken in July 2004.

• Total gold sales ounces were 1,060,196 (2004: 754,745).

This increase of 305,451 ounces was derived from:

– increase of 146,786 ounces from commencement of

operations at Telfer

– increase of 139,401 ounces from a full year of

operations at Toguraci

– increase of 62,228 ounces from increased throughput

and grade at Cadia Hill

– increase of 23,785 ounces from commencement of

operations at Cracow

– decrease of 66,749 ounces from lower grade at

Ridgeway.

Copper and Silver Sales Revenue
• Net by-product revenue increased significantly by

$100.5 million to $374.6 million as a result of the increase
in the spot copper price and copper tonnes sold
increasing to 87,539 tonnes (2004: 84,231 tonnes).
The achieved copper price received of A$1.85 per pound
(2004: A$1.44 per pound) was after taking into account
copper hedge losses of $29.4 million. Silver revenue was
$8.7 million (2004: $7.4 million).

Other Revenue Factors
• Revenue and profit in the year were adversely impacted

by the build up of inventory. At year end there were
77,519 ounces of gold and 8,166 tonnes of copper which
will be sold and realised in the 2005–06 financial year.

Gold
(ounces)

Copper
(tonnes)

Opening Finished Goods – 1 July 2004

12,010

1,122

Production (excluding commissioning
production)

1,125,705

94,583

Sales (excluding commissioning sales)

(1,060,196)

(87,539)

Closing Finished Goods – 30 June 2005

77,519

8,166

• Main items included in other revenue comprised interest

received and proceeds from asset disposals and property
settlements.

Costs
• Gross mine costs (excluding copper by-product revenue)

increased due to higher production volume.

• Depreciation and amortisation on fixed assets totalled
$126.3 million which is equal to $119 per ounce sold
(2004: $147 per ounce). Depreciation is lower per ounce
mainly due to the plant and equipment at Toguraci being
fully depreciated at the time operations at Gosowong were
placed on care and maintenance and the inclusion of the
Cadia East mining reserve into the life-of-mine depreciation
calculation for Cadia Hill.

• $30.3 million (2004: $12.1 million) of borrowing costs

were expensed with the increase incurred following the
commissioning of the Telfer project. Net borrowing costs
capitalised to the Telfer project were $37.0 million
(2004: $36.5 million).

• Administration costs increased in line with the growth of
the Company resulting in an increase in the Operations
and Development divisions’ activities to assist the Group’s

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

an increase of $331 million as a result of the finalisation of
the debt raising. Newcrest Mining Limited concluded the year
with gearing (measured as net debt to net debt-plus-equity)
at 55 percent.

Contributed equity increased by $10.9 million during the year
from the issue of shares on conversion of employee options
and the Dividend Reinvestment Plan.

Statement of Cash Flows

Cash Flow – Operating Activities
Cash flow from operating activities decreased to
$259.0 million (2004: $266.8 million) due mainly to the
increase in debtors and the build up in inventories.

Cash Flow – Investing Activities
Major areas of expenditure in the period were:
• Telfer mine development (including pre-commissioning
operating costs and capitalised borrowing costs) –
$519.6 million

• Cadia, Ridgeway, Cadia East expenditure – $66.6 million
• Cracow mine development – $28.2 million
• Indonesia capital expenditure – $20.0 million
• Total exploration – $46.0 million.

Borrowings
Capital expenditure programs were largely financed by a
restructure in the debt profile of the Company. Major
movements in cash flows from financing activities include:
• $459.0 million proceeds received through US$350 million

private placement debt

• $333.7 million net drawdown from bilateral debt facilities
• $177.3 million proceeds from stand-by facilities
• ($538.1 million) full repayment of the Telfer syndicated loan

note facility

• ($41.2 million) repayment of the gold loan
• ($19.4 million) repayment of Nippon USD borrowing
• ($17.3 million) repayment of finance leases
• ($6.5 million) repayment of other loans.

Other Financing Activities
$8.4 million of funds were received from the exercise of share
options.

Dividend Payment
A final dividend payment of 5 cents per share amounting to
$16.5 million was paid to shareholders on 15 October 2004
in respect of the 30 June 2004 financial year. The Dividend
Reinvestment Plan reduced the actual cash amount paid to
$14.0 million. A dividend of $5.0 million was paid to outside
equity interests.

expanded operating base and the development of new
information technology infrastructure and systems to
match the expanded base. The increase was also due to
restructuring the Development division and included
payments to employees whose services were terminated.

• Total exploration expenditure for the period was $46.0 million
(2004: $45.4 million) with $39.2 million (2004: $32.1 million)
being expensed. Exploration expenditure capitalised in the
period related to Ridgeway Deeps and Kencana.

• Other expenses mainly comprise foreign exchange losses
on concentrate shipments and care and maintenance costs.

Significant Item – Provision for Hedging Restructures
• In July 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 restructure of the hedge book required the
gains and losses of the hedge restructure to be accounted
for as at the date the original transactions were
designated. This resulted in a provision profile as noted
below (that was reported as part of the hedge restructure)
and $17.3 million has been recorded as an expense which
also includes the ongoing accounting treatment of
previous years’ hedging restructures.

Adjustment from
Hedge Book
Restructure

Adjustment from
Prior Years’
Restructures

Net

(Expense)/
Revenue

(11)

(22)

(12)

(1)

(6)

–

(17)

(11)

–

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

Statement of Financial Position
During the year there was a significant debt restructure as
part of the Group’s Capital Management Plan. The
Company completed its funding requirements with the
successful issue of $US350 million of long-term senior
unsecured notes to the North American private placement
debt market. $US844 million of available revolving bilateral
debt facilities with Australian and foreign banks was also
completed. These facilities were used to repay the
A$575 million Telfer multi-currency syndicated loan note
and other short-term debt facilities. This revised debt
position has aligned Newcrest’s capital structure by
ensuring an appropriate mix of long and short-term debt.

At 30 June 2005 total assets have increased to $3.029 billion,
an increase of $463 million. The majority of this increase
represents the capital expenditure associated with the Telfer
project. Total liabilities at 30 June 2005 were $1.897 billion,

Statement of Financial Performance

For the year ended 30 June 2005

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

Reversal of provision for surplus foreign exchange and gold contracts

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 attributable to outside equity interest

Net profit attributable to members of the parent entity

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

2005
$M

985.5

(657.1)

328.4

14.0

(39.2)

(38.6)

(30.3)

(5.6)

(6.0)

(0.2)

–

(17.3)

205.2

(62.4)

142.8

(6.7)

136.1

41.3

40.8

2004
$M

711.4

(474.5)

236.9

5.1

(32.1)

(20.3)

(12.1)

5.7

(7.5)

(1.1)

10.2

(9.8)

175.0

(51.1)

123.9

(1.0)

122.9

37.5

37.0

The Statement of Financial Performance is to be read in conjunction with the discussion and analysis and the accompanying notes to the
financial statements.

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

Statement of Financial Position

At 30 June 2005

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

Income tax

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

2005
$M

64.6

154.5

1.2

103.3

–

34.7

358.3

9.1

4.8

1,309.8

1,079.2

–

267.9

2,670.8

3,029.1

154.7

321.5

–

8.8

13.7

–

498.7

2004
$M

157.0

109.9

0.3

40.2

10.8

20.5

338.7

34.6

7.9

537.9

1,411.6

30.8

204.1

2,226.9

2,565.6

159.7

86.2

10.8

–

8.1

3.3

268.1

1,118.8

1,027.6

–

147.3

64.8

67.4

1,398.3

1,897.0

1,132.1

802.4

319.9

1,122.3

9.8

1,132.1

30.8

100.7

57.3

81.3

1,297.7

1,565.8

999.8

791.5

200.3

991.8

8.0

999.8

The Statement of Financial Position is to be read in conjunction with the discussion and analysis and the accompanying notes to the financial
statements.

Statement of Cash Flows

For the year ended 30 June 2005

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

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Net proceeds from borrowings:

• US Private placement notes

• US Bilateral debt

• US 364-day loan

• Bank loan note

• Bank loan

Net repayment of borrowings:

• Bank loan

• Bank loan note

• US Dollar loan

• Gold loan

Repayment of finance lease principal

Proceeds from share issues

Dividends paid

Net cash provided by financing activities

Net increase/(decrease) 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

2005
$M

929.0

(644.6)

5.3

(23.0)

(7.7)

259.0

(51.5)

1.0

(46.0)

(42.9)

(460.6)

(46.3)

(39.7)

(686.0)

459.0

333.7

177.3

–

(6.5)

(538.1)

(19.4)

(41.2)

(17.3)

8.4

(19.0)

336.9

(90.1)

157.0

(2.3)

64.6

2004
$M

697.7

(419.7)

2.5

(12.1)

(1.6)

266.8

(19.1)

1.9

(45.4)

(9.4)

(647.8)

(18.0)

(15.6)

(753.4)

–

554.9

85.0

–

(22.8)

(49.1)

(15.4)

4.2

(13.4)

543.4

56.8

101.1

(0.9)

157.0

The Statement of Cash Flows is to be read in conjunction with the discussion and analysis and the accompanying notes
to the financial statements

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

Notes to the Concise Financial Report

Note 1 Accounting Policies
This Concise Financial Report has been derived from the Consolidated Entity’s full 2005 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.

Note 2 Revenue from Ordinary Activities

Sales revenue

Gold

Copper

Silver

Total sales revenue

Other revenues

Interest from other persons

Less: interest income capitalised

Gross proceeds from sale of non-current assets and property settlements

Joint venture management fees

Revaluation of investment

Other revenue items

Total other revenues

Total revenue from ordinary activities

Consolidated

2005
$M

610.9
365.9
8.7

985.5

5.7
(0.4)
6.4
0.8
0.7
0.8

14.0

999.5

2004
$M

437.3

266.7

7.4

711.4

3.4

(1.1)

2.0

0.2

0.4

5.1

716.5

Notes to the Concise Financial Report

Note 3 Expenses and Losses Included in Profit from Ordinary Activities Before Income Tax Expense

Consolidated

Depreciation of:

Property, plant and equipment

Amortisation of:

Plant and equipment under finance leases

Mine development

Feasibility

Mine leases

Deferred mining

Cadia royalty

(Less)/add: capitalised to inventory on hand

Total depreciation and amortisation

Borrowing costs:

Interest costs:

Interest on loans

Finance leases

Other:

Other borrowing costs

Foreign exchange (gains)/losses on USD borrowings and cash

Add: Capitalised foreign exchange on USD borrowings and cash

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 plant and equipment

Carrying value of plant and equipment sold

Profit on sale of plant and equipment

2005
$M

70.8

12.0

47.2

2.2

0.3

0.9

(8.0)

126.3

54.1

7.5

5.7

(48.5)

18.8

48.5

(37.0)

30.3

7.6

28.9

0.6

9.5

4.4
0.8

(0.2)

(5.6)

2.3

(0.2)

2.1

2004
$M

62.8

8.1

39.0

–

0.3

0.9

1.0

(1.2)

110.9

28.6

7.0

13.0

8.5

57.1

(8.5)

(36.5)

12.1

7.5

17.7

0.4

5.4

3.1

0.4

1.6

5.7

2.0

(1.1)

0.9

Note 4 Individually Significant Items (Charged)/Credited in Operating Profit from Ordinary Activities Before

Income Tax Expense

Provision for surplus foreign currency contracts

Losses recognised during the financial year in relation to hedge contract restructures

Total significant items before tax expense

Tax effect of significant items

Total significant items after tax expense

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

Consolidated

2005
$M

–

(17.3)

5.2

(12.1)

2004
$M

10.2

(9.8)

0.4

(0.1)

0.3

Note 5 Income Tax
The prima facie tax on profit, using tax rates applicable in the country of operation, differs from the income tax provided in the
financial statements as follows:

Prima facie tax on profit from ordinary activities at 30% (2004: 30%)

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

Note 6 Dividends

Dividends recognised in the current year by the Company are:

2005 – Dividend paid during the year

Final – ordinary

2004 – Dividend paid during the year

Final – ordinary

Subsequent events

Consolidated

2005
$M

61.6

0.1

0.3

0.6

(1.2)

0.9

62.4

2004
$M

52.5

0.1

–

0.1

(0.8)

(0.9)

51.1

Cents per
share

Total
amount
$M

Franked/
unfranked

Date of
payment

5.0

16.5

16.4

Franked

15 Oct 2004

Franked

17 Oct 2003

Dividend proposed and not recognised as a liability:(1)

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

Final – ordinary

5.0

16.5

49%

Franked

14 Oct 2005

(1) The financial effect of this dividend has not been brought to account in the financial statements for the year ended 30 June 2005 and will be recognised

in subsequent financial reports. Dividends proposed will be franked to 49 percent at the tax rate of 30 percent (2004: 30 percent).

Dividend franking account
30 percent franking credits are available to shareholders of Newcrest Mining Limited of approximately $2.9 million as at
30 June 2005 (2004: $10.2 million). 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 the year end

Group at the year end

(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 2005 will be 49 percent franked utilising the $2.9 million of the franking account balance and
any franking credits available from subsequent tax instalment payments.

Notes to the Concise Financial Report

Note 7 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 attributable to outside equity interest

Earnings used in calculating basic earnings per share

Consolidated

2005

41.3

40.8

2004

37.5

37.0

Consolidated

2005
$M

142.8

(6.7)

136.1

2004
$M

123.9

(1.0)

122.9

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

329,614,969

327,919,903

No. of shares

Effect of dilutive securities:

Share options

4,000,161

4,015,926

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

333,615,130

331,935,829

Note 8 Contributed Equity

Opening balance

Share issued under:

• Newcrest Executive Option Plan (b)

• Dividend Reinvestment Plan (c)

Total contributed equity

Movement in Issued Ordinary Shares for the Year

Opening number of shares

Share issued under:

• Employee Share Acquisition Plan (a)

• Newcrest Executive Option Plan (b)

• Dividend Reinvestment Plan (c)

Closing number of shares

Consolidated

2005
$M

791.5

8.4

2.5

802.4

2004
$M

784.3

4.2

3.0

791.5

Number of Ordinary Shares
2004

2005

328,559,191

326,911,171

30,000

29,808

1,819,770

1,351,500

166,117

266,712

330,575,078

328,559,191

(a) The Employee Share Acquisition Plan is a broad-based employee share plan. During the year, the Plan offered eligible employees fully paid shares

for $nil consideration, with a total of 30,000 (2004: 29,808) shares issued.

(b) The Newcrest Executive Option Plan provides options for senior management, including the Managing Director.

(c) The Dividend Reinvestment Plan provides shareholders with an opportunity to reinvest all or part of their dividend entitlements at the market price

at the time of issue.

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

Note 9 Retained Profits

Retained profits at beginning of year

Net profit attributable to members of the parent entity

Dividends recognised during the year (refer Note 6)

Retained profits at end of year

Consolidated

2005
$M

200.3

136.1

(16.5)

319.9

2004
$M

93.8

122.9

(16.4)

200.3

Note 10 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.

Refer to the 2005 full Financial Report for the full financial instruments note of the Consolidated Entity as at 30 June 2005.

The Aggregate Net Fair Values of Derivative Financial Instruments
The valuation of financial instruments not recognised on the Statement of Financial Position reflects the estimated net
realisable value or replacement value of the instruments, assuming an orderly execution in normal market conditions at the
current market rates as at reporting date. Fair value is based on either listed market prices or quotes from independent
external counterparties using standard valuation techniques.

Net fair value of derivative financial instruments

Gold hedge contracts

Copper hedge contracts

Foreign currency contracts

Gold loan swap contracts

Gold lease rate swaps

Total

Note 11 Segment Information

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

2005

Sales revenue (i)

Other revenue

Total segment revenue

Segment result (i)

Income tax expense

Net profit/(loss)

Segment assets

Segment liabilities (vi)

Acquisition of segment assets

Depreciation and amortisation of
segment assets

Other non-cash expenses

Significant revenues/(expenses)
(refer Note 4)

Cadia Valley
Operations
$M

704.1

–

704.1

233.8

1,036.4

377.3

74.3

96.7

6.2

–

Toguraci(iv)

Telfer (iii) Boddington (ii)

123.3

–

123.3

63.2

79.5

27.6

6.1

1.5

–

157.9

–

157.9

44.0

1,757.2

1,223.4

456.9

20.5

1.6

–

11.1

18.7

2.6

–

2005
$M

(426.0)

(118.2)

–

(46.0)

7.3

(582.9)

Group &
Cracow (v) Unallocated
$M

(13.3)

14.0

0.7

(137.4)

(62.4)

(199.8)

78.8

250.0

28.9

0.2

5.2

13.5

–

13.5

1.6

66.1

–

28.7

2.8

0.2

–

2004
$M

(357.8)

(42.9)

(50.9)

(26.8)

–

(478.4)

2005
Total
$M

985.5

14.0

999.5

205.2

(62.4)

142.8

3,029.1

1,897.0

619.0

126.3

14.7

(12.1)

Notes to the Concise Financial Report

Note 11 Segment Information (continued)

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 4)

Cadia Valley
Operations
$M

639.7

0.1

639.8

188.3

964.8

445.4

28.9

105.1

7.1

–

Toguraci(iv)

Telfer (iii) Boddington (ii)

42.6

0.2

42.8

20.3

47.0

6.8

13.8

4.2

0.3

–

1.3

–

1,277.6

838.5

631.3

–

0.5

–

9.0

18.3

1.3

–

Group &
Cracow (v) Unallocated
$M

–

23.4

3.8

20.3

–

29.1

3.0

32.1

(33.6)

(51.1)

(84.7)

243.8

253.0

23.0

1.6

3.1

0.3

2005
Total
$M

711.4

5.1

716.5

175.0

(51.1)

123.9

2,565.6

1,565.8

718.6

110.9

10.5

0.3

(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 commenced in February 2005, prior to this the Telfer mine was under redevelopment.

(iv) Operations at Toguraci commenced in February 2004, prior to this the mine was under care and maintenance.

(v) The Cracow Mining Joint Venture commenced operations in December 2004, prior to this time it was being constructed.

(vi) Group borrowings have been attributed to CVO and Telfer.

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

2005
$M

118.3

123.3

690.8

66.4

(13.3)

985.5

2004
$M

96.1

42.6

482.9

60.7

29.1

711.4

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

Note 12 Subsequent Events
Subsequent to 30 June 2005, Newcrest Mining Limited announced that it is assessing a divestment of its 22.22 percent
interest in the Boddington Gold Mine Joint Venture.

There are no other matters or circumstances which have arisen since 30 June 2005 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.

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

Note 13 Impact of Adopting Australian Equivalents to International Financial Reporting Standards
Newcrest Mining Limited will be required to prepare financial statements that comply with Australian equivalents to
International Financial Reporting Standards (‘A-IFRS’) for its annual reporting period beginning on 1 July 2005. Accordingly,
Newcrest Mining Limited’s first half-year report prepared under A-IFRS will be for the half-year reporting period ended
31 December 2005, and its first annual financial report prepared under A-IFRS will be for the year ended 30 June 2006.
Adopting A-IFRS for the first time will result in the comparative financial statements being restated to amounts reflecting the
application of A-IFRS to that comparative period. Most adjustments required on transition to A-IFRS will be made
retrospectively, against opening retained earnings as at 1 July 2004.

Management of the A-IFRS implementation
The Company established a formal project plan, allocated internal resources and engaged expert consultants, monitored by a
steering committee, to manage the transition to A-IFRS. Regular updates are also provided at each Audit Committee meeting.
The implementation project consists of the following phases:

• initial scoping and impact assessment studies to isolate key areas that will be impacted by the transition to A-IFRS

• an evaluation and design phase to identify specific changes required to existing accounting policies, information systems

and business and commercial impacts

• an implementation and review phase which culminates in the collection of financial information necessary to compile A-IFRS

compliant financial statements.

At the date of this financial report, Newcrest is well advanced in the project plan, including the assessment of accounting
policy alternatives on transition to A-IFRS, and the determination of the likely impact on the results and financial position of the
Company and the Consolidated Entity. The following A-IFRS Accounting Standards highlighted in the ‘Key Differences in
Accounting Policy’ section are the main areas identified to date which will impact Newcrest’s opening balance sheet and the
first sets of accounts prepared at 31 December 2005 and 30 June 2006.

Key differences in accounting policy
Set out below are the key areas where accounting policies are expected to change on adoption of A-IFRS and our best
estimate of the quantitative impact of the changes on net profit for the year ended 30 June 2005 and net assets and equity
as at 30 June 2005. The figures disclosed are management’s best estimates of the quantitative impact of the changes as at
the date of preparing the 30 June 2005 financial report. The actual effects of transition to A-IFRS may differ from the estimates
disclosed due to (a) ongoing work being undertaken by the A-IFRS project team; (b) potential amendments to A-IFRS and
Interpretations thereof being issued by the standard-setters and the International Financial Reporting Interpretations
Committee; and (c) emerging accepted practice in the interpretation and application of A-IFRS and Urgent Issues Group
(‘UIG’) Interpretations. Therefore until the Company prepares its first full A-IFRS financial statements, the accompanying note
disclosures may have to be adjusted.

The following reconciliations outline the likely impacts on the current year result and financial position of the Company and
Consolidated Entity had the financial statements been prepared under A-IFRS, based on the accounting policy decisions
current at the date of this financial report.

As described above, readers of the financial report should note that further developments in A-IFRS may result in changes to
the accounting policy decisions and, consequently, the likely impacts outlined in the following reconciliations.

Year ended 30 June 2005

Net profit after tax as reported under AGAAP

Employee benefits expense

Share-based payment expense

Changes in decommissioning expenses

Changes in the fair value of derivatives

Changes in the fair value of designated hedges

Income tax benefit

Net profit after tax under A-IFRS

Notes

Consolidated
$M

(a)

(b)

(c)

(e)

(h)

136.1

0.2

(4.5)

1.9

–

0.7

134.4

Notes to the Concise Financial Report

Note 13 Impact of Adopting Australian Equivalents to International Financial Reporting Standards (continued)

As at 30 June 2005

Net assets (AGAAP)

Property, plant and equipment

Other assets

Deferred tax liabilities

Provisions

Other financial liabilities

Net assets (A-IFRS)

As at 30 June 2005

Total equity (AGAAP)

Change in share-based payment reserve

Change in retained earnings – adjustment on transition to A-IFRS

Change in retained earnings – adjustment to current year profit

Total equity (A-IFRS)

Notes

Consolidated
$M

(c)

(d)

(h)

(c)

(a)

1,132.1

3.8

(4.4)

0.7

10.0

(0.2)

1,142.0

Notes

Consolidated
$M

(b)

(a) (c) (d) (h)

1,132.1

4.5

7.1

(1.7)

1,142.0

The following explanatory notes relate to the reconciliations above and describe, for significant items, the differences between
the accounting policies under A-IFRS and the current treatment of those items under AGAAP.

(a) Defined benefit superannuation plan
Under AASB 119 ‘Employee Benefits’, Newcrest will be required to recognise an actuarially determined cost for employees in
the defined benefit plan. The transitional adjustment on 1 July 2004 will be to record the deficit of the defined benefit plan of
$0.4 million as a liability in the balance sheet and an adjustment to opening retained earnings. At 30 June 2005 there are only
three employees remaining in the defined benefit plan, therefore the transitional and future period impacts are not expected to
be material. The effect of the above requirement on the 30 June 2005 financial year, based on the valuation of the fund, will be
a decrease in employee benefits expense of $0.2 million. This will result in the cumulative impact on the financial position at
30 June 2005 being an increase in the employee benefit provision of $0.2 million and a corresponding decrease to retained
earnings of $0.2 million.

(b) Share-based payments
In accordance with AASB 2 ‘Share-based Payment’, Newcrest’s Executive Option Plan and Employee Share Acquisition Plan
will be treated as share-based compensation. Under this approach equity-settled share-based payments in respect of equity
instruments issued after 7 November 2002 that were unvested as at 1 January 2005 are measured at fair value at grant date.
The fair value determined at grant date is expensed on a straight line basis over the vesting period, based on the estimated
number of equity instruments that will vest. As a consequence, for the financial year ended 30 June 2005 total contributed
equity would increase by $4.5 million and an additional employee benefit expense of $4.5 million would be recognised in the
profit and loss account. This will result in a change to the current accounting policy as equity-settled share-based payments
are not required to be expensed under current AGAAP.

(c) Provision for rehabilitation
AASB 137 ‘Provisions, Contingent Liabilities and Contingent Assets’ requires the rehabilitation, restoration and
decommissioning obligations associated with the retirement or disposal of mine site assets to be recognised when the
disturbance and obligation occurs. The provision is measured at the present value of the future expenditure and a
corresponding asset is also recognised under AASB 116 ‘Property, Plant and Equipment’. The capitalised cost is amortised
over the life of the project and a provision is increased as further disturbance occurs which creates a further obligation to
rehabilitate. Associated discounting of the liability unwinds throughout the life of the provision with this unwind being
recognised as an interest expense.

Currently under AGAAP, Newcrest has a rehabilitation liability which progressively increases over the life of the operation.
The build up is taken to the profit and loss account as the liability is raised.

The transitional adjustment at 1 July 2004 will result in recognising a related rehabilitation asset of $4.8 million, a decrease in
the rehabilitation provision of $7.2 million due to the requirement to present value the liability and a net increase to retained
earnings of $12.0 million. The restated profit impact for the year ended 30 June 2005 will result in a net decrease to the
rehabilitation provision of $2.8 million and an amortisation expense of $0.9 million, resulting in a net increase to profit for the
30 June 2005 financial year of $1.9 million from the reversal of the AGAAP expense and expensing the amortisation of the
rehabilitation asset and the unwinding of the discounting of the liability.

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

(d) Property, plant and equipment
In accordance with AASB 116 ‘Property, Plant and Equipment’ Newcrest has elected to continue to recognise non-current
assets on transition to A-IFRS at cost. Consequentially there will not be any impact for Newcrest, as non-current assets are
currently carried at cost.

Capitalised costs relating to the asset base of $4.4 million will be derecognised from other assets as this does not meet the
recognition criteria for a component of property, plant and equipment.

Newcrest has elected to continue to capitalise borrowing costs on qualifying assets and therefore no difference is expected
to result.

(e) Derivative financial instruments
Newcrest has elected to apply the first-time adoption exemption available to defer the date of transition of AASB 132
‘Financial Instruments: Disclosure and Presentation’ and AASB 139 ‘Financial Instruments: Recognition and Measurement’
until 1 July 2005. Accordingly, there will be no quantitative impacts on the restated 30 June 2005 financial statements.

However, it is expected that required adjustments on 1 July 2005 will be largely attributable to derivatives designated as cash
flow hedges, which will be recognised in the balance sheet position at their fair value. It is expected this will result in an
increase in other financial liabilities of $590.2 million on 1 July 2005. From this date changes in fair value of cash flow hedges
that meet the detailed hedge accounting requirements will be recognised directly in equity until the hedged transaction occurs.

It is also expected that adjustments will be required on 1 July 2005 for other derivatives that do not qualify for hedge
accounting and will be recognised in the balance sheet at their fair value on transition. This is expected to result in an
increase in other financial assets of $7.3 million on 1 July 2005. From this date changes in fair value of these derivatives
will be recognised in the profit and loss account.

(f) Exploration and evaluation
Newcrest Mining Limited’s existing policy for exploration and evaluation activity complies with A-IFRS requirements and
therefore no difference is expected to result from either the treatment of costs or from impairment testing.

(g) Retained earnings
With limited exceptions, adjustments required on first-time adoption of A-IFRS are recognised directly in retained earnings
(or if appropriate another category of equity) at the date of transition to A-IFRS. The cumulative effect of these adjustments
for the consolidated entity on transition to A-IFRS will be an increase in retained earnings of $7.1 million.

(h) Income tax
The adjustment to income tax expense relates to the above A-IFRS transitional adjustments.

(i) Restated A-IFRS Statement of Cash Flows for the year ended 30 June 2005
No material impacts are expected to the cash flows presented under AGAAP on adoption of A-IFRS.

Directors’ Declaration

In the opinion of the Directors of Newcrest Mining Limited:

(a) The Concise Financial Report of the Consolidated Entity

for the year ended 30 June 2005 is in accordance with
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 2005;

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 28 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.

Michael A. O’Leary
Acting Chairman

Anthony J Palmer
Managing Director and Chief Executive Officer

6 September 2005
Melbourne

Section 7 Financials
Newcrest Mining
Concise Annual Report 2005

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 and the accompanying notes to
the financial statements for the Consolidated Entity for the
year ended 30 June 2005. The Consolidated Entity
comprises both the Newcrest Mining Limited (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 2005. Our audit report on the full Financial Report
was signed on 6 September 2005, 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 the consolidated
entity, and have met the independence requirements of
Australian professional ethical pronouncements and the
Corporations Act 2001. We have given to the Directors of the
Company a written Auditor’s Independence Declaration,
signed on 6 September 2005 (a copy of which is included in
the Directors’ Report).

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
6 September 2005

Shareholder Information

Capital
Share capital comprised 331,183,328 shares on 31 August
2005.

Shareholder Breakdown
At 31 August 2005 the shareholder breakdown consisted of
the following:

Shareholder Details
At 31 August 2005 the Company had 26,293 ordinary
shareholders.

There were 468 shareholdings with less than a marketable
parcel of $500 worth of ordinary shares (based upon a
market price of $16.99 as at 31 August 2005).

Retail 14%

Other 2%

Domestic Institutions 24%

International Institutions 60%

The shareholder base continued to evolve over the year with
the international component of the register growing from
52.4 percent to 60 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 2005

Name

National Nominees Limited
Westpac Custodian Nominees Ltd
JPMorgan Nominees Australia Limited
ANZ Nominees Limited
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Queensland Investment Corporation
Cogent Nominees Pty Limited
AMP Life Limited
Westpac Financial Services Ltd
IAG Nominees Pty Limited
UBS Nominees Pty Ltd
Merrill Lynch (Australia) Nominees Pty Ltd
Bond Street Custodians Limited
Government Superannuation Office
National Superannuation Trusts Pty Ltd
RBC Global Services Australia
Equity Trustees Limited
Fortis Clearing Nominees Pty Ltd
UBS Private Clients Australia

Substantial Shareholders at 31 August 2005

Capital Group Companies, Inc.
Merrill Lynch Investment Management Group
Commonwealth Bank of Australia

Investor Categories
Ranges

1–1,000

1,001–5,000

5,001–10,000

10,001–100,000

100,001 and Over

Total

Newcrest Mining
Concise Annual Report 2005

Investors

16,090

9,015

703

413

26,293

Units

71,605,703
70,725,291
52,977,006
28,551,648
26,788,357
7,766,253
6,835,615
4,973,891
4,307,645
3,592,548
2,007,115
1,390,922
1,174,372
652,475
602,326
582,295
572,392
495,937
480,069
433,227

286,515,087

44,486,421
23,493,865
16,746,346

Securities

7,235,805

18,727,386

5,097,960

10,380,742

289,741,435

331,183,328

Issued Capital %

21.62
21.36
16.00
8.62
8.09
2.35
2.06
1.50
1.30
1.08
0.61
0.42
0.35
0.20
0.18
0.18
0.17
0.15
0.14
0.13

86.51

13.46
7.15
5.09

Issued Capital %

2.19

5.65

1.54

3.13

87.49

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 49 percent franked dividend of
5 cents per share. The dividend is payable to shareholders
on 14 October 2005. Shareholders registered as at the close
of business on 23 September 2005 will be eligible for the
dividend. The Dividend Reinvestment Plan remains in place
and will be offered to shareholders at market price.

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 positive
1,066,138 and at year end a net 4,557,082 ADRs were
outstanding.

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

• elect to receive financial reports electronically

• update your address details

• update your bank details

• confirm whether you have lodged your Tax File Number
(TFN), Australian Business Number (ABN) or exemption

• 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 (0)3 9615 9947. Share registry contact details are
contained in the Corporate Directory of this Report on the
inner back cover.

Five Year Summary

For the 12 months ending 30 June

2005

2004

2003

2002

2001

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

1,157,520*
124
245
136
9.9

761,780
119
268
123
9.6

714,377
217
356
92
6.6

644,626
253
414
(53)
3.7

773,352
290
439
38
7.2

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

Total

Copper Production (tonnes)

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)

Cash flow Expenditure ($M)
Exploration
Capital

Profit and Loss ($M)
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 ($M)
Total assets
Total liabilities
Shareholders’ equity

Return on Capital Employed (percent)

Issued Capital (million shares) at year end

Gold Inventory (million ounces)
Reserves
Resources

Includes commissioning production.

(1)
(2) Gosowong production.

Newcrest Mining
Concise Annual Report 2005

308,516

26,128(1)

382,034
217,740(1)
223,102
–
–

1,157,520

96,785

244,261
–
438,026
–
79,493
–
–

761,780

84,758

298,848
–
377,539
–

258,834
–
127,665
–

37,878(2)

232,297(2)

–
112

–
25,830

300,255
–
50,688
58,374
226,900(2)
86,379
50,756

714,377

644,626

773,352

67,738

40,055

34,002

124
245

302
1.08
374
1.34

46
641

986
259
(126)
(62)
136
41.3
5

3,031
1,899
1,132

9.9

330.6

33
61

119
268

289
0.77
379
1.01

45
710

711
267
(111)
(51)
123
37.5
5

2,566
1,566
1,000

9.6

328.6

28
62

217
356

331
0.75
426
0.96

33
232

607
199
(98)
(29)
92
29.6
5

1,839
954
885

6.6

311.4

28
53

253
414

330
0.86
449
1.17

45
275

480
90
(102)
21
(53)
(19.2)
5

1,376
836
540

3.7

276.7

28
53

290
439

349
1.00
466
1.33

51
145

581
136
(112)
(12)
38
15.6
5

1,217
769
448

7.2

244.4

10.4
42

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: bernard.lavery@newcrest.com.au

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

Share Registry
ASX Perpetual Registrars Limited
Level 4
333 Collins Street
Melbourne, Victoria 3000
Australia

Postal Address
GPO Box 1736
Melbourne, Victoria 3001
Australia

Telephone: 1300 554 474

+61 (0)3 9615 9947
Facsimile: +61 (0)3 9615 9900
+61 (0)2 9287 0309*
*For faxing of Proxy Forms only.

General Manager Corporate
Development
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: peter.reeve@newcrest.com.au

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 2005
Annual General Meeting at 10.00am
Hotel InterContinental
117 Macquarie Street
Sydney, New South Wales

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

Concise Annual Report
This is the Company’s Concise Annual
Report for 2005. The full Financial Report
and Auditor’s Report are available to
members free of charge upon request.