Newcrest Mining Annual Report 2007

FY2007 Annual Report · Newcrest Mining

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Newcrest Mining
Concise Annual Report
2007

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Newcrest is a leading gold and copper
producer. It provides investors with an
exposure to large, low-cost, long life and
small, high margin gold and copper mines.
It aims to be in the lowest quartile for costs.
Newcrest has technical skills and mining
experience to deliver strong ﬁ nancial returns
and growth through exploration success.
Its vision is to be the ‘Miner of Choice’.
Social responsibility, safety and sustainability
are the fundamental guideposts to that vision.

Contents
Key achievements 2006–07
Performance in brief 2006–07
Chairman’s Report
Managing Director and
Chief Executive Ofﬁ cer’s Review
Financial Report
Provinces
Telfer Province
Cadia Valley Province
Cracow Province
Gosowong Province
Namosi Prospect
Exploration
Mineral Resources and Ore Reserves
2007 Mineral Resources
2007 Ore Reserves
Risk Management
Health and Safety
Community Relations
Environment

1
2
4

6
8
9
10
14
20
22
24
25
28
32
33
34
36
38
40

Board of Directors
Corporate Governance
Concise Financial Report
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration Statement
Discussion and Analysis
of the Financial Statements
Income Statement
Balance Sheet
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Concise Financial Report
Directors’ Declaration
Independent Audit Report
Shareholder Information
Five Year Summary
Corporate Directory

42
44
48
49
54
75

76
79
80
81
82
83
88
89
90
92
IBC

Annual General Meeting
The 27th Annual General Meeting of Newcrest Mining Limited
will be held at the Grand Waldorf Ballroom, The Sebel
Albert Park, 65 Queens Road, Melbourne, Victoria on
Thursday 1 November 2007 at 10.00am.

Corporate Directory

Investor Information
Registered and Principal Ofﬁ ce
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
Link Market Services Limited
Level 9
333 Collins Street
Melbourne, Victoria 3000
Australia

Postal Address
Locked Bag A14
Sydney South, New South Wales 1235
Australia
Telephone: 1300 554 474

+61 (0)2 8280 7111
Facsimile: +61 (0)2 9287 0303
+61 (0)2 9287 0309*
*For faxing of Proxy Forms only.

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

ADR Depositary
BNY – Mellon Shareowner Services
Investor Services
P.O. Box 11258
Church Street Station
New York, NY 10286-1258
Telephone: Toll Free for domestic callers:
1-888-BNY-ADRS or 1-888-269-2377
International Callers: +1-212-815-3700
Email: shareowners@bankofny.com
Internet: http://www.adrbny.com

Other Ofﬁ ces
Brisbane
Exploration Ofﬁ ce
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 Ofﬁ ce &
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
1 November 2007
Annual General Meeting at 10.00am
Grand Waldorf Ballroom
The Sebel Albert Park
65 Queens Road
Melbourne, Victoria 3004

Visit our website at
www.newcrest.com.au to view our key
dates and features; current share price;
market releases; annual, quarterly and
ﬁ nancial 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 2007. The full Financial Report
and Auditor’s Report are available to
members free of charge upon request.

Key Achievements 2006–07

– Total gold production increased to over 1.6 million ounces
– Cash ﬂ ow from operations increased by 47 percent to A$387.4 million
– Telfer and Gosowong (Kencana) underground mines commissioned
– Growth projects, including Cadia East, Ridgeway Deeps and Kencana, progressed
– Copper production unhedged since June 2007
– Renewal of executive management and Board
– A$2.042 billion Entitlement Offering to fund ﬁ nancial restructure (post 30 June 2007)

Relative Share Price Performance Index – 10 Years (A$)

1,200

1,000

800

600

400

200

0
Jun 97

Jun 98

Jun 99

Jun 00

Jun 01

Jun 02

Jun 03

Jun 04

Jun 05

Jun 06

Jun 07

ASX 200
NCM Limited
Philadelphia Stock Exchange Gold & Silver Index

Newcrest Mining Concise Annual Report 2007

2,000

1,500

1,000

500

05*

120

100

300

250

200

150

100

6%
Increase

12%
Decrease

14%
Increase

Performance in brief 2006–07

– 1,617,251 ounces of gold and 88,940 tonnes of copper produced
– Group cash costs (at achieved prices) increased to A$280 per ounce
– Group total costs (at achieved prices) increased to A$419 per ounce
– Gold Ore Reserves remained the same at 33 million ounces of gold
– Copper Ore Reserves increased by 13 percent to 2.7 million tonnes
– Full year proﬁ t after tax was A$72 million
– Full year proﬁ t after tax and minority interest from continuing operations

before hedge restructure was A$194.5 million

– Group safety and environmental performance improved
– Market capitalisation increased 9 percent to A$7.7 billion (as at 30 June)
– A ﬁ ve cent unfranked ﬁ nal dividend declared
– Ridgeway Deeps Project Development was approved
– Memorandum of Understanding to establish joint venture for gold/copper

exploration at Namosi, Fiji

– Partial restructure of the gold hedgebook completed
– Legacy copper hedging positions completed
– Gearing reduced to 46 percent

Newcrest Mining Concise Annual Report 2007

150

120

06*

300

250

200

150

100

400

300

200

100

45%
Decrease

18%
Decrease

47%
Increase

Gold produced
Copper produced
Gold price realised
Sales revenue
Operating EBITDA before hedge restructure
Net proﬁ t after tax and minority interest
Net proﬁ t after tax and minority interest from continuing operations
Capital expenditure (cash ﬂ ow basis including exploration)
Basic earnings per share from continuing operations after minority interest
Return on capital employed (ROCE) (EBIT/average capital employed)
Net debt/(net debt plus equity)
(All $ are Australian denominated unless stated otherwise.)

12 months to

12 months to
30 June 2007 30 June 2006
1,529,866
100,521
564
1,393.1
456.6
349.5
131.3
544.9
39.6
8.4
50

1,617,251
88,940
682
1,555.0
587.2
72.0
72.0
400.7
21.5
5.9
46

(ounces)
(tonnes)
($ per ounce)
($ million)
($ million)
($ million)
($ million)
($ million)
(cents per share)
(percent)
(percent)

Newcrest Mining Concise Annual Report 2007

Chairman’s Report

The 2006–07 period was a signiﬁ cant
year for the Company as it consolidated
further its position as Australia’s leading
independent gold producer.

This was achieved through the
continued delivery of its growth strategy,
as well as through a number of
fundamental changes, which together
have enhanced its capacity to generate
wealth for shareholders.

In July 2006, the Board commenced
the task of rebuilding the senior
management team under the new
Managing Director, Mr Ian Smith
and Mr Greg Robinson, who joined
the Company as the Executive Director
Finance in November that year.
The new management team, as well
as a realigned management structure,
is now in place and functioning well.
Those changes have reinforced the
culture of performance and accountability
through all levels of the organisation and
have been fundamental to the Company’s
improving operating proﬁ le.

At the same time, the Board initiated
a process of its own renewal. This has
enabled ﬁ ve new Directors, including a
new Chairman, to be appointed bringing
a wide variety of expertise, skills and
fresh perspectives to the Board to add
to the insight and depth of experience
of those Directors who have served the
Company so well to date. The Company
acknowledges, and is grateful for, the
contribution of those Directors who have
stepped down during the year.

The Board has reafﬁ rmed the
Company’s strategy of maintaining
improving Newcrest’s position

a responsible and efﬁ cient producer
old and copper. The Company’s
ducing mines, particularly in the three
or provinces at Cadia Valley, Telfer
Gosowong, will continue to underpin

position as one of the world’s lowest
t major gold producers. They will also
vide the stable operating platform

that will provide the foundations for future
growth. After a problematic beginning,
the renewed Telfer operation has begun
to perform in line with the Company’s
revised expectations, as management
has gained a better understanding
of the complex characteristics of the
Telfer orebody.

The development projects in the Cadia
Valley at Ridgeway Deeps and at the
very large Cadia East deposit, as well
as the Kencana expansion at Gosowong,
will maintain the strong pipeline of
growth projects in the short to medium
term. Through those developments,
the Company will consolidate its
competitive advantage and add to
its existing levels of production. The
technical know how and human capital
that the Company has built up to enable
specialised underground mining
techniques to be used in those new
mines will also enhance the Company’s
competitive position.

Historically, exploration has been
a key value driver for Newcrest. The
commitment to both early stage and
advanced exploration will be maintained
and progressively increased. Early and
advanced exploration plays will be
sustained to ensure that an attractive
proﬁ le for growth is maintained. The
commitment to exploration will be
supported by a new focus on early
merger and acquisition opportunities.

Newcrest’s gold inventory of more
than 55 million ounces of estimated
resources and more than 33 million
ounces of estimated reserves continues
to place it among the leaders of the
world gold companies. This inventory
is a direct result of past successes
in exploration and will underpin the
Company’s production proﬁ le for many
years to come.

The 2006–07 period was a signiﬁ cant year
for the Company as it consolidated further
its position as Australia’s leading independent
gold producer.

The Board is conﬁ dent that the Company
has a bright future. The strategy which
has served it so well in the past remains
core to its future direction and will be
maintained, with adjustments as
necessary. The physical and ﬁ nancial
assets are strong, and the Company
is well served by a skilled workforce
and a talented management team.
The Board acknowledges and thanks
all of the people at Newcrest for their
efforts during the past year.

Donald Mercer
Chairman

While recent volatility in world capital
markets is a reminder of the variability
in price outlook for all commodities,
Newcrest’s strategy of positioning itself
as a low cost producer in both gold
and copper will ensure that it remains
strongly competitive in all commodity
price environments. In addition to gold’s
unique position as a store of value,
the demand for gold, particularly from
China and India, remains strong, as
does the demand for copper from most
developed and emerging economies.

In September 2007, the Company
announced that it would undertake
a Rights offering of new shares to
shareholders to raise approximately
$2,042 million. The proceeds will be
used to restructure the Company’s
ﬁ nancial arrangements, and in particular
to eliminate its gold hedge positions
and reduce gearing to less than twenty
percent. This strengthening of the
Company’s balance sheet will give
it greater ﬁ nancial ﬂ exibility and free
up cash ﬂ ow. Importantly, as an
unhedged producer it will provide
shareholders with a greater exposure
to spot gold and copper prices and,
in combination with the reduced levels
of debt, will enhance the Company’s
capacity to pursue new growth
opportunities. At the time of writing, the
Institutional component of the offering
had been successfully completed raising
$1,586 million. A further $456 million is to
be raised through the Retail component,
on a fully underwritten basis, by early
October 2007.

Newcrest Mining Concise Annual Report 2007

Managing Director
and Chief Executive
Ofﬁ cer’s Review

During 2006–07, considerable progress
was made in improving operational,
ﬁ nancial and business process
performance at Newcrest. This resulted
in record full year Group gold production
in excess of 1,600,000 ounces and
enabled the Company to maintain its
position as a leading international gold
company and one of the lowest cost
global gold producers. Cash ﬂ ow from
operations increased by 47 percent to
A$387 million and underlying net proﬁ t
(before hedging accounting changes)
increased 40 percent to $194.5 million.

The Cadia Valley, Gosowong and
Cracow operations performed in line with
plan, particularly in relation to production
and costs. At Telfer, difﬁ culties continued
in delivering the expected levels of
production from the estimated ore
grades. Extensive studies and reviews
throughout the year conﬁ rmed that
adjustments to resource classiﬁ cation,
grade calibrations, cut-off approach and
dilution parameters were necessary in
the supergene part of Telfer Main Dome.
The outcome of this work has been
applied to the primary mineralisation at
Telfer, resulting in a net decrease in the
Telfer Mineral Resource. We consider
this to be a conservative approach that
provides a more accurate estimate for
the Telfer deposits, and raises our
conﬁ dence that future production from
Telfer will be in line with expectations.

Two underground mines were
successfully commissioned during
the year. At Gosowong, Newcrest’s ﬁ rst
offshore underground operation, the
Kencana undercut-and-ﬁ ll operation,
commenced production. Commissioning
of the Telfer Deeps sub-level cave mine
commenced in August 2006, and by
February 2007 had ramped up to its
nameplate production rate of 4 million
tonnes per annum in record time.

In June, approval for the Ridgeway
Deeps gold and copper deposit was
announced. This will be Newcrest’s
ﬁ rst block cave mining operation and
is the ﬁ rst of three major developments

in the Cadia Valley planned over the
next ten years. Further development
of Newcrest’s caving capability is
a signiﬁ cant competitive advantage.
It will place Newcrest in a strong position
to capitalise on the industry trend to
deeper deposits mineable by low cost
bulk underground mining methods.

Newcrest’s pipeline of early
stage projects was added to with
announcement of an initial Mineral
Resource at the Marsden project in New
South Wales and establishment of a joint
venture to explore for copper-gold in the
highly prospective Namosi region of Fiji.

Newcrest continues to be faced with
cost pressures and the challenges of
the skills shortage, resulting from the
current buoyant nature of the Australian
resources sector, particularly in Western
Australia. A number of attraction and
retention initiatives have been put in
place across the Company, including
more attractive roster arrangements
and provision of a broad range of
training and development opportunities,
to ensure that it competes as effectively
as it can for those skills.

A review of Newcrest’s strategy during
the year reinforced the need to deliver
competitive shareholder returns by
focussing critically on each discrete
phase of the mining value chain for
gold within selected geographic areas.
This value chain spans the exploration,
development and operation of low cost,
long life gold and gold-copper mines.

During the year, the ﬁ ve-year strategic
planning process was successfully
implemented across both operational
and functional areas of the business.
This provides the basis for improving
productivity and reducing costs, and
is underpinned by speciﬁ c activities
and projects throughout the business.
Delivery of these projects is supported
by the systematic application of business
improvement methodologies, including
Six Sigma© techniques and Lean©
engineering principles.

During 2006–07, considerable progress was
made in improving operational, ﬁ nancial and
business process performance at Newcrest.

awards are acknowledgement of the
development and implementation of
Cadia’s Community Relations Strategy
and successful engagement with the
local communities. A key focus of
the strategy is providing opportunities
for the entire workforce to be involved
in a broad range of community
relations activities.

Newcrest’s vision is to be the ‘Miner of
Choice’ for all stakeholders, including
our employees and contractors, the
communities in which we operate and
our shareholders. In all respects, during
the coming year, we will continue to
work to improve further our returns to
shareholders and to build our standing
as the ‘Miner of Choice’.

Ian Smith
Managing Director and
Chief Executive Ofﬁ cer

The new risk framework that I mentioned
in last year’s Annual Report was
implemented during the year and has
provided an improved basis for assessing
and mitigating all risks, and particularly
those with potential to be of high
severity. While we set, and achieved,
a safety target that was aggressive
by industry standards, for which the
Company and all of its workforce can
be proud, the result was overshadowed
by the tragic death of a contractor’s
employee in an underground vehicle
accident at Telfer in late March.
This event serves as a reminder to all
at Newcrest that safety must remain
our number one priority. We extend our
sincere condolences to the members
of the deceased’s family.

Water management issues recently
faced by the Company at Cadia
serve as a reminder of the impact of
potential climate change and severe
drought conditions across much of
Australia. During the coming year, water,
energy and greenhouse gas emissions
will become an increasingly important
focus for the Company. Newcrest is
committed to the sustainable and
efﬁ cient use of all natural resources at
each of its operations. The Company’s
environmental performance during the
year remained strong and free of any
major incidents.

Newcrest’s community relations
achievements were recently recognised
with Cadia Valley Operations receiving
two Excellence Awards at the NSW
Minerals Council Environment and
Community Conference. These

Newcrest Mining Concise Annual Report 2007

Financial Report

The ﬁ nancial position of the Company
during the year continued to improve
with signiﬁ cantly higher cash ﬂ ow and
lower net debt. Reduced earnings
compared with the previous year
reﬂ ect the gold hedge position,
increasing costs and a number of
Other Income beneﬁ ts in the 2006
ﬁ nancial year.

Financial focus during the year was
on maximising shareholder returns by
improving Newcrest’s exposure to spot
gold and copper prices, containing
costs, funding capital expenditure and
reducing debt. Management focus was
strongly on delivering optimal outcomes
across all the elements of the mining
value chain in exploration, project delivery
(capital management) and operations
(productivity and cost improvements).

Equity Offering
On September 10, the Company
announced its intention to raise
$2.042 billion in equity using an
accelerated pro-rata entitlement offer.
The offering has been fully underwritten
by UBS AG, Australia Branch and
Goldman Sachs JBWere Pty Ltd.
The proceeds will be used to pay
down the gold hedge book liabilities
and reduce borrowings.

The rationale for the reduction in
Newcrest’s gold hedging position
and debt is to increase the Company’s
exposure to the spot gold price and
provide a more ﬂ exible capital structure.
The new capital structure will improve
Newcrest’s ﬂ exibility to fund project
capital expenditure at existing sites,
undertake growth opportunities and
improve its credit proﬁ le. Newcrest has
also put in place some price protection
through the purchase of gold puts.

Summary of Financial Results
Net proﬁ t after tax and minority interest
was $72.0 million (2006: $349.5 million).
The reported results for 2006 included
$218.2 million proﬁ t on sale of the
Company’s interest in the Boddington
Joint Venture.

Excluding the 2006 proﬁ t on the sale
of Boddington, net proﬁ t after tax
and minority interest from continuing
operations decreased 45 percent
from $131.3 million to $72.0 million.
Revenue and net proﬁ t include the
impact of gold hedge restructures
which are non-cash accounting
adjustments. The net proﬁ t impact
in the current year from gold hedge
restructures was negative $122.5 million
compared to the smaller amount in 2006
of $7.7 million. The Company’s copper
production will beneﬁ t from spot prices
going forward with the expiry of all
copper hedge positions in June 2007.

Please refer to the Discussion and
Analysis of the Financial Statements
on page 76 for a detailed review of the
ﬁnancial results.

Cash Flow Management
In November 2006, Newcrest restructured
its gold hedge book to increase
exposure to spot gold prices. This
restructure left the total amount of gold
ounces hedged the same, but reduced
the amount of gold hedged in any one
year to 700,000 ounces by extending
the maturities two years until 2013.

This year, higher spot gold and copper
prices combined with the reduction of
hedged gold and copper contributed
to higher operating cash ﬂ ow for the
Company, increasing from $263.8 million
last ﬁ nancial year to $387.4 million this year.

Capital expenditure for the year was
$340.8 million (2006: $487.9 million),
a 30 percent reduction from last ﬁ nancial
year. Capital expenditure was ﬁ nanced
through operating cash ﬂ ow. Two
projects were completed during the
year, namely Kencana underground
and Telfer underground.

Capital expenditure next year will be
focussed on the development of Ridgeway
Deeps, and progressing new projects
at Cadia East underground, Cadia East
open pit and a second underground
development at Kencana. Newcrest
expects all capital expenditure will be
ﬁ nanced through operating cash ﬂ ows.

In addition to operating cash ﬂ ows
funding capital expenditure during the
year, $93.3 million in net repayments were
made on borrowings. This contributed
to reducing gearing from 50 percent to
46 percent (on a net debt to net debt plus
equity basis, excluding the hedge reserve).
Over time, the equity offering discussed
earlier will reduce gearing into a target
range of 15 percent to 20 percent.

Dividends
Dividends have been maintained at
5 cents per share unfranked. The cash
ﬂ ow priority during the year has been to
fund capital projects and reduce gearing.

With the equity offering proceeds
reducing gearing and creating full
spot gold price exposure, Newcrest
will review future dividend payments
after balancing operating cash ﬂ ow with
capital expenditure and maintaining
a robust capital structure.

The ﬁ nancial highlights of the 2006–07 year are summarised in the following table:

2007

2006

Net proﬁ t after tax from continuing operations
and after minority interest
Net proﬁ t after tax from discontinued operation (Boddington)
Total net proﬁ t after tax and minority interest
Basic earnings per share from continuing operations
39.6 cents
after minority interest
8.9 percent
Return on members equity (net proﬁ t after tax)*
50 percent
Gearing (net debt/net debt + equity)*
Cash ﬂ ow from operating activities
$263.8 million
* Calculations based on proﬁ t from continuing operations after minority interest and equity after excluding

21.5 cents
4.7 percent
46 percent
$387.4 million

$131.3 million
$218.2 million
$349.5 million

$72.0 million
–
$72.0 million

the hedge reserve.

Gosowong
Mine type: Underground
Production: Gold 347,807 ounces

Cracow
Mine type: Underground
Production: Gold 81,678 ounces

Telfer
Mine type: Open Cut and

Underground

Production: Gold 627,077 ounces
Copper 27,820 tonnes

Cadia Valley
Mine type: Open Cut and

Underground

Production: Gold 560,689 ounces
Copper 61,120 tonnes

Provinces Tim Lehany

Executive General
Manager Operations

Ron Douglas
Executive General
Manager Projects

The Telfer operation comprises
the Main Dome open pit mine and
the Telfer Deeps underground mine.
During the current phase of mining
of the underground mineralisation,
the selected mining method is
sub-level caving, as used at Ridgeway.
The Main Dome orebody extends
to a depth of 1.3 kilometres below
the surface, is open at depth and
is subject to ongoing exploration.

Ore from both open pit and
underground operations is
processed in the concentrator that
comprises a dual train comminution
circuit followed by ﬂ otation and
cyanide circuits. Copper concentrate
containing elevated gold values is
trucked to Port Hedland for export
to smelters, primarily in the
East Asia region.

Operations
In 2006–07, the focus at Telfer
has been on determining reliable ore
reserve estimates for the open pit and
underground mines. Extensive work has
also been undertaken to quantify grade
reconciliation performance and to
establish an achievable life-of-mine plan.

Substantial effort has also been
applied to stabilising production,
rationalising costs and improving
overall mine performance.

Total production was 627,077 ounces
of gold (2005–06: 650,016 ounces) and
27,820 tonnes of copper in concentrate
(2005–06: 38,374 tonnes). Lower metal
production in the 2006–07 year resulted
from interruptions to production, lower
gold recoveries and reduced copper
grades in mill feed.

At achieved prices, the cash cost
of production was $534 per ounce
(2005–06: $315) and total cost was
$732 per ounce (2005–06: $441).
At spot prices, the cash cost of
production was $429 per ounce
(2005–06: $114) and total cost was
$627 per ounce (2005–06: $240).

The major factors inﬂ uencing costs
were reduced production (including
copper by-product credits), increased
movements of waste and increases
in the unit prices of key inputs.

The open pit mine produced 520,544
ounces of gold (2005–06: 639,607 ounces)
and 18,841 tonnes of copper (2005–06:
37,775 tonnes). The decrease in open
pit production primarily resulted from
disruptions and lower head grades.

Production at the underground mine
increased considerably to 106,533
ounces of gold (2005–06: 10,409 ounces)
and 8,979 tonnes of copper (2005–06:
599 tonnes). This was due to higher
throughput as underground production
was ramped-up, coupled with increased
copper grades.

During the year, mining and processing
activities were adversely impacted by
two major unplanned disruptions. These
were a power supply outage in October,
which resulted in lost production and
additional operating costs, and a major
cyclonic event in March, which resulted
in a temporary suspension of mining
activities in the base of the open pit
and underground mine.

Telfer Province

10 Newcrest Mining Concise Annual Report 2007

During the March weather interruption,
ore production was temporarily halted,
with mill feed supplemented with lower-
grade stockpiled supergene ore that
adversely affected recovery rates.

Notwithstanding these impacts, all
physical feasibility parameters were
achieved or exceeded, including mill
throughput, material mined in the open
pit, and the ramp-up of production from
the underground mine.

In the open cut mine, ore was sourced
from Stages 2 and 3 of the Main Dome
pit. Mining volumes increased as new
equipment was mobilised in accordance
with mining plans. Towards the end of
the year, mined grades increased as ore
was mined from the lower benches of
Stage 2 and upper benches of Stage 3
in Main Dome.

Oxide ores were treated on
a dump leach pad and contributed
34,109 ounces of gold as dore.

In the underground mine, sub-level
caving was successfully initiated, and
ore was sourced from the undercut
and ﬁ rst production level approximately
850 to 900 metres below surface.

In July 2006, the underground ore
handling system, comprising an
underground crusher, transfer conveyor
and haulage shaft, was commissioned.
Ramp-up of underground mining
progressed well, and by February 2007
the design annualised mining rate of
4 million tonnes per annum was achieved.
Following the March cyclonic weather
event, ore production was halted.
It was re-established in April with the
sub-level cave again reaching its design
rate by June.

Success in stabilising concentrator
performance resulted in improved
recoveries and enhanced concentrate
quality. An upgrade of the gravity gold
recovery circuit was also commissioned.

Overall gold production is expected to
increase to around 730,000 to 760,000
ounces during 2007–08, with unit
operating costs declining as production
is ramped-up and the cost proﬁ le of the
mine optimised.

Page 10
Main dome, Telfer Open Pit.
Page 11 left
Ore haulage from the Telfer
Open Pit.
Page 11 centre
Telfer processing facility.
Page 11 right
Gold pour at Telfer.

Telfer Gold Production
thousand ounces

2007 Telfer Statistics
Ownership

Location

Mine type
Material mined
Nominal treatment rate
Tonnes treated
Grade

Gold
Copper

Recovery Gold

Copper

Production Gold

Copper

Newcrest Mining Limited
100 percent
Pilbara Region,

north-west Western Australia
Open cut and underground

61.1 million tonnes

17 million tonnes pa on hard ore

20.6 tonnes
1.16 grams per tonne
0.21 percent
76.9 percent
65.3 percent
627,077 ounces
27,820 tonnes

Cash cost (at achieved prices)
Total cost (at achieved prices)

$534 per ounce
$732 per ounce

800

600

400

200

Newcrest Mining Concise Annual Report 2007 11

Telfer Province

Business Improvement Initiatives
The Newcrest Margin Improvement
Program provided a focus for business
improvement activities to be initiated
across all areas of the Telfer operations
during 2006–07.

A range of signiﬁ cant improvement
initiatives were identiﬁ ed and
successfully implemented, including:

(cid:129) upgrade of the concentrator primary

gravity gold recovery circuit

(cid:129) a strategy to reduce the frequency
of mill shutdowns (planned and
unplanned)

(cid:129) optimisation of haul truck payloads

(cid:129) rationalisation of charter ﬂ ights and
work rosters to increase efﬁ ciencies.

There was a major drive to generate
initiatives for further cost savings, with
identiﬁ ed opportunities estimated to
potentially reduce site costs by nearly
10 percent. Several of these were

implemented during the year. Others
will be implemented throughout
2007–08. The focus on identifying
and implementing cost saving
initiatives will be ongoing.

In 2007–08, the key focus at Telfer
will be on stabilising and improving
operational performance. Strategies
to be implemented include:

(cid:129) enhancing operational reliability

by improving asset management
and operating practices

(cid:129) further streamlining plant processes

(cid:129) enhancing metallurgical process

controls to increase recovery rates.

To support the business improvement
and cost reduction processes, advanced
methodologies such as Six Sigma©
techniques and Lean© engineering
principles will be implemented across a
range of projects at the Telfer operations.

12 Newcrest Mining Concise Annual Report 2007

Exploration
During the coming year, targets identiﬁ ed
in and around the Telfer Deeps sub-level
cave will be drilled from underground.

Investigations beyond Main Dome
continue to be focussed to the south-
east, mostly on Trotmans Dome.
Past drilling has been conﬁ ned to
depths between 100 and 200 metres
below the surface. A three-dimensional
electrical geophysical technique is being
used to assist with the identiﬁ cation of
drilling targets at greater depths. This
program will continue during 2007–08.

Page 12
Conveyor belt for transport
of material from underground
to primary stockpiles.
Page 13 left
Pyrite Circuit thickener.
Page 13 centre
Dumping ore into
Underground Crusher.
Page 13 right
Del Whaling, operating the
Underground Jumbo Rig.

Development Projects
Telfer Deeps Cave
The I30 reef in Telfer Deeps is currently
being mined using the sub-level caving
mining method. Studies are being
undertaken to enhance the project
business case by optimising the
mining methodology.

Alternative mining methods are
being investigated to reduce costs
and increase production from the
lower-grade stockwork ore beneath
the current mining block.

Other concept studies
Additional studies were undertaken
with a view to optimising the potential
of the existing resource. These included
analysing the economic viability of in-pit
crushing, conveying and on-site
production of gold metal and copper
cathodes from concentrate. These
studies are in the preliminary stage
and will continue during 2007–08.

Newcrest Mining Concise Annual Report 2007 13

Cadia Hill Operations
Cadia Hill performed in line with plan,
achieving increased mill throughput and
metal recoveries to offset expected lower
head grades. This resulted in metal
production comparable with that of the
previous year. An additional 1.1 million
tonnes of ore were processed compared
with the previous year, reﬂ ecting
improved mill availability.

At achieved prices, the cash cost of
production was lower at $351 per ounce
(2005–06: $386) and total cost was
$484 per ounce (2005–06: $483). At spot
prices, the cash cost of production was
$109 per ounce (2005–06: $84) and total
cost was $241 per ounce (2005–06: $181).
Improved by-product credits, due to
higher spot prices for copper continued
to be an important inﬂ uence on reported
costs throughout the year.

Mining of Cutback 2 in the open pit
resulted in lower mined grades during
the ﬁ rst half of the year; however, grades
improved materially during the second
half as mining advanced to deeper
sections of the pit. Grades were
substantially in accordance with reserve
expectations. Mining of Cutback 3
commenced in May 2007.

Improved availability and reliability of
the haul truck and loader ﬂ eet was a
key focus throughout the year. Loading
ﬂ eet capacity is sufﬁ cient to deliver the
2007–08 production plan.

Gold production during the coming year
is expected to increase to around 330,000
to 350,000 ounces, primarily as a result
of higher head grades associated with
the completion of Cutback 2. Increased
copper head grade is also expected to
result in higher copper production to
around 24,500 to 26,000 tonnes.

Cadia Valley is the largest gold and
copper mining operation in New
South Wales and one of Australia’s
largest gold producers. The province
presently includes the Cadia Hill
open cut mine and the Ridgeway
underground mine. With a signiﬁ cant
mineralised system to the east of
Cadia Hill and a mineral resource
below Ridgeway, Cadia Valley has
the potential to underpin Newcrest’s
production for up to 30 years.

Cadia Hill is a major open cut
operation that commenced production
in 1998. The pit currently extends
500 metres below the original surface
and lies within a north-west trending
corridor that is approximately two
kilometres wide and six kilometres
long. Ore from the pit is transported
by truck to a concentrator comprising
primary crushing, coarse ore
stockpiling, grinding and ﬂ otation
circuits to produce a copper
concentrate containing elevated
gold levels. Concentrate is pumped
to a ﬁ ltration plant in Blayney where it
is de-watered prior to being transported
by rail to Port Kembla for export to
smelters in the East Asia region.

Cadia Valley Province

14 Newcrest Mining Concise Annual Report 2007

Ridgeway Operations
The Ridgeway underground mine,
located adjacent to Cadia Hill,
commenced operation in 2002.
The Ridgeway orebody, which has no
surface expression, lies approximately
500 metres below the surface and
resembles an inverted teardrop
measuring approximately 450 metres
by 250 metres and extending in excess
of 850 metres in depth. Ridgeway is
a sub-level caving operation. Crushed
ore from underground is delivered by
conveyor to a surface stockpile, adjacent
to the Ridgeway concentrator. Using
similar processes to the adjacent Cadia
Hill concentrator, gold and copper are
recovered in a conventional ﬂ otation
circuit to produce a copper concentrate
containing elevated gold levels.
Ridgeway concentrate is combined
with the Cadia Hill concentrate before
it is pumped to the ﬁ ltration plant in
Blayney where it is de-watered prior
to being transported by rail to Port
Kembla for export to smelters in the
East Asia region.

Ridgeway delivered a robust
performance as it continued to record
high production levels while signiﬁ cantly
reducing cash costs.

Total production was 314,028 ounces
of gold (2005–06: 366,520 ounces)
and 37,939 tonnes of copper (2005–06:
39,938 tonnes). The effect of expected
lower head grades was partially offset
by increased mill thoughput.

At achieved prices, the cash cost of
production was negative $228 per ounce
(2005–06: negative $52) and total cost
was negative $112 per ounce (2005–06:
$114). At spot prices, the cash cost of
production was negative $544 per ounce
(2005–06: negative $428) and total cost
was negative $428 per ounce (2005–06:
negative $263).

Ore production took place from ﬁ ve
levels within the sub-level cave. The
lowest level, situated 830 metres below
surface, is the last production level
before mining progresses below the
crusher transfer horizon. As expected,
gold and copper head grades have
progressively decreased with depth.

Trucking of ore and waste from lower
levels to the crusher will commence
in 2007–08 when production from below
the crusher transfer level is scheduled
to begin.

In 2007–08, lower copper head grade is
expected to result in copper production
in the range of 34,500 to 35,500 tonnes,
while gold production is forecast to be
in the range 305,000 to 320,000 ounces.

Page 14
Ore haulage from the Cadia
Open Pit.
Page 15 left
Cadia Hill crushed ore
stockpile and feed conveyor
to the processing plant.
Page 15 centre
Copper concentrate slurry
ready for transport to Blayney
for processing.
Page 15 right
Peter Bennett, Production
Supervisor, Ore Treatment,
inspecting the Bore Mill.

Cadia Hill Gold Production
thousand ounces

2007 Cadia Hill Statistics
Ownership

Location

Mine type
Material mined
Nominal treatment rate
Tonnes treated
Grade

Gold
Copper

Recovery Gold

Copper

Production Gold

Copper

Newcrest Mining Limited

100 percent

Orange District,

Central New South Wales

Open cut
47.2 million tonnes
17.0 million tonnes pa
16.6 million tonnes
0.58 grams per tonne
0.16 percent
79.7 percent
89.3 percent
246,661 ounces
23,181 tonnes

Cash cost (at achieved prices)
Total cost (at achieved prices)

$351 per ounce
$484 per ounce

350

300

250

200

150

100

Newcrest Mining Concise Annual Report 2007 15

Cadia Valley Province

Business Improvement Initiatives
At the Cadia Valley Operations, the initial
phases of the Margin Improvement
Program have been completed.
An audit conducted in May 2007
conﬁ rmed that annualised beneﬁ ts in the
order of $30 million had been achieved.

Continuous improvement activities
have been maintained across all areas
of Cadia Valley Operations. Signiﬁ cant
initiatives implemented during the
year included:

(cid:129) changes to reagents in the Ridgeway

ﬂ otation circuit

(cid:129) modiﬁ cations to the Cadia Hill

grinding mill

(cid:129) improvement of open pit mining

ﬂ eet utilisation.

In 2007–08, the business improvement
program will continue across a range
of projects at Cadia Valley.

Training and skills development remain
a key focus and, to support the business
improvement program, Lean engineering
principles and Six Sigma techniques will
be applied across a range of site projects.

Development Projects
The future of Cadia Valley is underpinned
by three signiﬁ cant development projects
– Cadia East open pit, Cadia East
underground and the recently approved
Ridgeway Deeps underground.

Ridgeway Deeps
In June 2007, the Board of Newcrest
approved the Ridgeway Deeps project,
which will allow the development of a
block cave below the current Ridgeway
sub-level cave mine and extend the
depth by 300 metres to approximately
1,300 metres below the surface. This will
enable resources previously identiﬁ ed
at depth to be economically exploited.

Ridgeway Deeps will be the ﬁ rst natural
cave operation to be developed by
Newcrest and will be the deepest block
cave in Australia. The mine is forecast
to produce in excess of 2.8 million gold
equivalent ounces (1.6 million ounces
of gold and 210,000 tonnes of copper)
over a project life of 12 years.

The project will comprise underground
mine development, extensions to the
existing underground ore handling
system and modiﬁ cations to the
processing plant. Important aspects
of the Ridgeway Deeps project include
application of bulk underground mining
methods and advanced technologies
such as automated, remotely controlled
loaders. The capital cost is estimated
to be $545 million, the majority of
which will be spent over the next
two ﬁ nancial years.

Project commissioning will occur
progressively and Ridgeway Deeps
is expected to reach its design
production rate in 2010–11.

16 Newcrest Mining Concise Annual Report 2007

Ridgeway Gold Production
thousand ounces

2007 Ridgeway Statistics
Ownership
Location

Mine type
Material mined
Nominal treatment rate
Tonnes treated
Grade

Gold
Copper

Recovery Gold

Copper

Production Gold

Copper

Newcrest Mining Limited 100%
Orange District,
Central New South Wales
Underground
5.9 million tonnes
5.6 million tonnes pa
5.7 million tonnes
2.00 grams per tonne
0.73 percent
85.7 percent
90.6 percent
314,028 ounces
37,939 tonnes

Cash cost (@ achieved prices) Negative $228 per ounce
Total cost (@ achieved prices) Negative $112 per ounce

500

400

300

200

100

Development of the Ridgeway Deeps
block cave will position the Company
well for the future development of the
larger Cadia East underground project.

Cadia East open pit
The Cadia East open pit resource
is a large low-grade deposit suited
to a bulk open-pit mining operation.

In August 2006, a pre-feasibility study
commenced to assess the economics
of developing the open pit resource.
Approximately $10 million has been
expended on data collection, geological
modelling and metallurgical test work to
enable a preferred business case to be
identiﬁ ed for detailed feasibility analysis.

Current studies suggest that a production
rate of approximately 15 million tonnes
of ore per annum is sustainable from an
open pit operation, and that clearing and
pre-stripping prior to commencement of
ore production will take approximately
three years to complete. Mine life is
estimated at eight years.

The Cadia East project is based
on 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 approximately
1.9 kilometres below the surface.

Exploration initially indicated that the
area had the potential to be developed
as an underground mine similar to
Ridgeway; however, more recent drilling
has conﬁ rmed the existence of a much
larger zone of mineralisation. Initial
mining studies indicated this larger
mineralised zone is likely to support
both open pit and underground mines.

It is expected that Cadia East will
sustain production in the Cadia Valley
well beyond the life of the current
Cadia Hill open pit and Ridgeway
underground operations.

As the project is adjacent to the existing
Cadia Hill open pit operation, a life-of-
province approach is being applied,
including co-ordination of mining ﬂ eet
selection and operation, and scheduling
ore production through the existing
processing facilities.

It is expected that the results of the
pre-feasibility study will be available
in ﬁ rst half of 2007–08.

Page 16
Cadia Valley Operations
Processing Plant, early
morning.
Page 17 left
Westrac maintenance
technicians, Peter Brady and
Mark Hodder, conducting
a maintenance check on
an ore haulage truck.
Page 17 centre
Peter Bennett, Production
Supervisor, Ore Treatment,
inspecting material
movement on the pebble
crusher feed conveyor.
Page 17 right
Transport of ore from the
Cadia Open Pit.

Newcrest Mining Concise Annual Report 2007 17

An additional resource has been
identiﬁ ed beneath the Cadia East pit and
above the panel cave. Investigations are
currently under way to identify the most
appropriate approach to recovering this
mineralisation while maintaining the
continuity of open pit production.

Cadia Valley Province

Cadia East underground
The Cadia East underground resource
is a large, low-grade deposit suited to
the application of bulk underground
mining methods. With potential to
produce at a rate approximately
22 million tonnes per annum, it is
anticipated that Cadia East underground
will be Australia’s largest underground
mining operation.

In early 2005, the Newcrest Board
allocated $100 million for further
investigation and study of the Cadia
East deposit, including:

(cid:129) development of 6.7 kilometres access
decline and 6 kilometres of lateral
development to provide access to
the orebody for drilling and sampling

(cid:129) more than 45 kilometres of resource

drilling

(cid:129) data collection and studies
(geotechnical, mining and
metallurgical) in order to establish the
optimal mining and processing option.

Decline development commenced
in May 2005 and in September 2006,
equipment that permitted higher
development advance rates was
purchased. This resulted in the
achievement of advance rates some
30 percent above industry benchmarks.
The decline had advanced some
3.7 kilometres by the end of June 2007,
and access to the orebody undercut
level is scheduled to occur in late 2007.

Current analysis indicates that panel
caving will deliver the best technical
and economic outcomes. This method
is best suited to ore bodies in which
the horizontal dimensions exceed those
that are suited for block caving. Ore
extraction advances across the orebody
as ‘panels’ are progressively developed,
resulting in lower establishment costs
for these large orebodies.

Completion of the Cadia East Underground
development decline is scheduled for
January 2008. This will allow underground
resource drilling and bulk sampling to
proceed. Completion of the pre-feasibility
study is expected by mid 2009.

18 Newcrest Mining Concise Annual Report 2007

Ridgeway Deeps
Status
Mineral Resource

Ore Reserve

Implementation
3.0 million ounces gold
0.38 million tonnes copper
1.8 million ounces gold
0.22 million tonnes copper

Cadia East Open Pit
Status
Mineral Resource

Ore Reserve

Pre-feasibility stage
5.9 million ounces gold
1.44 million tonnes copper
1.8 million ounces gold
0.63 million tonnes copper

Cadia East Underground Project
Status
Mineral Resource

Ore Reserve

Pre-feasibility stage
15.5 million ounces gold
2.24 million tonnes copper
8.9 million ounces gold
1.05 million tonnes copper

Page 18
Ore at Ridgeway being
dumped into the underground
crusher.
Page 19 left
Loading of high-grade copper
concentrate at Blayney for
transportation to Port Kembla.
Page 19 right
Jeremy Craig, longhole driller,
measuring the proﬁ le for drill
hole preparation.

Exploration
Mine-based exploration focussed on
three strategic areas within Cadia Valley.
At Ridgeway, drilling was targeted to
deﬁ ne extensions of mineralisation to
the east of the Ridgeway Deeps block
cave resource. During the coming year,
priorities will include closer deﬁ nition
drilling of the mineralisation below the
currently planned block cave, as well
as investigating an isolated high grade
intercept north-east of the currently
identiﬁ ed Ridgeway resource.

Deep drilling at Ridgeway West
intersected similar alteration to that
observed in the vicinity of the Ridgeway
deposit; however, this is considered
unrelated to the Ridgeway mineralisation.
Additional deep drilling is planned to
further investigate this area.

Drilling to deﬁ ne the limits of the Cadia
East mineralised system continued, with
focus on a higher-grade zone in the
eastern part of the system and the upper
western portion of the system below the
open pit resource. This work conﬁ rmed
continuity of the mineralisation in these
directions. Drilling in these areas will
continue in 2007.

The pace of exploration in the Cadia
district has been moderated while
a major research program on the
geological setting of the presently
known deposits is completed. This work
is being conducted in conjunction with
the Centre of Excellence in Ore Deposits
at the University of Tasmania. Results
from this project are expected to assist
in the search for further deposits in
the district.

Newcrest Mining Concise Annual Report 2007 19

Cracow is a high-grade underground
mine based on steeply dipping
epithermal vein-style gold
mineralisation. Production at Cracow
commenced in November 2004. The
current mine plan is based on three
of the ten identiﬁ ed shoots, the Royal,
the Crown and the Sovereign. The
Royal is approximately 350 metres
in strike length, the Crown has a
strike length of approximately 300
metres and the Sovereign, which is
currently being accessed, has a strike
length of approximately 150 metres.
These shoots average approximately
5 metres in width. Ore is trucked to
the surface via a decline where it is
delivered to a stockpile adjacent to
the crushing plant prior to crushing
and grinding. The ore is then
processed in a conventional carbon-
in-leach cyanide leach circuit to
produce gold dore bars.

Operations
The second full year of operations
at Cracow saw further improvements
in mine production, mill throughput
and gold production. This is attributed
to continued focus on mine and mill
optimisation and, in particular,
initiatives emerging from the Margin
Improvement Program.

A total of 116,683 ounces of gold was
produced during 2006–07 of which
81,678 ounces was Newcrest’s share
of mine production. This was an increase
of 5 percent above the previous years
result (2005–06: 111,003 ounces –
Newcrest’s share 77,702 ounces).
The cash cost of production was
$343 per ounce (2005–06: $308)
and total cost was $487 per ounce
(2005–06: $421). The major factor that
inﬂ uenced cost was the lower grade
of ore processed.

There was excellent correlation between
the mine and mill estimated grade, both
of which correlated well with plan.

During the year, decline advance
totalled 1,127 metres. The majority of
this development, 745 metres, occurred
in the Crown deposit. Late in the year,
initial decline access to the Sovereign
deposit commenced, with 347 metres
of decline completed by year end.

Orebody access and other infrastructure
development for the Royal, Crown
and Sovereign ore bodies totalled
1,006 metres.

The life-of-mine plan is regularly
reviewed and, with the inclusion of the
Sovereign, the current mine planning
inventory is 1.6 million tonnes containing
approximately 446,000 ounces of gold.

The remaining mine life is approximately
ﬁ ve years. However, assessment of other
shoots is expected to further extend
mine life.

Cracow Province

20 Newcrest Mining Concise Annual Report 2007

An Inferred Mineral Resource estimate
(100 percent) of 870,000 tonnes grading
7.1 grams per tonne gold, for an in situ
resource of 203,000 ounces of gold
was established.

Further exploration work was also carried
out on Klondyke North, Phoenix, Roses
Pride, Fernyside and South and West
of Royal shoots.

Exploration drilling in 2007–08 will focus
on extensions to the major structures
that host the presently identiﬁ ed ore
bodies. The full strike extent of these
structures has not been established;
however, it is likely that less than half
of this extent has been investigated
so far, particularly to the south.

Business Improvement Initiatives
The Margin Improvement Program
at Cracow identiﬁ ed in excess of
40 initiatives, of which more than 30 have
now been fully implemented. Coupled
with other continuous improvement
initiatives, this resulted in a 22 percent
increase in mill throughput compared
with the previous year.

In 2007–08, the business improvement
program will continue across a range
of activities at Cracow.

Training will remain an imperative
and, to support the business
improvement process, Six Sigma©
techniques and Lean© engineering
principles are being implemented
across a range of site projects.

Exploration
Resource deﬁ nition drilling was
completed on part of the Kilkenny
mineralisation and, in conjunction
with step-out drilling, established the
presence of two mineralised shoots,
both of which are open at depth.

Page 20
Cracow Processing Plant
at night.
Page 21 left
Ore haulage at the Cracow
operation.
Page 21 centre
Fitting of a rockbolt into the
boom of an underground drill
prior to installation.
Page 21 right
Des Motlap, Roche Mining
Jumbo Operator, boring an ore
development heading at the
Cracow underground mine.

Cracow Gold Production
thousand ounces

2007 Cracow Statistics
Ownership

100

Location

Mine type
Material mined
Nominal treatment rate
Tonnes treated
Grade
Gold
Recovery Gold
Production Gold

Cash cost
Total cost

Cracow Mining Joint Venture
Newcrest Mining Limited

70 percent
Lion Selection Group
30 percent

Gladstone Region,

Central Queensland

Underground
0.38 million tonnes
0.30 million tonnes pa
0.39 million tonnes
10.11 grams per tonne

93.9 percent

116,683 ounces (Newcrest share
81,678 ounces)

$343 per ounce
$487 per ounce

Newcrest Mining Concise Annual Report 2007 21

Development of the Kencana mine,
Newcrest’s ﬁ rst underground
mine in Indonesia, commenced in
February 2005 with ﬁ rst ore from the
K1 orebody mined in March 2006.
Kencana is located approximately
1 kilometre south of the original
Gosowong open pit within the highly
prospective Gosowong province,
which covers an area of approximately
30,000 hectares.

Due to ground conditions and variable
orebody geometry, the undercut-and-
ﬁ ll mining method with cemented
paste ﬁ ll is used to mine the Kencana
orebody. Ore is trucked to the surface
where it is stockpiled adjacent to the
treatment plant before being treated
using a cyanide leach and Merrill-
Crowe process to extract gold and
silver to produce dore bars.

Operations
The ramp-up of production at Kencana,
together with a signiﬁ cant increase in
the grade of ore mined and higher
throughput rates, resulted in a total of
347,780 ounces of gold being produced
(2005–06: 187,316 ounces). The cash
cost of production was $238 per ounce
(2005–06: $377) and total cost was
$301 per ounce (2005–06: $419).
The higher grades and throughput
rates, with a corresponding increase
in metal production, were responsible
for the improved cost performance
on a dollar per ounce basis.

Commencement of ore production
from Kencana underground operations
resulted in head grade at the Gosowong
mill increasing signiﬁ cantly to 37.36 grams
per tonne (2005–06: 22.9 grams per
tonne, when ore was mostly sourced
from the Toguraci open pit). The grade
of epithermal gold ore bodies can
be highly variable in the short term,
and in the case of Kencana can exceed
100 grams per tonne in some parts of
the orebody.

The undercut-and-ﬁ ll mining method
is designed to achieve high ore recovery

and is well suited for mining in difﬁ cult
ground conditions such as those
encountered at Kencana. A key feature
of the method is the backﬁ lling of mined
areas with a cemented paste ﬁ ll so that
mining can proceed immediately
beneath the ﬁ lled zone. The paste ﬁ ll
is produced in a purpose-built plant
adjacent to the mine.

During the year, the Kencana decline
advanced 1.3 kilometres to a point
where the sub-level 6 can be accessed.

During 2007–08, the commissioning of
additional equipment and mining faces
will enable access to multiple extraction
levels within the orebody, leading to
higher production and more ﬂ exibility in
the mining plan. With higher throughput
rates, production is forecast to increase
to around 370,000 to 385,000 ounces.

Business Improvement Initiatives
Continuous improvement activities under
the Margin Improvement Program were
maintained across all areas of Gosowong,
with signiﬁ cant initiatives, including:

(cid:129) commissioning of a gravity circuit

(cid:129) change of the concentrator feed
classiﬁ cation system to enhance
recoveries

Gosowong Province

22 Newcrest Mining Concise Annual Report 2007

(cid:129) successful implementation of

improvements to the underground
mining methods.

In 2007–08, the business improvement
program will continue to be applied to
all activities at Gosowong.

Training and skills development will
remain a high priority. Lean engineering
principles and Six Sigma techniques are
being implemented across a range of
site based projects.

Development Projects
The Gosowong Extension project has
the potential to add signiﬁ cant value to
Gosowong and increase its producing
life by around ﬁ ve years.

The Extension project is based on the
development of the K2 and K Link high-
grade epithermal gold deposits, located
450 metres below surface. These
deposits are located approximately
200 metres vertically and 750 metres
horizontally from the K1 orebody.

With initial studies indicating the viability
of K2, the capital cost to take the project
into production will be approximately
US$80 million, including underground
access, plant modiﬁ cations and
construction of additional site infrastructure.

It is anticipated that the existing K1
decline will enable rapid access to the
K2 and K Link deposits. The preferred
mining method is being evaluated as
part of the pre-feasibility study. Ore will
be treated at the existing process plant,
following minor modiﬁ cations.

The Extension project is expected to move
through feasibility during 2008 with project
implementation scheduled for 2009,
conﬁ rming Gosowong as a world-class
gold province.

Exploration
Exploration activity at Gosowong has
focussed on upgrading and expanding
the K2 deposit, adding 0.6 million
ounces to the K2 resource. It has also
provided an improved understanding
of the Kencana mineralised system. Step-
out drilling to test the K2 extension to the
north is ongoing and has demonstrated
continuation of mineralisation.

In K1, drilling to test extensions has
commenced to the north and south,
assessing both shallow and deep
targets with some encouraging
mineralisation intersected to date.

A target generation review has identiﬁ ed
a number of signiﬁ cant targets in the
Kencana district and further systematic
exploration is planned in 2007–08.

Discovery exploration activities
at Gosowong are directed towards
identifying other gold-bearing faults that
might host high-grade gold mineralisation
similar to that discovered at Kencana.

Electrical geophysical surveys,
completed in the immediate Toguraci-
Kencana environ south of the Tobobo
River, are being used in conjunction with
geological mapping to identify targets for
discovery drilling.

Drilling to the north of the river has
intersected narrow intervals of high-grade
gold mineralisation in the hanging-wall
rock to the south-east-trending Lempung
Vein; however, the resource potential of this
mineralisation appears modest at present.

Page 22
Gosowong mine site
operating facility.
Page 23 left
Rehabilitated Gosowong
waste dump.
Page 23 centre
Accommodation in staff
village on-site at Gosowong
Page 23 right
Gosowong based chartered
h li
helicopter.

350

300

250

200

150

100

Gosowong Gold Production
thousand ounces

2007 Gosowong Statistics
Ownership

PT Nusa Halmahera Minerals
(Newcrest Mining Limited

82.5 percent
PT Aneka Tambang 17.5 percent)
Halmahera Island, North Maluku

Indonesia

Kencana – Underground

Location

Mine type
Material mined
Nominal treatment rate
Tonnes treated
Gold
Grade
Recovery Gold
Production Gold
Cash cost
Total cost

0.69 million tonnes
0.37 million tonnes pa
0.31 million tonnes
37.36 grams per tonne

94.2 percent
347,780 ounces

$238 per ounce
$301 per ounce

All numbers are on 100 percent basis.

Gosowong Extension Project
Status
Mineral resource
Ore reserve

Pre-feasibility stage
1.5 million ounces gold
1.3 million ounces gold

Newcrest Mining Concise Annual Report 2007 23

Namosi Prospect Overview
Ownership
Location
Status
Resource*

Gold

Copper

Newcrest Mining Limited earning 65 percent
South-eastern Viti Levu, Fiji
Concept stage
4 million ounces
4 million tonnes

Namosi Prospect

Newcrest recently signed a
Memorandum of Understanding with
Nittetsu Mining Co. Ltd and Mitsubishi
Materials Corporation to establish
a joint venture to explore for copper-
gold in the Namosi region of Fiji.
Under the terms of the agreement,
Newcrest can earn a 65 percent
interest in the joint venture by funding
exploration over a 4 to 5.5 year period.

The Namosi tenement, which hosts a
highly prospective large copper-gold
porphyry mineralised system, is centred
on the upper reaches of Waisoi Creek
in south-eastern Viti Levu in Fiji, some 30
kilometres west of Fiji’s capital city, Suva.

Namosi has a long history of mineral
exploration, commencing in the 1850s
with the discovery of pyrite. The potential
for gold and base metals was
established in the 1960s, and exploration
led to the eventual discovery of the
Waisoi deposits. Between 1991 and
1995, Placer Paciﬁ c conducted work,
including drilling, and identiﬁ ed a low
grade open pit copper gold resource
in excess of 900 million tonnes* grading
0.43 percent copper and 0.14 grams
per tonne gold, and conducted a
feasibility study.

The immediate work program
at Namosi will include concept level
studies centred on previously identiﬁ ed
mineralisation at Waisoi, as well as
testing possible depth extensions of
the Waisoi mineralisation. These studies
will consider potential open pit and
underground exploitation options,
as well as evaluating the infrastructure,
permitting and services requirements.

Additionally, the remainder of the large
prospecting licence will be subjected to
systematic exploration, which will include
airborne geophysical surveys, geological
mapping, sampling and drilling, with
particular emphasis on the more than
15 signiﬁ cant copper and gold prospects
already identiﬁ ed during reconnaissance
level exploration within the broader
Namosi tenement.

* Note: Placer Paciﬁ c estimate, 1994. Newcrest has not veriﬁ ed the classiﬁ cation of historic resource
references and is not treating it as a JORC compliant resource veriﬁ ed by a Competent Person’s
Statement. Although this historical reference of resource potential may be relevant to recognising
the potential of the district, it should not be relied upon.

24 Newcrest Mining Concise Annual Report 2007

Gosowong

Telfer
Ashburton

Nevada

Peru

Americas

Mt Leyshon/Fenian

Fiji

Cracow

Cadia District

Marsden

Exploration

Discovery has been the key
to Newcrest’s growth

Dan Wood
Executive General
Manager Exploration

Exploration

Strategy
Since inception, Newcrest has been
an active and successful explorer
and has based its strategy for growth
on exploration discovery. As a result
of the success of this strategy,
Newcrest is one of the few major
mining companies in the world that
can claim to have discovered every
deposit it is presently mining.

This discovery success was achieved
through a combination of strong
commitment to exploration effort and
the consistent application of a simple,
focussed discovery strategy.

The main elements of this strategy
are to generally restrict exploration to
known mineralised districts, apply good
science and conduct extensive drilling.
The primary focus of the Company’s
exploration effort has been directed to
the discovery of large gold and gold-
copper deposits, with a secondary focus
on the discovery of smaller high-grade
gold deposits.

26 Newcrest Mining Concise Annual Report 2007

The success of this strategy is
demonstrated by the mines Newcrest
is operating and by the development
projects that underpin its growth proﬁ le.
The Company’s success as the
discoverer of major gold deposits
was acknowledged in 2006 by Metals
Economics Group, which concluded
from a study of gold mining industry
discoveries in the 1992–2005 period that:
‘Only 11 of the 22 proﬁ led companies
reported major discoveries during the
1992–2005 period,’ and that: ‘Newcrest
Mining has been the most successful,
with total gold resources of 64.6 million
ounces in ﬁ ve discoveries.’ If the
associated copper mineralisation
in these discoveries is included as a
gold-equivalent, the total amount of
gold-equivalent resources discovered
is a little over 98 million ounces.

Importantly, the dual focus of the
Company’s discovery strategy was
also recognised when Metals Economics
Group reported that during this period,
on a metal-value grade basis, the
Kencana deposit (as then established)
discovery was second only in quality to
the Red Lake gold discovery in Canada.
In terms of average gold grade, however,

Kencana was the richest gold deposit
discovered in the world in the 1992–2005
period. Since 2006, the size of the
Kencana deposit has increased, as
the full extent of the K2 shoot has been
deﬁ ned by drilling.

The only change to Newcrest’s discovery
strategy in recent years has been to
include within its focus the search for
deposits that are amenable only to
underground mining. The Company was
an early Australian gold industry leader
in this search, as demonstrated by the
discovery of the Ridgeway deposit at
a depth of more than 500 metres below
surface in late 1996, and the subsequent
discoveries at Cracow and at Kencana
in Indonesia.

Newcrest’s discovery strategy is framed
over a ten-year period. The strategy
through to 2016 is to continue to pursue
the dual discovery-target objective. This
will be undertaken in regions where the
business/political risk is acceptable and
geological conditions are conducive to
discovery. Underground mining targets
will continue to be of interest based on
Newcrest’s growing experience and
expertise in developing and operating
large-scale underground mines.

Greenfields Exploration Expenditure
$29.7M

Total Exploration Expenditure
$59.9M

Americas
$10.4 million

Eastern Australia
$8.8 million

Western Australia
$5.0 million

Indonesia $0.3 million

Other $5.2 million

Definition Drilling
$15.2 million

Mine Exploration
$15.0 million

Greenfields
$29.7 million

In Chile, drilling commenced on the
100 percent-owned Cristales project,
located to the south of Antofagasta in
northern Chile. Surface mapping and
sampling have conﬁ rmed the presence
of iron-oxide-related oxide-copper
mineralisation, which may transition
into iron-oxide copper-gold
mineralisation at depth.

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 sufﬁ cient 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 deﬁ ned 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.

Page 26
Diamond drilling at Cadia.

Greenﬁ elds exploration
Marsden, New South Wales
Widely-spaced resource deﬁ nition drilling
at the 100 percent-owned Marsden
porphyry project, located 70 kilometres
south-west of Forbes, enabled an initial
Inferred Mineral Resource of 77 million
tonnes, grading 0.3 grams per tonne
gold and 0.50 percent copper for
approximately 0.8 million ounces of
gold and 0.38 million tonnes of copper.

Additional mineralisation of lower average
gold and copper grades surrounds the
Inferred Resource, but the drill-spacing
in this mineralisation is presently too
wide to permit a resource estimate.

The Marsden mineralisation occurs
beneath approximately 100 metres
of clay-rich transported alluvium and
is truncated at its base by a relatively
ﬂ at-lying fault, which restricts the body
of mineralisation vertically to an average
thickness of 100–150 metres.

Additional drilling will be conducted
to expand the size of the presently-
identiﬁ ed mineralisation and to seek
additional mineralisation in the district.

Coalstoun, Queensland
Previous exploration in the Coalstoun
area near Gayndah in south-east
Queensland during the late 1960s
and early 1970s identiﬁ ed a small
body of low-grade porphyry copper
mineralisation, surrounded by an
extensive area of altered and, in places,
brecciated sedimentary rocks.

Surface mapping and sampling have
identiﬁ ed several areas of strong breccia
development, some of which coincide
with low-level gold-in-soil anomalies.

A hole drilled by Newcrest into a
breccia to the south-east of the copper
mineralisation has recorded weakly-
mineralised breccia over a downhole
interval of more than 300 metres.

Ashburton, Western Australia
(earning up to 80 percent)
Drilling in late 2006 of geophysical
anomalies to the south-east of the
Mt Olympus mine (identiﬁ ed by electrical
geophysical surveys) failed to detect
mineralisation. Investigations in 2007
were focussed mostly on the Merlin and
Xanadu areas, where previous drilling
had recorded signiﬁ cant intervals of
modest-grade gold mineralisation.

This drilling has assisted in identifying
possible feeder faults to the known
mineralisation, particularly at Merlin.
Drilling in 2008 will investigate these
faults for higher-grade gold
mineralisation at depth.

Nevada, United States of America
Investigations in Nevada have been
refocussed on a small number of
projects where potential exists to
discover large epithermal gold or
porphyry-style gold-copper deposits.

Drilling at the Redlich project has
intersected a relatively wide zone
of weakly gold-mineralised breccia.
Additional drilling is planned.

At the Gabbs project, drilling around the
small Sullivan open pit has intersected
modest grade porphyry-style gold copper
mineralisation. Additional widely spaced
drilling will be conducted to better
understand the geology and distribution
of the mineralisation at Sullivan.

Peru and Chile
Field investigations in southern Peru have
identiﬁ ed several large areas that exhibit
evidence of epithermal-style alteration
and are gold-anomalous. Tenements
have been acquired over some of these
and it is expected that drilling will be
conducted on two areas in 2008.

Newcrest Mining Concise Annual Report 2007 27

Mineral Resources
and Ore Reserves

Total Mineral Resources for the Group,
are estimated at 55.2 million ounces
of gold and 5.65 million tonnes of
copper. This represents a reduction
of gold estimated in resource of
3.7 million ounces (-6 percent)
and an increase in copper of
0.25 million tonnes (+5 percent).

This result is driven by a signiﬁ cant
reduction at Telfer of approximately
4.9 million ounces of gold and
0.15 million tonnes of copper; offset by
increases in gold at Kencana (Indonesia)
totalling 0.6 million ounces and the
addition of a new resource at Marsden
(NSW) estimated at 0.8 million ounces
of gold and 0.38 million tonnes of
copper. Small increases at both Cadia
Valley (NSW) and Cracow (QLD) largely
offset production depletion at those
sites. Adjustments made to the Telfer
Mineral Resource give greater certainty
about future performance and are
explained in more detail below.

Total Group Ore Reserves depleted
to June 30 2007 are estimated at
33.2 million ounces of gold and
2.70 million tonnes of copper,
representing an increase of 0.7 million
ounces of gold (+2 percent) and 0.26
million tonnes of copper (+11 percent).

Signiﬁ cant increases in Ore Reserves
occurred at Cadia Valley with the addition
of 1.7 million ounces of gold and
0.30 million tonnes of copper from
the Cadia East Underground deposit.
Kencana was responsible for the addition
of 1.3 million ounces of gold. These
increases were partially offset by
reductions totalling 2.4 million ounces
of gold and 0.06 million tonnes of copper
at Telfer. There was also a small increase
at Cracow with the addition of the
Crown Shoot.

The accompanying statement of Mineral
Resources and Ore Reserves conforms
to the Australasian Code for Reporting of
Exploration Results, Mineral Resources
and Ore Reserves (the JORC Code)
2004 Edition. Ore Reserves quoted
are a subset of Mineral Resources.
Independent external and internal
reviews are conducted on all completed
estimates. Unless stated otherwise, all
ﬁ nancial assumptions are in Australian
dollars. Cut-off grade calculations

assume metal prices of $600 per ounce
of gold and $1.60 per pound of copper
with the exception of Kencana where
USD $550 per ounce of gold is assumed.
Mineral Resources, where appropriate,
are constrained spatially within a notional
$800 per ounce of gold and $2.00 per
pound of copper shell. As is typical with
epithermal deposits, both Cracow and
Kencana contain amounts of silver.
The Cadia East porphyry deposit
contains some molybdenum in addition
to the gold and copper reported.

More detailed 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 on the Company’s
website at www.newcrest.com.au.

Cadia Province (NSW)
Mineralisation recognised to date in
the Cadia Province is porphyry related
gold and copper hosted in rocks of
Ordovician age. Ore bodies are typically
large tonnage low grade gold with strong
copper by-product and minor base metal
associations. Ore is sourced from bulk
mining from open pit and underground
sources. Products include gold in dore’
recovered via gravity methods and a
gold rich copper concentrate which is
exported to customers via Port Kembla.
Established processing capacity is in
excess of 22 million tonnes per annum.

Cadia Hill Open Pit
Mining depletion was the only material
change that occurred at Cadia Hill
during the period. This resulted in a
net reduction in the estimated Mineral
Resource of 26.5 million tonnes
containing 0.5 million ounces of gold
and 0.04 million tonnes of copper.
Similarly the estimated remaining
Ore Reserve fell by 20.1 million tonnes
containing 0.5 million ounces of gold
and 0.04 million tonnes of copper.
Some minor changes were made to
the pit design necessary to mitigate
geotechnical issues. Stockpiles during
the period increased by approximately
7.7 million tonnes containing 0.1 million
ounces of gold and 0.01 million tonnes
of copper.

28 Newcrest Mining Concise Annual Report 2007

Telfer Province (WA)
Gold and copper mineralisation
recognised to date in the Telfer Province
is largely structurally controlled reefs,
veins and stockworks hosted by
sedimentary rocks of Proterozoic age.
Deep weathering depleted the copper
in the upper parts of the Main Dome
and West Dome orebodies allowing
much of the historical gold production to
be processed using gravity and cyanide
leaching processes. Ore processing
facilities have now been replaced to
allow exploitation of the large gold and
copper sulphide resources at Telfer with
the bulk of production in the form of dore
recovered from gravity and gold rich
copper concentrate recovered from
ﬂ otation. Concentrate is exported to
customers via Port Hedland.

Telfer has under-performed since
commissioning of the new processing
facility. Mineral Resources and Ore
Reserves have been adjusted in response
to this; supported by extensive studies and
reviews. Ore Reserve tonnes and grades
reported are now based on expected mill
feed over the life of the mines.

Main Dome Open Pit
The Telfer Main Dome Mineral Resource
decreased by 2.0 million ounces of
gold and 0.06 million tonnes of copper
including stockpiles. Mining depletion
accounted for 0.6 million ounces of gold
and 0.02 million tonnes of copper from
the pit and 0.3 million ounces of gold
and 0.02 million tonnes of copper from
stockpiles. This was offset by increases
due to a revised cut-off algorithm resulting
in the addition of 0.4 million ounces of
gold and 0.03 million tonnes of copper.

Cadia East Open Pit
No changes were made to the Mineral
Resource and Ore Reserve estimates for
the Cadia East Open Pit during the period.
Pre-feasibility level studies were ongoing.

Cadia East Underground Panel Cave
Revised Mineral Resource and Ore
Reserve estimates have been completed
for the Cadia East Underground Project,
located adjacent to existing operations
in the Cadia Province. Deep diamond
drilling undertaken in the period provided
the basis for an additional 275 metres of
strike length from the previous Inferred
Resource to be upgraded to Indicated
Resource classiﬁ cation for an estimated
174 million tonnes including 3.4 million
ounces of gold and 0.58 million tonnes
of copper. The total Mineral Resource
increased by approximately 28.0 million
tonnes and resulted in a small increase
of 0.04 million tonnes of copper.
Estimated gold in resource, however,
fell by 0.06 million ounces due to
identiﬁ cation of lower grades at the
margins of the deposit.

The Cadia East Underground Ore
Reserve is based on pre-feasibility level
mining studies and selection of panel
caving methodology. The underground
component of the Cadia East Indicated
Resource was previously converted to
Probable Reserves. This Probable Ore
Reserve was ﬁ rst published in June 2005
and updated in July 2006. The Ore
Reserve was updated during the period
to reﬂ ect the successful upgrade of
Inferred to Indicated Resources, resulting
in an estimated increase of 101 million
tonnes of ore containing approximately
1.7 million ounces of gold and
0.30 million tonnes of copper. Cadia
East is located entirely within the existing
mining lease containing the Cadia Hill
and Ridgeway operating mines.
Underground access is well underway,
thus enabling advanced investigation,
feasibility studies and project execution.

Cadia Extended
Cadia Extended was mined as a small
satellite pit to Cadia Hill. In recent years
this pit has been back ﬁ lled with waste
from Cadia Hill. The remaining Mineral
Resource has now been re-estimated
on the basis of possible underground
extraction using bulk caving methods.
This resulted in a net reduction of
18.8 million tonnes containing 0.2 million
ounces of gold and 0.03 million tonnes
of copper. Remnant Indicated Resource
was also re-classiﬁ ed as Inferred
Resource on the basis of changed
mining assumptions. No Ore Reserve
has been estimated for Cadia Extended.

Ridgeway Underground Sub-Level Cave
Ridgeway produced 5.7 million tonnes
containing 0.4 million ounces of gold
and 0.04 million tonnes of copper.
The decrease in the Mineral Resource
reﬂ ects mine depletion for production,
a correction for an omission of
approximately 3.0 million tonnes of
cave stocks from the 2006 statement,
and a small increase from resource
re-estimation. The net Mineral Resource
reduction is 1.8 million tonnes containing
0.03 million ounces of gold and 0.01
million tonnes of copper for the period.

Changes to the Ore Reserve included
depletion for mine production, offset
by an increased mining area on the
ﬁ nal SLC level and an increase in the
remaining production draw rate for the
SLC from 130 percent to 150 percent.
The net decrease in the Ore Reserve is
2.8 million tonnes containing 0.2 million
ounces of gold and 0.02 million tonnes of
copper compared to the 2006 statement.

Ridgeway Deeps Block Cave
Ridgeway Deeps Block Cave is located
immediately below the existing Ridgeway
SLC Mine. The Mineral Resource was
re-estimated following a geological
re-interpretation exercise resulting in an
extension of the resource model at depth
that yielded an increased resource of
20.0 million tonnes containing 0.5 million
ounces of gold and 0.05 million tonnes
of copper. The estimated Ore Reserve
increased on a similar basis by
18.9 million tonnes containing 0.5 million
ounces of gold and 0.07 million tonnes
of copper. A Feasibility Study for
Ridgeway Deeps was completed
during the period and the project
was approved for construction.

Newcrest Mining Concise Annual Report 2007 29

Mineral Resources
and Ore Reserves
continued

After detailed reconciliation studies over
the last 12 months, grade calibrations
for both gold and copper in stockwork
mineralisation were revised in the
resource estimate resulting in a decrease
of 1.5 million ounces of gold and
0.06 million tonnes of copper. In addition,
all Measured Resource was re-classiﬁ ed
to Indicated Resource to better reﬂ ect
experience to date. The implementation
of reduced calibrations negates a portion
of the previous risk associated with the
gold and copper resource estimate for
Main Dome. Accordingly, some of the
Inferred Resource in the reef associated
mineralisation has been re-classiﬁ ed to
Indicated Resource. This has no impact
on the total 2007 resource base.

The Main Dome Ore Reserve was adjusted
to reﬂ ect reduced Mineral Resource
grades and revised classiﬁ cations.
In addition, cut-off criteria have been
simpliﬁ ed and dilution parameters
adjusted to reﬂ ect achievable mining
practices. The net effect of these
changes was to increase tonnage by
48 million tonnes and decrease grades
by 0.23 grams per tonne gold and
0.02% copper. Mining depletion
decreased the reserve by 16 million
tonnes containing 0.6 million ounces of
gold and 0.02 million tonnes of copper.

The net change in the Ore Reserve
for the period including stockpile
movements was a decrease of
0.8 million ounces of gold and
0.02 million tonnes of copper.

Telfer Underground
The Telfer Underground Mineral
Resource decreased by 1.9 million
ounces of gold and 0.07 million tonnes
of copper net of depletion. Stockwork
grade calibrations were reduced in line
with ﬁ ndings from Main Dome open pit
contributing a decrease of 1.7 million
ounces to this result. The Telfer Deeps
SLC Ore Reserve decreased by
1.0 million ounces of gold, 0.8 million
ounces primarily due to change in
calibrations and 0.2 million ounces due
to depletion, and similarly 0.02 million
tonnes of copper due to change in
calibrations and 0.01 million tonnes
of copper due to depletion.

West Dome Open Pit
No mining activity occurred at West
Dome during the period. Technical
results from Main Dome, however, have
been applied as a conservative measure
resulting in a decrease in the resource
estimate of 1.1 million ounces of gold
and 0.01 million tonnes of copper.
Resource classiﬁ cations have also been
modiﬁ ed by downgrading all Measured
Resources to Indicated Resource status.
Given these resource changes the
Ore Reserve estimate for West Dome
decreased by 0.6 million ounces of
gold and is now entirely classiﬁ ed as
the Probable Reserve. These changes
did not lead to any signiﬁ cant decrease
in the copper reserve.

Emerging Provinces
Gosowong (Indonesia)
Gosowong is located on the island
of Halmahera in North Maluku Province
in the eastern part of the Republic of
Indonesia. It is owned and operated
by PT Nusa Halmahera Minerals, an
incorporated joint venture between
Newcrest (82.5 percent) and PT Aneka
Tambang (17.5 percent). For the purpose
of reporting Mineral Resources and
Ore Reserves, Newcrest is reporting
100 percent of the assets. This is a
change from previous convention of
reporting 82.5 percent of the Mineral
Resources and Ore Reserves for
Gosowong. The impact of the change
is an increase in Mineral Resource of
0.5 million ounces and, in the Ore Reserve,
an increase of 0.2 million ounces.

Gosowong is emerging as a world class
epithermal province with historical
production of over 1.5 million ounces
from the Gosowong and Toguraci open
pits and the newly commissioned
Kencana underground mine. Precious
metal mineralisation in the Gosowong
Province is characterised as low
sulphidation-epithermal in nature.
The gold grade is very high and is
associated with similar levels of silver.
Gosowong Province ores mined to date
have proven to be without contamination
issues and metallurgical recoveries
greater than 95 percent have been
demonstrated utilising conventional
leaching methods. Prospectivity for
further growth of Kencana and new
discoveries in the region remain high.

30 Newcrest Mining Concise Annual Report 2007

The Marsden Resource is reported on a
‘value’ basis (material above zero dollar
cut-off) similar to that used for open
pit Mineral Resources in Cadia Valley.
The value estimation includes long-term
revenue assumptions of $600 per ounce
for gold and $1.60 per pound for copper,
and incorporates mining costs based on
similarities to Cadia Hill with allowance for
cover stripping, expected mill recoveries,
and anticipated realisation costs.
A notional $800 per ounce gold and
$2.00 per pound copper pit shell is
also used to spatially limit the resource.
Additional drilling and concept studies
are planned.

continuing to focus on the highly
prospective western side of the Cracow
Goldﬁ eld. Ore mined to date through the
Cracow mill shows an average gold
recovery of 94 percent and silver
recovery of 80 percent using
conventional leaching methods.

Newcrest attributable Mineral Resources
increased at Cracow by 0.5 million tonnes
containing 0.04 million ounces of gold.
Similarly, attributable Ore Reserves
increased by 0.4 million tonnes
containing 0.10 million ounces of gold.
Material changes included mining
depletion of the Royal and Crown
shoots, upgrading of the Crown Shoot
from Inferred to Indicated Resource
status, and estimation of a new Mineral
Resource for the Kilkenny Shoot.

The Ore Reserves for Cracow are
comprised of the Royal and Crown
shoots. The Royal shoot commenced
ore production in August 2004 and
milling commenced in November 2004.
To date 0.6 million tonnes of ore has
been successfully mined and milled
from the Royal orebody. Production
from the Crown Shoot in March 2006.
To date 0.2 million tonnes of ore has
been successfully mined and milled
from the Crown Shoot. The net change
in the Ore Reserve for the period was an
increase of 0.2 million ounces of gold.

Marsden Discovery (NSW)
An initial Inferred Resource estimate has
been made for a greenﬁ elds discovery
at Marsden, located on Exploration
Licence 5524 (Newcrest 100 percent)
between Forbes and West Wyalong
in Central Western NSW, Australia.
Marsden is a body of porphyry-style
Copper-Gold mineralisation hosted
in intrusive rocks. The resource lies
about 120m below the surface under
un-mineralised riverine plain clays and
sands and is terminated on the eastern
side and at depth by a major, west-
dipping regional fault called the Marsden
Thrust, beneath which un-mineralised
sedimentary rocks occur.

After depletion, the Kencana Mineral
Resources increased during the period by
0.5 million tonnes for 0.6 million ounces
inclusive of stockpiles. Similarly the Ore
Reserves increased by 1.3 million tonnes
containing 1.4 million ounces of gold.
Mining depletion in the K1 Mineral
Resource accounted for a decrease of
0.4 million ounces of gold. Inﬁ ll drilling
and geological re-modeling added to
the Mineral Resource with the net result
being a 0.22 million ounce decrease in
gold. All previous Inferred Resource has
been upgraded to Indicated.

Inﬁ ll drilling in the K2 shoot resulted
in an increase in the Mineral Resource
by approximately 0.8 million ounces
and most of the mineralisation being
classiﬁ ed as Indicated. Inﬁ ll drilling
will continue to convert the remaining
Inferred Resource to Indicated. The K Link
Inferred Mineral Resource remained
unchanged at 0.2 million ounces of gold.

Ore Reserves for the expanded Kencana
ﬁ eld comprises the K1 and K2 shoots.
The reserve is based on the March 2007
mine design for K1 and the preliminary
pre-feasibility designs for K2. Both
orebodies employ underhand cut-and-ﬁ ll
mining methods. The net change in the
Ore Reserve for the period including
depletion was an increase of 1.4 million
ounces of gold.

Mining of the Toguraci Open Pit was
completed during the period. There are no
Ore Reserves for the Toguraci Open Pit.

Cracow Gold Mine (QLD)
Cracow Gold Mine is an unincorporated
joint venture between Newcrest
(70 percent) and Sedimentary
(30 percent) – a wholly owned
subsidiary of Lion Selection Group.
Newcrest reports 70 percent of the
Mineral Resources and Ore Reserves
at Cracow. Discovery of the early
Permian age Royal, Crown, Sovereign
and Kilkenny shoots have contributed
1.2 million ounces to the mineral
endowment. This combined with
historical production of 0.9 million
ounces takes the total endowment of
the Cracow Goldﬁ eld to over 2.0 million
ounces. The gold shoots are structurally
controlled, within steeply dipping low
sulphidation epithermal veins that are
hosted by andesitic volcanics and
volcaniclastic sediments. The gold grade
is high (>10g/t Au) and is associated
with silver. Exploration along and
deﬁ nition of auriferous structures is

Newcrest Mining Concise Annual Report 2007 31

2007 Mineral Resources

Measured
Resource

Indicated Resource

Inferred Resource

Total Resource

Contained Metal

Gold and Copper Resources
(#– includes stockpiles)

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)

Dry
Tonnes
(million)

Gold
Grade
(g/t Au)

Copper
Grade
(% Cu)

Gold
(million
ounces)

Copper
(million
tonnes)

Competent
Person

Cadia Hill Open Pit#

189.7

0.7

0.15

27.4

0.5

0.17

40.8

0.5

0.11 258.0

0.6

0.15

5.3

0.38

Cadia Extended

Ridgeway Sub Level
Cave#
Ridgeway Deeps Block
Cave

Cadia East Open Pit

21.3

0.5

0.25 21.3

0.5

0.25

0.3

0.05

11.9

2.0

0.62

3.0

2.4

0.79

15.0

2.0

0.66

1.0

0.10

13.3

1.3

0.52

35.6

1.3

0.50

35.5

0.9

0.36 84.5

1.1

0.44

3.0

0.38

223.3

0.4

0.37 211.5

0.5

0.29 434.8

0.4

0.33

5.9 1.44

Cadia East Underground

499.3

0.8

0.33 222.4

0.5

0.26 721.7

0.7

0.31

15.5

2.24

Total Cadia Province – Gold and Copper

31.0 4.59

Main Dome Open Pit#

2.5

1.0

0.14 249.2

1.3

0.12

38.3

0.8

0.11 290.0

1.2 0.12

11.4 0.35

West Dome Open Pit

Telfer Underground

Telfer Satellite Deposits

125.3

0.9

0.07

35.9

0.8

0.05 161.2

0.9

0.06

4.7 0.10

49.9

1.9

0.39

9.3

1.3

0.32 59.1

1.8

0.38

3.4

0.23

0.6

4.2

0.03

1.7

2.6

0.08

2.3

3.0

0.07

0.2

0.00

Total Telfer Province – Gold and Copper

Kencana Underground#*

Cracow Underground#**

0.4 11.2

2.4 35.7

0.5

8.0

0.4

27.5

2.8

34.6

1.4

7.3

2.3

8.2

19.6 0.68

3.2

N/A

0.6

N/A

Marsden Discovery

76.7

0.3

0.50

76.7

0.3

0.50

0.8

0.38

Total Other Provinces – Gold and Copper

Total Gold and Copper

4.6 0.38

55.2 5.65

1. Paul Dunham, 2. Geoff Smart, 3. Dean Collett, 4. Colin Moorhead, 5. Dale Sims, 6. James Francis, 7. John Holliday
*

Newcrest reports 100% of the Mineral Resource at Kencana. Kencana is owned and operated by PT Nusa Halmahera Minerals, an incorporated
joint venture between Newcrest (82.5%) and PT Aneka Tambang (17.5%).

** Newcrest reports 70% of the Mineral Resources at Cracow. Cracow Gold Mine is an unincorporated joint venture between Newcrest (70%) and

Lion Selection Group (30%).

32 Newcrest Mining Concise Annual Report 2007

2007 Ore Reserves

Gold and Copper Reserves
(# = includes stockpiles)

Cadia Hill Open Pit#

Proved Reserve

Probable Reserve

Total Reserve

Contained
Metal

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)

(million
tonnes)

Competent
Person

116.0

0.8

0.16

1.7

0.4

0.19 117.6

0.7

0.16

2.8

0.19

Ridgeway Sub Level Cave#

8.4

1.8

0.67

3.5

1.8

0.67

11.8

1.8

0.67

0.7

0.08

Ridgeway Deeps Block Cave

2.1

1.1

0.47

49.7

1.1

0.42

51.9

1.1

0.42

1.8

0.22

Cadia East Open Pit

Cadia East Underground

–

143.2

0.4

0.44 143.2

0.4

0.44

1.8

0.63

304.2

0.9

0.35 304.2

0.9

0.35

8.9

1.05

Total Cadia Province – Gold and Copper

16.0

2.17

2.5

1.0

0.13 254.7

1.0

0.11 257.2

1.0

0.11

8.6

0.28

Main Dome Open Pit#

West Dome Open Pit

Telfer Underground

Total Telfer Province – Gold and Copper

Kencana Underground#*

–

Cracow#**

0.4

10.2

Total Other Provinces – Gold

Total Gold & Copper

144.7

0.7

0.05 144.7

0.7

0.05

3.2

0.07

50.8

1.7

0.36

50.8

1.7

0.36

2.7

0.18

2.2

34.5

0.3

7.9

2.2

34.5

0.7

9.1

–

14.6

0.53

2.4

0.2

2.6

–

33.2

2.70

1. Geoff Dunstan, 2. Pasqualino Manca, 3. Matt Brinckley, 4. Jason May, 5. Robbie Whitworth, 6. Justin Woodward
*

Newcrest reports 100% of the Ore Reserves at Kencana. Kencana is owned and operated by PT Nusa Halmahera Minerals, an incorporated
joint venture between Newcrest (82.5%) and PT Aneka Tambang (17.5%).

** Newcrest reports 70% of the Ore Reserves at Cracow. Cracow Gold Mine is an unincorporated joint venture between Newcrest (70%) and

Lion Selection Group (30%).

Newcrest Mining Concise Annual Report 2007 33

Health and Safety

Community Relations

Environment

Providing a healthy and safe
environment is fundamental
to the way we operate.

Throughout the year,
Newcrest implemented
a number of programs
in consultation with local
and regional communities.

The effective management
of environmental issues
is an integral part of
Newcrest’s operations.

Risk Management

Newcrest is focussed on maintaining a safe
environment for its employees, operating
and developing mines in line with good
environmental practices, and embracing
a strong sense of commitment to the local
communities around its operations.

Tony Pooley
Head of Safety
Environment and Risk

Risk Management

Risk management is integrated into
all facets of the business, including
ﬁ nancial and project planning,
operations, health and safety,
environmental matters, and
community relations.

Newcrest is committed to:

(cid:129) ensuring that all material risks are

identiﬁ ed and objectively assessed
against accepted criteria and that
appropriate control measures are
implemented

(cid:129) complying with all applicable laws,
regulations, internal policies and
contractual obligations as a
minimum standard

(cid:129) ensuring that all employees and

contractors are informed about the
risk policy and their responsibilities
for its implementation

(cid:129) implementing effective insurance

strategies for transfer of residual risk

(cid:129) continually striving to improve

its performance and to periodically
reviewing performance to identify
areas for improvement

(cid:129) implementing effective crisis
management and business
continuity plans.

Risk assessment is an integral part
of decision-making at both corporate
and operating levels. The methodology
applied is Semi-Quantitative Risk
Assessment (SQRA©), which is
recognised and promoted by executive
management as a robust process and
valuable business tool that can drive
better performance.

SQRA© is an in-depth risk assessment
tool which generates quantitative risk
assessments that allow cost-beneﬁ t
decisions to be made. In relation to
health, safety and environmental issues,
it also seeks to demonstrate that risks
have been managed to a point that is
As Low As Reasonably Practicable
(ALARP). To implement SQRA©,
workshop teams within Newcrest
develop detailed diagrams of all of the
causes, controls and outcomes of the
exposure under assessment. Questions
relating to frequency, materiality,
probability and outcomes of particular
risks and their potential consequences
are addressed. From this information,
the frequency or likelihood of a material
event occurring can be calculated and
critical risk controls deﬁ ned. The
effectiveness of these controls is
assessed and actions to address any
modiﬁ cations required are identiﬁ ed.
These actions are then subject to
cost-beneﬁ t review.

A Risk Lead Team is implementing
SQRA© principles and practices
throughout the organisation, with a
Risk Reference Group being established
at each site and at all other corporate
locations to promote risk assessment
on a day-to-day basis.

The risk management process outlined
above allows all material business, safety
and sustainability risks to be assessed.

In the area of community relations, the
ENGAGE© process is used as a tool
for identifying and assessing potential
stakeholder issues in relation to
Newcrest activities which may impact
upon communities. This assists
Newcrest to develop strategies
for engaging with stakeholders
on these issues.

Page 35
Ross Howard, Leading Hand
Service Crew, Michael Fowler,
Service Crew Member, and
Adrian Short, Underground
Superintendent, inspecting
construction of works
underground.

Newcrest Mining Concise Annual Report 2007 35

Risk Management Health and Safety

Newcrest is focussed on maintaining
a safe environment for its employees,
operating and developing mines in
line with good environmental practices
and embracing a strong sense of
commitment to the local communities
around its operations.

Newcrest’s vision is to be the ‘Miner
of Choice’. Safety, social responsibility
and sustainability are fundamental
guideposts to that vision. Social
responsibility embodies Newcrest’s
commitment to the communities and
environments within which it operates.

In the past year, Newcrest has
established programs to achieve
continuous improvement of its
performance in Health, Safety,
Environment and Community (HSEC).
These programs fall into three broad
categories:

(cid:129) Organisational initiatives intended
to strengthen Newcrest’s focus,
strategic intent and follow-through
on HSEC matters.

(cid:129) Systems initiatives intended to ensure
Newcrest has all of the controls in
place to manage HSEC threats.

(cid:129) Behavioural initiatives intended to ensure
Newcrest’s employees and contractors
genuinely understand and are prepared
to strive for sound HSEC outcomes.

The role of Head of Safety, Environment
and Risk has been created, reporting
directly to the Managing Director. Other
organisational changes have been
introduced to establish Centres of
Excellence (with the objective of
improving HSEC standards and
consistency across the Company).

Health and safety performance
Providing a healthy and safe environment
is fundamental to the way we operate.

The Target Zero program has
encouraged an overall improvement
in safety performance in 2006–07,
based on injury statistics.

In 2006–07, the Lost Time Injury
Frequency Rate (LTIFR) decreased
by 16 percent, from 1.3 to slightly less
than 1.1, as shown in the LTIFR graph
on page 37. The LTIFR is the rate of lost
time injuries per million exposure hours.

The Total Recordable Injury Frequency
Rate (TRIFR) (being a measure per
million exposure hours, which includes

36 Newcrest Mining Concise Annual Report 2007

injuries leading to allocation of restricted
work duties and injuries that are
medically treated, but do not preclude
employees from continuing to carry
out their duties), decreased by 3 percent
from 11.1 to 10.8, as shown in the TRIFR
graph on page 37.

Fatality at Telfer
At Telfer on 26 March 2007, an employee
of contractor Jetcrete Australia Pty Ltd
died as a result of a vehicle accident
in the underground mine. Newcrest
is conducting a comprehensive
investigation into this fatality to identify
the cause of the accident and any
actions that can be taken to prevent
incidents of this nature. The West
Australian Department of Consumer
and Employment Protection is also
conducting its own investigations.
Newcrest and the owner of Jetcrete
have arranged ﬁ nancial and other
support for the deceased’s family.

Site Safety Performance

Lost Time Injury
Frequency Rate (LTIFR)

Total Recordable Injury
Frequency Rate (TRIFR)

Site
Cadia Valley
Cracow
Gosowong
Telfer
Exploration
Total

2007
1.5
0.0
0.3
2.0
1.4
1.1

2006
1.5
0.0
0.3
4.1
0.0
1.3

2007
7.6
12.2
1.9
22.1
14.9
10.8

2006
14.7
24.2
6.4
13.1
23.4
11.1

LTIFR – Total Group

TRIFR – Total Group

0
.
3

9
.
1

2
.
2

3
.
1

1
.
1

1
.
8
2

7
.
4
1

6
.
3
1

1
.
1
1

8
.
0
1

3.0

2.5

2.0

1.5

1.0

0.5

0.0

The Safe Behaviour Observation (SBO)
process has also been implemented
across all operations. Initial feedback
has led to efforts to improve the quality
of the SBOs, focussing on the root cause
of unsafe acts (rather than just the acts),
and empowering and training staff to
lead safe behaviour observations in
the workplace.

Employee wellness program
At Cadia Valley Operations, a ‘Wellness
for Life’ program was initiated in the
second half of 2006–07. This is a follow-
up program to the existing employee
wellness program that promoted healthy
eating habits, increased exercise and a
balanced approach to lifestyle choices.

Safety and health management
system initiatives
As part of the ongoing Target Zero
program, at each site a range of working
groups, comprising representatives from
management, staff and contractors,
have focussed on speciﬁ c areas of site
safety and activities in 2006–07.

In addition, site audits were completed
across the business against 24 health
and safety standards. The results of
these audits will be used to guide safety
action planning by each operation.
Semi-quantitative risk assessments
using SQRA© were conducted for
several of the major site hazards, and
implementation of control measures
resulting from those assessments
has commenced.

Behavioural safety initiatives
Key Performance Indicators and
‘league’ tables that measure both
lagging performance and leading
indicators were established and trialled
across Newcrest during the last quarter.
The tables are designed to build a
competitive team culture within the
business to drive improved safety
and health performance.

Page 36
John McGuire, Training Ofﬁ cer
conducting a safety and
induction training session.

Newcrest Mining Concise Annual Report 2007 37

Risk Management Community Relations

Building and maintaining sound
relationships with the communities
surrounding Newcrest’s operations
is a key component of being the
‘Miner of Choice’.

Throughout the year, Newcrest
implemented a number of programs
in consultation with local and regional
communities. Some of these are
described below.

Telfer
Indigenous employment
Newcrest’s Indigenous Employment and
Training Strategy (IEATS) recognises the
inherent value of Indigenous Australian
perspectives to its business and aims
to position Newcrest as the employer
of choice for Aboriginal people residing
within the locale of its mining operations.

Throughout the year, Telfer employed
65 Aboriginal people, including 25 local
Martu people and 11 from Marble Bar.
Training was provided for 30 Aboriginal
people within the local communities,
all of whom subsequently gained
employment.

Through the Strategy, Newcrest
seeks to increase the employment and
advancement of Indigenous Australians
across all levels of mining and related
work roles, reﬂ ecting its commitment
to developing career pathways for
Aboriginal employees.

The IEATS is based on building positive
relationships with host communities while
providing a mechanism for Aboriginal
people to participate in Newcrest’s
workforce through employment and
training. Newcrest is looking to engage
local communities and organisations
in actively supporting the development
of skilled and semi-skilled Indigenous
employees of both genders.

The IEATS is based on best practices,
developed over a period of time, that
have proved successful in other similar
employment and training strategies.
It is consistent with Newcrest’s diversity
strategy and overarching principles of
access and equity, and falls in line with
the general expectations of a broad
cross section of the mining industry
within Australia who embrace
Indigenous employment.

Western Desert Dialysis Program
Newcrest is involved in a proposal
to develop a respite dialysis program
at the nearby Aboriginal community of
Jigalong. Newcrest’s involvement in this
proposal reﬂ ects the strong cooperative
relationship between Newcrest’s
Telfer operations and the local
Martu community. Newcrest has led
discussions to date with the Martu
community, other miners in the area
and government.

The proposed program involves the
refurbishment of a house and installation
of equipment to provide a local service
to Aboriginal people in need of dialysis
treatment who would otherwise need
to relocate to Perth for that treatment.
The proposed program will require
government approval before it can
be implemented.

38 Newcrest Mining Concise Annual Report 2007

Community support
Telfer community affairs personnel also
assisted the local community with:
(cid:129) training courses in mine entry,

hospitality/mine support services
and car and truck licences

(cid:129) facilitation of a feasibility study into the
construction of the Niminjarra Highway
between the nearby Indigenous
communities of Punmu and Parnngurr

(cid:129) educational support, including

a scholarship for a Martu youth to
attend a Perth secondary college
(cid:129) provision of a car and driver to the

Bloodwood Tree association for use in
an Indigenous driver training program

(cid:129) contributions and support for the

desert sport development program,
including the Australian Football
League’s Western Desert Shield
match, which is held as a curtain raiser
to the Western Derby match between
the two Western Australian AFL clubs

(cid:129) the upgrade of sporting facilities,
including a grass oval at Jigalong

(cid:129) provision of a Community

Development Ofﬁ cer and Business
Development Ofﬁ cer to work with
Port Hedland Indigenous
community groups

(cid:129) funding of three positions in the Western
Desert Lands Aboriginal Corporation,
which represents the Martu people.

Family days
During the year, Telfer commenced
‘family day’ visits that involved ﬂ ying
employees’ spouses and children to
the site on selected weekends, giving
the families the opportunity to see
ﬁ rst-hand conditions in the workplace.
Positive feedback has been received
on the program.

Cadia Valley
Cadia East Project community
consultation
In July 2006, a community consultation
program was initiated in relation to
the proposed Cadia East mining
development in Cadia Valley. A number
of meetings have since been held with
representatives of stakeholder groups
in relation to the project proposals.

The aim of the consultation process
is to identify areas where the objectives
of Newcrest and the local communities
are aligned, and any areas where they
may differ, and to proceed with the
establishment of a project that both
parties can live with for decades to come.

At the community meetings, Newcrest
outlined the broad concept proposals
for mining Cadia East, including a range
of options under consideration in the
technical assessment. Project
stakeholders, and most particularly

the residents of Cadia and nearby
Panuara districts, have been instrumental
in shaping the progress of this
assessment. The local residents have
identiﬁ ed and prioritised the issues of
most concern to them and offered
viable alternatives to the project
proposals put forward.

The above information and input from
other sources contributed to a preliminary
environmental assessment, which formed
part of the development application
to the NSW Department of Planning.
Community consultation is an integral
part of Cadia East development, and
will continue throughout the assessment
and approvals phase and into project
implementation and operation.

Community programs
In addition to the targeted consultation
process, ongoing community relations
programs continued to be developed
under the guidance of Cadia Valley’s
ﬁ ve-year Community Relations Strategy.
Over the year, contributions totalling
$337,000 were made to various
community groups, health organisations,
schools and charities. This support is
provided through the Community
Partnerships Program, which is
administered by an on-site committee
that includes four elected representatives
from the workforce.

Major initiatives supported through
the program included a fundraising
campaign for construction of a Ronald
McDonald House at the new Orange
Base Hospital; the Learning for Life
program conducted by The Smith Family
in Orange; and the introduction of a pilot
program to extend weekend bus
services to disadvantaged districts
of Orange to help address the social
isolation issues in those areas.

Open Day
A public open day was held in April 2007
and approximately 2,600 people visited
the Cadia Valley operations. An active
program of site tours is also conducted
throughout the year for educational,
business and general interest groups.

Cracow
Cracow continues to engage with
the local town community to identify
opportunities to assist and enhance it.
Activities include community volunteer
work by Newcrest employees and
participation in, and representation
on, the Cracow Community Centre
Committee (three out of four positions
on the Committee are held by Newcrest
employees, who donate their time to
assist). Committee activities include
organising fundraising events for the
community, operating the club facilities
and organising entertainment.

Newcrest also compiles, edits
and pays for the printing of a local
community newspaper.

The Cracow mine continues to meet
its obligations under the Indigenous
Land Use Agreement, which the
traditional owners negotiated in 2004,
with emphasis on providing education
and employment opportunities.

Gosowong
Community relations activities at
Gosowong during the year were directed
towards contributions to local charities
and the support of regional infrastructure
projects, including road rebuilding, a port
facility upgrade and improved availability
of clean water. Five virgin coconut oil
processing plants purchased during
the year are being commissioned and
will operate on a co-operative basis to
supply local needs and create income
for the communities.

In May 2007, the local government
and community leaders agreed that
Gosowong’s community development
initiatives be extended to fulﬁ ll broader
corporate social responsibility objectives.
The Community Development Program
has subsequently been renamed the
Corporate Social Responsibility (CSR)
Program, and Newcrest agreed to
contribute, from January 2007
1 percent of gross revenue from the
Gosowong operations to fund program
activities which will focus on sustainable
development initiatives. The aim of
the program is to empower local
communities by developing goals
and implementing action plans that
will produce long-term sustainable
development, particularly through the
use of renewable natural resources.

Whilst some illegal miners continued
to access the site outside the security
wall during the year, this did not disrupt
mining. A Memorandum of Understanding
has been signed with the local police
for support to be provided during any
signiﬁ cant future encroachment. The
Indonesian Government has placed the
Gosowong site on the National Strategic
Assets Register. This provides the site
with added protection if faced with
outside activities having the potential
to impact operations.

Page 38
Local youngsters participating
in a football clinic conducted
during the Parnngurr Sports
Carnival sponsored by
Newcrest in association
with WA Department of Sport
and Recreation.

Newcrest Mining Concise Annual Report 2007 39

Risk Management Environment

The effective management of
environmental issues is an integral
part of Newcrest’s operations.
Signiﬁ cant aspects of the year’s
activities are detailed below.

Environmental incident data
The number of reported environmental
incidents continued to decline, with
23 incidents reported in 2006–07
compared to 44 in the previous year.
There were no Category IV or
Category V incidents (the highest
levels of signiﬁ cance in Newcrest’s
internal environmental incident
classiﬁ cation system).

The majority of the environmental
incidents reported relate to small
process spills (8), water leaks (4) and
minor hydrocarbon spills (3). A more
meaningful measurement for year-on-
year comparisons can be made using
the number of hours worked during the
year as an indicator of overall Group
activity. On this basis, there was a
continued decrease in environmental
incidents per million work hours, from
3.91 in 2005–06 to 2.12 in 2006–07.

Energy usage/greenhouse emissions
Newcrest is a member of the Federal
Government’s Greenhouse Challenge
Plus program. While Newcrest has
undertaken a number of activities
that have contributed to a reduction
in energy usage and greenhouse gas
emissions, the focus for 2006–07
was on establishing a comprehensive
understanding of Newcrest’s greenhouse
gas emission proﬁ le, and providing
a basis for developing a greenhouse
emissions strategy.

Newcrest is also registered under the
Federal Energy Efﬁ ciency Opportunities
Act and Regulations 2006, as its energy
use for the inaugural year 2005–06 was
12.6 petajoules (the trigger level is
0.5 petajoules). In December 2007,
Newcrest will be submitting its
assessment and reporting schedule
in accordance with the requirements
of the regulations.

In New South Wales, Cadia Valley is a
designated Major Energy User under the
NSW Energy and Utilities Administration
Act, and accordingly has submitted an
Energy Savings Action Plan to the NSW
Department of Water and Energy.

40 Newcrest Mining Concise Annual Report 2007

The study, which began in 2005–06
and was discussed in last year’s
Annual report, is well under way, with
the construction of trial slope and
surface plots designed around the local
mesa-type landform and using a variety
of treatments. Initial results are positive
and, despite four signiﬁ cant cyclonic
events, the trial area conﬁ rms the
beneﬁ ts of the technique.

Environment award for Gosowong
Gosowong has won a major
environmental award from the
Indonesian Department of Energy
and Mineral Resources. The award
was presented to mine representatives
by the Minister of Energy and Mineral
Resources, Dr Ir Purnomo Yusgiantoro,
in December 2006.

With awards given for good mining
practice in managing erosion control
and sedimentation, Gosowong was
judged in the category for companies
that move more than 15 million tonnes of
material per annum. Judging was based
on ﬁ eld inspections, data veriﬁ cation and
evaluation by a plenary committee.
Gosowong was presented with a silver
award (no gold award was presented)

At the ceremony, Gosowong also
received a silver award for mine safety,
which was judged on fatality numbers,
safety statistics and the implementation of
safety management systems. Gosowong
was judged in the category for companies
with more than 1,500 employees.

Energy usage and greenhouse gas
emission data are provided in Newcrest’s
annual Sustainability Report, which is
available on the Newcrest website.

Global Reporting Initiative
Newcrest’s Sustainability Report,
which is based on the Global Reporting
Initiative, provides a wide range of data
on aspects of Newcrest’s sustainability
performance and provides links to more
detailed supporting information. For the
ﬁ rst time, aspects of the report were
externally veriﬁ ed. Newcrest will look
to enhance the veriﬁ cation process
in future reports.

Cadia East project
Extensive baseline environmental
assessment studies have commenced
in the Cadia East project area. These
studies cover groundwater, ﬂ ora, fauna,
aquatic ecosystem, surface water,
Aboriginal and European heritage,
air, noise, trafﬁ c and visual factors.

The results of these baseline studies
will be used in environmental impact
assessment modelling and to
develop appropriate environmental
management strategies. This
information will be presented in the
Cadia East environmental assessment
document that forms part of the project
approval process.

Water at Cadia Valley
At the end of June 2006, extreme
drought conditions in central New South
Wales led to water storages at Cadia
Valley reaching critically low levels,
causing particular concern for Cadia Hill
operations. A number of potential on-site
and off-site, have been investigated for
both short-term supplies and longer-term
security of supply.

Runoff from early winter rains and an
agreement with Orange City Council
in June 2007 for the provision of up to
450 megalitres of water have ensured
adequate supplies until early 2008.
Any further rainfall will improve on
that position.

Telfer Eco-Hydrology study
The ﬁ ve-year Telfer Eco-Hydrology
study, which is part of the mine’s revised
closure plan, is being undertaken to
support the design and construction of
landforms that are compatible with the
unique physiography of the surrounding
east Pilbara environment.

Page 40
Chantell Hosking,
Environmental Scientist,
inspecting the growth
of topsoil mixture.

Newcrest Mining Concise Annual Report 2007 41

Board of Directors

Donald P. Mercer
Non-Executive Chairman

Bachelor of Science (Hons) and
Master of Arts (Econ).

Mr Mercer is a former Managing
Director and Chief Executive
Ofﬁ cer of ANZ Banking Group and
was appointed to the Board and
elected Chairman in October 2006.
Mr Mercer is Chairman of Orica
Limited, Australia Paciﬁ c Airports
Corporation Limited, The State
Orchestra of Victoria, and former
Chairman of Australian Institute
of Company Directors Ltd.
He is a Director of Air Liquide
Australia Limited.

Other Directorships
Orica Limited
Australia Paciﬁ c Airports
Corporation Limited
Air Liquide Australia Limited

Ian K. Smith
Managing Director and
Chief Executive Ofﬁ cer

Bachelor of Engineering (Hons.)
from the University of New South
Wales, Bachelor of Financial
Administration from the University
of New England.

Mr Smith was formerly the
Global Head of Operational and
Technical Excellence of Rio Tinto
plc, based in London, and prior to
that was the Managing Director –
Aluminium Smelting within the Rio
Tinto Group. He commenced as
CEO of Newcrest on 14 July 2006
and was appointed Managing
Director on 19 July 2006.
Mr Smith is also a member
of the Australian Institute of
Company Directors and Vice
President of the Australian Mines
and Metals Association.

Gregory J. Robinson
Finance Director

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 a member
of the Safety, Health and
Environment Committee and
the Audit and Risk Committee.

Other Directorships
OneSteel Limited
Coal & Allied Industries Ltd
Bendigo Mining Limited
– to January 2006
Indophil Resources N.L.
– to April 2005

Bachelor of Science (Hons)
Geology, Monash University
and MBA, Columbia University

Mr Robinson is responsible
for the Group’s Finance
function and leads Newcrest’s
strategy, planning and business
development activities. Prior to
joining Newcrest in November
2006, Mr Robinson was with
the BHP Billiton Group for the
period 2001–2006 where he held
the positions of Project Director
of the Corporation Alignment
Project, Chief Finance and Chief
Development Ofﬁ cer, Energy and
Chief Financial Ofﬁ cer, Petroleum.
He was also a member of the
Energy Executive Committee
and Group Executive Committee.
Before joining BHP Billiton,
Mr Robinson was Director of
Investment Banking at Merrill
Lynch & Co and headed the Asia
Paciﬁ c Metals and Mining Group.

Your directors as at 20 September 2007

42 Newcrest Mining Concise Annual Report 2007

Ronald C. Milne
Non-Executive Director

Michael A. O’Leary
Non-Executive Director

Rick Lee
Non-Executive Director

Member of Certiﬁ ed Practising
Accountants Australia.

Bachelor of Science (Technology)
from the University of NSW.

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 Audit and Risk
Committee and a member of the
Safety, Health and Environment
Committee.

Other Directorships
Brambles Industries Limited
– to November 2004
Brambles Industries pic
– to November 2004

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 Chairman of the Safety, Health
and Environment Committee.

Other Directorships
Santos Limited
– to December 2006
Bank West Ltd
– to September 2004

Bachelor of Chemical Engineering
(Hons), University of Sydney
and Master of Arts (Econ),
Oxford University.

Mr Lee is a former Chief Executive
of NM Rothschild Australia
Group. He is Chairman of Salmat
Limited, Inteq Limited and Deputy
Chairman of Ridley Corporation
Limited. Mr Lee is also an
independent member of the Board
Trading and Risk Management
Committee of Graincorp Limited
and the Governor of the Institute
of Neuromuscular Research.
He was appointed to the Board
in August 2007.

Other Directorships
CSR Limited
Salmat Limited
Ridley Corporation Limited
Cash Services Australia Pty Ltd
Australian Rugby Union Limited
North Shore Heart Research
Foundation
Insurance Division of
Wesfarmers Limited

Tim Poole
Non-Executive Director

Bachelor of Commerce,
Melbourne University.

Mr Poole is a former Managing
Director of Hastings Funds
Management. He is a member
of the Investment Committee of
the industry superannuation fund
AustralianSuper and a member
of the LEK Consulting Advisory
Board. Mr Poole was appointed
to the Board in August 2007
and is a member of the Audit
and Risk Committee.

Other Directorships
Asciano Group
Australian Infrastructure Fund
– to June 2007
Hastings Funds Management
– to June 2007
Victoria Racing Club

Newcrest Mining Concise Annual Report 2007 43

Corporate
Governance

Newcrest’s vision is to be the ‘Miner
of Choice’ – to maintain its position as
a leading producer of gold and copper,
creating shareholder wealth in a manner
which also beneﬁ ts its employees and
the communities and environment
in which it operates. 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 its vision.

Following is a summary of Newcrest’s
corporate governance practices during
the year to 30 June 2007, in accordance
with the Principles of Good Corporate
Governance and Best Practice
Recommendations issued by the
Australian Stock Exchange Corporate
Governance Council (ASX CGC
Recommendations).

Principle 1 – Lay Solid Foundations
for Management and Oversight
On behalf of the shareholders, the
Board:

(cid:129) sets the Company’s strategic goals

and objectives

(cid:129) oversees the management and
performance of the Company’s
business.

These and other functions of the Board,
have been formalised through the
adoption of a formal Board Charter.
The Board Charter can be found at
www.newcrest.com.au/corporate.asp.

The Board Charter deﬁ nes the Board’s
role and responsibilities in relation to
strategic, ﬁ nancial, 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.
In the context of the Board Charter,
management is charged with the
responsibility and authority for the
day-to-day management of the
Company and its operations. Its remit
is formally set out, and agreed with the
Board, in a Statement of Management
Authorities and Responsibilities which
is backed up by a comprehensive
framework of management approval
and authority limits.

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, if
necessary, at the Company’s expense.
All Directors are encouraged to visit the
Company’s operating sites annually.

To facilitate the execution of its
responsibilities, the Board maintains
two standing Committees, which provide
a forum for a more detailed analysis
of key issues. All Directors (including
the Managing Director) receive all
Committee papers and minutes and
are welcome to attend any Committee
meeting. Each Committee reports its
deliberations to the next Board meeting.

During the 2006–07 period, the Board
comprehensively reviewed its own
processes and committee structures.
As a result of that review, it discontinued
the Remuneration Committee, the
Finance Committee, and the Nomination,
Governance and Ethics Committee.
The work of those Committees is
now dealt with by the Board itself or,
where appropriate, by the Audit and
Risk Committee. Speciﬁ cally the
Board determined that a separate
nomination committee, as proposed
in Recommendation 2.4, and a separate
remuneration committee, as proposed
in Recommendation 9.2, are not required.
The Board determined that it itself is
able to undertake the work of those
committees and is best placed to
do so having regard to the size of the
Company, and that all decision-making
authorities in relation to those aspects of
the Board’s role rest with the Board itself.
The Board has structured its annual
program of business to ensure that
these matters are fully dealt with by it.
The current Committees of the Newcrest
Board, their membership and functions
are as follows.

Audit and Risk Committee
Members: Ron Milne (Chairman),
Bryan Davis, Tim Poole
Function: ensures compliance with
all accounting and ﬁ nancial reporting
obligations of the Group and reviews
internal ﬁ nancial controls and the role
of the internal and external auditors,
including the independence of the
external auditors, and the Company’s
risk management activities.

d Lavery
ve General
er Corporate
s

Safety, Health and Environment
Committee
Members: Michael O’Leary (Chairman),
Ronald Milne, Bryan Davis
Function: monitors the Company’s
safety, health and environmental
management practices and that the
Company has appropriate policies
in place to provide a framework for
compliance with all relevant laws,
regulations and standards.

The Charter for each
Board Committee can be found at
www.newcrest.com.au/corporate.asp.
Details of the number of meetings of
the Board and of each Committee held
during the ﬁ nancial year, and of each
Director’s attendance at those meetings
(as relevant), are set out on page 53
of this Report.

Principle 2 – Structure the Board
to Add Value
Newcrest’s Board currently comprises
eight Directors – the Managing Director,
Mr Ian Smith, the Executive Director
Finance, Mr Greg Robinson and
six Non-Executive Directors, being
Mr Don Mercer (Chairman) and
Messrs Bryan Davis, Ronald Milne,
Michael O’Leary, Tim Poole and Richard
Lee. Details of each Director’s skills,
experience and relevant qualiﬁ cations
and expertise, as well as the term of
ofﬁ ce held by that Director as at the
date of this Report, are set out on pages
42 to 43. Dr Nora Scheinkestel was a
Non-Executive Director until she retired
on 31 August 2007. The Board has
determined that as a general rule, and
subject to current appointees completing
their term of ofﬁ ce, a Non-Executive
Director will not serve on the Board
for more than 10 years.

The Board has determined that all
Non-Executive Directors, other than
Mr Davis, are independent and free of
any relationship which might conﬂ ict with
the interests of the Company. In doing
so, the Board has adopted the deﬁ nition
of independence set out in the ASX CGC
Recommendations, and formed the view,
that the materiality thresholds set out in
that deﬁ nition 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
Ofﬁ cer of a supplier or customer that
held contracts with the Company for an
aggregate value exceeding 10 percent
of Newcrest’s annual revenue.

Based on the deﬁ nition of
independence set out in the ASX CGC
Recommendations, the Board has
determined that Mr Davis ceased to
be an independent director during the
year as a result of his employment by
the Company in an executive capacity,
as Interim Managing Director and Chief
Executive Ofﬁ cer upon Mr Palmer’s
departure from the Company on
3 May 2006. Mr Davis acted in this role
from 4 May to 19 July 2006, pending
Mr Ian Smith’s commencement as the
Company’s new Managing Director.
Details of Mr Davis’ remuneration
during that time are set out on page 66
of this Report.

Mr Davis was granted leave of absence
as a Non-Executive Director and
stood down as a member of the Audit
Committee during his tenure as Interim
Managing Director and Chief Executive
Ofﬁ cer. As a consequence, during that
time, the Audit Committee comprised
only two members, rather than three
as recommended by the ASX CGC
Recommendations. The Board did not
appoint an additional Non-Executive
Director to the Audit Committee during
Mr Davis’ tenure as Interim Managing
Director and Chief Executive Ofﬁ cer
(from 4 May to 19 July 2006) due to the
short-term nature of his absence from
the Committee. The Audit Committee
met only once during that period.

The Board has also considered the
potential impact of Mr Mercer’s and
Dr Scheinkestel’s status as independent
Non-Executive Directors of the
Company, in view of their positions
as Non-Executive Chairman and
as a non-executive director of Orica
Limited during the year. The Board has
determined that, notwithstanding that
Orica is a supplier of chemicals and
explosives to Newcrest, Mr Mercer
and Dr Scheinkestel each remained
independent on the basis that the
annual aggregate value of Newcrest’s
contracts with the Orica group is below
the applicable materiality threshold
adopted by the Board for the purpose
of assessing Director independence,
as outlined above.

The Board will continue to monitor 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 identiﬁ ed,
with professional advice taken if
necessary. Candidates are considered
and appointed 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.

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 the procedures
that personnel 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
ﬁ ve key values to guide its Directors
and employees in the conduct of the
Company’s activities.

(cid:129) We act with integrity and honesty.

(cid:129) We seek high performance
in ourselves and others.

(cid:129) We work together.

(cid:129) We value innovation and

problem solving.

(cid:129) We care about people.

An extensive training program has been
developed 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
and share trading are subject to the
Company’s Share Trading Policy,
which restricts the times when a
Director or employee can purchase
or sell Company securities and prohibits
short-term trading.

A copy of the Share Trading Policy, as
well as the Company’s Code of Conduct
and other policies, can be found online
at www.newcrest.com.au/corporate.asp.

Newcrest Mining Concise Annual Report 2007 45

Corporate
Governance
continued

46 Newcrest Mining Concise Annual Report 2007

Principle 4 – Safeguard Integrity
in Financial Reporting
Newcrest’s Managing Director and
Executive Director Finance have each
provided written statements to the
Newcrest Board, in relation to both the
half year to 31 December 2006 and the
full ﬁ nancial year, that the Company’s
ﬁ nancial reports present a true and
fair view of the Company’s ﬁ nancial
condition and operational results and are
in accordance with relevant accounting
standards, and that the Company’s
ﬁ nancial records have been properly
maintained in accordance with the
requirements of the Corporations Act.

In relation to the year ended 30 June
2007, the Company’s Managing Director
and Executive Director Finance have
also provided a written statement to the
Board that the integrity of the Company’s
ﬁ nancial statements is founded on a
sound system of risk management and
internal compliance and control, and that
the system is operating effectively in all
material respects.

Those statements support the Audit
and Risk Committee in discharging
its role of reviewing the integrity of
Newcrest’s ﬁ nancial reporting, and
reporting to the Board on the status
of the Company’s risk management
and control systems. The Audit and Risk
Committee is given further assurance
regarding the integrity of the Company’s
control systems through the internal
audit program. The program is
developed by management, approved
by the Committee and implemented
by the internal auditor, KPMG.

Ernst & Young has provided the Audit
and Risk Committee with a conﬁ rmation
of its independence for the ﬁ nancial
year. During the ﬁ nancial 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:

(cid:129) the non-audit services would normally
be subject to scrutiny as part of the
external audit process

(cid:129) the fees for the non-audit services
would be considered signiﬁ cant
compared to the audit fees

(cid:129) the non-audit services could be
considered to be in conﬂ ict 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. The Company
has a formal Continuous Disclosure
Policy in place to ensure that this
occurs, a copy of which is available at
www.newcrest.com.au/corporate.asp.
Pursuant to the Policy, Company
information considered to be material
is announced immediately through the
ASX, and key presentations given by
Company personnel to investors and
institutions are also lodged with the
ASX. The Executive General Manager
Corporate Services has primary
responsibility for co-ordinating
disclosure in accordance with the Policy.

All key communications are placed
immediately on the Company website
and, when necessary, provided
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
It is the Board’s aim that the Company
implements effective communication
with its shareholders. Under the
guidance of Newcrest’s Company
Secretary and its Head of Investor
Relations, this is achieved through:

(cid:129) complying with ASX listing rules
and Corporations Act reporting
requirements

(cid:129) webcasting half year and full year
ﬁ nancial results presentations

(cid:129) ensuring continuous disclosure

compliance

(cid:129) holding an accessible and informative

Annual General Meeting

(cid:129) posting on the Company’s website all
other ASX announcements, including
brieﬁ ngs to investors and analysts,
and presentations by the Company
to public forums.

At its Annual General Meeting the
Company’s auditors are available to
answer questions relating to the audit
of the Company’s ﬁ nancial statements
and the accounting policies adopted
by the Company in the preparation of
its ﬁ nancial 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.

The Board has established with the
Managing Director appropriate and
speciﬁ c 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 the Company’s policies and
practices in relation to both Director and
employee remuneration, and how they
relate to Company performance, are
set out in the Remuneration Report
on pages 55 to 68.

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 Directors and employees
of the Company, and which conﬁ rms the
values that underpin all of Newcrest’s
relationships with its stakeholders.

Sustainability is an important part
of Newcrest’s vision to be the ‘Miner
of Choice’ and 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.

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 risk
identiﬁ cation, evaluation and reporting
system which seeks to identify, at the
earliest opportunity, any signiﬁ cant
business risks, the controls relevant
to those risks and the effectiveness
of the controls.

The Company has speciﬁ c reporting
and control mechanisms in place to
manage material risks and a program
to monitor compliance levels in key
areas. A component of the internal
audit program is the periodic auditing
of control mechanisms in key areas.
Reports are provided to the Audit
Committee on the effectiveness of
those mechanisms.

These reporting and control
mechanisms underpin the written
statements given by the Managing
Director and Executive General Manager
Finance to the Board each half year.
Details of these statements are set out in
the section of this corporate governance
statement dealing with Principle 4.

Principle 8 – Encourage Enhanced
Performance
The Company has in place
a performance appraisal and
remuneration system for the Board,
the Board’s Committees, individual
directors and executives that is
designed to encourage performance.
Further details regarding the Newcrest
performance management system for
the period 2006–07 are set out in the
Remuneration Report on pages 55 to 74.
The Company also receives an annual
conﬁ dential market report benchmarking
Board and Company performance and
standing relative to comparable ‘peer
group’ companies.

Principle 9 – Remunerate Fairly
and Responsibly
Board Remuneration
Remuneration of the Non-Executive
Directors is ﬁ xed 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.

Total annual remuneration paid to all
Non-Executive Directors may not exceed
the maximum amount authorised by
the shareholders in a general meeting
(currently $1,300,000). The Board has
also adopted a policy that each Director
must personally hold a minimum of
3,000 shares in the Company as a
measure to align Directors’ personal
interests with shareholders’ interests.
In addition to the ﬁ xed fees paid to
Directors, they may receive remuneration
for performing additional services such
as serving on a Board Committee or
undertaking special duties at the request
of the Board. Details of fees paid to
Non-Executive Directors are set out
in the Remuneration Report on page 66.

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 beneﬁ t being
an amount equivalent to the fees paid
to that Director during their preceding
three years, less superannuation beneﬁ ts
attributable to Company contributions.
In 2003, the Board determined that the
practice of providing retirement beneﬁ ts
be discontinued, and that all beneﬁ ts
accrued as at December 2003 should
be frozen at that date.

Executive Remuneration
The Board has a formal Remuneration
Policy in place which deﬁ nes and directs
the Company’s remuneration practices.
During the year, the Board approved
a change to the Policy which resulted
in a variation to the short-term incentive
components of executive remuneration,
and in particular how corporate and
personal performance are measured
and used in combination to determine
an employee’s entitlement to a short
term incentive. Details of that change
are set out in the Remuneration Report
on pages 55 to 61. During the year,
the Board reviewed and reafﬁ rmed the
Policy and the way in which executive
remuneration is structured, with the
result that the underlying principles
of risk and reward for performance
remain unchanged. The Remuneration
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
signiﬁ cant proportion of each senior
manager’s remuneration placed ‘at
risk’ – that is, dependent upon 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.

Newcrest Mining Concise Annual Report 2007 47

Concise Financial Report
For the year ended 30 June 2007

Directors’ Report
Remuneration Report
Auditor’s Independence Declaration Statement
Discussion and Analysis of the Financial Statements
Income Statement
Balance Sheet
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Concise Financial Report
Directors’ Declaration
Independent Audit Report
Shareholder Information
Five Year Summary

49
54
75
76
79
80
81
82
83
88
89
90
92

The 2007 Concise Financial Report is an extract from the full Financial
Report for the year ended 30 June 2007. The ﬁ nancial statements and
speciﬁ c disclosures included in the Concise Financial Report have
been derived from the full Financial Report.
The Concise Financial Report does not, and cannot be expected to
provide as full an understanding of the ﬁ nancial performance, ﬁ nancial
position and ﬁ nancing and investing activities of Newcrest Mining
Limited and its controlled entities as the full Financial Report.

2007 Full Financial Report
A copy of Newcrest Mining Limited’s 2007 Annual Financial Report,
together with the Independent Audit Report, is available to all
shareholders free of charge upon request. The ﬁ nancial statements
can be requested by telephone, by internet or email.

48 Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 49

Directors’ Report

The Directors present their report together with the Financial Report
of Newcrest Mining Limited (‘the Company’) and of the Consolidated
Entity, being the Company and its controlled entities, for the year
ended 30 June 2007 and the Auditor’s Report thereon.

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

Mr Lavery has been the Company Secretary of Newcrest Mining
Limited for 10 years.

Directors
The Directors of the Company at any time during the financial year
were, and until the date of this report are:

Donald P. Mercer
Non-Executive Chairman
(appointed 26 October 2006)

Ian R. Johnson
Non-Executive Chairman
(resigned 26 October 2006)

Ian K. Smith
Managing Director and Chief Executive Officer
(appointed 19 July 2006)

R. Bryan Davis
Non-Executive Director

Ronald C. Milne
Non-Executive Director

Michael A. O’Leary
Non-Executive Director

Ian A. Renard
Non-Executive Director
(resigned 15 September 2006)

Nora L. Scheinkestel
Non-Executive Director

Rick Lee
Non-Executive Director
(appointed 14 August 2007)

Tim Poole
Non-Executive Director
(appointed 14 August 2007)

Greg J. Robinson
Executive Director Finance
(appointed 23 November 2006)

Appointment and Qualifications of Directors
Details of the Directors' qualifications, experience and special
responsibilities are detailed below. All Directors held their position
as a Director throughout the entire year and up to the date of this
Report except as follows:

• R. Bryan Davis was acting Managing Director and Chief Executive

Officer for the period 4 May 2006 to 19 July 2006.

• Ian K. Smith was appointed Chief Executive Officer on

14 July 2006 and as Managing Director on 19 July 2006.

• Ian A. Renard was a Non-Executive Director from the beginning
of the financial year up to his resignation on 15 September 2006.

• Ian R. Johnson was the Non-Executive Chairman from
the beginning of the financial year up to his resignation
on 26 October 2006.

• Donald P. Mercer was appointed Non-Executive Chairman

on 26 October 2006.

• Greg J. Robinson was appointed Executive Director Finance

on 23 November 2006.

• Rick Lee was appointed Non-Executive Director on 14 August 2007.
• Tim Poole was appointed Non-Executive Director on 14 August 2007.

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 2007
after income tax and minority interest amounted to $72.0 million
(2006: $349.5 million). The net profit after tax for 2007 includes
a negative $122.5 million impact of the November 2006 hedge
restructure and previous restructures (2006: $7.7 million). 2006
includes a positive $218.2 million profit from the sale of the
Boddington Gold Mine Joint Venture Interest.

Dividends
The following dividends of the Consolidated Entity have been paid,
declared or recommended since the end of the preceding year:
• Final unfranked dividend for the year ended 30 June 2006
of 5 cents per share, amounting to $16.7 million was paid
on 13 October 2006.

• Dividend of $11.3 million (2006: $2.2 million) was paid to

the minority shareholder of Newcrest’s Indonesian operation.

• Final unfranked dividend for the year ended 30 June 2007

of 5 cents per share, amounting to approximately $16.8 million
has been declared and will be paid on 27 September 2007 to
shareholders registered by close of business on 6 September
2007 (refer Note 3).

Operating and Financial Review

Overview of Operating Results for the Year

Net profit after tax and minority interest was $72.0 million (2006:
$349.5 million). The reported results for 2006 included $218.2 million
profit on sale of the Consolidated Entity’s 22.22 percent interest in
the Boddington Gold Mine Joint Venture. Net profit after tax from
continuing operations and after minority interest was $72.0 million
(2006: $131.3 million).

Hedging commitments reduced the Consolidated Entity’s ability
to fully benefit from the higher spot gold and copper prices resulting
in an achieved gold price of $682 per ounce (2006: $564 per ounce)
and an achieved copper price of $2.94 per pound (2006: $2.22 per
pound). Average spot prices for the period were $814 per ounce
and $4.08 per pound for gold and copper respectively
(2006: $708 per ounce and $3.69 per pound).

In November 2006, the Consolidated Entity completed a partial
restructure of its gold hedgebook by deferring the delivery of
1.6 million ounces of existing hedges from earlier years into later
years. The principal purpose of the restructure was to adjust
hedging commitments to achieve a better balance of exposure
to spot gold prices and to reduce the percentage of production
hedged for any one year.

Revenue and net profit include the impact of gold hedge restructures
which are non-cash accounting adjustments. The net profit impact in
the current year was negative $122.5 million (2006: $7.7 million loss).
Details of the impact on profit, revenue and expenses from hedge
restructures are provided in Note 2(h) to the Concise Financial
Statements.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 50

Directors’ Report

The November 2006 hedge book restructure did have a positive
impact on cash flow. Cash flow from operating activities increased
by $123.6 million from the previous year to $387.4 million in 2007.
For cash flow, the percentage of gold settled against lower priced gold
forwards decreased from 93 percent last financial year to 55 percent
this year.

Sales revenue increased to $1,555.0 million (2006: $1,393.1 million)
due to the higher volumes and stronger prices. Higher sales
volumes were achieved from Gosowong, with the first full year of
production from Kencana underground, and Telfer with the
commissioning of its underground operation on 1 November 2006.
These were partly offset by lower production from Cadia Valley
Operations with the mining of lower grade material.

Overall the Consolidated Entity’s operating costs were impacted
by an increase in mining costs associated with a higher proportion
of Telfer production in the cost base and continued pressure on input
costs at our other operations.

The financial highlights of the 2006–07 year are summarised
in the following table:

2007

2006

Net profit after tax from
continuing operations and
after minority interest
Net profit after tax from
discontinued operation
(Boddington)
Total net profit after tax
and minority interest
Basic earnings per share
from continuing operations
after minority interest
Total basic earnings per share
after minority interest
Return on members equity
(Net profit after tax)*
Gearing (Net Debt / Net Debt
+ Equity)*
Cash flow from
operating activities

$72.0 million

$131.3 million

–

$218.2 million

$72.0 million

$349.5 million

21.5 cents

39.6 cents

21.5 cents

105.3 cents

4.7 percent

8.9 percent

46 percent

50 percent

$387.4 million

$263.8 million

*Calculations based on profit from continuing operations after minority interest
and equity after excluding the Hedge Reserve (refer Statement of Changes
in Equity).

Further information on the operating results are included in the
Chairman’s Report, Managing Director and Chief Executive Officer’s
report and the Financial Statements section of the Annual Report
and the discussion and analysis section in the Concise Accounts.

Review of Financial Condition
The financial condition of the Consolidated Entity improved
substantially in the current year. Increased production levels and a
restructure of the hedge book provided greater exposure to the higher
spot prices for commodities. The increased cash flow from operations
enabled repayments to debt facilities and a reduction in gearing.

The Consolidated Entity’s gearing ratio (net debt/(net debt + equity)),
adjusted to exclude the hedge reserve from equity, reduced to
46 percent at 30 June 2007 from 50 percent at 30 June 2006. The
Consolidated Entity met all of its financial covenants during the year.

The Group’s Net Assets and Total Equity increased during the
current year by $780.1 million. This was mostly due to a reduction
in the mark to market value of the hedge book recorded on balance
sheet at 30 June 2007 by $576.4 million net of deferred taxes.
In addition, Net Assets and Total Equity increased due to a foreign
exchange gain on US$ denominated debt (net of deferred taxes)
of $127.4 million and net profit after tax for the year of $72.0 million.

The Consolidated Entity’s exposure to spot commodity prices
will be further enhanced in future periods following the fulfilment
of its legacy copper hedging commitments in June 2007.

Further information on the financial condition of the Consolidated
Entity is included in the Financial Statements 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 anticipates that increased production levels
across the operations portfolio will have a positive impact on key
financial results and measures in the 2007–08 full financial year.
The most significant areas of development, strategies and prospects
for Newcrest are:
• Stabilised production from Telfer. A full year of production from
the underground should contribute to higher throughputs. Good
quality primary ore from the open pit and underground should
improve recoveries.

• Kencana is expected to increase production through higher

throughput and improved grade.

• Higher grades and better recoveries are expected from Cadia Hill

in 2007–08.

• Pre-feasibility and feasibility work to continue at Cadia East Open

Pit, Cadia East Underground and Kencana 2/Link.
• Development work to continue at Ridgeway Deeps.
• Increased commitment to exploration activities.
• Focus on business improvement initiatives at all operating sites.

Further information on likely developments and future prospects
for 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.

Significant Changes in the State of Affairs
Significant changes in the state of affairs of the Consolidated Entity
that occurred during the financial year were as follows:
(i) A substantial change in the leadership of the Consolidated
Entity with the appointment of a new Chief Executive Officer
and Managing Director in July 2006 and a new Non-Executive
Chairman in October 2006. Subsequent Senior Management
changes occurred, including the appointment of a new Executive
Director Finance in November 2006.

(ii) The Consolidated Entity achieved a record full year Group

gold production of 1,617,251 ounces. This included increased
production from Gosowong with the first full period for the
Kencana underground plus initial production from the Telfer
underground which was commissioned in November 2006.

(iii) A partial restructure of the hedgebook was completed in

November 2006 whereby the delivery of 1.6 million ounces from
existing hedges were deferred from earlier years into later years.
The primary purpose of the restructure was to adjust hedging
commitments to achieve a better balance of exposure to spot
gold prices and to reduce the percentage of production hedged
for any one year. The restructure resulted in an increase in
cash flow from operations of $160.6 million in the current year.
At current spot prices, the impact of the restructured hedgebook
on the Consolidated entity’s cash flow will continue to be positive
in the early years. The accounting treatment of this restructure
requires that the hedges are accounted for based on their
original maturity profile irrespective of whether the contracts have
been effectively deferred into future periods. As a result, a non-
cash accounting adjustment is required in the Income Statement.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 51

(iv) The Consolidated Entity announced on 27 June 2007 that it

had approved the development of the Ridgeway Deeps gold
and copper deposit. The development will transition the existing
mining operations in the Ridgeway sub-level cave to the lower
cost block mining method. The Ridgeway Deeps mine is
expected to produce over 2.8 million gold equivalent ounces
(1.6 million ounces of gold and 210,000 tonnes of copper) over
the total project life of 12 years. The mine will transition from
Ridgeway to Ridgeway Deeps ore over the next 2 financial years
and will reach full production in 2009–10. The capital cost
of the project is A$545.0 million.

(v) Newcrest Mining Limited has updated its Mineral Resources

and Ore Reserves estimates for the year ended 30 June 2007.

Group Mineral Resources are estimated at 55.2 million ounces
of gold and 5.65 million tonnes of copper which, compared with
June 2006, is a decrease of 3.7 million ounces of gold and an
increase of 0.25 million tonnes of copper. Group Ore Reserves
are estimated at 33.2 million ounces of gold and 2.70 million
tonnes of copper which, compared with June 2006, is an
increase of 0.7 million ounces of gold and an increase of
0.26 million tonnes of copper.

The key points of the 2007 statement are:
• Group Mineral Resources decreased by 3.7 million ounces
to 55.2 million ounces of gold and increased by 0.25 million
tonnes to 5.65 million tonnes of copper.

• Group Ore Reserves increased by 0.7 million ounces

to 33.2 million ounces of gold and by 0.26 million tonnes
to 2.70 million tonnes of copper.

• Telfer Mineral Resources have been reduced by 4.9 million
ounces of gold and 0.15 million tonnes of copper. Ore
Reserves have been reduced by 2.4 million ounces of
gold and 0.06 million tonnes of copper. This adopts a more
conservative position with respect to contained metal and
expected production outcomes.

• Kencana underground Ore Reserves increased to 2.4 million
ounces of gold. The increase is partly due to a policy change
of reporting 100 percent from 82.5 percent of Ore Reserves
(increase 0.2 million ounces of gold). Newcrest’s economic
interest remains at 82.5 percent.

• Cadia East Underground Ore Reserves increased by

1.7 million ounces to 8.9 million ounces of gold and by
0.30 million tonnes to 1.05 million tonnes of copper.
• Ridgeway Deeps block cave Ore Reserve increased by
0.5 million ounces to 1.8 million ounces of gold and by
0.07 million tonnes to 0.22 million tonnes of copper.
• Initial Mineral Resource estimates for porphyry style

mineralisation discovered near Marsden (NSW) contain
0.8 million ounces of gold and 0.38 million tonnes of copper.

Subsequent Events
On 17 August 2007, the Directors of Newcrest Mining Limited
declared a final unfranked dividend on ordinary shares in respect
of the 2007 financial year. The total amount of the dividend is
$16.8 million, which represents an unfranked dividend of 5 cents
per share. The dividend has not been provided for in the
30 June 2007 financial statements.

On 14 August 2007 Mr Tim Poole and Mr Rick Lee were each
appointed as Non-Executive Directors of the Company. On the
same date Dr Scheinkestel also advised of her intention to step
down as Non-Executive Director, with effect from 31 August 2007.

There are no other matters or circumstances which have arisen since
30 June 2007 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 and Performance
The operations of the Consolidated Entity in Australia are subject to
environmental regulation under the laws of the Commonwealth and
the States in which those operations are conducted. The operation
in Indonesia is subject to environmental regulation under the laws
of the Republic of Indonesia and the Province in which it operates.
It is the policy of the Consolidated Entity to comply with all relevant
environmental regulations in all countries in which it operates.
The Consolidated Entity releases an annual Sustainability Report.

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 that 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 was undertaken. There was a decrease in Category II (minor)
incidents compared with the previous year. The reduction occurred
across all sites where improved focus on hydrocarbon management
and improved controls on the process plant reduced small spills.

Category

2007 – No. of incidents
2006 – No. of incidents

21
40

III

2
4

-
-

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 that reviews
the environmental and safety performance of the Consolidated Entity.
The Directors are not aware of any environmental matters which
would have a materially adverse impact on the overall business
of the Consolidated Entity.

Information on Directors

Donald P. Mercer
Non-Executive Chairman
Bachelor of Science (Hons) and Master of Arts (Econ).

Mr Mercer is a former Chairman of the Australian Institute of
Company Directors Limited, and a former Managing Director
and Chief Executive Officer of ANZ Banking Group. He was
appointed Non-Executive Chairman of Newcrest Mining Limited
on 26 October 2006.

Other Directorships:
Mr Mercer is Chairman of Orica Limited, Australia Pacific Airports
Corporation Limited and The State Orchestra of Victoria. He is
a Director of Air Liquide Australia Limited.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 52

Directors’ Report

Ian K. Smith
Managing Director and Chief Executive Officer
Bachelor of Engineering (Hons.) from the University of New South
Wales, Bachelor of Financial Administration from the University
of New England.

Mr Smith was formerly the Global Head of Operational and
Technical Excellence of Rio Tinto plc, based in London, and prior
to that was the Managing Director – Aluminium Smelting within the
Rio Tinto Group. He commenced as CEO of Newcrest Mining
Limited on 14 July 2006 and was appointed Managing Director
on 19 July 2006. Mr Smith is also a member of the Australian Mines
and Metals Association.

Greg J. Robinson
Executive Director Finance
Bachelor of Science (Hons) Geology, Monash University and MBA,
Columbia University.

Mr Robinson is responsible for the Group’s Finance function and
leads Newcrest’s strategy, planning and business development
activities. Prior to joining Newcrest Mining Limited he was with the
BHP Billiton Group for the period 2001–2006 where he held the
positions of Project Director of the Corporation Alignment Project,
Chief Finance and Chief Development Officer, Energy and Chief
Financial Officer, Petroleum. He was also a member of the Energy
Executive Committee and Group Executive Committee. Before
joining BHP Billiton, he was Director of Investment Banking at Merrill
Lynch & Co and headed the Asia Pacific Metals and Mining Group.

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 a member of the Safety, Health and
Environment Committee and the Audit and Risk Committee.

Other Directorships:
Director of Onesteel Limited from December 2004 and Director of
Coal & Allied Industries Limited from September 2000. Previously
Chairman of Bendigo Mining Limited from September 2004 to
January 2006 and 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 Audit and Risk Committee and a member of the Safety,
Health and Environment Committee.

Other Directorships:
Previously a 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 Chairman of the Safety,
Health and Environment Committee.

Other Directorships:
Previously a Director of Santos Limited from October 1996 to
December 2006, and Director and Deputy Chairman of Bank West
Limited from May 1996 to September 2004.

Nora L. Scheinkestel
Non-Executive Director
Bachelor of Laws (Hons) and PhD from the University of Melbourne.

Dr Scheinkestel is an experienced company director with a
background in international project and structured financing. She
was appointed to the Board in August 2000. Dr Scheinkestel is an
Associate Professor at the Melbourne Business School and a Fellow
of the Australian Institute of Company Directors. She is a member
of the Audit and Risk Committee and former Chairman of the now
disbanded Nomination Committee.

Other Directorships:
Director of PaperlinX Limited (since February 2000), AMP Limited
(since September 2003), AMP Capital Group (since February 2004)
and Orica Ltd (from August 2006). Previous directorships include
Mayne Group Limited (July 2005 – November 2005), Mayne Pharma
Limited (November 2005 – February 2007), North Limited, IOOF
Funds Management, Medical Benefits Fund of Australia Limited
and Chairman and Directors of various energy and water utilities.

Rick Lee
Non-Executive Director
Appointed to the Board on 14 August 2007.

Bachelor of Chemical Engineering (Hons) from University of Sydney
and Master of Arts (Econ) as a Rhodes Scholar, from Oxford
University.

Mr Lee is Chairman of Salmat Limited, Inteq Limited, and Deputy
Chairman of Ridley Corporation Limited. He is a Director of CSR
Limited, Cash Services Australia Pty Limited, Australian Rubgy Union
Limited, Insurance Division of Wesfarmers Limited and North Shore
Heart Research Foundation. Mr Lee is also an Independent Member
of the Board Trading and Risk Management Committee of Graincorp
Limited, the Governor of the Institute of Neuromuscular Research
and a former Chief Executive of NM Rothschild Australia Group.

Tim Poole
Non-Executive Director
Appointed to the Board on 14 August 2007.

Bachelor of Commerce from University of Melbourne and he is
a Chartered Accountant.

Mr Poole is Chairman of Asciano Group. and Director of Victorian
Racing Club. Mr Poole is also a Member of the Investment
Committee of the industry superannuation fund Australian Super
and a Member of the LEK Consulting Advisory Board. Formerly
he was the Managing Director of Hastings Funds Management.

Newcrest Mining Concise Annual Report 2007

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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
(resigned 26 October 2006)
D. Mercer
I. K. Smith
G. J. Robinson
N. L. Scheinkestel
R. B. Davis
R. C. Milne
I. A. Renard
(resigned 15 September 2006)
M. A. O’Leary

Directors’
Meetings

Audit and Risk Remuneration

Committee
Meetings

Committee
Meetings*

Finance
Committee
Meetings*

Nomination,
Governance
and Ethics
Committee
Meetings*

Safety,
Health and
Environment
Committee
Meetings

5
8
13
8
11
12
13

3
13

5
8
13
8
13
13
13

3
13

–
–
–
–
4
5
5

1
–

–
–
–
–
4
5
5

1
–

3
–
3
–
2
2
3

3
3

3
–
3
–
3
3
3

3
3

–
–
–
–
1
–
1

–
1

–
–
–
–
1
–
1

–
1

1
–
–
–
1
–
–

1
–

1
–
–
–
1
–
–

1
–

–
–
–
–
–
2
2

–
2

–
–
–
–
–
2
2

–
2

*The Remuneration, Finance and Nomination, Governance and Ethics Committees were disbanded during the year.

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:

D. Mercer
I. K. Smith
G. J. Robinson
R. B. Davis
R.C. Milne
N. L. Scheinkestel
M. A. O’Leary
R. Lee
T. Poole

Chief Entity or
Related Body Corporate

Number of
Ordinary Shares

Nature
of Interest

Newcrest Mining Limited
Newcrest Mining Limited
Newcrest Mining Limited
Newcrest Mining Limited
Newcrest Mining Limited
Newcrest Mining Limited
Newcrest Mining Limited
Newcrest Mining Limited
Newcrest Mining Limited

11,241
3,000
3,000
16,736
10,576
74,313
14,522
6,000
3,000

Direct and Indirect
Direct and Indirect
Direct and Indirect
Direct and Indirect
Direct and Indirect
Direct and Indirect
Direct and Indirect
Direct and Indirect
Direct and Indirect

Number of
Rights/Options
over Ordinary
Shares

–
211,998
16,252
–
–
–
–
–
–

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 54

Directors’ Report

REMUNERATION REPORT

1. About this Report

2. Summary

3. Non-Executive Directors’ Remuneration

4. Executive Directors’ and Senior Executives’

Remuneration

5. Relationship of Incentives to Newcrest’s Financial

Performance

6. Executive Service Agreements

7. Remuneration Details

8. Options and Rights Held by Executive Directors

and Key Management Personnel

Newcrest Mining Concise Annual Report 2007

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Remuneration Report

1. About this Report

This entire Remuneration Report is designated as audited.

This Remuneration Report forms part of the Directors’ Report.
It outlines the overall remuneration strategy, framework and
practices adopted by Newcrest Mining Limited (the Company)
for the 1 July 2006 – 30 June 2007 year and has been prepared
in accordance with Section 300A of the Corporations Act 2001,
Regulation 2M and Schedule 5B of the Corporations Regulations
2001, AASB 124 Related Party Disclosures and ASX Corporate
Governance Principle 9.

Key Management Personnel as defined in AASB 124 comprise
the Company’s Directors, whose names appear in Table 10, and
the Executive General Managers whose names appear in Table 11.
In sections of this report where remuneration arrangements are dealt
with separately for Directors and for Executive General Managers,
the term Directors is used and the term Key Management Personnel
refers to Executive General Managers only.

2. Summary
2.1 Remuneration Policy and Strategy
In November 2006, the Board determined that the Remuneration
Committee should be discontinued and that remuneration policy
and strategy should become the responsibility of the full Board.

The Board, through its remuneration policy and strategy in 2006–07,
has sought to provide market-competitive levels of remuneration for
Executive General Managers, the Executive Director Finance and
the Managing Director, having regard to both the level of work and
the impact that those employees can potentially have on Company
performance. The policy seeks to align the interests of employees
and shareholders by linking levels of incentive and reward to both
Company and individual performance, to encourage retention of
capable employees and to achieve an appropriate balance of risk
and reward.

2.2 Non-Executive Directors
Non-Executive Directors’ fees are set based upon the need to attract
and retain individuals of appropriate calibre, reflecting the demands
of the role and prevailing market conditions. In order to maintain
independence and impartiality, Non-Executive Directors do not
receive any performance-related remuneration.

2.3 Executive Directors and Executive General Managers
Executive Directors’ and Executive General Managers’ remuneration
comprises both a fixed and variable component. Fixed remuneration
is set with reference to fixed remuneration paid by a comparator
group of companies for comparable roles. Variable remuneration
comprises an annual cash incentive scheme described as Salary
at Risk (SaR) and equity remuneration awarded under Medium Term
Incentive (MTI) and Long Term Incentive (LTI) employee share plans.
Variable remuneration is awarded based on a combination of pre-
determined personal and Company performance targets. Details of
these targets and their weightings, which differ for each component
of variable remuneration, are set out in this Report.

3. Non-Executive Directors’ Remuneration
3.1 Policy – Independence and Impartiality
In order to maintain impartiality and independence, Non-Executive
Directors do not receive any performance-related remuneration and
are not entitled to participate in the Company’s employee share plans.

3.2 Fixed Fees
Non-Executive Directors, including the Chairman, are paid fixed fees
for their services to the Company. Those fees are inclusive of any
contribution to superannuation that a Non-Executive Director wishes to
make or which the Company is required by law to make on behalf of a
Non-Executive Director. 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 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 27 October 2005,
at which shareholders approved an aggregate amount of
$1,300,000 per annum.

Fees paid to Non-Executive Directors in 2006–07 are set out in
Table 10.

3.3 Additional Services
Under the Company’s Constitution, Non-Executive Directors
may be remunerated for additional services, for example, if they
undertake specialist or consulting work on behalf of the Company
outside the scope of their normal Director’s duties. Rule 59 of the
Company’s Constitution expressly states that committee work
undertaken by a Director constitutes additional services.

In early 2007 the Board approved the payment of fees to
Non-Executive Directors for participation on Board Committees.
Fees are $15,000 per annum for each Committee member and
$30,000 for each Committee Chairman. The Company currently
has two Board Committees, the Audit and Risk Committee and
the Safety, Health and Environment Committee. Details of Board
Committee fees paid during 2006–07 are included under the
heading ‘Other Benefits/Services’ in Table 10.

In 2006–07, in addition to fees received as a member of Board
Committees, Mr Ron Milne was paid an amount of $5,000, for acting
as Chairman of the Company’s Superannuation Policy Committee.

Mr Bryan Davis also received remuneration from the Company
in addition to his Board Committee fees whilst acting as Interim
Chief Executive Officer and Managing Director from 3 May 2006
to 19 July 2006. Details of that remuneration are set out in Table 10.

No other fees were paid to Non-Executive Directors during 2006–07.

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3.4 Non-Executive Directors’ Share Plan
Each Non-Executive Director was previously required to participate
in the compulsory Non-Executive Directors’ Share Plan pursuant to
which a minimum 10 percent of each Non-Executive Director’s fees
had to be used to buy shares in the Company, on market, at the
prevailing market price (with no discount). In June 2007, the Board
resolved to suspend the operation of the Non-Executive Directors’
Share Plan with effect from 1 July 2007.

All Directors, including the Managing Director and Executive Director
Finance, are required to hold a minimum of 3,000 shares in the
Company. Such shares must be acquired no later than one month
after a Director is appointed to the Board subject to the Company’s
share trading policy.

Directors’ shareholdings are set out in Table 17.

3.5 Retirement Benefits
During 2003 the Board made a decision to discontinue, as from
31 December 2003, the practice of paying Non-Executive Directors
a retirement benefit. Each of the Non-Executive Directors in office at
that time, whose retirement benefits were contractually established in
their formal terms of engagement with the Company, agreed to have
those benefits consisting of a cash payment and the amount of each
individual’s Company-funded superannuation, frozen with effect from
31 December 2003 in respect of the services they had provided up
to that date. Retirement benefits will not be provided to any new
Non-Executive Director, nor to Mr O’Leary who was appointed in
September 2003 after the decision to discontinue the retirement
benefits scheme had been taken. Each Non-Executive Director eligible
for a retirement benefit will receive, on retirement, an amount consisting
of the frozen cash payment amount, less the value (at 31 December
2003), of any Company-funded superannuation entitlement. In 2006–07,
frozen retirement benefits were paid to Ian Johnson ($483,580) and
Ian Renard ($221,876) upon retirement from the Board.

4. Executive Directors’ and Senior Executives’ Remuneration
4.1 Executive Reward Structure
The Company’s executive reward system consists of the following three elements:
• fixed remuneration;
• Salary at Risk; and
• Equity-based remuneration.
(SaR and Equity-based remuneration together are known as variable remuneration)

Table 1: Overview of the Company’s Fixed and Variable Remuneration System

Fixed Remuneration

Salary at Risk (SaR)

Fixed Remuneration includes
cash salary, superannuation,
site allowances (where
applicable) and any benefits
(grossed up where necessary
to include Fringe Benefits Tax)
provided under a salary
sacrifice arrangement.

SaR is an annual performance-
dependent cash payment
determined by personal and
company performance relative to
target performance. Above-target
performance leads to an above-
target payment, and below-target
performance to a below-target
payment.

Variable Remuneration

Equity-based Remuneration

Based on a combination of the MTI and LTI

Medium Term Incentive
(MTI)

Long Term Incentive
(LTI)

The MTI plan, which was
introduced in 2005 in response
to the sharp tightening of labour
markets in the resources sector,
is designed to retain highly
productive and capable
employees and to provide a
level of reward commensurate
with corporate performance
measured over a 1 year
performance period.

The LTI plan is designed to
encourage superior performance
in employees with their level of
personal reward directly linked
to the interests of shareholders,
measured over a 3 year
performance period.

Short term

Medium term

Long term

Cash based remuneration

Equity based remuneration

No risk

At Risk

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4.2 Board Policy and Strategy on Executive Remuneration
The Board has adopted a policy and strategy on remuneration
which apply to Executive General Managers; the Executive Director
Finance; and the Managing Director. The structure of remuneration
arrangements for the above Company employees is, in broad terms,
no different from those for other senior management in the
Company. The main differences relate to the weighting and trigger
points for the receipt of different components of their remuneration.

The key principles of the Executive Reward Strategy during
2006–07 were:
• to provide market competitive levels of remuneration to employees
having regard both to the level of work and to the impact those
employees can potentially have on the Company’s performance;
• to reward and recognise the personal performance of employees;
• to adopt performance measures which align performance

incentives of employees with the interests of shareholders;

• to retain capable employees; and
• to adopt a remuneration structure that provides the appropriate
balance in risk and reward sharing, between each participating
employee and the Company.

4.3 Determining Fixed Remuneration
The Board annually reviews and determines fixed remuneration
for the Managing Director and Executive Director Finance. The
Managing Director does the same with respect to Key Management
Personnel, who in turn review and recommend fixed remuneration for
other senior management, to the Managing Director.

In 2006–07 the Board’s policy was to position fixed remuneration
plus SaR (at target performance) at around the 75th percentile of
Fixed Remuneration plus performance bonuses paid, measured by
a comparator group of companies, in relation to Key Management
Personnel. The comparator group included those companies used
in the comparator group for the MTI (see Table 4 for details).

The Company drew on the services of independent and specialist
remuneration consultants in formulating recommendations on fixed
remuneration for Key Management Personnel.

4.4 Determining Variable Remuneration
The Board takes the view that SaR and the MTI/LTI are important
elements of remuneration which provide tangible incentives for
participating employees to improve the Company’s performance in
both the short-term and the long term, for the benefit of shareholders.

SaR depends entirely on Company and individual (personal)
performance against short-term performance measures as set
out in Section 4.4.1 below.

The MTI depends entirely on the performance of the Company as
measured by relative Total Shareholder Returns (TSR) over the financial
year immediately preceding its award, as described in Table 4 below.

The LTI depends entirely on the long-term performance of
the Company as measured by relative TSR over a 3 year
performance period commencing on the date on which the LTI
is awarded, as described in Table 5 below.

TSR is the growth in the Company’s 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 in the relevant year, compared with
the same period a year earlier. Details of historic TSR and TSR
for 2006–07 are set out in Table 7.

4.4.1 Salary at Risk (SaR)
SaR was last awarded in November 2006 in relation to individual
and Company performance during 2005–06. For Key Management
Personnel, SaR at-target performance was set at 50 percent of
fixed remuneration. One-third of the target depended on Company
performance and two-thirds on personal performance against
a set of Key Performance Indicators established with the Managing
Director. The measure of Company performance was Net Profit
After Tax (NPAT).

In September 2006 the Board revised SaR. Key differences from
its prior application include the following:
• the range of awards is from 0 percent to 100 percent of fixed
remuneration where 100 percent is awarded for outstanding
personal performance and Company performance must be at
or above the maximum level pre-determined by the Board;
• overall performance is measured by Company performance

multiplied by personal performance;

• Company performance is measured by 3 SMART (Specific,

Measurable, Achievable, Relevant and Time-bound) objectives
covering safety, earnings and costs, plus a discretionary measure;
and

• personal performance is measured by 3 SMART objectives that

capture the key goals for the year, plus a discretionary measure.
The revised SaR is intended to provide a sharper focus on the key
performance expected from the Company and individual employees
and to provide a more balanced measure of Company performance.
The revised SaR is summarised in Table 2 below.

Note that the revised SaR was not applied in November 2006 and
will be applied for the first time in or around October 2007 in relation
to performance during 2006–07.

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Table 2: Salary at Risk

Summary of SAR

What is SaR?

An annual cash incentive plan linked to both personal performance and Company performance measures.

Who participates
in the SaR?

Employees in permanent full-time management positions, senior management, Executive General Managers,
the Executive Director Finance and the Managing Director.

Company and individual performance criteria were chosen so that each SaR participant has an incentive to
achieve high personal performance and to contribute to high Company performance.

Award of cash incentives dependent on achievement of Company performance measures and personal
performance measures in each case known as SMART (Specific, Measurable, Achievable, Relevant and
Time-bounded) objectives.
Actual award of SaR results directly from the actual measured performance achieved at year’s end, and is paid
in November each year in relation to the prior year’s financial performance.

Company performance measures relate to:
• safety:
• earnings; and
• costs; plus
• one further discretionary Company performance measure determined annually.
Personal performance measures relate to:
• 3 SMART objectives in key areas not being part of an employee’s day to day job; and
• a fourth discretionary SMART objective developed by each participant’s manager.
These four objectives are agreed annually between participant and manager under the Company’s Work
Performance System (WPS). Each performance measure (other than the discretionary measure) has an upper
limit that caps the performance measure and a threshold below which the measured performance is zero.

An award may be made in these circumstances if a participating employee satisfied the one discretionary
Company performance measure and achieved a positive outcome in their personal performance measures.

Why does the Board
consider the SaR an
appropriate incentive?

What are the key
features of the SaR?

What are the
performance
conditions?

Is SaR awarded when
Company performance
falls below the
minimum threshold
performance level?

What percentage of
base salary may be
awarded as SaR?

The Managing Director, Executive Director Finance and Executive General Managers may receive between
0 percent and 100 percent of fixed remuneration depending on performance. Senior management and other
participating employees receive varying percentages set according to the strategic value and seniority of their roles.

What is the performance
measurement testing
period?

1 year.

How is a participant’s
entitlement to SaR
calculated?

Performance against Company SMART objectives is measured in the range of 0 percent to 125 percent and a
minimum performance threshold must be exceeded to achieve a positive outcome. Overall Company performance
is measured as the simple average of achieved performance against the four Company SMART objectives.
Performance against each personal performance objective is measured on a scale of 0 percent – 160 percent and
the overall personal performance is measured as the simple average of the outcomes on the above four personal
measures.
Overall performance is calculated as Company performance multiplied by personal performance. The actual
award of SaR is calculated by multiplying the overall performance rating by a participating employee’s target SaR.

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4.4.2 Equity-based Remuneration
In 2006–07, the Board determined to adjust the content and balance of equity-based remuneration by setting combinations of MTI and LTI
which seek to sharpen their effectiveness as an incentive and to recognise the potential impact on the Company of very senior employees.
Table 3 shows the composition of equity-based remuneration.

Table 3: Equity-based Remuneration as a percentage of Fixed Remuneration for Key Management Personnel

Total Equity-based Remuneration (maximum award)
MTI
LTI

Table 4 – Medium Term Incentive (MTI)

Managing
Director

Executive
Director Finance

Executive
General Manager

75%
15%
60%

50%
30%
20%

Summary of MTI

What is the MTI?

An annual incentive plan under which eligible employees are granted rights to receive ordinary fully paid shares
in the Company (Restricted Rights). The award of Restricted Rights is determined by the Company’s performance
in the financial year immediately prior to the date the award is granted. Once awarded, the Restricted Rights
vest at the end of three years provided the employee is employed by the Company throughout the vesting
period (subject to limited exceptions outlined below) and achieves minimum acceptable personal performance.

Who participates in
the MTI?

The Managing Director, the Director Finance, Key Management Personnel, senior management and other selected
high-performance personnel.

Why does the Board
consider the MTI an
appropriate incentive?

What are the key
features of the MTI?

What are the
performance
conditions under
the MTI?

What is the
relationship
between Company
performance and
allocation of
Restricted Rights?

What is the period
over which Company
performance is
assessed?

Are MTIs awarded
where performance
falls below a
minimum threshold?

The MTI is designed to link Company performance, individual performance and retention by putting a significant
proportion of participating employees’ remuneration at risk.

• Restricted Rights under the MTI are conditional entitlements for the holder to subscribe for fully paid ordinary

shares in the Company.

• No amount is payable by the participant upon grant of the Restricted Rights (unless the Board determines

otherwise), or upon exercise of the Restricted Rights once vested.

• Each Restricted Right initially entitles the holder to subscribe for one ordinary share, although that is subject

to adjustment in the case of any rights issues or other capital restructure that may occur.

• Unvested Restricted Rights are forfeited upon cessation of employment, except in limited circumstances
including death, incapacity, redundancy or retirement in which case participants (or in case of death, their
representatives) are entitled to exercise those Restricted Rights on a pro-rata basis according to the amount
of the vesting period which has elapsed.

• Performance is measured according to the Company’s Total Shareholder Returns (TSR) measured against

the TSR of a comparator group of companies over the previous financial year.

• The award of the MTI in 2006 was based on the comparator group listed below in this table. From 2007

onwards, the comparator group of companies is a group pre-selected by the Board from the FTSE Gold Mine
Index. A list of these companies used in the case of the LTI award in 2006 is set out below in Table 5 (LTI).
• For participants to receive any grant of Restricted Rights, the Company’s TSR performance must be at or

above the median performance of the TSR of the comparator group.

• The TSR results are obtained by an independent third party, from data provided by Standard and Poor’s.

In terms of the relationship between Company performance and the allocation of Restricted Rights:
• 0 percent allocation occurs if the Company TSR performance is below the threshold 50th percentile of the TSR

for the comparator group;

• 30 percent allocation occurs if the Company TSR performance is at the 50th percentile of the TSR for the

comparator group;

• 100 percent allocation occurs where the 75th percentile (or greater) is achieved; and
• Straight line allocation between the 50th and 75th percentile occurs.

The financial year immediately prior to the date of grant of Restricted Rights.

No, MTI is awarded if Newcrest’s performance based on TSR in the relevant period falls below the 50th percentile
of the TSR for the comparator group; and/or a participant’s performance is ranked below ‘Meets Most
Requirements’ in the Company’s Work Performance System (WPS).

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Table 4: Medium Term Incentive (MTI) continued

Summary of MTI

How are shares
provided to
participants under
the MTI?

Once Restricted Rights have vested, shares are either bought on market or transferred to eligible MTI participants.

Why did the Board
select a TSR
performance hurdle?

TSR was chosen as a performance hurdle for the MTI because it incorporates capital returns as well as
dividends notionally reinvested and was therefore considered as the most appropriate means of measuring
Company performance.

Is the benefit of
participation in the MTI
affected by changes
in the share price?

Are the performance
conditions retested?

What is the maximum
number of Restricted
Rights that may be
granted to an MTI
participant?

Which companies
are in the TSR
Comparator Group?

Yes, participants in the MTI will be affected in the same way as all other shareholders by changes in the Company’s
share price. The remuneration value participants receive through participation in the MTI will be reduced if the share
price falls during the vesting period and will increase if the share price rises over the period.

No, the performance conditions are only tested once, at the end of the one year performance period.

The maximum number of Restricted Rights that may be granted is determined by the level of Equity-based
remuneration applicable to each participant. This component is determined as a percentage of base salary
commencing at 15 percent, 30 percent for senior management, and 50 percent for Key Management Personnel
including the Executive Director Finance and 75 percent for the Managing Director.

The comparator group used for the award of MTI in November 2006 comprised Alinta Ltd, Australian Gas Light
Ltd, Boral Ltd, Coal and Allied Industries Ltd, CSL Ltd, James Hardie Ltd, Leighton Holdings Ltd, Lend Lease Ltd,
Lion Nathan Ltd, Mirvac Group Ltd, Oil Search Ltd, Orica Ltd, Origin Energy Ltd, Santos Ltd, Toll Holdings Ltd and
Transurban Ltd. Future awards will use the same comparator group as used for the LTI (see below in Table 5).

Table 5: Long Term Incentive (LTI)

Summary of LTI

What is the LTI?

An incentive plan under which eligible employees are granted rights to receive ordinary fully paid shares in the
Company (Performance Rights). The entitlement is contingent on the Company achieving a performance hurdle
over a set performance period.

Who participates
in the LTI?

The Managing Director, the Executive Director Finance, Key Management Personnel, Executives and senior
management participate in the LTI.

Why does the Board
consider the LTI an
appropriate incentive?

The LTI is designed to reward participants for Company performance and to align the long-term interests of
shareholders, senior and executive management and the Company, by linking a significant proportion of
participating employees’ remuneration at risk, to the Company’s future performance, currently over a 3 year period
from the date of grant of Performance Rights.

What are the key
features of the LTI?

• Performance Rights issued under the LTI are conditional entitlements for the holder to subscribe for fully paid

ordinary shares in the Company.

• No amount is payable by the participant upon grant of the Performance Rights (unless the Board determines

otherwise), or upon the exercise of the Performance Rights once vested.

• Each Performance Right initially entitles the holder to subscribe for one ordinary share although that is subject

to adjustment in the case of any rights issue or other capital restructures that may occur.

• Unvested Performance Rights are forfeited upon cessation of employment with the Company, except in limited
circumstances including death, incapacity, redundancy or retirement in which case participants (or in the case
of death, their representatives) are entitled to exercise those Rights pro-rated according to the amount of the
performance period which has elapsed and the extent to which the performance hurdle has been met.

What are the
performance
conditions
under the LTI?

• Performance is measured according to the Company’s comparative Total Shareholder Return (TSR) measured

against the TSR of a comparator group of companies over a predetermined period (currently three years)
commencing on the date on which Performance Rights are granted.

• For Performance Rights to vest, the Company’s performance must be at or above the median performance of

the TSR of the comparator group.

• The TSR results are obtained by an independent third party, from data provided by Standard & Poor’s.

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Table 5: Long Term Incentive (LTI) continued

Summary of LTI

Which companies
are in the TSR
comparator group?

What is the
relationship
between Company
performance
and allocation of
Performance Rights?

The TSR comparator group is comprised of a select group of companies in the FTSE Gold Mine Index at the time
of any award of LTI. In the case of the LTI award made in November 2006 this group comprised Barrick Gold,
Newmont, AngloGold Ashanti, Gold Fields, Gold Corp, Polyus Gold, Glamis Gold, Harmony, Zijin Mining Group H,
Kinross Gold, Buenaventura ADR, Meridian Gold, Lihir Gold, Centerra Gold, IAMGOLD, DRD Gold, Cambior,
Resolute Mining and Randgold.

In terms of the relationship between Company performance and the allocation of Performance Rights:
• 0 percent allocation occurs if Company TSR performance is below the threshold 50th percentile of the TSR

of the comparator group;

• 50 percent allocation occurs if the Company TSR performance is at the 50th percentile of the TSR of the

comparator group;

• 100 percent allocation occurs when the 75th percentile (or greater) is achieved; and
• Straight line allocation between the 50th and 75th percentile occurs.

What is the vesting
period for the LTI?

Performance Rights vest in participants (i.e. may be exercised) 3 years after the date of grant, provided
performance conditions are met.

What is the period
over which Company
performance
is assessed?

Are LTIs awarded
when Company
performance falls
below the minimum
threshold
performance level?

How are shares
provided to
participants
under the LTI?

The assessment period is three years following the date of grant of Performance Rights.

No, LTI is awarded if Newcrest’s performance based on TSR in the relevant period falls below the median of the
TSR for the TSR comparator group.

Once Performance Rights have vested, shares are either bought on market or transferred to eligible
LTI participants.

Why did the Board
choose a TSR
performance hurdle?

TSR was chosen as a performance hurdle for the LTI because it incorporates capital returns as well as dividends
notionally reinvested and it was therefore considered by the Board as the most appropriate means of measuring
Company performance.

Yes, participants in the LTI will be affected in the same way as all other shareholders by changes in the Company’s
share price. The remuneration value participants receive through participation in the LTI will be reduced if the share
price falls during the vesting period and will increase if the share price rises over the period.

No, the performance conditions are only tested once at the end of the 3 year performance period.

The maximum number of Performance Rights that may be granted is determined by the level of Equity based
remuneration applicable to each participant. See Table 3.

Is the benefit of
participation in the LTI
affected by changes
in the share price?

Are the performance
conditions retested?

What is the
maximum number of
Performance Rights
that may be granted
to an LTI participant?

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Table 6: Executive Share/Option Plan Performance Hurdles 2001–2006

The following is a summary of performance hurdles that relate to Option and Share Plan awards for the period 2001 to 2006.
Note: 2007 awards are scheduled to be made in November 2007.

Year

Grant Date

Performance Hurdle

2006 (MTI)

3 Nov 2006

2006 (LTI)

3 Nov 2006

2006
(MD and CEO)

14 July 2006

2005 (MTI)

8 Nov 2005

2004 (LTI)

5 Nov 2004

The performance hurdle is based on the TSR ranking of the Company. If at a grant date the TSR
ranking of the Company is:
(a) less than the 50th percentile of the TSR for the comparator group, the number of rights which

is granted is zero;

(b) equal to the 50th percentile of the TSR for the comparator group, the number of rights which

is granted is 30 percent of the rights comprised in the grant;

of rights which is granted is 100 percent of the rights 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 are granted, the number being calculated
on a straight line basis.

The performance hurdle is based on the TSR ranking of the Company over a three year period.
If at a performance measurement date the TSR ranking of the Company is:
(a) less than the 50th percentile of the TSR for the comparator group, the number of rights which

is granted is zero;

(b) equal to the 50th percentile of the TSR for the comparator group, the number of rights which

is granted is 50 percent of the rights comprised in the grant;

of rights which is granted is 100 percent of the rights 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 are granted with the number being calculated
on a straight line basis.

The performance hurdle is the achievement of initial performance objectives by Mr Smith during the first
180 days in his role as Managing Director and Chief Executive Officer and was agreed with Mr Smith
upon his employment with the Company. In February 2007 the Board reviewed Mr Smith’s performance
against his initial performance objectives and determined that the performance hurdle had been met.
As a result the Rights have vested, in accordance with their terms but will not become convertible to
ordinary shares in the Company until the third anniversary of his appointment.

The performance hurdle is based on the TSR ranking of the Company. If at a grant date the TSR
Ranking of the Company is:
(a) less than the 50th percentile of the TSR for the comparator group, the number of rights which

is granted is zero;

(b) equal to the 50th percentile of the TSR for the comparator group, the number of rights which

is granted is 50 percent of the rights comprised in the grant;

of rights which is granted is 100 percent of the rights comprised in the grant;

(d) greater than the 50th percentile and less than the 75th percentile of the TSR for the comparator
group, then in addition to the rights exercisable under paragraph (b) above, further rights are
granted with 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 are granted.

The performance hurdle is based on the TSR ranking of the Company. If at a performance date the
TSR ranking of the Company is:
(a) less than the 50th percentile of the TSR for the comparator group, the number of rights which

vest is zero;

(b) equal to the 50th percentile of the TSR for the comparator group, the number of rights which

vest is 50 percent of the rights comprised in the grant;

of rights which vest is 100 percent of the rights comprised in the grant;

(d) greater than the 50th percentile of the TSR for the comparator group, and less than the

75th percentile, then in addition to the rights exercisable under paragraph (b) above, further
rights vest, with 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 are granted vest.

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Table 6: Executive Share/Option Plan Performance Hurdles 2001–2006 continued

Year

2003

Grant Date

Performance Hurdle

2 Dec 2003
6 Feb 2003

comprised in the relevant tranche which may be exercised is zero;

(b) equal to the 50th percentile of the TSR for the comparator group, the number of options which

may be exercised is 50 percent of the total number of options comprised in the relevant tranche;

options which may be exercised is 100 percent of the total number of options comprised in the
relevant tranche;

(d) 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 the Company 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 the Company 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)

5. Relationship of Incentives to Newcrest’s Financial
Performance

MTI/LTI allocations are tied to Company performance. Company
performance for MTI/LTI has been measured by Total Shareholder
Returns (TSR). Table 7 sets out the Company’s performance in TSR
for the period 30 June 2003 to 30 June 2007. LTI and MTI outcomes
have been aligned to, and reflect, TSR performance.

Table 7: Newcrest’s Financial Performance
2005
Year Ended 30 June

2004

2003

2006

2007

Basic Earnings
Per Share (EPS)* (cents)
Dividends (cents)
Share Price at 30 June ($)
Share Price Increase** ($)
Total Shareholder
Returns*** (%)

29.6
5.0
7.65
0.07

37.5
5.0
13.78
6.13

39.4
5.0
17.38
3.60

39.6
5.0
21.08
3.70

21.5
5.0
22.85
1.77

16.5

82.4

32.8

38.4

2.0

Basic EPS is calculated as net profit after tax from continuing operations,
after minority interests 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.

In relation to MTI, the TSR performance achieved in 2005–06 was
at the 69th percentile, resulting in 82.5 percent of the maximum
award of Restricted Shares being made. Table 11 sets out details
of the MTI awarded to Key Management Personnel.

In relation to SaR awarded for 2005–06, the Company’s NPAT
performance was below the level required to trigger payment of the
Company performance component of SaR. This meant that SaR
payments made to Key Management Personnel in 2006-07 in
relation to the 2005–06 year were solely determined by their
performance against the Key Performance Indicators applicable
to their personal performance.

In relation to SaR awarded for 2006–07, the Company’s performance
against the Company performance objectives for Key Management
Personnel is set out in Table 8. It shows that overall, the Company’s
performance was at 115 percent of the target, reflecting above-target
performance for earnings and costs and at-target performance
in relation to safety. Performance above or below target results
in a percentage of target outcome based on a scale of pro-rating
predetermined by the Board. The outcome for each of the Key
Management Personnel for 2006–07 will be determined by the
overall personal performance multiplied by the Company’s
overall performance.

Table 8: Performance Objective for Year Ending
30 June 2007 (Key Management Personnel)

Performance Objective

Target

Outcome

Percentage
of Target
achieved

Safety Lost Time Injury
Frequency Rate (LTIFR)
for Newcrest as a whole
(Lost time injuries per million
work hours)

1.1

1.096

100%

Earnings (Net Profit
after Tax and Minority
Interest) (1)

Costs (Total Production
Costs per ounce at an
achieved copper price)

Discretionary Component (2)

Overall Company Performance
(including discretionary component)

A$50 million A$53.0 million

125%

A$452/oz

A$419/oz

118%

115%

(1) Actual earnings are adjusted for commodity price and exchange rate

impacts when compared to Target earnings.

(2) The discretionary component is a discretionary assessment by the Board
of the overall performance of the Company in areas other than safety,
earnings and costs.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 64

Directors’ Report

6. Executive Service Agreements
6.1 Overview & Summary
Remuneration and other key terms of employment for the Executive Directors and Key Management Personnel (with the exception
of Mr J. Smith) are formalised in service agreements. The terms of the service agreements for current and former Executive Directors
and Key Management Personnel are summarised in the following table.

Table 9: Executive Service Agreements
Term of
Agreement

Name

Fixed Annual Notice Period
by Executive

Remuneration (1) $

Notice Period
by Newcrest

Termination

Payment (2)

I. Smith
(Commenced 14 July 2006)

G. Robinson
(Commenced 3 November 2006)

D. Wood

B. Lavery

R. Douglas
(Commenced 8 May 2007)

Former Executives
B. Davis (3)
(4 May 2006 to 19 July 2006)

J. Smith
(Until 28 February 2007)

P. Hallam
(Until 28 February 2007)

M. Butlin
(Until 28 February 2007)

T. O’Neill
(Until 22 June 2007)

Open

1,700,000

3 months

12 months

1.0 times total annual remuneration

Open

850,000

602,400

523,700

3 months

12 months

1.0 times total annual remuneration

3 months

24 months

2.0 times total annual remuneration

3 months

24 months

2.0 times total annual remuneration

602,400

3 months

12 months

1.0 times total annual remuneration

Fixed

2,400,000

1 month

708,800

n/a

nil

n/a

602,400

3 months

24 months

2.0 times total annual remuneration

531,600

3 months

24 months

2.0 times total annual remuneration

787,500

3 months

24 months

2.0 times total annual remuneration

(1) Fixed salary, inclusive of the required superannuation contribution amount, is reviewed annually by the Board following the end of the financial year.

The amounts set out above are the Executive’s fixed annual remuneration as at 30 June 2007.

(2) Termination payment if Newcrest terminates the Executive’s employment other than for cause.

(3) Due to the short-term nature of his appointment, Bryan Davis was not entitled to receive any SaR payments or to participate in either the MTI or LTI Plans.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 65

6.2 Executive Service Agreements entered into in 2006-07
6.2.1 Mr Ian Smith
Mr Smith commenced employment with the Company as Chief
Executive Officer on 14 July 2006 and was appointed to the Board
as Managing Director on 19 July 2006, pursuant to a letter of
appointment and has entered into a Service Agreement the terms
of which are summarised below.

• The appointment is for an indefinite duration. Mr Smith may resign

at any time on giving three (3) months written notice, and the
Company may terminate Mr Smith’s employment on giving
twelve (12) months written notice, or payment in lieu of notice.
• The Agreement sets out Mr Smith’s duties and responsibilities.
• Base salary of $1,700,000 per annum to be reviewed annually.
• Salary at Risk (SaR) of up to 100 percent of base salary

dependent upon Mr Smith meeting specified personal and
Company performance targets, where 100 percent is only
achievable for ‘outstanding’ performance.

• Mr Smith was offered a sign on award of 165,000 Performance

Rights under the Company’s 2004 Executive Performance Share
Plan, as an incentive to join the Company. The performance
hurdle for those Rights was the achievement of initial performance
objectives determined in advance by the Board. The performance
hurdle was measured as part of an interim review of Mr Smith’s
performance undertaken by the Board in February 2007. The initial
performance objectives were determined by the Board to have
been achieved and the Performance Rights will vest and become
convertible to Newcrest ordinary shares on the third anniversary
of Mr Smith’s appointment. The deferred vesting of Performance
Rights provides alignment between Mr Smith’s interests and those
of shareholders during the 3 year period. If a change of control
occurs, the Performance Rights can vest prior to the third
anniversary. The award of the initial Performance Rights was
approved by shareholders at the 2006 Annual General Meeting.
• Mr Smith will also be offered an annual award in accordance with
the Company’s Remuneration Policy in relation to MTI and LTI
equal to 75 percent of base salary.

• Award of the annual MTI and LTI are subject to shareholder

approval.

• Statutory entitlements apply upon termination of employment
of accrued annual and long service leave together with any
superannuation benefits.

6.2.2 Mr Greg Robinson
Mr Robinson commenced employment with the Company as
Executive General Manager Finance and Chief Financial Officer
on 3 November 2006 and was appointed to the Board as Executive
Director Finance on 23 November 2006, pursuant to a letter of
appointment and has been provided with a Service Agreement
the terms of which are summarised below.

• The appointment is for an indefinite duration. Mr Robinson may

resign at any time on giving three (3) months written notice, and
the Company may terminate Mr Robinson’s employment on giving
twelve (12) months written notice, or payment in lieu of notice.
• The Agreement sets out Mr Robinson’s duties and responsibilities.
• Base salary of $850,000 per annum to be reviewed annually.
• Salary at Risk (SaR) of up to 100 percent of base salary

dependent upon Mr Robinson meeting specified personal and
Company performance targets, where 100 percent is only
achievable for ‘outstanding’ performance.

• Mr Robinson will also be offered an annual award in accordance

with the Company’s Remuneration Policy in relation to MTI and LTI
equal to 50 percent of base salary.

• Award of annual MTI and LTI are subject to shareholder approval.
• Statutory entitlements apply upon termination of employment
of accrued annual and long service leave together with any
superannuation benefits.

6.2.3 Mr Ron Douglas
Mr Douglas commenced employment with the Company on 8 May
2007, pursuant to a letter of appointment and has been provided
with a Service Agreement the terms of which are summarised below.

• The appointment is for an indefinite duration. Mr Douglas may

resign at any time on giving three (3) months written notice, and
the Company may terminate Mr Douglas’ employment on giving
twelve (12) months written notice, or payment in lieu of notice.
• The Agreement sets out Mr Douglas’ duties and responsibilities.
• Base salary of $602,400 per annum to be reviewed annually.
• Salary at Risk (SaR) of up to 100 percent of base salary

dependent upon Mr Douglas meeting specified personal and
Company performance targets, where 100 percent is only
achievable for ‘outstanding’ performance.

• Mr Douglas will also be offered an annual award in accordance
with the Company’s Remuneration Policy in relation to MTI and
LTI equal to 50 percent of base salary.

• Statutory entitlements apply upon termination of employment
of accrued annual and long service leave together with any
superannuation benefits.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 66

Directors’ Report

7. Remuneration Details
7.1 Directors
Details of the nature and amount of each major element of the remuneration of each Director of the Company are as follows:

Table 10: Directors’ Remuneration

Short term

Post
Employment

Share-based
Payments

$’000

Salary
& Fees
(A)

Salary
at Risk
(B)

Other
Benefits/
Services
(C)

Superannuation
Contributions
(D)

Value of
Options
(E)

Value of
Performance
Rights
(F)

Termination
Benefits
(G)

Total

Equity
Compensation
Value %
(H)

Performance
Related
Remuneration
% (I)

2006–07
Executive Director
I.K. Smith
(Chief Executive Officer
and Managing Director)
Appointed 19 July 2006
R.B. Davis
(Interim Chief Executive
Officer and Managing
Director from 4 May 2006
to 19 July 2006)
G.J. Robinson
(Executive Director Finance)
Appointed 23 November 2006

Non-Executive Directors

D.P. Mercer
(Chairman) Appointed
26 October 2006
I.R. Johnson
(Chairman) Resigned
26 October 2006
R.B. Davis
(Until 3 May 2006,
resumed 19 July 2006)
R.C. Milne
I.A. Renard
Resigned 15 September 2006
N.L. Scheinkestel
M.A. O’Leary

2005–06
Executive Director
A.J. Palmer
(Chief Executive Officer
and Managing Director)
Employment ceased
3 May 2006
R.B. Davis
(Interim Chief Executive
Officer and Managing
Director from 4 May 2006)

Non-Executive Directors

I.R. Johnson
(Chairman)
R.B. Davis
(Until 3 May 2006)
R.C. Milne
I.A. Renard
N.L. Scheinkestel
M.A. O’Leary

1,597

978

–

524

489

261

125

131
25

131
143

–

–
–

28
0

8
15

12
3

12
0

3,081

1,467

115

229

1,327

–

–
–

–

1,224

3,847

31.8

57.2

–

126

–

1,121

5.5

49.2

–

–
–

288

137

151

171
28

151
158

–

–
–

–

–
–

1,286

6,178

–

4,735 6,160

0.0

307

–

345

105

125
125
125
130

2,589

–

–
–
–
–

–

55
–
32
19

12
12
12
7

154

233

–

–
–
–
–

–

–
–
–
–

–

381

–

–
–
–
–

401

115

192
137
169
156

4,735 7,711

–

–
–
–
–

–

–
–
–
–

See Table 11 for explanation of notes (A) – (I)

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 67

7.2 Other Key Management Personnel

Details of the nature and amount of each major element of remuneration for the Company’s Key Management Personnel are as follows:

Table 11: Key Management Personnel Remuneration

Short term

Post
Employment

Share-based
Payments

$’000

Salary
& Fees
(A)

Salary
at Risk
(B)

Other
Benefits/
Services
(C)

Superannuation
Contributions
(D)

Value of
Options
(E)

Value of
Performance
Rights
(F)

Termination
Benefits
(G)

Total

Equity
Compensation
Value %
(H)

Performance
Related
Remuneration
% (I)

2006–07
D. Wood
Executive General Manager
Exploration
B. Lavery
Executive General Manager
Corporate Services
R. Douglas
Executive General Manager
Development and Projects
(Commenced on 8 May 2007)

Former Executives

J. Smith
Executive General Manager
Finance (Employment
ceased 28 February 2007)
T. O’Neill
Executive General Manager
Operations (Employment
ceased 22 June 2007)
M. Butlin
Executive General Manager
Organisation Effectiveness
(Employment ceased
28 February 2007)
P. Hallam
Executive General Manager
Development and Projects
(Employment ceased on
28 February 2007)

2005–06
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
P. Hallam
Executive General Manager
Development and Projects

111

134

108

– 1,188

20.4

49.5

105

134

–

– 1,052

21.7

50.3

485

346

412

301

–

363

750

284

–

101

–

1,299 1,763

–

2,600 3,368

–

797 1,149

–

1,193 1,591

289

–

105

–

2,655

647

515

268

202

5,889 10,201

562

151

630

151

457

128

405

111

406

113

466

128

–

101

143

109

143

100

–

955

14.8

30.6

–

995

19.8

35.0

–

892

21.7

36.1

–

795

23.5

37.5

–

665

–

752

6.8

7.0

23.8

24.1

2,926

782

505

510

307

– 5,054

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 68

Directors’ Report

Notes to Tables 10 and 11:

(A) Salary & Fees comprise cash salary and available salary package options grossed-up by related fringe benefits tax, where applicable. The Company’s

minimum required superannuation contributions made on behalf of Directors and Key Management Personnel are disclosed separately.

(B) Salary at Risk relates to the Managing Director’s, Finance Director’s and Key Management Personnel’s performance in the 30 June 2007 year and for

comparatives, the 30 June 2006 year. Allocations of SaR for 2006–07 shown in Tables 10 and 11 are estimates based on what those allocations would
be if the personal performance of each of the Managing Director, Finance Director and Key Management Personnel was assessed to be at target level.
The Company’s performance was assessed at 115 percent (refer Table 8). Actual award levels will be determined in or around October 2007. Mr Douglas,
who joined the Company on 8 May 2007, will not qualify for an SaR allocation in relation to 2006–07.

(C) Includes additional services provided by Directors plus non-monetary benefits to Directors and Key Management Personnel such as travel, parking and

applicable fringe benefits tax payable on benefits.

(D) Represents company contributions to superannuation under the Superannuation Guarantee legislation (SGC) and any additional contribution made through

salary sacrifice by Executive Directors and Key Management Personnel.

(E)(F) The total value of options and rights included in remuneration for the year is calculated as follows:

• 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 Restricted Share Plan and Executive Performance Share Plan has

been valued as European call options as at grant date, making use of the Black-Scholes formula for option valuation.

• The following factors and assumptions were used in determining the fair value of options and rights on the grant date:

Fair Value*
Exercise Price
Estimated Volatility
Risk-free interest rate
Dividend Yield
Expected life of award/option

Rights
LTI Nov
2006

$18.19
–
36%
5.99%
0.40%
3 years

Rights
MTI Nov
2006

$23.81
–
36%
5.99%
0.40%
3 years

Rights MD
& CEO
July
2006

$19.52
–
36%
5.99%
0.40%
3 years

Rights
MTI Nov
2005

$18.78
–
34%
5.42%
0.40%
3 years

Rights Options – Options – Options –
Nov
2001

LTI Nov
2004

Feb
2003

Dec
2003

$10.55
–
33%
5.25%
0.40%
3 years

$4.11
$12.29
37%
6.33%
0.39%
5 years

$2.06
$6.62
43%
4.97%
0.75%
5 years

$0.70
$3.36
46%
4.80%
1.5%
5 years

*Fair Value has been calculated and audited by an independent third party.

(G) Termination benefits include payments in lieu of notice, applicable STI and LTI, and payments for statutory and accrued annual leave and

long service leave entitlements.

(H) Represents the value of options and rights included in remuneration as a percentage of total remuneration.

(I) Represents performance related remuneration as a percentage of total remuneration.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 69

8. Options and Rights Held by Executive Directors and Key Management Personnel
8.1 Options
All options refer to options over ordinary shares of the Company, which are exercisable on a one-for-one basis under the Executive Share
Option Plan.

There were no new options granted during the 2006–07 year.

The movements during the year in the number of options over ordinary shares in the Company held by each Executive Director and each
of the Key Management Personnel, as part of their remuneration, are as follows:

Table 12: Movement in Options for Executive Directors and Key Management Personnel 2006–07

Grant
Date

Expiry
Date

Exercise
Price

Balance at
1 July
2006

Options
Exercised

Amount
Paid to
Exercise
Options

Options
Lapsed

Balance at
30 June
2007

Options Vested and
Vested Exercisable
at 30
during
the year

June 2007 Non-Vested

Movement During the Year

8-Nov-01
Parcel A
8-Nov-01
Parcel B
6-Feb-03
2-Dec-03

8-Nov-06

$3.36

100,000 (100,000)

$336,000

–

– 25,000

–

8-Nov-06
6-Feb-08
2-Dec-08

$3.36
$6.62
$12.29

40,000
100,000
98,000

(40,000)
–
–

$134,400
–
–

–
–
(2,500)

– 12,500
25,000
22,500

100,000
95,500

–
75,000
45,500

–
25,000
50,000

338,000 (140,000)

$470,400

(2,500) 195,500

85,000 120,500

75,000

8-Nov-06

$3.36

50,000

(50,000)

$168,000

–

– 25,000

–

8-Nov-06
6-Feb-08
2-Dec-08

$3.36
$6.62
$12.29

25,000
100,000
98,000

(25,000)
–
–

$84,000
–
–

–
–
(2,500)

– 12,500
25,000
22,500

100,000
95,500

–
75,000
45,500

–
25,000
50,000

273,000

(75,000)

$252,000

(2,500) 195,500

85,000 120,500

75,000

Key Management
Personnel

D. Wood

Total

B. Lavery

Total

Former Executives

J. Smith

2-Dec-03

2-Dec-08

$12.29

98,000

(45,500)

$559,195 (27,500)

25,000

22,500

Total

T. O’Neill

98,000

(45,500)

$559,195 (27,500)

25,000

22,500

8-Nov-01
Parcel A
8-Nov-01
Parcel B
6-Feb-03
2-Dec-03

8-Nov-06

$3.36

100,000 (100,000)

$336,000

–

– 25,000

8-Nov-06
6-Feb-08
2-Dec-08

$3.36
$6.62
$12.29

50,000
100,000
98,000

(50,000)
(75,000)
(45,500)

$168,000
–
$496,500 (25,000)
$559,195 (52,500)

– 12,500
– 25,000
– 22,500

Total

348,000 (270,500) $1,559,695 (77,500)

– 85,000

–

–
–
–

–

25,000

–

–
–
–

–

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 70

Directors’ Report

8.2 Rights
All conditional entitlements refer to Restricted Rights and Performance Rights over ordinary shares of the Company, which are exercisable
on a one-for-one basis.

The movements in the year in the number of Rights over ordinary shares in the Company held by each Executive Director and Key
Management Personnel, as part of their remuneration, are as follows:

Table 13: Movement in Restricted Rights and Performance Rights for Executive Directors and Key Management
Personnel 2006–07

Executive
Directors and
Key Management
Personnel

I. Smith

G. Robinson

D. Wood

B. Lavery

J. Smith

T. O'Neill

M. Butlin

P. Hallam

Share
Price at
Type Grant Date

Grant Date

Balance at
Rights
1 July 2006 Granted Exercised

Rights

Rights
Lapsed

Vested and
Balance Exercisable
at 30
June 2007

at 30
June 2007

14-Jul-06
3-Nov-06
3-Nov-06
3-Nov-06
3-Nov-06
5-Nov-04
8-Nov-05
3-Nov-06
3-Nov-06
5-Nov-04
8-Nov-05
3-Nov-06
3-Nov-06
5-Nov-04
8-Nov-05
3-Nov-06
3-Nov-06
5-Nov-04
8-Nov-05
3-Nov-06
3-Nov-06
5-Nov-04
8-Nov-05
3-Nov-06
3-Nov-06
5-Nov-04
8-Nov-05

MTI
LTI
MTI
LTI

MTI
LTI

$19.52
$24.10
$24.10
$24.10
$24.10
$17.30
$18.98
$24.10
$24.10
$17.30
$18.98
$24.10
$24.10
$17.30
$18.98
$24.10
$24.10
$17.30
$18.98
$24.10
$24.10
$17.30
$18.98
$24.10
$24.10
$17.30
$18.98

–
–
–
–
–
9,512
4,890
–
–
8,232
4,251
–
–
10,976
5,753
–
–
9,512
5,753
–
–
8,232
4,315
–
–
9,942
4,890

165,000
4,117
42,881
4,245
12,007
–
–
4,013
7,294
–
–
3,489
6,340
–
–
4,720
8,580
–
–
5,244
9,535
–
–
3,541
6,436
–
–

–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1,884)
–
–
–
(2,135)

–
–
–
–
–
–
–
–
–
–
–
–
–
(2,496)
(5,753)
(4,720)
(8,580)
(9,512)
(5,753)
(5,244)
(9,535)
(1,872)
(2,431)
(3,541)
(6,436)
(2,261)
(2,755)

165,000
4,117
42,881
4,245
12,007
9,512
4,890
4,013
7,294
8,232
4,251
3,489
6,340
8,480
–
–
–
–
–
–
–
6,360
–
–
–
7,681
–

Non-
Vested

165,000
4,117
42,881
4,245
12,007
9,512
4,890
4,013
7,294
8,232
4,251
3,489
6,340
8,480
–
–
–
–
–
–
–
6,360
–
–
–
7,681
–

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 71

8.3 Performance Conditions for Options and Rights

Table 14: Value of Options, Restricted Rights and Performance Rights
Directors and
Key Management
Personnel

(A)
Value at Grant Date
$’000

(B)
Value at Exercise Date
$’000

(D)
Total of Columns A–C
$’000

I. Smith
G. Robinson
D. Wood
B. Lavery
R. Douglas
J. Smith
T. O’Neill
M. Butlin
P. Hallam

4,099
319
228
198
–
268
298
201
–

–
–
2,309
1,364
–
407
4,243
–
–

–
–
(33)
(33)
–
(766)
(1,689)
(321)
(113)

4,099
319
2,503
1,529
–
(90)
2,853
(120)
(113)

Table 14 above shows the total value of any Restricted Rights, Performance Rights or options granted, exercised and lapsed in 2006-07
in relation to Executive Directors and Key Management Personnel based on the following assumptions:

(A) The value of Restricted Rights and Performance Rights at grant date reflects the fair value of a Right multiplied by the number of performance or restricted

Rights granted during 2007 (refer footnotes E&F to Tables 10 & 11).

(B) The value at exercise date has been determined by the Company’s share price at the close of business on the exercise date less the option or right exercise

price multiplied by the number of options or rights exercised during 2007.

(C) The value at lapse date has been determined by the share price at the close of business on the date of the Restricted Right, Performance Right or Option

lapsed, less the exercise price multiplied by the number of performance or restricted rights or options that lapsed during the year.

Performance conditions for Restricted Rights, Performance Rights and Options are set out in Table 15 below.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 72

Directors’ Report

Table 15: Executive Directors and Key Management Personnel – Options granted between 8 November 2001 and
2 December 2003, The following is a summary of Performance Hurdles that relate to Option and Share Plan awards
for the period 2001 to 2006. Note: 2007 awards are scheduled to be made in November 2007.

Note: Refer Table 6 for a summary of the applicable Performance Hurdles.

Performance Date
(for Options and LTI)
or Vesting
Date (for MTI)

Performance
Achieved

Percentage
Vested

3 Nov 2009

To be determined

n/a

Expiry Date

Comparative Group

3 Nov 2011

Newcrest’s TSR ranking
against FTSE Gold Index

Select Group referred to in
the Performance Condition
(TSR ranking on sliding scale)

Strike
Price

Nil

3 Nov 2009

14 July 2009 Performance objectives

Nil

14 January 2007

agreed with Board

8 Nov 2010

Select Group referred to in
the Performance Condition
(TSR ranking on sliding scale)

Nil

8 Nov 2008

69th percentile
resulting in 82.5% of
the maximum award
of Rights

Fully achieved and will
become convertible
to ordinary shares on
14 July 2009

53rd percentile
resulting in 38.2% of
the maximum award of
Rights

100% on
3 Nov 2009

100%

100% on
8 Nov 2008

5 Nov 2009

Select Group referred to in
the Performance Condition
(TSR ranking on sliding scale)

Nil

5 Nov 2007

To be determined

n/a

2 Dec 2008

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

$12.29

Grant
Date

3 Nov
2006 (LTI)

2 Nov
2006
(MTI)

14 July
2006
(MD &
CEO)

8 Nov
2005
(MTI)

5 Nov
2004
(LTI)

2 Dec
2003

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

71st percentile
70th percentile
To be determined
To be determined

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

>75th percentile
>75th percentile
>75th percentile
>75th percentile

92%
90%
n/a
n/a

100%
100%
100%
n/a

100%
100%
100%
100%

6 Feb
2003

6 Feb 2008

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

$6.62

8 Nov
2001
Parcel B

8 Nov
2001
Parcel A

8 Nov 2006

Newcrest’s TSR
(Compound growth per
annum)

8 Nov 2006

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

$3.36

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 73

Table 16: Short Term Incentive and Allocation of the 2006 Equity Grant

Short Term Incentive
(A)
as a percentage of maximum STI

Long Term Incentive
(B)
(Estimates of the maximum remuneration amounts which could be
received under the 2006 performance rights grants in future years)

Executive Director/
Key Management Personnel

Percentage
Awarded

Percentage
Forfeited

I. Smith
G. Robinson
D. Wood
B. Lavery
R. Douglas

57.5
57.5
57.5
57.5
n/a

42.5
42.5
42.5
42.5
n/a

2007–08
$’000

1,379
106
74
64
–

2008–09
$’000

2009–10
$’000

Maximum Total
$’000

1,379
106
74
64
–

147
37
25
22
–

2,906
248
173
150
–

(A) Estimates only (refer note (B) to Tables 10 & 11.

To be awarded a STI of 100 percent an Executive has to have met outstanding personal performance and Company performance must be at or above
the maximum level pre-determined by the Board. At target personal performance and Company performance will result in an award of 50 percent of the
maximum STI;

(B) The maximum value in future years has been determined in relation to the grant of performance rights in 2007 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 2007.

9. Shares Held by Directors and Key Management Personnel

Table 17: Directors’ Shareholdings (shares held both directly and indirectly)

Balance at
1 July 2006

Received as
Remuneration

Acquired Pursuant
to Non-Executive
Directors’ Share Plan

Acquired on
Exercise of
Options

Directors

I. K. Smith
G. J. Robinson
D. P. Mercer
R. B. Davis
R. C. Milne
N. L. Scheinkestel
M. A. O'Leary

Total

–
–
–
16,082
9,924
73,482
13,812

113,300

–
–
–
–
–
–
–

–

–
–
1,241
615
652
652
676

3,836

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

Table 18: Key Management Personnel Shareholdings

Key Management Personnel

Balance at
1 July 2006

Received as
Remuneration

D. Wood
B. Lavery
R. Douglas

Total

86,325
–
–

86,325

–
–
–

–

–
–
–
–
–
–
–

–

Acquired on
Exercise of
Rights or
Options

140,000
75,000
–

Net
Change
Other

3,000
3,000
10,000
39
–
179
34

16,252

Net
Change
Other

(76,000)
(75,000)
–

Balance at
30 June 2007

3,000
3,000
11,241
16,736
10,576
74,313
14,522

133,388

Balance at
30 June 2007

150,325
–
–

150,325

215,000

(151,000)

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 74

Directors’ Report

Share Rights and Options

During the year an aggregate of 2,032,222 options were exercised,
resulting in the issue of 2,032,222 ordinary shares of the Company
at an aggregate consideration of $12.7 million.

At the date of this report there were 1,983,400 unissued shares
under rights and options (1,993,723 at 30 June 2007).

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. During the
year, additional accounting advice and other assurance-related
services were provided by Ernst & Young (auditor to the Company).
The Directors are satisfied that the provision of these services did
not impair the Auditor’s Independence.

Indemnification and Insurance of Directors and Officers

Newcrest maintains a Directors’ and Officers’ insurance policy
that, subject to some exceptions, provides insurance cover to past,
present or future Directors, Secretaries or Executive Officers of the
Consolidated Entity and its subsidiaries. The Company has paid an
insurance premium for the policy. The contract of insurance prohibits
disclosure of the amount of the premium and the nature of the
liabilities insured.

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 (amended by ASIC 05/641) and issued
pursuant to section 341(1) of the Corporations Act 2001. As a result,
amounts in the 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.

Donald P. Mercer
Chairman

Ian K. Smith
Managing Director and
Chief Executive Officer

17 August 2007
Melbourne

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 75

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

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 76

Discussion and Analysis
of the Financial Statements

Review of Results
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 2007 Financial Report of
Newcrest Mining Limited.

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

Overview of Operating Results for the Year
Net profit after tax and minority interest was $72.0 million
(2006: $349.5 million). The reported results for 2006 included
$218.2 million profit on sale of the Consolidated Entity’s
22.22 percent interest in the Boddington Gold Mine Joint Venture.

Net profit after tax and minority interest from continuing operations
decreased 45 percent from $131.3 million to $72.0 million.

Revenue and net profit include the impact of gold hedge restructures
which are non-cash accounting adjustments. The net profit impact
in the current year was negative $122.5 million (2006: $7.7 million
loss). Details of the impact on profit, revenue and expenses from
hedge restructures are provided in Note 2(h) to the Concise
Financial Report.

A partial restructuring of the hedge book was undertaken in
November 2006. The objective of restructuring the hedge book was
to increase exposure to higher spot gold prices to enable additional
cash flow for debt reduction and capital reinvestment. To gain
this exposure, the delivery of 1.6 million ounces relating to existing
hedges from the initial four years were deferred into the three
subsequent years, resulting in a more acceptable risk profile for
Newcrest. The cash flow impact in the current year of the hedge
book restructures was positive by $160.6 million.

Both gold production and gold sales volume were higher than 2006.
Gold production increased 5.7 percent and gold sales volume
increased by 8.6 percent to 1.627 million ounces compared to the
previous year. In the current financial year, sales were higher than
production with a resultant draw down on mineral inventory.
Higher gold sales volumes were driven by an improved production
performance from Gosowong offsetting minor movements at
other sites.

Copper production and sales were lower compared to the prior
financial year. Copper production declined by 11.5 percent and
Copper sales volume declined 15.4 percent compared to the
previous year. Copper production at Cadia Valley operations was in
line with plan, while Telfer suffered from grade and recovery issues.

Revenue benefited from improved achieved gold and copper prices.
The average spot price received increased by 15 percent to
$814 per oz ($708 per oz). On a cash flow basis, after the hedge
restructure, gold sales hedged for the year decreased to 55 percent
compared to 93 percent in the prior corresponding year.

Revenue also benefited from higher achieved copper prices and
a reduced percentage of copper tonnes hedged. The spot price
of copper increased 10.6 percent to $4.08 per pound ($3.69 per
pound) and tonnes hedged reduced from 90 percent to 40 percent.
Newcrest’s legacy copper hedging commitments were completed
in June 2007.

Pressure on key input costs, higher unit costs at Telfer and higher
depreciation expenses had a negative impact on profitability.
The prior year benefited from copper pricing finalisation on prior
year shipments and higher other income associated with valuation
of gold lease rates.

The financial highlights of the 2006–07 year are summarised in the
following table:

2007

2006

Net profit after tax from
continuing operations and
after minority interest

Net profit after tax from
discontinued operations
(Boddington)

Total net profit after tax
and minority interest

Basic earnings per share
from continuing operations
after minority interest

Total basic earnings per share
after minority interest

Return on members equity
(Net profit after tax)*

Gearing (Net Debt/Net Debt
+ Equity)*

Cash flow from operating
activities

$72.0 million

$131.3 million

–

$218.2 million

$72.0 million

$349.5 million

21.5 cents

39.6 cents

21.5 cents

105.3 cents

4.7 percent

8.9 percent

46 percent

50 percent

$387.4 million

$263.8 million

* Calculations based on profit from continuing operations after minority

interest and equity after excluding the hedge reserve.

Discussion and Analysis of the Income Statement
Key factors impacting the result for continuing operations in the
current year are:

Gold Sales Revenue

Total gold revenue increased significantly to $1,110.4 million
(2006: $845.4 million) as a result of higher achieved prices plus
an increase in sales volumes. Spot prices received were A$814 per
ounce (2006: A$708 per ounce) however the settlement of hedge
book commitments resulted in an achieved gold price received for
2007 of A$682 per ounce (2006: A$564 per ounce).

Total gold sales ounces, excluding sales of gold produced
during pre-commissioning of Telfer underground, were 1,626,979
(2006: 1,498,526). This increase of 128,453 ounces was mainly as
a result of:
• increase of 181,965 ounces at Gosowong due to the

commencement of production at the Kencana underground
operation;

• decrease of 63,914 ounces from lower grade material at Ridgeway;
• increase of 16,731 ounces from Telfer due to the commencement
of production from the underground operation partly offset by
lower throughput and lower grade material from the open pit;
• decrease of 13,650 ounces from lower throughput and grade

at Cadia Hill; and

• increase of 7,320 ounces from Cracow.

Gold sales were higher than production resulting in a reduction in
mineral inventory. The accounting impact for the November 2006
hedge restructure was a negative charge of $158.0 million to sales.
Although accounting revenue was lower by this amount, the cash
benefit from the de-hedged ounces was $160.6 million.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 77

Copper and Silver Sales Revenue

Total copper by-product revenue for 2007 increased to $573.0 million
(2006: $515.2 million) due to increased realised prices partly offset by
lower sales volumes from Telfer and Ridgeway. The higher average
spot copper price received in 2007 of A$4.08 per pound (2006:
A$3.69 per pound) was offset by the delivery of copper
hedge book commitments which resulted in an achieved copper price
received for the Consolidated Entity of A$2.94 per pound (2006:
A$2.22 per pound).

Silver revenue increased to $20.8 million (2006: $14.1 million) due to
higher spot prices received. The prior year benefited from favourable
pricing adjustments on prior year shipments of $29.4 million
compared with $1.9 million in the current year.

Losses on Restructured Hedges

The non-cash accounting adjustment to sales revenue due to the
November 2006 hedge restructure plus previous hedge restructures
was a loss of $151.1 million (2006: $11.0 million loss).

Other Revenue Factors

The combination of other revenue and other income was $22.9 million
(2006: $48.3 million). This was lower due to a reduction in the mark-
to-market movement on the gold lease swap rate in the current period
to a gain of $1.6 million (2006: $27.8 million gain) and a foreign
exchange gain in the corresponding year of $5.6 million. These were
partly offset by a $12.3 million refund in the current year of prior year
royalty payments from Cadia Valley Operations.

Profit from Sale of Boddington Interest
In the corresponding year, a net profit after tax of $218.2 million was
made on the disposal of the Consolidated Entity’s 22.22 percent
interest in the Boddington Gold Mine Joint Venture.

Costs

Gross mine costs (before by-product revenue) and per unit cash costs
were higher compared to the prior year. The increase was principally
due to higher costs experienced at the Telfer site and to a lesser extent
cost pressures on key inputs at all sites. Telfer experienced higher
costs during the current year attributable to specific operational factors
and one-off cost impacts. These included the ramp up of the Telfer
underground operation, a power outage suffered in October 2006
and associated ongoing incremental costs and cyclonic rainfall events
experienced in March 2007. Cost increases for labour, explosives,
fuel and maintenance activities continue to be experienced across
the operations.

Depreciation and amortisation increased to $224.4 million
(2006: $186.6 million). The unit rate of depreciation increased from
$125 per oz to $138 per oz due mainly to the commissioning of the
Telfer underground mine.

Gross borrowing costs were higher at $96.7 million (2006: $89.8 million).
Interest of $84.4 million (2006: $75.4 million) was expensed and
$12.3 million (2006: $14.4 million) was capitalised. The increase
in interest costs was mainly due to higher average interest rates
compared to the corresponding year. Total finance costs include
an expense of $23.9 million for the unwinding of discount relating
to the 2006 hedge restructure (2006: $Nil).

Administration costs of $38.2 million excluding depreciation
(2006: $42.9 million) were lower mainly due to the costs
associated with corporate restructuring and redundancies
in the corresponding year.

Total exploration expenditure for the year was $59.9 million
(2006: $57.0 million) with $47.2 million being charged against
income compared to $41.7 million in the previous year. Exploration
capitalised for the year related to Kencana, Cadia East and Cracow.

Other expenses of $26.7 million (2006: $8.5 million) mainly
comprised a foreign exchange loss of $18.5 million (2006:
$5.6 million gain reported in other income). The loss in the
current year was due to the impact of the strengthened AUD on
the restatement of US$ denominated concentrate receivables.
In addition, other expenses included equity settled compensation
expense of $5.5 million (2006: $4.5 million).

Income tax expense in the current year of $10.4 million (2006:
$46.9 million) resulted in an effective tax rate of 10.4 percent
(2006: 25.5 percent). The decrease is primarily due to increased
deductions for research and development allowances including
adjustments to amounts provided in the prior year for this item.

Discussion and Analysis of the Balance Sheet
The group’s Net Assets and Total Equity increased during the current
year by $780.1 million. This was mostly due to a reduction in the
mark to market value of the hedge book recorded on balance sheet
at 30 June 2007 by $576.4 million net of deferred taxes. In addition,
Net Assets and Total Equity increased due to a foreign exchange gain
on US$ denominated debt (net of deferred taxes) of $127.4 million
and net profit after tax for the year of $72.0 million.

Net debt, comprising total borrowings less cash, of $1,319.6 million
(2006: $1,476.7 million) was reduced by $157.1 million during the
current year. This was due to the foreign exchange gain on US$
denominated debt of $182.0 million (before tax) and net repayments
on borrowings of $93.3 million partly offset by a lower cash balance
as at 30 June 2007. The gearing ratio of net debt to net debt plus
equity decreased from 50 percent to 46 percent as at 30 June 2007.
(Equity is adjusted to remove the impact of the hedge reserve).

Discussion and Analysis of the Cash Flow Statement
Cash Flow – Operating Activities
Cash flow from operating activities increased significantly to
$387.4 million (2006: $263.8 million).

Cash flow increased due to higher sales and increased exposure
to higher priced spot sales. The November hedge book restructure
resulted in a reduction of hedged gold ounces for the year from
93 percent to 55 percent.

Payments to suppliers and employees increased due to continued
pressure on labour, fuel and maintenance costs across all operations
and the higher operating costs base of the Telfer operation.

Increased borrowing costs were mostly due to higher average
interest rates.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 78

Discussion and Analysis
of the Financial Statements

Cash Flow – Investing Activities
Capital expenditure for the year was $340.8 million (2006:
$487.9 million), a 30 percent reduction from the last financial year.
Major areas of capital expenditure during the financial year were:
• Development expenditure of $138.0 million, primarily relating

to Telfer Underground and Kencana;

• Project expenditure of $63.0 million, including Ridgeway Deeps

and Cadia East;

• Sustaining capital of $75.0 million; and
• Capitalised pre-commissioning and borrowing costs of $64.8

million.

In addition, total exploration and province development expenditure
was $59.9 million.

Cash Flows – Financing Activities
Capital expenditure programs were financed through operating cash
flows. During the year, $93.3 million in net repayments were made
on borrowings, conversely cash was reduced by $118.7 million
to $34.3 million. Total debt reduced by $275.8 million due to the
$182.0 million benefit from restatement of US Dollar debt.

Major movements in cash flows from financing activities included:
• $41.6 million repayment of Nippon USD loan;
• $33.5 million repayment of the Gold loan;
• $8.4 million net repayment from US Bilateral debt facilities;
• $5.7 million net repayment of loan from minority interest;
• $4.5 million repayment of finance lease principal; and
• $12.7 million of funds were received from the exercise of share

options.

Dividends Paid
Dividends paid of $24.5 million comprised:
• A final dividend payment of five cents per share amounting to

$16.7 million was paid to Newcrest shareholders on 13 October
2006 in respect of the 30 June 2006 financial year, however,
the Dividend Reinvestment Plan reduced the actual cash amount
paid to $13.8 million; and

• A dividend of $10.7 million was paid to the minority shareholder
of Newcrest’s Indonesian operation during the financial year.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 79

Income Statement

For the year ended 30 June 2007

Continuing Operations

Operating sales revenue
Losses on restructured hedges

Total sales revenue

Site operating costs

Gross profit

Other revenue
Other income
Exploration costs
Corporate administration costs
Other expenditure

Operating profit

Finance costs
Finance costs – unwind discount relating to hedge restructure

Profit before income tax expense

Income tax (expense)

Profit/(loss) after tax from continuing operations

Discontinued Operations

Profit after tax from discontinued operations

Profit after income tax

Attributable to:
Minority interest
Members of the parent entity

Earnings per share (EPS) (cents per share)
• Basic EPS for profit for the year attributable to

ordinary equity holders of the parent

• Basic EPS for profit from continuing operations

attributable to ordinary equity holders of the parent

• Diluted EPS for profit for the year attributable to

ordinary equity holders of the parent

• Diluted EPS from continuing operations attributable

to ordinary equity holders of the parent.

Dividends per share (cents per share)

Note

2(a)
2(a)

2(b)
2(c)

2(f)
2(h)

2007
$M

1,706.1
(151.1)

1,555.0

(1,250.7)

304.3

6.0
16.9
(47.2)
(41.6)
(26.7)

211.7

(84.4)
(23.9)

103.4

(10.4)

93.0

–

93.0

21.0
72.0

93.0

21.5

21.4

21.4
5.0

Consolidated

2006
$M

1,404.1
(11.0)

1,393.1

(1,086.6)

306.5

5.8
42.5
(41.7)
(45.2)
(8.5)

259.4

(75.4)
–

184.0

(46.9)

137.1

218.2

355.3

5.8
349.5

355.3

105.3

39.6

104.5

39.2
5.0

The income statement is to be read in conjunction with the discussion and analysis and accompanying notes to the financial statements.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 80

Balance Sheet

At 30 June 2007

Current assets

Cash and cash equivalents
Trade and other receivables
Inventories
Financial derivative assets
Tax receivable
Other

Total current assets

Non-current assets

Other receivables
Inventories
Property, plant and equipment
Exploration, evaluation and development
Deferred tax asset
Other

Total non-current assets

Total assets

Current liabilities

Trade and other payables
Interest bearing loans and borrowings
Financial derivatives and other financial liabilities
Income tax payable
Provisions

Total current liabilities

Non-current liabilities

Interest bearing loans and borrowings
Financial derivatives and other financial liabilities
Deferred tax liabilities
Provisions
Other

Total non-current liabilities

Total liabilities

Net assets

Equity

Issued capital
Retained earnings
Reserves

Parent entity interest

Minority interest

Total equity

2007
$M

34.3
298.9
163.4
386.2
4.1
99.4

986.3

9.1
1.6
1,472.0
1,351.9
514.8
286.9

3,636.3

4,622.6

216.4
35.0
500.8
4.8
32.3

789.3

1,318.9
1,060.1
396.7
47.9
68.9

2,892.5

3,681.8

940.8

834.5
711.5
(626.7)

919.3

21.5

940.8

Consolidated

2006
$M

153.0
245.1
178.2
35.1
16.2
24.6

652.2

9.4
1.8
1,434.2
1,241.3
638.3
280.2

3,605.2

4,257.4

233.5
65.4
634.6
0.5
30.5

964.5

1,564.3
1,192.3
267.5
32.2
75.9

3,132.2

4,096.7

160.7

819.0
656.2
(1,327.4)

147.8

12.9

160.7

The Balance Sheet is to be read in conjunction with the discussion and analysis and the accompanying notes to the financial statements.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 81

Statement of Changes in Equity

As at 30 June 2007

Consolidated

Attributable to Equity Holders of the Parent

Foreign
Currency
Translation
Reserve
$M

Equity
Hedge Settlements
Reserve
$M

Reserve
$M

Retained
Earnings
$M

Total
$M

Minority
Interest

Total
Equity
$M

698.6

9.0

Balance at 1 July 2005*

Deferred FX loss on hedge of USD borrowings
Deferred (loss) on cash flow hedges
Foreign currency translation
Deferred tax on items taken directly to equity

Total income/(expense) recognised directly in equity
Net profit for the year

Total recognised income/(expense) for the year

Issued
Capital
$M

802.4

–
–
–
–

–
–

–

Share-based payments
Exercise of options
Shares issued under the Dividend Reinvestment Plan
Dividend paid

–
13.4
3.2
–

(3.3)

–
–
1.9
(0.6)

1.3
–

1.3

–
–
–
–

(437.3)

(34.0)
(1,236.7)
–
374.0

(896.7)
–

(896.7)

–
–
–
–

Balance at 30 June 2006

Balance at 1 July 2006

819.0

(2.0)

(1,334.0)

(2.0)

(1,334.0)

Deferred FX gain/(loss) on hedge of USD borrowings
Deferred gain/(loss) on cash flow hedges
Foreign currency translation
Deferred tax on items taken directly to equity

Total income/(expense) recognised directly in equity
Net profit for the year

Total recognised income/(expense) for the year

Share-based payments
Exercise of options
Shares issued
Dividends paid

–
–
–
–

–
–

–

–
12.7
2.8
–

–
–
(12.3)
3.7

(8.6)
–

(8.6)

–
–
–
–

177.4
820.2
–
(293.8)

703.8
–

703.8

–
–
–
–

4.5

323.3

689.6

–
–
–
–

–
–

–

4.1
–
–
–

8.6

–
–
–
–

–
–

–

5.5
–
–
–

–
–
–
–

(34.0)
(1,236.7)
1.9
373.4

–
(34.0)
– (1,236.7)
2.3
373.3

0.4
(0.1)

–
349.5

349.5

–
–
–
(16.6)

656.2

–
–
–
–

–
72.0

72.0

–
–
–
(16.7)

(895.4)
349.5

(545.9)

4.1
13.4
3.2
(16.6)

147.8

177.4
820.2
(12.3)
(290.1)

695.2
72.0

767.2

5.5
12.7
2.8
(16.7)

0.3
5.8

6.1

–
–
–
(2.2)

12.9

–
–
(2.4)
0.7

(1.7)
21.0

19.3

–
–
0.6
(11.3)

(895.1)
355.3

(539.8)

4.1
13.4
3.2
(18.8)

160.7

177.4
820.2
(14.7)
(289.4)

693.5
93.0

786.5

5.5
12.7
3.4
(28.0)

Balance at 30 June 2007

834.5

(10.6)

(630.2)

14.1

711.5

919.3

21.5

940.8

* The Consolidated Entity has applied AASB 132 and AASB 139 from 1 July 2006 which resulted in ($432.0M) being initially recognised in equity.

The above consolidated statement of changes in equity should be read in conjunction with the discussion and analysis and the accompanying notes
to the financial statements.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 82

Statement of Cash Flows

For the year ended 30 June 2007

Cash flows from operating activities

Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Income taxes (paid)/refunded

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
Interest capitalised to development projects
Cash received on disposal of interest in joint venture

Net cash (used in) investing activities

Cash flows from financing activities

Proceeds from borrowings:

USD Bilateral debt
Loan from minority interest

Repayment of borrowings:
Bank loan
USD 364 day loan
USD loan
Gold loan
Loan from minority interest
USD Bilateral debt
Repayment of finance lease principal
Proceeds from share issues
Dividends paid

Net cash (used in)/provided by financing activities

Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year

Effects of exchange rates to changes on cash held

Cash and cash equivalents at the end of the financial year

2007
$M

1,709.9
(1,223.8)
4.5
(81.2)
(22.0)

387.4

(116.7)
0.7
(59.9)
(154.9)
–
(56.9)
(12.3)
–

(400.0)

393.7
0.3

–
–
(41.6)
(33.5)
(5.7)
(402.0)
(4.5)
12.7
(24.6)

(105.2)

(117.8)
153.0

(0.9)

34.3

Consolidated

2006
$M

1,384.8
(1,038.6)
4.6
(56.8)
(30.2)

263.8

(105.6)
3.2
(57.0)
(28.6)
(295.7)
(45.4)
(12.6)
224.6

(317.1)

525.2
6.2

(78.5)
(165.0)
(23.6)
(33.3)
–
–
(87.3)
13.4
(15.5)

141.6

88.3
64.6

0.1

153.0

The statement of cash flows is to be read in conjunction with the discussion and analysis and the accompanying notes to the
financial statements.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 83

Notes to the Concise Financial Report

Note 1 Accounting Policies
This Concise Financial Report has been prepared in accordance with the Corporations Act 2001, Accounting Standard AASB 1039: Concise
Financial Reports and applicable Australian Interpretations. The financial statements and specific disclosures required by AASB 1039 have
been derived from the Consolidated Entity’s full Financial Report for the financial year. Information included in the Concise Financial Report
is consistent with the Consolidated Entity’s full Financial Report, and is presented in Australian dollars.

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.

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.

The full Financial Report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards
(AASBs) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.
The consolidated financial statements of the Group also complies with International Financial Reporting Standards (‘IFRSs’) including
interpretations adopted by the International Accounting Standards Board.

Note 2 Revenue and Expenses

Consolidated

2007
$M

2006
$M

Specific items

Profit before income tax expense includes the following revenues, income and expenses
whose disclosure is relevant in explaining performance of the Consolidated Entity:
2.(a) Sales Revenue
Gold
Copper
Silver
Concentrate adjustments from prior year sales

Total operating sales revenue
Losses on restructured hedges

Total sales revenue

2.(b) Other revenue
Interest from other persons
Joint venture management fees

2.(c) Other income
Profit on sale of non-current assets
Net foreign exchange gain
Royalty refund (1)
Fair value adjustment on gold lease rate swaps
Fair value adjustment on ‘copper sales’ forward exchange contracts (2)
Other

Total other income

Sales of assets:
Sales of assets have given rise to the following profits/(losses):
Proceeds from sale of plant and equipment
Carrying value of plant and equipment sold

Profit/(loss) on sale of plant and equipment

1,110.4
573.0
20.8
1.9

1,706.1
(151.1)

1,555.0

4.5
1.5

6.0

0.3
–
12.3
1.6
2.7
–

16.9

0.7
(0.4)

0.3

845.4
515.2
14.1
29.4

1,404.1
(11.0)

1,393.1

4.6
1.2

5.8

–
5.6
–
27.8
–
9.1

42.5

3.2
(4.8)

(1.6)

(1) The refund received during the year related to the prior year royalties paid. The refund was due to a change in the calculation basis for royalty payments

which now includes the impact of hedging.

(2) Fair value adjustment on copper forward sales contracts.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 84

Notes to the Concise Financial Report
Notes to the Concise Financial Report

Note 2 Revenue and Expenses continued

Expenses

2.(d) Depreciation and amortisation:
Depreciation of:
Property, plant and equipment
Plant and equipment under finance leases
Amortisation of:
Mine development
Add/(Less) capitalised to inventory on hand

Depreciation and amortisation expense

2.(e) Employee benefits expense
Defined benefit plans expense
Equity settled share-based compensation payments
Termination benefits expense
Defined contribution plan expense
Other employment benefits

2.(f) Finance costs:
Interest Costs:
Interest on loans
Finance leases
Other:
Borrowing costs
Unwind of rehabilitation provision discount

Less: capitalised borrowing costs

Total finance costs expensed

2.(g) Other items:
Operating lease rentals
Government royalties
Research and development expenditure
Stores obsolescence

2.(h) Hedge restructure
Net impact on profit, revenue and expenses from hedge restructure:
Release of losses relating to restructured hedges
(Gains)/losses from prior period hedge contract restructures

Total losses recorded in sales revenue
Finance costs – unwind of discount relating to hedge restructure

Net profit impact before tax
Applicable income tax (benefit)

Total net impact on profit after tax from hedge restructures

Newcrest Mining Concise Annual Report 2007

Consolidated

2007
$M

2006
$M

137.7
3.1

81.5
2.1

224.4

(0.5)
5.5
5.9
15.4
138.8

165.1

89.9
0.5

2.7
3.6

96.7
(12.3)

84.4

4.7
49.5
–
0.3

158.0
(6.9)

151.1
23.9

175.0
(52.5)

122.5

114.6
6.2

66.0
(0.2)

186.6

(0.4)
4.1
7.9
14.6
126.0

152.2

82.8
4.7

1.1
1.2

89.8
(14.4)

75.4

5.6
58.4
0.2
0.2

–
11.0

11.0
–

11.0
(3.3)

7.7

5263 New AR_07 fins 25/9/07 12:27 PM Page 85

Note 3 Dividends Paid and Proposed

Dividends recognised in the current year
by the Company are:
2007 – Dividend paid during the year
for the 30 June 2006 year
Final – ordinary

2006 – Dividend paid during the year
for the 30 June 2005 year
Final – ordinary

Subsequent events
Dividend proposed and not recognised as a liability:
Since the end of the financial year,
the Directors declared the following dividends:
Final – ordinary

Dividend franking account

Cents
per share

Total amount
$M

Franked/
unfranked

Date of
Payment

5.0

16.7

Unfranked

13 Oct 2006

16.6

49% Franked

14 Oct 2005

5.0

16.8

Unfranked

27 Sept 2007

Franking credit balance
Franking credits available for the subsequent financial year are:
Franking account balance as at the beginning of the financial year at 30% (2006: 30%)
Current year tax payment installments and adjustments
Franked dividends paid

Franking account balance as at the end of the financial year

Note 4 Earnings Per Share (EPS)

EPS (cents per share)

Basic EPS
Diluted EPS
Basic EPS from continuing operations
Diluted EPS from continuing operations
Basic EPS from discontinued operation
Diluted EPS from discontinued operation

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

Profit after income tax from continuing operations attributable to equity holders of the parent
Profit after income tax from discontinued operation

Earnings attributable to ordinary equity holders of the parent used in calculating basic EPS

Consolidated

2007
$M

1.2
(1.1)
–

0.1

2007

21.5
21.4
21.5
21.4
–
–

2007
$M

72.0
–

72.0

2006
$M

2.9
1.8
(3.5)

1.2

2006

105.3
104.5
39.6
39.2
65.7
65.2

2006
$M

131.3
218.2

349.5

Weighted average number of ordinary shares used in calculating basic EPS
Effect of dilutive securities:
Share options

No. of shares

334,188,763

331,868,645

1,605,251

2,686,239

Adjusted weighted average number of ordinary shares used in calculating diluted EPS

335,794,014

334,554,884

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 86

Notes to the Concise Financial Report

Note 5 Segment Information
The Consolidated Entity’s primary segment reporting format is geographical segments as the Consolidated Entity’s risk and rates of return
are affected predominantly by the location of the mine sites. The operating businesses are organised and managed separately according
to their location.

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

2007

External Sales revenue (i)
Other revenue

Total segment revenue

Segment result (i)
Income tax expense
Net profit

Segment assets
Segment liabilities

Other segment information
Acquisition of segment assets

Depreciation and amortisation
of segment assets

2006

External Sales revenue (i)
Other revenue

Total segment revenue

Segment result (i)
Income tax expense
Net profit

Segment assets
Segment liabilities

Other segment information
Acquisition of segment assets

Depreciation and amortisation
of segment assets

Cadia Valley
Operations
$M

1,013.4
–

1,013.4

526.7
–
526.7

1,255.7
266.0

94.2

70.0

Cadia Valley
Operations
$M

1,026.0
–

1,026.0

505.7
–
505.7

1,131.9
268.2

97.5

90.9

Gosowong (iv)

295.4
–

295.4

180.8
–
180.8

168.9
46.8

21.2

20.0

Gosowong (iv)

127.3
–

127.3

53.9
–
53.9

148.9
40.0

Telfer (iii)
$M

Boddington (ii)

Cracow
$M

764.2
–

764.2

149.2
–
149.2

2,213.4
114.5

224.0

116.2

–
–

–

–
–
–

–
–

–

69.0
–

69.0

27.7
–
27.7

149.9
0.4

13.0

11.2

Group and
Unallocated
$M

(587.0)
6.0

(581.0)

(781.0)
(10.4)
(791.4)

834.7
3,254.1

2007
Total
$M

1,555.0
6.0

1,561.0

103.4
(10.4)
93.0

4,622.6
3,681.8

56.9

409.3

7.0

224.4

Telfer (iii)
$M

Boddington
Discontinued
$M

Cracow
$M

Group and
Unallocated
$M

754.6
–

754.6

263.8
–
263.8

2,087.0
93.2

73.1

309.5

6.4

77.3

–
–

–

(0.2)
–
(0.2)

–
–

5.7

–

55.5
–

55.5

22.5
–
22.5

106.8
0.1

39.7

6.6

2006
Total
$M

1,393.1
5.8

1,398.9

406.5
(51.2)
355.3

4,257.4
4,096.7

(570.3)
5.8

(564.5)

(439.2)
(51.2)
(490.4)

782.8
3,695.2

18.4

543.9

5.4

186.6

Notes:
(i) Segment sales revenue and segment results by mine location includes gold and copper sales at unhedged 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. On the 21 March 2006, Newcrest Mining

sold its interest in the joint venture.

(iii) Telfer underground operations commenced in November 2006.
(iv) Gosowong consists of the Kencana underground which commenced operations in Q4 2006 and Toguraci open pit operation (prior year).

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 87

Note 5 Segment Information continued

Geographical Segments (based on location of customers)

Australia – Bullion
Other Asia – Bullion
Japan – Concentrate
Korea – Concentrate
Other Asia – Concentrate
Europe – Concentrate
Hedge losses included in revenue
Losses on restructured hedges

Total Sales Revenue

Sales Revenue
from External Customers
2007
2006
$M
$M

352.7
295.3
934.7
262.6
259.9
32.8
(431.9)
(151.1)

263.0
127.3
992.2
283.9
172.9
121.7
(556.9)
(11.0)

1,555.0

1,393.1

Business Segments (Secondary Reporting Format)

The Consolidated Entity operates predominately in one business segment being the gold mining industry and derives its revenue from the
sale of gold and gold/copper concentrate.

Note 6 Subsequent Events
On 17 August 2007, the Directors of Newcrest Mining Limited declared a final unfranked dividend on ordinary shares in respect of the 2007
financial year. The total amount of the dividend is $16.8 million, which represents an unfranked dividend of five cents per share. The dividend
has not been provided for in the 30 June 2007 financial statements.

On 14 August 2007, Mr Tim Poole and Mr Rick Lee were each appointed as Non-Executive Directors of the Company. On the same date
Dr Scheinkestel also advised of her intention to step down as Non-Executive Director, with effect from 31 August 2007.

There are no other matters or circumstances which have arisen since 30 June 2007 that have significantly affected or may significantly
affect the operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in subsequent
financial years.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 88

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 2007 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 2007;

(c) There are reasonable grounds to believe that the 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 29 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) This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A

of the Corporations Act 2001 for the financial year ended 30 June 2007.

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

Donald P. Mercer
Chairman

17 August 2007
Melbourne

Ian K. Smith
Managing Director and Chief Executive Officer

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 89

Independent Audit Report to
Members of Newcrest Mining Limited

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 90

Shareholder Information (2007)

Capital (on 31 August 2007)

Share Capital

Ordinary shareholders

Shareholdings with less than a marketable
parcel of $500 worth of ordinary shares
Market price

335,286,861

24,884

602
$24.50

Shareholder Breakdown

International Institutions 69%

Domestic Institutions 19%

Retail 10%

Other 2%

Newcrest Top 20 Investors at 31 August 2007

Name

1. HSBC Custody Nominees (Australia) Limited
2. National Nominees Limited
3. J P Morgan Nominees Australia
4. ANZ Nominees Limited
5. Citicorp Nominees Pty Limited
6. Queensland Investment Corporation
7. Citicorp Nominees Pty Limited
8. UBS Nominees Pty Ltd
9. Cogent Nominees Pty Limited
10. HSBC Custody Nominees
11. AMP Life Limited
12. Suncorp Custodian Services Pty Limited
13. Bainpro Nominees Pty Limited
14. Merrill Lynch (Australia) Nominees Pty Ltd
15. RBC Dexia Investor Services Australia Nominees Pty Limited
16. Bond Street Custodians Limited
17. Australian Reward Investment Alliance
18. UBS Wealth Management Australia Nominees Pty Ltd
19. Fleet Nominees Pty Limited
20. UCA Growth Fund Limited

Total

Substantial Shareholders at 31 August 2007

Capital Group
Commonwealth Bank
Merrill Lynch & Co. Inc

Investor Categories

Ranges

1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and Over

Total

Current Balance

Issued Capital %

97,089,653
64,676,829
43,728,123
37,300,336
31,642,330
4,655,837
3,328,081
3,187,665
2,454,744
2,274,658
1,918,733
1,381,969
1,087,517
911,058
720,416
580,195
576,252
503,627
483,091
400,000

298,901,114

48,657,911
32,249,723
31,878,733

28.96
19.29
13.04
11.12
9.44
1.39
0.99
0.95
0.73
0.68
0.57
0.41
0.32
0.27
0.21
0.17
0.17
0.15
0.14
0.12

89.15

14.56
9.62
9.52

Investors

Securities

Issued Capital %

16,839
7,224
458
296
67

24,884

6,720,416
14,610,822
3,280,934
7,742,590
302,932,099

335,286,861

2.00
4.36
0.98
2.31
90.35

100.00

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 91

Shareholder Information (2007)

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 an unfranked dividend of
5 cents per share. The dividend is payable to shareholders
on 27 September 2007. Shareholders registered as at the
close of business on 6 September 2007 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: BNY – Mellon
Shareowner Services, Investor Services, P.O. Box 11258,
Church Street Station, New York, NY 10286–1258.

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
11,392,973 and at year end a net 19,193,123 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 Link Market Services’ website
www.linkmarketservices.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.

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)2 8280 7111. Share registry contact details are
contained in the Corporate Directory of this Report on the
inner back cover.

Newcrest Mining Concise Annual Report 2007

5263 New AR_07 fins 25/9/07 12:27 PM Page 92

Five Year Summary

For the 12 months ending 30 June

2007

2006

2005

Gold Production (ounces)

1,617,251*

1,529,866*

1,157,520

2004

761,780

2003

714,377

Cash costs at achieved prices ($ per ounce)

Total costs at achieved prices ($ per ounce)

Net Profit after tax ($M)
– continuing operations ($M)
– discontinued operation ($M)
Return on Capital Employed (percent)

Gold Production – Newcrest Share (ounces)

Cadia Hill
Cracow
Ridgeway
Telfer
Gosowong
Boddington

Total

280

419

72
72
–
5.9

246,661
81,678
314,028
627,077*
347,807
–

245

365

349
131
218
8.4

248,312
77,702
366,520
650,016*
187,316
–

150

275

130
130
–
8.8

308,516
26,128*
382,034
217,740*
223,102
–

1,617,251

1,529,866

1,157,520

Copper Production (tonnes)

88,940

100,521

96,785

Costs per ounce

By–product basis (NAGIS)
Cash costs at achieved prices ($ per ounce)
Total costs at achieved prices ($ 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 ($M)
– continuing operations ($M)
– discontinued operations ($M)
Basic earnings per share (cents per share)#
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.
# From continuing operations.

Newcrest Mining Concise Annual Report 2007

280
419

399
1.96
486
2.38

60
341

1,555
387
(224)
(10)
72
72
–
21.5
21.5
5

4,623
3,682
941

5.9

335.3

33
55

245
365

332
1.85
398
2.22

57
488

1,393
264
(187)
(47)
349
131
218
39.6
105.3
5

4,257
4,097
161

8.4

333.1

33
59

150
275

304
1.07
377
1.32

46
641

972
259
(134)
(61)
130
130
–
39.4
39.4
5

3,104
1,973
1,131

8.8

330.6

33
61

114

263

123
123
–
9.6

244,261
–
438,026
–
79,493
–

761,780

84,758

114
263

289
0.77
379
1.01

45
710

703
267
(111)
(51)
123
123
–
37.5
37.5
5

2,566
1,566
1,000

9.6

328.6

28
62

212

350

92
92
–
6.6

298,848
–
377,539
–
37,878
112

714,377

67,738

212
350

331
0.75
426
0.96

33
232

596
199
(98)
(29)
92
92
–
29.6
29.6
5

1,839
954
885

6.6

311.4

28
53