2023 Annual Report “ Newcrest has a team of talented people, whose passion, drive to innovate, commitment to making a positive difference and can- do attitude has enabled us to achieve outcomes for a better future for our workforce, investors and communities.” Sherry Duhe Interim Chief Executive Officer See more in the Interim CEO’s Report, Page 5 Cover Image: Red Chris, Canada About Newcrest Newcrest is the largest gold producer listed on the Australian Securities Exchange (ASX, TSX, PNGX: NCM) and is one of the world’s largest gold mining companies. We are committed to: – creating a work environment where everyone can go home safe and healthy every day, and where everyone actively contributes to this outcome; – operating and developing mines in line with environmental, social and governance best practices; – developing a diverse workforce; and – maintaining strong relationships with our communities and governments. We are committed to building a diverse and inclusive environment where everyone can feel respected, valued and safe to bring their whole unique self to work. Our Purpose We proudly produce for a better future Our Vision To be the Miner of Choice Valued by our people and communities Respected by our partners, customers, suppliers and peers Celebrated by our owners 1 2 3 4 5 6 8 10 12 17 18 33 183 Our reporting suite Our 2023 Annual Report provides information on the Group’s activities and performance during the 2023 financial year. Contents Mineral Resources and Ore Reserves reporting can be located from page 21 of this report. FY23 Highlights Other documents in our reporting suite can be viewed on our website. See more, www.newcrest.com 2023 Annual Report 2023 Corporate Governance Statement 2023 Annual Report 2023 Corporate Governance Statement 2023 Sustainability Report 2023 Modern Slavery Statement 2023 Sustainability Report 2023 Modern Slavery Statement Users of this document should refer to the disclaimers on pages 183 to 184 of this report. Progress Against Our Aspirations Chairman’s Report Interim CEO’s Report Safety and Sustainability People Our Business at a Glance Operational Overview Innovation and Creativity The Board Directors’ Report Disclaimers 2 FY23 Highlights Financial (1,2) Returning cash to shareholders (cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:26)(cid:24)(cid:23)(cid:22)(cid:21)(cid:20)(cid:19)(cid:23)(cid:29)(cid:18)(cid:23)(cid:20)(cid:19)(cid:21)(cid:27)(cid:30)(cid:19)(cid:18)(cid:17)(cid:16)(cid:30)(cid:27)(cid:20) (US cents/share) Underlying profit (2) Net debt AISC margin (2,3) Return on capital employed (2) (cid:15)(cid:14)(cid:13)(cid:12) (cid:11)(cid:10)(cid:9)(cid:8) (cid:13)(cid:8)(cid:9)(cid:8) (cid:13)(cid:8)(cid:9)(cid:8) (cid:31)(cid:30)(cid:27)(cid:27) (cid:27)(cid:29)(cid:28) (cid:25)(cid:26)(cid:29)(cid:26) $778m FY22: $872m $1,459m FY22: $1,325m $680/oz FY22: $732/oz 9.0% FY22: 11.4% (cid:31)(cid:30)(cid:27)(cid:29) (cid:31)(cid:30)(cid:27)(cid:26) (cid:31)(cid:30)(cid:29)(cid:28) (cid:31)(cid:28)(cid:29)(cid:26) (cid:30)(cid:26)(cid:29)(cid:26) (cid:27)(cid:29)(cid:28) (cid:27)(cid:29)(cid:28) (cid:31)(cid:27)(cid:29)(cid:28) (cid:31)(cid:30)(cid:29)(cid:28) (cid:25)(cid:24)(cid:23)(cid:22)(cid:21)(cid:20)(cid:19) (cid:18)(cid:17)(cid:22)(cid:16)(cid:20)(cid:15)(cid:14) (cid:31)(cid:20)(cid:24)(cid:15)(cid:14) Statutory profit ($m) 778 872 (cid:31)(cid:30)(cid:29)(cid:28) (cid:31)(cid:30)(cid:29)(cid:29) Safety and Sustainability Learnings shared across the business following the tragic fatality at Brucejack and serious injury at Cadia TRIFR (5) (cid:31)(cid:30)(cid:29)(cid:28) (cid:31)(cid:30)(cid:29)(cid:29) 2.97 4.01 Earnings per share Dividends per share (4) 87.0cps FY22: 103.4cps 55.0cps FY22: 27.5cps First renewable power generated from the Rye Park Wind Farm in July 2023, with early supply commencing under Cadia’s Power Purchase Agreement Series of training and awareness programs launched aimed at fostering psychologically safe and respectful workplaces Newcrest Sustainability Fund contribution to eight major projects and two emergency response projects approved Brucejack underground truck loading fleet now fully battery electric Operational Quality portfolio includes high margin gold and copper assets with long reserve lives FY23 Gold production 2.1Moz FY22: 1.96Moz FY23 Copper production 133.1kt FY22: 120.7kt Sherry Duhe assumed the role of Interim Chief Executive Officer effective 19 December 2022 We have made significant progress across our quality organic gold and copper growth portfolio: 8 November 2022 25 January 2023 6 April 2023 11 August 2023 Telfer West Dome Stage 8 approval, extending mine life into early FY25 (6) Lihir Phase 14A Feasibility Study approved to full implementation Wafi-Golpu Framework MOU signed, marking key milestone towards the signing of a Mining Development Contract Newcrest released its initial Mineral Resources and Ore Reserves statement for Brucejack FY23 11 November 2022 Q2 2023 14 March 2023 15 May 2023 Cadia PC1-2 Feasibility Study approved to execution Cadia two-stage plant expansion complete. Brucejack debottlenecking study progressed to Pre-Feasibility. Red Chris exploration success expands East Ridge Exploration Target (7) contributing additional mining potential Binding agreement executed with Newmont to acquire 100% of the issued shares of Newcrest (8) (1) All financial data presented in this Annual Report is quoted in US dollars unless otherwise stated. (2) Non-IFRS Financial Information. See disclaimer on page 184 relating to Non-IFRS Financial Information. (3) Newcrest’s AISC margin has been determined by deducting the AISC attributable to Newcrest’s operations from Newcrest’s realised gold price. (4) Represents dividends determined in respect of the financial year (FY23: 55cps, FY22: 27.5cps). (5) TRIFR is the total number of recordable injuries per million hours worked. It is a lagging indicator of safety performance. (6) Subject to market and operating conditions and no unforeseen delays. (7) Further information as to the Exploration Target is included in Newcrest’s release titled “Red Chris exploration success expands East Ridge Exploration Target delivering additional mining potential” dated 14 March 2023 which is available at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile. (8) Subject to a number of conditions, including various regulatory approvals, approval by the Federal Court of Australia and approval by Newcrest and Newmont shareholders. Newcrest Annual Report 2023 Dividends per share (4) 55.0cps FY22: 27.5cps 3 Progress Against Our Aspirations Our Forging an even stronger Newcrest plan articulates our mission to deliver superior returns to our shareholders from finding, developing and operating gold/copper mines. The plan also affirms our existing vision to be the Miner of Choice, and defines five pillars that support us to be the preferred partner for investors, communities, governments and employees. Our Aspirations Progress in FY23 (1) We are a safe and sustainable business Everyone goes home safe and healthy every day. Communities trust us because of our environmental and social performance. We have the best people We have a high-performance, inclusive culture where everyone can thrive and excel. We are outstanding operators We safely operate our assets to their full potential. We are a leader in innovation and creativity We create lasting value through audacious breakthroughs. We grow profitably We have an industry-leading portfolio that delivers superior returns and growth. NewSafe coaching reinvigorated to support Leadership and Behavioural elements of the program Electric light vehicle trial onboarding commenced at Cadia Red Chris achieved its lowest annual TRIFR on record Key trials and studies to implement the Group Net Zero Emissions Roadmap progressed (2) Lihir had zero recordable injuries in Q3 and Q4 Eight social investment programs underway funded by the Newcrest Sustainability Fund Recorded 1,184 Critical Control System Verifications, (intended to verify that each applicable major hazard critical control is implemented and effective), up from 742 in FY22 50% female representation on our Executive Committee Female representation across employees globally 16.6% Launched culture change training programs, Upstander and FeelSafe, as part of our Respect@Work program to promote and encourage people to take action against disrespectful behaviour and create a psychologically safe workplace Front line leader program ManagingMatters updated to incorporate Inclusive Leadership Cadia PC2-3 first ore delivered to the mill in Q3 Red Chris expanded its Exploration Target for East Ridge Brucejack continued to progress its three-phase transformation program and is on track to deliver expected synergy benefits, with 50% of the expected benefits delivered in FY23 (3) Eight underground battery electric truck loading fleet in operation at Brucejack Ore sorting concept study at Brucejack complete which aims to deliver more consistent mill feed grades and lower cut-off grade Lihir steep wall and seepage barrier options developed for near shore Kapit extensions with the potential to enable access to additional high grade zones outside the current Ore Reserve Trial of advanced 4G Long-Term Evolution and 5G mobile technologies underground at Cadia New technology, explosive chemistries and robotic systems developed to enable safer mining of Lihir’s hot ground zones and Newcrest’s deeper underground environments Initial Newcrest Ore Reserves and Mineral Resource estimates for Brucejack announced Lihir Phase 14A Feasibility Study approved to full implementation Wafi-Golpu Framework MOU signed Cadia PC1-2 Feasibility Study approved to execution Cadia two-stage plant expansion complete Brucejack transformation debottlenecking study progressed to Pre-Feasibility to further investigate the potential to increase process plant capacity by up to 30% (4) West Dome Stage 8 cutback approved, extending Telfer mine life into early FY25 (5) (1) As at 30 June 2023 and reflects progress made since Newcrest’s FY22 Annual Report. Newcrest’s Forging an even stronger Newcrest plan was announced in February 2021. (2) Includes Brucejack battery electric loading fleet. See our FY23 Sustainability Report for further details. (3) Expected benefits of C$20-$30 million (US$16-$24 million) per annum. Indicative only and should not be construed as guidance. Subject to market and operating conditions, all necessary approvals, regulatory requirements, further studies, and no unforeseen delays. (4) Subject to further studies, all necessary approvals, permits, internal and regulatory requirements and further works and no unforeseen delays. (5) Subject to market and operating conditions and no unforeseen delays. 4 Chairman’s Report Total dividends per share with respect to FY23 US 55.0 cents FY22: US 27.5 cents pursue a range of optimisation opportunities. We are particularly proud of our technical and exploration capability. In FY23, we made significant progress against our growth strategy with key study milestones achieved at Cadia and Lihir, the signing of the Framework Memorandum of Understanding at the world-class Wafi-Golpu copper-gold deposit, and continued success was realised through the Brucejack transformation program. Together with activities underway to maximise the value of Telfer and Havieron, our global gold and copper portfolio is very well placed for the future. In May 2023, following several earlier approaches by Newmont, we entered into a binding agreement for Newmont to acquire 100% of Newcrest at a premium that recognises the quality of our assets and growth pipeline (Newmont Transaction), subject to satisfaction or waiver of conditions including Newcrest and Newmont shareholder approvals, court approval and regulatory approvals. We believe that this transaction with Newmont will bring forward significant value to shareholders through the recognition of our strong pipeline of organic growth projects. Combining the two companies’ premier portfolios will set a new benchmark in gold production while benefiting from a material and growing exposure to copper, a critical mineral in the energy transition. Under the terms of the Newmont Transaction, eligible Newcrest shareholders will be entitled to receive 0.400 Newmont shares for each Newcrest share held. In addition, Newcrest expects to pay a franked special dividend of US$1.10 per Newcrest share (1) prior to the implementation of the scheme of arrangement. The Newcrest Board has unanimously recommended that shareholders vote in favour of the Newmont Transaction in the absence of a superior proposal, and subject to the Independent Expert continuing to conclude that the Newmont Transaction is in the best interests of shareholders. If the Newmont Transaction is approved by Newcrest shareholders, and all conditions precedent are satisfied or waived, implementation of the Newmont Transaction is targeted to occur in November 2023. Following the retirement of Sandeep Biswas in December 2022, Sherry Duhe was appointed Interim Chief Executive Officer. Her appointment was at a pivotal moment for our company, and we thank Sherry for the great leadership she has shown through this period of change for our people. Newcrest’s rich history is made up of many great stories of discovery, overcoming challenges to achieve success, and most of all of the camaraderie and team spirit that has led to a world class metals business. As the next chapter of Newcrest’s story unfolds, our people can stand proud of the exceptional business they have built together. On behalf of the Board, I thank the Newcrest team for their dedication and contribution to the company’s success, and to the Executive Committee for their leadership, as we navigated a path towards what we believe will be an exciting future for people, communities and shareholders. It has been a great privilege to have served as a member of the Board since 2018 and to represent our shareholders as Chairman since November 2021. I thank you for your support. Our total dividends of 55 cents per share for the 2023 financial year were equal to the highest annual dividend Newcrest has ever determined, reflecting our ongoing commitment to providing strong shareholder returns. In FY23 we delivered higher gold and copper production, with a statutory and underlying profit of $778 million, free cash flow of $404 million, and a fully franked final dividend of US 20 cents per share. This exceeds the minimum payout targeted by our dividend policy and brings our total dividends for FY23 to US 55 cents per share. Safety is crucial for any mining company, ours included. Devastatingly, we had two major incidents this year – the loss of our colleague at our Brucejack mine on 22 October 2022 and then in June 2023, a colleague at our Cadia mine sustained a life-changing injury. We are committed to the safety of our people and ensuring safety remains at the forefront of every activity across the business. We must believe that all incidents are preventable and continue to share learnings, so that we can all work towards such incidents never happening again. During FY23, the NSW Environment Protection Authority (EPA) issued Cadia with variations to its Environment Protection Licence, which largely formalised the actions Cadia had developed in consultation with the EPA and was already undertaking to address dust concerns. We continue to work openly and transparently with the EPA and the local community to meet our statutory obligations in a way that is aligned with our values. Our assets produced over 2 million ounces of gold and 133,000 tonnes of copper during the year. This was despite the impact of an extended weather pattern which produced drought conditions at Lihir in particular. We continued to invest in key expansion projects at Cadia, Red Chris and Lihir and following our strong exploration performance, we significantly expanded the Exploration Target at East Ridge, highlighting the exciting opportunity for Red Chris as the Block Cave Feasibility Study continued to (1) Newcrest expects to have sufficient franking credits available to frank a special dividend up to an amount of US$1.10 per share. The franking of the special dividend amount is subject to change based on timing of implementation of the scheme, business performance, foreign exchange movements and an ATO Class Ruling. Peter Tomsett Chairman Newcrest Annual Report 2023 Interim CEO’s Report 5 Gold production with respect to FY23 2.1 Moz FY22: 1.96 Moz This year we produced 2.1 million ounces of gold and 133,000 tonnes of copper, with a significantly improved free cash flow of $404 million and Statutory and Underlying profit of $778 million. Our balance sheet remains strong as we continued to invest in our organic portfolio of value generating projects. Key study milestones were achieved at Cadia and Lihir, a Framework Memorandum of Understanding was signed for the world-class Wafi-Golpu copper-gold deposit, and continued success was realised through the Brucejack transformation program. Our strong exploration performance resulted in an expanded Exploration Target at East Ridge, highlighting the exciting opportunity for Red Chris as the Block Cave Feasibility Study continued to pursue a range of optimisation opportunities. Together with activities underway to maximise the value of Telfer and Havieron, our global gold and copper portfolio is very well placed for the future. Climate change is the greatest global challenge of our time, and we have a role to play in reducing carbon emissions. In FY23, we progressed our Net Zero Emissions Roadmap by continuing to invest in electric vehicles and other new technologies to support our transition to a low-carbon future. The underground truck loading fleet at Brucejack is now fully battery electric and activities to procure and onboard trials of a high technology readiness fleet are progressing at Cadia and Brucejack. Since then, the first renewable power was generated from the Rye Park Wind Farm, with early supply commencing under Cadia’s Power Purchase Agreement. There were also changes to our Executive Committee this year. It has been a great honour and privilege to lead this company following Sandeep Biswas’ retirement in December 2022. This year, we welcomed Beth White as Chief Sustainability Officer, Megan Collins as Chief People and Culture Officer, and Dan O’Connell as Interim Chief Financial Officer. They have all greatly contributed to our successes. We also farewelled Phil Stephenson, Chief Operating Officer (Australasia) and Seil Song, Chief Development Officer. I very much look forward to seeing the future growth and development of our enviable portfolio of world-class gold and copper assets, backed by our first-rate team of operators, explorers and pioneers. Sherry Duhe Interim Chief Executive Officer Newcrest has a team of talented people, whose passion, drive to innovate, commitment to making a positive difference and can-do attitude has enabled us to achieve outcomes for a better future for our workforce, investors and communities. In FY23, we delivered higher gold and copper production, and announced a final dividend of 20 cents per share, bringing our total dividends for the 2023 financial year to 55 cents per share. This is equal to the highest total annual dividend Newcrest has ever determined, reflecting our ongoing commitment to providing strong shareholder returns. We also achieved several major milestones across our pipeline of high-quality projects, made strong progress in our initiatives to support our transition to a low-carbon future, and maintained strong financial fundamentals. As we reflect on the year’s performance, we remember the tragic loss of life at our Brucejack mine in October 2022 and the life-changing injury sustained by one of our colleagues while working at our Cadia mine. These incidents are felt deeply across our business and, while our FY23 injury rates decreased by 26% (to a Total Recordable Injury Frequency Rate of 2.97), they are a stark reminder of the importance of our people’s health and safety. We remain resolute in our commitment to take action which will help prevent such incidents occurring. We want a workplace which people are proud to be part of and in which they thrive. In the past year, we advanced our efforts to embrace diversity as a strength and put respect at the core of the way we work. Notably, Respect@Work Managers have been appointed at each of our locations to help drive positive action towards eliminating unacceptable behaviours from our workplace. 6 Newcrest Annual Report 2023 Safety and Sustainability Climate Change goals Net zero Scope 1 and Scope 2 carbon emissions by 2050 goal We also intend to work across our value chain to reduce our Scope 3 emissions. 30% reduction in Scope 1 and Scope 2 greenhouse gas emissions intensity per tonne of ore milled by 2030 target compared to a baseline of FY18 emissions Learn more about Newcrest’s Sustainability progress in our 2023 Sustainability Report, www.newcrest.com/sustainability/sustainability-reports Our Purpose We proudly produce for a better future. Safety Safety and sustainability are core to the operation of Newcrest’s business. Newcrest is committed to creating a work environment where everyone can go home safe and healthy every day, and where everyone actively contributes to this outcome; operating and developing mines in line with environmental, social and governance practices; developing a diverse workforce; and developing and maintaining strong relationships with our communities and governments. In October 2022, a tragic fatality involving a contractor occurred at Newcrest’s Brucejack mine in British Columbia. During the suspension of operations, Newcrest completed a safety review across all activities at Brucejack to identify major hazards and corresponding critical control. This review has helped Newcrest to establish additional control verification mechanisms to monitor those critical controls. (1) During FY23, the Upstander program was made available to staff and contractors at Brucejack, Cadia, Lihir, Red Chris, Telfer and Corporate, and the FeelSafe program was made available to staff and contractors at Telfer and Red Chris. The New South Wales Resources Regulator is investigating two safety incidents at Cadia. These are in response to a serious injury that occurred to a team member from one of Cadia’s contracting partners in June 2023, and a separate incident resulting in serious injuries to a team member that occurred in October 2021. Newcrest remains committed to learning from these devastating incidents to ensure that safety remains at the forefront of every activity across the business. The Newcrest Safety Transformation Plan was developed and implemented with core components including NewSafe Leadership (health and safety behavioural cultural program), field Critical Control Management verifications and Process Safety, which combine to support the intent of eliminating fatalities and injuries from Newcrest’s business. During the 2023 financial year we renewed our commitment across all sites to the Safety Transformation Plan, including: – A launch or re-launch of the NewSafe Leadership program at all sites, including the review and development of NewSafe behaviours for many workgroups. – Relaunch of the NewSafe coaching program for frontline supervisors at all sites. – Increased support for safety incident investigations, including additional training and independent facilitators for high-level incidents, resulting in improved quality of outcomes for all sites. – Continuation of the SafeHands program which analysed manual tasks and changing procedures, realising a 21% reduction in hand and finger injuries compared to FY22. – Delivery of the Eye on Risk program on every site which focussed on hazard identification and critical control management. – Launch of the FeelSafe and Upstander programs directed at supporting psychologically safe workplaces. (1) 7 Sustainability We are committed to making decisions across our business that create value today and for generations to come. In FY22, Newcrest adopted an Integrated Sustainability Framework (ISF) which provides the framework for how we as a company approach sustainability and what it means to Newcrest. The ISF is centred around four pillars: – Improving people’s lives. – Respecting the environment. – Building a business for the future. – Being a trusted company. Further details are provided in our 2023 Sustainability Report, www.newcrest.com/sustainability/sustainability-reports (2) See Risk Factors discussed in Section 7 of the Operating and Financial Review on page 69 of this Annual Report. Newcrest recognises that climate change is one of the most significant challenges facing the world today. We acknowledge the climate change science and support the Paris Agreement goals. The mining sector has a role to play in reducing global greenhouse gas (GHG) emissions. The nature of our portfolio of gold and copper commodities exposes us to a range of risks and opportunities related to the transition to a low carbon future, for example the use of copper in the energy transition. (2) We are pro gressing multiple carbon emissions reduction initiatives as part of our Group Net Zero Emissions Roadmap, including scoping and planning key trials and studies. Fleet electrification remains a focus across the business, with the underground truck loaders at Brucejack now fully battery electric, the battery electric load haul dump scoop trial continuing at Brucejack and planning for other electric vehicle trials ongoing at Cadia. The Telfer/ Havieron renewables concept study is nearing completion and the Lihir FY23 power technology assessment workplan was completed during the last quarter of FY23 with several options selected for further assessment. In FY23 Newcrest also launched the Newcrest Sustainability Fund with A$10 million to invest in strategic social investments in support of the United Nations Sustainable Development Goals. The Fund continues to identify projects to contribute to the resilience of communities across Newcrest’s geographic areas of interest. Contribution to eight major projects and two emergency response projects were approved during FY23 with a focus across health, education, biodiversity, reduction in inequalities and economic growth outcomes. 8 People Newcrest Annual Report 2023 Our aspiration is to have a high-performance, inclusive culture where everyone can thrive and excel. We have not set enterprise-wide targets for diversity for FY24 in light of the Newmont transaction, and plan to work with each site to discuss aspirations at a site level. Our sites continue to implement local action plans aimed at attracting and retaining a diverse workforce and creating a safe, respectful and inclusive work environment. – At Lihir, targeted development of local talent is a priority in FY24, specifically planning to accelerate Level 1 and 2 Lihirian talent and expanding numbers of Lihirian graduates, trainees and scholarships to foster a local talent pipeline that is healthy and thriving. – At Brucejack the Indigenous Cultural Alliance Committee has been established with two (Indigenous) co-Chairs who are committed to raising awareness of the value of diverse backgrounds for all our people. – At Cadia, we have a focus on female talent in our early careers programs. During FY23, 17 university vacation students (35% female), 15 new graduates (46% female), and 38 apprentices (26% female) joined our Cadia team. Inclusion and Diversity In FY23 our front line leader program ManagingMatters was updated to include Inclusive Leadership awareness and skills. Inclusion is the foundation upon which our leaders create the conditions for people to feel they belong, feel valued and feel psychologically safe at work. Facilitating an inclusive culture is the role of a leader and is fundamental to our approach towards leadership development. Over the course of FY23, we increased our overall global female employee representation which is currently 16.6% (16.5% at the end of FY22). For sites, we saw an increase in female representation at Telfer and Red Chris, steady at Lihir, and a decrease at Cadia and Brucejack. A longer-term target has been set for the Executive Committee of 30% female representation by the end of the 2024 financial year. The Executive Committee currently exceeds this target as it includes four female members out of seven as at the date of this Annual Report. In June 2020, the Board adopted a target for Board composition of not less than 30% of each gender by 30 June 2023. The current Board meets this target as it includes three female Directors out of seven Directors. 9 Respect@Work and Reporting We believe that everyone has the right to feel and be safe at work while being treated with respect and dignity. Newcrest is committed to providing a safe, inclusive and respectful workplace that is free of sexual assault and sexual harassment. During FY23 we continued to deliver on our Respect@Work program activities which align with our Respect@Work Prevention and Response Framework. Key milestones include: – Listened to our people through focus groups, one-on-one meetings, and a Respect@Work Pulse Survey. This engagement told us that there is a strong belief that Newcrest takes matters of sexual assault and sexual harassment seriously, and that there is higher confidence in reporting such incidents than in the past. – Launched culture change training through Upstander and FeelSafe programs. The Upstander program educates our workforce on how to speak up in difficult situations, and the FeelSafe program focusses on enhancing an inclusive and psychologically safe workplace. – Risk assessments were completed at three sites and accommodation/ security audits were completed at all operating sites. Sixty-three cases of sexual assault and sexual harassment were reported globally in FY23, (1) an increase from the 50 cases reported in FY22. We continue to investigate a number of these cases. Thirty-five cases have been substantiated and include: – five sexual assaults (2) which included unwanted touching of a sexual nature, but no reports of rape or attempted rape; and – thirty incidents of sexual harassment (3) which included inappropriate comments, jokes and gestures, requests of a sexual nature and stalking. Outcomes of substantiated matters included 26 people terminated/ removed from the Newcrest business, nine written warnings or other disciplinary action, and counselling and education for others. As we continue to promote and enhance our reporting channels, we expect that case numbers may increase in the year ahead, as people feel safe and supported in stepping forward. There is only one acceptable number of incidents of inappropriate workplace behaviour, and that is zero. Our Prevention and Response Framework outlines what we are doing in the Respect@Work program and can be viewed in our Sustainability Report (1) Incidents involved a mix of contractors and employees. (2) Newcrest considers sexual assault to be rape or attempted rape, forced or attempts to force sexual activity, and unwanted touching of a sexual nature. (3) Newcrest considers sexual harassment to be unwelcome sexual advances, including touching, online sexual photos/comments/texts, requests for sexual favours, and retaliation for not being sexually cooperative. 2023 Sustainability Report 2023 Sustainability Report www.newcrest.com/sustainability/ sustainability-reports 10 Our Business at a Glance Newcrest has an outstanding portfolio of long-life gold and copper assets, a material and increasing exposure to copper, and a well-established organic growth pipeline. Papua New Guinea Australia 1 Juri (JV & FI) 2 Wilki (O & FI) 3 Antipa (EI) 4 Tennant East (100%) 5 Mt Coolon (O & FI) 6 Second Junction Reefs Project (JV) Lihir New Ireland Province 100% Newcrest Ownership Au 670koz Wafi-Golpu JV Morobe Province 50% Newcrest Ownership Telfer Pilbara, Western Australia 100% Newcrest Ownership Au 349koz Cu 17kt 1 32 Havieron JV & FI Pilbara, Western Australia 70% Newcrest Ownership (1) 4 5 Our commodities in FY23 Gold 76% of Net Revenue 2.1 Moz (2) Produced US$1,797/oz Realised Price (3) Copper 22% of Net Revenue 133.1 kt Produced US$3.76/lb Realised Price (3) Au 597koz Cu 98kt 6 Asset type Producing assets Advanced projects Exploration projects Exploration projects FI Farm-In JV Joint Venture 100% 100% Newcrest Tenement O Option EI Equity Investment Mining method Open pit mining Underground mining Cadia Orange, New South Wales100% Newcrest OwnershipNewcrest Annual Report 2023 11 Canada 1 Boomerang (100%) USA 1 Mahogany (O & FI) 2 Appaloosa (O & FI) 3 Lodestar (O & FI) 4 Midas North (O & FI) 5 Spring Peak (O & FI) 6 Headwater Gold (EI) 7 Metallic Minerals (EI) Red Chris JV (4) (incl. the GJ property) British Columbia 1 70% Newcrest Ownership Au 39koz Cu 18kt Au 286koz 1 2 3 4 5 6 7 Fiji Mexico Namosi JV Waisoi Project Namosi Province 73.03% Newcrest Ownership 1 Azucar Minerals (EI) 1 Employees/Contractors (5) Ecuador 1 2 SurNorte (Gamora, Jackpot) (JV + FI) SolGold (EI) Fruta del Norte Zamora-Chinchipe Province 32% Newcrest Ownership (6) Au 164koz 1 2 13,637 Total 6,576 Employees 7,061 Contractors See detail by location in our 2023 Sustainability Report Performance Data www.newcrest.com/sustainability/ sustainability-reports (1) The Havieron Project is operated by Newcrest under a Joint Venture Agreement with Greatland Gold. Newcrest has a 70% interest in the Havieron Project (Greatland Gold Plc 30%). (2) Group gold production includes 164,008 ounces relating to Newcrest’s 32% attributable share of Fruta del Norte through its 32% equity interest in Lundin Gold Inc. The outcomes for Fruta del Norte have been sourced from Lundin Gold’s news releases and have been aggregated to reflect the 12-month period ended 30 June 2023. (3) Realised metal prices are the US$ spot prices at the time of sale per unit of metal sold (net of Telfer gold production hedges), excluding deductions related to treatment and refining charges and the impact of price related finalisations for metals in concentrate. The realised price has been calculated from sales ounces generated by Newcrest’s operations only (i.e., excluding Fruta del Norte). (4) Production and financial outcomes represent Newcrest’s 70% share. (5) As at 30 June 2023. Employees are directly employed by Newcrest (headcount). Contractor FTEs include labour hire and project contractors, replacement labour and other contractors. Wafi-Golpu data not included as it is not under Newcrest’s operational control. (6) The production outcome shown represents Newcrest’s 32% attributable share, through its 32% equity interest in Lundin Gold Inc. Brucejack British Columbia100% Newcrest Ownership 12 Operational overview Cadia Cadia is located 25km from Orange in central western New South Wales, Australia. Cadia is one of the world’s largest gold and copper mining operations with Ore Reserves of 17Moz gold and 3.6Mt copper, and Measured and Indicated Mineral Resources of 32Moz gold and 7.2Mt copper. (1,2) FY23 Performance Cadia’s higher gold and copper production in FY23 reflects an increase in mill throughput following completion of the planned replacement and upgrade of the SAG mill motor in FY22, and the ongoing benefits of recovery improvement projects with the commissioning of the two-stage plant expansion project completed. This was partially offset by the expected decline in grade. AISC of $45 per ounce was higher than FY22 primarily driven by the impact of a lower realised copper price, higher site production costs and an increase in sustaining capital expenditure relating to construction activities on the Tailings Storage Facilities. These impacts were partially offset by higher gold and copper sales volumes and favourable FX movements. Cadia’s AISC remains around the bottom of the first quartile in the gold industry. (3) Free cash flow of $720 million was 17% higher than in FY22. This reflects lower non-sustaining capital expenditure with commissioning of the two-stage plant expansion completed together with increased earnings (EBITDA) in FY23, partially offset by unfavourable working capital movements and increased sustaining capital expenditure. During the June 2023 quarter, the NSW Environment Protection Authority (EPA) issued Cadia with variations to its Environment Protection Licence, a Prevention Notice and Notices to Provide Information regarding the management of dust emissions and other air pollutants from the Tailings Storage Facilities and ventilation rises. The licence variations largely formalised the actions Cadia had developed in consultation with the EPA and were already undertaking across a range of measures. See further details in the Operating and Financial Review on pages 57–58 of this report. In August 2023, the NSW EPA commenced proceedings in the state Land and Environment Court against Cadia Holdings, alleging that air emissions from Cadia in March 2022 exceeded the standard of concentration for total solid particles permitted under applicable laws due to the use of surface exhaust fans at the mine. The NSW EPA’s investigation regarding the management of air emissions from the mine is ongoing. Cadia expansions The two-stage plant expansion project at Cadia is now complete. Construction of the underground materials handling system for PC2-3 was finalised in FY23 and first ore was delivered to the mill in the March 2023 quarter. This was a significant milestone for Cadia’s next panel cave, with activities now focused on mine development. In November 2022, the Newcrest Board approved progression of the Cadia PC1-2 Feasibility Study to Execution. The Feasibility Study demonstrated an optimised mine footprint substantially increasing expected ore mined across the life of the project. Key development activities for PC1-2 remain on track and first ore production from PC1-2 is expected in FY26. (4,5) (1) Ore Reserve and Mineral Resource estimates are as at 30 June 2023 based on the release titled “Annual Mineral Resources and Ore Reserves Statement – as at 30 June 2023” dated 11 August 2023 which is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile. Data is reported to two significant figures to reflect appropriate precision in the estimate and this may cause some apparent discrepancies in totals. (2) For tonnes and grade breakdown by confidence category refer to Table 5 for Mineral Resources on page 27 and Table 11 for Ore Reserves on page 31. Long-life world-class asset Orange, New South Wales, Australia Free cash flow (6) AISC $720m FY22: $613m $45/oz FY22: $(124)/oz Gold production 597koz 561koz (cid:31)(cid:30)(cid:29)(cid:28) (cid:31)(cid:30)(cid:29)(cid:29) Copper produced 98kt 85kt (cid:31)(cid:30)(cid:29)(cid:28) (cid:31)(cid:30)(cid:29)(cid:29) Site process Mining Processing Output Panel Cave (PC) mining from Cadia East (PC1, PC2 and PC2-3), with underground crushing and conveyor to surface High pressure grinding rolls, SAG mills, ball mills, flotation, coarse ore flotation and gravity concentration Principally gold doré, copper/gold concentrate, molybdenum concentrate Reserves & Resources Gold Reserve Life (7) Gold Probable Ore Reserves (1,2) Gold M&I Mineral Resources (1,2,8) Copper Probable Ore Reserves (1,2) Copper M&I Mineral Resources (1,2,8) +25 years 17Moz 32Moz 3.6Mt 7.2Mt (3) AISC per ounce is first quartile when compared to the Metals Focus Ltd “Q1 2023 Gold Mine Cost Service” report dated 23 June 2023. (4) Subject to market and operating conditions. (5) The Cadia PC1-2 Feasibility Study has been prepared with the objective that its findings are subject to an accuracy range of ±10–15%. The findings in the Study and the implementation of the PC1-2 Project are subject to all the necessary approvals, permits, internal and regulatory requirements and further works. The Study estimates are indicative only and are subject to market and operating conditions. They should not be construed as guidance. (6) Free cash flow is before interest, tax and intercompany transactions. (7) Reserve life is indicative and calculated as Probable Gold Reserves (contained metal) as at 30 June 2023 divided by forecast average production rate as per the Life of Province Plan or stated in a Feasibility Study. Estimated reserve life does not necessarily equate to operating mine life. (8) Gold and Copper M&I Mineral Resources represent Measured and Indicated Mineral Resources. The M&I Mineral Resources are reported inclusive of those Mineral Resources modified to produce the Ore Reserves. Newcrest Annual Report 2023 13 Significant long-life asset New Ireland Province, Papua New Guinea Free cash flow (4) AISC $125m FY22: $87m $1,466/oz FY22: $1,622/oz Gold production 670koz 687koz (cid:31)(cid:30)(cid:29)(cid:28) (cid:31)(cid:30)(cid:29)(cid:29) Site process Mining Processing Open pit drill, blast, load and haul mining Crushing, grinding, flotation, pressure oxidation, NCA circuit Output Gold doré Reserves & Resources Gold Reserve Life (5) Gold Proved & Probable Ore Reserves (1,2) Gold M&I Mineral Resources (1,2,6) ~22 years 22Moz 41Moz Lihir Lihir is located on Aniolam Island, 900 km from Port Moresby, Papua New Guinea, comprising of an open pit mine. Lihir is one of the world’s largest producing gold mines, with Ore Reserves of 22Moz gold and Measured and Indicated Mineral Resources of 41Moz gold. (1,2) FY23 Performance Lihir’s performance in FY23 was impacted by lower feed grade, reduced mill throughput and mill availability. The lower feed grade reflects a higher proportion of low grade expit material being processed in the second half of FY23, with extreme rainfall limiting pit access and causing material handling issues at the crushers. Mill throughput was significantly constrained in the first half of FY23 due to drought conditions experienced across the New Ireland Province which limited raw water supply to the plant together with several unplanned downtime events impacting mill availability. Despite the weather events, ore mined increased by 57% in FY23 reflecting the progression of stripping into higher grade ore. AISC of $1,466 per ounce was lower than FY22 driven by lower production stripping activity, lower sustaining capital expenditure and higher gold sales volumes. Free cash flow of $125 million was 44% higher than FY22, primarily driven by lower capital expenditure. This was partially offset by unfavourable working capital movements. Phase 14A Pre-Feasibility Study In January 2023, the Newcrest Board approved the Lihir Phase 14A Feasibility Study, endorsing the project into full implementation. Phase 14A is another step forward in realising the full potential of Lihir with the cutback expected to deliver additional high grade gold production over the next four years. Lihir is on track to deliver high grade ore from Phase 14A in FY24. (3) Newcrest continues to evaluate a range of options to unlock additional high grade mineralisation outside the current Ore Reserve with the potential to extend the elevated production profile at Lihir beyond FY31. (3) (1) Ore Reserve and Mineral Resource estimates are as at 30 June 2023 based on the release titled “Annual Mineral Resources and Ore Reserves Statement – as at 30 June 2023” dated 11 August 2023 which is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile. Data is reported to two significant figures to reflect appropriate precision in the estimate and this may cause some apparent discrepancies in totals. (2) For tonnes and grade breakdown by confidence category refer to Table 5 for Mineral Resources on page 27 and Table 11 for Ore Reserves on page 31. (3) Subject to market and operating conditions and no unforeseen delays. (4) Free cash flow is before interest, tax and intercompany transactions. (5) Reserve life is indicative and calculated as Proved and Probable Gold Reserves (contained metal) as at 30 June 2023 divided by forecast average production rate as per the Life of Province Plan. Estimated reserve life does not necessarily equate to operating mine life. (6) Gold and Copper M&I Mineral Resources represent Measured and Indicated Mineral Resources. The M&I Mineral Resources are reported inclusive of those Mineral Resources modified to produce the Ore Reserves. 14 Newcrest Annual Report 2023 Operational overview continued Telfer Telfer is located 400 km from Port Hedland, Western Australia, comprising open pit and underground mines with Ore Reserves of 2.4Moz gold and 0.10Mt copper, and Measured and Indicated Mineral Resources of 5.8Moz gold and 0.49Mt copper. (1,2) Telfer’s strategic positioning in the highly prospective Paterson Province, with its existing infrastructure and 22Mtpa processing capacity, provides potential opportunities for Newcrest moving forward. FY23 Performance Telfer’s lower gold production in FY23 was driven by lower mill throughput and lower grade. In November 2022, the Newcrest Board approved expenditure of A$214 million (~US$150 million) for the West Dome Stage 8 (WDS8) cutback. The cutback underpins the continuity of operations at Telfer, with the mine now expected to continue operations into early FY25. (3) First ore production in WDS8 was achieved during the December 2022 quarter with mining rates in the cutback performing above expectations in FY23. AISC of $1,633 per ounce was higher than FY22 primarily due to lower gold sales volumes, a lower realised copper price, an increase in production stripping activity relating to WDS8 and additional costs relating to inflationary pressures. This was partially offset by higher copper sales volumes and favourable FX movements. Free cash flow of $9 million was 91% lower than FY22. This reflects lower earnings (EBITDA) and increased production stripping activity, partially offset by favourable working capital movements. Excluding hedge losses of $76 million in FY23, Telfer’s free cash flow would have been $85 million. Havieron The Havieron Project is operated by Newcrest under a Joint Venture Agreement with Greatland Gold Plc. Newcrest is the manager and holds a 70% interest in the Havieron Project (Greatland holds a 30% interest). Havieron is located 45 km east of Telfer. Various workstreams to support the Feasibility Study continue to progress with several value enhancing options underway to maximise value and de-risk the Havieron project. The growth drilling program continued during the financial year with drilling results continuing to identify extensions to the mineralisation. Strategically positioned in the Paterson Province Pilbara, Western Australia, Australia Free cash flow (4) AISC $9m FY22: $103m $1,633/oz FY22: $1,388/oz Gold production 349koz 408koz (cid:31)(cid:30)(cid:29)(cid:28) (cid:31)(cid:30)(cid:29)(cid:29) Copper produced 17kt 14kt (cid:31)(cid:30)(cid:29)(cid:28) (cid:31)(cid:30)(cid:29)(cid:29) Site process Mining Open pit mining and Underground sub-level cave and stope mining Processing Crushing, grinding, gravity concentration, flotation, leaching circuit, dump leach Output Copper/gold concentrate and gold doré Reserves & Resources Gold Reserve life (5) Gold Proved & Probable Ore Reserves (1,2) Gold M&I Mineral Resources (1,2,6) Copper Probable Ore Reserves (1,2) Copper M&I Mineral Resources (1,2,6) 2 years 2.4Moz 5.8Moz 0.10Mt 0.49Mt (1) Ore Reserve and Mineral Resource estimates are as at 30 June 2023 based on the release titled “Annual Mineral Resources and Ore Reserves Statement – as at 30 June 2023” dated 11 August 2023 which is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile. Data is reported to two significant figures to reflect appropriate precision in the estimate and this may cause some apparent discrepancies in totals. (2) For tonnes and grade breakdown by confidence category refer to Table 5 for Mineral Resources on page 27 and Table 11 for Ore Reserves on page 31. Figures shown include Havieron at 100%. (3) Subject to market and operating conditions and no unforeseen delays. (4) Free cash flow is before interest, tax and intercompany transactions. (5) Reserve life is indicative and calculated as Proved and Probable Gold Reserves (contained metal) as at 30 June 2023 divided by forecast average production rate as per the Life of Province Plan or stated in a Pre-Feasibility Study. Estimated reserve life does not necessarily equate to operating mine life. (6) Gold and Copper M&I Mineral Resources represent Measured and Indicated Mineral Resources. The M&I Mineral Resources are reported inclusive of those Mineral Resources modified to produce the Ore Reserves. Newcrest Annual Report 2023 15 Potential multi- decade producer (4) British Columbia, Canada Free cash flow (6) AISC $(204)m FY22: $(120)m $3,733/oz FY22: $1,349/oz Gold production 39koz 42koz (cid:31)(cid:30)(cid:29)(cid:28) (cid:31)(cid:30)(cid:29)(cid:29) Copper produced 18kt 21kt (cid:31)(cid:30)(cid:29)(cid:28) (cid:31)(cid:30)(cid:29)(cid:29) Site process Mining Open pit mining, with block cave potential Processing Crushing, grinding, flotation Output Gold, copper and silver concentrate Reserves & Resources Gold Reserve life (7) Open Pit Underground Gold Proved & Probable Ore Reserves (2,3) Gold M&I Mineral Resources (2,3,8) Copper Probable Ore Reserves (2,3) Copper M&I Mineral Resources (2,3,8) 5 years ~31 years 7.8Moz 12Moz 2.1Mt 3.5Mt Red Chris Red Chris is located in northwest British Columbia, Canada with Ore Reserves of 7.8Moz gold and 2.1Mt copper, and Measured and Indicated Mineral Resources of 12Moz gold and 3.5Mt copper. (1,2) Newcrest has a 70% interest in and operates the Red Chris mine and surrounding tenements in a joint venture with Imperial Metals Corporation (30%). FY23 Performance Red Chris’ lower gold production in FY23 was driven by lower recovery, with the lower copper production driven by lower grade. AISC of $3,733 per ounce was higher than FY22, primarily due to higher site production costs, a lower realised copper price and lower production driving lower gold and copper sales volumes, partially offset by lower sustaining capital. Free cash flow of negative $204 million was lower than FY22, primarily driven by lower earnings (EBITDA) and unfavourable movements in working capital, partially offset by lower capital expenditure. Red Chris Block Cave Newcrest continued development of the Red Chris exploration decline which has now advanced well over three kilometres, with the installation of the first ventilation rise largely complete. The Feasibility Study remains on track for completion in the second half of CY23,(3) as optimisation opportunities continue to be assessed to unlock further value. Newcrest is reviewing various options to offset any inflationary cost pressures on future capital expenditure and operating costs. Exploration Newcrest is undertaking a brownfields exploration program which is focused on searching for higher grade mineralisation relative to this deposit within the Red Chris porphyry corridor. This program has been successful in discovering East Ridge, and an Exploration Target (5) for East Ridge was defined during FY22. Newcrest continued its drilling campaign at Red Chris during FY23 with drilling intersecting a new higher grade zone of mineralisation east of the East Ridge Exploration Target, which has the potential to become the fifth porphyry centre along the Red Chris porphyry corridor. East Ridge is located immediately adjacent to East Zone and outside of Newcrest’s initial Mineral Resource estimate. (1) Ore Reserve and Mineral Resource estimates are as at 30 June 2023 based on the release titled “Annual Mineral Resources and Ore Reserves Statement – as at 30 June 2023” dated 11 August 2023 which is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile. Data is reported to two significant figures to reflect appropriate precision in the estimate and this may cause some apparent discrepancies in totals. (2) For tonnes and grade breakdown by confidence category refer to Table 5 for Mineral Resources on page 27 and Table 11 for Ore Reserves on page 31. Newcrest attributable share is 70%. All data is reported on a 100% asset basis. (3) Subject to market and operating conditions and no unforeseen delays. (4) Subject to market and operating conditions, further drilling and studies, all necessary permits, regulatory requirements and Board approvals. (5) Further information as to the Exploration Target is included in Newcrest’s release titled “Red Chris exploration success expands East Ridge Exploration Target delivering additional mining potential” dated 14 March 2023 which is available at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile. (6) Free cash flow is before interest, tax and intercompany transactions. (7) Reserve life is indicative and calculated as Proved and Probable Gold Reserves (contained metal) as at 30 June 2023 divided by forecast average production rate as per the Life of Province Plan or stated in a Pre-Feasibility Study. Estimated reserve life does not necessarily equate to operating mine life. (8) Gold and Copper M&I Mineral Resources represent Measured and Indicated Mineral Resources. The M&I Mineral Resources are reported inclusive of those Mineral Resources modified to produce the Ore Reserves. 16 Newcrest Annual Report 2023 Operational overview continued High-grade gold mine in Tier 1 jurisdiction British Columbia, Canada Free cash flow (4,5) AISC (5) $115m FY22: $88m $1,157/oz FY22: $1,125/oz Gold production (7) 286koz 114koz (cid:31)(cid:30)(cid:29)(cid:28) (cid:31)(cid:30)(cid:29)(cid:29) Site process Mining Processing Underground Crushing, grinding, gravity concentration, sulphide flotation Output Gold-silver doré and flotation concentrate Reserves & Resources Gold Reserve life (6) Gold Probable Ore Reserves (1,2) Gold Indicated Mineral Resources (1,2,7) 10 years 3.7Moz 8.2Moz Brucejack The Brucejack mine is located in the highly prospective Golden Triangle region of British Columbia, Canada, approximately 140km away from Newcrest’s majority-owned and operated Red Chris mine, with Ore Reserves of 3.7Moz gold, and Indicated Mineral Resources of 8.2Moz gold. (1,2) FY23 Performance The financial and operating performance at Brucejack was impacted in FY23 by the temporary suspension of operations following the tragic fatality in October 2022. All mining and processing activities returned to full capacity in early December 2022, although gold production in the second half of FY23 was lower than expectations driven by lower gold head grade. During the suspension of operations, Newcrest completed an extensive safety review across all activities at Brucejack to identify major hazards and corresponding critical controls, establishing additional control verification mechanisms to monitor those critical controls. These learnings have been shared across Newcrest’s global operations to help prevent fatalities and life-changing injuries going forward. The outcomes presented on this page for FY23 reflect the 12 months to 30 June 2023, with FY22 reflecting the period from 25 February 2022 (being the acquisition date) to 30 June 2022. Transformation Program Newcrest continued to successfully proceed with the three-phase transformation program at Brucejack, with a range of initiatives well progressed. Brucejack remains on track to deliver the expected synergy benefits of C$20–$30 million (US$16–$24 million) per annum, (3) with over 50% of the benefits delivered in FY23. The debottlenecking Pre-Feasibility Study to further investigate the potential to increase process plant capacity by up to 30% (4) is progressing well. The processing plant permit amendment application has been lodged with the regulator. The ore sorting concept study is now complete, with detailed design on a trial installation and procurement of long-lead items well advanced. Exploration The extensive drilling program continued to confirm the potential for resource growth at the Valley of the Kings deposit and surrounding area. Further high-grade results were returned from the 1080 HBx Zone and Golden Marmot during the period, with 1080 HBx Zone partially outside and Golden Marmot entirely outside of Newcrest’s published Brucejack Mineral Resource estimate. (1) Ore Reserve and Mineral Resource estimates are as at 30 June 2023 based on the release titled “Annual Mineral Resources and Ore Reserves Statement – as at 30 June 2023” dated 11 August 2023 which is available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile. Data is reported to two significant figures to reflect appropriate precision in the estimate and this may cause some apparent discrepancies in totals. (2) For tonnes and grade breakdown by confidence category refer to Table 5 for Mineral Resources on page 27 and Table 11 for Ore Reserves on page 31. (3) Indicative only and should not be construed as guidance. Subject to market and operating conditions, all necessary approvals, regulatory requirements, further studies, and no unforeseen delays. Subject to further studies, all necessary approvals, permits, internal and regulatory requirements and further works and no unforeseen delays. (4) Free cash flow is before interest, tax and intercompany transactions. (5) Newcrest completed the Pretium transaction on 9 March 2022. In accordance with accounting standards, the acquisition date has been determined to be 25 February 2022. All Brucejack figures relating to FY22 represent the period since Newcrest’s acquisition. (6) Reserve life is indicative and calculated as Probable Gold Reserves (contained metal) as at 30 June 2023 divided by forecast average production rate as per the reserves plan. Estimated reserve life does not necessarily equate to operating mine life. (7) Gold and Copper Indicated Mineral Resources. The Mineral Resources are reported inclusive of those Mineral Resources modified to produce the Ore Reserves. Innovation and Creativity 17 Newcrest has a pipeline of growth projects and strong technical and innovative capability. Newcrest has a proven track record of creating value and delivering superior returns through implementation of deep mining and selective processing capabilities. These skills become increasingly valuable as projects become larger scale and lower grade. Our technical capabilities are key to Newcrest maximising shareholder value across the existing asset portfolio, as well as with respect to new investment opportunities. Strong exploration capabilities also focus on growing Mineral Resource and Ore Reserves to extend Newcrest’s long reserve life advantage. Newcrest’s key competitive capabilities Next Gen Mining Robotics and Electrification Deep cave mining Battery electric trucks Sites deployed: Cadia, Red Chris Lihir Cadia Brucejack High-lift deep caving – Cadia’s PC1-2 optimised block cave mine design utilises several innovations to enhance operator safety and increase productivity Transitioning Cadia knowledge to other deep deposits and projects including Red Chris East Ridge – Selective steep pits – Engineered steep wall and seepage barrier options to deliver earlier higher-grade ore from 14A in FY24– FY26 and allow access to sustained higher-grade Kapit scheduled from FY26 (1) Automation – Fully developed autonomous production system including support functions that is capable of 24/7 production across a panel cave – Reduces hazard exposure rates of manual operators on the production level with application to other sites Electrification – Eight underground truck loading fleet now fully battery electric and expected to deliver productivity and environmental improvements (1,2) Coarse Flotation and Sustainable Tailings Selective Processing Coarse flotation Ore sorting Sites deployed: Cadia, Red Chris Brucejack Lihir Coarse flotation and tailings Cadia Expansion Project utilises coarse particles flotation to treat all flotation tailings from concentrator 1 (approximately 75%) resulting in: – – Reduced power demand and fine grinding – Downstream impacts including tailings and water consumption – Extended application of coarse ore studies in future projects with tailings Increased recovery of gold and copper currently lost to tailings reduction application including Cadia and Red Chris. (1) Ore sorting – Ore sorting trials at Brucejack Selective oxidation – Selective oxidation at Lihir commenced following impressive positive preliminary results. Concept study now complete and detailed design on a trial installation and procurement of long-lead items well advanced. currently being used allowing for higher sulphur ore feeds enabling bottleneck rates, lower energy transition in kWh/t and lower unit costs. (1) Subject to market conditions and no unforeseen delays (2) The new fleet is expected to improve truck productivity, lower unit costs and abate CO2 emissions when compared to performance of the previous diesel fleet. 18 The Board Peter Tomsett Independent Chairman Philip Aiken AM Independent Non-Executive Director Roger Higgins Independent Non-Executive Director Vickki McFadden Independent Non-Executive Director BEng (Mining) (Hons), MSc (Mineral Production Management), GAICD, 65 Mr Tomsett was appointed as Chairman of the Board effective from the end of the Annual General Meeting on 10 November 2021, after being appointed as a Non-Executive Director of the Board in September 2018. Mr Tomsett is also the Chairman of the Nominations Committee. Skills, experience and expertise Mr Tomsett has extensive and deep gold mining and international business experience as both an executive and non-executive director of a broad range of mining companies listed on the Australian, Toronto, New York and London stock exchanges. His last executive role was President and Chief Executive Officer of global gold and copper company, Placer Dome Inc, where he worked for 20 years in project, operational and executive roles. Mr Tomsett has been Chairman and Managing Director of Kidston Gold Mines Ltd and Non-Executive Chairman of Equinox Minerals Ltd and Silver Standard Resources Inc. He has also held numerous other Board positions in mining, energy and construction companies and associations including as a Director of OZ Minerals Ltd, Acacia Mining plc, Talisman Energy Inc, North American Energy Partners Inc, Africo Resources Ltd, World Gold Council, Minerals Council of Australia, and International Council for Mining and Metals. BEng (Chemical), Advanced Management Program (HBS), 74 Mr Aiken was appointed to the Board as a Non-Executive Director in April 2013. He is Chairman of the Human Resources and Remuneration Committee and a member of the Safety and Sustainability Committee and the Nominations Committee. Skills, experience and expertise Mr Aiken has extensive Australian and international business experience, principally in the engineering and resources sectors. He was Group President Energy BHP Billiton, President BHP Petroleum, Managing Director BOC/CIG, Chief Executive of BTR Nylex and Senior Advisor Macquarie Bank (Europe). Current Listed Directorships – Director of New Energy One Acquisition Corporation Plc (from 2022) Other Current Directorships/ Appointments – Director of BIAC (Business@ OECD) (from 2023) – Business Ambassador, Business Events Sydney Pty Ltd (from 2016) BE (Civil Engineering) (Hons), MSc (Hydraulics), PhD (Water Resources), Stanford Executive Program, FIEAust, FAusIMM, 72 Dr Higgins was appointed to the Board as a Non-Executive Director in October 2015. He is Chairman of the Safety and Sustainability Committee and a member of the Human Resources and Remuneration Committee. Skills, experience and expertise Dr Higgins brings extensive experience leading mining companies and operations, and has deep working knowledge of Papua New Guinea as a former Chairman, Non-Executive Director and Managing Director of Ok Tedi Mining Limited in Papua New Guinea. In his most recent executive position, Dr Higgins served as Senior Vice President, Copper at Canadian metals and mining company, Teck Resources Limited. Prior to this role he was Vice President and Chief Operating Officer with BHP Billiton Base Metals Customer Sector Group working in Australia and also held senior positions with BHP Billiton in Chile. He also holds the position of Adjunct Professor with the Sustainable Minerals Institute, University of Queensland. Former Listed Directorships (last 3 years) – Chairman of Balfour Beatty plc (2015–2021) Current Listed Directorships – Director of Hillgrove Resources Limited (from 2023) – Director of Worley Limited – Chairman of Aveva Group plc (from 2019) BComm, LLB, 64 Ms McFadden was appointed to the Board as a Non-Executive Director in October 2016. She is Chairman of the Audit and Risk Committee and a member of the Human Resources and Remuneration Committee and the Nominations Committee. Skills, experience and expertise Ms McFadden is an experienced company director and has broad experience in several roles as member or chairman of audit and risk committees. Ms McFadden has an extensive background in finance and law. She is a former investment banker with considerable expertise in corporate finance transactions, having served as Managing Director of Investment Banking at Merrill Lynch in Australia and as a Director of Centaurus Corporate Finance and a former President of the Australian Takeovers Panel. Current Directorships – Chairman of The GPT Group (from 2018) Other Current Directorships/ Appointments – Director of Allianz Australia Limited (from 2020) Former Listed Directorships (last 3 years) – Director of Tabcorp Holdings Limited (2017–2020) (2012–2023) Other Current Directorships/ Appointments – Chair of the Advisory Board, PAX Republic (from 2019) – Member of the Energy and Resources Advisory Board, University of Adelaide (from 2019) – Member of the Sustainable Minerals Institute Advisory Board, University of Queensland (from 2016) Former Listed Directorships (last 3 years) – Chairman of Minotaur Exploration Limited (Director 2016–2022, Chairman 2017–2022) – Chairman of Demetallica Limited (2022) Newcrest Annual Report 2023 19 Sally-Anne Layman Independent Non-Executive Director Jane McAloon AM Independent Non-Executive Director Philip Bainbridge Independent Non-Executive Director BEng (Mining) (Hons), BComm, CPA Australia, MAICD, 49 BEc (Hons), LLB, GDip CorpGov, FAICD, 59 BSc (Mechanical Engineering) (Hons), MAICD, 64 Mr Bainbridge was appointed to the Board as a Non-Executive Director in April 2022. He is a member of the Safety and Sustainability Committee. Skills, experience and expertise Mr Bainbridge has extensive senior executive experience, primarily in the oil and gas sector across exploration, development and production. He has worked in a variety of jurisdictions, including Papua New Guinea. His most recent executive role was as Executive General Manager LNG for Oil Search Limited. Prior to that, he had senior executive roles at Pacific National and BP Group. Current Listed Directorships – Director of Sims Limited (from 2022) Other Current Directorships/ Appointments – Chairman of Global Carbon Capture and Storage Institute (from 2019) – Chairman of Sino Gas and Energy (from 2014) Former Listed Directorships (last 3 years) – Director of Beach Energy Limited (2016–2023) Ms Layman was appointed to the Board as a Non-Executive Director in October 2020. She is a member of the Audit and Risk Committee and the Safety and Sustainability Committee. Skills, experience and expertise Ms Layman has over 26 years of international experience in resources and corporate finance. She spent 14 years with the Macquarie Group in a range of senior positions, including as Division Director and Joint Head of the Perth office of the Metals, Mining & Agriculture Division. Prior to that, Ms Layman held various positions with resource companies including Mount Isa Mines, Great Central Mines and Normandy Yandal. Current Listed Directorships – Director of Beach Energy Limited (from 2019) – Director of Pilbara Minerals Limited (from 2018) – Director of Imdex Limited (from 2017) Other Current Directorships/ Appointments – Director of RL Advisory Pty Limited (from 2017) Former Listed Directorships (last 3 years) – Director of Perseus Mining Limited (2017–2020) Ms McAloon was appointed to the Board as a Non-Executive Director in July 2021. She is a member of the Human Resources and Remuneration Committee and the Audit and Risk Committee. Skills, experience and expertise Ms McAloon has extensive experience in the resources, energy, infrastructure and utilities industries. She spent nine years as Group Company Secretary at BHP, including two years on the Group Management Committee as President Governance. Prior to that, Ms McAloon was Group Manager, Corporate & External Services & Company Secretary at AGL, had leadership roles with the NSW Government and worked in a private legal practice. Current Listed Directorships – Director of Bluescope Steel Limited (from 2022) Other Current Directorships/ Appointments – Chairman and Director of Energy Australia (Director from 2012, Chairman from 2022) – Director of Allianz Australia Limited (from 2020) – Independent Member of the Advisory Board for Allens Linklaters (from 2019) – Chairman of the Monash University Foundation (from 2019) Former Listed Directorships (last 3 years) – Director of Viva Energy Group Limited (2018–2021) – Director of United Malt Group Limited (2020–2023) – Director of Home Consortium (2019–2022) 20 Corporate Governance The Board believes that adherence by Newcrest and its people to the highest standards of corporate governance is critical in order to achieve its vision. Accordingly, Newcrest has a detailed governance framework, which is regularly reviewed and adapted to developments in market practice and regulation. As at the date of lodgement of this Report, Newcrest’s governance framework complies with the Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council. Further information in relation to Newcrest’s governance framework is provided in the Corporate Governance Statement, which was lodged with ASX on the date of lodgement of this Annual Report and is available in the corporate governance section of the Newcrest website at www.newcrest.com. The corporate governance section of the Newcrest website also provides further information in relation to Newcrest’s governance framework, including Board and Board Committee Charters and key policies. Newcrest Annual Report 2023 Mineral Resources and Ore Reserves 21 Newcrest released its Annual Mineral Resource and Ore Reserve Statement for the period ending 30 June 2023 on 11 August 2023 (the Statement). It can be found on Newcrest’s website at www.newcrest.com. This section of the Annual Report includes relevant information set out in that Statement. For the purposes of the Statement, Newcrest completed a detailed review of all production sources. The review considered mining depletion, drilling results, studies, audits, macroeconomic parameters and cost assumptions, as well as mining and metallurgy performance to inform cut‑off values and physical mining parameters since the previous estimate for the period ending 30 June 2022, published on 19 August 2022. Group Ore Reserves As at 30 June 2023, Group Ore Reserves (1) were estimated to contain approximately 64 million ounces of gold, 11 million tonnes of copper, 42 million ounces of silver and 0.096 million tonnes of molybdenum. This represents increases, predominantly as a result of the inclusion of the initial Newcrest Brucejack Ore Reserves, of approximately 3 million ounces of gold (~5%) and 13 million ounces of silver (~46%) after mining depletion. Copper Ore Reserves decreased by approximately 0.2 million tonnes (~2%) and molybdenum decreased by 0.0036 million tonnes (~4%) predominantly due to depletion compared with the estimate as at 30 June 2022. The Group Ore Reserve estimates as at 30 June 2023 are set out in Tables 11 and 12 on a 100 per cent basis. Tonnes are reported as dry metric tonnes. All Group Ore Reserves are classified as Probable Reserves except for 57 million tonnes of Lihir Stockpiles that are Proved Reserves. All tabulated tonnes, grade and metal information has been rounded to two significant figures to reflect appropriate precision in the estimate, and this may cause some apparent discrepancies in totals. Feasibility Studies are progressing for Red Chris Block Cave and Havieron. Outcomes of these studies will inform future Ore Reserves updates. The Group Ore Reserves as at 30 June 2023 includes the following changes as compared to 30 June 2022: – Inclusion of the initial Newcrest Ore Reserves for Brucejack. – Inclusion of the Telfer Stage 8 West Dome Open Pit Ore Reserves. – Estimated mining depletion of approximately 2.4 million ounces of gold, 0.2 million tonnes of copper, 0.9 million ounces of silver and negligible molybdenum. Group Mineral Resources As at 30 June 2023, Group Measured and Indicated Mineral Resources (2) were estimated to contain approximately 130 million ounces of gold, 25 million tonnes of copper, 120 million ounces of silver and 0.17 million tonnes of molybdenum. This represents an increase of approximately 5.3 million ounces of gold (~4%) and 20 million ounces of silver (~20%) after mining depletion compared to the estimate as at 30 June 2022, predominantly due to the inclusion of the initial Newcrest Brucejack Mineral Resources estimate. The minimal decrease in copper and molybdenum metal tonnes is due to mining depletions. Red Chris East Ridge studies are in progress to inform a future Mineral Resources update. The Group Measured and Indicated Mineral Resources and Inferred Mineral Resources as at 30 June 2023 are set out in Tables 5 to 10 on a 100 per cent basis. The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources modified to produce the Ore Reserves. Tonnes are reported as dry metric tonnes. All tabulated tonnes, grade and metal have been rounded to two significant figures to reflect appropriate precision in the estimates. This may cause some apparent discrepancies in totals. The Group Measured and Indicated Mineral Resources as at 30 June 2023 includes the following changes as compared to 30 June 2022: – Inclusion of the initial Newcrest Mineral Resources for Brucejack. – Minor adjustments at Telfer due to changes in Mineral Resources shell design as a result of mining and increased cost assumptions. – Reduction in O’Callaghans polymetallic tonnes due to an increase in Net Smelter Return (NSR) cut‑off as an outcome of an internal Scoping Study. – Estimated mining depletion of approximately 2.5 million ounces of gold, 0.2 million tonnes of copper, 0.9 million ounces of silver and negligible molybdenum. As at 30 June 2023, Group Inferred Mineral Resources (3) were estimated to contain approximately 25 million ounces of gold, 4.8 million tonnes of copper, 22 million ounces of silver and 0.012 million tonnes of molybdenum. This represents an increase of 4 million ounces of both gold (~20%) and silver (~23%) with no appreciable change for copper or molybdenum after mining depletion compared with the estimate as at 30 June 2022. The Group Inferred Mineral Resources as at 30 June 2023 include the following changes as compared to 30 June 2022: – Inclusion of the initial Newcrest Mineral Resources for Brucejack. – Minor adjustments at Telfer due to updated Mineral Resources estimates informed by remodelling, interpretation and classification based on additional drilling. – Reduction in O’Callaghans polymetallic tonnes due to an increase in NSR cut‑off as an outcome of an internal Scoping Study. (1) 100 per cent basis. Note 31 December 2021 and prior Group Ore Reserves Statements were reported on an attributable share basis. Refer to Tables 11 and 12 in this section of the Annual Report for Ore Reserves detailed tonnage, grade and metal content categorised by confidence classification. (2) 100 per cent basis. Note 31 December 2021 and prior Group Measured and Indicated Mineral Resources Statements were reported on an attributable share basis. Refer to Tables 5, 7 and 9 in this section of the Annual Report for Measured and Indicated Mineral Resources detailed tonnage, grade and metal content categorised by confidence classification. (3) 100 per cent basis. Note 31 December 2021 and prior Group Inferred Mineral Resources Statements were reported on an attributable share basis. Refer to Tables 6, 8 and 10 in this section of the Annual Report for Inferred Mineral Resources detailed tonnage, grade and metal content. 22 Mineral Resources and Ore Reserves continued Governance Competent and Qualified Persons Newcrest has a policy for the Public Reporting of Exploration Results, Mineral Resources and Ore Reserves. This policy provides a clear framework for how Newcrest manages all public reporting of Exploration Results, Mineral Resources and Ore Reserves, ensuring compliance with the JORC Code and National Instrument 43‑101 – Standards of Disclosure for Mineral Projects (NI 43‑101). This policy applies to all regulatory reporting, public presentations and other publicly released company information at both local (site) and corporate levels. Newcrest has in place a Resource and Reserve Steering Committee (RRSC). The role of the committee is to ensure the proper functioning of Newcrest’s Resource and Reserve development activity and reporting. The Committee’s control and assurance activities respond to a four‑level compliance process: 1. Provision of standards and guidelines, and approvals consequent to these; 2. Resources and Reserves reporting process, based on well founded assumptions and compliant with external standards (JORC Code, ASX Listing Rules and NI 43‑101); 3. External review of process conformance and compliance; 4. Internal assessment of processes around all input assumptions; and 5. Annual reconciliation performance metrics to validate Mineral Resources and Ore Reserves estimates for operating mines. Updates to the Mineral Resource and Ore Reserve estimates at 30 June 2023 were completed in accordance with the RRSC governance and review process. This included reporting in compliance with the JORC Code, training and endorsement of suitably qualified Competent Persons, independent external review of Mineral Resources and Ore Reserves every three years (unless otherwise agreed by the RRSC) or where there is a new estimate or material change and endorsement of the Annual Mineral Resources and Ore Reserves Statement by the RRSC prior to release to the market. The information in this section of the Annual Report that relates to Group Mineral Resources, Ore Reserves, and associated scientific and technical information, is based on and fairly represents information compiled by Ms J Terry. Ms Terry is Newcrest’s Head of Mineral Resource Management and a full‑time employee of Newcrest Mining Limited. She participates in Newcrest’s executive equity long term incentive plan, details of which are included in Newcrest’s 2023 Remuneration Report. She is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM). Ms Terry has sufficient experience which is relevant to the styles of mineralisation and types of deposits under consideration and to the activity which she is undertaking to qualify as a Competent Person as defined in the JORC Code and as a Qualified Person under NI 43‑101. Ms Terry has reviewed and approves the disclosure of scientific and technical information contained in this section of the Annual Report and consents to the inclusion in this section of the Annual Report of the matters based on her information in the form and context in which it appears. The information in this section of the Annual Report that relates to specific Mineral Resources, Ore Reserves, and associated scientific and technical information, is based on and fairly represents information and supporting documentation compiled by the Competent Persons (as defined in the JORC Code) and the Qualified Persons (as defined in NI 43‑101) named in Table 1. All Competent and Qualified Persons have, at the time of reporting, sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity they are undertaking to qualify as a Competent and/ or Qualified Person. Each Competent Person and Qualified Person (QP) listed is, unless otherwise noted, a full‑time employee of Newcrest Mining Limited, or its relevant subsidiaries and may be entitled to participate in Newcrest’s long term incentive plan, details of which are included in Newcrest’s 2023 Remuneration Report. Some hold Newcrest shares and declare that they have no issues that could be perceived by investors as a material conflict of interest in preparing the reported information. All Competent Persons are Members or Fellows of the AusIMM or Members of the AIG or a Recognised Professional Organisation. All Qualified Persons are Fellows of the AusIMM or Members of the AIG or a Recognised Professional Organisation. Each Competent and Qualified Person consents to the inclusion in this section of the Annual Report of the matters based on their information in the form and context in which it appears. Newcrest Annual Report 2023 23 Accountability Competent and Qualified Person Professional Membership Mineral Resources Mark Mori MAIG Ore Reserves Ore Reserves Geoff Newcombe Geoff Newcombe Mineral Resources Peter Morgan Ore Reserves Ore Reserves Brett Swanson Brad Cook (CP) and Mark Kaesehagen (QP) Ore Reserve Pasqualino Manca Ore Reserves Ore Reserves Brett Swanson Michael Sykes Mineral Resources Lauren Elliott FAusIMM FAusIMM FAusIMM MMSA (QP) MAusIMM FAusIMM FAusIMM FAusIMM MMSA (QP) FAusIMM MAIG Ore Reserves Christopher Chiang FAusIMM Mineral Resources Rob Stewart (CP) and Barry McDonough (QP) FAusIMM EGBC (PGeo) Ore Reserves Mark Kaesehagen Mineral Resources David Finn Ore Reserves Pasqualino Manca Mineral Resources Greg Job (1) Mineral Resources Vik Singh FAusIMM MAIG FAusIMM FAusIMM FAusIMM Table 1 Competent and Qualified Persons Property Deposit Cadia Telfer Cadia East Underground, Ridgeway Underground, Cadia Extended Underground, Big Cadia and Cadia Hill Stockpiles Cadia East Underground Ridgeway Underground Telfer Open Pit Stockpiles, West Dome Open Pit, Telfer Underground, Havieron, Satellites Deposits, Camp Dome and O’Callaghans Telfer Open Pit Stockpiles, and West Dome Open Pit Telfer Underground Havieron Open Pit and Open Pit Stockpiles Underground Lihir Open Pit and Stockpiles Brucejack Underground WGJV Golpu Wafi and Nambonga Namosi JV Waisoi and Wainaulo (1) Employed by Harmony Gold Mining Company Limited. Red Chris Open Pit, Open Pit Stockpiles and Underground Mineral Resources Rob Stewart Mineral Resources and Ore Reserves Assumptions Mining, metallurgical, and long‑term cost assumptions were developed with reference to performance data and studies. The revised assumptions include changes in performance consistent with changing activity levels at each site over the life of the operation and the latest study for each deposit. Long‑term and Short‑term metal prices and foreign exchange assumptions for Mineral Resources and Ore Reserves are presented in Table 2. These prices and most assumptions remain unchanged from those used in the 30 June 2022 reporting period except CAD:USD exchange rate which has been adjusted from 0.8 to 0.77. Where appropriate, Mineral Resources are also spatially constrained within notional mining volumes based on metal prices of US$1,400/oz for gold, US$4.00/lb for copper and US$30/oz silver and AUD:USD exchange rate of 0.80. This approach is adopted to eliminate mineralisation that does not have reasonable prospects for eventual economic extraction from Mineral Resource estimates. Mineral Resources and Ore Reserves cut‑off criteria are described in Table 3. Ore Reserves metallurgical recovery assumptions are described in Table 4. A discussion of the known legal, political, environmental, or other risks that could materially affect the potential development of the Ore Reserves and Mineral Resources for each of Newcrest’s material properties (Cadia, Lihir, Wafi‑Golpu and Red Chris) can be found in the Technical Report for each project (referred to below). 24 Mineral Resources and Ore Reserves continued Table 2 Metal Price Assumptions Mineral Resources Estimates Gold – US$/oz Copper – US$/lb Silver – US$/oz Molybdenum – US$/Ib Ore Reserves Estimates Gold – US$/oz Copper – US$/lb Silver – US$/oz Molybdenum – US$/Ib Exchange Rate AUD : USD USD : PGK CAD : USD (1) Operations with less than 5 years of reserve life. Long Life Assets 1,400.00 3.40 21.00 10.00 1,300.00 3.00 18.00 8.00 0.75 3.50 0.77 Short Life Assets(1) (Telfer and Red Chris Open Pit) 1,625.00 3.60 21.00 1,600.00 3.50 18.00 0.75 3.50 0.77 Some legacy Mineral Resources and Ore Reserves estimates have applied older, more conservative price and cost assumptions than stated in Table 2. These have been tested for economic viability. Table 3 Cut-Off Assumptions Deposit Mineral Resources Cut-Off Criteria Ore Reserves Cut-Off Criteria Cadia East Underground Ridgeway Underground Cadia Extended Underground Cadia Hill Stockpiles Big Cadia Telfer West Dome Open Pit Telfer Stockpiles Telfer Underground Havieron Satellites Deposits Camp Dome O’Callaghans NSR of approx. A$18.00/t milled. NSR of approx. A$22.70/t milled. NSR of A$12.50/t milled. NSR of A$18.71/t milled. NSR of A$12.81/t milled. NSR of A$12.81/t milled. NSR of A$22.50/t milled. NSR of A$22.50/t milled. NSR of A$22.40/t milled. – – – NSR of A$22.50/t milled. NSR of A$22.50/t milled. Variable NSR of A$46.55/t – A$147.96/t milled. Variable NSR of A$46.55/t – A$147.96/t milled. Variable NSR of A$50.00/t – A$100.00/t milled. NSR of A$130.00/t milled. 0.20g/t gold in oxide material and 0.56g/t gold for transitional and fresh material. 0.13% copper based on dump leach processing. NSR of A$80.0/t milled applied to visible high grade mineralised skarn that has a minimum 5m height. – – – Red Chris Open Pit and Stockpiles NSR of C$17.70/t milled. NSR of C$20.33/t milled. Red Chris Underground Brucejack Underground NSR of C$21.00/t milled. NSR of C$246.00/t milled Lihir Open Pit and Stockpiles 1.00g/t gold. Variable NSR of C$22.00/t – 22.80/t milled. NSR of C$246.00/t milled 1.00g/t gold. WGJV – Golpu WGJV – Wafi WGJV – Nambonga Namosi JV Waisoi Namosi JV Wainaulo NSR of US$22.29/t milled. NSR of US$19.15/t – US$60.00/t milled (block cave). 0.40g/t gold for non‑refractory gold and 0.90g/t gold for refractory gold. 0.50g/t gold (potential block cave shell). NSR of US$11.00/t milled. NSR of US$23.20/t milled within a block cave shell. – – – – Newcrest Annual Report 2023 Table 4 Ore Reserves Metallurgical Recovery Assumptions Deposit Cadia East Underground Ridgeway Underground West Dome Open Pit and Telfer Stockpiles Telfer Underground Havieron Red Chris Open Pit and Stockpiles Red Chris Underground Brucejack Lihir Open Pit and Stockpiles WGJV – Golpu 25 Recovery Gold average – 81% Copper average – 86% Silver average – 67% Molybdenum average – 72% Gold average – 81% Copper average – 87% Silver average – 63% Gold average – 77% Copper average – 52% Gold range 81 – 96% Copper range 82 – 97% Gold average – 88% Copper average – 84% Gold average – 54% Copper average – 80% Gold range 60 – 75% Copper range 81 – 86% Gold average – 96% Silver average – 85% Gold range 73 – 85% Gold average – 68% Copper average – 95% JORC Code and ASX Listing Rules Requirements This section of the Annual Report setting out Mineral Resources and Ore Reserves has been prepared in accordance with the JORC Code. As indicated in the footnotes below, Newcrest’s attributable interest in Mineral Resources and Ore Reserves reported for the Wafi‑Golpu Joint Venture (WGJV) is 50%, for the Havieron Joint Venture is 70%, for the Red Chris Joint Venture is 70% and for the Namosi Joint Venture is 73.03%. 26 Mineral Resources and Ore Reserves continued JORC and CIM Comparison As a result of Newcrest’s listing on the Toronto Stock Exchange, Newcrest is subject to certain Canadian disclosure requirements and standards, including the requirements of the CIM Definition Standards and NI 43‑101. Mineral Resources and Ore Reserves are classified using the JORC Code. The confidence categories assigned under the JORC Code were reconciled to the confidence categories in the CIM Definition Standards. As the confidence category definitions are the same, no modifications to the confidence categories were required. There are differences in terminology from JORC compared to the CIM Definition Standards. Terminology differences are the term “Ore Reserves” in the JORC Code is equivalent to “Mineral Reserves” using the CIM Definition Standards, and the term “Proved Ore Reserves” in the JORC Code is equivalent to “Proven Mineral Reserves” using the CIM Definition Standards. There are no other material differences between JORC and the CIM Definition Standards. Note that NI 43‑101 reporting requirements do not permit Inferred Mineral Resources to be added to other Mineral Resource categories. Therefore, Measured and Indicated Mineral Resources have been reported separately from Inferred Mineral Resources. Mineral Resources that are not Ore Reserves do not have demonstrated economic viability. Due to lower certainty, the inclusion of Mineral Resources should not be regarded as a representation by Newcrest that such amounts can necessarily be totally economically exploited, and investors are cautioned not to place undue reliance upon such figures. Therefore, no assurances can be given that the estimates of Mineral Resources presented in this section of the Annual Report will be recovered at the tonnages and grades presented, or at all. NI 43-101 Technical Reports In connection with the TSX Listing, Technical Reports have been prepared in accordance with NI 43‑101 for the following operations and projects, which are Newcrest’s material mineral properties for the purposes of Canadian securities laws: – Cadia Operations, New South Wales, Australia, NI 43‑101 Technical Report, Report effective date 30 June 2020. – Lihir Operations, Aniolam Island, Papua New Guinea, NI 43‑101 Technical Report, Report effective date 30 June 2020. – Wafi‑Golpu Project, Morobe Province, Papua New Guinea, NI 43‑101 Technical Report, Report effective date 30 June 2020. – Red Chris Operations British Columbia, Canada NI 43‑101 Technical Report, Report effective date 30 June 2021. These reports (collectively, the Technical Reports) can be found on Newcrest’s website at www.newcrest.com and on Newcrest’s profile on the System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com. Newcrest Annual Report 2023 27 Table 5 30 June 2023 Gold and Copper Measured and Indicated Mineral Resources (1) Measured Resources Indicated Resources Jun 2023 Measured and Indicated Resources Jun 2022 Measured and Indicated Resources Tonnes Grade Tonnes Grade Tonnes Grade Contained Metal Tonnes Grade Contained Metal Mt (Dry) Au (g/t) Cu (%) Mt (Dry) Au (g/t) Cu (%) Mt (Dry) Au (g/t) Cu (%) Au (MOz) Cu (Mt) Mt (Dry) Au (g/t) Cu (%) Au (MOz) Cu (Mt) Operational Provinces Cadia Cadia East Underground Ridgeway Underground Cadia Extended Underground – – – – – – – – – 2,600 0.35 0.26 2,600 0.35 0.26 29 6.7 2,600 0.35 0.26 110 0.57 0.30 110 0.57 0.30 1.9 0.31 110 0.57 0.30 30 1.9 6.8 0.31 80 0.35 0.19 80 0.35 0.19 0.89 0.15 80 0.35 0.19 0.89 0.15 Cadia Hill Stockpiles 32 0.30 0.13 – – – 32 0.30 0.13 0.31 0.041 32 0.30 0.13 0.31 0.041 3.3 0.41 0.14 6.9 0.37 0.054 10 0.38 0.081 0.13 0.0083 21 0.37 0.068 0.26 0.014 0.75 0.053 0.75 0.053 0.93 0.020 0.65 0.064 39 29 28 0.44 63 39 29 28 0.44 0.51 – 0.44 0.30 63 1.9 3.2 2.9 – 1.9 3.2 2.9 – 0.44 0.51 1.8 2.9 0.13 0.14 76 35 28 – 0.040 – 0.44 0.30 – 0.19 69 – 0.040 0.29 – 0.20 1.6 2.0 2.9 0.049 0.16 0.14 – 0.46 0.51 1.8 3.2 2.9 – 8.6 0.17 0.25 – – – 220 0.31 0.37 220 8.6 0.31 0.17 0.37 0.25 2.2 0.82 0.048 0.021 240 9.5 0.30 0.15 0.36 0.24 2.4 0.88 0.047 0.023 670 0.46 0.40 670 0.46 0.40 10 2.7 670 0.46 0.40 10 2.7 490 21 2.3 1.4 19 13 – – – 490 78 2.3 1.7 19 13 690 110 0.71 1.7 1.1 – 690 110 0.71 1.7 – – – 1.1 – 1,800 0.11 0.35 1,800 Au Cu 7,000 6,400 0.11 0.56 0.35 – – 0.39 36 4.4 8.2 16 5.7 6.4 130 – – – – 510 72 2.3 1.8 – – 7.5 – 690 110 0.71 1.7 – – – 1.1 – 6.3 1,800 – 7,100 0.11 0.53 0.35 – 25 6,500 – 0.39 37 4.2 – 16 5.7 6.4 120 – – – – 7.5 – 6.3 – 25 (1) All data reported here is on a 100% asset basis, with Newcrest’s attributable interest shown against each asset within footnotes. (2) Some partially costed stockpiles have been removed due to revised cost assumptions. (3) Reduction due to increased cost assumptions and revised pit designs. (4) Newcrest attributable share 70%. (5) Reduction due to increase in NSR cut‑off to align with internal Scoping Study outcomes. (6) Newcrest attributable share 70%. (7) Initial Mineral Resources estimate for Newcrest Mining Limited. (8) In March 2021, the then Governor of the Morobe Province commenced a judicial review application against the State of PNG, challenging the December 2020 grant of the environment permit for the Wafi‑Golpu Project. In December 2022 a number of villagers from the Huon Gulf coastal area commenced a separate judicial review application against the State of PNG also challenging the grant of the project’s Environment Permit. Both reviews are still to be heard and determined. Newcrest attributable share 50%. (9) Newcrest attributable share 73.03%. (10) Mineralisation is not coincident therefore total tonnages differ for each metal reported. Telfer Telfer Open Pit Stockpiles (2) West Dome Open Pit (3) Telfer Underground Havieron (4) Satellites Deposits O’Callaghans (5) Red Chris Red Chris Open Pit (6) Red Chris Open Pit Stockpiles (6) Red Chris Underground (6) Lihir Lihir Open Pit Lihir Stockpiles Brucejack Brucejack Underground (7) Non-Operational Provinces WGJV Golpu (8) Wafi (8) Namosi JV Waisoi (9) Total Measured and Indicated Mineral Resources(10) – – – – – – – – – – – – – – – – – – – – – 57 – 1.9 – – – – – – – – – – – – – – – 28 Mineral Resources and Ore Reserves continued Table 6 30 June 2023 Gold and Copper Inferred Mineral Resources (1) Jun 2023 Inferred Resources Jun 2022 Inferred Resources Tonnes Grade Contained Metal Tonnes Grade Contained Metal Mt (Dry) Au (g/t) Cu (%) Au (MOz) Cu (Mt) Mt (Dry) Au (g/t) Cu (%) Au (MOz) Cu (Mt) Operational Provinces Cadia Cadia East Underground Ridgeway Underground Big Cadia Telfer West Dome Open Pit Telfer Underground (2) Havieron (3) Satellites Deposits Camp Dome O’Callaghans (4) Red Chris Red Chris Open Pit (5) Red Chris Underground (5) Lihir Lihir Open Pit Brucejack Brucejack UG (6) Non-Operational Provinces WGJV Golpu (7) Wafi (7) Nambonga (7) Namosi JV Waisoi (8) Wainaulo (8) Total Inferred Mineral Resources (9) 500 41 11 1.6 14 57 4.4 14 6.5 7.6 180 1.5 1.4 1.1 – – 0.26 0.32 500 41 11 1.5 10 57 4.4 14 9.0 8.5 180 1.5 1.4 1.1 – – 0.25 0.32 0.24 0.38 0.70 0.17 0.40 0.52 3.8 0.50 0.25 0.85 0.17 0.058 0.85 0.044 0.045 0.00072 0.24 0.38 0.70 0.17 0.40 0.52 3.8 0.50 0.25 0.85 0.17 0.058 0.79 0.079 0.038 0.0012 0.70 2.6 0.16 – – 0.056 0.082 – 0.052 0.017 0.065 0.024 1.8 0.54 4.9 4.0 2.8 1.6 1.1 0.40 0.14 – 0.37 0.26 0.31 0.30 – – 0.85 – 0.20 0.27 0.43 – 66 2.3 9.6 13 – – 67 2.3 – – 140 37 48 170 290 1,300 1,500 Au Cu 0.63 1.4 0.69 0.081 – 0.60 1.2 – 0.094 0.45 0.46 – 25 – 1.2 – 4.8 0.63 1.4 0.69 0.081 – 0.50 140 37 48 170 290 1,300 1,500 – 0.32 – 0.32 0.46 0.14 – 0.37 0.24 0.30 0.30 – – 0.85 – 0.20 0.27 0.43 – 0.47 2.6 0.16 – – 0.047 0.082 – 0.052 0.022 0.069 0.026 1.8 0.54 4.9 – 2.8 1.6 1.1 – – 1.2 – 0.094 0.45 0.46 – 21 – 1.2 – 4.8 (1) All data reported here is on a 100% asset basis, with Newcrest’s attributable interest shown against each asset within footnotes. (2) Updated Mineral Resources estimate informed by remodelling, interpretation and classification based on infill and extensional drilling. (3) Newcrest attributable share 70%. (4) Reduction due to increase in NSR cut‑off to align with internal Scoping Study outcomes. (5) Newcrest attributable share 70%. (6) Initial Mineral Resources estimate for Newcrest Mining Limited. (7) In March 2021, the then Governor of the Morobe Province commenced a judicial review application against the State of PNG, challenging the December 2020 grant of the environment permit for the Wafi‑Golpu Project. In December 2022 a number of villagers from the Huon Gulf coastal area commenced a separate judicial review application against the State of PNG also challenging the grant of the project’s Environment Permit. Both reviews are still to be heard and determined. Newcrest attributable share 50%. (8) Newcrest attributable share 73.03%. (9) Mineralisation is not coincident therefore total tonnages differ for each metal reported. Newcrest Annual Report 2023 29 Table 7 30 June 2023 Silver and Molybdenum Measured and Indicated Mineral Resources (1) Measured Resources Indicated Resources Jun 2023 Measured and Indicated Resources Jun 2022 Measured and Indicated Resources Tonnes Grade Tonnes Grade Tonnes Grade Contained Metal Tonnes Grade Contained Metal Mt (Dry) Ag (g/t) Mo (ppm) Mt (Dry) Ag (g/t) Mo (ppm) Mt (Dry) Ag (g/t) Mo (ppm) Ag (MOz) Mo (Mt) Mt (Dry) Ag (g/t) Mo (ppm) Ag (MOz) Mo (Mt) 2,600 0.65 65 2,600 0.65 65 54 0.17 2,600 0.65 66 55 0.17 Operational Provinces Cadia Cadia East Underground Ridgeway Underground Brucejack Brucejack Underground (2) Non-Operational Provinces WGJV (3) Golpu Wafi – – – – – – 110 0.74 – – – 19 34 – – – – – – 690 110 1.3 4.4 Total Measured and Indicated Mineral Resources (4) Ag Mo 3,500 2,600 – – – – 110 0.74 19 34 690 110 1.3 4.4 1.1 – – – – – – 65 2.5 21 28 15 120 – – – – – – 110 0.74 – – 690 110 1.3 4.4 3,500 0.89 – – – – – 0.17 2,600 – 66 2.5 – 28 15 100 – – – – – – 0.17 (1) All data reported here is on a 100% asset basis, with Newcrest’s attributable interest shown against each asset within footnotes. (2) Initial Mineral Resources estimate for Newcrest Mining Limited. (3) In March 2021, the then Governor of the Morobe Province commenced a judicial review application against the State of PNG, challenging the December 2020 grant of the environment permit for the Wafi‑Golpu Project. In December 2022 a number of villagers from the Huon Gulf coastal area commenced a separate judicial review application against the State of PNG also challenging the grant of the project’s Environment Permit. Both reviews are still to be heard and determined. Newcrest attributable share 50%. (4) Mineralisation is not coincident therefore total tonnages differ for each metal reported. Table 8 30 June 2023 Silver and Molybdenum Inferred Mineral Resources (1) Jun 2023 Inferred Resources Jun 2022 Inferred Resources Tonnes Grade Contained Metal Tonnes Grade Contained Metal Mt (Dry) Ag (g/t) Mo (ppm) Ag (MOz) Mo (Mt) Mt (Dry) Ag (g/t) Mo (ppm) Ag (MOz) Mo (Mt) Operational Provinces Cadia Cadia East Underground Ridgeway Underground Brucejack Brucejack Underground (2) Non-Operational Provinces WGJV (3) Golpu Wafi Total Inferred Mineral Resources (4) 500 41 0.47 0.43 25 – 9.6 13 7.5 0.012 0.56 4.1 4.6 5.0 22 – – – – – – – – – 500 41 0.47 0.43 – – 140 37 710 1.1 4.2 0.77 – 25 – – – – – 25 7.5 0.012 0.56 – 4.6 5.0 18 – – – – – – 0.012 – 25 – 0.012 500 140 37 720 500 Ag Mo 1.1 4.2 0.94 (1) All data reported here is on a 100% asset basis, with Newcrest’s attributable interest shown against each asset within footnotes. (2) Initial Mineral Resources estimate for Newcrest Mining Limited. (3) In March 2021, the then Governor of the Morobe Province commenced a judicial review application against the State of PNG, challenging the December 2020 grant of the environment permit for the Wafi‑Golpu Project. In December 2022 a number of villagers from the Huon Gulf coastal area commenced a separate judicial review application against the State of PNG also challenging the grant of the project’s Environment Permit. Both reviews are still to be heard and determined. Newcrest attributable share 50%. (4) Mineralisation is not coincident therefore total tonnages differ for each metal reported. 30 Mineral Resources and Ore Reserves continued Table 9 30 June 2023 Polymetallic Measured and Indicated Mineral Resources Jun 2023 Polymetallic Measured and Indicated Mineral Resources Jun 2022 Polymetallic Measured and Indicated Resources Tonnes Grade Contained Metal Tonnes Grade Contained Metal Mt (Dry) (1) WO3 (%) Zn (%) Pb (%) WO3 (Mt) Zn (Mt) Pb (Mt) Mt (Dry) WO3 (%) Zn (%) Pb (%) WO3 (Mt) Zn (Mt) Pb (Mt) – 63 63 – 0.36 0.36 – 0.56 0.56 – 0.28 0.28 – 0.23 0.23 – 0.36 0.36 – 0.18 0.18 – 69 69 – 0.34 0.34 – 0.53 0.53 – 0.26 0.26 – 0.24 0.24 – 0.36 0.36 – 0.18 0.18 O’Callaghans Measured Indicated (2) Total Measured and Indicated Mineral Resources (1) WO3 Tungsten Trioxide. (2) Reduction due to increase in NSR cut‑off to align with internal Scoping Study outcomes. Table 10 30 June 2023 Polymetallic Inferred Mineral Resources Jun 2023 Polymetallic Inferred Resources Jun 2022 Polymetallic Inferred Resources Tonnes Grade Contained Metal Tonnes Grade Contained Metal Mt (Dry) WO3 (1) (%) Zn (%) Pb (%) WO3 (Mt) Zn (Mt) Pb (Mt) Mt (Dry) WO3 (%) Zn (%) Pb (%) WO3 (Mt) Zn (Mt) Pb (Mt) O’Callaghans Inferred (2) Total Inferred Mineral Resources 6.5 6.5 0.29 0.29 0.23 0.23 0.14 0.14 0.019 0.015 0.0088 0.019 0.015 0.0088 9.0 9.0 0.25 0.25 0.19 0.19 0.11 0.11 0.023 0.017 0.0097 0.023 0.017 0.0097 (1) WO3 Tungsten Trioxide. (2) Reduction due to increase in NSR cut‑off to align with internal Scoping Study outcomes. Newcrest Annual Report 2023 31 Table 11 30 June 2023 Gold and Copper Ore Reserves (1) Proved Reserves Probable Reserves Jun 2023 Proved and Probable Reserves Jun 2022 Proved and Probable Reserves Tonnes Grade Tonnes Grade Tonnes Grade Contained Metal Tonnes Grade Contained Metal Mt (Dry) Au (g/t) Cu (%) Mt (Dry) Au (g/t) Cu (%) Mt (Dry) Au (g/t) Cu (%) Au (MOz) Cu (Mt) Mt (Dry) Au (g/t) Cu (%) Au (MOz) Cu (Mt) Operational Provinces Cadia Cadia East Underground Ridgeway Underground (2) Telfer Telfer Open Pit Stockpiles West Dome Open Pit (3) Telfer Underground (4) Havieron (5) Red Chris Red Chris Open Pit (6) Red Chris Open Pit Stockpiles (6) Red Chris Underground (7) Lihir Lihir Open Pit (8) Lihir Stockpiles (8) Brucejack Brucejack Underground (9) Non-Operational Provinces Wafi-Golpu WGJV – Golpu (10,11) Total Ore Reserves (12) – – – – – – – – – – 57 – – – – – – – – – – – – 1.9 – – – – – – – – – – – – – – 1,200 0.42 0.29 1,200 0.42 0.29 16 3.4 1,200 0.42 0.29 16 3.5 80 0.54 0.28 80 0.54 0.28 1.4 0.23 80 0.54 0.28 1.4 0.23 1.6 0.43 0.097 1.6 0.43 0.097 0.022 0.0015 8.2 0.43 0.087 0.11 0.0071 23 2.0 14 42 7.9 0.83 0.066 2.1 3.7 0.40 0.16 0.69 0.54 0.47 0.24 23 2.0 14 42 7.9 0.83 0.066 2.1 3.7 0.40 0.16 0.69 0.54 0.47 0.24 0.62 0.14 0.015 0.014 1.6 0.073 0.54 0.20 0.040 0.019 20 2.5 14 53 9.5 0.60 0.060 1.7 3.7 0.39 0.15 0.68 0.54 0.45 0.24 0.39 0.14 0.012 0.017 1.6 0.073 0.68 0.24 0.047 0.023 410 0.55 0.45 410 0.55 0.45 7.2 1.8 410 0.55 0.45 7.2 1.8 220 26 2.5 1.3 14 8.4 – – – 220 83 2.5 1.7 14 8.4 – – – – 400 0.86 1.2 Au Cu 400 2,500 2,100 0.86 0.81 1.2 – – 0.50 18 4.5 3.7 11 64 – – – – 230 72 2.4 1.8 – – – – – 4.9 400 – 11 2,500 2,200 0.86 0.76 1.2 – – 0.49 18 4.2 – 11 61 – – – – 4.9 – 11 (1) All data reported is on a 100% asset basis, with Newcrest’s attributable interest shown against each asset within footnotes. (2) Ridgeway is currently on care and maintenance subject to further studies, all necessary approvals, permits, internal and regulatory requirements and further works. (3) New pit designs to include additional staged mining areas. (4) Mining depletion partially offset by Ore Reserves increase due to Mineral Resources model update. (5) A Feasibility Study for Havieron is currently in progress. Newcrest attributable share 70%. (6) Reduction due to removal of waste stripping and changes to mine design. Newcrest attributable share 70%. (7) Red Chris Block Cave Feasibility Study is in progress and due for completion in H2 CY23. Newcrest attributable share 70%. (8) Changes are aligned with the FY23 Life of Province Plan. (9) Initial Ore Reserves estimate for Newcrest Mining Limited. (10) In March 2021, the then Governor of the Morobe Province commenced a judicial review application against the State of PNG, challenging the December 2020 grant of the environment permit for the Wafi‑Golpu Project. In December 2022 a number of villagers from the Huon Gulf coastal area commenced a separate judicial review application against the State of PNG also challenging the grant of the project’s Environment Permit. Both reviews are still to be heard and determined. Newcrest attributable share 50%. (11) Golpu Ore Reserves is based on the 2018 Feasibility Study Update which used a gold price of US$1,200/oz and USD:PGK foreign exchange of 3.13. (12) Mineralisation is not coincident therefore total tonnages differ for each metal reported. 32 Mineral Resources and Ore Reserves continued Table 12 30 June 2023 Silver and Molybdenum Ore Reserves (1) Proved Reserves Probable Reserves Jun 2023 Proved and Probable Reserves Jun 2022 Proved and Probable Reserves Tonnes Grade Tonnes Grade Tonnes Grade Contained Metal Tonnes Grade Contained Metal Mt (Dry) Ag (g/t) Mo (ppm) Mt (Dry) Ag (g/t) Mo (ppm) Mt (Dry) Ag (g/t) Mo (ppm) Ag (MOz) Mo (Mt) Mt (Dry) Ag (g/t) Mo (ppm) Ag (MOz) Mo (Mt) Operational Provinces Cadia Cadia East Underground Ridgeway Underground (2) Brucejack Brucejack Underground (3) Total Ore Reserves (4) – – – – – – – – – 1,200 0.69 81 1,200 0.69 81 26 0.096 1,200 0.70 80 0.66 14 32 – – 80 0.66 14 Ag Mo 1,300 1,200 32 1.0 – – – – 1.7 14 42 – – – 80 0.66 – – 1,300 0.69 81 – 0.096 1,200 – 82 – – – 82 27 0.099 1.7 – 29 – – – – 0.099 (1) All data reported here is on a 100% asset basis, with Newcrest’s attributable interest shown against each asset within footnotes. (2) Ridgeway is currently on care and maintenance subject to further studies, all necessary approvals, permits, internal and regulatory requirements and further works. (3) Initial Ore Reserves estimate for Newcrest Mining Limited. (4) Mineralisation is not coincident therefore total tonnages differ for each metal reported. Newcrest Annual Report 2023 33 Directors’ Report Directors’ Report Operating and Financial Review Remuneration Report Consolidated Financial Statements Independent Auditor’s Report 34 39 82 116 174 34 Directors’ Report The Directors present their report together with the consolidated financial statements of the Newcrest Mining Limited Group, comprising Newcrest Mining Limited (‘the Company’) and its controlled entities (‘Newcrest’ or ‘the Group’), for the year ended 30 June 2023. Directors The Directors of the Company during the year ended 30 June 2023, and up to the date of this report are set out below. All Directors held their position as a Director throughout the entire year and up to the date of this report unless otherwise stated. Peter Tomsett Philip Aiken AM Philip Bainbridge Roger Higgins Sally-Anne Layman Jane McAloon AM Vickki McFadden Sandeep Biswas Chairman Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Managing Director and Chief Executive Officer (1) (1) Ceased as Managing Director and Chief Executive Officer on 18 and 19 December 2022 respectively. Principal Activities The principal activities of the Group during the year were exploration, mine development, mine operations and the sale of gold and gold/copper concentrate. There were no significant changes in those activities during the year. Consolidated Result The profit after tax attributable to Newcrest shareholders (‘Statutory Profit’) for the year ended 30 June 2023 was US$778 million (2022: US$872 million). Refer to the Operating and Financial Review for further details. The Operating and Financial Review forms part of this Directors’ Report. The financial information in the Operating and Financial Review includes non-IFRS financial information. Explanations and reconciliations of non-IFRS financial information to the financial statements are included in Section 6 of the Operating and Financial Review. Significant Changes in the State of Affairs and Future Developments In May 2023, Newcrest entered into a binding Scheme Implementation Deed (‘SID’) with Newmont Corporation (‘Newmont’) in relation to a proposal for Newmont to acquire 100% of the issued shares in Newcrest by way of a scheme of arrangement (‘Scheme’) under the Corporations Act 2001 (Cth) (‘the Newmont Transaction’). Under the terms of the Newmont Transaction, Newcrest shareholders will be entitled to receive 0.400 Newmont shares for each Newcrest share held on the scheme record date. In addition, Newcrest expects to pay a franked special dividend of US$1.10 per Newcrest share prior to implementation of the scheme, subject to the scheme becoming effective. Refer Note 32 for further information. Refer to the Operating and Financial Review for information on the other significant changes in the state of affairs of the Group and for likely developments and future prospects of the Group. Dividends Subsequent Events The following dividends of the Company were paid during the year: – Final dividend for the year ended 30 June 2022 of US 20 cents per share, amounting to US$179 million, was paid on 29 September 2022. This dividend was fully franked. – Interim dividend for the year ended 30 June 2023 of US 15 cents per share, amounting to US$134 million, was paid on 30 March 2023. This dividend was fully franked. – Special dividend for the year ended 30 June 2023 of US 20 cents per share, amounting to US$179 million, was paid on 30 March 2023. This dividend was fully franked. The Directors have determined to pay a final dividend for the year ended 30 June 2023 of US 20 cents per share, which will be fully franked. The dividend will be paid on 18 September 2023. Subsequent to year end, the Directors have determined to pay a final dividend for the year ended 30 June 2023 of US 20 cents per share, which will be fully franked. The dividend will be paid on 18 September 2023. The total amount of the dividend is US$179 million. This dividend has not been provided for in the 30 June 2023 financial statements. A New South Wales Legislative Council Committee has commenced an inquiry into current and potential community impacts of the gold, silver, lead and zinc mining industries in the state. Newcrest will provide a submission to the committee. There have been no other matters or events that have occurred subsequent to 30 June 2023 that have significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years. Newcrest Annual Report 2023 35 Options Currency The Company does not have any unissued shares or unissued interests under option as at the date of this report, nor has it granted, or issued shares or interests under any options during or since the end of the year. Refer to Note 35 for the number of Performance Rights at year end. Non-Audit Services During the year, Ernst & Young (external auditor to the Company), has provided other services in addition to the statutory audit, as disclosed in Note 37 to the financial statements. These services included: – Investigating Accountant services in connection with the Newmont Transaction; and – Assurance and agreed-upon-procedure services relating to sustainability related assurance services and audit related assurance services. The Directors are satisfied that the provision of non-audit services and assurance and agreed-upon procedures provided by the auditor is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that these services do not compromise the auditor’s independence, based on advice received from the Audit and Risk Committee, for the following reasons: – all non-audit services have been approved by the Audit and Risk Committee Chairman prior to engagement to ensure they did not impact on the impartiality and objectivity of the auditor; – all audit related or other assurance services with an estimated cost of greater than US$100,000 have been approved by the Audit and Risk Committee Chairman prior to engagement to ensure they did not impact on the impartiality and objectivity of the auditor. The Interim Chief Financial Officer has informed the Chairman of all audit-related or other assurance services with an estimated cost below US$100,000; – none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing economic risks and rewards; and – Ernst & Young has individually confirmed, prior to each service commencing, that the service does not create any independence issues with respect to the Corporations Act 2001. They have also provided a copy of their Auditor’s Independence Declaration, as required by the Corporations Act 2001, for inclusion in the Annual Report. Auditor Independence A copy of the Auditor’s Independence Declaration, as required by the Corporations Act 2001, is included after this report. All references to dollars in the Directors’ Report and the Financial Report are references to US dollars ($ or US$) unless otherwise specified. Rounding of Amounts Newcrest Mining Limited is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and in accordance with that Instrument, amounts in the Directors’ Report and the Financial Report are rounded to the nearest million dollars except where otherwise indicated. Environmental Regulation and Performance The Interim Chief Executive Officer reports to the Board on all significant safety, health and environmental incidents. The Board also has a Safety and Sustainability Committee which has oversight of the safety, health and environmental performance of the Group and meets at least four times per year. The operations of the Group are subject to environmental regulation under the jurisdiction of the countries in which those operations are conducted, including Australia, Papua New Guinea (‘PNG’), Canada, USA, Chile, Ecuador and Fiji. Each mining operation is subject to particular environmental regulation specific to their activities as part of their operating licence or environmental approvals. Each of our sites are required to also manage their environmental obligations in accordance with our corporate environmental policies and standards. The environmental laws and regulations that cover each of our sites, combined with our policies and standards, address the potential impact of the Group’s activities in relation to water and air quality, noise, land disturbance, waste and tailings management, and the potential impact upon flora and fauna. The Group releases an annual Sustainability Report in accordance with the Global Reporting Initiative that details our activities in relation to management of key environmental aspects. The Group has an internal reporting system covering all sites. Environmental incidents are reported and assessed according to their environmental consequence and environmental authorities are notified where required and remedial action is undertaken. Levels of environmental incidents are categorised based on factors such as spill volume, incident location (onsite or offsite) and environmental consequence. Incident numbers are based on four levels of actual environmental consequence including: 1 (Minor), 2 (Major), 3 (Critical), and 4 (Catastrophic). Level 1 Minor incidents are tracked and managed at a site level and are not reported in aggregate for the Group. The number of incidents reported by level based on actual environmental consequence for the 2023 financial year and 2022 comparative year is shown in the following table. Category Level 2 Level 3 Level 4 2023 – Number of incidents (1) 2022 – Number of incidents 21 19 0 0 0 0 (1) The majority of environmental incidents during the 2023 financial year related to dust or noise emissions at Cadia and low-level spills within the footprints of our mines. 36 Directors’ Report continued Indemnification and Insurance of Directors and Officers Newcrest indemnifies each Director, Secretary and Executive Officer of Newcrest and its subsidiaries against any liability related to, or arising out of, the conduct of the business of Newcrest or its subsidiaries or the discharge of the Director’s, Secretary’s or Executive Officer’s duties. These indemnities are given to the extent that Newcrest is permitted by law and its Constitution to do so. No payment has been made to indemnify any Director, Secretary and Executive Officer of the Company and its subsidiaries during or since the end of the financial year. Newcrest maintains a Directors’ and Officers’ insurance policy which, subject to some exceptions, provides insurance cover to past, present or future Directors, Secretaries and Executive Officers of Newcrest and its subsidiaries. The Company has paid an insurance premium for the policy. Indemnification of Auditors To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the end of the financial year. Information on Directors Details of the Directors’ qualifications, experience and special responsibilities are set out on pages 18 to 19 of this Annual Report. These details have been updated since 11 August 2023. Information on Former Director (1) Sandeep Biswas Managing Director and Chief Executive Officer BEng (Chem) (Hons), FAusIMM, 60 Mr Biswas was appointed Managing Director and Chief Executive Officer effective 4 July 2014. He joined Newcrest in January 2014, as an Executive Director and Chief Operating Officer. Skills, experience and expertise Mr Biswas was previously Chief Executive Officer of Pacific Aluminium, a wholly owned subsidiary within the Rio Tinto group, which incorporated the bauxite, alumina, refining and smelting operations in Australia and New Zealand. He began his career with Mount Isa Mines, working in both Australia and Europe. Mr Biswas has also worked for Western Mining Corporation in Australia and Rio Tinto in Canada and Australia. He has experience in research, operations, business development and projects, across commodities including aluminium, copper, lead, zinc and nickel. Other Current Directorships/Appointments – Director of the Minerals Council of Australia (from 2014) – Vice Chairman of the World Gold Council (Vice Chairman from 2020, Director from 2017) – Member of ICMM Council (from 2017) (1) Information provided is as at the date of cessation as a Director of the Company. Newcrest Annual Report 2023 37 Information on Company Secretary and Deputy Company Secretary Maria (Ria) Sanz Perez Chief Legal, Risk & Compliance Officer and Company Secretary BComm, LLB, HDipTax, AMP (Harvard) Ms Sanz Perez has extensive experience in the mining and resources, manufacturing, construction, private healthcare and banking sectors. She is a seasoned executive who has advised public boards, Chief Executives and Executive Committees on governance, risk, sustainability, compliance, mergers and acquisitions, litigation, regulatory and commercial legal matters. Joining Newcrest as Chief Legal, Risk and Compliance Officer in July 2020, Ms Sanz Perez has previously led international teams and has regulatory expertise across Africa, the Americas, Australia and the United Kingdom. Current Directorships/Appointments – Director of Australian Resources and Energy Employer Association (AREEA) (from 2022) Claire Hannon Head of Secretariat BSc, LLB (Hons), Grad. Dip. App Fin, GAICD Ms Hannon joined Newcrest in January 2013 as Corporate Counsel in the legal team. She was appointed as an additional Company Secretary in August 2015. Prior to joining Newcrest, Ms Hannon worked as a lawyer in the Melbourne office of Ashurst and the London office of Clifford Chance, specialising in mergers and acquisitions and corporate law. Directors’ Interests As at the date of this report, the interest of each Director in the shares and rights of Newcrest Mining Limited were: Director Peter Tomsett Philip Aiken AM Philip Bainbridge Roger Higgins Sally-Anne Layman Jane McAloon AM Vickki McFadden Former Directors Sandeep Biswas (2) Number of Ordinary Shares 43,799 19,940 9,910 13,675 10,510 6,132 12,208 Nature of Interest Indirect Indirect Indirect Indirect Indirect Indirect Indirect Number of Rights Over Ordinary Shares (1) Nature of Interest – – – – – – – – – – – – – – 821,048 Direct and Indirect 545,751 Direct (1) Represents unvested performance rights granted pursuant to the Company’s Long Term Incentive plans in the 2021 and 2022 financial years for Sandeep Biswas. (2) Numbers as at his cessation date of 18 December 2022. Subsequently, 355,574 performance rights were forfeited following his cessation as Key Management Personnel on 19 December 2022 and his retirement on 18 March 2023. 38 Directors’ Report continued 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 were: Committees of the Board Director Directors’ Meetings Audit & Risk Human Resources & Remuneration Safety & Sustainability Nominations Special Board Committees (2) Peter Tomsett Philip Aiken AM Philip Bainbridge Roger Higgins Sally-Anne Layman Jane McAloon AM Vickki McFadden Former Directors A 21 21 21 21 21 19 (1) 21 Sandeep Biswas (3) 5 B 21 21 21 21 21 21 21 6 A – – – – 7 7 7 – B – – – – 7 7 7 – A – 5 – 5 – 5 5 – B – 5 – 5 – 5 5 – A – 5 5 5 5 – – – B – 5 5 5 5 – – – A 2 2 – – – – 2 – B 2 2 – – – – 2 – A 2 – 2 – 2 3 4 1 B 2 – 2 – 2 3 4 1 Column A – Indicates the number of meetings attended whilst a Director/Committee member. Column B – Indicates the number of meetings held whilst a Director/Committee member. (1) Meetings missed were out of session meetings held on short notice which the Director was unable to attend due to prior commitments. (2) These are out of session Committee meetings and include meetings of the Board Executive Committee, the Due Diligence Committee and other Committees established from time to time to deal with ad-hoc matters delegated to the relevant Committee by the Board. The membership of such special Committees may vary. (3) Sandeep Biswas ceased as a Director effective 18 December 2022 and ceased as Chief Executive Officer effective 19 December 2022. Details of the functions and memberships of the Committees of the Board are presented in Newcrest’s Corporate Governance Statement and on Newcrest’s website. Remuneration Report The Remuneration Report is set out on pages 82 to 113 and forms part of this Directors’ Report. This report is signed in accordance with a resolution of the Directors. Peter Tomsett Chairman 11 August 2023 Melbourne Newcrest Annual Report 2023 39 OPERATING AND FINANCIAL REVIEW To assist readers to better understand the financial performance of the underlying operating assets of Newcrest, the financial information in this Operating and Financial Review includes non-IFRS financial information. Explanations and reconciliations of non-IFRS information to the financial statements are set out in Section 6. Unless otherwise stated, all financial data presented in this Operating and Financial Review is quoted in US$ and the prior period represents the 12 months ended 30 June 2022. Section 1 Endnotes are located at the end of the section. 1. Summary of Results for the 12 months ended 30 June 2023 (1,2,3,4,5,6) Key points – Gold production of 2.1 million ounces (7) and copper production of 133.1 thousand tonnes – Statutory profit (8) and Underlying profit (9) of $778 million – All-In Sustaining Cost (AISC) (7,9,10) of $1,093 per ounce, delivering an AISC margin (11) of $680 per ounce – Free cash flow (9) of $404 million Safety and sustainability – Extensive safety review completed at Brucejack following the tragic fatality in October 2022 – Improved annual TRIFR (12) of 2.97 with learnings shared across the business following the tragic fatality at Brucejack and serious injury at Cadia – Transition to electric vehicles continues with Brucejack truck loading fleet now fully battery electric and activities to procure and onboard trials of high technology readiness fleet progressing at Cadia and Brucejack – First renewable power generated from the Rye Park Wind Farm in July 2023, with early supply commencing under Cadia’s Power Purchase Agreement – Newcrest Sustainability Fund driving social investments with contribution to eight major projects and two emergency response projects approved Quality organic gold and copper growth portfolio – Cadia confirmed its position as a world class, long-life gold and copper producer with the PC1-2 Feasibility Study approved to execution and completion of the two-stage plant expansion project – Lihir Phase 14A Feasibility Study demonstrated attractive financial returns as further studies evaluate the potential extension of Lihir’s elevated production profile beyond FY31 (13) – Telfer mine life extended into early FY25 with the West Dome Stage 8 cutback now underway (13) – Wafi-Golpu Framework Memorandum of Understanding (MOU) signed with all parties working to progress the Mining Development Contract Strong balance sheet supports organic growth and increased shareholder returns – Fully franked final dividend of US 20 cents per share, bringing total FY23 dividends to US 55 cents per share – Balance sheet remains well within financial policy targets, with net debt of $1.5 billion, leverage ratio of 0.7 times (9) and a gearing ratio of 11.1% – Significant liquidity with $2.3 billion in cash and committed undrawn bank facilities Binding agreement executed with Newmont to acquire 100% of the issued shares of Newcrest (14) – Transaction expected to establish a clear global leader in gold production by combining two of the world’s largest producers, with a significant and growing exposure to copper – Newcrest Board unanimously recommends shareholders vote in favour of the transaction in the absence of a Superior Proposal, (15) and subject to the Independent Expert concluding and continuing to conclude that the transaction is in the best interests of Newcrest shareholders – Newcrest expects to pay a franked special pre-completion dividend of US$1.10 per Newcrest share (16) – Scheme Meeting expected to be held in October 2023 with implementation targeted for November 2023 (20) 40 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 1. Summary of Results for the 12 months ended 30 June 2023 (1,2,3,4,5,6) continued For the 12 months ended 30 June TRIFR Group production – gold Group production – copper Revenue EBITDA EBIT Statutory profit Underlying profit Cash flow from operating activities Free cash flow before M&A activity Free cash flow* EBITDA margin EBIT margin All-In Sustaining Cost All-In Sustaining margin Realised gold price Realised copper price Average exchange rate Average exchange rate Average exchange rate Closing exchange rate Earnings per share (basic) Earnings per share (diluted) Dividends paid per share Cash and cash equivalents Net debt Leverage ratio Gearing ROCE Interest coverage ratio Total equity Endnote 12,17 7 9 9 8 9 9 9 7,9,10,18 11 19 19 9 9 9 UoM mhrs oz t US$m US$m US$m US$m US$m US$m US$m US$m % % US$/oz US$/oz US$/oz US$/lb AUD:USD PGK:USD CAD:USD AUD:USD US$ cents US$ cents US$ cents US$m US$m times % % times US$m 2023 2.97 2,105,068 133,149 2022 4.01 1,956,182 120,650 4,508 2,063 1,172 778 778 1,605 447 404 45.8 26.0 1,093 680 1,797 3.76 0.6735 0.2833 0.7468 0.6630 87.0 86.8 55.0 586 1,459 0.7 11.1 9.0 30.4 11,712 4,207 2,054 1,304 872 872 1,680 229 (868) 48.8 31.0 1,043 732 1,797 4.36 0.7260 0.2843 0.7903 0.6889 103.4 103.1 47.5 565 1,325 0.6 10.2 11.4 37.6 11,665 Change Change % (1.04) (26%) 148,886 12,499 301 9 (132) (94) (94) (75) 218 8% 10% 7% 0% (10%) (11%) (11%) (4%) 95% 1,272 >100% (3.0) (5.0) 50 (52) – (0.60) (0.0525) (0.0010) (0.0435) (0.0259) (16.4) (16.3) 7.5 21 134 0.1 0.9 (2.4) (7.2) 47 (6%) (16%) 5% (7%) – (14%) (7%) (0%) (6%) (4%) (16%) (16%) 16% 4% 10% 17% 9% (21%) (19%) 0% * Free cash flow in the prior period includes the payment for the acquisition of Pretium Resources Inc. (Pretium) of $1,084 million (net of cash acquired). Newcrest Annual Report 2023 41 Under the terms of the Newmont Transaction, Newcrest shareholders will be entitled to receive 0.400 Newmont shares for each Newcrest share held on the scheme record date. In addition, Newcrest expects to pay a franked special dividend of US$1.10 per Newcrest share prior to implementation of the scheme, subject to the scheme becoming effective. (16) The Newcrest Board unanimously recommends that shareholders vote in favour of the Newmont Transaction in the absence of a Superior Proposal (as defined in the SID), and subject to the Independent Expert concluding and continuing to conclude that the Newmont Transaction is in the best interest of shareholders. The scheme of arrangement is subject to a number of conditions, including approval by Newcrest shareholders at a Scheme Meeting which is expected to be held in October 2023. If the Newmont Transaction is approved by Newcrest shareholders and the other conditions precedent are satisfied or waived, implementation of the Newmont Transaction is targeted to occur in November 2023. (20) Newcrest’s gold production of 2.1 million ounces(7) was 8% higher than the prior period. This reflects the inclusion of 12 months of production from Brucejack (the prior period included four months of production), higher gold production at Cadia following the completion of the planned replacement and upgrade of the SAG mill motor in November 2021, together with higher gold production at Fruta del Norte. This was partially offset by lower gold production at Telfer (driven by lower mill throughput and head grade) and Lihir. Lihir’s production performance in the current period was impacted by several extreme weather events together with a number of unplanned downtime events which impacted mill availability. Drought conditions experienced across the New Ireland Province in the first half of the current period constrained mill throughput, with extreme rainfall in the second half restricting pit access which limited the delivery of high grade ore to the mill. Copper production of 133.1 thousand tonnes was 10% higher than the prior period driven by higher copper production at Cadia following the completion of the planned replacement and upgrade of the SAG mill motor in November 2021. Statutory profit and Underlying profit were both $778 million in the current period. Underlying profit of $778 million was $94 million lower than the prior period primarily due to a lower realised copper price, higher depreciation, higher operating costs (including the impact of inflationary pressures which were in line with expectations), a decrease in Newcrest’s share of profits from its associates, and an increase in finance costs with a higher level of debt and higher interest rates in the current period. These impacts to Underlying profit were partially offset by the addition of Brucejack, a higher contribution of low cost Cadia production, the favourable impact on operating costs (including depreciation) from the weakening of the Australian dollar and the Canadian dollar against the US dollar, favourable fair value movements recognised on Newcrest’s investment in the Fruta del Norte finance facilities, a lower income tax expense as a result of the Company’s decreased profitability in the current period, and higher molybdenum revenue with increased sales volumes. Full year results In October 2022, a tragic fatality involving a contractor occurred at Newcrest’s Brucejack mine in British Columbia. During the suspension of operations, Newcrest completed an extensive safety review across all activities at Brucejack to identify major hazards and corresponding critical controls, establishing additional control verification mechanisms to monitor those critical controls. These learnings have been shared across Newcrest’s global operations to help prevent fatalities and life-changing injuries going forward. The New South Wales Resources Regulator is investigating two safety incidents at Cadia. These are in response to a serious injury that occurred to a team member from one of Cadia’s contracting partners in June 2023, and a separate incident resulting in serious injuries to a team member that occurred in October 2021. Newcrest remains committed to learning from these devastating incidents to ensure that safety remains at the forefront of every activity across the business. In the current period, Newcrest reported a Total Recordable Injury Frequency Rate (TRIFR) of 2.97 per million hours worked, which was 26% lower than the prior period. Additionally, in the current period Red Chris achieved its lowest TRIFR on record and Lihir delivered two consecutive quarters (March and June 2023) with zero recordable injuries, with the March 2023 quarter being the first quarter with zero recordable injuries in ten years. Newcrest continued to progress its Net Zero by 2050 goal during the current period with the scoping and planning of key trials and studies to implement the Group Net Zero Emissions Roadmap continuing. Fleet electrification remains a key focus across the business, with the underground truck loaders at Brucejack now fully battery electric, the battery electric load haul dump scoop trial continuing at Brucejack and planning for other electric vehicle trials ongoing at Cadia. The Telfer/Havieron renewables concept study is nearing completion and the Lihir FY23 power technology assessment workplan was completed during the current period with several options selected for further assessment. In July 2023, the first renewable power was generated from the Rye Park Wind Farm, with early supply commencing under Cadia’s Power Purchase Agreement (PPA) with Tilt Renewables. As previously announced, Newcrest has a 15-year renewable PPA to secure a significant portion of Cadia’s future projected energy requirements from 2024. The wind farm is expected to be fully operational in mid-2024. (13) Newcrest launched a A$10 million Newcrest Sustainability Fund in July 2022 to support programs that contribute to the resilience of communities across Newcrest’s geographic areas of interest and support the United Nations Sustainable Development Goals. Contribution to eight major projects and two emergency response projects were approved during the current period with a focus across health, education, biodiversity, reduction in inequalities and economic growth outcomes. In May 2023, Newcrest entered into a binding Scheme Implementation Deed (SID) with Newmont Corporation (Newmont) in relation to a proposal for Newmont to acquire 100% of the issued shares in Newcrest by way of a scheme of arrangement (Newmont Transaction). The Newmont Transaction will bring forward significant value to Newcrest shareholders through the recognition of Newcrest’s outstanding portfolio of long-life assets, material and increasing exposure to copper, and well-established organic growth pipeline. The combined group will create a clear global leader in gold production, with increased flexibility in project sequencing and growth optionality, and a market leading position in safety and sustainability. 42 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 1. Summary of Results for the 12 months ended 30 June 2023 (1,2,3,4,5,6) continued Newcrest’s AISC of $1,093 per ounce (7,10) was 5% higher than the prior period primarily due to a lower realised copper price and higher operating costs. These impacts were partially offset by a higher contribution of low cost Cadia production following the replacement and upgrade of the SAG mill motor in the prior period, the addition of Brucejack, the favourable impact on costs from the weakening of the Australian dollar and the Canadian dollar against the US dollar, and lower production stripping activity. Newcrest’s Free cash flow of $404 million was higher than the prior period primarily due to the acquisition of Pretium which occurred in the prior period. ‘Free cash flow before M&A activity’ of $447 million was 95% higher than the prior period reflecting reduced spend on major capital projects at Cadia with the completion of the two-stage plant expansion in the current period, an increase in interest received driven by Lundin Gold’s early repayment of the Fruta del Norte gold prepay credit facility in January 2023, and the receipt of $30 million in dividends from Lundin Gold. This is partially offset by a lower realised copper price, unfavourable net working capital movements, and an increase in income taxes paid. In November 2022, the Newcrest Board approved the progression of the Cadia PC1-2 Feasibility Study to Execution, marking a key strategic milestone to maintain Cadia’s gold and copper production profile for decades to come. The Feasibility Study demonstrated strong financial returns with an optimised mine footprint substantially increasing expected ore mined across the life of the project. Key development activities remain on track with development metres increasing in the June 2023 quarter. First ore production from PC1-2 is expected in FY26. (13,21) Additionally in November 2022, the Newcrest Board approved expenditure of A$214 million (~US$150 million) for the West Dome Stage 8 cutback (WDS8). The cutback underpins the continuity of operations at Telfer, with the mine now expected to extend operations into early FY25. (13) First ore production in WDS8 was achieved during the December 2022 quarter with mining rates in the cutback performing above expectations in the current period. Following the approval of the WDS8 cutback, Newcrest has completed further hedging of a portion of Telfer’s planned production to June 2024 to secure margins and support investments in cutbacks and mine development. In January 2023, the Newcrest Board approved the Lihir Phase 14A Feasibility Study, endorsing the project into full implementation. Phase 14A is another step forward in realising the full potential of Lihir with the cutback expected to deliver additional high grade gold production over the next four years. (13) Lihir is on track to deliver high grade ore from Phase 14A in FY24. (13) Newcrest continues to assess a range of options to unlock additional high grade mineralisation outside the current Ore Reserve with the potential to extend the elevated production profile beyond FY31. Work to assess the application of steep wall technologies in the northern and eastern extents of the Kapit orebody, including a lower cost and simpler seepage barrier design is on track for completion in CY23. (13) In April 2023, Newcrest and its Wafi-Golpu Joint Venture partner Harmony Gold (through their respective PNG subsidiaries) signed a Framework Memorandum of Understanding (MOU) with the Independent State of Papua New Guinea. The MOU represents a substantial step forward in progressing towards the signing of a Mining Development Contract for Wafi-Golpu and confirms the parties’ intent to proceed with the project, subject to finalising the permitting process and approvals of both the Newcrest and Harmony Gold Boards. The MOU is a pivotal milestone towards the development of one of the world’s premier undeveloped copper- gold deposits, with its development expected to result in fair and equitable benefits for landowners, communities, local level governments, the Morobe Provincial Government and the Independent State of Papua New Guinea, while also delivering strong returns for the developers. Capital structure Newcrest’s financial objectives are to meet all financial obligations, maintain a strong balance sheet to withstand cash flow volatility, be able to invest capital in value-creating opportunities, and to provide returns to shareholders. Newcrest looks to maintain an appropriately conservative level of balance sheet leverage. Newcrest’s net debt as at 30 June 2023 was $1,459 million. This comprises of $586 million of cash holdings, less $1,637 million of capital market debt, $298 million in bilateral bank debt facilities and lease liabilities of $110 million. As at 30 June 2023, Newcrest had liquidity coverage of $2,288 million, comprising $586 million of cash and cash equivalents and $1,702 million in committed undrawn bilateral bank debt facilities with tenors ranging from 2024 to 2026. Newcrest Annual Report 2023 43 Newcrest’s financial policy metrics and its performance against them are as follows: Metric Policy ‘looks to’ As at 30 June 2023 As at 30 June 2022 Credit rating (S&P/Moody’s) Leverage ratio (Net debt to EBITDA) Gearing ratio Cash and committed undrawn bank facilities Investment grade Less than 2.0 times Below 25% At least $1.5bn, of which ~1/3 is in the form of cash BBB/Baa2 0.7 11.1% BBB/Baa2 0.6 10.2% $2.29bn ($586m cash) $2.42bn ($565m cash) Gold hedging Approximately 90% of Newcrest’s gold sales in the period were unhedged and therefore benefitted from the strong gold prices in the period. Telfer is a large scale, low grade mine and its profitability and cash flow are sensitive to the realised Australian dollar gold price. In November 2022, following the approval of the WDS8 cutback, Newcrest hedged a portion of Telfer’s future planned production to June 2024 in the form of Australian dollar gold zero cost collars to secure margins and support investment in cutbacks and mine development. Zero cost collars consist of a call (sold by Newcrest) at the collar price cap and a put (bought by Newcrest) at the collar price floor. The option premium paid on the bought put options and received on the sold call options net out to zero. As at 30 June 2023, the total outstanding volume and prices of the Australian dollar gold zero cost collars implemented for Telfer are: Financial Year Ending 30 June 2024 Gold Ounces Hedged Floor Price A$/oz Cap Price A$/oz 308,755 2,500 2,886 The put and call options for the current period included 123,723 ounces at an average price of A$2,847 per ounce against a cap of A$2,773 per ounce, representing a net realised revenue loss of $9 million for the current period. As at 30 June 2023, based on gold forward curves, the unrealised mark-to-market loss of the remaining options was $24 million. Newcrest had previously put in place hedging instruments in the form of Australian dollar gold forward contracts to secure margins on a portion of planned production to June 2023, which have now matured. The current period included 137,919 ounces of Telfer gold forward sales hedged at an average price of A$1,942 per ounce, representing a net realised revenue loss of $67 million on the Australian dollar gold forward contracts for the current period. 44 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 1. Summary of Results for the 12 months ended 30 June 2023 (1,2,3,4,5,6) continued Dividend Policy Newcrest looks to pay ordinary dividends that are sustainable over time having regard to its cash flow generation, reinvestment options in the business and external growth opportunities, financial policy metrics and balance sheet strength. Newcrest targets a total annual dividend payout of 30–60% of free cash flow generated for the financial year, with the annual total dividends being at least US 15 cents per share on a full year basis. Acknowledging the cyclical nature of the industry, Newcrest has a flexible dividend policy that allows it to balance cash returns to shareholders and investment in the business, with the intention of maximising long-term shareholder value. Consistent with Newcrest’s commitment to disciplined capital management, the Board has determined that a final fully franked dividend of US 20 cents per share will be paid on Monday, 18 September 2023, demonstrating Newcrest’s commitment to providing strong shareholder returns. The record date for entitlement is Monday, 21 August 2023. The financial impact of the FY23 final dividend amounting to $179 million has not been recognised in the Consolidated Financial Statements for the year. Suspension of the Dividend Reinvestment Plan The Dividend Reinvestment Plan (DRP) will not apply to the final dividend as the Newcrest Board has determined to suspend the DRP with effect from 11 August 2023. Guidance (3,22) Newcrest provides the following guidance for FY24, subject to market and operating conditions. Newcrest has determined, in consideration of the binding agreement entered into with Newmont Corporation on 15 May 2023 and the upcoming Scheme vote (expected to be held in October 2023), that guidance for the 12 months ending 30 June 2024 will be provided on a Group-level basis. The Company has followed its standard Group budget reporting process in preparing this guidance range based on Newcrest continuing on a standalone basis. If the Scheme of Arrangement with Newmont is approved by shareholders and the other conditions precedent are satisfied or waived, Newmont will assume management control of Newcrest and the Group level guidance set out below will not apply. Guidance for the 12 months ending 30 June 2024 Production Gold – koz Copper – kt All-In-Sustaining Cost (AISC) AISC ($m) Includes sustaining capital expenditure Capital Expenditure Sustaining capital expenditure ($m) Includes production stripping (sustaining) and sustaining capital Non-sustaining capital expenditure ($m) Includes production stripping (non-sustaining) and major projects Exploration and Depreciation Exploration expenditure ($m) Depreciation and amortisation ($m) Includes depreciation of production stripping Group (a) 2,000 – 2,300 120 – 140 2,200 – 2,600 560 – 640 610 – 735 130 – 150 820 – 870 (a) Group gold production and AISC includes Newcrest’s 32% attributable share of Fruta del Norte through its 32% equity interest in Lundin Gold Inc. For H1 of FY24, Newcrest has derived its guidance range for Fruta del Norte by taking the mid-point of Lundin Gold’s CY23 guidance range of 425koz to 475koz for gold production and $870/oz to $940/oz for AISC. For H2 of FY24, Newcrest has derived its guidance range for Fruta del Norte by taking the mid-point of Lundin Gold’s CY24 guidance range of 450koz to 500koz for gold production and $780/oz to $850/oz for AISC. The mid-points for both calendar years were then divided by two and multiplied by Newcrest’s 32% attributable interest. Lundin Gold’s guidance ranges were sourced from their website (www.lundingold.com). Newcrest Annual Report 2023 45 Review of Operations (23) UoM Cadia Lihir Telfer Brucejack Red Chris Norte (7) Other Group For the 12 months ended 30 June 2023 Fruta del Operating Production Gold Copper Silver Molybdenum Sales Gold Copper Silver Molybdenum Financial Revenue EBITDA EBIT Net assets/(liabilities) Operating cash flow Investing cash flow Free cash flow* AISC (10) AISC Margin koz kt koz t koz kt koz t US$m US$m US$m US$m US$m US$m US$m US$m US$/oz US$/oz 597 98 592 660 612 101 604 789 1,897 1,306 1,072 3,569 1,202 670 – 31 – 674 – 31 – 1,237 455 117 4,215 416 349 17 208 – 352 17 208 – 672 124 24 (72) 114 (482) (291) (105) 720 28 45 1,752 125 988 1,466 331 9 576 1,633 164 286 – 460 – 269 – 371 – 493 220 72 2,575 233 (118) 115 312 1,157 640 39 18 94 – 40 19 104 – 209 (5) (59) 1,166 (15) (189) (204) 149 3,733 (1,936) 164 – – – 166 – – – – – – – – – – 136 819 – – – – – – – – – – (37) (54) 259 (345) (16) (361) 122 – – 2,105 133 1,385 660 2,114 136 1,318 789 4,508 2,063 1,172 11,712 1,605 (1,201) 404 2,311 1,093 680 * Free cash flow for ‘Other’ includes a net inflow of $113 million relating to other investing activities (comprising net receipts from the Fruta del Norte finance facilities of $116 million and net proceeds of $10 million relating to proceeds from contingent consideration, partially offset by investments in Lundin Gold, Metallic Minerals, Headwater Gold and Antipa Minerals totalling $13 million), income tax paid of $359 million, corporate costs of $108 million, other capital expenditure of $68 million, exploration expenditure of $66 million, business development costs of $19 million, and business integration transaction costs of $6 million, partially offset by net interest received of $99 million, dividends received of $30 million, and other inflows of $23 million. 46 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 1. Summary of Results for the 12 months ended 30 June 2023 (1,2,3,4,5,6) continued Operating Production Gold Copper Silver Molybdenum Sales Gold Copper Silver Molybdenum Financial Revenue EBITDA EBIT Net assets Operating cash flow Investing cash flow Free cash flow* AISC (18) AISC Margin UoM Cadia Lihir Telfer Brucejack Red Chris Norte (7) Other Group For the 12 months ended 30 June 2022 Fruta del koz kt koz t koz kt koz t US$m US$m US$m US$m US$m US$m US$m US$m US$/oz US$/oz 561 85 499 277 543 84 491 72 1,744 1,229 1,049 3,421 1,296 (683) 613 (67) (124) 1,921 687 – 17 – 666 – 17 – 1,223 446 145 4,193 453 (366) 87 1,080 1,622 175 408 14 190 – 407 14 191 – 751 203 78 (83) 180 (77) 103 565 1,388 409 114 – 179 – 120 – 156 – 226 109 41 2,678 122 (34) 88 135 1,125 672 42 21 137 – 41 21 136 – 263 98 41 1,077 102 (222) (120) 55 1,349 448 144 – – – 139 – – – – – – – – – – 107 766 – – – – – – – – – – (31) (50) 379 (473) (1,166) (1,639) 124 – – 1,956 121 1,022 277 1,917 119 991 72 4,207 2,054 1,304 11,665 1,680 (2,548) (868) 1,999 1,043 732 *Free cash flow for ‘Other’ includes a net outflow of $1,023 million relating to other investing activities (comprising the cash consideration for the acquisition of Pretium of $1,084 million (net of cash acquired), purchase of a put option of $19 million, $7 million relating to further investments in Lundin Gold, partially offset by net receipts from the Fruta del Norte finance facilities of $51 million and net proceeds of $36 million relating to the sale of the royalty portfolio), income tax paid of $244 million, exploration expenditure of $81 million, corporate costs of $103 million, other capital expenditure of $69 million, business integration transaction costs of $23 million, net interest paid of $5 million, and other outflows of $91 million. Newcrest Annual Report 2023 47 (1) All figures in this document relate to businesses of the Newcrest Mining Limited Group (Newcrest or the Group) for the 12 months ended 30 June 2023 (current period) compared with the 12 months ended 30 June 2022 (prior period), except where otherwise stated. All references to ‘the Company’ are to Newcrest Mining Limited. (2) Technical and scientific information: The technical and scientific information contained in this document relating to Cadia, Lihir and Red Chris was reviewed and approved by Craig Jones, Newcrest’s Interim Chief Operating Officer, FAusIMM and a Qualified Person as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101). (3) Disclaimer: This document includes forward looking statements and forward looking information within the meaning of securities laws of applicable jurisdictions, including within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. We intend the forward-looking statements contained in this communication to be covered by the safe harbor provisions of such securities laws. All statements other than statements of historical fact in this communication or referred to or incorporated by reference into this communication are “forward looking statements” for purposes of these sections. Forward looking statements can generally be identified by the use of words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “target”, “anticipate”, “believe”, “continue”, “objectives”, “outlook” and “guidance”, or other similar words and may include, without limitation, statements regarding estimated reserves and resources, internal rates of return, expansion, exploration and development activities and the specifications, targets, results, analyses, interpretations, benefits, costs and timing of such activities; certain plans, strategies, aspirations and objectives of management, anticipated production, sustainability initiatives, climate scenarios, dates for projects, reports, studies or construction, expected costs, cash flow or production outputs and anticipated productive lives of projects and mines. Newcrest continues to distinguish between outlook and guidance. Guidance statements relate to the current financial year. Outlook statements relate to years subsequent to the current financial year. These forward looking statements involve known and unknown risks, uncertainties and other factors that may cause Newcrest’s actual results, performance, and achievements to differ materially from any future results, performance or achievements, expressed or implied by these forward looking statements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of resources or reserves, political and social risks, changes to the regulatory framework within which Newcrest operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation. In addition, with respect to the Newmont Transaction, relevant factors may include, among others: (1) the risk that the Newmont Transaction may not be completed in a timely manner or at all, (2) the failure to receive, on a timely basis or otherwise, the required approvals of the Newmont Transaction by Newmont stockholders or Newcrest shareholders or the required approval of the scheme of arrangement by the Australian court, (3) the possibility that any or all of the various conditions to the consummation of the Newmont Transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals), (4) the possibility that competing offers or acquisition proposals for Newcrest or Newmont will be made, (5) the occurrence of any event, change or other circumstance that could give rise to the termination of the SID, including in circumstances which would require Newcrest to pay a termination fee, (6) the effect of the announcement or pendency of the Newmont Transaction on Newcrest’s ability to retain and hire key personnel, its ability to maintain relationships with its customers, suppliers and others with whom it does business, or its operating results and business generally, (7) risks related to diverting management’s attention from Newcrest’s ongoing business operations, (8) the risk of litigation in connection with the Newmont Transaction, including resulting expense or delay, and (9) (A) those risks discussed in Section 7 of this document and the Annual Information Form dated 13 December 2022, and (B) those risks discussed in other documents Newcrest files with the ASX and the Canadian Securities Administrators. For further information as to the risks which may impact on Newcrest’s results and performance, please see the risk factors discussed in Section 7 of this document and the Annual Information Form dated 13 December 2022 which are available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile. Forward looking statements are based on management’s current expectations and reflect Newcrest’s good faith assumptions, judgements, estimates and other information available as at the date of this report and/or the date of Newcrest’s planning or scenario analysis processes as to the financial, market, regulatory and other relevant environments that will exist and affect Newcrest’s business and operations in the future. Newcrest does not give any assurance that the assumptions will prove to be correct. There may be other factors that could cause actual results or events not to be as anticipated, and many events are beyond the reasonable control of Newcrest. Readers are cautioned not to place undue reliance on forward looking statements, particularly in the current economic climate with the significant volatility, uncertainty and disruption caused by global events such as geopolitical tensions. Forward looking statements in this document speak only at the date of issue. Except as required by applicable laws or regulations, Newcrest does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in assumptions on which any such statement is based. (4) Reliance on Third-Party Information: This document contains information that has been obtained from third parties and has not been independently verified, including estimates and actual outcomes that relate to production and AISC for Fruta del Norte. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This document should not be relied upon as a recommendation or forecast by Newcrest. (5) Ore Reserves and Mineral Resources Reporting Requirements: As an Australian Company with securities listed on the Australian Securities Exchange (ASX), Newcrest is subject to Australian disclosure requirements and standards, including the requirements of the Corporations Act 2001 and the ASX. Investors should note that it is a requirement of the ASX Listing Rules that the reporting of Ore Reserves and Mineral Resources in Australia is in accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and that Newcrest’s Ore Reserve and Mineral Resource estimates and reporting comply with the JORC Code. Newcrest is also subject to certain Canadian disclosure requirements and standards, as a result of its secondary listing on the Toronto Stock Exchange (TSX), including the requirements of NI 43-101. Investors should note that it is a requirement of Canadian securities law that the reporting of Mineral Reserves and Mineral Resources in Canada and the disclosure of scientific and technical information concerning a mineral project on a property material to Newcrest comply with NI 43-101. Newcrest’s material properties are currently Cadia, Lihir, Red Chris and Wafi-Golpu. Copies of the NI 43-101 Reports for Cadia, Lihir and Wafi-Golpu, which were released on 14 October 2020, and Red Chris, which was released on 30 November 2021, are available at www.newcrest.com and on Newcrest’s SEDAR profile. (6) Long Term Outlook: Newcrest released an indicative longer-term outlook in October 2021 based on the findings of the Cadia PC1-2 Pre-Feasibility Study (PFS) dated 19 August 2021, and the Red Chris Block Cave, Havieron Stage 1 and Lihir Phase 14A Pre-Feasibility Studies dated 12 October 2021. The PFS findings are indicative only, subject to an accuracy range of ±25% and should not be construed as guidance. Newcrest released the Cadia PC1-2 Feasibility Study on 11 November 2022 and the Lihir Phase 14A Feasibility Study on 25 January 2023. Newcrest is currently progressing the other studies through the Feasibility Stage, which will take into account revised inflationary expectations and updated project economics. As a result, it is expected that the indicative longer-term outlook will be updated on completion of the remaining studies. (7) Group gold production, gold sales and AISC includes Newcrest’s 32% attributable share of Fruta del Norte through its 32% equity interest in Lundin Gold Inc. The outcomes for Fruta del Norte have been sourced from Lundin Gold’s news releases and have been aggregated to reflect the twelve-month period ended 30 June 2023. Refer to Section 6.7 for further details. – Gold production in the current period includes 164,008 ounces relating to Newcrest’s 32% attributable share of the 512,526 ounces reported by Lundin Gold for the twelve-month period ended 30 June 2023; and – Group AISC in the current period includes a reduction of $23 per ounce, which represents 43,805 ounces of Newcrest’s 32% attributable share of the 134,640 ounces sold resulting in an AISC of $807 per ounce as reported by Lundin Gold for the September 2022 quarter, 38,365 ounces of Newcrest’s 32% attributable share of the 119,890 ounces sold resulting in an AISC of $865 per ounce as reported by Lundin Gold for the December 2022 quarter, 43,101 ounces of Newcrest’s 32% attributable share of the 134,691 ounces sold resulting in an AISC of $728 per ounce as reported by Lundin Gold for the March 2023 quarter, 41,267 ounces of Newcrest’s 32% attributable share of the 128,958 ounces sold for the June 2023 quarter at an estimated AISC of $882 per ounce. The AISC estimate for the June 2023 quarter represents the mid-point of Lundin Gold’s CY23 AISC guidance. (8) Statutory profit is profit after tax attributable to owners of the Company. (9) Newcrest’s results are reported under International Financial Reporting Standards (IFRS). This document includes certain non-IFRS financial information within the meaning of ASIC Regulatory Guide 230: ‘Disclosing non-IFRS financial information’ published by ASIC and ‘non-GAAP information’ within the meaning of National Instrument 52-112 – Non-GAAP and Other Financial Measures published by the Canadian Securities Administrator. This non-IFRS financial information is defined in Section 6 of this document. (10) Subsequent to the release of Newcrest’s June 2023 Quarterly Report, AISC for the current period was restated following the finalisation of the FY23 financial statements. (11) Newcrest’s AISC margin has been determined by deducting the All-In Sustaining Cost attributable to Newcrest’s operations from Newcrest’s realised gold price. Refer to Section 6.7 for further details. (12) Total Recordable Injury Frequency Rate (injuries per million hours). (13) Subject to market and operating conditions and no unforeseen delays. (14) Subject to conditions including Newcrest and Newmont shareholder and regulatory approvals. (15) As defined in the Scheme Implementation Deed. (16) Newcrest expects to have sufficient franking credits available to frank a special dividend up to an amount of US$1.10 per share. The franking of the special dividend amount is subject to change based on timing of implementation of the scheme, business performance, foreign exchange movements and an ATO Class Ruling. (17) Subject to the release of the Operating and Financial Review for the year ended 30 June 2022, the Total Recordable Injury Frequency Rate was restated following an internal review of injury classifications. (18) Subsequent to the release of the June 2022 quarterly report, the FY22 AISC outcome for the Group and Fruta del Norte has been restated to include Newcrest’s 32% attributable share of Fruta del Norte’s June 2022 quarterly results which Lundin Gold Inc released on 9 August 2022. 48 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 1. Summary of Results for the 12 months ended 30 June 2023 (1,2,3,4,5,6) continued (19) Realised metal prices are the US dollar spot prices at the time of sale per unit of metal sold (net of Telfer gold production hedges), excluding deductions related to treatment and refining costs and the impact of price related finalisations for metals in concentrate. The realised price has been calculated using sales ounces generated by Newcrest’s operations only (i.e. excluding Fruta del Norte). (20) These dates are indicative and may be subject to change due to a range of factors, including (but not limited to) the expected timing of necessary regulatory approvals. (21) The Cadia PC1-2 Feasibility Study has been prepared with the objective that its findings are subject to an accuracy range of ±10–15%. The findings in the Study and the implementation of the PC1-2 Project are subject to all the necessary approvals, permits, internal and regulatory requirements and further works. The Study estimates are indicative only and are subject to market and operating conditions. They should not be construed as guidance. (22) The guidance stated assumes weighted average copper price of $3.90 per pound, AUD:USD exchange rate of 0.69 and CAD:USD exchange rate of 0.77 for FY24. (23) All data relating to operations is shown at 100%, with the exception of Red Chris which is shown at 70% and Fruta del Norte which is shown at 32%. (24) Spend is shown net of Greatland Gold’s 30% contributions to the Havieron joint venture. (25) Additional operational and financial information can be viewed via the Interactive Analyst Centre TM which is located under the Investor Centre tab on Newcrest’s website (www.newcrest.com). This interactive tool allows users to chart and export Newcrest’s current and historical results for further analysis. (26) AISC per ounce is first quartile when compared to the Metals Focus Ltd “Q1 2023 Gold Mine Cost Service” report dated 23 June 2023. (27) Indicative only and should not be construed as guidance. Subject to market and operating conditions, all necessary approvals, regulatory requirements, further studies, and no unforeseen delays. (28) Subject to further studies, all necessary approvals, permits, internal and regulatory requirements and further works and no unforeseen delays. Newcrest Annual Report 2023 49 2. Discussion and Analysis of Operations and the Income Statement 2.1. Profit overview Statutory profit and Underlying profit were both $778 million in the current period. Underlying profit of $778 million was $94 million lower than the prior period primarily due to a lower realised copper price, higher depreciation, higher operating costs (including the impact of inflationary pressures which were in line with expectations), a decrease in Newcrest’s share of profits from its associates, and an increase in finance costs with a higher level of debt and higher interest rates in the current period. These impacts were partially offset by the addition of Brucejack, a higher contribution of low cost Cadia production, the favourable impact on costs (including depreciation) from the weakening of the Australian dollar and Canadian dollar against the US dollar, favourable fair value adjustments recognised on Newcrest’s investment in the Fruta del Norte finance facilities, a lower income tax expense as a result of the Company’s decreased profitability in the current period, and higher molybdenum revenue with increased sales volumes. US$m Gold revenue Copper revenue Silver revenue Molybdenum revenue Less: treatment and refining deductions Total revenue Operating costs Depreciation and amortisation Total cost of sales Corporate administration expenses Exploration expenses Share of profit of associates Other income/(expenses) Net finance costs Income tax expense Underlying profit Movement in Underlying Profit ($m) For the 12 months ended 30 June 2023 3,500 1,130 29 43 (194) 4,508 (2,408) (874) (3,282) (138) (76) 19 141 (96) (298) 778 2022 3,194 1,149 22 3 (161) 4,207 (2,122) (731) (2,853) (138) (76) 45 119 (75) (357) 872 Change Change % 306 (19) 7 40 (33) 301 (286) (143) (429) – – (26) 22 (21) 59 (94) 10% (2%) 32% 1,333% (20%) 7% (13%) (20%) (15%) – – (58%) 18% (28%) 17% (11%) Revenue $301m Operating Costs ($286)m Depreciation & Amortisation ($143)m 161 7 40 (33) (409) 306 872 (180) 123 (181) 38 (26) 22 (21) 59 778 FY22 COPPER PRICE GOLD SALES VOLUME COPPER SALES VOLUME SILVER REVENUE MOLYB- DENUM REVENUE REVENUE DEDUCT- IONS OPERATING COSTS FX ON OPERATING COSTS DEPREC- IATION FX ON DEPREC- IATION SHARE OF PROFIT OF ASSOC- IATES OTHER INCOME/ (EXPENSES) NET FINANCE COSTS INCOME TAX EXPENSE FY23 50 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 2. Discussion and Analysis of Operations and the Income Statement continued 2.2. Revenue Total sales revenue for the current period of $4,508 million included deductions for treatment and refining costs of $194 million. Newcrest’s sales revenue continues to be predominantly attributable to gold, being 76% of total net sales revenue in the current period (75% in the prior period). US$m Total gross revenue for the 12 months ended 30 June 2022 Changes in revenues from volume: Gold Copper Silver Molybdenum Total volume impact Change in revenue from price: Gold Copper Silver Molybdenum Total price impact Total gross revenue for the 12 months ended 30 June 2023 Less: treatment and refining deductions Total net revenue for the 12 months ended 30 June 2023 306 161 7 30 – (180) – 10 4,368 504 (170) 4,702 (194) 4,508 Gold revenue in the current period of $3,448 million included deductions for gold treatment and refining costs of $52 million. Excluding these deductions, total gold revenue increased by 10% compared to the prior period, primarily driven by the inclusion of twelve months of gold sales volumes from Brucejack (compared to four months in the prior period) and higher gold sales volumes at Cadia due to the completion of the planned replacement and upgrade of the SAG mill motor in the prior period. This was partially offset by lower gold sales volumes at Telfer and Red Chris (driven by lower production). Copper revenue in the current period of $997 million included deductions for copper treatment and refining costs of $133 million. Excluding these deductions, total copper revenue decreased by 2% compared to the prior period, driven by a 14% decrease in the realised copper price ($3.76 per pound in the current period compared to $4.36 per pound in the prior period), and lower copper sales volumes at Red Chris. This was partially offset by higher copper sales volumes at Cadia and Telfer. 2.3. Cost of sales US$m Site production costs Royalties Selling costs Inventory movements – ore Inventory movements – finished goods Operating costs Depreciation and amortisation Cost of sales For the 12 months ended 30 June 2023 2,264 120 91 (59) (8) 2,408 874 3,282 2022 1,915 125 82 20 (20) 2,122 731 2,853 Change Change % 349 (5) 9 (79) 12 286 143 429 18% (4%) 11% (>100%) 60% 13% 20% 15% Cost of sales of $3,282 million were $429 million (or 15%) higher than the prior period. Site production costs of $2,264 million were $349 million higher than the prior period primarily due to the inclusion of twelve months of operating costs from Brucejack in the current period (compared to four months in the prior period), increased mining and milling activity at Cadia, upfront costs relating to embedding business improvement initiatives at Red Chris and continued inflationary pressures on costs (which were in line with expectations). These impacts were partially offset by the favourable impact on operating costs from the weakening of the Australian dollar and Canadian dollar against the US dollar. Newcrest Annual Report 2023 51 The decrease in royalties primarily reflects the impact of a lower realised copper price and lower sales volumes at Telfer and Red Chris, partially offset by the addition of Brucejack and higher sales volumes at Cadia. Selling costs increased in the current period driven by higher sales volumes at Cadia and the addition of Brucejack. The favourable movement in ore inventory in the current period primarily reflects a capitalisation of costs to the balance sheet driven by an increase in stockpiles at Lihir with mining continuing while the mill was constrained due to the limited raw water supply in the first half of the current period. Depreciation expense was higher than the prior period which primarily reflects the addition of Brucejack, higher production volumes at Cadia, and higher amortisation of production stripping at Lihir. This was partially offset by the benefit of a weakening Australian dollar and Canadian dollar against the US dollar, and lower production volumes at Telfer. As the Company is a US dollar reporting entity, its cost of sales will vary in accordance with the movements in the operating currencies where those costs are not denominated in US dollars. The table below shows indicative currency exposures on operating costs by site for the current period: Cadia Telfer Lihir Brucejack Red Chris Group* USD 20% 10% 25% – 20% 15% AUD 80% 90% 30% – – 50% PGK – – 45% – – 15% CAD – – – 100% 80% 20% * The Group number also includes the impact of currency exposures on corporate administration expenses and exploration expenditure. 2.4. Corporate, Exploration and Other items US$m Corporate administration expenses Exploration expenses Share of profit of associates Other income/(expenses) Corporate, Exploration and Other items For the 12 months ended 30 June 2023 2022 Change Change % (138) (76) 19 141 (54) (138) (76) 45 119 (50) – – (26) 22 (4) – – (58%) 18% (8%) Corporate administration expenses of $138 million in the current period comprised corporate costs of $108 million, depreciation of $17 million and equity-settled share-based payments of $13 million. Exploration expenditure of $76 million was expensed in the current period, which was in-line with the prior period. The share of profit of associates of $19 million represents Newcrest’s share of profits or losses relating to its equity accounted associates, comprising Lundin Gold, SolGold, Azucar Minerals, Antipa Minerals, Metallic Minerals and Headwater Gold. Other income/(expenses) of $141 million comprised: US$m Net fair value movements on concentrate receivables Net foreign exchange gain Net fair value gain on Fruta del Norte finance facilities Net fair value gain on Power Purchase Agreement (PPA) Business acquisition and integration costs Business development costs Insurance settlement for the Cadia NTSF embankment slump (net of associated costs) Gain on sale of royalty portfolio Other items Other income/(expenses) For the 12 months ended 30 June 2023 2022 Change Change % 4 7 143 5 (6) (23) – – 11 141 (51) 68 62 – (42) – 65 11 6 119 55 (61) 81 5 36 (23) (65) (11) 5 22 >100% (90%) 131% – 86% – (100%) (100%) 83% 18% 52 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 2. Discussion and Analysis of Operations and the Income Statement continued 2.4. Corporate, Exploration and Other items continued Newcrest is exposed to changes in commodity prices during the quotational period for the sale of concentrate. The measurement of fair value for Newcrest’s outstanding concentrate debtors is recognised as a net fair value gain (or loss) on gold and copper derivatives in other income and is driven by the movement in gold, copper and molybdenum prices across the quotational period. The net foreign exchange gain in the current period primarily relates to the restatement of US dollar denominated cash and foreign denominated financial assets (including concentrate debtors) and liabilities held by the Group’s Australian and Canadian subsidiaries. The current period also includes: – a favourable movement of $143 million in the net fair value of Newcrest’s investment in the Fruta del Norte finance facilities following Lundin Gold’s early repayment of the gold prepay credit facility in January 2023, an increase in the gold price assumptions used in the fair value calculations, and application of updated life of mine plans; – an adjustment of $5 million relating to hedge ineffectiveness associated with the fair value movement of the renewable PPA at Cadia; – $6 million in business acquisition and integration costs relating to systems integration at Brucejack; and – $23 million in business development costs relating to legal and advisory costs, and the acceleration of open equity-settled long term incentive plans, associated with the proposed Newmont transaction. Newcrest expects to incur additional external advisory fees, subject to the completion of the proposed Newmont transaction. 2.5. Net finance costs US$m Interest on Fruta del Norte finance facilities Other interest income Finance income Interest on loans Interest on leases Facility fees and other costs Discount unwind on provisions Finance costs Net finance costs For the 12 months ended 30 June 2023 2022 Change Change % 13 28 41 (103) (5) (13) (16) (137) (96) 19 6 25 (75) (4) (12) (9) (100) (75) (6) 22 16 (28) (1) (1) (7) (37) (21) (32%) 367% 64% (37%) (25%) (8%) (78%) (37%) (28%) Net finance costs of $96 million were $21 million (or 28%) higher than the prior period driven by an increase in drawdowns on the bilateral bank debt facilities and higher interest rates in the current period, and an increase in the discount unwind on provisions with the addition of Brucejack. This was partially offset by an increase in interest income earned on cash balances. 2.6. Income tax expense Income tax on Statutory and Underlying profit was $298 million, resulting in an effective tax rate of 28% which is lower than the Australian company tax rate of 30%. This is primarily due to the effective tax rate in some jurisdictions in which Newcrest operates being lower than 30% together with the recognition of net deferred tax assets. 2.7. Significant items There were no significant items reported in the current or prior period. Newcrest Annual Report 2023 53 3. Discussion and analysis of cash flow Free cash flow was $404 million for the current period. ‘Free cash flow before M&A activity’ of $447 million was 95% higher than the prior period reflecting reduced spend on major capital projects at Cadia with the completion of the two-stage plant expansion project in the current period, an increase in interest received driven by Lundin Gold’s early repayment of the Fruta del Norte gold prepay credit facility in January 2023, and the receipt of $30 million in dividends from Lundin Gold. This is partially offset by a lower realised copper price, unfavourable net working capital movements, and an increase in income taxes paid. In the current period, Newcrest received cash flows of $262 million (net of withholding taxes) from the Fruta del Norte financing facilities. This is reflected in the cashflow statement as $146 million in operating cashflow (interest received) and $116 million in investing cashflow (primarily principal repayments received). Newcrest has received $480 million (net of withholding taxes) from these financing facilities since they were acquired for $460 million in April 2020, including cash flows of $325 million (net of withholding taxes) from the gold prepay credit facility. For the 12 months ended 30 June US$m Cash flow from operating activities Business acquisition and integration costs* Business development costs* Production stripping and sustaining capital expenditure Major capital expenditure (non-sustaining) Reclassification of capital leases Exploration and evaluation expenditure Net receipts from Fruta del Norte finance facilities Proceeds from sale of property, plant and equipment Free cash flow (before M&A activity) Business acquisition and integration costs* Business development costs* Brucejack integration capital Acquisition of Pretium (net of cash acquired) Payment for purchase of put option* Payments for investment in associates Proceeds from contingent consideration Net proceeds from sale of royalty portfolio Free cash flow 2023 1,605 6 19 (651) (515) 7 (143) 116 3 447 (6) (19) (15) – – (13) 10 – 2022 1,680 23 – (644) (773) 11 (120) 51 1 229 (23) – – (19) (7) – 36 Change Change % (75) (17) 19 (7) 258 (4) (23) 65 2 218 17 (19) (15) 19 (6) 10 (36) 1,272 (4%) (74%) – (1%) 33% (36%) (19%) 127% 200% 95% 74% – – 100% 100% (86%) – (100%) >100% (1,084) 1,084 * Included within Cash flow from operating activities. Business and integration costs reported in Section 2.4 includes the acceleration of the open equity-settled long term incentive plans which are non-cash. In the prior period, business and integration costs reported in Section 2.4 is the sum of business transaction costs and the payment for purchase of put option presented in the table above. 404 (868) 54 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 3. Discussion and analysis of cash flow continued 3.1. Cash at the end of the period US$m Cash flow from operating activities Cash flow from investing activities Free cash flow Cash flow from financing activities Net movement in cash Cash and cash equivalents at the beginning of the period Effects of exchange rate changes on cash held Cash and cash equivalents at the end of the period 3.2. Cash flow from operating activities US$m EBITDA Add: Exploration expenditure written-off Deduct: Other non-cash items or non-operating items Sub-total Working capital movements* Receivables Inventories Payables and provisions Other assets and liabilities Net working capital movements Dividends received Net interest received/(paid) Income taxes paid Net cash from operating activities * Includes adjustments for non-cash items. For the 12 months ended 30 June 2022 1,680 (2,548) (868) (427) (1,295) 1,873 (13) 565 Change Change % (75) 1,347 1,272 48 1,320 (1,308) 9 21 (4%) 53% >100% 11% >100% (70%) 69% 4% For the 12 months ended 30 June 2022 2,054 76 (125) 2,005 6 (38) (35) (9) (76) – (5) (244) 1,680 Change Change % 9 – (72) (63) (21) (63) 84 (31) (31) 30 104 (115) (75) 0% – (58%) (3%) (>100%) (166%) >100% (344%) (41%) – >100% (47%) (4%) 2023 1,605 (1,201) 404 (379) 25 565 (4) 586 2023 2,063 76 (197) 1,942 (15) (101) 49 (40) (107) 30 99 (359) 1,605 Net cash from operating activities of $1,605 million was $75 million (or 4%) lower than the prior period. The decrease is driven by a lower realised copper price, higher operating costs, unfavourable net working capital movements, and higher income taxes paid. These impacts were partially offset by the addition of Brucejack, a higher contribution of low cost Cadia production, the favourable impact on costs from the weakening of the Australian dollar and Canadian dollar against the US dollar, an increase in interest received driven by Lundin Gold’s early repayment of the gold prepay credit facility in January 2023, and dividends received from Lundin Gold. Newcrest Annual Report 2023 3.3. Cash flow from investing activities US$m Production stripping Telfer Lihir Red Chris Total production stripping Sustaining capital Cadia Telfer Lihir Brucejack Red Chris Corporate Total sustaining capital Major projects (non-sustaining) Cadia Telfer Lihir Brucejack Red Chris Wafi-Golpu Havieron (24) Total major projects (non-sustaining) capital Brucejack integration capital Total capital expenditure Reclassification of capital leases M&A activity Acquisition of Pretium (net of cash acquired) Payment for purchase of put option Payment for investment in associates Proceeds from contingent consideration Proceeds from sale of royalty portfolio Total M&A activity Net receipts from Fruta del Norte finance facilities Exploration and evaluation expenditure Proceeds from sale of property, plant and equipment Net cash outflow from investing activities 55 For the 12 months ended 30 June 2023 2022 Change Change % 54 125 27 206 207 35 102 24 65 12 445 277 3 59 42 78 5 51 515 15 1,181 (7) – – 13 (10) – 3 (116) 143 (3) 31 132 50 213 141 33 156 15 72 14 431 23 (7) (23) (7) 66 2 (54) 9 (7) (2) 14 544 (267) – 77 16 81 5 50 773 – 1,417 (11) 3 (18) 26 (3) – 1 (258) 15 (236) 4 1,084 (1,084) 19 7 – (36) 1,074 (51) 120 (1) (19) 6 (10) 36 (1,071) (65) 23 (2) 1,201 2,548 (1,347) 74% (5%) (46%) (3%) 47% 6% (35%) 60% (10%) (14%) 3% (49%) – (23%) 163% (4%) – 2% (33%) – (17%) 36% (100%) (100%) 86% – 100% (100%) (127%) 19% (200%) (53%) Net cash outflow from investing activities of $1,201 million was $1,347 million (or 53%) lower than the prior period. Excluding the acquisition of Pretium (which occurred in the prior period), investing activities were $263 million lower in the current period due to a reduction in major projects expenditure, and an increase in net receipts from the Fruta del Norte finance facilities, this was partially offset by higher exploration expenditure and Brucejack integration capital. Capital expenditure of $1,181 million in the current period included the following: – Production stripping of $206 million was $7 million (or 3%) lower than the prior period primarily due to lower waste stripping in Phase 7 at Red Chris (as the Phase nears the production stage) and lower production stripping in Phases 15 and 16 at Lihir. This was largely offset by the commencement of stripping in WDS8 at Telfer and increased mining activity in Phase 17 at Lihir. – Sustaining capital expenditure of $445 million was $14 million (or 3%) higher than the prior period due to increased expenditure at Cadia (primarily relating to construction activities on the Tailings Storage Facilities), together with the addition of Brucejack. This was largely offset by lower spend at Lihir (reclassification of Phase 14A expenditure as non-sustaining in the current period) and Red Chris. – Major project, or non-sustaining, capital expenditure of $515 million was $258 million (or 33%) lower than the prior period with commissioning of the two-stage plant expansion project at Cadia now complete and the Lihir Front End Recovery Project nearing completion. This was partially offset by the inclusion of twelve months of expenditure from Brucejack compared to four months in the prior period. – Capital expenditure also benefitted from the weakening of the Australian dollar and Canadian dollar against the US dollar. 56 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 3. Discussion and analysis of cash flow continued 3.3. Cash flow from investing activities continued Exploration activity of $143 million was $23 million (or 19%) higher than the prior period, comprising the following: US$m Expenditure by nature Greenfield Brownfield Resource Definition Total Expenditure by region Australia Papua New Guinea North America South America Total For the 12 months ended 30 June 2023 2022 Change Change % 53 53 37 143 40 6 83 14 143 69 27 24 120 57 1 41 21 120 (16) 26 13 23 (17) 5 42 (7) 23 (23%) 96% 54% 19% (30%) 500% 102% (33%) 19% In the current period, Newcrest continued its search for new discoveries with greenfield and brownfield expenditure across Newcrest’s key search areas. Exploration activity was focused in and around fertile gold and copper districts including Newcrest’s existing operations, the broader Paterson Province (Western Australia), Drummond Basin (Queensland, Australia), the Northern Territory (Australia), the Golden Triangle of British Columbia (Canada), Ontario (Canada), the Great Basin in Nevada/Oregon (USA), Chile and Ecuador. Brownfield, Resource Definition and North American expenditures were higher during the current period with the impact of a full year of exploration activities at Brucejack, the continuation of the mineralisation assessment at the East Ridge Exploration Target at Red Chris and the addition of several new greenfield option and earn-in agreements as part of Newcrest’s high grade epithermal search in the Great Basin (USA). Expenditure in Australia decreased in the current period which primarily reflects the conclusion of the current surface drilling program at Havieron. In the current period, Newcrest signed option and earn-in agreements with respect to seven new greenfield exploration projects in Nevada (USA), Oregon (USA) and Queensland (Australia). 3.4. Cash flow from financing activities US$m Net proceeds from borrowings Repayment of lease principal Repayment of other loans Dividends paid to members of the parent entity Payment for treasury shares Other financing activities Net cash outflow from financing activities For the 12 months ended 30 June 2023 (155) 49 – 477 8 – 379 2022 (143) 43 140 372 14 1 427 Change Change % (12) 6 (140) 105 (6) (1) (48) (8%) 14% (100%) 28% (43%) (100%) (11%) Net cash outflow from financing activities of $379 million for the current period comprised: – Net draw down on the bilateral bank debt facilities of $155 million; – Repayment of lease principal totalling $49 million; – Dividends paid to Newcrest shareholders of $477 million, which were $105 million (or 28%) higher than those paid in the prior period (including the special dividend of US 20 cents that was paid in March 2023); and – Payment for treasury shares of $8 million represents shares purchased on market to satisfy obligations under employee incentive plans. Newcrest Annual Report 2023 57 For the 12 months ended 30 June UoM 2023 2022 Change Change % ounces tonnes ounces tonnes US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$/oz 596,879 98,191 612,061 100,701 560,702 85,383 543,029 83,888 1,897 825 1,306 1,072 1,202 207 277 484 720 28 45 1,744 695 1,229 1,049 1,296 141 544 685 613 (67) (124) 36,177 12,808 69,032 16,813 153 130 77 23 (94) 66 (267) (201) 107 95 169 6% 15% 13% 20% 9% 19% 6% 2% (7%) 47% (49%) (29%) 17% >100% >100% 4. Review of Operations (25) 4.1. Cadia Measure Operating Gold production Copper production Gold sales Copper sales Financial Revenue Cost of Sales (including depreciation) EBITDA EBIT Operating cash flow Sustaining capital Non-sustaining capital Total capital expenditure Free cash flow All-In Sustaining Cost All-In Sustaining Cost Gold production was 596,879 ounces for the current period, and copper production was 98,191 tonnes. Cadia’s higher gold and copper production in the current period reflects an increase in mill throughput following completion of the planned replacement and upgrade of the SAG mill motor in the prior period and the ongoing benefits of recovery improvement projects with the commissioning of the two-stage plant expansion project completed. This was partially offset by lower gold head grade which was in line with expectations. EBIT of $1,072 million was 2% higher than the prior period reflecting higher gold and copper sales volumes and the favourable impact on costs from a weakening Australian dollar against the US dollar. These benefits were partially offset by a lower realised gold and copper price, and an increase in Cost of Sales (including depreciation) which reflects increased mining and milling activity, costs relating to transformation activities and environmental management, and higher depreciation. AISC of $45 per ounce was higher than the prior period primarily driven by the impact of a lower realised copper price, higher site production costs and an increase in sustaining capital expenditure relating to construction activities on the Tailings Storage Facilities. These impacts were partially offset by higher gold and copper sales volumes, and the favourable impact on costs from a weakening Australian dollar against the US dollar. Cadia’s AISC remains within first quartile performance for the gold industry. (26) Free cash flow of $720 million was 17% higher than the prior period reflecting lower non-sustaining capital expenditure with commissioning of the two-stage plant expansion completed together with higher EBITDA in the current period. This was partially offset by unfavourable working capital movements relating to timing of receivables and payables, and higher sustaining capital expenditure. Capital expenditure in the current period includes the development of PC2-3 and PC1-2, the two-stage Cadia Expansion Project and construction activities relating to Tailings Storage Facilities. In November 2022, the Newcrest Board approved the progression of the Cadia PC1-2 Feasibility Study to Execution, marking a key strategic milestone to maintain Cadia’s gold and copper production profile for decades to come. The Feasibility Study demonstrated strong financial returns with an optimised mine footprint substantially increasing expected ore mined across the life of the project. Key development activities for PC1-2 remain on track with development metres increasing in the June 2023 quarter. First ore production is expected in FY26. (13,21) During the June 2023 quarter, the NSW Environment Protection Authority (EPA) issued Cadia with variations to its Environment Protection Licence, a Prevention Notice and Notices to Provide Information regarding the management of dust emissions and other air pollutants from the Tailings Storage Facilities and ventilation rises. The licence variations largely formalised the actions Cadia had developed in consultation with the EPA and were already undertaking across a range of measures. 58 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 4. Review of Operations (25) continued 4.1. Cadia continued Cadia received a letter from the EPA in June 2023 requiring it to immediately comply with specific statutory requirements and licence conditions relating to a ventilation rise. Adjustments were implemented underground, including a reduction in mining rates, modifications to the ventilation circuit and the installation of additional dust sprays and spray curtains. Four dust filtration units are currently in place, with commissioning of the remaining three units expected to be progressively completed in the December 2023 quarter. No material impacts to production are expected, (13) with mill feed supplemented by surface stockpiles until that time. Cadia continues to work openly and transparently with the EPA and the local community to meet its statutory obligations in a way that is aligned with Newcrest values. A New South Wales Legislative Council Committee has commenced an inquiry into current and potential community impacts of the gold, silver, lead and zinc mining industries in the state. Newcrest will provide a submission to the committee. 4.2. Lihir Measure Operating Gold production Gold sales Financial Revenue Cost of Sales (including depreciation) EBITDA EBIT Operating cash flow Production stripping Sustaining capital Non-sustaining capital Total capital expenditure Free cash flow All-In Sustaining Cost All-In Sustaining Cost For the 12 months ended 30 June UoM 2023 2022 Change Change % ounces ounces 670,013 674,080 687,445 665,993 (17,432) 8,087 US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m 1,237 1,120 455 117 416 125 102 59 286 125 988 US$/oz 1,466 1,223 1,078 446 145 453 132 156 77 365 87 1,080 1,622 14 42 9 (28) (37) (7) (54) (18) (79) 38 (92) (156) (3%) 1% 1% 4% 2% (19%) (8%) (5%) (35%) (23%) (22%) 44% (9%) (10%) Gold production was 670,013 ounces for the current period. Lihir’s performance in the current period was impacted by lower feed grade, reduced mill throughput and mill availability. The lower feed grade in the current period reflects a higher proportion of low grade expit material being processed in the second half of the current period with extreme rainfall limiting pit access and causing material handling issues at the crushers. Mill throughput was significantly constrained in the first half of the current period due to drought conditions experienced across the New Ireland Province which limited raw water supply to the plant together with several unplanned downtime events impacting mill availability. Lihir continues to progress options to improve its water management resilience, including improving its internal water recycling and identifying additional water sources and storage options. Despite the weather events, ore mined increased by 57% in the current period reflecting the progression of stripping into higher grade ore. EBIT of $117 million was 19% lower than the prior period reflecting an increase in amortisation relating to production stripping, partly offset by higher gold sales volumes. AISC of $1,466 per ounce was 10% lower than the prior period driven by lower production stripping activity, lower sustaining capital expenditure, and higher gold sales volumes. The decrease in sustaining capital was primarily due to the reclassification of Phase 14A to non-sustaining capital in the current period, with the lower production stripping expenditure driven by reduced activity in Phase 15 and 16, partially offset by increased activity in Phase 17. Free cash flow of $125 million was 44% higher than the prior period, primarily driven by lower total capital expenditure. This was partially offset by unfavourable working capital movements which reflects an increase in stockpiles and timing of payments to suppliers. In January 2023, the Newcrest Board approved the Lihir Phase 14A Feasibility Study, endorsing the project into full implementation. Phase 14A is another step forward in realising the full potential of Lihir with the cutback expected to deliver additional high grade gold production over the next four years, (13) Lihir is on track to deliver high grade ore from Phase 14A in FY24. (13) Newcrest continues to assess a range of options to unlock additional high grade mineralisation outside the current Ore Reserve with the potential to extend the elevated production profile beyond FY31. Work to assess the application of steep wall technologies in the northern and eastern extents of the Kapit orebody, including a lower cost and simpler seepage barrier design is on track for completion in CY23. (13) Newcrest Annual Report 2023 59 For the 12 months ended 30 June UoM 2023 2022 Change Change % ounces tonnes ounces tonnes US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$/oz 348,823 16,665 352,388 16,667 407,550 13,904 407,094 14,277 (58,727) 2,761 (54,706) 2,390 672 648 124 24 114 54 35 3 92 9 576 1,633 751 673 203 78 180 31 33 – 64 103 565 1,388 (79) (25) (79) (54) (66) 23 2 3 28 (94) 11 245 (14%) 20% (13%) 17% (11%) (4%) (39%) (69%) (37%) 74% 6% – 44% (91%) 2% 18% 4.3. Telfer Measure Operating Gold production Copper production Gold sales Copper sales Financial Revenue Cost of Sales (including depreciation) EBITDA EBIT Operating cash flow Production stripping Sustaining capital Non-Sustaining capital Total capital expenditure Free cash flow All-In Sustaining Cost All-In Sustaining Cost (10) Gold production was 348,823 ounces for the current period, and copper production was 16,665 tonnes. Lower gold production in the current period was driven by lower mill throughput (lower utilisation partially offset by higher milling rates) and lower grade which reflects an increase in the proportion of stockpile material processed. The higher copper production in the current period was driven by higher grade. EBIT of $24 million was 69% lower than the prior period driven by lower gold production driving lower gold sales volumes, and a lower realised copper price. This was partially offset by the favourable impact on operating costs from a weakening Australian dollar against the US dollar, higher copper sales volumes, lower depreciation in line with lower sales, and a higher realised gold price. AISC of $1,633 per ounce (10) was 18% higher than the prior period primarily due to lower gold sales volumes, a lower realised copper price, an increase in production stripping activity relating to WDS8, and additional costs relating to inflationary pressures on earth-moving equipment parts and higher diesel prices. This was partially offset by higher copper sales volumes, and the benefit of a weakening Australian dollar against the US dollar. Free cash flow of $9 million was 91% lower than the prior period. This reflects lower EBITDA and increased production stripping activity, partially offset by favourable working capital movements. Excluding the hedge losses of $76 million in the current period, Telfer’s free cash flow would have been positive $85 million. In November 2022, the Newcrest Board approved expenditure of A$214 million (~US$150 million) for the WDS8 cutback. The cutback underpins the continuity of operations at Telfer, with the mine now expected to continue operations into early FY25. (13) First ore production in WDS8 was achieved during the December 2022 quarter with mining rates in the cutback performing above expectations in the current period. Following the approval of the WDS8 cutback, Newcrest has completed further hedging of a portion of Telfer’s planned production to June 2024 to secure margins and support investments in cutbacks and mine development. 60 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 4. Review of Operations (25) continued 4.4. Brucejack Measure Operating Gold production Gold sales Financial Revenue Cost of Sales (including depreciation) EBITDA EBIT Operating cash flow Sustaining capital Non-Sustaining capital Integration capital Total capital expenditure Free cash flow All-In Sustaining Cost All-In Sustaining Cost For the 12 months ended 30 June UoM 2023 2022 Change Change % ounces ounces 286,003 269,356 114,421 120,056 171,582 149,300 US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$/oz 493 421 220 72 233 24 42 15 81 115 312 1,157 226 185 109 41 122 15 16 – 31 88 135 1,125 267 236 111 31 111 9 26 15 50 27 177 32 150% 124% 118% 128% 102% 76% 91% 60% 163% – 161% 31% 131% 3% The outcomes presented in the table above reflect the 12 months to 30 June 2023, with the comparative column reflecting the period from 25 February 2022 (being the acquisition date) to 30 June 2022. The financial and operating performance at Brucejack was impacted in the current period by the temporary suspension of operations following the tragic fatality in October 2022. All mining and processing activities returned to full capacity in early December 2022, although gold production in the second half of the current period was lower than expectations driven by lower gold head grade. Newcrest continued to successfully progress the three-phase transformation program during the current period with a range of initiatives well progressed. (27) with over 50% of the benefits Brucejack remains on track to deliver the expected synergy benefits of C$20–$30 million (US$16–$24 million) per annum, delivered in the current period. The debottlenecking Pre-Feasibility Study (PFS) to further investigate the potential to increase process plant capacity by up to 30% is progressing well. The processing plant permit amendment application has been lodged with the regulator and the PFS is expected to be completed in the December 2023 quarter. (28) The ore sorting project is also progressing following positive preliminary results in the initial bench scale trials, with the concept study now complete and detailed design on a trial installation and procurement of long-lead items well advanced. Newcrest Annual Report 2023 61 For the 12 months ended 30 June UoM 2023 2022 Change Change % ounces tonnes ounces tonnes US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$/oz 39,342 18,293 39,838 18,842 209 268 (5) (59) (15) 27 65 78 170 (204) 149 3,733 42,341 21,363 40,921 21,313 263 222 98 41 102 50 72 81 203 (120) 55 1,349 (2,999) (3,070) (1,083) (2,471) (54) 46 (103) (100) (117) (23) (7) (3) (33) (84) 94 2,384 (7%) (14%) (3%) (12%) (21%) 21% (>100%) (>100%) (>100%) (46%) (10%) (4%) (16%) (70%) 171% 177% 4.5. Red Chris (23) Measure Operating Gold production Copper production Gold sales Copper sales Financial Revenue Cost of Sales (including depreciation) EBITDA EBIT Operating cash flow Production stripping Sustaining capital Non-Sustaining capital Total capital expenditure Free cash flow All-In Sustaining Cost All-In Sustaining Cost Gold production was 39,342 ounces for the current period, and copper production was 18,293 tonnes. In the current period, Newcrest continued to focus on operational improvements at Red Chris with the optimisation of the flotation circuit and upgrade to the materials handling system. The lower gold production in the current period was primarily due to lower recovery with the completion of mining in the East Zone and mill feed transitioning to Phase 7 (Main Zone) which has higher levels of pyrite which impacted recovery performance. Copper production was 14% lower than the prior period driven by lower grade. EBIT of negative $59 million was lower than the prior period reflecting higher Cost of Sales (including depreciation), a lower realised gold and copper price and lower gold and copper sales volumes, partially offset by the favourable impact on operating costs from a weakening Canadian dollar against the US dollar. Cost of Sales (including depreciation) was 21% higher than the prior period, primarily due to higher site production costs driven by the upfront cost of embedding business improvement initiatives, and inflationary pressures on consumables. Cost of sales was further impacted by lower production stripping activity due to timing of the Phase 7 stripping campaign which reduced costs capitalised to the balance sheet. AISC of $3,733 per ounce was higher than the prior period, primarily due to higher site production costs, a lower realised copper price, and lower production driving lower gold and copper sales volumes, partially offset by lower sustaining capital. Free cash flow of negative $204 million was lower than the prior period, primarily driven by lower EBITDA and unfavourable movements in working capital, partially offset by lower total capital expenditure. 62 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 5. Discussion and Analysis of the Balance Sheet 5.1. Net assets and total equity Newcrest had net assets and total equity of $11,712 million as at 30 June 2023. US$m Assets Cash and cash equivalents Trade and other receivables Inventories Other financial assets Current tax asset Property, plant and equipment Goodwill Other intangible assets Deferred tax assets Investment in associates Other assets Total assets Liabilities Trade and other payables Current tax liability Borrowings Lease liabilities Other financial liabilities Provisions Deferred tax liabilities Total liabilities Net assets Equity Equity attributable to owners of the parent Total equity As at 30 June 2023 2022 Change Change % 586 363 1,731 411 58 565 314 1,609 595 5 12,996 12,902 686 32 50 483 125 704 37 56 487 85 17,521 17,359 (693) (37) (1,935) (110) (33) (687) (2,314) (5,809) 11,712 11,712 11,712 (675) (136) (1,779) (111) (68) (657) (2,268) (5,694) 11,665 11,665 11,665 21 49 122 (184) 53 94 (18) (5) (6) (4) 40 162 (18) 99 (156) 1 35 (30) (46) (115) 47 47 47 4% 16% 8% (31%) 1,060% 1% (3%) (14%) (11%) (1%) 47% 1% (3%) 73% (9%) 1% 51% (5%) (2%) (2%) 0% 0% 0% Newcrest Annual Report 2023 63 5.2. Financial metrics 5.2.1. Net debt and gearing Net debt (comprising total borrowings and lease liabilities less cash and cash equivalents) as at 30 June 2023 was $1,459 million (or $134 million higher than the prior period). All of Newcrest’s borrowings are US dollar denominated. The gearing ratio (net debt as a proportion of net debt and total equity) as at 30 June 2023 was 11.1%, an increase from 10.2% as at 30 June 2022. Notwithstanding this increase from 30 June 2022, a gearing ratio of 11.1% remains comfortably within Newcrest’s financial policy target of being less than 25%. Components of the movement in net debt and gearing are outlined in the table below. US$m Bilateral bank debt facilities Corporate bonds – unsecured Capitalised transaction costs on facilities Total borrowings Lease liabilities Total debt Less cash and cash equivalents Net debt Total equity Total capital (Net debt and total equity) Gearing (Net debt/total capital) 2023 298 1,650 (13) 1,935 110 2,045 (586) 1,459 11,712 13,171 11.1% As at 30 June 2022 143 1,650 (14) 1,779 111 1,890 (565) 1,325 11,665 12,990 10.2% Change Change % 155 – 1 156 (1) 155 (21) 134 47 181 0.9 108% – 7% 9% (1%) 8% (4%) 10% 0% 1% 9% 5.2.2. Leverage Ratio and Interest Coverage Ratio Newcrest’s net debt to EBITDA (leverage ratio) of 0.7 times as at 30 June 2023 (an increase of 0.1 times compared to 30 June 2022) remains comfortably within its financial policy target of being less than 2.0 times EBITDA on a trailing 12 month basis. US$m Net debt EBITDA (trailing 12 months) Leverage ratio (times) As at 30 June 2023 1,459 2,063 0.7 2022 1,325 2,054 0.6 Change Change % 134 9 0.1 10% 0% 17% Newcrest’s interest coverage ratio decreased to 30.4 times as at 30 June 2023 (compared to 37.6 times as at 30 June 2022). For the 12 months ended 30 June US$m EBITDA Less facility fees and other costs Less discount unwind on provisions Adjusted EBITDA Net finance costs Less facility fees and other costs Less discount unwind on provisions Net Interest Payable Interest Coverage ratio 2023 2,063 (13) (16) 2022 2,054 (12) (9) 2,034 2,033 96 (13) (16) 67 75 (12) (9) 54 Change Change % 9 (1) (7) 1 21 (1) (7) 13 0% (8%) (78%) 0% 28% (8%) (78%) 24% (19%) 30.4 37.6 (7.2) 64 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 5. Discussion and Analysis of the Balance Sheet continued 5.2. Financial metrics continued 5.2.3. Liquidity coverage Newcrest had $2,288 million of cash and committed undrawn bank facilities as at 30 June 2023. US$m As at 30 June 2023 Cash and cash equivalents Bilateral bank debt facilities Liquidity coverage As at 30 June 2022 Cash and cash equivalents Bilateral bank debt facilities Liquidity coverage Facility utilised Available liquidity Facility limit n/a 298 298 n/a 143 143 586 1,702 2,288 565 1,857 2,422 n/a 2,000 2,000 n/a 2,000 2,000 6. Non-IFRS Financial Information Newcrest’s results are reported under International Financial Reporting Standards (IFRS). This document includes certain non-IFRS financial information within the meaning of ASIC Regulatory Guide 230: ‘Disclosing non-IFRS financial information’ published by ASIC and ‘non-GAAP information’ within the meaning of National Instrument 52-112 – Non-GAAP and Other Financial Measures published by the Canadian Securities Administrators. Such information includes: – ‘Underlying profit’ (profit or loss after tax before significant items attributable to owners of the Company); – ‘EBITDA’ (earnings before interest, tax, depreciation and amortisation, and significant items); – ‘EBIT’ (earnings before interest, tax and significant items); – ‘EBITDA Margin’ (EBITDA expressed as a percentage of revenue); – ‘EBIT Margin’ (EBIT expressed as a percentage of revenue); – ‘ROCE’ is ‘Return on capital employed’ and is calculated as EBIT expressed as a percentage of average total capital employed (net debt and total equity); – ‘Interest coverage ratio’ is calculated as EBITDA adjusted for facility fees and discount unwind on provisions, divided by net interest payable (interest expense adjusted for facility fees, discount unwind on provisions and interest capitalised); – ‘Leverage ratio (net debt to EBITDA)’ (calculated as net debt divided by EBITDA for the preceding 12 months); – ‘Free cash flow’ (calculated as cash flow from operating activities less cash flow from investing activities, with Free cash flow for each operating site calculated as Free cash flow before interest, tax and intercompany transactions); – ‘Free cash flow before M&A activity’ (being ‘Free cash flow’ excluding acquisitions, investments in associates and divestments); – ‘AISC’ (All-In Sustaining Cost) and ‘AIC’ (All-In Cost) as per the updated World Gold Council Guidance Note on Non-GAAP Metrics released November 2018. AISC and AIC will vary from period to period as a result of various factors including production performance, timing of sales and the level of sustaining capital and the relative contribution of each asset; – ‘AISC Margin’ reflects the average realised gold price less the AISC per ounce sold. These measures are used internally by Management to assess the performance of the business and make decisions on the allocation of resources and are included in this document to provide greater understanding of the underlying financial performance of Newcrest’s operations. The non-IFRS information has not been subject to audit or review by Newcrest’s external auditor and should be used in addition to IFRS information. Such non-IFRS financial information/non-GAAP financial measures do not have a standardised meaning prescribed by IFRS and may be calculated differently by other companies. Although Newcrest believes these non-IFRS/non-GAAP financial measures provide useful information to investors in measuring the financial performance and condition of its business, investors are cautioned not to place undue reliance on any non-IFRS financial information/non-GAAP financial measures included in this document. When reviewing business performance, this non-IFRS information should be used in addition to, and not as a replacement of, measures prepared in accordance with IFRS, available on Newcrest’s website and the ASX and SEDAR platforms. The non-IFRS measures do not have any standard definition under IFRS and may be calculated differently by other companies. The tables below reconcile these non-IFRS measures to the most appropriate IFRS measure, noting that: – Sustaining and Major project (non-sustaining) capital are reconciled to cash flow from investing activities in Section 3.3; and – Free cash flow is reconciled to the cash flow statement in Section 3. Newcrest Annual Report 2023 65 6.1. Reconciliation of Statutory profit to Underlying profit Underlying profit, EBIT and EBITDA is reported by Newcrest to provide greater understanding of the underlying business performance of its operations and the Group. These measures exclude significant items of income or expense which are, either individually or in aggregate, material to Newcrest or to the relevant business segment and are either outside the ordinary course of business or are part of the ordinary activities of the business but unusual due to their size and nature. Examples include gains/losses and other costs incurred for acquisitions and disposals of mining interests and asset impairment and write-down charges. Statutory profit and Underlying profit both represent profit after tax amounts attributable to Newcrest shareholders. In the current and prior period, Statutory profit was equal to Underlying profit. 6.2. Reconciliation of Underlying profit to EBIT and EBITDA US$m Underlying profit Income tax expense Net finance costs EBIT Depreciation and amortisation EBITDA For the 12 months ended 30 June 2023 2022 778 298 96 1,172 891 2,063 872 357 75 1,304 750 2,054 6.3. Reconciliation of All-In Sustaining Cost and All-In Cost ‘All-In Sustaining Cost’ and ‘All-In Cost’ are non-IFRS measures which Newcrest has adopted since the guidance was released by the World Gold Council in June 2013. The World Gold Council released an updated guidance note in November 2018, which Newcrest fully applied from 1 July 2019. The AISC and gold sales outcomes presented in the table below are from Newcrest’s operations only and do not include Newcrest’s 32% attributable share of Fruta del Norte (through its 32% equity interest in Lundin Gold). Gold sales (koz) Cost of sales Depreciation and amortisation By-product revenue Gold concentrate treatment and refining deductions Corporate costs Sustaining exploration Sustaining leases Sustaining production stripping Underground mine development Sustaining capital expenditure Rehabilitation accretion and amortisation All-In Sustaining Cost Growth and development expenditure Non-sustaining capital expenditure* Non-sustaining production stripping Non-sustaining exploration Non-sustaining leases All-In Cost Reference 6.3.1 6.3.2 6.3.3 6.3.4 6.3.7 6.3.5 6.3.5 6.3.6 6.3.4 6.3.6 6.3.5 6.3.7 For the 12 months ended 30 June 2023 (10) 2022 US$m 1,948 3,282 (874) (1,060) 52 112 18 44 128 (3) 445 31 2,175 9 508 78 125 8 US$/oz 1,685 (449) (544) 27 57 9 23 66 (2) 228 17 1,117 5 261 40 64 3 US$m 1,777 2,853 (731) (1,057) 44 110 10 30 163 4 431 35 1,892 9 762 50 110 12 US$/oz 1,605 (411) (594) 25 62 5 17 92 2 243 19 1,065 5 428 28 62 7 2,903 1,490 2,835 1,595 * Represents spend on major projects that are designed to increase the net present value of the applicable mine and are not related to current production. Significant projects in the current period include key projects at Cadia (including the development of PC1-2 and PC2-3 and the Expansion Project), the Front-End Recovery Project at Lihir, Red Chris Block Cave FS and Early Works and Havieron Early Works. Non-sustaining capital expenditure for AISC purposes is shown net of Capitalised leases (refer Section 6.3.6). 66 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 6. Non-IFRS Financial Information continued 6.3. Reconciliation of All-In Sustaining Cost and All-In Cost continued 6.3.1. Cost of sales US$m Cost of sales as per Note 5(b) of the consolidated financial statements 6.3.2. Depreciation and amortisation US$m Depreciation and amortisation per Note 5(b) of the consolidated financial statements 6.3.3. By-product revenue US$m Copper concentrate sales revenue Copper concentrate treatment and refining deductions Total copper sales revenue per Note 5(a) of the consolidated financial statements Silver sales revenue Silver concentrate treatment and refining deductions Total silver sales revenue per Note 5(a) of the consolidated financial statements Molybdenum concentrate sales revenue Molybdenum concentrate treatment and refining deductions Total molybdenum sales revenue per Note 5(a) of the consolidated financial statements Total By-product revenue 6.3.4. Corporate costs US$m Corporate administration expenses per Note 5(c) of the consolidated financial statements Less: Corporate depreciation Less: Growth and development expenditure Total Corporate costs 6.3.5. Production stripping and underground mine development US$m Sustaining production stripping Underground mine development Non-sustaining production stripping Total production stripping and underground mine development Underground mine development Production stripping per Note 11 of the consolidated financial statements Total production stripping and underground mine development For the 12 months ended 30 June 2023 3,282 2022 2,853 For the 12 months ended 30 June 2023 874 2022 731 For the 12 months ended 30 June 2023 1,130 (133) 997 29 (5) 24 43 (4) 39 2022 1,149 (115) 1,034 22 (2) 20 3 – 3 1,060 1,057 For the 12 months ended 30 June 2023 2022 138 (17) (9) 112 138 (19) (9) 110 For the 12 months ended 30 June 2023 2022 128 (3) 78 203 (3) 206 203 163 4 50 217 4 213 217 Newcrest Annual Report 2023 6.3.6. Capital expenditure US$m Payments for plant and equipment, development and feasibility studies per the statements of cash flows in the consolidated financial statements Information systems development per the statement of cash flows in the consolidated financial statements Total capital expenditure Sustaining capital expenditure (per section 3.3 of the Operating and Financial Review) Non-sustaining capital expenditure (per section 3.3 of the Operating and Financial Review) Brucejack integration capital (per section 3.3 of the Operating and Financial Review) Capitalised Leases (per section 3.3 of the Operating and Financial Review) Total capital expenditure 6.3.7. Exploration expenditure US$m Exploration and evaluation expenditure per the consolidated financial statements Sustaining exploration (per section 6.3 of the Operating and Financial Review Non-sustaining exploration (per section 6.3 of the Operating and Financial Review) Total exploration expenditure 6.4. Earnings per share US$ cents Earnings per share (basic) per Note 8 of the consolidated financial statements Earnings per share (diluted) per Note 8 of the consolidated financial statements 6.5. Dividends per share US$m Total dividends paid per Note 9(a) of the consolidated financial statements Total issued capital per Note 26(b) of the consolidated financial statements Dividends paid per share 67 For the 12 months ended 30 June 2023 2022 961 7 968 445 515 15 (7) 968 1,181 12 1,193 431 773 – (11) 1,193 For the 12 months ended 30 June 2023 2022 143 18 125 143 120 10 110 120 For the 12 months ended 30 June 2023 87.0 86.8 2022 103.4 103.1 For the 12 months ended 30 June 2023 492 2022 388 894,230,732 893,123,247 55.0 47.5 68 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 6. Non-IFRS Financial Information continued 6.6. Reconciliation of Return on Capital Employed (ROCE) Return on Capital Employed (ROCE) is reported by Newcrest to provide greater understanding of the underlying business performance of its operations and the Group. ROCE is calculated as EBIT before significant items expressed as a percentage of average total capital employed (net debt and total equity). $m EBIT Total capital (net debt and total equity) – as at 30 June 2021 Total capital (net debt and total equity) – as at 30 June 2022 Total capital (net debt and total equity) – as at 30 June 2023 Average total capital employed Return on Capital Employed For the 12 months ended 30 June 2023 1,172 – 12,990 13,171 13,081 9.0% 2022 1,304 9,948 12,990 – 11,469 11.4% 6.7. Reconciliation of Newcrest’s Operational Performance including its 32% attributable share of Fruta del Norte (through its 32% equity interest in Lundin Gold Inc) (7) Gold Production Gold production – Newcrest operations Gold production – Fruta del Norte (32%) Gold production All-In Sustaining Cost (7,10,18) All-In Sustaining Cost – Newcrest operations All-In Sustaining Cost – Fruta del Norte (32%) All-In Sustaining Cost Gold ounces sold – Newcrest operations Gold ounces sold – Fruta del Norte (32%) Total gold ounces sold All-In Sustaining Cost – Newcrest operations All-In Sustaining Cost – Fruta del Norte (32%) All-In Sustaining Cost All-In Sustaining Cost margin Realised gold price (19) All-In Sustaining Cost – Newcrest operations All-In Sustaining Cost margin For the 12 months ended 30 June UoM 2023 2022 oz oz oz 1,941,060 164,008 1,812,459 143,723 2,105,068 1,956,182 For the 12 months ended 30 June 2023 2,175 136 2,311 2022 1,892 107 1,999 1,947,723 165,818 1,777,092 139,409 2,113,541 1,916,502 1,117 819 1,093 For the 12 months ended 30 June 2023 1,797 1,117 680 1,065 766 1,043 2022 1,797 1,065 732 UoM $m $m $m oz oz oz $/oz $/oz $/oz UoM $/oz $/oz $/oz Newcrest Annual Report 2023 69 7. Risk Management Newcrest recognises that risk is inherent in its business and effective risk management is essential to protecting business value and securing the growth of the Company. Our Risk management framework comprises seven elements: Risk Strategy & Appetite, Risk Governance, Risk Culture, Risk Assessment & Measurement, Risk Management & Monitoring, Risk Reporting & Insights, and Data & Technology. Data & Technology Risk management data translated into meaningful risk information for stakeholders Risk Strategy & Appetite Applying risk management to ensure the achievement of business plan, goals and strategic objectives Risk & reporting Insights Reporting of information to provide insight into strengths and weaknesses of risk management activities Risk Management Framework Risk Governance Structure through which the organisation directs, manages and reports management activities Risk Management & Monitoring Management’s response to manage, mitigate, or accept risk Risk Culture Values and behaviours that shape decision-making on risk Risk Assessment & Measurement Activities in place that allow the organisation to identify, assess and quantify known and emerging risks 7.1. Risk Strategy and Appetite The Board recognises that risk management and internal controls are fundamental to sound management, and that oversight of such matters is a key responsibility of the Board. 7.2. Risk Governance The Board reviews and confirms that systems are in place which facilitate the effective identification, management and mitigation of any significant financial and non-financial risks to which the Company is exposed. The Board works with management to develop a strategic plan for the Company, including the identification of risks and opportunities that shape strategic decision-making. The Board reviews performance of the plan on a regular basis, including internal and external factors that may impact on performance. The broad range of skills, expertise and experience of the Board assists in providing a diverse view on risk management. The Board also considers the skills and experience in relation to risk management that is contained at management level and receives information and advice on specific risk areas from management and expert advisers, where required. Newcrest categorises risk according to a group Risk Architecture that reflects the Company’s value chain. This provides the structure to identify and review our top down enterprise risks, including our highest priority risk areas (referred to as ‘Risks in Focus’), and creates the platform for strengthening our risk appetite approach. In FY23, Newcrest’s risk appetite program involved the development of risk appetite statements for a selection of risk categories on our group Risk Architecture. Our risk appetite statements, which are yet to be approved by the Board, and define the amount of risk we seek to take in pursuing our strategic objectives. Each risk appetite statement is supported by key risk indicators, with set limits, which help management monitor performance against appetite and take action based on early warning signals that a limit may be exceeded. The Audit and Risk Committee (ARC) assists the Board to fulfil its responsibilities in relation to risk. Its role in relation to risk is to: a) review the overall adequacy and effectiveness of the risk framework, risk identification and assessment process and methodology (including processes for the identification of new and emerging risks) and risk culture of the Company; and b) oversee identification, management and mitigation of risks relating to the ARC Areas, and report to the Board. Responsibility for monitoring some elements of the risk framework, risk identification and assessment process and methodology may be allocated to other Board Committees from time to time. For example, the Safety and Sustainability Committee (SSC) oversees the identification, management and mitigation of safety and sustainability risks. The Risk and Assurance function is accountable for designing, maintaining and governing the risk management framework, policy and standard. The function is led by the Head of Risk and Assurance, who reports to the Chief Legal, Risk and Compliance Officer. 70 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 7. Risk Management continued 7.2. Risk Governance continued At the management level, risk is embedded in the Company’s operating model and Three Lines Model for assurance. That sets clear ownership and accountabilities across the Company for managing risks and the checks required to confirm that the risk management framework and processes, and risk controls, are in place and operating effectively. Outcomes of assurance activities are reported to management, the ARC and the SSC. Those outcomes are used to develop action plans to address deficiencies in risk controls and enhance our risk management framework and processes. A more detailed discussion of our approach to Corporate Governance that supports risk governance can be found in the Company’s Corporate Governance Statement: https://www.newcrest.com/about-newcrest/ corporate-governance. 7.3. Risk Culture The implementation of our risk management framework and processes is supported by a Code of Conduct which embeds the Company’s core values. We see risk culture as part of the overall culture of the Company that is overseen by the Board, owned at management level, and integrated into business activities through our leader-led culture program and comprehensive range of group policies and standards. There is both planned and unplanned (as required) communication on risk matters across the Company and at local management level. That includes management updates to employees on programs and initiatives related to our highest priority enterprise level risks and opportunities. Dedicated risk roles that comprise our Risk Community of Practice have objectives related to the implementation of the risk management framework, policy and standard and the processes that support delivery of our strategic objectives. Business and technical management and specialists across the Company may have responsibilities for managing risks and implementing risk controls that are incorporated into personal objectives and performance incentives. 7.4. Risk Assessment and Measurement Regular risk assessments are conducted at all levels of the organisation using approved methods from our risk management standard and procedures to identify risks, understand causes and impacts, determine controls, and rate risks. Specialist risk analysis methods may be applied at the enterprise, operation or project level to suit the nature and technical complexity of the activity. Identified risks are either material risks or non-material risks. Materiality is determined by the maximum credible impact if that risk event were to occur, assuming all risk controls are ineffective. The material risk process operates Company-wide and actively engages key operational and functional employees, risk owners, control owners and subject matter experts. In FY23 we conducted the third annual enterprise risk review with the Executive Committee and with the Board to identify and review current and emerging risks that may have an impact on the group. The outcomes of that review include verifying our Risks in Focus. These are areas of risk that have the potential to be particularly disruptive or damaging to the Company in terms of production, financial impact and/or the Company’s reputation with regulators, investors and host communities. Our group Risk Architecture enables us to classify enterprise risks top-down across the Company. We apply the Risk Architecture as an input to the identification of enterprise risks and during the annual review of local material risk profiles. Similar material risks are mapped to common risk categories on our group Risk Architecture to provide visibility over the aggregate risk exposure for the group. Scenario analysis and stress testing is routinely applied to assess the resilience of our balance sheet and robustness of our capital management plan in line with our risk appetite. That planning process includes modelling a series of macroeconomic scenarios and using a range of assumptions. 7.5. Risk Management and Monitoring Enterprise risks, including Risks in Focus, are managed through top-down group programs and initiatives. The aggregate exposure for an area of risk may also be managed bottom up through the material risk process. Material risks are documented and monitored with the implementation of preventative and mitigating processes and controls. Risk owners and control owners are required to understand and actively manage their material risks and have measures in place aimed at preventing their occurrence, including clear management plans for each material risk. A key component of the material risk process is the work conducted by control owners to monitor and verify the effectiveness of controls. Material risks are required to be evaluated by the risk owner at least once a year to determine overall control effectiveness and whether the residual risk is within the Company’s risk appetite (as referred to through measures of residual risk acceptance defined in our risk management standard). Where outside appetite, improvement actions are required to reduce the residual risk. A higher than target residual risk may be accepted by management only where it is determined that no further improvement action is warranted. Under our Three Lines Model for assurance, subject matter experts from 2nd Line functions may conduct reviews and verifications of the management of risk by the sites. In addition, our Internal Audit program is designed to align to the group risk profile and test the effectiveness of risk management and internal controls for material risks. Risk management information is reported to, and discussed with, Management and the Board and Board Committees to ensure regular oversight and involvement in risk management is maintained at a high level within the Company. In FY23 we built on previous work to better understand the emerging risks that are relevant to the Company. That is in recognition of a significant increase in the external influences we now face but cannot control and the added uncertainties and threats that brings to the business. In FY23, Newcrest conducted a detailed review of external data sources to support the identification of emerging risks (for monitoring) and the review of current risks (for management). Newcrest Annual Report 2023 71 7.6. Risk Reporting and Insights Dedicated risk roles at the site/regional level report routinely to their local management on the management of material risk, including control effectiveness and improvement actions to reduce residual risk. The Risk and Assurance function routinely reports to the Executive on the aggregate of that site information, plus data for the management of material risks owned by group functions. In FY23 an internal audit was completed of Newcrest’s risk management framework. The audit evaluated Newcrest’s Risk Management Framework using a global Enterprise Risk Management (ERM) maturity model and assessment approach. The assessment found that Newcrest’s Risk Management Framework is overall at the higher end of the ERM maturity scale (“Sustainable” heading towards “Mature”) and confirms that risk management capabilities and activities are integrated and coordinated across corporate and remote operations and business entities. The Risk and Assurance function reports to the ARC and SSC on the effectiveness of the risk management framework and processes, the management of enterprise Risks in Focus, and the highest priority operational material risks. Risk reports may include updates on the risk management framework including framework effectiveness, changes in the material risk profile, and risk management priorities. In FY23, the annual risk review report was supported by an opinion from the Head of Risk and Assurance. The Executive Committee and the Board and Board Committees also receive reports from other teams to support their review and monitoring of the effectiveness of the Company’s systems for financial and non-financial risk management. These include reports from other 2nd Line functions on programs and initiatives related to enterprise risks, legal reports, ethics and compliance reports, investigations reports, and internal audit reports. 7.7. Data and Technology Material risk data is stored in the Company’s risk management system according to a standard design and data workflow across the organisation. A risk dashboard provides automated and real time reporting of material risk data at an enterprise and local level. The dashboard supports the escalation of key risk management information by highlighting overdue and extended actions and by filtering by residual risk rating. By implementing these technologies, Newcrest seeks to enable the business to manage risks more effectively, with increased transparency. Qualitative risk analytics is available through the material risk dashboard including actions by residual risk rating, residual risks by impact type, and actions extended/closed late. This includes trend analysis that looks across the past 12 months to the change in action completion metrics during this time. Further deep dive analysis is conducted as required. 72 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 8. Risks in focus Newcrest refers to its highest priority enterprise risks areas as Risks in Focus. These are seen as top-down aggregate areas of enterprise risk; either current or emerging. A Risk in Focus may link to individual material risk events where they are defined at the local operating level. This section provides details on why each Risk in Focus is important to Newcrest, the potential threats and opportunities associated with each, and the key mitigations and actions taken to manage them. The matters identified below are not necessarily listed in order of importance and are not intended as an exhaustive list of all the risks and uncertainties associated with Newcrest’s business. Additional risks and uncertainties including material risks that are not highest priority enterprise risks, risks and uncertainties not presently known to Management and the Board, or risks that Management and the Board currently believe to be immaterial or manageable, may adversely affect Newcrest’s business. The mitigations and actions described are not exhaustive, since they exclude reference to other processes and controls designed to support effective risk management; for example, through our Ethics and Compliance framework, by implementing group standards that set the mandatory minimum performance requirements, and through our material risk process. Implemented processes and controls may not prevent a risk from occurring or eliminate the potential impact entirely. Further, Newcrest’s business, operating and/or financial results and performance may be materially impacted should any such actions and controls fail or be disrupted. Major project execution The risk of failure to execute on a major project according to time, cost or scope. This is considered at the enterprise level (the strategic), whereas the project management process considers the risks within individual projects that could impact on delivery (the tactical). Why it is important to Newcrest? Newcrest’s ability to sustain or increase its current level of production in the future is in part dependent on the development of new projects and the expansion of existing operations. We need to deliver our organic growth portfolio to provide additional gold and copper production to offset production drop-off from existing operations and increase production spread. Potential threats and opportunities for Newcrest Newcrest is planning for higher capital expenditure over the next few years in connection with the development of new projects. This project development and increased capital spend cycle is likely to coincide with a period of ongoing challenges with cost escalation, supply chain issues and people resourcing and capability gaps. A number of major projects comprising our global organic growth portfolio are at various stages of development. In October 2021, the Newcrest Board approved the progression of the Red Chris Block Cave Pre-Feasibility Study to the Feasibility Stage. The project will leverage Newcrest’s industry-leading block caving expertise with the intention that the asset would become a significant component of Newcrest’s portfolio for the medium to long term. As multiple factors influence the successful delivery of major projects (for example, project management expertise, detailed project planning and execution, rigorous project/cost control and change control, understanding latent technical conditions, performance of engineering partners, obtaining regulatory approvals and permits in a timely manner), Newcrest is exposed to a broad range of major project execution risks. A number of major projects across our global organic growth portfolio are at various stages of development. Failure to execute on any one or more of the major projects on time, at cost or as per the approved scope may affect Newcrest’s market value and adversely impact returns to investors. For example, a delay in expansion of an existing asset could require us to amend the existing mine plan in a way that leads to higher operating costs due to the need to mine sub-optimal grade material for longer. Impacts could be exacerbated by external factors, including inflationary pressures on the cost of goods and services, supply chain disruptions, labour shortages, or permitting delays. Newcrest has joint venture interests, including its interests in the Red Chris mine in Canada. These operations are subject to the risks normally associated with the conduct of joint ventures. That includes (but is not limited to) disagreement with joint venture partners on how to develop and operate the mines or projects efficiently, and the inability of joint venture partners to meet their financial and other joint venture commitments. The existence or occurrence of one or more of these circumstances or events may have a negative impact on Newcrest’s future business, operating and financial performance and results, and/or value of the underlying asset. On time and on budget delivery of our projects, at the same time as delivering local social value (for example, through local business opportunities), may see Newcrest as a preferred developer of new projects. Acceleration of organic growth options may strengthen our portfolio and protect and grow value over the long term. The opportunity through delivery of our global organic growth portfolio, including the Red Chris Block Cave project, is to increase our exposure to copper and thereby participate further in the potential opportunities presented by the global shift to decarbonisation. Newcrest Annual Report 2023 73 Mitigations implemented and/or action taken Newcrest has defined a set of controls for the enterprise level material risk ‘Failure of Project Delivery’: – In line with our Project Management System and Investment Management System, we have defined standards for the activities associated with Studies and Projects and the work associated with each project gate, and to promote the sensible investment of capital. – The Project Delivery Group comprising competent and experienced project professionals executes major capital projects and provides support and governance for other capital projects across the business. – A stage gate process operates for project and study approvals including Readiness Review and Competent Independent Reviews involving internal and external subject matter experts. – The Capital Review Committee oversees all significant investment decisions for these projects at each specific gate. For example, a focus in FY23 was the Red Chris Block Cave project. For the Red Chris Block Cave Feasibility Study, escalation and global supply chain interruptions continue to be assessed as part of the Feasibility Study and value engineering and optimisation opportunities are under evaluation with the objective to offset inflationary cost pressures. The Project Delivery Group is also planning to undertake additional engineering and market engagement during the Feasibility Study to Execution bridging period to further improve confidence in the project schedule and capital cost estimate. Production planning and forecasting Risks that are associated with the assumptions and uncertainties regarding production plans and forecasts, including energy supply and market declarations. Why it is important to Newcrest? Production planning and forecasting is important to generate timely and reliable plans that enable the business to predictably achieve and exceed its objectives and realise its value potential. Newcrest’s production planning and forecasting process applies our latest knowledge to generate a view of future business performance and informs corporate strategy and market guidance. The production planning and forecasting process also plays a significant role in helping us to identify and manage business threats and opportunities and allow us to deliver on our commitments to the Board and external stakeholders. Potential threats and opportunities for Newcrest Our production plans and forecasts underpin our commitments to investors, regulators and host communities regarding our short to medium term business operations and outcomes. Where actual performance differs from planned outcomes and external market guidance is not achieved, there is potential for damage to our financial and reputational performance, loss of stakeholder trust, and reduction in share price leading to our inability to effectively raise capital to pursue strategic growth options. Our mining operations are subject to variability and uncertainty with respect to a range of factors including ore quality, delivery, metal grade, metal recovery, availability of utilities (e.g., power and water), equipment reliability, workforce availability and natural hazards. Many of our operations are located in remote areas and the availability of parts, equipment, labour, infrastructure and key inputs, such as power and water, at a reasonable cost, cannot be assured. Even a temporary interruption in supply of goods, services or utilities could materially affect our operations and ability to achieve our plans and forecasts. Examples of potential threats to delivering planned outcomes include: – Unfavourable ore variability/quality, mine production, process plant throughput and/or metallurgical performance resulting from emerging or altered inputs to the initial plan, spatial compliance deviation and/or failure to achieve planned mobile and fixed plant productivities. – Changing and challenging geotechnical and hydrogeological conditions that may limit our ability to access ore, which may include pit wall stability, landslides or slope failure, seismic events or mine induced subsidence, inrush of water or other materials. – Unplanned and/or unexpected electrical or mechanical failure of key equipment such as autoclaves, SAG mills or material handling systems. – Unplanned and/or unexpected events that impact production. – Uncertainty around water supply and security, with sites experiencing both drought and flood conditions within a relatively short period of time. – Difficulty mobilising labour and/or equipment to sites, resulting in lost productivities that cannot be recovered during the year. – Disruption to power or gas supplies to operate processing plants, equipment and camps. Examples of potential opportunities to expediate delivery of planned outcomes include: – Application of alternative mining methods and techniques such as steep wall mining, hot-ground mining and semi-autonomous underground mining with unprecedented cave heights to remove personnel exposure to major hazards and potentially prolong cave life. – Trialling new process plant technology such as predictive control, Coarse Ore Flotation or ultrafine particle recovery to recover metal that would otherwise have been lost to tailings. – Integration of the Edge program which is designed to realise the full potential of our assets through productivity improvements and capital and cost reductions, while leveraging step-change innovation. 74 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 8. Risks in focus continued Mitigations implemented and/or action taken Our forecasts are intended to represent plans that safely deliver our ‘most likely’ production, cost and capital outcomes. They reflect planned improvements, growth or ramp-down (where relevant), reassessment of inflationary cost pressures, minimising overheads at operations and the centre, while ensuring governance, risk management and strategy considerations are not compromised. The following mitigations are intended to address the threats and exploit potential opportunities in our plans: – Plan input assumptions are set based on agreed plan confidence, reviewed by Site and by group subject matter experts, and approved by Management. – Risk assessment of plan delivery to identify threats, opportunities and risk mitigation activities with resourcing. – Data collection to meet an improved confidence level of orebody knowledge, as well as laboratory test work and pilot plant programs to develop metallurgical test work data in support of new technologies or methodologies prior to plant implementation. – More frequent reviews and updates to planning models (e.g., geology, geometallurgical and recovery models) to ensure that they are representative of current knowledge and conditions for forecasts of future production. – Mine value chain reconciliation (MVCR) to provide quantifiable feedback on anticipated compared to actual production performance over a period of time and to identify corrective actions required. – Long-term water and power security strategies and initiatives. – Independent reviews and audits on the Mineral Resources and Ore Reserves estimates and respective input assumptions to identify gaps, opportunities and potential risks and alternatives mitigation measures. People and culture Includes: – Risks associated with maintaining Newcrest’s ability to attract and retain top talent for competitive advantage, as well as develop talent pools for future prosperity. – Risks associated with maintaining the desired organisational culture, including diversity and inclusion and tone from the top. Key focus in FY23 was on talent retention and development and our Respect@Work program. Why it is important to Newcrest? Newcrest seeks to attract and retain employees and third-party contractors with the appropriate skills and experience necessary to operate and grow our business. This is at a time of low rates of unemployment, coupled with increased competition across the sector for critical skills and talent. Potential threats and opportunities for Newcrest Conventional approaches to recruitment, employee development and succession planning have been impacted by the decreasing number of tertiary graduates entering the industry. The reasons for this are varied and include the poor perception amongst young people of the mining industry as a place to work, including misalignment with their values related to social responsibility and sustainability. Newcrest sees organisational culture as a key part of the Company’s employee value proposition. At Newcrest, there is no place for any behaviours that cause people physical or psychological harm. Everyone has the right to be and feel safe at work, and to always be treated with dignity and respect. Safety at Newcrest is more than just eliminating incidents and injuries. It is also about eliminating and preventing unacceptable behaviours that do not align with our core values. Failure to attract and/or retain appropriately skilled and experienced personnel could result in disruptions to Newcrest’s activities and/or affect our operations and financial condition. We need to maintain fair and competitive remuneration and benefits packages which are compliant with relevant legislative requirements and policies. Newcrest undertakes periodic reviews of compliance with relevant legislative requirements and policies, including one currently being undertaken. Any non-compliance or breaches could have a financial and/or reputational impact. If we do not maintain an inclusive and high performing culture where everyone feels safe and is supported to thrive, that may impact our ability to attract and retain the best talent. The Australian Human Rights Commission’s Respect@Work: Sexual Harassment National Inquiry Report, issued in 2020, found that almost two in five women (39%) and just over one in four men (26%) had experienced sexual harassment in the workplace in the previous five years. In the mining sector, it found this was the experience of three in four women (74%) and one in three men (32%). Instances of sexual assault and sexual harassment are still prevalent across our industry. Newcrest Annual Report 2023 75 Mitigations implemented and/or action taken Newcrest has policies, procedures, frameworks and initiatives in place to mitigate risks related to attracting and retaining talent – including performance reward and recognition, diversity and inclusion initiatives, employee feedback surveys, leadership development programs, and our Respect@Work program. We seek to build a future supply of industry labour by actively promoting mining and the resources industry, within Australia, PNG and Canada, and through universities and other educational institutions, as a compelling and attractive career proposition. We aspire to increase the diversity of our workforce, by employing more women in management and professional roles, and including more Indigenous and First Nations employees across our operations globally. Progress is monitored and periodically reported to management. In FY24 we plan to work with each site to discuss aspirations at a site level. Our diversity and inclusion targets for FY23 and performance for the 2022 financial year are included in our FY23 Corporate Governance Statement. Newcrest also lodges annual reports with the Workplace Gender Equality Agency (WGEA) in relation to its Australian operations. A copy of these reports may be obtained from the WGEA website. Newcrest is actively engaged in promoting, progressing and supporting our diverse and high potential talent to access career and development opportunities. This includes striving to have diverse representation on our talent and succession plans, focusing on promoting internal talent, and supporting our early career talent and emerging leaders. Commencing in 2021, our people leaders, including our Executive Committee, have been in engaged in an Inclusive Leadership program to develop their skills in self-awareness, empathy, curiosity, courage and vulnerability. This program is now integrated into our frontline people leader program ManagingMatters which is the foundation leadership program at Newcrest for new and emerging leaders. In FY23 we furthered our Respect@Work program to strengthen our approach to lower the risk of instances of sexual assault and sexual harassment across our operations. Newcrest has an established Respect@Work program to protect people’s safety through a strong framework that aims to eliminate and prevent sexual assault and sexual harassment across our company. This is part of our determination to make Newcrest a company where sexual harassment and sexual assault is not tolerated and does not happen. Market Risk Risks associated with commodity price fluctuations as well as macroeconomic risks, such as (but not limited to) boom and bust cycles. That includes cost inflation, foreign exchange fluctuations, interest rates and commodity price. Why it is important to Newcrest? Newcrest’s revenue is principally derived from the sale of gold and copper based on prevailing market prices. Lower gold and/or copper prices may adversely affect Newcrest’s financial condition and performance. Potential threats and opportunities for Newcrest Given the geographic spread of Newcrest’s operations, its earnings, cash flows and balance sheet are exposed to multiple currencies, including a portion of spend at each operation being denominated in the local currency. The relative movement of these currencies (particularly the Australian dollar and Canadian dollar) against the US dollar may have a significant impact on Newcrest’s financial results and cash flows, which are reported in US dollars. Operating costs and capital expenditure are, to a significant extent, driven by external economic conditions impacting the cost of commodity inputs consumed in extracting and processing ore (including but not limited to the delivered cost for electricity, water, fuel, chemical reagents, explosives, tyres and steel), and labour costs associated with those activities. Actual or forecasted lower metal prices, and/or adverse movements in exchange rates and/or adverse movements in operating costs may: – Increase the threat of cost escalation on our ability to deliver the capital project portfolio. It is noted that this threat is heightened due to the connections it has to risk areas such as labour and supply chain vulnerabilities. – Change the economic viability of mining operations, particularly higher cost mining operations, which may result in decisions to alter production plans, investment decisions or the suspension or closure of mining operations. – Reduce the market value of Newcrest’s gold or copper inventory and Newcrest’s estimates of Mineral Resources and Ore Reserves. – Result in Newcrest curtailing or suspending its exploration activities, with the result that depleted Ore Reserves may not be replaced and/or unmined Mineral Resources may not be mined. – Affect Newcrest’s future operating activities and financial results through changes to proposed project developments. – Result in changes in the estimation of the recoverable amount of Newcrest’s assets when assessing potential accounting impairment of those assets. 76 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 8. Risks in focus continued Mitigations implemented and/or action taken Newcrest maintains exposure to commodity prices, it manages the impact of adverse movements in commodity prices and macroeconomic factors by seeking to be a low-cost producer, maintaining a strong balance sheet, and having sufficient liquid funds and committed bank facilities available to meet the Group’s financial commitments over time. Newcrest implements capital and financial management policies and significant capital and financial risk management activities, including undertaking scenario analysis to stress test our portfolio. Protections to manage our exposure to inflationary pressures include: – pricing formula structures to manage higher costs for labour and consumables; – long-term fixed price contracts to reduce exposure to near-term volatility in the cost of maintenance and parts; – fixed price electricity contract for Cadia and hedging contracts in place for Lihir site fuel costs; and – long term vessel charters to reduce exposure to sharp rises in container/cargo ship costs. Newcrest is predominantly an unhedged producer, although Newcrest has hedges over a portion of Telfer’s future planned gold production to June 2024 to secure margins and support investment in cutbacks and mine development. Telfer is a large- scale, low-grade mine and its profitability and cash flow are sensitive to the realised Australian dollar gold price. Newcrest does not hedge its foreign exchange transaction exposures although it may hedge certain major capital expenditures to the functional currency of the project or operation as appropriate. Tailings Management Risks associated with tailings storage facility (TSF) management and Deep Sea Tailings Placement (DSTP). Why it is important to Newcrest? Tailings are produced as part of the mining process. Tailings storage facilities (TSFs) are constructed progressively throughout the life of the mine to support increasing capacity requirements. Newcrest uses deep sea tailings placement (DSTP) at its Lihir mine and has selected this method for tailings management at the proposed Wafi-Golpu mine. At Brucejack, lacustrine deposition was selected and permitted. Potential threats and opportunities for Newcrest Should there be a failure in the integrity of a tailings facility, there is a risk that tailings may be released and cause material harm to people and the environment downstream of the facility. Such an occurrence could severely damage Newcrest’s reputation and standing. It may also subject Newcrest to material regulatory action, penalties and claims, and may lead to the suspension or disruption of Newcrest’s operations and projects. Mitigations implemented and/or action taken The occurrence of an environmental incident has the potential to cause significant adverse reactions in the local community, which may impact Newcrest’s reputation, result in additional costs, lead to disruptions of Newcrest’s operations and projects or lead to regulatory action, which may include financial penalties. Tailings Management Framework Newcrest maintains a framework to manage tailings performance and critical controls applied to Newcrest’s operations (including water storage dams). As a member of the ICMM we are committed to conforming with Global Industry Standard on Tailings Management (GISTM) for all facilities and continue to work towards conformance, whilst prioritising dam integrity improvements. Responsible Tailings Facility Engineers (RTFE) are appointed at Red Chris, Cadia and Telfer for all eligible TSFs and water storage dams. An Accountable Executive is appointed, who has ongoing direct engagement with the RTFE, Engineer of Record (EoR) and Independent Tailings Review Board (ITRB) for Telfer, Cadia and Red Chris. Twice yearly (minimum) reporting to the Safety and Sustainability Committee of the Board is scheduled to communicate progress and to ensure accountability. EoRs have been appointed for most TSFs across Newcrest. A set of inactive facilities at Telfer (TSF 1-6) do not have an EoR appointed, a program of investigations and studies are planned to address gaps and enable an EoR to be appointed. ITRB are in place for Cadia and Red Chris. Telfer is transitioning from a Senior Independent Tailings Reviewer to an ITRB structure. The Tailings Stewardship Board commenced in FY22 and a dam safety inspection plus assurance review was completed. During FY23 this program focused on changes since FY22 in the management of the risk and organisational factors. Each of our active TSFs is subject to external inspections by the EoR, ITRB and Tailings Stewardship Board. All facilities have either completed, or are planned to complete, a Dam Safety Review between 2021 and 2026. Newcrest Annual Report 2023 77 DSTP DSTP was identified as the preferred tailings management option for Lihir and was approved by the PNG Government following findings from studies. Operational controls on the DSTP system are regularly checked including the integrity of the outfall pipeline. During the life of the mine two DSTP pipelines have been constructed and one of the DSTP pipelines is undergoing refurbishment to provide flexibility for tailings management and a back-up if, for example, one pipeline is not able to be used for example, during maintenance. The integrity of the DSTP system at Lihir is regularly inspected and includes an alarm system to track potential changes in normal operating conditions. The latest five yearly offshore marine survey of the Lihir DSTP system (to complement monthly and annual monitoring programs) commenced in 2022 and is continuing into 2023. The Wafi-Golpu Environmental Impact Statement (EIS) is publicly available on the Wafi-Golpu Joint Venture (WGJV) website and includes information on comprehensive DSTP studies used to inform the selection of DSTP as the preferred tailings management option for Wafi-Golpu. A DSTP working group is maintained to monitor and respond to stakeholder interest in DSTP at Wafi-Golpu and Lihir and assess opportunities for engagement. Newcrest also participates in multiple industry forums and working groups to provide strategic perspectives on DSTP during development of relevant industry guidelines (e.g., International Council on Mining and Metals, World Gold Council, Minerals Council of Australia). Community relations and social licence Risks associated with maintaining our social licence to operate. That may stem, for example, from our environmental management performance at any one of our operations. Why it is important to Newcrest? Newcrest’s relationship with the communities in proximity to its operations and on whose land it operates is an essential part of ensuring success of its existing operations, exploration and the construction and development of its projects. Our relationship with communities is grounded in our approach to human rights. Understanding, protecting and respecting those rights is core to our success. We do this by considering the United Nations Guiding Principles for Business and Human Rights in our operations, our policies and in our dealings with others. Newcrest’s ability to engage with communities in proximity to our mines determines the level of support we enjoy for ongoing operations and for growth prospects of those sites. Communities that are negatively impacted by our sites, through increased traffic, migratory workforces, environmental impacts and resource depletion may not accept continued or new mining activity. This will impact regulatory approvals and the severity of conditions associated with licence to operate. There is a level of public concern relating to the impact of mining activities on the environment and on the communities located in proximity to and potentially impacted by such activities. Various non-government and community-based organisations are vocal critics of the mining industry and its practices, including in relation to the disturbance or destruction of cultural heritage, due diligence processes associated with human rights including modern slavery risk management, the use of hazardous substances in processing activities, tailings dam management and planning for the worst-case scenario of failures, dust emissions and management and the use of DSTP. A failure to manage relationships with the communities may lead to local dissatisfaction which, in turn, may lead to interruptions to Newcrest’s operations, development projects and exploration activities. Specific challenges in community relations include community concerns over management of social, environmental, and cultural heritage impacts, increasing expectations regarding the level of benefits that communities receive, benefits sharing with First Nations’ governments, concerns focused on the level of transparency regarding the payment of compensation, and the provision of other benefits to affected landholders and the wider community. The nature and subject matter of negotiations with Indigenous communities, local landholders and the wider local community may result in community unrest which, in some instances, results in interruptions to Newcrest’s exploration programs, operational activities or delays to project implementation. Confidentiality clauses in agreements negotiated with Indigenous organisations may limit the ability of the parties including Indigenous communities to speak out on issues of concern. Negative publicity generated by non-government-organisations or others relating to extractive industries generally, or Newcrest specifically, could have an adverse impact on Newcrest’s reputation or financial condition and may impact Newcrest’s relationships with communities in proximity to its operations. Potential threats and opportunities for Newcrest 78 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 8. Risks in focus continued Mitigations implemented and/or action taken Catastrophic operational risks Where Newcrest has exploration activities, development projects or operations, it enters into agreements with Indigenous communities and/or local landholders and the wider local community. These agreements may include (but are not limited to) compensation, co-management and other benefits and may be subject to periodic review. The negotiation and/or review of agreements, including components such as business development, participation, co-management, and compensation and other benefits involves complicated and sensitive issues, associated expectations and often competing interests, which Newcrest seeks to manage respectfully and in partnership with relevant parties. Newcrest encourages parties to come together to better understand and work through issues collaboratively. This includes people speaking freely with each other about their concerns to reach a mutually acceptable resolution. To gain insight to external perceptions of Newcrest’s reputation, we have undertaken stakeholder mapping, perception awareness and risk sensing. Newcrest aims to use this information to support our activities and to provide the baseline for ongoing monitoring. To identify where we may have the greatest impact on human rights, we identify our most salient human rights issues and embed mitigation programs which is governed by our Human Rights Steering Committee. The Newcrest Sustainability Fund may create opportunities for non-mine related socioeconomic value in the jurisdictions we operate in. This focus on social value creation through partnerships aims to foster stakeholder relations, enhanced community trust and increase Newcrest’s contribution to broader social issues. Includes: – Risks associated with geotechnical stability, including aboveground and underground mining environments and stockpiles. – Risks associated with the storage and handling of hazardous materials and the creation of hazardous environments which have the potential to result in a material process safety event. – Risks associated with fire or explosions not involving hazardous materials. – Risks associated with the reliability and structural integrity of fixed and non-fixed assets, equipment and machinery required for the delivery of the business plan. – Risks associated with acute natural catastrophes or events associated with natural processes. Why it is important to Newcrest? Newcrest operates in locations that are subject to the risk of catastrophic natural events like earthquake and avalanche, which are difficult to predict. Our operations face increasing geotechnical, geothermal and hydrogeological challenges as our surface mines become deeper and/or we encounter more complex operating environments at our underground mines. Delivery of our business plan is also dependent on our assets, utilities and equipment being operated safely and achieving their planned availability and utilisation rates. Use of explosives and hazardous materials is critical to mining operations and mineral processing at all Newcrest sites. That includes the transportation, storage and use of hazardous materials such as cyanide, potassium amyl xanthate (PAX), Methyl IsoButyl Carbinol (MIBC), sodium hydrosulfide (NaSH), propane and oxygen. A failure to control catastrophic operational risks could result in fatalities, serious injuries to personnel and/or damage to infrastructure or equipment. That in turn could potentially adversely impact our licence to operate and have a material reputational and financial impact on the Company. Newcrest Annual Report 2023 79 Potential threats and opportunities for Newcrest Mitigations implemented and/or action taken Climate Change Transition risk Why it is important to Newcrest Examples include: – Risks and uncertainties associated with the cave mining methods applied at Cadia and Telfer and planned to be used at Red Chris. Risks include that a cave may not propagate as anticipated, excessive air gaps may form during cave propagation, unplanned ground movement may occur due to changes in stresses released in the surrounding rock, or mining induced seismicity is larger or more frequent than anticipated. Excessive water ingress, disturbance and the presence of fine materials may also give rise to a sudden unplanned release of material including mud and dry fine ore. – Risks and uncertainties associated with the application of techniques used in the civil engineering industry for the stabilisation of steep open pit slopes that have not been widely applied in a mining setting. Risks include variation to technical models when compared to actual conditions, performance of reinforcement system in hot ground, and delays with the execution of the civil works due to lack of experience with these techniques. – Risks associated with the incorrect transportation, storage and handling of explosives leading to an unplanned detonation event. – Risks associated with the use of hazardous chemicals and processes at our operations include catastrophic release due to vessel rupture resulting in an explosion, unplanned/undetected release impacting personnel working in or near the area or creating an explosive environment and toxic gas release. – Critical equipment related risks that apply at all Newcrest sites; for example, mill failure arising from catastrophic failure of a component, or unavailability of mine haul fleet. Other critical equipment related risks may be site specific; for example, impacts on asset integrity at Lihir due to the proximity of the mine to a corrosive marine environment. – Risks associated with a natural disaster include tsunami and mine flooding risk at Lihir, the impacts of cyclones at Telfer, both flooding or drought conditions at Cadia, avalanche risk cutting road access to Brucejack mine, landslide at Red Chris and geysers and outbursts at Lihir. Key mitigations implemented and/or action taken include: – Implementation of engineering solutions to local geotechnical, hydrogeological and geothermal conditions. For example, rock ‘preconditioning’ techniques are implemented at Cadia to reduce the magnitude of large seismic events and reduce the risk associated with air blast. At Cadia and Telfer, ground support systems are designed and installed to contain potential energy release that may result from a seismic event. At Cadia, semi-autonomous equipment is deployed due to the safety risk associated with unplanned release of material, including mud and dry fine ore. At Lihir, equipment with reinforced windows and remote controlled equipment are used to mitigate the impact of geysers and geothermal outburst and blasting of outburst prone areas is used to reduce frequency and severity of outburst events. – The Newcrest Process Safety program includes consideration of equipment and process design; controls management; and field excellence. Process Safety reviews are conducted at all Newcrest sites to challenge the adequacy of the controls in place to manage site specific process safety risks. – In most jurisdictions that Newcrest operates the management of explosives is heavily regulated. Compliance with local laws and the execution of controls is critical to prevent unplanned detonation events. – Newcrest implements asset integrity programs which systematically review the condition of assets, determine their current condition and the risk this poses to the business. These programs include the development and execution of maintenance strategies, operating equipment with design limits and the holding of critical spares. Newcrest facilitates independent reviews which analyse risk understanding, control design and control execution for those risks which may result in the highest business interruption. – Each Newcrest site considers the potential material risks associated with a natural disaster. That likelihood is re-assessed annually based on changing climatic conditions. Controls focused on mitigation (i.e., reduction of consequence should the event occur) are prioritised. For example, Telfer undertakes cyclone season preparedness, Lihir performs wet season prevention activities, and Brucejack mine undertakes preventative actions as part of avalanche management practices. Risks associated with climate change include transition risks relating to the transition to a lower-carbon global economy and acute or chronic physical risks from changing weather patterns. Transition risks and opportunities are associated with policy, legal, regulatory, technological, market, behavioural and reputational developments arising from the global transition to a lower-carbon economy. Newcrest predominantly produces gold and copper from operations in Australia, Canada and Papua New Guinea (PNG). The production of gold and copper is energy intensive and produces greenhouse gas emissions that contribute to climate change. Implementation of policy, legislation and regulation to reduce greenhouse gas emissions to align with the Paris Agreement differs across each jurisdiction in which Newcrest operates. Failure by Newcrest to engage with government policy frameworks, reduce greenhouse gas emissions intensity of its operations or properly assess and implement new technologies may lead to a material impact on financial performance, financial position, share price and reputation. 80 Directors’ Report continued OPERATING AND FINANCIAL REVIEW continued 8. Risks in focus continued Potential threats and opportunities for Newcrest Australia, Canada and PNG’s Nationally Determined Contributions (NDC) under the Paris Agreement, commit to a reduction in greenhouse gas emissions by 2030 by 43% below 2005 levels, 40–45% below 2005 levels and 50% below 2015 levels, respectively. In Australia, from 1 July 2023, the policy mechanism used to realise the NDC for large industrial emitters, the Safeguard Mechanism, will require progressive limitations to greenhouse gas emissions from our sites, with the allowance to purchase and surrender Australian Carbon Credit Units (ACCUs) at market prices on exceedance of these limitations. Telfer is a covered facility under the Safeguard Mechanism and is required to reduce emissions below its baseline whereas Cadia is not currently a covered facility. In British Columbia, Canada, a carbon tax of C$50 per tonne of carbon dioxide equivalent (CO2-e) applies to both Brucejack and Red Chris, which increased to C$65 per tonne on 1 April 2023. The transition to lower-carbon technologies, including electrified fleet and alternative fuels, may require changes to mine plans, standard operating practices, training and infrastructure which are likely to have an impact on operating and capital expenditures, and work continues in these areas. Mitigations implemented and/or action taken Newcrest contributes to the climate change policy debate in all jurisdictions in which we operate by advocating for effective long-term policy to transition to lower-carbon technologies as well as harmonisation of regulations within the states, provinces and territories in which it operates. Newcrest’s contributions are through its memberships of local industry associations. Newcrest’s investment decisions are typically multi-decadal requiring incorporation of long-term revenue and cost assumptions. Newcrest applies legislated carbon prices and/or a shadow carbon price of US$50 and US$100 per tonne of CO2-e when considering investment decisions to test whether the financial returns on investment are resilient under different carbon pricing scenarios. Newcrest is actively seeking to expand and develop its copper resources, particularly through exploration and its investments in Cadia, Red Chris and Wafi-Golpu. Newcrest holds interests in operations and projects with approximately 25 million tonnes of contained copper metal as Measured and Indicated Mineral Resources providing exposure to the increase in demand for copper resulting from the transition to lower-carbon technologies. Physical risks include acute climate change risks from the increasing frequency and intensity of extreme weather events such as floods, landslides, avalanches, cyclones, wildfires and hot and cold extremes. They also include chronic climate change risks from sustained shifts in climate patterns such as higher average temperatures causing droughts, sea level rise, increasing and decreasing regional long-term precipitation, thawing permafrost and glaciers. Newcrest’s operations, supply and value chains and the communities in which it works need to be resilient to both acute and chronic climate change risks. Failure to identify, respond, mitigate, and adapt to these risks may result in business interruption causing reduced production and resource access as well as abrasion of critical infrastructure such as roads. These may lead to a material negative impact on the timing of growth projects, financial performance, share price, employee and community safety and Newcrest’s reputation. Physical risk Why it is important to Newcrest Potential threats and opportunities for Newcrest All of Newcrest’s businesses and the local communities in which it works are subject to long term physical climate change risks that may include water scarcity and wildfires from reducing precipitation, heat stress from increasing average temperatures and sea level rises from thawing sea ice and glaciers. They are also exposed to extreme weather events resulting in flooding, landslides, avalanches, increasing intensity of cyclones and extreme heat and cold. Mitigations implemented and/or action taken For example, in the current period Lihir experienced reduced milling rates due to limited raw water supply to the plant driven by drought conditions experienced across the New Ireland Province in PNG. Cadia has previously experienced water scarcity from drought conditions in 2019 which resulted in a reduction in water use to assist the Orange community response to the drought. Floods and wildfires have been experienced near Cadia, Telfer and Red Chris in recent years. Brucejack’s glacial access road is subject to thaw as average temperatures increase. Newcrest has obtained localised climate projections over the period until approximately 2100 using CMIP5 and CMIP6 (climate simulations from Coupled Model Intercomparison Project Phase 5 and Coupled Model Intercomparison Project Phase 6) for each operation and project and is developing adaptation plans for each operation and project in order to prepare them for the increasing frequency and intensity of extreme weather events and the sustained shifts in long-term climate patterns. These adaptation plans include the need to reflect forecast climate projections in engineering designs, including tailings design and management, and the augmentation of emergency response services along with a corresponding estimate of any potential incremental cost in Newcrest’s long-term plans. Procurement, inbound supply chain and inventory management Newcrest’s reputation, production continuity and cost profile can be impacted by risks associated with the management and operation of its inbound global supply chain (including risks associated with the inventory management of critical equipment, spares and consumables). The underlying risks include failure to supply critical goods/services (causing operational disruption) and a direct modern slavery event occurring in our supply chain. Why it is important to Newcrest Newcrest’s reputation, production and revenue continuity is exposed to harm and disruption within the supply chain of critical material (spares and consumables) and contract labour inputs, through transgressions, compromised availability, route disruption and performance issues (including in source and transit geographies with the suppliers of both product and labour along with logistics service providers). Newcrest Annual Report 2023 81 Potential threats and opportunities for Newcrest Mitigations implemented and/or action taken Cyber security and data protection Why it is important to Newcrest There is a risk that inbound supply chain disruption will lead to Newcrest reputational damage, mine site production curtailment or stoppage in the event of a critical material or labour input unavailability or association with a human rights transgression. This could have a material adverse impact to Newcrest’s financial condition depending on the duration of the curtailment or stoppage, or reputation if the incident is due to a supplier’s human rights breach. The risks can result from loss of suitable suppliers, the impact of epidemics, disruption to trade flows, critical infrastructure bottlenecks/breakdowns, geopolitical impacts/changes in legislation, sub performance of suppliers, and damage to our reputation caused by actions of our suppliers. Newcrest aims to mitigate its inbound supply chain disruption by performing the following assurance and monitoring activities: – Procurement Policy and Standards deployment – sets out the commitment to procuring, delivering and managing goods and services in a way that aligns to Newcrest’s Vision and aspirations. – Supplier due diligence and ongoing assurance – our Supplier Performance Commitments publicly set out our expectations for business conduct from all suppliers wishing to do business with, or on behalf of, Newcrest. Newcrest routinely reviews its supplier selection, procurement governance and contract management processes to evaluate and monitor performance in its supply chain, with specific focus on human rights and critical inputs/high risk geographies. We also perform supplier category assessments to assess modern slavery risk. – Compliance with human rights legislation and standards – we publicly disclose an annual Modern Slavery Statement, track international trends such as the Canadian Modern Slavery Act, and are guided by the UN Guiding Principles on Business and Human Rights. – Category planning for critical inputs – live documents with strategies and risk mitigation for optimising cost effective supply and usage of critical inputs. – Business continuity and crisis management plans for critical inputs – with early warning signals to be established (including recognition of tolerances for higher cost inputs in business continuity planning), critical roles training and awareness and incident response capability and plans. – Critical shipping, transport and labour contracts oversight and management. – Inventory management and optimisation – strategies, tools and management system for optimising inventory availability for critical inventory segments. – Ongoing critical Supplier Relationship Management which aims to have suppliers prioritising Newcrest in times of interruption or scarcity. – Procurement Excellence Program progression and Newcrest global procurement team capability build. Additionally, there is a natural risk mitigation as a result of the uniqueness of supply chains to each operation (i.e., risk/disruption in the supply chain to one operation is independent to the supply chain risk to other operations) and the ability to implement alternate processing pathways at each operation depending on short term unavailability of particular inputs. Risks associated with cyber security and data protection, including both technology and physical security. Newcrest’s operations are supported by and dependent on IT systems, consisting of infrastructure, networks, applications, and service providers. In addition, Newcrest relies on the accuracy, capacity and security of its IT systems for the operation of many of its business processes and to comply with regulatory, legal and tax requirements. A disruption in, or failure of, Newcrest’s IT systems could adversely affect its business processes. While Newcrest maintains some of its critical IT systems, it is also dependent on third parties to provide certain IT services. Despite the security measures that Newcrest has implemented, including those related to cybersecurity, its systems could be breached or damaged by malicious actors. Potential threats and opportunities for Newcrest Newcrest could be subject to network and systems interference or disruptions from a number of sources, including (without limitation) security breaches, cyber-attacks and system defects. The impact of IT systems interference or disruption could include production downtime, operational delays, destruction or corruption of data, disclosure of personal or commercially sensitive information and data breaches. Any such interference or disruption could have a material impact on Newcrest’s business, operations or financial condition and performance. Cybersecurity risk is increasingly difficult to identify and quantify and cannot be fully mitigated because of the rapidly evolving nature of the threats, targets and consequences. Unauthorised parties may attempt to gain access to Newcrest’s systems, information through fraud or other means of deceiving its third-party service providers, employees or contractors. Newcrest may be required to incur significant costs to protect against and remediate the damage caused by such disruptions or system failures in the future. Security measures and recovery plans are in place for all of Newcrest’s major sites and critical IT systems. Mitigations implemented and/or action taken 82 Directors’ Report continued REMUNERATION REPORT 11 August 2023 Dear Shareholder On behalf of the Board of Newcrest, I am pleased to provide our Remuneration Report for the year ended 30 June 2023. This report explains the links between Newcrest’s Executive remuneration framework as well as outcomes and Newcrest’s strategy and performance. Newmont Transaction On 15 May 2023, Newcrest announced that it had entered into a binding scheme implementation deed with Newmont Corporation (Newmont), under which the parties agreed to proceed with a proposal for Newmont to acquire 100% of the issued shares in Newcrest by way of an Australian scheme of arrangement (the Newmont Transaction). The Newmont Transaction is subject to a number of conditions, including various regulatory approvals, approval by the Federal Court of Australia and approval by Newcrest and Newmont shareholders. The Board has decided to unanimously recommend that shareholders vote in favour of the Newmont Transaction in the absence of a superior proposal and subject to the Independent Expert concluding and continuing to conclude that the Newmont Transaction is in the best interests of Newcrest shareholders. A meeting of the shareholders of Newcrest is likely to occur in or around October 2023, with implementation targeted to occur in November 2023. Year in review Newcrest’s performance in the 2023 financial year (FY23) was overshadowed by a tragic fatality involving a contractor at the Brucejack mine in October 2022 and a serious injury sustained by a team member from one of Cadia’s contracting partners in June 2023. Newcrest remains committed to learning from these devastating incidents to ensure that safety remains at the forefront of every activity across the business to prevent fatalities and life-changing injuries going forward. For FY23, Newcrest reported a Total Recordable Injury Frequency Rate (TRIFR) of 2.97 per million hours worked, which was a 26% improvement on FY22 and was underpinned by Red Chris reporting its lowest TRIFR outcome on record and Lihir delivering two consecutive quarters with zero recordable injuries. Newcrest continued to progress its Net Zero by 2050 target during FY23 with the scoping and planning of key trials and studies to implement the Group Net Zero Emissions Roadmap continuing. In July 2022, Newcrest launched its Sustainability Fund which contributed to eight major projects and two emergency response projects in FY23 with a focus across health, education, biodiversity, reduction in inequalities and economic growth outcomes. Operationally, Newcrest produced 2.1 million ounces of gold which was 8% higher than FY22. This primarily reflects the inclusion of Brucejack for a 12 month period (FY22 included four months of production) and higher gold production at Cadia following the completion of the planned replacement and upgrade of the SAG mill motor in November 2021. This was partially offset by lower production at Telfer and Lihir, with Lihir’s production performance impacted by several extreme weather and unplanned downtime events. Newcrest delivered a strong financial performance in FY23, reporting a statutory profit of $778 million, free cash flow (FCF) of $404 million and an All-In Sustaining Cost (AISC) of $1,093 per ounce. Newcrest made significant progress against its growth strategy with key study milestones achieved at Cadia with the PC1-2 Feasibility Study approved to execution and completion of the two-stage plant expansion project. Newcrest also released its Lihir Phase 14A Feasibility Study and signed a Framework Memorandum of Understanding for the Wafi-Golpu project. In line with Newcrest’s commitment to providing strong shareholder returns, Newcrest determined a fully franked final dividend of US 20 cents per share, bringing total dividends for FY23 to US 55 cents per share (including the special dividend of US 20 cents that was paid in March 2023), which is an equal record for Newcrest. In addition, Newcrest expects to pay a franked special dividend of US$1.10 per Newcrest share prior to implementation of the scheme of arrangement, subject to the scheme of arrangement becoming effective. (1) KMP changes During the 2023 financial year, Sherry Duhe was appointed as Interim Chief Executive Officer (CEO), Daniel O’Connell was appointed as Interim Chief Financial Officer (CFO), and Craig Jones was appointed as Interim Chief Operating Officer (COO), following the departure of Sandeep Biswas (Managing Director and CEO) and Philip Stephenson (Chief Operating Officer – Australasia). Seil Song also ceased as Chief Development Officer (CDO) on 30 June 2023. Both Sherry and Daniel commenced in their interim role on a total remuneration package lower than their predecessor, reflecting that they are new to their role. Further information in respect of the remuneration packages for the interim roles, as well as the exit arrangements for Sandeep, Philip and Seil, can be found in section 8. (1) Newcrest expects to have sufficient franking credits available to frank a special dividend up to an amount of US$1.10 per share. The franking of the special dividend amount is subject to change based on timing of implementation of the scheme, business performance, foreign exchange movements and an ATO Class Ruling. Newcrest Annual Report 2023 83 Remuneration framework At the 2022 Newcrest Annual General Meeting, the 2022 Remuneration Report received a “first strike”. The Board values shareholder feedback and has, over the last year, engaged with shareholders and proxy advisors to obtain their views as to Newcrest’s Executive remuneration arrangements. The Board has considered the feedback and is of the view that the main concerns raised have been addressed with the following changes, some of which were foreshadowed in the 2022 Remuneration Report: – For the Short Term Incentives (STIs): – replacement of FCF with Operating Cash Flow (OCF), to increase relevance of the metric for employees with limited control over non-sustaining or M&A activities; – an increase in the weighting of sustainability and costs measures; and – streamlining of personal objectives for Executives, resulting in fewer, more heavily weighted objectives designed to emphasise critical focus areas such as our culture, including organisational health and Respect@Work. – For the Long Term Incentives (LTIs), an increase in the weighting of the relative total shareholder return (TSR) measure from 33% to 50%, and an increase in the required level of performance for vesting of the Return on Capital Employed (ROCE) measure. – An increase in the Minimum Shareholding Requirement for Executives from FY23 onwards to 200% of total fixed remuneration (TFR) for the CEO, and 100% of TFR for other Executives, to encourage retention of shares and enhance the alignment of shareholder and Executive interests. – Enhanced disclosure of STI outcomes in the remuneration report (refer section 5.3.1). Further information as to our response to the main concerns raised by shareholders and proxy advisers is set out in section 2.3. Remuneration outcomes FY23 STI outcomes for Executives ranged from 28% to 55% of the maximum possible award, against a scorecard of business and personal performance metrics. 66.67% of the 2019 LTIs vested during the 2023 financial year, representing Newcrest’s performance for the three years to 30 June 2022. While no increase was made in Board or Committee fees for the Non-Executive Directors (NEDs) during the 2023 financial year, Peter Tomsett received additional Director fees in recognition of his increased involvement in the business during the CEO transition period (as previously announced to the market), and four NEDs received additional fees in recognition of their involvement in the Due Diligence Committee relating to the Newmont Transaction, as disclosed in section 9.3. Impact of the Newmont Transaction on future remuneration The following has been agreed with Newmont in relation to KMP remuneration: – FY23 STI awards will be delivered in cash before implementation of the Newmont Transaction with no portion deferred into restricted shares; – Conditional on the Newmont Transaction becoming effective: – 2021 and 2022 LTIs and sign-on rights will vest in full shortly prior to implementation of the Newmont Transaction. These awards will not be eligible to receive the special dividend; – 2020 LTIs will vest based on performance against the relevant performance measures (performance period is 1 July 2020 – 30 June 2023). The date of vesting may be brought forward slightly, to ensure the shares allocated on vesting participate in the Newmont Transaction. Vested awards will be eligible to receive the special dividend; – In order for all issued capital to participate in the Newmont Transaction, any restricted shares held in connection with previous STI and LTI awards will be released from trading restrictions shortly prior to implementation of the Newmont Transaction; – No 2023 LTI award will be made; and – A 6-month STI program will be in place for the period 1 July 2023 to 31 December 2023. The maximum STI opportunity will be half of the typical annual entitlement. The STI will be assessed post implementation of the Newmont Transaction, by Newmont, and will be delivered in cash. Further information in relation to the above, is set out in section 6. The Board is committed to ensuring that Newcrest’s remuneration framework remains effective in the context of the Newmont Transaction, particularly with a view to underpinning employee engagement, and the retention of key skills and experience, throughout a period of uncertainty, in a fair and transparent manner, as well as recognising the increased workload of our Executive team and employees in order to deliver the Newmont Transaction for our shareholders. More generally, the Board is confident that the updated remuneration framework is suitably aligned to the Company’s strategy and performance and that it is sufficient to attract, reward and retain high calibre people through this period of change. We continue to welcome shareholder feedback and thank you for your support. Philip Aiken AM Chairman, Human Resources and Remuneration Committee 84 Directors’ Report continued REMUNERATION REPORT continued This Report details the remuneration arrangements in place for the key management personnel (KMP) of Newcrest, being those people who had authority for planning, directing and controlling the activities of the Company during the 2023 financial year. The KMP for the 2023 financial year comprised the NEDs and certain members of the Executive Committee specified in section 1 (the Executives). This Report has been audited under section 308(3C) of the Corporations Act 2001. Contents Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Section 11 Key Management Personnel Remuneration Snapshot Remuneration Governance Executive Remuneration Framework Remuneration Outcomes Impact of Newmont Transaction on future year remuneration arrangements Executive Service Agreements Executive Changes Non-Executive Directors’ Remuneration Shareholdings Statutory Tables 85 86 89 90 99 106 107 107 108 108 110 Newcrest Annual Report 2023 85 1. Key Management Personnel (KMP) The following table sets out the Company’s KMP during the 2023 financial year. Name Executives Sherry Duhe Craig Jones Daniel O’Connell (1) Maria Sanz Perez Seil Song (2) Suresh Vadnagra Former Executives Sandeep Biswas (3) Philip Stephenson Non-Executive Directors Peter Tomsett Philip Aiken AM Philip Bainbridge Roger Higgins Sally-Anne Layman Jane McAloon AM Vickki McFadden Role FY23 Term Interim CEO CFO Interim COO COO – Americas Interim CFO 19 Dec 2022 – present 1 Jul 2022 – 18 Dec 2022 19 Dec 2022 – present 1 Jul 2022 – 18 Dec 2022 19 Dec 2022 – present Chief Legal, Risk & Compliance Officer (CLRCO) Full year CDO Chief Technical & Projects Officer (CTPO) Full year Full year CEO COO – Australasia Chairman Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director 1 Jul 2022 – 19 Dec 2022 1 Jul 2022 – 15 Dec 2022 Full year Full year Full year Full year Full year Full year Full year (1) Daniel O’Connell was Group Treasurer prior to his appointment as Interim CFO. (2) Seil Song ceased as CDO on 30 June 2023. The cessation of his employment with Newcrest will take effect in December 2023. (3) Sandeep Biswas ceased as Managing Director on 18 December 2022 and as CEO on 19 December 2022. 86 Directors’ Report continued REMUNERATION REPORT continued 2. Remuneration Snapshot 2.1. Key remuneration outcomes for the 2023 financial year Executive Remuneration STI Outcomes LTI Outcomes NED Remuneration During the 2023 financial year, 66.67% of the 2019 LTIs vested reflecting the Company’s performance over the three year performance period to 30 June 2022. Changes were made to the weightings of the LTI measures and the ROCE vesting schedule for the 2022 LTIs. These are described in detail at section 4.5. 2022 LTIs granted to Executives who ceased employment with Newcrest during FY23 lapsed. No changes were made to Board or Committee fees. Peter Tomsett received additional director fees during the CEO transition period in recognition of his increased involvement in the business. Vickki McFadden, Sally-Anne Layman, Jane McAloon and Philip Bainbridge received additional fees in recognition of their involvement in the Due Diligence Committee relating to the Newmont Transaction. To reflect that they are new to their respective roles, the remuneration packages offered to the Interim CEO and Interim CFO were materially lower than the amounts received by the previous permanent incumbents. Fixed remuneration was approximately 40% lower for each role, and maximum incentive opportunity was more than 50% lower. With effect from 1 October 2022 the former CEO received a TFR increase of 2.9% and other Executives received TFR increases averaging 2.9%. Changes were made to the STI business measures and weightings for the 2023 financial year, with the most significant changes being the use of Operating Cash Flow (rather than Free Cash Flow) and an increase in the weighting for Sustainability. These are described in detail at section 4.4. Personal objectives for Executives for the 2023 financial year were streamlined, resulting in fewer, more heavily weighted objectives, with increased emphasis on culture, including organisational health and Respect@Work. FY23 STI outcomes for Executives ranged from 28% to 55% of the maximum possible award, based on the assessment of business and personal measures. Given the timing of the Newmont Transaction, FY23 STIs will be delivered as cash without any portion deferred into restricted shares. Executives who ceased employment with Newcrest during FY23 did not receive a FY23 STI. In addition, the Minimum Shareholding Requirement for Executives increased to 200% of TFR for the CEO, and to 100% of TFR for other Executives from FY23 onwards. Newcrest Annual Report 2023 87 2.2. Actual Remuneration The table below details the cash and value of other benefits actually received by the Executives in the 2023 financial year in their capacity as KMP. This disclosure provides shareholders with increased clarity and transparency in relation to Executive remuneration. It includes the value of LTI Rights and Restricted STI Shares that vested during their period as KMP during the 2023 financial year. See section 11.1 for the statutory remuneration table that has been prepared in accordance with statutory obligations and Australian Accounting Standards. As noted in section 8, Sandeep Biswas and Philip Stephenson did not receive a FY23 STI, and the 2022 LTIs granted to them lapsed, as a result of their cessation of employment. Actual Executive Remuneration for the 2023 financial year 2022 STI Paid as cash (2) TFR (1) Termination Benefits (3) Other Benefits (4) LTI Rights Vested (5) Restricted STI Shares Vested (6) Sign-On Rights Vested (7) Total US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 873 645 234 562 538 602 1,570 541 102 191 – 172 174 197 826 191 – – – – – – – 577 275 224 4 5 12 6 58 77 – 230 – – 140 – 1,171 230 – 145 – 78 85 82 601 129 411 – – – – – – – 1,661 1,435 238 817 949 887 4,226 1,745 Executives Sherry Duhe Craig Jones Daniel O’Connell Maria Sanz Perez Seil Song Suresh Vadnagra Former Executives Sandeep Biswas Philip Stephenson Notes to Actual Executive Remuneration (1) TFR comprises base salary, superannuation contributions and payment of unused statutory leave entitlements. For all Executives, TFR has been pro-rated for time served as KMP during the financial year. For Sandeep Biswas, this also includes payments for advisory services up to his retirement on 18 March 2023 as set out in section 8.2. (2) Represents amounts paid for STIs relating to performance for the 2022 financial year. The cash component for the 2022 financial year was paid in October 2022. (3) This comprises of payment in lieu of any notice period not served to Philip Stephenson upon cessation of his employment. A description of the treatment of former KMP remuneration is set out in section 8.2. (4) Comprises cash payments for travel costs, relocation assistance, non-monetary benefits such as parking, insurance and applicable fringe benefits tax paid on benefits. It also includes: – For Sherry Duhe, sign-on cash rights (refer to section 4.7) and relocation assistance of US$135,000. – For Craig Jones, an allowance that covers part of the cost of housing, vehicle, and other expenses associated with his assignment to Canada prior to his appointment as Interim COO. (5) Represents 2019 LTIs that vested on 22 November 2022. The Shares issued on vesting remain subject to a one year holding lock (i.e. they are included in this column, but are not available for trading until the earlier of 22 November 2023 and the Effective Date for the Newmont Transaction). The value of the Rights has been determined based on the share price at the close of business on the vesting date of A$18.88 (US$12.54). (6) Ordinary Newcrest shares were released by Pacific Custodians Pty Ltd as trustee for the Newcrest Employee Share Trust: – on 28 October 2022 to Sandeep Biswas (16,926), Craig Jones (2,675), Seil Song (902) and Philip Stephenson (3,596) on vesting of restricted STI shares (tranche 2) awarded for the 2020 financial year; – on 28 October 2022 to Sandeep Biswas (34,900), Craig Jones (7,076), Maria Sanz Perez (6,720), Seil Song (6,431), Philip Stephenson (7,501) and Suresh Vadnagra (7,098) on vesting of restricted STI shares awarded (tranche 1) for the 2021 financial year; – on 4 November 2022 to Craig Jones (17,392) as an allocation of STI shares awarded for the 2022 financial year. Of those shares, 2,871 shares were sold to fund Canadian withholding tax, and a holding lock was applied over the remaining 14,521 shares to apply for one year as to 50% of the 14,521 shares, and two years as to the other 50% of the 14,521 shares (with the intention that the holding lock be of similar effect to the restrictions on the STI restricted shares allocated to other Executives). The value of the restricted STI Shares which vested has been determined based on the share price at the close of business on the vesting date being A$17.81 (US$11.59) for shares vested on 28 October 2022 and A$17.40 (US$11.08) for shares transferred to Craig Jones on 4 November 2022. (7) Represents the Sign on Rights issued to Sherry Duhe that vested on 21 February 2023. The value of the Rights has been determined based on the share price at the close of business on the vesting date of A$23.74 (US$16.36). TFR and Other Benefits have been translated from Australian dollars (in which they were paid) to US dollars using an average exchange rate of 0.6735, and, in the case of payments to Craig Jones while relocated to Canada, from Canadian dollars (in which they were paid) to US dollars using an average exchange rate of 0.9017. STI paid as cash, LTI Rights vested, Restricted STI Shares vested and Sign-on Rights vested have been translated at the rate applicable on the date of the event. For Restricted STI Shares, this is the date the trading restriction is lifted. 88 Directors’ Report continued REMUNERATION REPORT continued 2. Remuneration Snapshot continued 2.3. Response to ‘first strike’ received at the 2022 AGM At the 2022 AGM, some shareholders expressed concerns regarding Newcrest’s Executive remuneration arrangements, resulting in a ‘first strike’ against the adoption of the Remuneration Report for the year ended 30 June 2022 (with 36.60% votes cast against). The Board values shareholder feedback and has, over the last year, engaged with proxy advisers and shareholders to obtain their view as to the total quantum and complexity of Newcrest’s Executive remuneration arrangements and the overall alignment of them with investor outcomes. The Board has considered the feedback and the options available to it, and received input from the Board’s independent advisor, KPMG. A number of key changes to the Executive remuneration framework were implemented for the 2023 financial year, as set out below and foreshadowed in the 2022 Remuneration Report. Changes were made with the key objective of seeking alignment of shareholder and Executive interests and clearer accountability. – For the STIs: – replacement of FCF with OCF, to increase the relevance of the metric for employees with limited control over non-sustaining or M&A activities; – an increase in the weighting of sustainability and costs measures; and – streamlining of personal objectives for Executives, resulting in fewer, more heavily weighted objectives designed to emphasise critical focus areas such as our culture, including organisational health and Respect@Work. – For the LTIs, an increase in the weighting of the relative TSR measure from 33% to 50%, and an increase in the required level of performance for vesting of the ROCE measure. – An increase in the Minimum Shareholding Requirement for Executives from FY23 onwards to 200% of TFR for the CEO, and 100% of TFR for other Executives, to encourage retention of shares and enhance the alignment of shareholder and Executive interests. In light of the first strike, the Board has continued to consider the Executive remuneration framework during the 2023 financial year against the feedback received, and considers that the feedback received has been addressed appropriately as set out below. Feedback topics Board response Remuneration structure Quantum of TFR and incentive outcomes Alignment between incentive outcomes and shareholder returns FY22 STI outcome Outcome of the FCF STI measure in FY22 Newcrest reviews Executive remuneration periodically on the basis of benchmarking provided by the Board’s independent advisor, KPMG, to ensure that Executive remuneration is market competitive and sufficient to attract and retain talent. Fixed pay increases averaging 2.9% for the former CEO and other Executives took effect from 1 October 2022. The increases were reflective of the length of time since a previous increase and the positioning of the former CEO and Executives’ packages relative to key peers, as well as the experience and tenure of the former CEO and other Executives. To reflect that they are new to their respective roles, the remuneration packages offered to the Interim CEO and Interim CFO were materially lower than the amounts received by the previous permanent incumbents. Fixed remuneration was approximately 40% lower for each role, and maximum incentive opportunity was more than 50% lower. No Executive remuneration increases have taken place since Newmont’s indicative proposal was received, and none are scheduled entering FY24. The changes made to Newcrest’s Executive remuneration framework in the 2023 financial year have sought to increase alignment of Executive and shareholder outcomes by: – reducing the total number of metrics within the STI scorecards, in order to encourage greater focus on the measures considered most important to create shareholder value; – increasing the LTI weighting of relative TSR from 33% to 50%; – increasing the ROCE vesting thresholds; and – increasing the minimum shareholding requirement to 200% for the CEO and 100% for other Executives. The FCF target, which was based on Newcrest’s FY22 Budget, was negative in the 2022 financial year. The Board considered the appropriateness of the FCF outcome for the 2022 financial year, along with the outcome of the other STI measures, when determining the overall STI outcome and considered it reasonable on the basis that: – the Budget was set having regard to significant additional capital expenditure expected to be undertaken in the 2022 financial year as well as materially lower than expected production at Cadia due to the SAG mill motor replacement; – the FCF outcome included unfavourable adjustments for the effect of commodity prices, foreign exchange rates, transactions related to M&A activity and other items determined by the Board which were considered to be outside the control of Management; and – the Board used discretion to exclude the receipt of an insurance settlement of $75 million relating to the NTSF embankment slump, which had the effect of reducing the adjusted FCF. In FY23, adjusted operating cash flow was US$893M. The corresponding FY23 STI measure vested at 69% of target (34.5% of maximum). Newcrest Annual Report 2023 89 Feedback topics Board response STI business measures Calculation of the NPAT STI measure Change from FCF to OCF LTI measures ROCE threshold Newcrest has retained ‘NPAT before significant items’ as a STI business measure. The Board considers this appropriate. Under the terms of the plan, the Board retains a discretion on any adjustments in the NPAT calculation and does not adjust significant items that are considered within the control of Management. For the FY22 STI, the Board made adjustments for significant items outside the control of management and the net adjustments to the NPAT measure reduced the vesting outcome for participants. The FCF performance measure was replaced by an OCF performance measure for the FY23 STI. Newcrest considers OCF to be a critical measure as it is within the control of Management and goes directly to generation of cash from operations. This change has been made to increase relevance of the metric for employees with limited control over non-sustaining or M&A activities. For the 2023 LTI, the Board increased the ROCE thresholds for vesting at 30% from 6% to 8%, and for vesting at 100% from 13% to 15%. The Board is satisfied that this increase is sufficiently challenging in light of prevailing economic conditions. Relative TSR as a measure The increase in weighting of relative TSR as a hurdle (to 50%) has been made to more closely align Executive and shareholder outcomes, as noted above. LTI structure LTI performance period Disclosure STI thresholds and targets Sign-on awards Sign-on awards The Board is satisfied that the three year performance period, with a further one year holding lock, is an appropriate way to incentivise and retain Executives. Additional detail has been provided in this report compared with previous reports in relation to the thresholds and targets used as STI measures. See section 5.3. Sign-on awards are an important mechanism to attract experienced Executives to the Company, as they compensate for benefits forfeited on leaving a previous employment. 2.4. Currency Unless otherwise indicated, the currency used in this Report is US dollars (US$) which represents Newcrest’s reporting (presentation) currency. Executive remuneration and NED fees are paid in Australian dollars (A$) and are translated into US dollars for reporting purposes at the average rate of A$1.00:US$0.6735 (2022: A$1.00:US$0.7260). The TFR for current Executives in Australian dollars is shown in section 5.1 to enable comparisons to be made in future years without the impact of changes in exchange rates. The NED fees in Australian dollars are shown in section 9.3. 3. Remuneration Governance Board HRR Committee Takes an active role in the governance and oversight of Newcrest’s remuneration policies and has overall responsibility for ensuring that the Company’s remuneration strategy aligns with Newcrest’s short and long term business objectives and risk profile. The Board approves the remuneration arrangements for the CEO and non-executive directors, upon recommendation from the Human Resources and Remuneration (HRR) Committee. No Executive is involved in deciding his or her own remuneration. Established by the Board to review, formulate and make recommendations to the Board in relation to matters within its Charter, including the remuneration arrangements of the CEO, Executives and the NEDs, and oversees the major components of the Board’s approved remuneration strategy. The Charter for the HRR Committee is available on the Company’s website: www.newcrest.com.au/about-us/corporate-governance. Current members of the HRR Committee are Philip Aiken AM (Chairman), Vickki McFadden, Roger Higgins and Jane McAloon AM, who are each independent NEDs. All Directors are invited to attend HRR Committee meetings. External Remuneration Consultants External remuneration consultants are on occasion engaged by the HRR Committee to provide advice on remuneration related issues. The Company’s External Remuneration Consultants Policy sets out protocols governing the engagement of external remuneration consultants. No remuneration consultant made a remuneration recommendation in relation to any of the KMP for the reporting period. 90 Directors’ Report continued REMUNERATION REPORT continued 4. Executive Remuneration Framework 4.1. Remuneration Strategy and Guiding Principles Our remuneration strategy is to provide market-competitive remuneration, having regard to the size and complexity of the Company, the scope of each role, and the impact the Executive can have on Company performance. The guiding principles of our remuneration strategy are as set out below. Strategy and Purpose Values and culture Shareholders Performance Market Drive execution of key objectives, which align with the Company’s strategy and short, medium and longer term performance objectives, and will deliver long term growth in shareholder value and is consistent with the Company’s risk appetite. This includes our commitment to safety and sustainability. Incorporate framework and processes that reinforce our values and culture. Align interests of Executives with those of shareholders. Provide appropriate levels of “at risk” performance pay to encourage, recognise and reward high performance. Attract and retain talented, high performing Executives by reference to comparable roles. Executive remuneration packages are benchmarked against comparable roles in: – ASX listed companies with market capitalisations ranked between 11 – 40; – a customised peer group of ASX listed companies comprising largely industrial, materials, energy and utilities companies of comparable scale and international complexity, i.e.: Woodside Energy Ltd, Transurban Group, South32 Ltd, Brambles Ltd, Amcor PLC, Fortescue Metals Group Ltd, Origin Energy Ltd, Santos Ltd, Aurizon Holdings Ltd, James Hardie Industries PLC, BlueScope Steel Ltd, Northern Star Resources Ltd, Evolution Mining Ltd and Mineral Resources Ltd; and – the following global gold mining companies: Agnico Eagle Mines Limited, AngloGold Ashanti Ltd, Barrick Gold Corporation, Gold Fields Ltd, Kinross Gold Corporation, Newmont, Evolution Mining Limited, Northern Star Resources Limited and Endeavour Mining Plc. TFR is targeted at the 50th percentile for comparable roles and experience/skills, while the total remuneration package for each Executive (inclusive of both fixed and variable remuneration) is targeted at up to the 75th percentile for comparable roles and experience/skills. 4.2. Components of the Executive Remuneration Framework The table below outlines the remuneration components that were put in place for the 2023 financial year for all Executives. Remuneration Type Fixed Remuneration Variable/At-Risk Remuneration Component Delivery Composition Total Fixed Remuneration (TFR) Short Term Incentive (STI) Long Term Incentive (LTI) Cash Equity Base salary plus superannuation contributions in line with statutory obligations, and any salary packaged amounts. 50% of STI award paid in cash after the financial year. 50% of STI award as shares, with one half restricted for one year and the other half restricted for two years. Outcomes based on a combination of business performance and personal measures. Subject to clawback and overarching Board discretion. Rights with a three year vesting period and shares allocated on vesting subject to a one year holding lock (or cash at the Board’s discretion). Outcomes based on ROCE, comparative cost position and relative TSR. Subject to clawback and overarching Board discretion. Link with strategic objectives Set to attract, retain, motivate and reward high quality executive talent to deliver on the Company’s strategy. Designed to: Designed to: – align interests of shareholders and Executives through an appropriate level of “at risk” pay and by delivering 50% in restricted equity; – motivate and reward for increasing shareholder value by meeting or exceeding Company and individual objectives; and – support the financial and strategic direction of the business through performance measures. – align interests of shareholders and Executives through an appropriate level of “at risk” pay and by delivering 100% in restricted equity; and – encourage Executives to focus on the key performance drivers which underpin the Company’s strategy to deliver long term growth in shareholder value. Newcrest Annual Report 2023 91 4.2. Components of the Executive Remuneration Framework continued The diagram below illustrates how the different components of Executive remuneration provided in respect of the 2023 financial year were intended to be delivered over a four year period. However, note that it has been agreed with Newmont that, if the Newmont Transaction proceeds, some changes will be made including in relation to vesting and release dates. Further details regarding the changes are provided in section 6. Salary Paid throughout year 50% cash 25% restricted shares 25% restricted shares STI Performance Period (12 months) Restriction Restriction Payable Oct 2023 Released Oct 2024 Released Oct 2025 Awarded as Rights LTI Performance Period (3 years) Vests as shares Unlocked Holding lock Nov 2022 Nov 2025 Nov 2026 FY23 FY24 FY25 FY26 FY27 Newcrest’s mix of remuneration components, expressed as a percentage of “maximum” earning opportunity, for current Executives for the 2023 financial year is illustrated in the following graph. Although the components of TFR, STI and LTI are described separately, they should be viewed as part of an integrated package. As above, some changes will be made to timing of awards if the Newmont Transaction proceeds. Further details regarding the changes are provided in section 6. Remuneration Mix as a Percentage of Maximum FY23 (%) 31.6 42.1 26.3 9.5 42.9 47.6 26.7 31.3 40.0 37.5 33.3 31.3 TFR STI LTI Interim CEO, COO, CTPO Interim CFO CLRCO CDO Totals in the above graph may not add to 100% due to rounding. As at the date they ceased as KMP: the former Managing Director and CEO (Sandeep Biswas) had a package comprising 20.8% TFR, 41.7% STI and 37.5% LTI; and the former COO – Australasia (Philip Stephenson) had a package comprising 26.3% TFR, 42.2% STI and 31.6% LTI. The “at risk” components are subject to deliberately challenging financial and non-financial performance conditions. The potential “maximum” earning opportunity shown above is not expected to be achieved each year, but is designed to only be achieved in respect of exceptional performance. There is no STI awarded unless a threshold level of performance is achieved. The table does not include sign-on grants awarded to Sherry Duhe in the 2022 financial year, some of which vested in the 2023 financial year, and does not include transition performance awards offered to Craig Jones and Suresh Vadnagra during the 2023 financial year. See sections 4.6, and 4.7 and 11.2. 92 Directors’ Report continued REMUNERATION REPORT continued 4. Executive Remuneration Framework continued 4.3. Total Fixed Remuneration (TFR) Description Feature Composition TFR comprises base salary, superannuation contributions in line with statutory obligations, and any salary packaged amounts (for example, novated lease vehicles). TFR is paid in Australian dollars for all Executives other than Craig Jones, for whom TFR was paid in Canadian dollars during his period of relocation to Canada. Relevant Considerations TFR is determined on an individual basis, considering the scope of the role, the individual’s skills and expertise, individual and group performance, market movements and competitiveness. 4.4. Short Term Incentive (STI) 4.4.1. Key features of the STI award for the 2023 financial year Feature Participation Opportunity Description All Executives are eligible to participate. Executives are eligible for the following STI opportunities: Role Interim CEO, Interim COO, and CTPO CLRCO & CDO Interim CFO Target Opportunity (as % of TFR) Maximum Opportunity (as % of TFR) 80% 60% 45% 160% 120% 90% In respect of the Interim Executives, their actual FY23 STI awards were pro-rated to take into account the TFR levels in their previous positions. Performance Period The performance period is the financial year preceding the payment date of the STI. For the 2023 financial year, the performance period was 1 July 2022 to 30 June 2023. Performance Conditions Performance conditions are a mix of personal and business measures. Robust threshold, target and maximum targets are established for all measures to drive high levels of business and individual performance. The specific personal measures applicable to each Executive may change from year to year to reflect business priorities. The relative weightings of these categories may also change from year to year to best reflect each Executive’s priorities. The annual budget generally forms the basis for the “target” performance set by the Board. Further details in relation to the personal and business STI measures and the outcomes are described in sections 4.4.2 and 5.3.1. The diagram below illustrates the indicative weighting of the performance conditions, using the Interim CEO’s personal conditions for the period from her appointment as Interim CEO to the end of the 2023 financial year as an example. Cultural Transformation 30% Executive Leadership 10% Effective Capital Allocation 20% 40% Personal measures Capital Projects and Operations 40% 60% Business measures Safety 15% Sustainability 15% Earnings 20% Costs 25% Free Cash Flow 25% Newcrest Annual Report 2023 93 Feature Description Calculation of STI Award to Executives STI Amount ($) = ((40% x personal outcome) + (60% x business outcome)) x “At Target” STI% x TFR (other than for Daniel O’Connell who continued to have business and personal measures weighted as 50% each). Business and personal measures are scored out of 200%, with 50% for threshold performance, 100% for target performance and 200% for maximum performance. Business or personal measures that fail to meet the threshold target score 0%. If the overall average of the personal measures is below 50%, the CEO (in the case of an award to the other Executives) or the Board (in the case of an award to the CEO) has the discretion not to make an STI award to that participant. Accordingly, the minimum value of the STI Award is nil. Payment, Delivery and Deferral For Executives, the STI is delivered in or around October 2023, following finalisation of the audited annual Company results and the approval of all personal outcomes. The STI is usually delivered 50% in cash and 50% in restricted shares, with half of the restricted shares to be released 12 months after the allocation date (in October 2024) and the remainder two years after the allocation date (in October 2025). However, in light of the Newmont Transaction, FY23 STIs will be delivered as cash rather than 50% in cash and 50% in restricted shares. Cessation of Employment Except at the discretion of the Board: – if a participant resigns or is dismissed for cause during the STI performance period, the participant will not be eligible to receive an STI award for that financial year; – if a participant ceases employment for any other reason during the STI performance period, the STI award will be reduced on a pro rata basis, but will remain payable in the ordinary course; – if a participant is dismissed for cause while the restricted STI shares are subject to restrictions, the restricted STI shares will be forfeited; – if the participant resigns while the restricted STI shares are subject to restrictions, the participant will be entitled to retain their restricted STI shares and the shares will be released after the restriction period. The Board will have the discretion to increase the STI restriction period for some or all of the existing restricted STI shares, from one year to two years; and – if the participant ceases employment for any other reason while the restricted STI shares are subject to restrictions, the participant will be entitled to retain their restricted STI shares and the shares will be released after the restriction period. In general, the Board has the discretion to reduce or forfeit an STI award, or to seek recovery from an Executive, if an event or circumstance has occurred which has resulted in an inappropriate benefit being conferred on an Executive (including in the case of fraud, dishonesty, gross misconduct by the Executive or if the outcomes are the result of material error or misstatement of the financial accounts). The discretion may be exercised for a period of two years from the vesting or award date. Clawback Overriding Board Discretion The Board retains overriding discretion to adjust the final STI outcome. This is an important measure to ensure any STI award is appropriate in the circumstances. 94 Directors’ Report continued REMUNERATION REPORT continued 4. Executive Remuneration Framework continued 4.4. Short Term Incentive (STI) continued 4.4.2. Performance conditions for the STI award for the 2023 financial year in detail Business measures for the 2023 financial year Business Measure Weighting Reason the Performance Measure Was Adopted Safety TRIFR (1) (7.5%) Scheduled Critical Control System Verifications (CCSVs) (7.5%) Sustainability Improved maturity level of Newcrest’s Integrated Sustainability Framework relative to FY22 baseline (10%) Resolution of community complaints, concerns and grievances (5%) Earnings 20% Adjusted Net Profit/(Loss) After Tax and Before Significant Items Costs 25% AISC per ounce (2) 15% The Company is committed to reinforcing a strong safety culture and improving safety leadership. As such, the measures and targets are reviewed annually to meet the aspirations of the Safety Transformation Plan. The combined measures maintain a focus on safety performance, as measured by TRIFR, and focus the business on a key leading indicator of safety, as measured by CCSVs. A gateway applies to safety metrics of Executives in the event of a fatality during the 2023 financial year. The overall weighting was reduced (from 20% in FY22) to accommodate the increase in weighting of Sustainability. 15% These measures are intended to determine how well the Integrated Sustainability Framework is embedded throughout the business. The performance measures chosen for the FY23 STI represent measurable objectives that can be contributed to by all sites, and form key components of our overall sustainability goals. The first metric relates to the advancement of the maturity of Newcrest’s approach to sustainability across three key areas of the GlobeScan Sustainability Leaders Survey (core business model/strategy, sustainability values/purpose, and stakeholder impact). Performance against this metric was assessed by a third party, against a detailed rubric, and informed by insights from stakeholder interviews and documentation reviews. The second measure was selected to support the global adoption of our renewed approach to the management and resolution of community concerns, complaints and grievances (CCCGs), and is assessed based on the percentage of CCCGs resolved within 30 days or with action plans in place. The overall weighting of Sustainability increased (from 10% in FY22). The earnings target is a direct financial measure of the Company’s performance, providing a strong alignment to the interests of shareholders. The results are based on the statutory profit of the Group adjusted for the effect of commodity prices, foreign exchange rates and other significant items determined by the Board which are considered to be outside the control of Management. It provides a strong reflection of production delivery, operational efficiency and cost management. The overall weighting reduced (from 25% in FY22) to accommodate the increase in weighting for Costs. This measure is a highly relevant short and long term measure which is consistent with the Company’s strategy of focussing on sustainable cash generation and profitability. It is the primary unit cost measure in the gold industry, and is visible and readily understood. It is based on publicly disclosed and reconciled results and is therefore a reliable measure for use by the Company, adjusted for the effect of commodity prices and foreign exchange rates and other significant items determined by the Board which are considered to be outside the control of Management. The overall weighting of this measure increased from 20% in FY22 to 25%. Operating Cash Flow 25% (OCF) This measure replaced Free Cash Flow (used for the FY22 STI). The Board’s intention in changing this measure was to increase relevance of the metric for employees with limited control over non-sustaining or M&A activities. OCF is defined as the amount of cash generated by normal business operations, that is revenue less expenses, net of working capital movements, and after interest and tax, and for the avoidance of doubt, it includes sustaining capex, sustaining production stripping and sustaining exploration but does not include non-sustaining capex, non-sustaining production stripping, non-sustaining exploration and M&A activities. TRIFR is the total number of recordable injuries per million hours worked. It is a lagging indicator of safety performance. (1) (2) All-In Sustaining Cost metrics as per World Gold Council Guidance Note on Non-GAAP metrics. Refer to section 6 of the Operating and Financial Review in the Company’s Annual Financial Report for the 2023 financial year (Operating and Financial Review). The business measures are set by the Board. The Board assesses the Company’s performance outcomes, as it is best placed to undertake the assessment. Newcrest Annual Report 2023 95 Personal measures for the 2023 financial year For the 2023 financial year, STI personal measures for Executives were streamlined, resulting in fewer, more heavily weighted objectives and increased weighting on matters relating to our culture, including organisational health and Respect@Work. The key elements of the personal performance measures for the Interim CEO were set by the Board to align with the Company’s strategic goals and taking into account the Company’s key material risks. The personal performance measures for other Executives for the 2023 financial year were set by the CEO following consultation with the Board. They were focussed on their areas of responsibility which included safety, people, production, operating performance and business improvement, project delivery, enterprise risk management, sustainability and profitable growth. Non-financial targets were generally aligned to core values, including safety, culture, organisational health and Respect@Work. In assessing personal performance outcomes, regard was also had for performance against key business objectives that were triggered following the receipt of Newmont’s indicative proposal on 5 February 2023. The Board (in the case of the CEO) and the CEO (in the case of the other Executives) assess the personal performance outcomes, as it is considered those people are best placed to undertake the assessment. Further detail as to the personal measures for the Interim CEO and other Executives, and outcomes with respect to such measures, is set out in section 5.3.1. 4.4.3. STIs for the 2022 financial year The terms that applied to the 2022 financial year STI award in respect of the performance period from 1 July 2021 to 30 June 2022, were described in detail in the 2022 Remuneration Report. For the 2022 financial year STI award, the cash component was paid on 14 October 2022 and the restricted STI shares were allocated on 28 October 2022 for all Executives other than Craig Jones. On 4 November 2022 Craig Jones was allocated STI shares for the 2022 financial year, after a proportion was sold to fund Canadian withholding tax. A holding lock was applied over the shares to apply for one year as to 50%, and two years as to the other 50% (intended to be of similar effect to the restrictions on the STI restricted shares allocated to other Executives). 4.5. Long Term Incentive (LTI) 4.5.1. Key features of the 2022 LTIs (under which Rights were granted during the 2023 financial year) Feature Equity type Description Allocations are in the form of rights to shares in the Company (Rights). Upon vesting, each Right is automatically exercised at a nil exercise price and the Executive receives one fully paid ordinary share for each Right (subject to a 12 month holding lock), or a cash payment at the Board’s discretion in lieu of an allocation of shares. As the Rights represent a participant’s ‘at risk’ long term incentive component of their remuneration package, the Rights are granted at no cost to the participant. Rights are automatically exercised and do not have an expiry date. Rules The 2022 LTIs are governed by the Equity Incentive Plan Rules. Maximum LTI Opportunity Executives were eligible for the following 2022 LTI opportunities: Role Maximum Opportunity (as % of TFR) Interim CEO, Interim COO, and CTPO CDO CLRCO Interim CFO Former CEO Former COO – Australasia 120% 100% 80% 20% 180% 120% In respect of the Interim Executives, their LTI grants were made in their previous roles and were calculated based on their TFRs in those positions. As noted in section 8.2, due to their cessation of employment, the 2022 LTI Rights granted to the Former CEO and Former COO – Australasia lapsed in full. Grant Date The grant date was 16 November 2022 and Rights will vest, subject to the satisfaction of the performance conditions and other terms of the grant, on 16 November 2025 (unless the Newmont Transaction becomes effective). The total number of Rights issued to, and held by, each Executive is summarised in section 11.4. LTI Grant Value For allocation purposes, the value of each Right was calculated based on the face value of the underlying security, using the five day VWAP of Newcrest’s shares trading on the ASX immediately preceding the grant date (being, A$19.51 per share). Performance period The 2022 LTI performance period is the three financial years commencing on 1 July 2022 and ending on 30 June 2025. 96 Directors’ Report continued REMUNERATION REPORT continued 4. Executive Remuneration Framework continued 4.5. Long Term Incentive (LTI) continued 4.5.1. Key features of the 2022 LTIs (under which Rights were granted during the 2023 financial year) continued Feature Description Performance Conditions 2022 LTI Rights issued are subject to the Performance Conditions shown below: ROCE 25% Comparative Cost 25% Relative TSR 50% Vesting The Performance Conditions have been set to align with the long-term goals and performance of Newcrest and the generation of shareholder returns. Further details in relation to the Performance Conditions are detailed in section 4.5.2. Rights are scheduled to vest three years from the grant date subject to the Performance Conditions and other terms of the grant being met. Rights are automatically exercised on vesting. On vesting of the Rights, the Board has the discretion, subject to the Equity Incentive Plan Rules, to satisfy the vesting obligations by the issue of new shares, transfer of existing shares purchased on-market or by paying a cash equivalent amount. The practice in recent years has been to satisfy the vesting obligations by allocating shares purchased on-market. If the Newmont Transaction proceeds it has been determined that all 2022 LTIs will vest in full after the Special Dividend Record Date, and prior to the Scheme Record Date. Holding lock For Executives, shares received on the vesting and automatic exercise of Rights are subject to a 12 month holding lock. Dividends Clawback If the Newmont Transaction proceeds it has been determined that all 2022 LTIs will vest and no holding lock will apply. No dividends are paid on unvested Rights. Shares allocated on the vesting and automatic exercise of Rights and subject to the holding lock have the right to receive dividends (when applicable). In general, the Board has the discretion to reduce, forfeit or lapse an LTI award for an Executive if an event or circumstance has occurred which has resulted in an inappropriate benefit being conferred on an Executive (including in the case of fraud, dishonesty, gross misconduct by the Executive or if the outcomes are the result of material error or misstatement of the financial accounts). The discretion may be exercised for a period of two years from the vesting or grant date. Cessation of employment Except at the discretion of the Board: Change of control – if a participant gives a notice of resignation or is dismissed for cause, unvested Rights will lapse on cessation of employment; and – if a participant ceases employment for any other reason, a pro-rata number of unvested Rights will continue and vest in the usual course subject to satisfaction of the applicable Performance Conditions and any holding lock in the terms of grant. The remainder will lapse. For all leavers, any restricted shares will be released after expiration of the holding lock period (subject to the Board exercising a discretion to vary the date of release of the restricted shares or a discretion under the clawback policy). The Board has broad discretion in relation to the treatment of the LTI award. A change of control event includes a takeover bid or any other transaction, event or state of affairs that, in the Board’s opinion, is likely to result in a change in the control of the Company. Where there is an actual change in control of the Company then, unless the Board determines otherwise, unvested Rights will immediately vest or cease to be subject to restrictions on a pro rata basis having regard to the portion of the vesting period that has lapsed and any remaining unvested Rights will lapse. All restricted shares subject to holding lock will be released from restrictions. Retesting There is no retesting. Rights that do not vest based on performance over the three year performance period will lapse. Overriding Board discretion The Board retains overriding discretion to adjust the final LTI outcome. This is an important measure to ensure any LTI award is appropriate in the circumstances. Newcrest Annual Report 2023 97 4.5.2. 2022 LTI performance conditions in detail Component Assessment Reason for adoption of the Performance Measure Relative Total Shareholder Return (TSR) Relative TSR is a measure of performance over time that combines share price appreciation and dividends paid to show the total return to the shareholder, expressed as an annualised percentage. Relative TSR is a measure of the Company’s TSR performance against that of other gold companies. In FY23 the weighting of Relative TSR has been increased to 50% (from 33% in FY22). The increased weighting was thought to better align Management reward with shareholders’ experience, and encourage outperformance of international gold miners. Relative TSR will be measured by comparing Newcrest’s AUD share price performance against the S&P TSX Global Gold Index over three years. The performance calculations will reference the six month period immediately prior to the start (1 January 2022 – 30 June 2022) and the end (1 January 2025 – 30 June 2025) of the performance period. Assessing performance against average prices avoids relying on sometimes volatile spot prices. The treatment of dividend and capital adjustments will be in accordance with the adjustments made by the data provider. The vesting schedule for this measure is detailed below. – 0% vests if Relative TSR is below the Index; – – 50% vests if Relative TSR is equal to the Index; 100% vests if Relative TSR exceeds the Index by 18 percentage points or more. – Straight line vesting occurs between these thresholds. The Relative TSR measure provides alignment between the outcomes of vesting of the 2022 LTI and the returns experienced by shareholders, in order to specifically encourage outperformance against other gold mining companies. The S&P TSX Global Gold Index is the most appropriate comparison point for Newcrest to use for the Relative TSR measure because: – – As a gold mining company, Newcrest’s share price performance is significantly impacted by fluctuations in the gold price. Accordingly, it is appropriate to compare Newcrest’s performance to that of other gold mining companies. There are few ASX-listed gold mining companies which act as a directly relevant comparison to Newcrest given the differences in scale, and it is therefore considered that a comparison with international peers is more appropriate. Rather than a hand-picked selection of peer gold mining companies from various stock exchanges globally, the Board considers that Newcrest’s performance should be compared to the S&P TSX Global Gold Index as each of Newcrest’s major peers are constituents in the S&P TSX Global Gold Index. This measure is closely aligned to Newcrest’s strategic objective to be a low cost producer and aligned to our relative value proposition for gold equity investors. The AISC per ounce result is a sound basis for the Company to use in assessing comparative cost as it is based on publicly disclosed results. Comparative Cost Position The Company’s measure for the Comparative Cost Position performance condition is the AISC per ounce, adopted by the Company in relation to costs reporting. The AISC per ounce incorporates costs related to sustaining production. As a result of the increase in the weighting of Relative TSR in FY23, the weighting of Comparative Cost Position was decreased to 25% (from 33% in FY22). Performance over the three year performance period is compared against approximately 250 of the world’s largest gold producing operations based on data sourced from an independent provider selected by the Board, which is currently Metals Focus Ltd. The entities that are included in the independent provider’s database can change from year to year (such as where additional companies begin to report AISC, or where there are mergers and demergers). Cost performance for each of the three years of the performance period is averaged to determine the number of Rights that may vest and be exercised in relation to this performance measure. The vesting scale for this measure is as follows: – – – 0% vests if Comparative Costs are at or above the 50th percentile; 40% vests if Comparative Costs are less than the 50th percentile; 100% vests if Comparative Costs are below the 25th percentile. Straight line vesting occurs between these thresholds. The Comparative Costs measure will be assessed using peer data for the period from 1 July 2022 until 30 June 2025. 98 Directors’ Report continued REMUNERATION REPORT continued 4. Executive Remuneration Framework continued 4.5. Long Term Incentive (LTI) continued 4.5.2. 2022 LTI performance conditions in detail continued Component Assessment Reason for adoption of the Performance Measure ROCE aligns Management action and Company outcomes closely with long term shareholder value. ROCE provides a balance to the other LTI metrics as it serves as a counter to “buying” success. ROCE is also based on publicly disclosed and reconciled results and is therefore a sound basis for the Company to use in assessing value. Impairments are excluded from the capital base in the year in which they occur, such that the return is on a pre-impairment basis and LTI participants do not benefit from the impairment. However, the post impairment capital base is used in the calculation of returns in subsequent years so as to not de-incentivise current or new Management. Return on Capital Employed (ROCE) The vesting scale for this measure is as follows: ROCE is an absolute measure, defined as underlying earnings before interest and tax (EBIT), divided by average capital employed, being shareholders’ equity plus net debt. – – – 0% vests if ROCE is less than 8%; 30% vests if ROCE is 8%; 100% vests if ROCE is 15% or more. Straight line vesting occurs between these thresholds. The required level of performance for vesting was increased for the 2022 LTI award, when compared to the 2021 LTI award. The targets were designed to exceed Newcrest’s Weighted Average Cost of Capital whilst also incentivising returns that are higher than comparable industries in the prevailing economic conditions. The average of ROCE for each of the three years of the performance period is used to determine the number of Rights that may vest and be exercised in relation to this performance measure. Average capital employed is calculated as a simple average of opening and closing balances. If material equity transactions (for example, significant equity issuances or asset impairments) occur such that the simple average is not representative of actual performance, the average capital employed for the year is adjusted for the effect of these transactions. Average capital employed for the purpose of this calculation excludes approved capital invested in long-dated projects until commercial production is achieved, so as not to discourage Management’s pursuit of long-dated growth options. As a result of the increase in the weighting of Relative TSR in FY23, the weighting of ROCE was decreased to 25% (from 33% in FY22). Newcrest Annual Report 2023 99 4.6. Transition performance awards In December 2022, following the announcement of the departure of Sandeep Biswas and Philip Stephenson, Craig Jones and Suresh Vadnagra were advised that they would be offered transition performance awards as an additional performance and retention incentive during the period of leadership change for Newcrest. Craig Jones’ award has a maximum value of $714,000 and Suresh Vadnagra’s award has a maximum value of $630,000, each payable in cash. While each of Craig and Suresh were advised of the expected terms of the transition performance awards in December 2022, the awards have a formal grant date of 23 February 2023. The vesting date is scheduled for 23 February 2025, with payment to occur in March 2025. Vesting conditions include performance conditions that relate to the Executive’s key responsibilities, contribution to leadership, individual performance rating, and continued service (other than in limited circumstances). These conditions were chosen because they incentivise the delivery of key objectives in the Executive’s area of responsibility over the vesting period and act as a retention incentive during a period of leadership change for Newcrest. The Board will assess performance against the relevant conditions as it is best placed to assess the Executive’s performance. Where the gateway conditions and the performance conditions are not satisfied, the cash payments will not be made. Therefore, the minimum possible value of the transition performance awards is zero. Unless the Board determines otherwise, if the Executive resigns or their employment is terminated for cause, the transition performance awards will be forfeited. In all other circumstances, the service vesting gateway will be waived and the performance conditions and other vesting gateways will be tested based on the period between the grant date and the date of termination of employment. 4.7. Sign-on arrangements As set out in the 2022 Remuneration Report 41,845 sign-on rights were granted to Sherry Duhe in the 2022 financial year, in compensation for benefits forfeited on leaving her previous employer. Of these, 25,107 rights vested in the 2023 financial year, with the remaining 16,738 due to vest in February 2024. A cash sign-on payment of A$200,000 was also made to her in February 2023. Further information as to the terms of the sign-on arrangements are set out in the 2022 Remuneration Report. 5. Remuneration Outcomes 5.1. Total Fixed Remuneration (TFR) for the 2023 financial year Set out below is the TFR for the current Executives as at 30 June 2023, shown in Australian dollars, which is the currency in which they are paid, except for Craig Jones, whose TFR was paid in Canadian dollars during the 2023 financial year until he was appointed as Interim COO. TFR comprises base salary and superannuation contributions and any salary packaged amounts (for example, novated lease vehicles). This information is provided in Australian dollars to enable comparisons to be made in future years, without the impact of changes in exchange rates. The increases in TFR which took effect on 1 October 2022 followed a benchmarking review. Increases averaged 2.9% across the Executives. The increases in TFR for Sherry Duhe, Craig Jones and Daniel O’Connell in December 2022 occurred due to their change in role to interim positions. The remuneration packages offered to the Interim CEO and Interim CFO were at a material discount to the previous full-time incumbents. Fixed remuneration was approximately 40% lower for each role compared to the previous permanent Executive. Executive Sherry Duhe Craig Jones Daniel O’Connell (2) Maria Sanz Perez Seil Song Suresh Vadnagra (1) Craig Jones TFR translated into Australian Dollars using an exchange rate of A$1.00:C$0.9116. (2) Daniel O’Connell was not KMP prior to his appointment as Interim CFO. TFR A$ 30 June 2023 TFR A$ 1 October 2022 TFR A$ 30 June 2022 1,500,000 1,020,000 650,000 840,000 805,000 900,000 1,075,000 1,050,000 900,000(1) 875,000(1) n/a 840,000 805,000 900,000 n/a 815,000 780,000 875,000 100 Directors’ Report continued REMUNERATION REPORT continued 5. Remuneration Outcomes continued 5.1. Total Fixed Remuneration (TFR) for the 2023 financial year continued Set out below is the TFR for the Executives as at 30 June 2023, shown in US dollars. The amounts for 2023 have been translated using the average exchange rate for 2023 of 0.6735. The amounts for 2022 have been converted to US dollars using the average exchange rate for 2022 of 0.7260. The difference between the TFR for the Executives as at 30 June 2023 and as at 30 June 2022 are on account of fluctuations in the exchange rate and the increases in TFR outlined above. Executive Sherry Duhe Craig Jones Daniel O’Connell Maria Sanz Perez Seil Song Suresh Vadnagra TFR US$ 30 June 2023 TFR US$ 30 June 2022 1,010,250 686,970 437,775 565,740 542,168 606,150 762,300 635,250 n/a 591,690 566,280 635,250 5.2. Newcrest’s Financial Performance for the past five financial years The following table provides a summary of key financial results for Newcrest over the past five financial years. Year Ended 30 June Statutory profit Underlying profit (1) Cash flows from operating activities FCF (2) FCF (before M&A activity) (2) OCF (3) EBITDA Margin EBIT Margin Net Debt to EBITDA (4) ROCE Gearing (5) Share price at 30 June (6) Earnings per share (7) Basic Underlying Dividends (8) Gold produced All-in sustaining cost (9) Average realised gold price Measure US$ million US$ million US$ million US$ million US$ million US$ million % % Times % % A$ 2023 778 778 1,605 404 447 893 45.8 26.0 0.7 9.0 11.1 2022 872 872 1,680 (868) 229 – 48.8 31.0 0.6 11.4 10.2 2021 1,164 1,164 2,302 1,104 1,125 – 53.4 38.7 (0.1) 18.5 (1.8) 26.42 20.89 25.28 US cents/share US cents/share US cents/share 000’s ounces US$/oz sold US$/oz 87.0 86.8 2,105 1,093 1,797 103.4 103.1 27.5 1,956 1,043 1,797 142.5 142.1 55.0 2,093 911 1,796 2020 647 750 1,471 (621) 670 – 46.8 30.4 0.3 13.8 6.8 31.53 83.4 83.1 25.0 2,171 862 1,530 2019 561 561 1,487 804 878 – 44.6 24.7 0.2 11.2 4.9 31.95 73.0 72.8 22.0 2,488 738 1,269 This table includes non-IFRS financial information. Refer to section 6 of the Operating and Financial Review in the audited consolidated financial statements of the Company for the 2023 financial year for an explanation and reconciliation of non-IFRS terms. (1) Underlying profit is profit after tax before significant items attributable to owners of the parent. (2) FCF is calculated as cash flow from operating activities less cash flow related to investing activities. FCF (before M&A activity) is calculated as FCF excluding investing activities relating to M&A investments and business divestments. (3) OCF is the amount of cash generated by normal business operations, that is revenue less expenses, net of working capital movements, and after interest and tax, and for the avoidance of doubt, includes sustaining capex, sustaining production stripping and sustaining exploration but does not include non-sustaining capex, non-sustaining production stripping, non-sustaining exploration and M&A activities. As this is a new measure for 2023 there are no comparatives. (4) Net debt to EBITDA is calculated as net debt at the end of the reporting period divided by the rolling 12 month EBITDA. (5) Gearing ratio is calculated as net debt at the end of the reporting period divided by net debt plus equity. (6) Opening share price on 1 July 2018 was A$21.80. (7) Basic EPS is calculated as net profit after tax and non-controlling interests (statutory profit) divided by the weighted average number of ordinary shares. Underlying earnings per share is calculated as net profit after tax and non-controlling interests and before significant items (underlying profit) divided by the weighted average number of ordinary shares. (8) Represents dividends determined in respect of the financial year. (9) AISC metrics as per World Gold Council Guidance Note on Non-GAAP Metrics. See section 4.4.2 for further detail. Newcrest’s AISC will vary from period to period as a result of various factors including production performance, timing of sales, the level of sustaining capital and the relative contribution of each asset. Newcrest Annual Report 2023 101 The graphs below show Newcrest’s performance over the last five years for metrics used for multiple years to determine the business component of STI awards, before any adjustments as a result of the exercise of Board discretion. Where no values are shown in the graphs for particular years, they represent years where it was not a business performance measure for STI purposes. Statutory Profit (US$m) Underlying Profit (US$m) 1,164 1,164 872 778 647 561 750 561 872 778 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 AISC (US$ per oz sold) Cash Flows from Operating Activities (US$m) 1,043 1,093 2,302 862 911 738 1,487 1,471 1,680 1,605 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 TRIFR 4.0 3.0 2.6 2.3 2.3 2019 2020 2021 2022 2023 102 Directors’ Report continued REMUNERATION REPORT continued 5. Remuneration Outcomes continued 5.3. STI Outcomes for 2023 financial year 5.3.1. Performance against STI objectives STI outcomes are determined based on business and personal performance. When assessing personal performance, as well as considering the outcomes, consideration is given to whether the outcomes have been achieved in a manner that is consistent with the Company’s values and standards and risk management processes. Business Measures – representing 60% of the STI award Performance Measure Safety Performance Outcomes Target Weight Threshold Target Maximum Outcome (as a % Target) The health and safety of our employees and contractors, and that of the broader communities in which we operate, lies at the core of our company values. During the 2023 financial year, there was a tragic incident at our Brucejack mine which sadly resulted in the fatality of an employee from our contracting partner, Procon. This was the first fatality at Newcrest in seven years. In addition, in June 2023 a team member from one of Cadia’s contracting partners sustained a serious injury which is currently subject to investigation by the NSW Resource Regulator. As a result, the safety gateway has been applied for the 2023 financial year and each member of the Executive Committee received a score of zero on the safety component of the business scorecard. Notwithstanding that the gateway has been applied, resulting in nil vesting, performance against the safety measures is included below in order to provide shareholders with an overview of performance over FY23. Total Recordable Injury Frequency Rate (TRIFR) TRIFR decreased from 4.0 in FY22 to 2.97 in FY23. This outcome included a record low TRIFR at Cadia, Red Chris and Brucejack. Despite exceeding TRIFR targets, the fatality at Brucejack in October 2022, and the life changing injury at Cadia in June 2023, has led to the safety gateway being applied to reduce the score to nil. The Board considers this appropriate as nothing is more important than the safety of our people. Schedules Critical Control System Verification 4.49 3.29 2.19 7.5% 129% 2.97 System verifications are detailed interrogations into the design, implementation and training of each critical control, and can take between two hours and two days to complete. This is a leading measure to mitigate safety risks. 7.5% All scheduled major hazard critical controls were verified during FY23. An additional 314 critical control system verifications were conducted across our sites, exceeding our target. 90% 100% 150% 184% 142% Safety measures total Sustainability 15% Gateway applied 0% In 2022 we established our Integrated Sustainability Framework. The performance measures chosen for the FY23 STI represent key measurable objectives that all sites can contribute to, and that form key components of our overall sustainability goals. Integrated Sustainability Framework Specific objectives were set in relation to the advancement of the maturity of Newcrest’s approach to sustainability across three key areas of the GlobeScan Sustainability Leaders Survey (core business model/strategy, sustainability values/purpose, and stakeholder impact). Progress from an FY22 baseline was independently assessed, and while significant progress was made, including through areas relating to progress to Net Zero and development and rollout of refreshed stakeholder engagement training, the assessed outcome was slightly below our ambitious targets. Threshold Target Maximum 10% 90% Below target Newcrest Annual Report 2023 103 Performance Measure Community Response Time This metric was selected in order to support the global adoption of our renewed approach to the management and resolution of community concerns, complaints and grievances. Significant work was completed across FY23 including building capability of our social performance and engagement practitioners, and the development of consistent and streamlined processes for engagement. While our assessed outcome against this metric was above target, the Board exercised its discretion to reduce this score to a target outcome. Sustainability measures total Financial Performance Outcomes Target Weight Threshold Target Maximum Outcome (as a % Target) 5% 15% 80% 90% 90% 100% 100% 14% The following are core measures used to assess Newcrest’s financial performance. Newcrest’s financial performance for FY23 was impacted by lower production at Lihir and Brucejack with both operations delivering below their production guidance ranges for the year. Lihir’s production performance was impacted by lower grade and mill throughput driven by extreme weather events experienced during the year, with Brucejack’s production performance impacted by the temporary suspension of operations following the tragic fatality in October 2022 together with lower grade. As described in section 4.4.2, these STI measures are assessed net of adjustments for the effect of commodity prices, foreign exchange rates, transactions related to M&A activity and other items determined by the Board which are considered to be outside the control of Management and/or in the interests of shareholders. The Board uses guiding principles to apply adjustments consistently each year, where the Board considers it appropriate to do so. In FY23, the value of adjustments made had the impact of reducing management outcomes for all three financial metrics. While adjustments for each of the financial metrics were unfavourable to management overall, favourable adjustments were included in relation to the impact of the temporary evacuation of Telfer due to Cyclone Isla, and a partial adjustment in relation to extreme weather at Lihir. NPAT (before significant items) (US$m) NPAT (before significant items) was 15% below target for FY23. Adjusted Operating Cash Flow (US$m) Adjusted Operating Cash Flow was 19% below target for FY23. All-In-Sustaining-Costs (AISC) (US$m) AISC for was 12% higher than target for FY23. Financial measures total Total 552 736 920 619 769 1,099 1,429 893 1,157 1,006 855 1,129 20% 25% 25% 70% 100% 69% 69% 59% 46% 60% 104 Directors’ Report continued REMUNERATION REPORT continued 5. Remuneration Outcomes continued 5.3. STI Outcomes for 2023 financial year continued 5.3.1. Performance against STI objectives continued Personal Measures – representing 40% of the target STI award Interim CEO – Sherry Duhe On Sherry Duhe’s appointment to the Interim CEO role on 19 December 2022, the Board’s intended approach to assessing the personal component of her STI was to review her performance against a combination of her CFO personal scorecard (for the period from 1 July 2022 to 18 December 2022) and the personal scorecard largely inherited from the previous CEO (for the period from 19 December 2022). In light of the approaches received from Newmont from early 2023, and the impact that this had on Sherry’s responsibilities (and the relevance of many of the objectives in the scorecards initially set), the Board has assessed her personal performance on a holistic basis. Sherry demonstrated outstanding performance through FY23, culminating in the delivery of significant shareholder value through successful negotiations with Newmont, leading to increased offers and a substantial premium for Newcrest shareholders. Additionally, she led the business in achieving various operational, commercial and exploration milestones. This includes advancing Wafi-Golpu negotiations with the Papua New Guinea government, expanding exploration targets for East Ridge at Red Chris and completing the Lihir Phase 14A Feasibility Study, which is expected to boost gold production from a previously inaccessible high-grade ore source. Under her leadership, the year also saw the securing of an early repayment of the gold prepay credit facility from Lundin Gold, which resulted in a special dividend being paid to investors during the year, and completion of the Pretium integration into the Newcrest business. Within the company, her leadership was consistently exemplary as she focused on strengthening our organisational culture and ensuring both physical safety and psychological safety are at the core of our global workplaces. Sherry spearheaded more direct engagement with the company’s global workforce, driving essential business and cultural priorities during uncertain times arising as a result of the Newmont approaches. Consistent feedback from our workforce shows this approach has led to improvements in employee satisfaction, enhanced trust, openness and empowerment across the business. Furthermore, Sherry championed the Respect@Work program, with significant progress achieved in the first year of this substantive cultural change program. With the appointment of key roles in FY23, the business strengthened the journey to remove sexual assault and sexual harassment from our workplaces through education and awareness, accommodation reviews, risk and reporting assessments, process and procedure updates, and continued communication to our workforce. In recognition of her highly valued contribution, the Board awarded Sherry 160% in her personal STI scorecard. In awarding a personal score of 160% of target, in addition to Sherry’s performance, the Board recognises that the workload associated with the Interim CEO role as a result of the Newmont Transaction was significantly greater than foreshadowed at the time of appointment. The Board recognises and thanks Sherry for her performance through this period. 160% Other Executives Individual measures based on initiatives and key project deliverables linked to company strategy, culture and performance. 50% to 160% 5.3.2. Reconciliation of Earnings and OCF measures for the 2023 financial year A reconciliation of the Earnings measure outcome to statutory profit is detailed below: Earnings Measure Statutory profit Add back: Significant items after tax (1) Underlying profit Adjust: Board agreed adjustments (2) Earnings measure 2023 US$m 778 – 778 (159) 619 2022 US$m 872 – 872 (277) 595 There were no significant items in 2023 (2022: nil). (1) (2) Represents adjustments for the effect of commodity prices, foreign exchange rates and other significant items determined by the Board which are considered to be outside the control of Management. Newcrest Annual Report 2023 A reconciliation of the OCF measure outcome to the statutory cashflow is detailed below: Operating Cashflow Measure Cash flows from operating activities Sustaining exploration (1) Sustaining leases (1) Sustaining production stripping (1) Underground mine development (1) Sustaining capital expenditure (1) Cash flows from sustaining investing activities Unadjusted OCF Adjust: Board agreed adjustments (2) OCF measure 105 2023 US$m 1,605 (18) (44) (128) 3 (445) 417 973 (80) 893 (1) Refer to section 6.3 of the Operating and Financial Review for details. (2) Represents adjustments for the effect of commodity prices, foreign exchange rates and other significant items determined by the Board which are considered to be outside the control of Management. No comparatives have been included in the above table as the Operating Cashflow measure replaced the Free Cash Flow measure (used for the FY22 STI). 5.3.3. STI outcomes for all Executives for the 2023 financial year The table below summarises achievement against the performance conditions and final STI outcomes for all Executives for the 2023 financial year. The 2023 STI awards are expected to be made in October 2023 and delivered in cash with no portion deferred into restricted shares, as has been agreed with Newmont in connection with the Newmont Transaction. Details of changes in connection with the Newmont Transaction are set out in section 6. Executives Sherry Duhe Craig Jones Daniel O’Connell Maria Sanz Perez Seil Song Suresh Vadnagra Former Executives Sandeep Biswas Philip Stephenson % of STI Target Awarded (1) Total STI Awarded (2) US$’000 % of Max STI Opportunity Forgone 100 90 110 74 56 90 – – 701 467 115 251 182 436 – – 50 55 45 63 72 55 100 100 (1) The assessment against personal measures for the Executives (which represent 40% of the award for Executives other than Daniel O’Connell, for which it represents 50% of the award) ranged from 25% to 80% of maximum. (2) Amounts have been translated from Australian dollars to US dollars using the average exchange rate for the financial year. 5.4. Vesting Outcomes for 2019 LTIs Following the completion of the performance period from 1 July 2019 to 30 June 2022, the 2019 LTI Rights vested on 22 November 2022 at 66.67% of maximum based on the assessment of performance against the applicable measures. Element Comparative Cost ROCE Relative Total Shareholder Return (TSR) TOTAL VESTING Weighting Performance Achieved 33.3% 33.3% 33.3% 20th percentile (3-yr avg) 16.6% (3-yr avg) (1) NCM share price underperformed the S&P/TSX Global Gold Total Return Index over the period Percentage of Total LTI Award Vesting 33.3% 33.3% 0% 66.67% (33.33% lapsed) (1) The 3-year ROCE average has been adjusted to allow for Development Projects that are not yet in commercial production. This amounted to an average reduction in the Capital Employed of $1.233 million, representing approximately 12% of the pre-adjusted Capital Employed. 106 Directors’ Report continued REMUNERATION REPORT continued 6. Impact of Newmont Transaction on Future Year Remuneration Arrangements On 15 May 2023 the Newmont Transaction was announced. Under the Scheme Implementation Deed, it is a condition of the scheme of arrangement that Newcrest do all things necessary to ensure that all Newcrest equity incentives vest or lapse before the scheme record date (so that, on implementation of the Newmont Transaction, Newmont will hold all of the issued shares in Newcrest and no other rights over shares will exist). This applies to all restricted shares and rights issued under the Newcrest equity plans. Accordingly, the Board has determined, and has agreed with Newmont (where required), to treat KMP remuneration in future periods as summarised in this section. If the Newmont Transaction does not proceed, further consideration will be given to the Executive remuneration framework, including the appropriate STI and LTI measures. 6.1. Short Term Incentives 6.1.1. FY23 STI (2023 financial year) The STI payment will be delivered 100% in cash and will not be deferred into equity. 6.1.2. Deferred STIs for past financial years The remaining tranches of restricted shares allocated under the FY21 and FY22 deferred STI plans will be released on the Effective Date for the Newmont Transaction and the shares will be eligible for the special dividend. 6.1.3. FY24 STI (2024 financial year) If the Newmont Transaction proceeds, it has been agreed with Newmont that Executive KMP are eligible to receive a STI award for the 6-month period from 1 July 2023 to 31 December 2023. The FY24 will be assessed against an agreed scorecard of performance measures. However, Newmont has agreed, as a retention mechanism for employees more generally, that the STI payment for the period 1 July 2023 to 31 December 2023 will be not less than “at target” performance (subject to behavioural hurdles) and the award will be delivered in cash. 6.2. Long Term Incentives 6.2.1. Estimated vesting of 2020 LTI Rights in the 2024 financial year The performance period for the 2020 LTI Rights, which is 1 July 2020 to 30 June 2023, has been completed and these Rights are scheduled to vest on 18 November 2023. If the Newmont Transaction proceeds, it has been determined that testing against the performance measures and vesting of the 2020 LTI Rights will be brought forward slightly to the Effective Date to ensure that shares allocated on vesting participate in the Newmont Transaction. Shares held on the special dividend record date will also be eligible to receive the special dividend. The vesting outcome is not yet known, but it is anticipated that it will be in the range of 60% to 70%. The performance conditions which apply to the 2020 LTIs are the same as for the 2019 LTIs detailed in section 5.4 above, i.e.: Comparative Cost (33.3%), ROCE (33.3%) and Relative TSR (33.3%). Additional details on the performance standards attached to each performance condition were disclosed in the 2021 Remuneration Report that can be found in the Company’s Annual Financial Report for the 2021 financial year. 6.2.2. LTIs for past financial years The terms that apply to the 2019 LTIs which vested in the 2023 financial year, and the 2020 and 2021 LTIs which remain on foot, are described in detail in the 2020, 2021 and 2022 Remuneration Reports that can be found in the Company’s Annual Reports in respect of such years. Refer to sections 5.4 and 11.2 for details of prior vestings of LTI awards. In the event that the Newmont Transaction proceeds, it has been agreed with Newmont that: – 2019 LTIs will be released from holding lock restrictions on the earlier of their scheduled date of release and the effective date of the Newmont Transaction and the shares will be eligible for the special dividend; – 2020 LTIs will vest based on performance against the relevant performance measures (see above for further details), no holding lock will apply and the shares will be eligible for the special dividend; and – 2021 and 2022 LTIs will vest in full shortly prior to implementation of the Newmont Transaction. These awards will not be eligible to receive the special dividend. 6.2.3. 2023 LTI (2024 financial year) In the event that the Newmont Transaction proceeds, it has been agreed with Newmont that Newcrest will not grant a 2023 LTI. 6.3. Other changes 6.3.1. Sign-on arrangements Sherry Duhe has 16,738 sign-on rights (granted in the 2022 financial year, in compensation for benefits forfeited on leaving her previous employer) that are due to vest in February 2024. If the Newmont Transaction proceeds, the sign-on rights will vest in full shortly prior to implementation of the Newmont Transaction. The shares allocated on vesting of the sign-on rights will not be eligible to receive the special dividend. 6.3.2. Transition performance awards Craig Jones and Suresh Vadnagra have been offered transition performance awards that have a vesting date of 23 February 2025. If the Newmont Transaction proceeds, Craig Jones and Suresh Vadnagra remain eligible to receive their transition performance awards in accordance with the terms of offer, including that the transition performance awards will vest/become payable on a pro-rata basis unless the Board determines otherwise. Newcrest Annual Report 2023 107 7. Executive Service Agreements Remuneration and other terms of employment for the Executives are formalised in Executive Service Agreements (ESAs). Each of the ESAs provides for the payment of fixed remuneration, an opportunity to participate in incentive plans (performance based at risk remuneration), employer superannuation contributions, other benefits such as death and disablement insurance cover via the Newcrest Superannuation Plan, and salary continuance cover. The ESAs do not have a fixed end date. The remuneration for each Executive during the 2023 financial year is detailed in sections 2.2 and 11.1, and positions held are detailed in section 1. Set out below is a summary of the minimum notice periods for termination set out in the ESAs for the current Executives. Executive notice Newcrest notice Notice for cause Sherry Duhe Craig Jones Daniel O’Connell Maria Sanz Perez Seil Song Suresh Vadnagra 6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 6 months 12 months 12 months 12 months Immediate Immediate Immediate Immediate Immediate Immediate Notwithstanding the proposed treatment of incentives prior to the Newmont Transaction (described in section 6), any outstanding STI or LTI awards will vest, lapse or are forfeited on cessation of employment, in accordance with the relevant plan rules and grant terms. Refer to sections 4.4 and 4.5 for further details. On termination of employment, the Executives continue to be bound by confidentiality and protection of intellectual property obligations and restrictive covenants. In the case of each Executive, the restricted covenants include a non-competition and non-solicitation obligation. 8. Executive Changes 8.1. Interim CEO, CFO and COO Sherry Duhe (former Newcrest CFO) was appointed as the Interim CEO from 19 December 2022. Upon her appointment, Sherry’s TFR increased to $1,500,000. Sherry’s notice period remained unchanged and her “at-target” STI remained at 80% of TFR. She was not offered any additional LTI as a result of her interim appointment. Daniel O’Connell (former Newcrest Group Treasurer) was appointed as the Interim CFO from 19 December 2022. On his appointment, Daniel’s TFR increased to $650,000, and his “at-target” STI opportunity increased to 45% of his TFR. Assessment of his STI amount continued to be determined based on 50% personal outcome and 50% business outcome. Daniel’s notice period remained unchanged and he was not offered any additional LTI as a result of his interim appointment. Craig Jones (former Newcrest COO – Americas) was appointed as the Interim COO from 19 December 2022. On his appointment, Craig’s TFR increased to $1,020,000, reflecting his responsibility for both Americas and Australasia. Craig’s notice period remained unchanged and his “at-target” STI remained at 80% of his TFR. He was not offered any additional LTI as a result of his interim appointment. 8.2. Departed Executive KMP During the 2023 financial year, two Executives, being Sandeep Biswas and Philip Stephenson, ceased employment with the Company. Sandeep Biswas ceased as Managing Director on 18 December 2022 and as CEO on 19 December 2022. Sandeep remained employed in an advisory capacity during a transition period, and retired on 18 March 2023. Philip Stephenson ceased as COO – Australasia on 15 December 2022, and as an employee on 31 December 2022. Sandeep and Philip were each entitled to receive their statutory entitlements (including accrued annual leave) and their STIs and LTIs were treated in accordance with Newcrest’s policy, including that: – no FY23 STI was awarded; – their restricted FY21 and FY22 STIs remained on foot in accordance with the original terms of grant; – their 2022 LTI Rights lapsed in full; – a pro rata number of their 2020 and 2021 LTI Rights (based on time served) remained on foot, subject to the applicable vesting conditions and the original terms of grant. The remaining 2020 and 2021 LTI Rights lapsed; and – their 2019 LTI shares remained on foot, subject to the applicable holding lock in accordance with the original terms of grant. Other than the payment in lieu of any notice for Philip, no additional termination benefits were provided. Seil Song ceased as CDO on 30 June 2023. The cessation of his employment with Newcrest will take effect in December 2023. Seil Song is entitled to receive his statutory entitlements (including accrued annual leave) and his STIs and LTIs will be treated in accordance with the original terms of grant. If the Newmont Transaction occurs prior to his cessation of employment, Seil’s incentives will be treated in the same manner as other employees (see section 6). Seil Song will not be eligible for a FY24 STI award or a 2023 LTI grant. 108 Directors’ Report continued REMUNERATION REPORT continued 9. Non-Executive Directors’ Remuneration 9.1. Remuneration Policy The Non-Executive Director (NED) fees and other terms of appointment are set by the Board. NEDs are paid by way of a fixed Director’s fee and Committee fees commensurate with their respective time commitments and responsibilities. The level and structure of the fees is based on the need for the Company to attract and retain NEDs of suitable calibre, the demands of the role and prevailing market conditions. In order to maintain impartiality and independence, NEDs do not receive any performance-related remuneration and are not entitled to participate in the Company’s short and long term incentive schemes. NEDs are not provided with any retirement benefits, other than statutory superannuation contributions. 9.2. Fee Pool The maximum amount of fees (including superannuation contributions) that can be paid to NEDs is capped by a pool approved by shareholders. At the AGM held on 9 November 2022, shareholders approved an increase in the aggregate fee pool to A$3,200,000 (US$2,155,200). 9.3. Fee Structure In reviewing the level of fees, the Board obtains independent market data from its remuneration adviser, KPMG, primarily (but not exclusively) in relation to ASX listed companies with market capitalisations ranked between 11–40. Base Board fees and Committee fees remained unchanged as a result of the review conducted in November 2022. The table below outlines the main Board and Committee fees as at 30 June 2023. Fees (per annum) (1) Board (2) Audit & Risk Committee Safety & Sustainability Committee HRR Committee Chairman Member A$’000 US$’000 A$’000 US$’000 630 55 44 44 424 37 30 30 210 28 22 22 141 19 15 15 (1) Board and Committee fees have been translated from Australian dollars to US dollars using the average exchange rate for the 2023 financial year. (2) The Chairman of the Board does not receive any additional payments for his role as Chairman or Member of any Committee. Under the Company’s Constitution, NEDs may be reimbursed for reasonable travel, accommodation and other expenses incurred while engaged on the business of the Company. NEDs may also 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. As previously announced to the market, to provide continuity and ongoing support to the management team, Peter Tomsett had an increased involvement in the business following the leadership changes in December 2022. Peter received additional director fees of A$128,000 during the 2023 financial year in recognition of this increased contribution. Vickki McFadden, Sally-Anne Layman, Jane McAloon and Philip Bainbridge received additional fees of A$20,000 in July 2023 in recognition of their involvement in the Due Diligence Committee relating to the Newmont Transaction, of which 50% is attributable to FY23. 10. Shareholdings 10.1. Minimum Shareholding Policy The Company has a Minimum Shareholding Requirement Policy which requires that KMP hold at least the value of Newcrest shares set out below. The intent of the policy is to align the interests of KMP with those of our shareholders. Progress is monitored at least annually. From FY23, the Minimum Shareholding Requirement value increased to 200% of TFR for the CEO, and to 100% of TFR for other Executives. The Minimum Shareholding Requirement for NEDs remained as one year’s total annual fees. As at 30 June 2023, each member of KMP who has been KMP for at least the period set out below has met the current requirement, including Seil Song and Maria Sanz Perez despite being employed for a shorter period of time. CEO Executives NEDs Minimum Shareholding Requirement 200% of TFR in shares 100% of TFR in shares One year’s total annual fees in shares Deadline for achieving shareholding (from the date of appointment) 5 years 5 years 3 years Newcrest Annual Report 2023 109 10.2. Executive Shareholdings A summary of shareholdings of Executives, including their closely related parties, as at 30 June 2023 is set out below. Granted as remuneration during FY23 Executives Sherry Duhe Craig Jones Daniel O’Connell Maria Sanz Perez Seil Song Suresh Vadnagra Former Executives Sandeep Biswas Philip Stephenson Opening balance (1) 0 51,427 5,461 42,826 23,446 21,196 718,684 159,410 STIs (2) LTIs (3) Sign-ons (4) Net other movements (5) Closing balance (6) Value based on VWAP (7) A$’000 Percentage of TFR % 9,250 17,392 – 15,622 15,804 17,922 75,028 17,326 – 18,374 – – 11,131 – 93,387 18,374 25,107 – – – – – – – 12,421 (7,747) – (3,360) (9,232) – 46,778 79,446 5,461 55,088 41,149 39,118 (66,051) – 821,048 195,110 1,024 1,740 120 1,206 901 857 N/A N/A 68 171 18 144 112 95 N/A N/A (1) Opening balance is as at 1 July 2022 for all Executives, except for Daniel O’Connell, whose opening balance is at his commencement date as Interim CFO of 19 December 2022. (2) Remuneration granted in FY23 includes restricted shares allocated on 28 October 2022 in respect of 50% of an Executive’s STI award for the STI for the 2022 financial year. The number of restricted shares granted was determined using the five day VWAP of shares, being A$17.53 per share, calculated over the period 7 to 13 October 2022, being the five trading days prior to the date the 2022 cash STI payment was made. Restricted STI shares were granted subject to restrictions. (3) Represents the shares acquired on vesting and automatic exercise of 2019 LTI Rights. (4) Represents the shares acquired on vesting and automatic exercise of sign-on rights. (5) Net other movements represents the sale or purchase of shares. (6) The closing balance is as at 30 June 2023 for current Executives, and as at the date of cessation as KMP for former Executives. (7) Based on VWAP for the period 1 July 2022 to 30 June 2023 of A$21.90. 10.3. Non-Executive Directors’ Shareholdings A summary of shareholdings of NEDs, including their closely related parties, as at 30 June 2023 is set out below. Non-Executive Directors Peter Tomsett Philip Aiken AM Philip Bainbridge Roger Higgins Sally-Anne Layman Jane McAloon AM Vickki McFadden Opening balance (1) Net other Movements (2) Closing balance (3) 42,143 19,187 4,310 13,675 10,510 6,132 11,747 1,656 753 5,600 – – – 461 43,799 19,940 9,910 13,675 10,510 6,132 12,208 Value based on VWAP (4) A$’000 Percentage of ongoing annual fees % 959 437 217 299 230 134 267 152 158 94 109 89 52 93(5) (1) Opening balance is as at 1 July 2022. (2) Net other movements represents the sale or purchase of shares or the acquisition of shares through the dividend reinvestment plan by Non-Executive Directors. (3) For current Non-Executive Directors, the closing balance is as at 30 June 2023. (4) Based on VWAP for the period 1 July 2022 to 30 June 2023 of A$21.90. (5) Vickki McFadden has complied with Newcrest’s Minimum Shareholding Requirements Policy based on the cost of acquisition of her Newcrest shares being $289,917, which is 101% of her TFR. Under the Policy, the value of holdings of Newcrest shares is the greater of the sum of the cost of acquisition of Newcrest shares held or the VWAP of Newcrest shares for the relevant financial year. 10.4. Securities Dealing Policy The Company has a Securities Dealing Policy which prohibits the use by Directors, Executives and employees of hedging and derivatives such as caps, collars, warrants or similar products in relation to Newcrest securities, including shares acquired under the Company’s equity incentive schemes, whether or not they are vested. The Securities Dealing Policy also prohibits entry into transactions in associated products that operate to limit the economic risk of their security or interest holdings in the Company. Employees are not permitted to enter into margin loans in relation to Newcrest securities at any time without prior approval from the Chairman or Company Secretary. The Securities Dealing Policy is available on the Company’s website at https://www.newcrest.com/about-newcrest/corporate-governance. 110 Directors’ Report continued REMUNERATION REPORT continued 11. Statutory Tables 11.1. Executive Remuneration Short Term Long Term Post- Employ- ment Termi- nation Benefits Share- Based Payments Short Term Incentive US$’000 (B) Other Cash Benefits US$’000 (C) Salary US$’000 (A) Other Benefits US$’000 (D) Leave US$’000 (E) Super- annuation US$’000 (F) Termi- nation Benefits US$’000 (G) LTI Rights US$’000 (H) STI Restricted Shares US$’000 (I) Sign-On Rights US$’000 (J) Total US$’000 Perfor- mance related % (K) Executives 2023 Sherry Duhe Craig Jones Daniel O’Connell (1) Maria Sanz Perez Seil Song Suresh Vadnagra Former Executives Sandeep Biswas (2) Philip Stephenson Total Executives 2022 856 635 224 544 521 585 1,167 286 701 467 115 251 182 436 – – 4,818 2,152 Sandeep Biswas 1,725 Sherry Duhe Craig Jones Maria Sanz Perez Seil Song Philip Stephenson Suresh Vadnagra 268 617 584 544 614 614 955 118 221 199 201 221 228 Total (3) 4,966 2,143 275 359 253 – – – 74 19 35 740 5 132 118 – – 20 – 6 11 4 5 12 6 39 42 125 11 1 2 4 6 21 6 51 60 39 8 18 (48) 22 22 19 140 76 8 3 17 5 40 20 169 17 9 9 17 17 17 12 13 111 17 6 12 5 17 17 17 91 – – – – 542 – – 577 1,119 – – – – – – – – 976 878 72 600 1,028 878 570 52 5,054 2,553 85 506 223 264 506 298 – – – – – – – – – 999 118 229 199 201 228 228 444 – – – – – – – 3,419 2,292 432 1,435 2,254 2,018 1,829 1,024 444 14,703 – 194 – – – – 30 6,341 930 1,708 1,231 1,238 1,667 1,441 49.0 62.3 43.3 59.3 53.7 68.8 31.2 5.1 71.1 34.5 56.0 50.4 53.8 57.3 52.3 4,435 2,202 224 14,556 (1) Appointed as KMP during the 2023 financial year and therefore no prior year comparison is shown. (2) 227,863 LTI Rights were issued to Sandeep Biswas on 2 December 2022 in accordance with shareholder approval under ASX Listing Rule 10.14. They subsequently lapsed following the announcement of his retirement. (3) Executive remuneration for the 2022 financial year excludes Executives who ceased being Executives in the 2022 financial year. Total remuneration for these Executives in the 2022 financial year was US$964,000. Refer to the 2022 Annual Report for further detail. The table above details the statutory remuneration disclosures in respect of the 2023 financial year as calculated with reference to the Corporations Act 2001 and relevant accounting standards. All Executives are compensated in Australian dollars other than Craig Jones who was paid in Canadian dollars during his relocation to Canada. Remuneration has been presented in US dollars, consistent with Newcrest’s presentation currency. All remuneration components have been translated from Australian dollars to US dollars using an average rate of 0.6735 (2022: 0.7260) except where otherwise stated in the associated footnotes below. Amounts paid in Canadian dollars have been translated to US dollars using an average rate of 0.7470. An explanation of the relevant remuneration items included in the table is provided in the associated footnotes. The figures provided in relation to share based payments (columns H to J) are calculated in accordance with accounting standards and represent the amortised fair value of equity instruments granted to Executives. Newcrest Annual Report 2023 111 Notes to Executive Remuneration (A) Salaries comprise cash salary and available salary package options grossed up by related fringe benefits tax, where applicable, net of superannuation commitments, paid during the financial year. For former and new Executives, this balance is pro-rated for time served as KMP during the financial year. Refer to section 1 for further information as to the period for which each of the Executives was KMP during the 2023 financial year. For Sandeep Biswas, this also includes payments for advisory services, up to his retirement on 18 March 2023 as set out in section 8.2. (B) Short Term Incentive refers to cash amounts earned as STIs. For FY23, 100% will be awarded in cash and none will be deferred. For FY22, this represents 50% of the total FY22 STI awarded as detailed in section 5.3.3. The remaining 50% is awarded as restricted shares. Refer to item (H) below. The cash amount is paid in the financial year following the STI performance period. (C) Other cash benefits comprise travel costs, sign-on arrangements and relocation assistance to Sherry Duhe and an expatriate allowance to Craig Jones. The sign-on arrangements and transition performance awards are being expensed over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the Executive becomes fully entitled to the sign-on arrangement. (D) Other benefits represents non-monetary benefits such as parking, insurance and applicable fringe benefits tax payable on benefits. (E) Represents statutory leave entitlements, measured on an accruals basis, and reflects the net movement in the entitlements over the year. Negative movement indicates leave taken during the year exceeding leave accrued during the current year. For former Executives, this includes the reversal of long service leave expensed in prior years which did not vest upon cessation. (F) Represents company contributions to superannuation under the Australian Superannuation Guarantee legislation (SGC). The Australian superannuation payment is required by legislation. It is made to a superannuation fund of the employee’s choice. Employees can make additional contributions over and above those required to be paid by the Company. (G) Termination Benefits represent payment in lieu of outstanding notice period for Seil Song and Philip Stephenson, being approximately 52 weeks and 50 weeks of fixed pay respectively. (H) Represents the amortisation of the fair value of LTI Rights over unissued shares. This is calculated in accordance with Australian Accounting Standard AASB 2 Share-based Payments. The Rights have been valued using a combination of the Monte Carlo simulation and Black-Scholes models. Valuations are as at the grant date and, for the portion of the awards that are not subject to market based hurdles (such as comparative cost position and return of capital employed), are adjusted for the probability of hurdles being achieved. The amounts disclosed have been determined by allocating the value of the Rights evenly over the period from grant date to vesting date and, as a result, the table includes Rights that were granted in prior years. As detailed in section 6, on 15 May 2023 the Newmont Transaction was announced. Subject to the Scheme of Arrangement becoming effective, all unvested LTI Rights will vest in full shortly prior to implementation of the Newmont Transaction. Newcrest Management assessed the likelihood of the Scheme of Arrangement becoming effective and has determined that it is more likely than not that it will become effective. As such, share based payments have been calculated on the basis that the Scheme of Arrangement becomes effective and all rights vest in full shortly prior to the implementation date (accelerated vesting), with the impact of the revision to the expense recognised in the Income Statement with a corresponding adjustment recognised in equity. The impact to the Executives was an increase in share-based payments expense of $518,000 for Sherry Duhe, $406,000 for Craig Jones, $32,000 for Dan O’Connell, $268,000 for Maria Sanz Perez, $238,000 for Seil Song and $406,000 for Suresh Vadnagra. The Newcrest share price on 15 May 2023 was A$28.68. (I) Represents the 50% of the FY22 STI award granted to the Executives which is in the form of restricted shares (refer to section 4.4). Effective from the grant of STIs for the 2020 financial year, on cessation of employment, other than for dismissal for cause, all restricted shares granted as part of the STI continue until released at the end of the restriction period, including on resignation. Restricted STI shares granted in respect of the 2022, 2021 and 2020 financial year are therefore expensed in the 2022, 2021 and 2020 financial year respectively. (J) Represents Sign-On Rights issued to Sherry Duhe and Suresh Vadnagra, as the equity component of their sign-on grant in accordance with their ESA. The Rights are being expensed over the period in which the performance and service conditions are fulfilled, ending on the date on which the Executive becomes fully entitled to the award. (K) Represents performance related remuneration as a percentage of total remuneration. Performance related remuneration comprises cash STI, restricted STI shares, LTI Rights, sign-on rights and transition performance awards. 11.2. Executives – Incentive Plan Awards – Movements during the 2023 financial year Number of Rights Executives Sherry Duhe Craig Jones Daniel O’Connell Maria Sanz Perez Seil Song Suresh Vadnagra Former Executives Sandeep Biswas Philip Stephenson Opening balance (1) 2022 LTI Rights granted Other Grants Rights Lapsed/ Forfeited (2) Vested and/or Exercised(3,6) Closing balance(4,5) 87,090 91,092 9,324 47,567 69,728 63,531 66,114 55,351 – 34,441 41,257 55,351 457,962 91,092 227,863 (7) 55,351 – – – – – – – – – (9,187) (25,107) (18,374) – – – – (2,227) (11,131) – – (402,261) (93,387) (94,679) (18,374) 128,097 118,882 9,324 82,008 97,627 118,882 190,177 33,390 The opening balance is as at 1 July 2022 or the date of appointment for new Executives during the year. (1) (2) Represents 2019 LTI Rights which lapsed or were forfeited (which were granted in the 2020 financial year). For Sandeep Biswas and Philip Stephenson, the numbers also include the number of their 2020 and 2021 LTI Rights that lapsed upon cessation. (3) Represents 2019 LTI Rights that vested (which were granted in the 2020 financial year). (4) The closing balance is on 30 June 2023 or the date of cessation as KMP for former Executives. (5) These Rights are ‘at risk’ (unvested) and will lapse or be forfeited in the event that the minimum prescribed conditions are not met by the Company or individual Executives, as applicable. As at 30 June 2023, no Rights are vested and exercisable or vested and unexercisable. (6) Sherry Duhe was granted 41,845 sign-on rights in the 2022 financial year, and 25,107 of these vested in the 2023 financial year, as detailed in section 4.7. (7) 227,863 LTI Rights were issued to Sandeep Biswas on 2 December 2022 in accordance with shareholder approval under ASX Listing Rule 10.14. They subsequently lapsed following the announcement of his retirement. 112 Directors’ Report continued REMUNERATION REPORT continued 11. Statutory Tables continued 11.3. Executives – Total Value of Rights Granted and Exercised during the 2023 financial year Executives Sherry Duhe Craig Jones Daniel O’Connell Maria Sanz Perez Seil Song Suresh Vadnagra Former Executives Sandeep Biswas Philip Stephenson Accounting Fair Value of 2022 LTI Rights Granted US$’000 Value of Rights Exercised US$’000 (A) 605 507 – 315 378 507 2,085 507 (B) 411 230 – – 140 – 1,171 230 The following assumptions have been applied to the table: (A) The accounting value of the 2022 LTI Rights reflects the fair value of a Right on the grant date, being US$9.15 multiplied by the number of Rights granted during the year. This amount represents the maximum value which will be expensed over the performance period. The minimum value is nil if the performance and/or service conditions are not met. (B) The Rights which were exercised were 2019 LTIs and sign-on rights. The value at the exercise date has been determined by the Company’s share price at the close of business on the exercise date multiplied by the number of Rights exercised during the year ended 30 June 2023 (nil exercise price). 11.4. Executives – Source of Rights Held as at 30 June 2023 Financial Year Type Grant Date VWAP for grant (1) Future financial years in which rights may vest (2) Executives Sherry Duhe (3) Craig Jones Daniel O’Connell Maria Sanz Perez Seil Song Suresh Vadnagra Former Executives Sandeep Biswas Philip Stephenson FY21 FY22 2020 LTI 2021 LTI FY22 Other FY23 2022 LTI 18 Nov 2020 17 Nov 2021 21 Feb 2022 16 Nov 2022 A$29.21 FY24 A$25.41 A$23.90 FY24 FY24 A$19.51 FY24 Balance at 30 June 2023 – 29,095 2,434 21,907 25,672 29,095 114,786 20,539 45,245 34,436 2,864 25,660 30,698 34,436 75,391 12,851 16,738 – – – – – – – 66,114 55,351 4,026 34,441 41,257 55,351 – – 128,097 118,882 9,324 82,008 97,627 118,882 190,177 33,390 (1) Five day VWAP of Newcrest’s share price prior to the grant date is used to determine the number of Rights offered under the 2020 LTI, 2021 LTI, and 2022 LTI. Five day VWAP of Newcrest’s share price for sign-on shares is for the period prior to commencement of employment of Sherry Duhe on 21 February 2022. (2) Details of the service and performance criteria used to determine the amount of compensation for each award are described in the 2020, 2021 and 2022 Remuneration Reports that can be found in the Company’s Annual Reports for the relevant year of grant. As detailed in section 6, if the Newmont Transaction proceeds all outstanding Rights will vest in full shortly prior to implementation of the Newmont Transaction. If the Newmont Transaction does not become effective, the Rights will remain on foot and vest according to existing vesting conditions, as determined by the Board. These awards will not be eligible to receive the special dividend. (3) 41,845 sign-on rights were granted to Sherry Duhe in part compensation for forgone equity awards with her previous employer. The number of sign-on rights granted was calculated based on a value of A$1,000,000 (based on a VWAP of Newcrest’s share price (US$23.90) over the five trading days immediately prior to commencement of employment on 21 February 2022). During the year 25,107 sign-on rights vested. Newcrest Annual Report 2023 113 11.5. Non-Executive Directors Compensation Non-Executive Directors Peter Tomsett Philip Aiken AM Philip Bainbridge Roger Higgins Sally-Anne Layman Jane McAloon AM Vickki McFadden Total Total (5) Short Term Committee Fees (1) Other Fees (2) US$’000 US$’000 Board Fees US$’000 Post Employment Super- annuation (3) US$’000 Total (4) US$’000 407 330 125 149 127 34 124 135 125 135 125 136 124 135 1,157 1,054 – 13 44 48 15 4 44 48 33 36 33 29 52 56 221 234 86 – – – 7 – – – 7 – 7 – 7 – 114 – 17 17 17 4 15 4 17 17 17 18 17 17 17 17 117 94 510 360 186 201 164 42 185 200 182 189 182 182 200 208 1,609 1,382 FY 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 Fees for the Audit & Risk Committee, Safety & Sustainability Committee and the HRR Committee. (1) (2) To provide continuity and ongoing support to the management team, Peter Tomsett had an increased involvement in the business following the leadership changes in December 2022. Vickki McFadden, Sally-Anne Layman, Jane McAloon and Philip Bainbridge received additional fees of A$20,000 (US$14,000) in July 2023 in recognition of their involvement in the Due Diligence Committee relating to the Newmont Transaction. Of this additional Due Diligence Committee fees, 50% is attributable to FY23. (3) Represents Company contributions to superannuation under the SGC and insurance payments. The Australian superannuation payment is required by legislation. It is made to a superannuation fund of the Non-Executive Director’s choice. Non-Executive Directors can make additional contributions over and above those required to be paid by the Company. (4) Non-Executive Directors are compensated in Australian dollars. All remuneration components have been translated from Australian dollars to US dollars using an average rate of 0.6735 (2022: 0.7260). (5) Non-Executive Director remuneration for the 2022 financial year excludes Non-Executives Directors who ceased being a Non-Executive Director in the 2022 financial year. Total remuneration for these Non-Executives Directors in the 2022 financial year was US$165,000. 11.6. Other Transactions with KMP There were no loans made, guaranteed or secured, directly or indirectly, by the Company and any of its subsidiaries to KMP or their related parties during the year. There were no other transactions between the Company or any of its subsidiaries and any KMP or their related parties during the year. 114 Auditor’s Independence Declaration Ernst & Young 8 Exhibition Street Melbourne VIC 3000 Australia GPO Box 67 Melbourne VIC 3001 Tel: +61 3 9288 8000 Fax: +61 3 8650 7777 ey.com/au Auditor’s Independence Declaration to the Directors of Newcrest Mining Limited As lead auditor for the audit of the financial report of Newcrest Mining Limited for the financial year ended 30 June 2023, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; b. No contraventions of any applicable code of professional conduct in relation to the audit; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of Newcrest Mining Limited and the entities it controlled during the financial year. Ernst & Young Glenn Carmody Partner 11 August 2023 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Newcrest Annual Report 2023 Financial Statements CONTENTS Consolidated Financial Statements Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Consolidated Statement of Changes in Equity Notes to the Consolidated Financial Statements Directors’ Declaration Independent Auditor’s Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS INTRODUCTION 1 Corporate Information 2 Basis of Preparation 116 116 117 118 119 120 121 173 174 121 121 121 115 CAPITAL STRUCTURE AND FINANCIAL RISK MANAGEMENT 143 20 Capital Management and Financial Objectives 21 Net Debt 3 Critical Accounting Judgements, Estimates and Assumptions 122 22 Leases PERFORMANCE 4 Segment Information 5 Income and Expenses 6 Net Finance Costs 7 Income Tax Expense 8 Earnings per Share (EPS) 9 Dividends 123 123 126 128 128 129 129 23 Other Financial Assets and Liabilities 24 Financial Risk Management 25 Fair Value Measurement 26 Issued Capital 27 Reserves GROUP STRUCTURE 28 Controlled Entities 10 Notes to the Consolidated Statement of Cash Flows 130 29 Interest in Joint Operations RESOURCE ASSETS AND LIABILITIES 11 Property, Plant and Equipment 12 Impairment of Non-Financial Assets 13 Inventories 14 Trade and Other Receivables 15 Other Assets 16 Goodwill 17 Other Intangible Assets 18 Deferred Tax 19 Provisions 131 131 134 136 137 137 138 138 139 141 30 Investment in Associates 31 Acquisition of Pretium Resources Inc. OTHER 32 Newmont Transaction 33 Contingencies 34 New Accounting Standards and Interpretations 35 Share-Based Payments 36 Key Management Personnel 37 Auditors’ Remuneration 38 Parent Entity Information 39 Deed of Cross Guarantee 40 Events Subsequent to Reporting Date 143 144 146 147 149 156 159 160 161 161 162 163 164 167 167 167 167 167 169 170 170 171 172 116 Consolidated Income Statement For the year ended 30 June 2023 Revenue Cost of sales Gross profit Exploration expenses Corporate administration expenses Other income/(expenses) Share of profit/(loss) of associates Profit before interest and income tax Finance income Finance costs Net finance costs Profit before income tax Income tax expense Profit after income tax Profit after tax attributable to: Owners of the parent Earnings per share (cents per share) Basic earnings per share Diluted earnings per share The above Statement should be read in conjunction with the accompanying notes. Note 5(a) 5(b) 11 5(c) 5(d) 30 6(a) 6(b) 7(a) 8 8 2023 US$m 4,508 (3,282) 1,226 (76) (138) 141 19 1,172 41 (137) (96) 1,076 (298) 778 778 87.0 86.8 2022 US$m 4,207 (2,853) 1,354 (76) (138) 119 45 1,304 25 (100) (75) 1,229 (357) 872 872 103.4 103.1 Newcrest Annual Report 2023 Consolidated Statement of Comprehensive Income For the year ended 30 June 2023 Profit after income tax Other comprehensive income/(loss) Items that may be reclassified subsequently to the Income Statement Hedging Hedge (gains)/losses transferred to the Income Statement Hedge gains/(losses) deferred in equity Income tax (expense)/benefit Investments Share of other comprehensive income/(loss) of associates Foreign currency translation Exchange gains/(losses) on translation of foreign operations, net of hedges of foreign investments and tax Items that will not be reclassified to the Income Statement Investments Fair value gain/(loss) of equity instruments held at fair value through other comprehensive income (‘FVOCI’) Other comprehensive income/(loss) for the year, net of tax Total comprehensive income for the year Total comprehensive income attributable to: Owners of the parent The above Statement should be read in conjunction with the accompanying notes. 117 2023 US$m 778 2022 US$m 872 73 (73) – – (2) (2) (258) (258) – – (260) 518 518 518 40 123 (49) 114 – – (457) (457) 46 46 (297) 575 575 575 Note 24(a) 30 25(d) 118 Consolidated Statement of Financial Position As at 30 June 2023 Current assets Cash and cash equivalents Trade and other receivables Inventories Other financial assets Current tax assets Other assets Total current assets Non-current assets Trade and other receivables Inventories Other financial assets Property, plant and equipment Goodwill Other intangible assets Deferred tax assets Investment in associates Other assets Total non-current assets Total assets Current liabilities Trade and other payables Lease liabilities Provisions Current tax liability Other financial liabilities Total current liabilities Non-current liabilities Borrowings Lease liabilities Provisions Deferred tax liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital Accumulated losses Reserves Total equity The above Statement should be read in conjunction with the accompanying notes. Note 2023 US$m 2022 US$m 14 13 23 15 14 13 23 11 16 17 18 30 15 22 19 23 21 22 19 18 26 27 586 254 615 60 58 80 565 238 633 141 5 43 1,653 1,625 109 1,116 351 76 976 454 12,996 12,902 686 32 50 483 45 15,868 17,521 693 45 176 37 33 984 1,935 65 511 2,314 4,825 5,809 11,712 13,764 (1,440) (612) 11,712 704 37 56 487 42 15,734 17,359 675 47 166 136 68 1,092 1,779 64 491 2,268 4,602 5,694 11,665 13,759 (1,726) (368) 11,665 Newcrest Annual Report 2023 Consolidated Statement of Cash Flows For the year ended 30 June 2023 Cash flows from operating activities Profit before income tax Adjustments for: Depreciation and amortisation Net finance costs Net fair value gain on Fruta del Norte finance facilities Exploration expenditure written off Share of profit of associates Other non-cash items or non-operating items Change in working capital Operating cash flows before interest and taxes Interest received Interest paid Income tax paid Dividends received Net cash provided by operating activities Cash flows from investing activities Payments for plant and equipment, development and feasibility Production stripping expenditure Exploration and evaluation expenditure Information systems development Cash consideration for acquisition of Pretium, net of cash acquired Net receipts from Fruta del Norte finance facilities Payments for investments in associates Proceeds from contingent consideration Proceeds from sale of property, plant and equipment Proceeds from sale of royalty portfolio Payment for purchase of put option Net cash used in investing activities Cash flows from financing activities Proceeds from borrowings: – Bilateral bank debt Repayment of borrowings: – Bilateral bank debt – Convertible notes – Term facility Payment for treasury shares Repayment of lease principal Other financing activities Dividends paid to members of the parent entity Net cash provided by/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Effects of exchange rate changes on cash held Cash and cash equivalents at the end of the year The above Statement should be read in conjunction with the accompanying notes. 119 Note 2023 US$m 2022 US$m 1,076 1,229 5(e) 6 25(b) 11 10(a) 31(c) 30 891 96 (143) 76 (19) (35) (107) 1,835 217 (118) (359) 30 1,605 (961) (206) (143) (7) – 116 (13) 10 3 – – 750 75 (62) 76 (45) (18) (76) 1,929 86 (91) (244) – 1,680 (1,181) (213) (120) (12) (1,084) 51 (7) – 1 36 (19) (1,201) (2,548) 21(d) 1,659 860 21(d) 10(b) 10(b) (1,504) – – (8) (49) – (477) (379) 25 565 (4) 586 (717) (52) (88) (14) (43) (1) (372) (427) (1,295) 1,873 (13) 565 120 Consolidated Statement of Changes in Equity For the Year Ended 30 June 2023 2023 Balance at 1 July 2022 Profit for the year Other comprehensive income/(loss) for the year Total comprehensive income/(loss) for the year Transactions with owners in their capacity as owners Share-based payments Shares purchased Dividends Shares issued – Dividend reinvestment plan Balance at 30 June 2023 Issued Capital US$m 13,759 – – – – (10) – 15 FX Translation Reserve US$m Hedge Reserve (1) US$m Equity Settlements Reserve US$m Other Reserves (2) US$m Accumulated Losses US$m (585) – (258) (258) – – – – 51 – – – – – – – 51 151 – – – 16 – – – 167 15 – (2) (2) – – – – 13 (1,726) 778 – 778 – – (492) – (1,440) 13,764 (843) (1) Includes cashflow hedge reserve and cost of hedging reserve. (2) Includes Newcrest’s share of other comprehensive income of associates and changes in fair value of equity instruments held at fair value. The above Statement should be read in conjunction with the accompanying notes. 2022 Balance at 1 July 2021 Profit for the year Other comprehensive income/(loss) for the year Total comprehensive income/(loss) for the year Transactions with owners in their capacity as owners Share-based payments Shares purchased Dividends Shares issued – Dividend reinvestment plan Share consideration for acquisition of Pretium Resources Inc. (Note 31) Shares issued – Convertible notes Share issue costs Transfer of fair value reserves Issued Capital US$m 12,419 – – – – (14) – 16 1,289 50 (1) – FX Translation Reserve US$m Hedge Reserve (1) US$m (128) – (457) (457) – – – – – – – – (63) – 114 114 – – – – – – – – Equity Settlements Reserve US$m 137 – – – 14 – – – – – – – Balance at 30 June 2022 13,759 (585) 51 151 (1) Includes cashflow hedge reserve and cost of hedging reserve. (2) Includes Newcrest’s share of other comprehensive income of associates and changes in fair value of equity instruments held at fair value. The above Statement should be read in conjunction with the accompanying notes. Other Reserves (2) US$m Accumulated Losses US$m 31 – 46 46 – – – – – – – (2,272) 872 – 872 – – (388) – – – – (62) 15 62 (1,726) Total US$m 11,665 778 (260) 518 16 (10) (492) 15 11,712 Total US$m 10,124 872 (297) 575 14 (14) (388) 16 1,289 50 (1) – 11,665 Newcrest Annual Report 2023 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2023 121 INTRODUCTION This section provides information about the overall basis of preparation that is considered to be useful in understanding these financial statements. 1. Corporate Information Newcrest Mining Limited is a company limited by shares, domiciled and incorporated in Australia, whose shares are publicly traded on the Australian Securities Exchange (‘ASX’), PNGX Markets Limited (‘PNGX’) and the Toronto Stock Exchange (‘TSX’). The registered office of Newcrest Mining Limited is Level 8, 600 St Kilda Road, Melbourne, Victoria, 3004, Australia. The nature of operations and principal activities of Newcrest Mining Limited and its controlled entities are exploration, mine development, mine operations and the sale of gold and gold/copper concentrate. The financial report of Newcrest Mining Limited for the year ended 30 June 2023 was authorised for issue in accordance with a resolution of the Directors on 11 August 2023. 2. Basis of Preparation (a) Overview This financial report is a general purpose financial report, prepared by a for-profit entity, in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB). The financial report also complies with International Financial Reporting Standards (IFRS) including interpretations as issued by the International Accounting Standards Board (IASB). The financial report has been prepared on a historical cost basis, except for metal concentrate receivables, other financial assets and other financial liabilities which have been measured at fair value. The financial report has been presented in United States (US) dollars and all values are rounded to the nearest US$1,000,000 (US$m) unless otherwise stated. The accounting policies have been consistently applied by all entities included in the Group and are consistent with those applied in the prior year, except as noted in Note 2(b). Discussion of the Group’s significant accounting policies are located within the applicable notes to the financial statements. (b) Adoption of New Accounting Standards Effective this Financial Year The following accounting policy was effective this financial year. Property, Plant and Equipment Amendment – Proceeds before Intended Use The amendment to AASB 116 Property, Plant and Equipment prohibits deducting from the cost of an item of property, plant and equipment, the proceeds from selling items produced before that asset is available for use (i.e. pre-commissioning revenue). Production costs of the items sold are now measured by applying AASB 102 Inventories. Proceeds from selling any such items, and the cost of those items, are recognised in the Income Statement. This amendment was applied from 1 July 2022. The impact of adoption of this amendment had no impact to the Group. (c) Basis of Consolidation The consolidated financial statements include the financial statements of the parent entity, Newcrest Mining Limited, and its controlled entities (referred to as ‘the Consolidated Entity’ or ‘the Group’ in these financial statements). A list of significant controlled entities (subsidiaries) is presented in Note 28. Control is achieved when the Group is exposed, or has the rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Specifically, the Group controls an investee if, and only if, the Group has all of the following: – Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); – Exposure, or rights, to variable returns from its involvement with the investee; and – The ability to use its power over the investee to affect its returns. Non-controlling interests in the results and equity of the entities that are controlled by the Group are shown separately in the Income Statement, Statement of Comprehensive Income, Statement of Financial Position and Statement of Changes in Equity respectively. 122 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 2. Basis of Preparation continued (d) Foreign Currency Presentation and Functional Currency The presentation currency of the Group is US dollars. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. The parent entity and the Group’s Australian entities have a functional currency of Australian dollars. Lihir has a functional currency of US dollars. The functional currency of Red Chris and Brucejack is Canadian dollars. Transactions and Balances Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. The subsequent payment or receipt of funds related to a transaction is translated at the rate applicable on the date of payment or receipt. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. All exchange differences in the consolidated financial statements are taken to the Income Statement with the exception of differences on certain US dollar borrowings (net of cash) held by entities with a functional currency of Australian dollars where the foreign currency components are designated as either cash flow hedges of future US dollar denominated sales or hedges of a net investment in a foreign operation. These are recognised in other comprehensive income and accumulated in a reserve until the forecast sales used to repay the debt occur (for cash flow hedges) or the foreign operation is disposed (for net investment hedges), at which time they are recognised in the Income Statement. Translation The assets and liabilities of subsidiaries with a functional currency other than US dollars (being the presentation currency of the group) are translated into US dollars at the exchange rate at the reporting date and the income statement is translated at the average exchange rate for the period. On consolidation, exchange differences arising from the translation of these subsidiaries, translation of net investments in foreign operations and of the US dollar borrowings (net of cash) designated as hedges of the net investment are recognised in other comprehensive income and accumulated in the foreign currency translation reserve. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in the Income Statement. 3. Critical Accounting Judgements, Estimates and Assumptions Judgements, estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. All judgements, estimates and assumptions made are believed to be reasonable based on the most current set of circumstances available to Management. The resulting accounting estimates will, by definition, seldom equal the related actual results. The judgements, estimates and assumptions that potentially have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are found within the following notes: – Note 11 – Exploration, evaluation and deferred feasibility expenditure – Note 11 – Production stripping – Note 11 – Units of production method of depreciation/amortisation – Note 11 – Ore reserves and mineral resources – Note 12 – Fair value of CGUs – Note 13 – Net realisable value of ore stockpiles – Note 18 – Recovery of deferred tax assets – Note 19 – Mine rehabilitation provision – Note 22 – Leases – Note 25 – Valuation of Fruta del Norte (‘FdN’) finance facilities – Note 25 – Valuation of power purchase agreement – Note 31 – Business combination – Note 35 – Share-based payments Newcrest Annual Report 2023 123 PERFORMANCE This section highlights the key indicators on how the Group performed in the current year. 4. Segment Information The Group’s operating segments are based on the internal management reports that are reviewed and used by the Group’s Executive Committee in assessing performance. The operating segments represent the Group’s operating mines and projects which are organised and managed according to their location and stage. The Group’s reportable operating segments are: – Cadia, Australia – Telfer, Australia – Lihir, Papua New Guinea – Brucejack, Canada (1) – Red Chris JV (70% interest), Canada – Exploration and Projects (2) (1) Newcrest acquired the Brucejack mine as part of the acquisition of Pretium Resources Inc. during the 2022 financial year. Refer to Note 31. (2) Exploration and Projects mainly comprises projects in the exploration, evaluation and feasibility phase. It includes the Havieron Project which is operated by Newcrest under a Joint Venture Agreement (‘JVA’) with Greatland Gold plc (‘Greatland’). Newcrest holds a 70% joint venture interest in the Havieron Project. It also includes Wafi-Golpu JV (50% Interest) in PNG, Namosi JV (73.03% interest) in Fiji, O’Callaghans in Australia and Newcrest’s global greenfields exploration portfolio. (a) Segment Results, Segment Assets and Segment Liabilities The measurement of segment results is in line with the basis of information presented to the Group’s Executive Committee for internal management reporting purposes. The performance of each segment is measured based on their Revenues, Costs, EBITDA and EBIT (‘Segment Result’). Segment Revenues represent gold, copper, silver and molybdenum revenue, less related treatment and refining deductions. All segment revenue is from third parties. EBITDA is earnings before interest, tax, depreciation, amortisation and significant items. EBIT is earnings before interest, tax and significant items. The reconciliation of EBIT to profit before tax is shown in Note 4(b). Capital Expenditure comprises payments for plant and equipment, production stripping expenditure, assets under construction, mine development and feasibility expenditure and information systems development. Segment assets exclude intercompany receivables. Segment liabilities exclude intercompany payables. The Group’s investment in associates is included within the Corporate and Other segment. Telfer US$m Brucejack US$m Red Chris US$m Total Operations US$m Exploration Corporate & Projects (2) US$m & Other (3) US$m 124 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 4. Segment Information continued Cadia US$m 1,120 834 13 43 (113) 1,897 1,306 Lihir US$m 1,236 – 1 – – 1,237 455 576 141 4 – (49) 672 124 495 – 9 – (11) 493 220 (234) (338) (100) (148) 1,072 117 484 4,451 (882) 286 5,617 (1,402) 24 92 242 (314) 72 81 3,510 (935) 73 155 2 – (21) 209 (5) (54) (59) 170 1,337 (171) 3,500 1,130 29 43 (194) 4,508 2,100 (874) 1,226 1,113 15,157 (3,704) 2023 Gold Copper Silver Molybdenum Treatment and refining deductions Total revenue EBITDA Depreciation and amortisation EBIT (Segment result) (1) Capital expenditure Segment assets Segment liabilities Net assets/ (liabilities) Total Group US$m 3,500 1,130 29 43 (194) 4,508 2,063 (891) 1,172 1,181 17,521 (5,809) – – – – – – 39 (17) 22 12 1,464 (1,984) – – – – – – (76) – (76) 56 900 (121) 779 3,569 4,215 (72) 2,575 1,166 11,453 (520) 11,712 Notes: (1) Refer to Note 4(b) for the reconciliation of segment result to profit before tax. (2) Includes net assets attributable to Wafi-Golpu JV of US$437 million, Havieron JV of US$223 million and Namosi JV of US$25 million. (3) Includes investment in associates, FdN finance facilities and eliminations. 2022 Gold Copper Silver Molybdenum Treatment and refining deductions Total revenue EBITDA Depreciation and amortisation EBIT (Segment result) (1) Capital expenditure Segment assets Segment liabilities Net assets/ (liabilities) Cadia US$m 1,014 806 11 3 (90) 1,744 1,229 Lihir US$m 1,222 – 1 – – 1,223 446 (180) (301) 1,049 145 685 4,237 (816) 365 5,655 (1,462) Telfer US$m Brucejack US$m Red Chris US$m Total Operations US$m Exploration Corporate & Projects (2) US$m & Other (3) US$m 657 138 4 – (48) 751 203 (125) 78 64 217 (300) 226 – 3 – (3) 226 109 (68) 41 31 3,606 (928) 75 205 3 – (20) 263 98 (57) 41 203 1,243 (166) 3,194 1,149 22 3 (161) 4,207 2,085 (731) 1,354 1,348 14,958 (3,672) – – – – – – (76) – (76) 55 801 (95) – – – – – – 45 (19) 26 14 1,600 (1,927) Total Group US$m 3,194 1,149 22 3 (161) 4,207 2,054 (750) 1,304 1,417 17,359 (5,694) 3,421 4,193 (83) 2,678 1,077 11,286 706 (327) 11,665 Notes: (1) Refer to Note 4(b) for the reconciliation of segment result to profit before tax. (2) Includes net assets attributable to Wafi-Golpu JV of US$447 million, Havieron JV of US$151 million and Namosi JV of US$25 million. (3) Includes investment in associates, FdN finance facilities and eliminations. Newcrest Annual Report 2023 125 Note 4(a) 6 2023 US$m 2022 US$m 1,172 (96) 1,076 1,304 (75) 1,229 1,801 1,622 15 3 2 1 – 7 – 19 1,822 1,648 1,555 368 288 160 149 91 67 8 – 2,686 4,508 4,767 5,672 5,159 245 25 1,500 261 155 174 110 191 143 – 25 2,559 4,207 4,541 5,644 5,178 346 25 15,868 15,734 (b) Reconciliation of EBIT (Segment Result) to Profit Before Tax Segment Result Net finance costs Profit before tax (c) Geographical Information – Revenue (1) Bullion (2) Australia United Kingdom Switzerland United States Canada Concentrate (3) Japan Korea China Philippines United States Singapore Switzerland Chile United Kingdom Total revenue (d) Geographical Information – Non-Current Assets (4) Australia Papua New Guinea Canada United States Other Total non-current assets (1) Revenue is attributable to geographic location, based on the location of customers. This location may differ to the port of destination. (2) Bullion sales to one customer amounted to US$553 million (2022: US$532 million). (3) Concentrate sales to one customer amounted to US$855 million (2022: US$802 million) arising from concentrate sales by Cadia and Telfer. (4) Non-Current Assets includes deferred tax assets of US$50 million (2022: US$56 million). 126 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 5. Income and Expenses (a) Revenue Gold – Bullion Gold – Concentrate Gold – Concentrate treatment and refining deductions Total gold revenue Copper – Concentrate Copper – Concentrate treatment and refining deductions Total copper revenue Silver – Bullion Silver – Concentrate Silver – Concentrate treatment and refining deductions Total silver revenue Molybdenum – Concentrate Molybdenum – Concentrate treatment and refining deductions Total molybdenum revenue Total revenue (1) (b) Cost of Sales Site production costs Royalties Selling costs Inventory movements Cost of sales (excluding depreciation and amortisation) Depreciation and amortisation Total cost of sales (c) Corporate Administration Expenses Corporate costs Corporate depreciation Share–based payments Total corporate administration expenses (d) Other Income/(Expenses) Net fair value movements on concentrate receivables Net foreign exchange gain/(loss) Net fair value gain on Fruta del Norte finance facilities Net fair value gain on power purchase agreement (Note 25(c)) Net insurance recoveries (2) Gain on sale of royalty portfolio Business acquisition and integration costs (Note 31(d)) Business development costs (3) Other items Total other income/(expenses) 2023 US$m 2022 US$m 1,818 1,682 (52) 3,448 1,130 (133) 997 4 25 (5) 24 43 (4) 39 1,646 1,548 (44) 3,150 1,149 (115) 1,034 2 20 (2) 20 3 – 3 4,508 4,207 2,264 120 91 (67) 2,408 874 3,282 108 17 13 138 4 7 143 5 – – (6) (23) 11 141 1,915 125 82 – 2,122 731 2,853 103 19 16 138 (51) 68 62 – 65 11 (42) – 6 119 Newcrest Annual Report 2023 (e) Depreciation and Amortisation Property, plant and equipment Intangible assets Adjustments to inventory on hand or assets under construction Total depreciation and amortisation expense Included in: Cost of sales depreciation Corporate depreciation Total depreciation and amortisation expense (f) Employee Benefits Expense Salaries, wages and other employment benefits Defined contribution plan expense Share-based payments Redundancy expense Total employee benefits expense 127 2023 US$m 2022 US$m 931 15 946 (55) 891 874 17 891 569 45 17 2 633 807 17 824 (74) 750 731 19 750 496 40 16 – 552 (1) Total revenue for the year comprises of revenue from contracts with customers of US$4,584 million (2022: US$4,298 million) and realised gold hedge losses of US$76 million (2022: US$91 million). (2) In April 2022, Newcrest settled an insurance claim in relation to the Northern Tailings Storage Facility embankment slump which occurred on 9 March 2018. The settlement amount of US$75 million is presented net of associated costs of US$10 million. (3) Business development costs relate to costs associated with the Newmont Transaction. Refer Note 32. It includes acceleration of certain share-based payments of US$4 million. (g) Significant Accounting Policies Revenue recognition Revenue from the sale of goods is recognised when the Group satisfies its performance obligations under its contract with the customer, by transferring such goods to the customer’s control. Control is generally determined to be when risk and title to the goods passes to the customer. Bullion revenue is recognised at a point in time upon transfer of control to the customer and is measured at the amount to which the Group expects to be entitled which is based on the deal agreement. Concentrate revenue is generally recognised upon receipt of the bill of lading when the goods are delivered for shipment under CIF Incoterms. The freight service on export concentrate contracts with CIF Incoterms represents a separate performance obligation to the transfer of the concentrate product itself and is separately disclosed where material. The terms of metal in concentrate sales contracts with third parties contain provisional pricing arrangements whereby the selling price for metal in concentrate is based on prevailing spot prices on a specified future date after shipment to the customer (quotation period). Adjustments to the sales price occur based on movements in quoted market prices up to the date of final settlement. The period between provisional invoicing and final settlement is typically between one and four months. Revenue on provisionally priced sales is recognised based on the estimated fair value of the total consideration receivable and is net of deductions related to treatment and refining charges. Subsequent changes in fair value are recognised in the Income Statement each period until final settlement and presented as part of ‘Other Income/Expenses’. 128 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 6. Net Finance Costs (a) Finance Income Interest on Fruta del Norte finance facilities Other interest income Total finance income (b) Finance Costs Interest on loans Interest on leases Facility fees and other costs Discount unwind on provisions Total finance costs Net finance costs Note 25(b) 22(b) 19(b) 2023 US$m 2022 US$m 13 28 41 (103) (5) (13) (16) (137) (96) 19 6 25 (75) (4) (12) (9) (100) (75) Interest income Interest income on financial assets that are classified as fair value through profit and loss (‘FVTPL’) is accounted for on a contractual rate basis. 7. Income Tax Expense (a) Reconciliation of Prima Facie Income Tax Expense to Income Tax Expense per the Income Statement Accounting profit before tax Income tax expense calculated at 30% (2022: 30%) Recognition and de-recognition of deferred tax balances Tax effect of profit from equity accounted investments Impact of tax rates applicable outside of Australia Other items Income tax expense per the Income Statement (b) Income Tax Expense Comprises: Current income tax Current income tax expense Adjustments to current income tax of prior periods Deferred tax (1) Relating to origination and reversal of temporary differences Adjustments to deferred tax of prior periods Income tax expense per the Income Statement (1) Refer to Note 18(a) for movements in deferred taxes. 2023 US$m 2022 US$m 1,076 323 (12) (5) (16) 8 (25) 298 227 (26) 201 72 25 97 298 1,229 369 1 (12) (3) 2 (12) 357 272 (70) 202 90 65 155 357 Newcrest Annual Report 2023 8. Earnings per Share (EPS) EPS (cents per share) Basic EPS Diluted EPS Earnings used in calculating EPS Earnings used in the calculation of basic and diluted EPS: Profit after income tax attributable to owners of the parent Weighted average number of shares Share data used in the calculation of basic and diluted EPS: Weighted average number of ordinary shares used in calculating basic EPS Effect of dilutive securities: share rights Adjusted weighted average number of ordinary shares used in calculating diluted EPS 129 2023 US¢ 87.0 86.8 2023 US$m 2022 US¢ 103.4 103.1 2022 US$m 778 872 2023 No. of shares 2022 No. of shares 893,783,801 842,968,290 2,844,704 2,420,456 896,628,505 845,388,746 Rights granted to employees as described in Note 35 have been included in the determination of diluted earnings per share to the extent they are dilutive. 9. Dividends (a) Dividends declared and paid The following fully franked ordinary dividends were paid during the year: Final dividend: Paid 29 September 2022 Paid 30 September 2021 Interim dividend: Paid 30 March 2023 Paid 31 March 2022 Special dividend: Paid 30 March 2023 2023 US¢ per share 2023 US$m 2022 US¢ per share 2022 US$m 20.0 – 15.0 – 20.0 55.0 179 – 134 – 179 492 – 40.0 – 7.5 – 47.5 – 327 – 61 – 388 Participation in the dividend reinvestment plan reduced the cash amount paid during 2023 to US$477 million (2022: US$372 million). (b) Dividend proposed and not recognised as a liability Subsequent to year end, the Directors have determined to pay a final dividend for the year ended 30 June 2023 of US 20 cents per share, which will be fully franked. The dividend will be paid on 18 September 2023. The total amount of the dividend is US$179 million. Refer Note 32 for details of the Newmont Transaction and proposed special dividend. (c) Dividend franking account balance Franking credits at 30% as at 30 June 2023 available for subsequent financial years is US$443 million (2022: US$440 million). 130 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 10. Notes to the Consolidated Statement of Cash Flows (a) Operating Cash Flows Arising from Changes in: Trade and other receivables Inventories Trade and other payables Provisions Other assets and liabilities Change in working capital 2023 US$m 2022 US$m (15) (101) 36 13 (40) (107) 6 (38) (31) (4) (9) (76) (b) Debt Assumed from Business Acquisition In 2022, Newcrest assumed convertible notes liability of US$102 million on the acquisition of Pretium Resources Inc. (‘Pretium’). Subsequent to the acquisition, this liability was settled for cash of US$52 million and issue of Newcrest shares for US$50 million (refer Note 26). In 2022, Newcrest assumed a term facility liability of US$88 million on the acquisition of Pretium. Subsequent to the acquisition, this liability was fully settled in cash. Newcrest Annual Report 2023 131 RESOURCE ASSETS AND LIABILITIES This section provides information that is relevant in understanding the composition and management of the Group’s resource assets and liabilities. 11. Property, Plant and Equipment Exploration & Evaluation Expenditure US$m Deferred Feasibility Expenditure US$m Assets Under Construction US$m Production Stripping US$m Right- Of-Use Assets US$m Mine Develop- ment US$m Plant and Equipment US$m Total US$m Year ended 30 June 2023 Carrying amount at 1 July 2022 1,054 2023 At 30 June 2023 Cost Accumulated depreciation and impairment Additions during the year Expenditure written-off Depreciation Disposal of assets Foreign currency translation Reclassifications/transfers (1) Carrying amount at 30 June 2023 1,181 (80) 1,101 143 (76) – – (20) – 404 – 404 356 56 (2) – – (6) – 1,101 404 950 – 950 947 540 – – – (26) (511) 950 913 232 9,763 9,199 22,642 (549) 364 372 206 – (210) – (4) – (123) 109 111 52 – (52) – (2) – (4,219) 5,544 5,710 132 – (226) – (125) 53 (4,675) 4,524 4,352 247 – (443) (1) (83) 452 (9,646) 12,996 12,902 1,376 (78) (931) (1) (266) (6) 364 109 5,544 4,524 12,996 (1) Total reclassifications of US$6 million relates to transfers to Other Intangible Assets (Note 17). 2022 At 30 June 2022 Cost Accumulated depreciation and impairment Year ended 30 June 2022 Carrying amount at 1 July 2021 Business acquisition (Note 31) Additions during the year Expenditure written-off Depreciation Disposal of assets Foreign currency translation Reclassifications/transfers (1) Carrying amount at 30 June 2022 Exploration & Evaluation Expenditure US$m Deferred Feasibility Expenditure US$m Assets Under Construction US$m Production Stripping US$m Right- Of-Use Assets US$m Mine Develop- ment US$m Plant and Equipment US$m Total US$m 1,134 356 (80) 1,054 484 541 120 (76) – – (15) – – 356 311 – 55 (3) – – (7) – 947 – 947 807 19 663 – – – (61) (481) 811 200 9,753 8,879 22,080 (439) 372 337 – 213 – (174) – (4) – (89) 111 60 12 85 – (43) – (3) – (4,043) 5,710 (4,527) 4,352 (9,178) 12,902 4,162 1,751 74 – (194) – (197) 114 3,627 568 343 – (396) – (145) 355 9,788 2,891 1,553 (79) (807) – (432) (12) 1,054 356 947 372 111 5,710 4,352 12,902 (1) Total reclassifications of US$12 million relates to transfers to Other Intangible Assets (Note 17). 132 11. Property, Plant and Equipment continued Exploration, Evaluation and Deferred Feasibility Expenditure Exploration and Evaluation Exploration and evaluation expenditure related to areas of interest is capitalised and carried forward to the extent that: (i) Rights to tenure of the area of interest are current; and (ii) (a) Costs are expected to be recouped through successful development and exploitation of the area of interest or alternatively by sale; or (b) Where activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. Such expenditure consists of an accumulation of acquisition costs and direct exploration and evaluation costs incurred, together with an appropriate portion of directly related overhead expenditure. The carrying value of capitalised exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying value may exceed its recoverable amount. Deferred Feasibility Feasibility expenditure represents costs related to the preparation and completion of a feasibility study to enable a development decision to be made in relation to an area of interest and are capitalised as incurred. At the commencement of construction, all past exploration, evaluation and deferred feasibility expenditure in respect of an area of interest that has been capitalised is transferred to assets under construction. Accounting Judgement, Estimates and Assumptions – Exploration, Evaluation and Deferred Feasibility Expenditure Judgement is required to determine whether future economic benefits are likely, from either exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves. In addition to these judgements, the Group has to make certain estimates and assumptions. The determination of a Joint Ore Reserves Committee (‘JORC’) resource is itself an estimation process that involves varying degrees of uncertainty depending on how the resources are classified (i.e. measured, indicated or inferred). The estimates directly impact when the Group capitalises exploration and evaluation expenditure. The capitalisation policy requires Management to make certain estimates and assumptions as to future events and circumstances, in particular, the assessment of whether economic quantities of reserves will be found. Any such estimates and assumptions may change as new information becomes available. The recoverable amount of capitalised expenditure relating to undeveloped mining projects (projects for which the decision to mine has not yet been approved at the required authorisation level within the Group) can be particularly sensitive to variations in key estimates and assumptions. If a variation in key estimates or assumptions has a negative impact on recoverable amount it could result in a requirement for impairment or write-down. Assets Under Construction This expenditure includes direct costs of construction, borrowing costs capitalised during construction and an appropriate allocation of attributable overheads. After production commences, all aggregated costs of construction are transferred to mine development or plant and equipment as appropriate. Production Stripping Expenditure Stripping (waste removal) costs are incurred both during the development phase and production phase of operations. Stripping costs incurred during the development phase are capitalised as part of mine development costs. Stripping costs incurred during the production phase are generally considered to create two benefits: – the production of ore inventory in the period – accounted for as a part of the cost of producing those ore inventories; or – improved access to the ore to be mined in the future – recognised as ‘production stripping asset’, if the following criteria are met: – Future economic benefits (being improved access to the ore body) associated with the stripping activity are probable; – The component of the ore body for which access has been improved can be accurately identified; and – The costs associated with the stripping activity associated with that component can be reliably measured. The amount of stripping costs deferred is based on the ratio obtained by dividing the amount of waste tonnes mined by the quantity of gold ounces contained in the ore for each component of the mine. Stripping costs incurred in the period are deferred to the extent that the actual current period waste to contained gold ounce ratio exceeds the life of component expected waste to contained gold ounce ratio (‘life of component’) ratio. A component is defined as a specific volume of the ore body that is made more accessible by the stripping activity and is determined based on mine plans. An identified component of the ore body is typically a subset of the total ore body of the mine. Each mine may have several components, which are identified based on the mine plan. The production stripping asset is initially measured at cost, which is the accumulation of costs directly incurred to perform the stripping activity that improves access to the ore within an identified component, plus an allocation of directly attributable overhead costs. The production stripping asset is depreciated over the expected useful life of the identified component of the ore body that is made more accessible by the activity, on a units of production basis. Economically recoverable reserves are used to determine the expected useful life of the identified component of the ore body. Accounting Judgement – Production Stripping The life of component ratio is a function of the mine design and therefore changes to that design will generally result in changes to the ratio. Changes in other technical or economic parameters that impact reserves will also have an impact on the life of component ratio even if they do not affect the mine design. Changes to production stripping resulting from a change in life of component ratios are accounted for prospectively. Notes to the Consolidated Financial StatementsFor the Year Ended 30 June 2023Newcrest Annual Report 2023 133 Capital Commitments The Group’s capital expenditure commitments were US$264 million at 30 June 2023 (2022: US$307 million). Accounting Estimates and Assumptions – Units of Production Method of Depreciation/Amortisation The Group uses the units of production basis when depreciating/ amortising mine-specific assets which results in a depreciation/ amortisation charge proportional to the depletion of the anticipated remaining life of mine production. Each item’s economic life, which is assessed annually, has due regard to both its physical life limitations and to present assessments of economically recoverable reserves of the mine property at which it is located. These calculations require the use of estimates and assumptions. Any change in these estimates and assumptions are accounted for prospectively. Accounting Estimates and Assumptions – Ore Reserves and Mineral Resources The Group estimates its mineral resources and ore reserves annually at 30 June each year, and reports in the following August. The Group’s Annual Mineral Resources and Ore Reserves Statement conforms with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves by the Australasian Joint Ore Reserves Committee Code (the JORC code 2012) and National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) of the Canadian Securities Administrators. The estimated quantities of economically recoverable reserves are based upon interpretations of geological models and require assumptions to be made regarding factors such as estimates of short and long-term exchange rates, estimates of short and long-term commodity prices, future capital requirements and future operating performance. Changes in reported reserves estimates can impact the carrying value of property, plant and equipment (including exploration and evaluation assets), the provision for rehabilitation obligations, the recognition of deferred tax assets, as well as the amount of depreciation charged to the Income Statement. Mineral Rights Mineral rights comprise identifiable exploration and evaluation assets, mineral resources and ore reserves, which are acquired as part of a business combination or a joint arrangement acquisition and are recognised at fair value at date of acquisition. Mineral rights are attributable to specific areas of interest and are amortised when commercial production commences on a units of production basis over the estimated economically recoverable reserves of the mine to which the rights relate. Plant and Equipment and Mine Development Cost Plant and equipment and mine development is carried at cost less accumulated depreciation and any accumulated impairment losses. The initial cost of an asset comprises its purchase price or construction cost, and any costs directly attributable to bringing the asset into operation, the initial estimate of the rehabilitation obligation, and for qualifying assets (where relevant), borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Construction cost for mine development includes expenditure in respect of exploration, evaluation and feasibility, previously accumulated and carried forward in relation to areas of interest in which development or construction is underway. Depreciation and Amortisation Items of plant and equipment and mine development are depreciated over their estimated useful lives. The Group uses the units of production basis when depreciating mine-specific assets which results in a depreciation charge proportional to the depletion of the anticipated remaining life of mine production. Each item’s economic life has due regard to both its physical life limitations and to present assessments of economically recoverable reserves of the mine property at which it is located. For the remainder of assets, the straight line method is used, resulting in estimated useful lives between 3 – 20 years, the duration of which reflects the specific nature of the asset. Estimates of remaining useful lives, residual values and depreciation methods are reviewed annually for all major items of plant and equipment and mine development. Any changes are accounted for prospectively. When an asset is surplus to requirements or no longer has an economic value, the carrying amount of the asset is reviewed and is written down to its recoverable amount or derecognised. 134 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 12. Impairment of Non-Financial Assets (a) Impairment Testing Impairment tests are performed when there is an indicator of impairment or impairment reversal and performed at least annually for cash generating units (‘CGUs’) with goodwill recognised as an asset. Newcrest conducts a review of the key drivers of the recoverable amount of CGUs annually, which is used as a source of information to determine whether there is an indicator of impairment or reversal of previously recognised impairments. Other factors, such as changes in assumptions in future commodity prices, exchange rates, production rates, input costs and impacts of carbon price scenarios are also monitored to assess for indications of impairment or reversal of previously recognised impairments. Where an indicator of impairment or impairment reversal exists, a detailed estimate of the recoverable amount is determined. CGUs represent a grouping of assets at the lowest level for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Generally, this results in the Group evaluating its CGUs as individual mining operations, which is consistent with the Group’s representation of operating segments. During the year ended 30 June 2023, the Group reviewed its future gold and copper price estimates, exchange rates and discount rate assumptions. During the year there were indicators of impairment at Lihir and indicators of impairment reversal at Telfer. Consequently, a detailed estimate of the recoverable amounts of both CGUs was undertaken. A range of valuation outcomes were assessed having regard to scenarios and sensitivity analysis conducted on a number of assumptions. As a result of this analysis, it was concluded that no impairment was required for Lihir and no impairment reversal was required for Telfer as at 30 June 2023. Goodwill is recognised in the Red Chris CGU following its acquisition in August 2019. A detailed estimate was undertaken of the recoverable amount of Red Chris as at 30 June 2023 and it was concluded no impairment was required. As a result of the Brucejack acquisition (refer Note 31) in 2022, goodwill of US$690 million was recognised. The goodwill reflects the requirement to record deferred tax balances for the difference between the assigned values and the tax bases of assets acquired and liabilities assumed in the business combination. A detailed estimate was undertaken of the recoverable amount of Brucejack at 30 June 2023 and it was concluded no impairment was required. The Scheme Implementation Deed (‘SID’) entered with Newmont on 15 May 2023 to acquire 100% of Newcrest’s issued shares (refer Note 32) represented a premium of 30% to book value based on closing prices at 30 June 2023. Due to this, there was an indicator of impairment reversal at the enterprise level. However, as the SID did not ascribe the consideration to specific CGUs, this did not impact on the Group’s assessment on whether there was an indicator of impairment reversal for Lihir or Telfer. (b) Basis of Impairment and Impairment Reversal Calculations An impairment loss is recognised when a CGU’s carrying amount exceeds its recoverable amount. The recoverable amount of each CGU has been estimated on the basis of fair value less costs of disposal (‘Fair Value’). The costs of disposal have been estimated based on prevailing market conditions. For CGUs that have previously recognised an impairment loss, an impairment reversal is recognised for non-current assets (other than goodwill) when the Fair Value indicates that the previously recognised impairment has been reversed. Such a reversal is limited to the lesser of the amount that would not cause the carrying amount to exceed its recoverable amount or the value that would have been determined (net of depreciation) had no impairment loss been recognised. Fair Value is estimated based on discounted cash flows using market-based commodity price and exchange rate assumptions, estimated quantities of recoverable minerals, production levels, operating costs and capital requirements, based on the CGU’s latest life of mine (‘LOM’) plans. For business planning, including new acquisitions and key capital expenditures: – Carbon price scenarios are included in sensitivity analysis at $50 per tonne of CO2-e, and at $100 a tonne of CO2-e for jurisdictions where there is no regulated carbon price (these shadow carbon prices enable Newcrest to simplistically scenario test the potential impact on investments); – Telfer includes the estimated cost associated with carbon emissions under the Australian Federal Government Safeguard Mechanism; and – Red Chris and Brucejack include the estimated cost associated with British Columbia’s Carbon Tax. In certain cases, where multiple investment options and economic input ranges exist, Fair Value may be determined from a combination of two or more scenarios that are weighted to provide a single Fair Value that is determined to be the most indicative. When plans and scenarios used to estimate Fair Value do not fully utilise the existing mineral resource for a CGU, and options exist for the future extraction and processing of all or part of those resources, an estimate of the value of unmined resources, in addition to an estimate of value of exploration potential, is included in the estimation of Fair Value. The Fair Value estimates are considered to be level 3 fair value measurements (as defined by accounting standards, refer Note 25(a)) as they are derived from valuation techniques that include inputs that are not based on observable market data. The Group considers the inputs and the valuation approach to be consistent with the approach taken by market participants. Estimates of quantities of recoverable minerals, production levels, operating costs and capital requirements are sourced from the Group’s planning and budgeting process, including LOM plans, latest short-term forecasts and CGU-specific studies. (c) Key Judgements, Estimates and Assumptions Accounting Estimates and Assumptions – Fair Value of CGUs Significant judgements, estimates and assumptions are required in determining estimates of Fair Value. This is particularly so in the assessment of long life assets. It should be noted that the CGU Fair Values are subject to variability in key assumptions including, but not limited to, gold and copper prices, exchange rates, discount rates, production profiles, operating and capital costs and estimates of the value of unmined resources and exploration potential. A change in one or more of the assumptions used to estimate Fair Value could result in a change in a CGU’s Fair Value. Newcrest Annual Report 2023 135 The table below summarises the key assumptions used in the carrying value assessments as at 30 June 2023, and for comparison also provides the equivalent assumptions used in 2022: As at 30 June 2023 As at 30 June 2022 2024 2025 2026 2027 Long term (2028+) 2023 2024 2025 2026 Long term (2027+) Assumptions for financial year Gold (US$ per ounce) $1,850 $1,800 $1,700 $1,600 $1,500 $1,750 $1,650 $1,550 $1,550 $1,500 Copper (US$ per pound) $3.90 $3.90 $3.80 $3.70 $3.50 $3.70 $3.60 $3.50 $3.50 $3.50 AUD:USD exchange rate CAD:USD exchange rate USD:PGK exchange rate $0.71 $0.72 $0.74 $0.74 $0.75 $0.73 $0.75 $0.75 $0.75 $0.75 $0.76 $0.78 $0.78 $0.78 $0.77 $0.80 $0.80 $0.80 $0.80 $0.80 K3.52 K3.52 K3.52 K3.52 K3.52 K3.52 K3.52 K3.52 K3.52 K3.52 Commodity prices and exchange rates estimation approach Commodity price and foreign exchange rates are estimated with reference to external market forecasts and reviewed at least annually. The rates applied have regard to observable market data including spot and forward values, and to market analysis including equity analyst estimates. Metal prices Newcrest has updated its US dollar gold price estimates and its US dollar copper prices applied as at 30 June 2023. These changes were to align with observable market data, taking into account spot prices during the 2023 financial year and Newcrest’s analysis of observable market forecasts for future periods. Newcrest has maintained its long-term gold price. AUD:USD exchange rate The AUD:USD exchange rate estimates for the 2024 to 2027 financial years have decreased from 2022, reflecting spot prices during the 2023 financial year and Newcrest’s analysis of observable market forecasts for future periods. Newcrest has maintained its long-term AUD:USD exchange rate estimates. CAD:USD exchange rate Newcrest has decreased its CAD:USD exchange rate estimates for all future periods, reflecting spot prices during the 2023 financial year and Newcrest’s analysis of observable market forecasts for future periods. USD:PGK exchange rate Newcrest has maintained its USD:PGK exchange rate estimates for all future periods, reflecting spot prices during the 2023 financial year and Newcrest’s analysis of observable market forecasts for future periods. Discount rate In determining the Fair Value of CGUs, the future cash flows were discounted using rates based on the Group’s estimated real after tax weighted average cost of capital (‘WACC’) for each functional currency used in the Group, with an additional premium applied having regard to the geographic location of, and specific risks associated with the CGU. CGU Cadia, Telfer Lihir Red Chris, Brucejack Functional Currency AUD USD CAD 2023 4.50% 6.50% 4.50% 2022 4.50% 6.00% 4.50% The Group uses a capital asset pricing model to determine its estimated real after tax WACC. Newcrest’s discount rate for Lihir was updated to 6.50% at 30 June 2023, predominantly driven by an increase in US government bond rates. Newcrest’s discount rate for other CGUs are unchanged from those applied at 30 June 2022. Production activity and operating and capital costs LOM production activity and operating and capital cost assumptions are based on the Group’s latest forecasts and longer-term LOM plans. These projections can include expected operating performance improvements reflecting the Group’s objectives to maximise free cash flow, optimise and reduce operational activity, apply technology and improve capital and labour productivity. 136 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 12. Impairment of Non-Financial Assets continued (d) Sensitivity Analysis Impairments have previously been recognised for the Lihir CGU in 2013 and 2014. Following the review of Lihir’s recoverable amount as at 30 June 2023, and in recognising no requirement for asset impairment or impairment reversal, the Group has determined that the Lihir carrying amount as at 30 June 2023 is within a range that approximates its Fair Value. Lihir’s Fair Value has high sensitivity to the USD gold price, operating cost, and capital cost and changes in these assumptions can have material impacts relative to Lihir’s Fair Value. Impairments have previously been recognised for the Telfer CGU in 2013, 2014 and 2018 and an impairment reversal was recognised for Telfer in 2015. Following the review of Telfer’s recoverable amount as at 30 June 2023, and in recognising no requirement for asset impairment or impairment reversal, the Group has determined that the Telfer carrying amount as at 30 June 2023 is within a range that approximates its Fair Value. Telfer remains a complex, low-grade, mid-to-high cost operation with a relatively high annual gold production level. Telfer’s Fair Value has high sensitivity to the AUD gold price, operating cost, capital cost and reserve and resource model conversion assumptions and changes in these assumptions can have material impacts relative to Telfer’s Fair Value. Any variation in the key assumptions used to determine the Fair Value of the Lihir and Telfer CGUs would result in a change of the estimated Fair Value. If the variation in assumption had a negative impact on Fair Value, it could indicate a requirement for impairment of non-current assets. If the variation in assumption had a positive impact on Fair Value, it could indicate a requirement for an impairment reversal of CGUs (where applicable). It is estimated that the following reasonably possible changes in the key assumptions would have the following approximate impact (increase or decrease) on the Fair Value of each of these CGUs in its functional currency as at 30 June 2023: $ million in functional currency US$100 per ounce change in gold price US$0.10 per pound change in copper price 0.25% increase/decrease in discount rate $0.05 increase/decrease in AUD:USD rate $0.05 increase/decrease in CAD:USD rate $0.10 increase/decrease in USD:PGK rate 5% increase/decrease in operating costs from that assumed Lihir US$ 910 n/a 105 290 n/a 100 355 Telfer A$ 75 5 minor 90 n/a n/a 60 Red Chris C$ Brucejack C$ 165 115 70 n/a 395 n/a 115 305 n/a 35 n/a 320 n/a 85 It must be noted that each of the sensitivities above assumes that the specific assumption moves in isolation, whilst all other assumptions are held constant. In reality, a change in one of the aforementioned assumptions may accompany a change in another assumption which may have an offsetting impact (for example, a decline in the US dollar gold price accompanied with a decline in the Australian dollar compared to the US dollar). Action is also usually taken by Management to respond to adverse changes in economic assumptions that may mitigate the impact of any such change. 13. Inventories Current Ore stockpiles Gold in circuit Bullion and concentrate Materials and supplies Total current inventories (1) Non-Current Ore stockpiles Total non-current inventories (1) (1) Total inventories include inventories held at net realisable value of US$14 million (2022: US$15 million). 2023 US$m 2022 US$m 79 48 78 410 615 1,116 1,116 119 35 96 383 633 976 976 Newcrest Annual Report 2023 137 Ore stockpiles, gold in circuit, bullion and concentrate are physically measured or estimated and valued at the lower of cost and net realisable value. Cost represents the weighted average cost and includes direct costs and an appropriate portion of fixed and variable production overhead expenditure, including depreciation and amortisation, incurred in converting materials into finished goods. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Ore stockpiles which are not scheduled to be processed in the twelve months after the reporting date are classified as non-current inventory. The Group believes the processing of these stockpiles will have a future economic benefit to the Group and accordingly values these stockpiles at the lower of cost and net realisable value. Materials and supplies are valued at the lower of cost and net realisable value. Any allowance for obsolescence is determined by reference to stock items identified. Accounting Judgement and Estimate – Net Realisable Value of Ore Stockpiles The computation of net realisable value for ore stockpiles involves significant judgements and estimates in relation to timing and cost of processing, commodity prices, foreign exchange rates, recoveries and the timing of sale of the bullion and concentrate produced. A change in any of these assumptions will alter the estimated net realisable value and may therefore impact the carrying value of ore stockpiles. 14. Trade and Other Receivables Current Metal in concentrate receivables GST receivable Receivable from joint venture partners (1) Other receivables Total current receivables Non-Current Receivable from joint venture partners (1) Other receivables Total non–current receivables 2023 US$m 2022 US$m 143 37 27 47 254 79 30 109 72 92 26 48 238 76 – 76 (1) Represents right to reimbursement from the Red Chris joint venture partner for its share of Red Chris’ liabilities and a receivable from the Havieron joint venture partner. Metal in concentrate receivables are initially and subsequently measured at fair value and are generally expected to settle within one to four months. Fair value movements are recognised in the Income Statement and presented as part of ‘Other Income/Expenses’. GST and other receivables are initially measured at fair value then subsequently at amortised cost, less an allowance for doubtful debts. GST and other current receivables are expected to settle within one to twelve months. 15. Other Assets Current Prepayments and other Total current other assets Non-Current Prepayments and other Non-current tax assets Total non–current other assets 2023 US$m 2022 US$m 80 80 2 43 45 43 43 3 39 42 138 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 16. Goodwill Opening balance Business acquisition (Note 31) Foreign currency translation Closing balance Goodwill is attributable to the following CGUs: – Red Chris – Brucejack 2023 US$m 2022 US$m 704 – (18) 686 17 669 686 19 690 (5) 704 18 686 704 Goodwill is measured at cost and is not amortised. It is tested annually for impairment (refer Note 12). Goodwill arose upon the acquisition of Red Chris in 2020 and Brucejack in 2022. It reflected the requirement to record deferred tax balances for the difference between the assigned values and the tax bases of assets acquired and liabilities assumed in those business acquisitions. 17. Other Intangible Assets Information Systems Development Cost Accumulated amortisation and impairment 2023 US$m 240 (208) 32 2022 US$m 237 (200) 37 Costs incurred in developing information technology systems and acquiring software are capitalised as intangible assets. Amortisation is calculated on a straight line basis over the useful life, ranging from three to seven years. Newcrest Annual Report 2023 139 18. Deferred Tax (a) Movement in Deferred Taxes 2023 Deferred tax relates to the following: – Revenue losses recognised – Property, plant and equipment – Provisions – Other Net deferred taxes Reflected in the statement of financial position as follows: Deferred tax assets Deferred tax liabilities Net deferred taxes 2022 Deferred tax relates to the following: – Revenue losses recognised – Property, plant and equipment – Provisions – Other Net deferred taxes Reflected in the statement of financial position as follows: Deferred tax assets Deferred tax liabilities Net deferred taxes Opening Balance at 1 July US$m Acquisi- tions US$m (Charged)/ credited to income US$m (Charged)/ credited to equity US$m Trans- lation US$m Closing Balance at 30 June US$m 142 (2,270) 55 (139) (2,212) – – – – – 54 (1,372) 54 (46) (1,310) – (791) – (33) (824) 18 (59) 2 (40) (79) 94 (147) 4 (12) (61) – – – – – – – – (49) (49) (4) 31 (1) 1 27 (6) 40 (3) 1 32 156 (2,298) 56 (178) (2,264) 50 (2,314) (2,264) 142 (2,270) 55 (139) (2,212) 56 (2,268) (2,212) 140 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 18. Deferred Tax continued (b) Unrecognised Deferred Tax Assets Deferred tax assets have not been recognised in respect of: – capital losses with a tax effect of US$101 million (2022: US$124 million); and – revenue losses and temporary differences with a tax effect of US$61 million (2022: US$73 million) because it is not probable that the Group will have sufficient future assessable income and/or capital gains available against which the deferred tax asset could be utilised. This is partly due to restrictions that limit the extent to which the losses can be applied to future taxable income in future periods. (c) Tax Consolidation The Company and its wholly-owned Australian subsidiaries are part of a tax consolidated group. Newcrest Mining Limited is the head entity of the tax consolidated group. The tax losses attributable to the Australian entities are available for offsetting against future profits of the tax consolidated group. These tax losses are subject to restrictions that limit the extent to which the losses can be applied against future taxable income. Notwithstanding these restrictions, these losses do not have an expiry date. (d) Significant Accounting Policies Current Income Tax Current tax assets and liabilities for the current and prior year are measured at the amount expected to be recovered from or paid to the taxation authorities based on the current year’s taxable income. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date. Deferred Income Tax Deferred tax is accounted for using the balance sheet liability method. Temporary differences are differences between the tax base of an asset or liability and its carrying amount in the statement of financial position. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. Deferred tax liabilities are recognised for taxable temporary differences. Deferred tax assets are recognised for deductible temporary differences, carry-forward of unused tax credits and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised. Deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them: – Arise from the initial recognition of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. – Are associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured based on the expected manner of recovery of the carrying value of an asset or liability. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised, or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Current and deferred taxes attributable to amounts recognised directly in equity are also recognised directly in equity. Accounting Judgements, Estimates and Assumptions – Recovery of Deferred Tax Assets Judgement is required to determine whether deferred tax assets are recognised in the statement of financial position. Deferred tax assets, including those arising from un-utilised tax losses, require Management to assess the likelihood that the Group will generate sufficient taxable earnings in future periods in order to recognise and utilise those deferred tax assets. Judgement is also required in respect of the expected manner of recovery of the value of an asset or liability (which will then impact the quantum of the deferred tax assets or deferred tax liabilities recognised) and the application of existing tax laws in each jurisdiction. Estimates of future taxable income are based on forecast cash flows from operations and existing tax laws in each jurisdiction. These assessments require the use of estimates and assumptions such as exchange rates, commodity prices and operating performance over the life of the assets. To the extent that cash flows and taxable income differ significantly from estimates, the ability of the Group to realise the net deferred tax assets reported at the reporting date could be impacted. Additionally, future changes in tax laws in the jurisdictions in which the Group operates could limit the ability of the Group to obtain tax deductions and recover/utilise deferred tax assets in future periods. Newcrest Annual Report 2023 19. Provisions Current Employee benefits Mine rehabilitation Other Total current provisions Non-Current Employee benefits Mine rehabilitation Total non-current provisions 141 Note 2023 US$m 2022 US$m (a) (b) (c) (a) (b) 152 7 17 176 13 498 511 143 7 16 166 9 482 491 Provisions (other than those relating to employee benefits) are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. (a) Employee Benefits Liabilities for wages and salaries, annual leave and any other employee benefits are measured at the amounts expected to be paid when the liabilities are settled. Amounts expected to settle within twelve months are recognised in ‘Current Provisions’ (for annual leave and salary at risk) and ‘Trade and Other Payables’ (for all other employee benefits) in respect of employees’ services up to the reporting date. Costs incurred in relation to non-accumulating sick leave are recognised when leave is taken and are measured at the rates paid or payable. The liability for long service leave and other long-term benefits is measured at the present value of the estimated future cash outflows resulting from employees’ services provided up to the reporting date. Long-term benefits not expected to be settled within twelve months are discounted using the rates attaching to high quality corporate bonds at the reporting date, which most closely match the terms of maturity of the related liability. (b) Mine Rehabilitation The Group records the present value of the estimated cost of legal and constructive obligations to rehabilitate locations where activities have occurred which have led to a future obligation to make good. The nature of rehabilitation activities includes dismantling and removing structures, rehabilitating mine sites, dismantling operating facilities, closure of tailings and waste sites and restoration, reclamation and revegetation of affected areas. Typically, the obligation arises when the asset is installed or the ground/environment is disturbed at the mining location. When the liability is initially recorded, the present value of the estimated cost is capitalised as part of the carrying amount of the related mining assets. Over time, the discounted liability is increased for the change in the present value based on a discount rate that reflects current market assessments. Additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation liability when incurred. Although the ultimate cost to be incurred is uncertain, the Group has estimated its costs based on feasibility and engineering studies using current restoration standards and techniques. 142 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 19. Provisions continued (b) Mine Rehabilitation continued The unwinding of the effect of discounting the provision is recorded as a finance cost in the Income Statement. The carrying amount capitalised as a part of mining assets is depreciated/amortised over the life of the related asset. Costs incurred that relate to an existing condition caused by past operations but do not have a future economic benefit are expensed as incurred. Accounting Estimate – Mine Rehabilitation Provision Significant estimates and assumptions are required in determining the provision for mine rehabilitation as there are many transactions and other factors that will affect the ultimate liability payable to rehabilitate the mine sites. Factors that may affect this liability include: changes in technology, changes in regulations, price increases, physical impacts of climate change, changes in timing of cash flows which are based on life of mine plans and changes in discount rates. When these factors change or become known in the future, such differences will impact the mine rehabilitation provision in the period in which they change or become known. Movements in Mine Rehabilitation provision Opening balance Business acquisition (Note 31) Movements in economic assumptions and timing of cash flows Change in cost estimates (1) Paid/utilised during the year Unwinding of discount (Note 6(b)) Foreign currency translation Closing balance Split between: Current Non-current 2023 US$m 489 – (37) 54 (6) 16 (11) 505 7 498 505 2022 US$m 561 27 (94) 20 (5) 9 (29) 489 7 482 489 (1) The change for 2023 primarily relates to an increase in estimated closure costs at Cadia, Lihir and Brucejack, following an update to their respective mine closure plans. The change for 2022 primarily relates to an increase in estimated closure costs at Red Chris, following an update to Red Chris’s mine closure plan. (c) Other Provisions Other provisions comprise of community obligations and other miscellaneous items. Newcrest Annual Report 2023 143 CAPITAL STRUCTURE AND FINANCIAL RISK MANAGEMENT This section outlines the Group’s capital and financial management policies and significant capital and financial risk management activities that have been implemented during the year. This includes the Group’s exposure to various risks and how these could affect the Group’s financial position and performance, as well as how the Group is managing those risks. 20. Capital Management and Financial Objectives Newcrest’s capital structure consists of cash and cash equivalents, equity and debt (borrowings and lease liabilities). Newcrest’s financial objectives are to meet all financial obligations, maintain a strong balance sheet to withstand cash flow volatility, be able to invest capital in value-creating opportunities, and to provide returns to shareholders. Newcrest looks to maintain an appropriately conservative level of balance sheet leverage. From a financial policy perspective, Newcrest looks to: – Target an investment grade credit rating throughout the cycle; – Maintain a leverage ratio (Net Debt to EBITDA) of less than 2.0 times; – Maintain a gearing ratio of below 25%; and – Maintain cash and committed undrawn bank facilities of at least US$1.5 billion, with approximately one-third of that amount in the form of cash. At 30 June, the Group’s position in relation to these metrics were: Metric Credit rating (S&P/Moody’s) Leverage ratio (Net debt to EBITDA) Gearing ratio Cash and committed undrawn facilities (US$) Policy ‘looks to’ be Investment grade Less than 2.0 times Below 25% At least $1.5bn, of which ~ 1/3 is in the form of cash Detail of the calculation of the capital management performance ratios is provided below: Leverage Ratio Net debt (Note 21) EBITDA (Note 4) Leverage ratio 2023 2022 BBB/Baa2 BBB/Baa2 0.7 11.1 % 0.6 10.2% $2.29bn ($586m cash) $2.42bn ($565m cash) 2023 US$m 1,459 2,063 2022 US$m 1,325 2,054 0.7 times 0.6 times Leverage Ratio is calculated as net cash or net debt at the end of the reporting period divided by the trailing 12 month EBITDA. Refer to Note 4, Segment Information, for the definition of EBITDA. Gearing Ratio Net debt (Note 21) Equity Total capital (Net debt/(cash) and equity) Gearing ratio 2023 US$m 1,459 11,712 13,171 11.1% 2022 US$m 1,325 11,665 12,990 10.2% Gearing ratio is calculated as net cash or net debt at the end of the reporting period divided by net cash or net debt plus equity. 144 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 21. Net Debt Newcrest obtains access to funds from financial institutions and debt investors in the form of committed revolving facilities and corporate bonds. As at 30 June 2023, all of Newcrest’s borrowings were unsecured. Borrowings are initially recognised at fair value and subsequently at amortised cost. Borrowings are net of transaction costs incurred. Borrowings are classified as non-current liabilities where Newcrest has an unconditional right to defer settlement or is not due to be settled for at least 12 months from the year end. Cash and cash equivalents comprise cash at bank and short-term deposits. Net Debt Corporate bonds Bilateral bank debt Less: capitalised transaction costs on facilities Total non-current borrowings Total borrowings Lease liabilities (current) Lease liabilities (non-current) Total lease liabilities Total Debt Cash and cash equivalents Net debt Note (a) (b) (d) 2023 US$m 1,650 298 (13) 1,935 1,935 45 65 110 2,045 (586) 1,459 2022 US$m 1,650 143 (14) 1,779 1,779 47 64 111 1,890 (565) 1,325 (a) Corporate Bonds (‘Notes’) In each of November 2011 and October 2012, Newcrest issued US$1,000 million in US dollar Notes. Following repurchases in prior periods, US$500 million remains on issue. In May 2020, Newcrest issued a further US$1,150 million in US dollar Notes. All Notes were issued in accordance with Rule 144A and Regulation S of the Securities Act of the United States. The Notes consist of: Maturity May 2030 November 2041 May 2050 Term (years) 10 30 30 Coupon Rate 3.25% 5.75% 4.20% 2023 US$m 650 500 500 1,650 2022 US$m 650 500 500 1,650 (b) Bilateral Bank Debt As at 30 June 2023, the Group had bilateral bank debt facilities of US$2,000 million (2022: US$2,000 million) with 13 banks (2022: 13 banks). These are committed unsecured revolving facilities, individually negotiated and documented with each bank but with similar terms and conditions. The facilities are on normal terms and conditions and include certain financial covenants. Up to 30 June 2023, interest is based on LIBOR plus a margin, which varies amongst the lenders. Due to the LIBOR reference rate ceasing on 30 June 2023, interest will be based on USD Term Secured Overnight Financing Rate, plus a credit spread and margin from 1 July 2023. The maturity date profile of these facilities is shown in the table below: Facility Maturity (financial year ending) June 2024 June 2026 2023 US$m 1,077 923 2,000 2022 US$m 1,077 923 2,000 Newcrest Annual Report 2023 (c) Financing Facilities The Group has access to the following unsecured financing facilities at the end of the financial year. 2023 Corporate bonds Bilateral bank debt facilities 2022 Corporate bonds Bilateral bank debt facilities (d) Movement in Debt Movement in total debt during the year was as follows: Debt Opening balance Movements: Cash movements: Drawdown of bilateral bank debt facilities Repayment of bilateral bank debt facilities Payment of lease principal Repayment – Convertible notes Repayment – Term facility Total cash movements Non-cash movements Business acquisition – Convertible notes Business acquisition – Term facility Business acquisition – Lease liabilities Repayment of Convertible notes – non-cash (1) Other non-cash movements (2) Total non-cash movements Net movement Closing balance 145 Facility Utilised US$m Facility Unutilised US$m Facility Limit US$m 1,650 298 1,948 1,650 143 1,793 Note 31 31 31 10(b) – 1,702 1,702 – 1,857 1,857 2023 US$m 1,890 1,659 (1,504) (49) – – 106 – – – – 49 49 155 1,650 2,000 3,650 1,650 2,000 3,650 2022 US$m 1,697 860 (717) (43) (52) (88) (40) 102 88 11 (50) 82 233 193 2,045 1,890 (1) Represents issuance of Newcrest’s ordinary shares for settlement of Pretium’s convertible notes during the prior period. (2) Represents non-cash movements in lease liabilities (including additions, modifications and terminations), amortisation of transaction costs and foreign exchange movements during the period. 146 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 22. Leases The Group has lease contracts for various items of property, plant and equipment used within its operations and office premises. Leases for property includes the Group’s office premises and have lease terms ranging from 1 to 10 years. Leases for operations includes equipment hire and contractor provided equipment and have lease terms ranging between 1 to 5 years. (a) Right-of-use Assets The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are presented in property, plant and equipment and are subject to impairment assessment. Refer to Note 11 for the quantum of the Group’s right-of-use assets. (b) Lease Liabilities Below is a summary of the movement in the Group’s lease liabilities. Lease Liabilities Opening balance Movements: Additions during the year Lease modifications Business acquisition (Note 31) Lease payments Interest accretion Foreign currency translation Net movement Closing balance Split between: Current Non-current 2023 US$m 2022 US$m 111 28 25 – (58) 5 (1) (1) 110 45 65 110 62 66 20 11 (49) 4 (3) 49 111 47 64 111 At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs. Newcrest Annual Report 2023 147 The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset. Lease components are separately identified to non-lease components of contracts where applicable. (c) Short-term Leases and Leases of Low-value Assets The Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the low-value asset recognition exemption to leases that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term. During the year, the Group incurred short-term lease expenses of US$41 million (2022: US$20 million). The value of leases of low-value assets was not material. Furthermore, the Group’s commitment for short-term leases not provided for in the financial statements at the reporting date was not material. (d) Other The Group is party to certain service contracts that contain contractor provided equipment leases. These leases include mix of payments arrangements, including both fixed and productivity-based payments based on performance. During the year, the Group incurred US$16 million (2022: US$16 million) of productivity-based lease payments that were not required to be included in the measurement of the lease liability. Accounting Judgement and Estimate – Leases Judgement is required when assessing whether a contract is or contains a lease. In exercising this judgement, the Group refers to the rights conferred to it in the contract, such as whether it conveys the right to control, or the right to direct the use of an identified asset. Judgement is also required in determining the lease term, in particular for service contracts that contain contractor provided equipment leases. The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. 23. Other Financial Assets and Liabilities Other Financial Assets/(Liabilities) Fuel forward contracts FdN finance facilities Power purchase agreement Total other financial assets – current FdN finance facilities Power purchase agreement Total other financial assets – non-current Telfer AUD gold hedges Fuel forward contracts Total other financial liabilities – current Note 2023 US$m 2022 US$m (b) (c) (b) (c) – 55 5 60 245 106 351 (24) (9) (33) 31 110 – 141 345 109 454 (68) – (68) 148 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 23. Other Financial Assets and Liabilities continued (a) Significant Accounting Policies (i) Non-derivative financial assets Initial recognition and measurement The Group holds financial assets in the form of facilities agreements and offtake arrangements. These assets have been classified as fair value through profit and loss (‘FVTPL’) as the cash flows arising are subject to variability due to commodity pricing and production volumes and do not meet the criteria for amortised cost or FVOCI classification. Financial assets at FVTPL are initially recognised at fair value. The initial fair value of acquired financial assets is their purchase price. Directly attributable transaction costs are expensed as incurred in the statement of profit or loss. Subsequent measurement Financial assets at FVTPL are measured at fair value as at each reporting date through profit and loss. The Group’s policy on financial assets at FVTPL is to separately present: – Interest income calculated on a contractual rate basis; and – All other changes in fair value. (ii) Fair value measurement The Group measures financial assets and financial liabilities at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All financial assets and financial liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy described in Note 25(a). (iii) Derivative financial instruments and hedging The Group uses derivative financial instruments to manage certain market risks. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in the Income Statement immediately unless the derivative is designated and effective as a hedging instrument, in which event, the timing of recognition in the Income Statement depends on the nature of the hedge relationship. For instruments in hedging transactions, the Group formally designates and documents the relationship between hedging instruments and hedged items at the inception of the transaction, as well as its risk management objective and strategy for undertaking various hedge transactions. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in Other Comprehensive Income (‘OCI’) and accumulated in the Hedge Reserve in equity. Any gain or loss relating to an ineffective portion is recognised immediately in the Income Statement. Amounts accumulated in the Hedge Reserve are transferred to the Income Statement in the periods when the hedged item affects the Income Statement, for instance when the forecast sale that is hedged takes place. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, if it no longer qualifies for hedge accounting or if the Group changes its risk management objective for the hedging relationship. At that point in time, any cumulative gain or loss on the hedging instrument recognised via OCI remains deferred in the Hedge Reserve until the original forecasted transaction occurs. When the forecasted transaction is no longer expected to occur, the cumulative gain or loss that was deferred in the Hedge Reserve is recognised immediately in the Income Statement. If a hedging instrument being used to hedge a commitment for the purchase or sale of gold or copper is redesignated as a hedge of another specific commitment and the original transaction is still expected to occur, the gains and losses that arose on the hedging instrument prior to its redesignation are deferred and included in the measurement of the original purchase or sale when it takes place. If the hedging instrument is redesignated as a hedge of another commitment because the original purchase or sale transaction is no longer expected to occur, the gains and losses that arose on the hedge prior to its redesignation are recognised in the Income Statement at the date of the redesignation. (b) Fruta del Norte Finance Facilities In April 2020, Newcrest acquired the gold prepay and stream facilities and an offtake agreement in respect of Lundin Gold Inc.’s (‘Lundin Gold’) Fruta del Norte (‘FdN’) mine in Ecuador for US$460 million. The Group has determined that the agreements represent financial assets, to be measured at fair value with changes in the fair value being recorded in profit or loss. Further detail on the fair value measurement process is provided in Note 25(b). Details of the agreements are as follows: Gold Prepay Credit Agreement (‘GPCA’) The GPCA is a non-revolving credit facility with a face value of US$150 million to be repaid in cash based on the value of 218,500 oz of gold (as adjusted for the risk collar described below). Key terms of the agreement are: – Repayment through 19 quarterly cash payments equivalent to 11,500 oz of gold (with the volume adjusted for the risk collar) at the price of gold starting from December 2020 and concluding in June 2025. – The risk collar is based on an average gold price for three months leading to any quarterly payment. Should this average gold price be > US$1,436 per ounce or < US$1,062 per ounce, the amount of the next quarterly payment is reduced or increased, respectively by 15%. In January 2023, Newcrest received early repayment of the GPCA from Lundin Gold Inc. representing the remaining ten quarterly payments from March 2023. The GPCA facility was subsequently terminated. Stream Credit Facility Agreement (‘SCFA’) The SCFA is a non-revolving credit facility with a face value of US$150 million to be repaid in cash based on the FdN mine gold and silver production. The amount of each monthly payment is the sum of the following: – 7.75% of refined gold processed in the prior month, multiplied by the excess of the gold price over US$400 per ounce (subject to an inflationary adjustment), until 350,000 ounces is reached; and – 100% of refined silver processed in the prior month, multiplied by the excess of the silver price over US$4 per ounce (subject to an inflationary adjustment), until 6 million ounces is reached. Newcrest Annual Report 2023 149 Lundin Gold also has the option to repay (i) 50% of the remaining Stream Credit Facility on 30 June 2024 for $150 million and/or (ii) the other 50% of the remaining Stream Credit Facility on 30 June 2026 for $225 million. (a) Commodity and Other Price Risks (i) Gold and copper price Both the GPCA and SCFA have a stated interest rate of 7.5%. Repayments in excess of the principal and stated interest rate amount is classified as other income. Offtake Agreement The offtake agreement allows Newcrest to acquire 50% of refined gold production from FdN, up to a maximum of 2.5 million ounces at a price determined based on delivery dates and a defined quotational period. Purchases of gold under the offtake agreement and the subsequent sale are recognised in other income/expense. (c) Power Purchase Agreement In December 2020, Newcrest entered into a 15-year renewable Power Purchase Agreement (‘PPA’) in relation to Cadia. The PPA will act as a partial hedge against future electricity price increases and will provide Newcrest with access to large scale generation certificates which the Group intends to surrender to achieve a reduction in its greenhouse gas emissions. The Group has determined that the PPA represents a derivative financial instrument and has designated this as a cash flow hedging instrument. It has been accounted for in accordance with the accounting policy outlined in Note 23(a)(iii). Potential sources of hedge ineffectiveness that may affect the hedging relationship during the term are variations to generation volume assumptions, retail electricity arrangements, credit risk and counterparty/construction risk. Detail on the fair value measurement process is provided in Note 25(c). 24. Financial Risk Management Newcrest is exposed to a number of financial risks, by virtue of the industry and geographies in which it operates and the nature of the financial instruments it holds. The key risks that could adversely affect Newcrest’s financial assets, liabilities or future cash flows are: a) Commodity and other price risks b) Foreign currency risk c) Liquidity risk d) Interest rate risk e) Credit risk Further detail of each of these risks is provided below, including Management’s strategies to manage each risk. These strategies are executed subject to Board approved policies and procedures and administered by Group Treasury. All of Newcrest’s gold and copper production is sold into global markets. The market prices of gold and copper are key drivers of Newcrest’s capacity to generate cash flow. Newcrest is predominantly an unhedged producer and provides its shareholders with exposure to changes in the market price of gold and copper. The fair valuation of the FdN finance facilities, which is accounted for at fair value through profit or loss, is impacted by fluctuations in gold prices. Refer to Note 25(b). Provisionally priced concentrate sales and gold and copper forward sales contracts The terms of metal in concentrate sales contracts with third parties contain provisional pricing arrangements whereby the selling price for metal in concentrate is based on prevailing spot prices on a specified future date after shipment to the customer (quotation period or ‘QP’). The QP exposure is typically between one and four months. Revenue of provisionally priced sales is recognised based on the estimated fair value of the total consideration receivable. Subsequent changes in fair value are recognised in the Income Statement each period until final settlement and presented as part of ‘Other Income/Expenses’. Refer to Note 5(d). As at 30 June 2023, 199,000 gold ounces and 46,000 copper tonnes were subject to QP adjustment (2022: 236,000 gold ounces and 48,000 copper tonnes). Partial hedging of Telfer future gold sales Newcrest has put in place hedges for a portion of the Telfer mine’s future planned gold production. Telfer is a large scale, low grade mine and its profitability and cash flow are both very sensitive to the realised Australian Dollar gold price. Having regard to the spot and forward prices at the time, hedging instruments in the form of Australian dollar (AUD) gold forward contracts were put in place in 2016 to 2018 to secure margins on a portion of future planned production to June 2023, to support investment in cutbacks and mine development. These Australian dollar forward contracts matured by the end of 2023. In November 2022, Newcrest hedged a portion of Telfer’s future planned production to June 2024, in the form of Australian dollar gold zero cost collar contracts, to secure margins and support investment in cutbacks and mine development. Zero cost collar contracts consist of a call (sold by Newcrest) at the collar price cap and a put (bought by Newcrest) at the collar price floor. 150 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 24. Financial Risk Management continued (a) Commodity and Other Price Risks continued (i) Gold and copper price continued The Telfer AUD gold hedges have been designated as hedging instruments with a hedge ratio of 1:1 to the underlying price risk on gold sales. Potential sources of hedge ineffectiveness that may affect the hedging relationship during the term are variations to forecast production timing and volume assumptions and credit risk. As of 30 June 2023, the Group is holding Australian dollar gold zero cost collar contracts with the following maturity: Gold AUD zero cost collar contracts maturing: Less than 12 months Total The Group previously held Australian dollar forward contracts with the following maturity: Quantity (ounces) (‘000s) 309 Collar Price Floor A$ 2,500 Gold AUD forward contracts maturing: Less than 12 months Total 2023 Weighted Average Price A$ Quantity (ounces) (‘000s) – – Fair Value US$m – – Quantity (ounces) (‘000s) 138 1,942 2023 Collar Price Cap A$ 2,886 2022 Weighted Average Price A$ Fair Value US$m (24) (24) Fair Value US$m (68) (68) These contracts are measured at fair value with the effective portion of fair value movements being recognised in OCI and accumulated in the ‘Hedge Reserve’ in equity. There was no hedge ineffectiveness recognised in the Income Statement during the year (2022: nil). (ii) Fuel and Electricity price The Group’s input costs are exposed to price fluctuations, in particular to diesel and heavy fuel oil prices. To mitigate this risk, the Group has entered into short-term fuel forward contracts to fix certain diesel and heavy fuel oil costs in line with budget expectations. These fuel forward contracts have been designated as cash flow hedging instruments with a hedge ratio of 1:1 to the underlying price risk on fuel purchases. Potential sources of hedge ineffectiveness that may affect the hedging relationship during the term include differences in the pricing structure of the physical (hedged) item and the hedging instrument, the volume of physical delivery becoming misaligned with the volumes hedged, and credit risk. Forward contracts maturing in: Less than 12 months Diesel (barrels) Heavy fuel oil (tonnes) Total 2023 Quantity (‘000s) Weighted Average Price US$ 426 177 102 442 Fair Value US$m Quantity (‘000s) 2022 Weighted Average Price US$ (5) (4) (9) 288 156 90 455 Fair Value US$m 13 18 31 These fuel forward contracts are measured at fair value with the effective portion of fair value movements being recognised in OCI and accumulated in the ‘Hedge Reserve’ in equity. There was no hedge ineffectiveness recognised in the Income Statement during the year (2022: nil). The Group’s input costs are exposed to price fluctuation in electricity prices. The Group entered into a power purchase agreement with respect to the Cadia mine in 2021. Refer to Note 23(c) for further details. Newcrest Annual Report 2023 (iii) Financial impacts of hedges The impact of hedged items designated in hedging relationships on the Income Statement and OCI, is as follows: Cash flow hedges Telfer gold sales Diesel Heavy fuel oil Total (iv) Sensitivity analysis Line item in the Income Statement Revenue – Total gold revenue Cost of sales – Site production costs Cost of sales – Site production costs 151 Gain/(loss) reclassified from OCI to Income Statement 2023 US$m 2022 US$m (76) 8 (5) (73) (91) 20 31 (40) The following table summarises the sensitivity of financial assets and financial liabilities held at the reporting date to movement in the gold and copper prices with all other variables held constant. The movements for gold and copper of 15% (2022: 15%) are based on reasonably possible changes, over a financial year, using an observed range of actual historical rates for the preceding five year period. Post-tax gain/(loss) Gold Gold +15% Gold -15% Copper Copper +15% Copper -15% Impact on Profit (1) Higher/(Lower) Impact on Equity (2) Higher/(Lower) 2023 US$m 2022 US$m 2023 US$m 2022 US$m 40 (40) 40 (40) 45 (45) 41 (41) (77) 36 – – (26) 26 – – (1) Represents the impact of the movement in commodity prices on the balance of the financial assets and financial liabilities at year end. (2) For derivatives which are in an effective hedging relationship, all fair value movements are recognised in Other Comprehensive Income. The sensitivity of the exposure of diesel and heavy fuel oil prices on financial assets and financial liabilities at year end has been analysed and determined to be not material to the Group. The sensitivity of the exposure of gold prices on the FdN finance facilities has been disclosed as part of Note 25(b). The sensitivity of the exposure of electricity prices on the Cadia PPA has been disclosed as part of Note 25(c). (b) Foreign Currency Risk The Group undertakes transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. The Group’s revenue is primarily denominated in US dollars whereas a material proportion of costs (including capital expenditure) are collectively in Australian dollars, PNG Kina and Canadian dollars. The Group has entities that have AUD, CAD and USD functional currencies. The Group’s Statement of Financial Position can also be affected materially by movements in the AUD:USD and the CAD:USD exchange rate. Measuring the exposure to foreign exchange risk is achieved by regularly monitoring and performing sensitivity analysis on the Group’s financial position. 152 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 24. Financial Risk Management continued (b) Foreign Currency Risk continued The carrying amounts of the Group’s US dollar denominated financial assets and liabilities in entities which do not have a US dollar functional currency at the reporting date are as follows: US Dollar Denominated Balances Financial Assets Cash and cash equivalents Trade and other receivables Related party receivables Derivatives Financial Liabilities Payables Borrowings Derivatives Lease liabilities Gross Exposure Net investment in US dollar functional currency entities Net Exposure (inclusive of net investment in foreign operations) Net investment hedges 2023 US$m 2022 US$m 286 225 96 – 607 49 1,935 9 – 1,993 (1,386) 1,935 549 316 155 99 31 601 30 1,779 – 3 1,812 (1,211) 1,779 568 The Group seeks to mitigate the effect of its foreign currency exposure by borrowing in US dollars. The entity which undertakes the majority of the Group’s borrowing activities has an AUD functional currency. Where considered appropriate the US dollar denominated debt is designated as a net investment in foreign operations. Exchange gains or losses upon subsequent revaluation of US dollar denominated borrowings from the historical draw down rate to the period end spot exchange rate are recognised through Other Comprehensive Income and deferred in equity in the Foreign Currency Translation Reserve and will be released to the Income Statement if the foreign operation is sold. As at 30 June 2023, US dollar borrowings of US$1,935 million were designated as a net investment in foreign operations (2022: US$1,779 million). Sensitivity analysis The following table details the Group’s sensitivity arising in respect of translation of financial assets and financial liabilities to a 5% movement (2022: 5%) in the Australian dollar against the US dollar at the reporting date, with all other variables held constant. The impact of the movement in other currencies against the US dollar is immaterial. The percentage sensitivity is based on reasonably possible changes, over a financial year, using the observed range of actual historical rates for the preceding five-year period. Post-tax gain/(loss) AUD/USD +5% AUD/USD -5% Impact on Profit After Tax Higher/(Lower) Impact on Equity Higher/(Lower) 2023 US$m (15) 15 2022 US$m (14) 14 2023 US$m (97) 97 2022 US$m (88) 88 Significant assumptions used in the foreign currency exposure sensitivity analysis above include: – Reasonably possible movements in foreign exchange rates; The reasonably possible movement of 5% (2022: 5%) was calculated by taking the AUD spot rate as at the reporting date, moving this spot rate by 5% (2022: 5%) and then re-converting the AUD into USD with the “new spot-rate”. This methodology reflects the translation methodology undertaken by the Group. – The translation of the net assets in subsidiaries has not been included in the sensitivity analysis as part of the equity movement. Newcrest Annual Report 2023 153 (c) Liquidity Risk Newcrest is exposed to liquidity risk, being the possibility that it may not be able to access or raise funds when required. Liquidity risk is managed centrally to ensure sufficient liquid funds are available to meet the Group’s financial commitments, such as through the following management actions: – Targeting to maintain cash and committed undrawn bank facilities of at least US$1,500 million, with approximately one-third of that amount in the form of cash. – Targeting to maintain an investment grade credit rating. – Forecasting cash flows relating to operational, investing and financing activities, including sensitivity analysis to test multiple scenarios. – Managing repayment maturities to avoid excessive refinancing in any period. – Maintaining funding flexibility with committed available credit lines with a variety of counterparties. – Managing credit risk related to financial assets. The Group maintains a balance between continuity of funding and flexibility through the use of cash, loans and committed available credit facilities, and equity market raisings. Included in Note 21 is a list of committed undrawn credit facilities that the Group has at its disposal to manage liquidity risk. The following table reflects all contractually fixed repayments and interest resulting from recognised financial liabilities at the reporting date, including derivative financial instruments and leases. For derivative financial instruments the market value is presented, whereas for the other obligations the respective undiscounted cash flows for the respective upcoming financial years are presented. 2023 Payables Borrowings Derivatives Lease liabilities 2022 Payables Borrowings Derivatives Lease liabilities Less than 6 months US$m Between 6–12 months US$m Between 1–2 years US$m Between 2–5 years US$m Greater than 5 years US$m 693 36 16 26 771 675 28 13 28 744 – 45 17 24 86 – 37 24 22 83 – 90 – 33 123 – 216 – 22 238 – 524 – 37 561 – 213 – 45 258 – 2,542 – – 2,542 – 2,613 – 2 2,615 Total US$m 693 3,237 33 120 4,083 675 3,107 37 119 3,938 154 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 24. Financial Risk Management continued (d) Interest Rate Risk The Group’s exposure to the risk of changes in market interest rates primarily relates to the Group’s cash and debt obligations that have floating interest rates. The Group is also subject to interest rate risk with respect to the fair value of the FdN finance facilities, which are accounted for at fair value through profit or loss (refer Note 25(b)). The Group’s interest rate exposure together with the effective interest rate for each class of financial assets and financial liabilities at the reporting date is summarised as follows: Consolidated Financial Assets Cash and cash equivalents FdN finance facilities (1) Other receivables Financial Liabilities Corporate bonds Bilateral debt facilities Lease liabilities Net exposure 2023 2022 Floating Interest US$m Fixed Interest US$m Effective Interest Rate % Floating Interest US$m Fixed Interest US$m Effective Interest Rate % 586 – 58 644 – 298 – 298 346 – 110 – 110 1,650 – 110 1,760 (1,650) 4.6 7.5 13.1 4.3 6.5 5.4 565 – 50 615 – 143 – 143 472 – 221 – 221 1,650 – 111 1,761 (1,540) 1.1 7.5 9.5 4.3 2.4 3.9 (1) The principal component of the FdN finance facilities are subject to interest at the contractual rate. The other financial assets and financial liabilities of the Group not included in the above table are non-interest bearing and not subject to interest rate risk. The sensitivity of this exposure has been analysed and determined to be not material to the Group. (e) Credit Risk The Group’s exposure to credit risk arises from the potential default of the counterparty to the Group’s financial assets, which comprise cash and cash equivalents, trade and other receivables, the FdN finance facilities and derivative financial instruments. The Group limits its counterparty credit risk on investment funds by dealing only with banks or financial institutions with credit ratings of at least A- (S&P) equivalent and rated at least BBB (S&P) equivalent for derivative financial instruments. Credit risk is further limited by ensuring diversification with maximum investment limits based on credit ratings. Counterparty credit risk on investment funds and derivative exposures is monitored on a continual basis. All concentrate customers who wish to trade on credit terms are subject to a credit risk analysis at least annually. The Group obtains sufficient collateral (such as a letter of credit) from customers where determined appropriate, as a means of mitigating the risk of financial loss from defaults. At the reporting date the value of collateral held was US$72 million (2022: US$61 million). Receivables balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. There were no material impairments of receivables as at 30 June 2023 or 30 June 2022. The majority of the Group’s trade receivables at the reporting date are due from concentrate customers in Japan. There have been no credit defaults with these customers in recent history. At the reporting date there were no other significant concentrations of credit risk with concentrate customers. The FdN finance facilities, which were acquired in April 2020 are due from Lundin Gold, which operates the FdN gold mine in Ecuador. The Group limited its credit risk on the facilities by acquiring a customary lender security covenant package, which includes a requirement for Lundin Gold to seek approvals from the senior lenders and Newcrest as subordinated lender under the Facilities for any material amendments to the mine plan, financial model and operating budget of the FdN mine. Newcrest also ranks ahead of ordinary equity holders with regard to preference of cash flows from the FdN mine. Newcrest Annual Report 2023 155 (f) Financial Assets and Financial Liabilities The following tables disclose the carrying amounts of each class of financial assets and financial liabilities at year end, classified between amortised cost, fair value through profit or loss and fair value through other comprehensive income (‘OCI’). 2023 Financial Assets Cash and cash equivalents Trade and other receivables – current Trade and other receivables – non-current FdN finance facilities – current FdN finance facilities – non-current Power purchase agreement – current (2) Power purchase agreement – non-current (2) Financial Liabilities Trade and other payables Borrowings Lease liabilities – current Lease liabilities – non-current Fuel forward contracts Telfer AUD gold hedges 2022 Financial Assets Cash and cash equivalents Trade and other receivables – current Trade and other receivables – non-current FdN finance facilities – current FdN finance facilities – non-current Fuel forward contracts Power purchase agreement (2) Financial Liabilities Trade and other payables Borrowings Lease liabilities – current Lease liabilities – non-current Telfer AUD gold hedges (1) The Trade and other receivables in this classification relates to concentrate receivables. (2) Refer to Note 25(c) for further details. Fair Value through profit or loss (1) US$m Fair Value through OCI US$m Amortised cost US$m 586 111 109 – – – – 806 693 1,935 45 65 – – 2,738 – 143 – 55 245 – – 443 – – – – – – – – – – – – 5 106 111 – – – – 9 24 33 Fair Value through profit or loss (1) US$m Fair Value through OCI US$m Amortised cost US$m 565 166 76 – – – – 807 675 1,779 47 64 – 2,565 – 72 – 110 345 – – 527 – – – – – – – – – – – 31 109 140 – – – – 68 68 Total US$m 586 254 109 55 245 5 106 1,360 693 1,935 45 65 9 24 2,771 Total US$m 565 238 76 110 345 31 109 1,474 675 1,779 47 64 68 2,633 156 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 25. Fair Value Measurement (a) Fair Value Measurements Recognised in the Statement of Financial Position For financial assets and liabilities carried at fair value, the Group uses the following to categorise the fair value method used, as defined by AASB 13/IFRS 13 Fair Value Measurement. – Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. – Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). Valuation inputs include forward curves, discount curves and underlying spot and futures prices. – Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Group’s financial assets and liabilities which are measured at fair value on a recurring basis, are categorised as follows: Financial assets and liabilities measured at fair value At 30 June 2023 Concentrate receivables FdN finance facilities Power purchase agreement Fuel forward contracts Telfer AUD gold hedges At 30 June 2022 Concentrate receivables FdN finance facilities Power purchase agreement Fuel forward contracts Telfer AUD gold hedges Note Level 1 US$m Level 2 US$m Level 3 US$m Total US$m (b) (c) (b) (c) – – – – – – – – – – – – 143 – – (9) (24) 110 72 – – 31 (68) 35 – 300 111 – – 411 – 455 109 – – 564 143 300 111 (9) (24) 521 72 455 109 31 (68) 599 There were no transfers between levels during the year. (b) Fair Value of FdN Finance Facilities In April 2020, Newcrest acquired the GPCA, SCFA and Offtake Agreement in relation to Lundin Gold’s FdN mine (refer Note 23(b)). Each of these financial instruments are classified as Level 3 as their valuation includes significant unobservable inputs. The following table summarises the fair value of these financial assets on an aggregated basis. Movements in Fair Value Opening balance Net receipts during the period (1) Accrued interest Fair value adjustments Other movements Closing balance Split between: Current Non-current 2023 US$m 2022 US$m 455 (307) 13 143 (4) 300 55 245 300 509 (132) 19 62 (3) 455 110 345 455 (1) In January 2023, Newcrest received early repayment of the GPCA of US$173 million (net of withholding taxes) from Lundin Gold Inc. The GPCA facility was subsequently terminated. The SCFA and offtake agreement continue in place following the early repayment of the GPCA. Newcrest Annual Report 2023 157 Valuation measurement and key assumptions The SCFA valuation is based on a discounted cash flow model, whilst the Offtake Agreement valuation is based on Monte Carlo simulation to determine the margin achieved on sales associated with this agreement (which is then incorporated into a discounted cash flow model). The valuation requires Management to make certain assumptions about the model inputs, including gold prices, discount rates and FdN production profiles. The probabilities of the various estimates within the range can be reasonably assessed and are used in Management’s estimate of fair value for these financial assets. The following table summarises the quantitative information about the significant unobservable inputs used in Level 3 fair value measurements. Unobservable inputs Inputs Relationship of unobservable inputs to fair value Gold price The Group’s carrying value assessment gold price assumption (refer Note 12(c)) Discount rate 8.5% FdN production profile FdN mine plan An increase or decrease in gold prices of 10% applied to the gold price assumptions for the term of the agreements would change the fair value of the asset by +US$30 million/-US$30 million. (2022: +US$44 million/-US$44 million) An increase or decrease in the discount rate of 1% would change the fair value of the asset by -US$10 million/+US$10 million. (2022: -US$14 million/+US$15 million) An increase or decrease in the production profile of 10% would change the fair value of the asset by +US$13 million/-US$14 million. (2022: +US$13 million/-US$17 million) Each of the sensitivities above assumes that the specific assumption moves in isolation, whilst all other assumptions are held constant. The sensitivity of the exposure of silver prices on the FdN finance facilities has been analysed and determined to be not material to the Group. Accounting Estimates and Assumptions – Fair Value of FdN finance facilities Significant judgements, estimates and assumptions are required in determining estimates of Fair Value for the FdN finance facilities. It should be noted that the Fair Value is subject to variability in key assumptions including, but not limited to, gold prices, discount rates and FdN production profiles. A change in one or more of the assumptions used could result in a material change in the estimated Fair Value of the FdN finance facilities. (c) Fair Value of Power Purchase Agreement In December 2020, Newcrest entered into a 15-year renewable Power Purchase Agreement (‘PPA’) in relation to Cadia. The PPA will act as a partial hedge against future electricity price increases and will provide Newcrest with access to large scale generation certificates which the Group intends to surrender to achieve a reduction in its greenhouse gas emissions. Movements in Fair Value Opening balance Fair value adjustments Closing balance Split between: Current Non-current 2023 US$m 2022 US$m 109 2 111 5 106 111 2 107 109 – 109 109 Hedge ineffectiveness recognised in the Income Statement was a net fair value gain of US$5 million (2022: nil). Refer Note 5(d). Valuation measurement and key assumptions The PPA is valued based on a discounted cash flow model. The valuation requires Management to make certain assumptions about the model inputs, including future electricity prices, discount rates and expected generation volumes associated with the contracts. The probabilities of the various estimates within the range can be reasonably assessed and are used in Management’s estimate of fair value for these financial assets. The following table summarises the quantitative information about the significant unobservable inputs used in Level 3 fair value measurements. Unobservable inputs Inputs Relationship of unobservable inputs to fair value Electricity prices Forward electricity price assumptions An increase or decrease in electricity prices of 10% applied to the electricity price assumptions for the term of the agreements would change the fair value by +US$36 million/-US$36 million. (2022: +US$35 million/-US$35 million) The sensitivity above assumes that the specific input moves in isolation, whilst all other assumptions are held constant. The sensitivity of the exposure to future generation volumes and the rate used to discount future cash flows has been analysed and determined to be not material to the Group. 158 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 25. Fair Value Measurement continued (c) Fair Value of Power Purchase Agreement continued Accounting Estimates and Assumptions – Fair Value of Power Purchase Agreement The valuation of PPAs required a number of significant assumptions, including assumptions about forward electricity prices, future generation volumes and the rate used to discount future cash flows. A change in one or more of the assumptions used could result in a material change in the estimated Fair Value of the Power Purchase Agreement. (d) Fair Value of Investment in Pretium Resources Inc As at 30 June 2021, the Group held 9,025,216 shares in Pretium representing an interest of 4.8% with a market value of $86 million. This was based on the closing share price of Pretium on the TSX at the reporting date. On 8 November 2021, the Group entered into an agreement to acquire all of the issued and outstanding common shares of TSX-listed Pretium that it does not already own, by way of a Canadian Plan of Arrangement. The acquisition was completed during the year. Refer Note 31 for further details. A total cumulative gain of US$62 million was recognised within Other Comprehensive Income upon revaluation to the acquisition date (including a gain of US$46 million in the 2022 year). This total gain was transferred from Other Comprehensive Income to Accumulated Losses during the 2022 year, reducing the Accumulated Losses balance. (e) Fair value of financial instruments carried at amortised cost The carrying amounts of financial assets and financial liabilities recognised at amortised cost in the financial statements approximate their fair value, except as detailed in the following table: Financial Liabilities Borrowings: Carrying amount Fair value (1) 2023 US$m 2022 US$m 2023 US$m 2022 US$m Fixed rate debt – Corporate Bonds 1,637 1,636 1,481 1,487 (1) The fair value is a level 2 valuation. Fair values of the Group’s fixed rate borrowings are determined by using discounted cash flow models that use discount rates that reflect the issuer’s borrowing rate as at the end of the reporting period. Newcrest Annual Report 2023 26. Issued Capital (a) Movements in Issued Capital Opening balance Shares issued – Acquisition of Pretium (1) Shares issued – Convertible notes Shares issued – Dividend reinvestment plan Share issue costs Shares repurchased and held in treasury (2) Total issued capital (b) Number of Issued Ordinary Shares Comprises: – Shares held by the public – Treasury shares Total issued shares Movement in issued ordinary shares for the year Opening number of shares Shares issued – Acquisition of Pretium (1) Shares issued – Convertible notes Dividend reinvestment plan Shares repurchased and held in treasury Share plans (3) Closing number of shares Movement in treasury shares for the year Opening number of shares – Purchases – Allocated pursuant to share plans Closing number of shares 159 Note 31(a) 10(b) 31(a) 2023 US$m 13,759 – – 15 – (10) 13,764 2022 US$m 12,419 1,289 50 16 (1) (14) 13,759 2023 No. 2022 No. 891,604,615 890,510,101 2,626,117 2,613,146 894,230,732 893,123,247 890,510,101 814,745,123 – – 72,316,008 2,606,579 1,107,485 (715,877) 702,906 910,968 (800,000) 731,423 891,604,615 890,510,101 2,613,146 2,544,569 715,877 (702,906) 2,626,117 800,000 (731,423) 2,613,146 (1) Represents issue of shares on 9 March 2022 pursuant to the Plan of Arrangement between Pretium and its ordinary shareholders. Refer Note 31 for further details. Transaction costs associated with the issue amounted to US$1 million. (2) During the year, the Newcrest Employee Share Plan Trust (‘Trust’) purchased a total of 715,877 (2022: 800,000) fully paid ordinary Newcrest shares at an average price of A$20.98 (US$14.26) per share (2022: average price of A$24.39 (US$17.70) per share). The shares were purchased on-market to be held by the Trustee on behalf of the Trust to satisfy the future entitlements of the holders of performance rights (and any other rights to acquire shares) under Newcrest’s current and future employee incentive schemes. (3) Represents rights exercised under the Company’s share-based payments plans and executive service agreements. Refer to Note 35 for share-based payments. 160 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 26. Issued Capital continued (c) Significant Accounting Policies Issued ordinary share capital is classified as equity and is recognised at the fair value of the consideration received by the Group. Any transaction costs arising on the issue of ordinary shares and the associated tax are recognised directly in equity as a reduction of the share proceeds received. Treasury Shares The Group’s own equity instruments, which are purchased on-market for later use in employee share-based payment arrangements (Treasury shares), are deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. 27. Reserves Equity settlements reserve Foreign currency translation reserve Hedge reserve Other reserves Total reserves Note (a) (b) (c) (d) 2023 US$m 167 (843) 51 13 (612) 2022 US$m 151 (585) 51 15 (368) (a) Equity Settlements Reserve This reserve is used to recognise the fair value of rights and options issued to employees in relation to equity-settled share-based payments. (b) Foreign Currency Translation Reserve The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of subsidiaries which do not have a functional currency of USD. The reserve is also used to record exchange gains and losses on hedges of the net investment in foreign operations. Refer Note 24(b). (c) Hedge Reserve The hedge reserve is used to record the effective portion of changes in the fair value of cash flow hedges and cost of hedging reserves (refer Note 24). The components of the hedge reserve at year end were as follows: Component Telfer AUD gold hedges Fuel forward contracts Power purchase agreement Tax effect Total Hedge Reserve Note 24(a) 24(a) 25(c) 2023 US$m 2022 US$m (24) (9) 106 73 (22) 51 (68) 31 109 72 (21) 51 (d) Other Reserves Other Reserves are used to record Newcrest’s share of other comprehensive income/(loss) of associates (refer Note 30) and changes in the fair value of equity instruments held at fair value. Newcrest Annual Report 2023 161 GROUP STRUCTURE This section provides information relevant to understanding the structure of the Group. 28. Controlled Entities Controlled entities are consolidated from the date on which control commences until the date that control ceases. All intercompany balances and transactions, including unrealised gains and losses arising from intra-group transactions, have been eliminated in preparing the consolidated financial statements. The Group comprises the following significant entities: Entity Parent Entity Newcrest Mining Limited Subsidiaries Cadia Holdings Pty Limited Contango Agricultural Company Pty Ltd Newcrest Finance Pty Limited Newcrest International Pty Ltd Newcrest Operations Limited Newcrest Services Pty Limited Newcrest West Africa Holdings Pty Ltd Newgen Pty Ltd Niugini Mining (Australia) Pty Ltd Newcrest Insurance Pte. Ltd. Gryphus Pte Ltd. Orion Co-V Pte. Ltd. PT Nusantara Bintang Management Newcrest (Fiji) Pte Limited Lihir Gold Limited Newcrest PNG 2 Limited Newcrest PNG 3 Limited Newcrest PNG Exploration Limited Newcrest Resources, Inc. Newroyal Resources, Inc. Newcrest USA Finance LLC Newcrest BC Mining Ltd. Newcrest Canada Inc. Newcrest Canada Holdings Inc. Newcrest Canada Services Inc. Newcrest Red Chris Mining Limited Pretium Exploration Inc. Pretium Resources Inc. Newcrest Chile SpA Newcrest Ecuador S.A. Notes: Notes Country of Incorporation 2023 % 2022 % Percentage Holding Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Singapore Singapore Singapore Indonesia Fiji Papua New Guinea Papua New Guinea Papua New Guinea Papua New Guinea USA USA USA Canada Canada Canada Canada Canada Canada Canada Chile Ecuador (a) (a) (a) (a) (a) (a) (b) (f) (f) (b) (b) (b) (b) (b) (c) (e) (b) (d) (e) (d) (e) (b) 100 100 100 100 100 100 100 100 100 100 – – 100 100 100 100 100 100 100 100 100 – 100 100 100 100 – 100 100 100 100 100 100 100 100 100 100 100 100 100 – – 100 100 100 100 100 100 100 100 100 – 100 100 100 100 – 100 100 100 (a) These controlled entities are a party to a Deed of Cross Guarantee. Refer Note 39 for further information. (b) Audited by affiliates of the Parent entity auditors. (c) This entity was incorporated during the 2022 year. (d) These entities were acquired during the 2022 year. (e) During the 2022 year, Pretium Resources Inc was amalgamated with Pretium Exploration Inc. and Newcrest BC Mining Ltd. (which was incorporated in 2022). (f) These entities were deregistered during the 2022 year. 162 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 29. Interest in Joint Operations The Group has interests in the following significant unincorporated joint arrangements, which are accounted for as joint operations under accounting standards. Name Wafi-Golpu JV Havieron JV Namosi JV Country Papua New Guinea Australia Fiji Principal Activity Mineral exploration Mineral exploration Mineral exploration Interest 2023 50.0% 70.0% 2022 50.0% 70.0% 73.03% 72.88% Note (a) (b) (c) Interest in Joint Operations A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. When a Group entity undertakes its activities under joint operations, the Group as a joint operator recognises in relation to its interest in a joint operation, its share of assets, liabilities, revenue and expenses from those operations and revenue from the sale of its share of the output from the joint operation or from the sale of the output by the joint operation. The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the standards applicable to the particular assets, liabilities, revenues and expenses. (a) Wafi-Golpu Joint Venture The Wafi-Golpu JV is owned 50% by the Group and 50% by Wafi Mining Limited, whose ultimate holding company is Harmony Gold Mining Company Limited. Pursuant to the JV agreement, key operational decisions of the JV require a minimum 70% (effectively unanimous) vote and therefore the Group has joint control. For segment reporting, Wafi-Golpu is included within the ‘Exploration and Projects’ segment. Under the conditions of the Wafi-Golpu exploration tenements, the PNG Government (‘the State’) has reserved the right to take up (prior to the commencement of mining) an equity interest of up to 30% of any mineral discovery within the Wafi-Golpu tenements. The right is exercisable by the State once at any time prior to the commencement of mining. If the State exercises this right, the exercise price is a pro rata share of the accumulated exploration expenditure. Once the right is exercised, the State is responsible for its proportionate share of ongoing exploration and project development costs. As at 30 June 2023, this option has not been exercised. In the event the option is exercised in full, Newcrest’s interest in the Wafi-Golpu JV would be reduced to 35%. The carrying value of the Group’s interest in the Wafi-Golpu JV as at 30 June 2023 is US$437 million (2022: US$447 million). (b) Havieron Joint Venture The Havieron Project is operated by Newcrest under a Joint Venture Agreement (‘JVA’) with Greatland Gold plc (‘Greatland’). Newcrest holds a 70% joint venture interest in the Havieron Project. Pursuant to the JV agreement, key operational decisions of the JV require a unanimous vote and therefore the Group has joint control. For segment reporting, the Havieron JV is included within the ‘Exploration and Projects’ segment. The carrying value of the Group’s interest in the Havieron JV as at 30 June 2023 is US$223 million (2022: US$151 million). (c) Namosi Joint Venture The Namosi JV was established between the Group and two other parties under the Namosi Joint Venture agreement in November 2007. Pursuant to this JV agreement, key operational decisions of the JV require a unanimous vote and therefore the Group has joint control. For segment reporting, the Namosi JV is included within the ‘Exploration and Projects’ segment. The carrying value of the Group’s interest in the Namosi JV as at 30 June 2023 is US$25 million (2022: US$25 million). Newcrest Annual Report 2023 30. Investment in Associates Movements in investment in associates Opening balance Acquisition – Lundin Gold Inc Acquisition – Antipa Minerals Ltd Acquisition – Headwater Gold Inc. Acquisition – Metallic Minerals Corporation Total acquisitions Dividends received Share of profit/(loss) Share of other comprehensive income/(loss) Foreign currency translation Closing balance 163 2023 US$m 487 2022 US$m 442 7 1 1 4 13 (30) 19 (2) (4) 483 7 – – – 7 – 45 – (7) 487 An associate is an entity that is neither a subsidiary nor joint arrangement, over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. The Group’s investment in associates is accounted for using the equity method. After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on its investment in its associate. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in the Income Statement. (a) Details of Associates Associate Lundin Gold Inc SolGold plc Azucar Minerals Ltd Antipa Minerals Ltd Headwater Gold Inc. Metallic Minerals Corporation Country of Incorporation Canada United Kingdom Canada Australia Canada Canada Interest Carrying Amount 2023 % 32.0% 10.3% 19.9% 9.9% 9.9% 9.5% 2022 % 32.0% 13.5% 19.9% 9.9% – – 2023 US$m 410 65 1 3 1 3 2022 US$m 408 74 1 4 – – 483 487 Lundin Gold’s FdN mine is in commercial production. The remaining associates are in the exploration and/or mine development phase and do not currently generate revenue. Further details are as follows: (b) Investment in Lundin Gold Inc Lundin Gold is a Canadian based mine development and operating company, operating the FdN gold mine in Ecuador. Lundin Gold is listed on the Toronto Stock Exchange (‘TSX’) and the Nasdaq Stockholm. In March 2018, Newcrest acquired a 27.1% equity interest in Lundin Gold for US$251 million (inclusive of transaction costs of US$1 million), following a share subscription agreement entered into on 24 February 2018. The Group’s current interest is 32.0%. The Group has appointed two directors to the Board of Lundin Gold. In April 2020, Newcrest acquired the FdN finance facilities. This did not have an impact on the Group’s equity interest in Lundin Gold. Refer to Note 23(b). 164 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 30. Investment in Associates continued (b) Investment in Lundin Gold Inc continued The following table discloses summarised financial information of the Group’s investment in Lundin Gold Inc. Lundin Gold’s Statement of Financial Position Current assets Non-current assets Current liabilities Non-current liabilities Net assets Proportion of Newcrest’s ownership Carrying value calculated per ownership percentage Fair value adjustment Carrying amount 2023 US$m 540 969 (272) (311) 926 2022 US$m 569 1,095 (315) (439) 910 32.0% 32.0% 296 114 410 291 117 408 Lundin Gold had revenue during the year of US$922 million (100% basis) (2022: US$771 million). As at 30 June 2023, the Group held 75,780,909 shares (2022: 75,231,577) with a market value of US$907 million (2022: US$539 million) based on the closing share price on the TSX. (c) Investment in Other Associates SolGold Plc (‘SolGold’) is an Australian based, copper gold exploration and future development company with assets in Ecuador, the Solomon Islands and Australia. SolGold is listed on the London Stock Exchange (‘LSE’) and the TSX. As at 30 June 2023, the Group held 309,309,996 shares (2022: 309,309,996 shares) with a market value of US$62 million (2022: US$110 million) based on the closing share price on the LSE. Azucar Minerals Ltd (‘Azucar’) is a mineral exploration company listed on the TSX. The associates’ assets include the El Cobre copper/gold porphyry project near Veracruz, Mexico. As at 30 June 2023, the Group held 14,674,056 shares (2022: 14,674,056 shares) with a market value of US$1 million (2022: US$1 million) based on the closing share price on the TSX. Antipa Minerals Ltd (‘Antipa’) is an Australia mineral exploration company listed on the ASX, with exploration assets in the Paterson Province of Western Australia. As at 30 June 2023, the Group held 356,114,785 shares (2022: 310,830,163 shares) with a market value of US$3 million (2022: US$7 million) based on the closing share price on the ASX. Headwater Gold Inc (‘Headwater’) is a Canadian based exploration company listed on the Canadian Securities Exchange (‘CSE’), with exploration assets in Idaho-Oregon and Nevada, United Stated of America. As at 30 June 2023, the Group held 6,151,397 shares (2022: nil) with a market value of US$1 million based on the closing share price on the CSE. Metallic Minerals Corporation (‘Metallic’) is a Canadian based exploration company listed on the TSX Venture Exchange (‘TSX-V’), with exploration assets in Colorado, United States of America and Yukon Territory, Canada. As at 30 June 2023, the Group held 15,838,593 shares (2022: nil) with a market value of US$4 million based on the close share price of the TSX-V. The Group has a right (but not an obligation) to appoint a Director to the Board of each of these associates. 31. Acquisition of Pretium Resources Inc. On 8 November 2021, the Group entered into an agreement to acquire all of the issued and outstanding common shares of TSX-listed Pretium Resources Inc. (‘Pretium’) that it did not already own, by way of a Canadian Plan of Arrangement (‘the Plan’). The Plan required approval by 66⅔% of Pretium shareholders and regulatory approvals including approval under the Investment Canada Act. This transaction has been accounted for as business combination under AASB 3/IFRS 3 Business Combinations using the acquisition method of accounting. On 25 February 2022, Newcrest received the final regulatory approval under the Investment Canada Act for the acquisition of Pretium. In accordance with accounting standards, Newcrest acquired control over Pretium effective from the date of this last regulatory approval and therefore 25 February 2022 is the acquisition date for this business combination. The total consideration (cash and scrip components) were settled on 9 March 2022. Pretium is the owner of the Brucejack mine in the Golden Triangle region of British Columbia, Canada. Brucejack began commercial production in July 2017 and is one of the highest-grade operating gold mines in the world. The acquisition aligns with Newcrest’s stated strategic goal of building a global portfolio of Tier 1 orebodies. Newcrest Annual Report 2023 165 (a) Consideration The consideration comprised cash and Newcrest shares, and Pretium shareholders were able to elect either C$18.50 in cash or 0.80847 Newcrest shares per Pretium share, subject to proration and an aggregate cap of 50% cash and 50% Newcrest shares. The consideration paid in the 2022 financial year is shown in the table below: Consideration paid in respect to: Consideration – Cash component (1) Consideration – Scrip component (2) Fair value of consideration transferred (for 95.2%) Fair value of existing 4.8% equity interest (3) Total fair value (100% interest) 2022 US$m 1,292 1,289 2,581 130 2,711 (1) Cash consideration paid to Pretium shareholders in March 2022. (2) Newcrest issued 72,316,008 ordinary shares to Pretium shareholders. The fair value of the scrip component reflects the Newcrest share price on the acquisition date of A$24.82 (US$17.82). (3) Newcrest held 4.8% of Pretium’s issued shares prior to the completion of the acquisition. A gain of US$62 million was recognised within other comprehensive income upon revaluation on the acquisition date. This gain was transferred from Other Comprehensive Income to Accumulated Losses. (b) Fair Value Details of the fair values at the date of acquisition are set out below. During the 2023 financial year, the fair values were finalised and there were no changes to the fair values provisionally determined at 30 June 2022. Assets and Liabilities Acquired Cash and cash equivalent Receivables Inventories Property, plant and equipment Other assets Total assets Trade and other payables Debt – convertible notes Debt – term facility Debt – lease liabilities Provisions – employee benefits Provisions – mine rehabilitation Deferred tax liabilities Other liabilities Total liabilities Fair value of identifiable net assets Goodwill on acquisition Fair value of net assets Final Fair Value US$m 208 36 39 2,891 26 3,200 (123) (102) (88) (11) (2) (27) (824) (2) (1,179) 2,021 690 2,711 The goodwill reflects the requirement to record deferred tax balances for the difference between the assigned values and the tax bases of assets acquired and liabilities assumed in the business combination. Goodwill is not deductible for tax purposes. 166 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 31. Acquisition of Pretium Resources Inc. continued (c) Net Cashflow Attributable to the Acquisition Net cash outflow Cash consideration paid Less: Cash and cash equivalent balance acquired Net cash outflow (d) Business Acquisition and Integration Costs Business acquisition and integration costs incurred during the year were as follows: Business acquisition and integration costs Purchase of put option (1) Business transaction costs (2) Total 2022 US$m 1,292 (208) 1,084 2022 US$m 19 23 42 2023 US$m – 6 6 (1) Newcrest purchased put options in November 2021 to hedge the downside risk on the USD cost of the cash consideration in relation to the Pretium acquisition. (2) Comprises acquisition costs of nil (2022: US$17 million) and integration costs of US$6 million (2022: US$6 million). The above items have been expensed in the Income Statement. Refer to Note 5(d). (e) Other Information Refer to Note 4 Segment Information for details of the segment result of Brucejack. Pretium contributed US$226 million of revenue and US$37 million to profit before tax in the 2022 financial year from the date of acquisition until 30 June 2022. If the combination had taken place at the beginning of the 2022 financial year, the Group’s: – Revenue would have increased by US$452 million to US$4,659 million; and – Profit before tax would have increased by US$74 million to US$1,306 million, in respect to the 2022 financial year. Accounting Estimates and Assumptions – Business Combination Assets acquired and liabilities assumed as part of a business acquisition are generally recorded at their fair value at the date of acquisition. Determining fair value of identifiable assets, particularly intangibles, and liabilities acquired also requires management to make estimates, which are based on all available information and in some cases assumptions. Newcrest Annual Report 2023 167 OTHER This section includes additional financial information and other disclosures that are required by the accounting standards and the Corporations Act 2001. 32. Newmont Transaction In May 2023, Newcrest entered into a binding Scheme Implementation Deed (‘SID’) with Newmont Corporation (‘Newmont’) in relation to a proposal for Newmont to acquire 100% of the issued shares in Newcrest by way of a scheme of arrangement (‘Scheme’) under the Corporations Act 2001 (Cth) (‘the Newmont Transaction’). Under the terms of the Newmont Transaction, Newcrest shareholders will be entitled to receive 0.400 Newmont shares for each Newcrest share held on the scheme record date. In addition, Newcrest expects to pay a franked special dividend of US$1.10 per Newcrest share prior to implementation of the scheme, subject to the scheme becoming effective. The scheme of arrangement is subject to a number of conditions, including approval by Newcrest shareholders at a Scheme Meeting which is expected to be held in October 2023. If the Newmont Transaction is approved by Newcrest shareholders and the other conditions precedent are satisfied or waived, implementation of the Newmont Transaction is targeted to occur in November 2023. The SID includes certain circumstances in which a break fee of US$174 million would be payable to Newmont, or reverse break fee of US$375 million would be payable to Newcrest. 33. Contingencies (a) Bank Guarantees The Group has negotiated a number of bank guarantees in favour of various government authorities and service providers. The total nominal amount of these guarantees at the reporting date is US$205 million (2022: US$173 million). (b) Other Matters The companies in the Group are recipients of, or defendants in, certain claims, proceedings and/or complaints made, commenced or threatened. In the opinion of the Directors, all such matters are of such a kind, or involve such amounts, that they are not anticipated to have a material effect on the financial position of the Group if disposed of unfavourably or are at a stage which does not support a reasonable evaluation of the likely outcome of the matter. 34. New Accounting Standards and Interpretations The Group has considered accounting standards, amendments and interpretations that have been issued and will be applicable in future periods, however their impact is not considered material to the Group. 35. Share-Based Payments The Group provides benefits to employees (including Executive Directors) in the form of share-based compensation, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions). The Group operates a number of share-based payment plans, including: – Executive Performance Share Plan (‘LTI Plan’) – Employee Share Acquisition Plan (‘ESAP’) – Share Match Plan – Sign-On Share Plan – Short Term Incentive Deferral Plan (‘STI Deferral Plan’) (a) Executive Performance Share Plan (LTI Plan) The Executive Performance Share Plan (also referred to as the Long Term Incentive (‘LTI’) plan) entitles participants to receive rights to ordinary fully paid shares in the Company (Performance Rights). The members of the Executive Committee (including Key Management Personnel), General Managers and Managers participate in this plan. The vesting conditions for the Performance Rights granted in the 2023 financial year for members of the Executive Committee comprised a service condition and three performance measures, being: – Relative Total Shareholder Return (‘TSR’) – Comparative Cost Position (‘CCP’); and – Return on Capital Employed (‘ROCE’). 168 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 35. Share-Based Payments continued (a) Executive Performance Share Plan (LTI Plan) continued The weighting for the TSR is 50% (2022: 33.3%), the CCP is 25% (2022: 33.3%) and the ROCE is 25% (2022: 33.3%). Each LTI measure was chosen by the Board as it is a key driver of group performance. Performance against each of these measures over the three year vesting period determines the grant made to participants. There is no ability to re-test performance under the Plan after the performance period. The vesting conditions for the General Managers comprise a service condition and 50% of the rights have performance measures as noted above. The vesting conditions for Managers comprise service conditions only. The assessed fair value at grant date of the Performance Rights granted under the LTI plan is independently determined using an option pricing model. The model inputs included: Fair value – Members of the Executive Committee Fair value – General Managers Fair value – Managers Grant date Share price at grant date Expected life of right Exercise price Risk-free interest rate Annualised volatility Expected dividend yield 2023 A$13.67 A$15.44 A$17.21 2022 A$19.38 A$20.89 A$22.40 16 Nov 2022 17 Nov 2021 A$19.11 3 years Nil 3.2% 30.0% 1.8% A$24.66 3 years Nil 0.8% 25.0% 1.5% The rights have been valued using a combination of the Monte Carlo simulation and Black-Scholes models. The fair value of the rights granted is adjusted to reflect market vesting conditions. Non-market conditions are included in the assumptions about the number of rights that are expected to become exercisable and are updated at each reporting date. The impact of the revision to original estimates is recognised in the Income Statement with a corresponding adjustment to equity. Upon the exercise of rights, the balance of the equity settlements reserve relating to those rights remains in the Equity Settlements Reserve. Accounting Estimates and Assumptions – Share-Based Payments The Group measures the cost of equity settled transactions with employees by reference to the fair value of equity instruments at the date at which they are granted. The fair value is determined by an external valuer using an option pricing model, using the assumptions detailed above. (b) Movements in the Number of Rights issued under the LTI Plan Detailed information about Performance Rights is set out below: Grant date 2023 16 Nov 2022 17 Nov 2021 18 Nov 2020 19 Nov 2019 Total 2022 17 Nov 2021 18 Nov 2020 19 Nov 2019 21 Nov 2018 Total Exercise date 16 Nov 2025 17 Nov 2024 18 Nov 2023 19 Nov 2022 17 Nov 2024 18 Nov 2023 19 Nov 2022 21 Nov 2021 Movement in Number of Rights During the Year Beginning of year Granted Exercised Forfeited End of year – 1,630,838 953,974 658,579 529,766 – – – 2,142,319 1,630,838 – 1,009,239 774,929 623,592 796,396 – – – 2,194,917 1,009,239 – – – (379,768) (379,768) – – – (544,204) (544,204) (358,372) 1,272,466 (212,326) (109,249) (149,998) 741,648 549,330 – (829,945) 2,563,444 (55,265) (116,350) (93,826) (252,192) 953,974 658,579 529,766 – (517,633) 2,142,319 All Performance Rights have a nil exercise price. The number of performance rights exercisable at year end is nil (2022: nil). Newcrest Annual Report 2023 169 (c) ESAP, Share Match Plan and Sign-On Share Plan Under the ESAP, eligible employees are granted shares in the Company for no cash consideration. All Australian resident permanent employees who have been continuously employed by the Group for a period of at least one year, and are not eligible for the LTI Plan, are able to participate in the ESAP. Under the Share Match Plan, eligible employees may contribute up to A$4,950 to acquire shares in the plan year. At the time of acquisition of shares, the Company grants a matching Right to an ordinary share for each share acquired. The Rights vest three years after grant subject to satisfaction of certain conditions including continuous employment. To support Newcrest’s ability to attract and/or retain suitable executives and senior managers, it is sometimes necessary to offer sign-on incentives. Such incentives are consistent with market practice in the industry. Rights awarded under the Sign-on Share Plan vest over periods up to three years and are subject to continued employment and/or performance. The number of shares and rights granted under these plans during the year was not material to the Group. The number of rights outstanding under these plans at year end was 281,260 (2022: 278,137). (d) STI Deferral Plan This plan applied to certain employees including Key Management Personnel in the 2022 and prior financial years. Under the STI Deferral Plan, for eligible employees, 50% of the payment was provided in cash with the remaining 50% deferred into shares. The number of shares calculated is based on the Company’s volume weighted average share price during the five trading days immediately preceding the date of payment of the cash portion. Half the shares are released after 12 months and the remainder after 2 years. The number of rights outstanding under this plan at year end was 258,982 (2022: 223,762). (e) Expense Refer to Note 5(f) for the total share-based payments expense. As detailed in Note 32, in May 2023, Newcrest entered into the Newmont Transaction. Subject to the Scheme of Arrangement becoming effective, all unvested rights over shares will vest in full shortly prior to implementation of the Newmont Transaction. Newcrest assessed the likelihood of the Newmont Transaction becoming effective and has determined that it is more likely than not that it will become effective. As such, the share-based payments expense from May 2023, has been calculated on the basis that all rights vest in full shortly prior to the implementation date (accelerated vesting), with the impact of the revision to the expense recognised in the Income Statement. 36. Key Management Personnel (a) Remuneration of Key Management Personnel and Directors Short-term Long-term Post-employment Termination benefit Share-based payments expense Total (b) Loans and Other Transactions with Key Management Personnel There are no loans made to Key Management Personnel, or their related entities, by the Group. 2023 US$’000 9,327 140 228 1,119 5,498 16,312 2022 US$’000 10,019 123 204 86 6,635 17,067 170 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 37. Auditors’ Remuneration The auditor of the Group is Ernst & Young Australia. (a) Fees to Ernst & Young Australia Fees for auditing the statutory financial report of the parent covering the group and auditing the statutory financial reports of any controlled entities Fees for assurance services required by legislation to be provided by the auditor Fees for other assurance and agreed-upon-procedures services: – Investigating accountant services – Transaction accounting services – Sustainability assurance services – Audit-related assurance services Fees for other services Total (b) Fees to Other Member Firms of Ernst & Young Australia Fees for auditing the financial report of any controlled entities Total Total fees to Ernst & Young (c) Fees to Other Auditors Audit or review of financial reports of subsidiaries 2023 US$’000 2022 US$’000 2,713 – 475 – 324 9 808 – 2,118 – – 29 284 7 320 – 3,521 2,438 336 336 3,857 276 276 2,714 26 33 38. Parent Entity Information The summarised Income Statement and Statement of Financial Position in respect to the parent entity (‘Company’) is set out below. (a) Income Statement Profit/(loss) after income tax Other comprehensive income/(loss) Total comprehensive income/(loss) for the year (b) Statement of Financial Position Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Net assets Issued capital Equity settlements reserve Foreign currency translation reserve Accumulated losses Total equity (c) Commitments Capital expenditure commitments Company 2023 US$m 2022 US$m 654 (355) 299 97 8,807 8,904 259 540 799 8,105 13,764 167 (1,053) (4,773) 8,105 666 (642) 24 92 8,997 9,089 272 540 812 8,277 13,759 151 (698) (4,935) 8,277 11 6 Newcrest Annual Report 2023 171 (d) Guarantees and Contingent Liabilities The Company and certain Australian controlled entities have entered into a Deed of Cross Guarantee. The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of the controlled entities under certain provisions of the Corporations Act 2001. Further details are included in Note 39. At the reporting date, no amounts have been recognised in the financial information of the Company in respect of this Deed on the basis that the possibility of default is remote. 39. Deed of Cross Guarantee Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 dated 17 December 2016, the wholly-owned controlled entities detailed in Note 28 are relieved from the Corporations Act 2001 requirements for preparation, audit, and lodgement of financial reports, and Directors’ Report. It is a condition of the Class Order that the Company and each of its eligible controlled entities enter into a Deed of Cross Guarantee (‘Deed’). The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of the controlled entities under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be liable in the event that after six months any creditor has not been paid in full. The controlled entities have also given similar guarantees in the event that the Company is wound up. In May 2016, the Company and its eligible controlled entities entered into a new Deed. A consolidated Income Statement and consolidated Statement of Financial Position, comprising the Company and controlled entities which are a party to the Deed, after eliminating all transactions between parties to the Deed is set out below. Income Statement Revenue Cost of sales Gross profit Exploration costs Corporate administration costs Other income/(expenses) Share of profit/(loss) of associate Impairment reversal/(loss) Profit before interest and income tax Finance income Finance costs Profit/(loss) before income tax Income tax expense Profit/(loss) after income tax Consolidated 2023 US$m 2,568 (1,468) 1,100 (33) (129) (73) (8) (8) 849 26 (127) 748 (255) 493 2022 US$m 2,495 (1,365) 1,130 (38) (130) (92) (5) (19) 846 7 (94) 759 (284) 475 172 Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2023 39. Deed of Cross Guarantee continued Statement of Financial Position Current assets Cash and cash equivalents Trade and other receivables Inventories Other financial assets Other assets Total current assets Non-current assets Other receivables Investment in subsidiaries Property, plant and equipment Other intangible assets Deferred tax assets Other financial assets Other assets Investment in associates Total non-current assets Total assets Current liabilities Trade and other payables Provisions Current tax liability Lease liabilities Other financial liabilities Total current liabilities Non-current liabilities Borrowings Provisions Deferred tax liabilities Lease liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital Accumulated losses Reserves Total equity Consolidated 2023 US$m 2022 US$m 206 156 238 4 36 640 212 7,726 4,437 25 39 106 2 68 12,615 13,255 572 99 35 16 33 755 1,935 274 469 16 2,694 3,449 9,806 13,764 (2,683) (1,275) 9,806 218 109 251 31 18 627 187 8,105 4,217 30 43 109 3 78 12,772 13,399 567 101 119 19 68 874 1,779 248 375 10 2,412 3,286 10,113 13,759 (2,684) (962) 10,113 40. Events Subsequent to Reporting Date Subsequent to year end, the Directors have determined to pay a final dividend for the year ended 30 June 2023 of US 20 cents per share, which will be fully franked. The dividend will be paid on 18 September 2023. The total amount of the dividend is US$179 million. This dividend has not been provided for in the 30 June 2023 financial statements. A New South Wales Legislative Council Committee has commenced an inquiry into current and potential community impacts of the gold, silver, lead and zinc mining industries in the state. Newcrest will provide a submission to the committee. Other than matters disclosed in the Notes to the financial statements, there are no other matters or events that have occurred subsequent to 30 June 2023 that have significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years. Newcrest Annual Report 2023 Directors’ Declaration 173 In accordance with a resolution of the Directors of Newcrest Mining Limited, we state that: 1. In the opinion of the Directors: (a) The financial statements, notes and additional disclosures included in the Directors’ Report designated as audited, of the Group are in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance for the year ended on that date; and (ii) Complying with Australian Accounting Standards and Corporations Regulations 2001. (b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. (c) The financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board as disclosed in Note 2(a). 2. 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 2023. 3. In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified in Note 28 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the Deed of Cross Guarantee. On behalf of the Board Peter Tomsett Chairman 11 August 2023 Melbourne 174 Independent Auditor’s Report Ernst & Young 8 Exhibition Street Melbourne VIC 3000 Australia GPO Box 67 Melbourne VIC 3001 Tel: +61 3 9288 8000 Fax: +61 3 8650 7777 ey.com/au Independent Auditor's Report to the Members of Newcrest Mining Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Newcrest Mining Limited (the ‘Company’) and its subsidiaries (collectively the ‘Group’), which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, the notes to the financial statements, including a summary of significant accounting policies, and the Directors’ Declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the consolidated financial position of the Group as at 30 June 2023 and of its consolidated financial performance for the year ended on that date; and (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Newcrest Annual Report 2023 175 1. Assessment of the carrying value of non-current assets Why significant At 30 June 2023 the Group’s consolidated statement of financial position includes property, plant and equipment of $12,996 million, goodwill of $686 million and other intangible assets of $32 million. The Group is required to assess for indicators of impairment and impairment reversal at each reporting period. Where an indicator of impairment or impairment reversal exists for a cash generating unit (‘CGU’), an impairment test is performed for that CGU. For CGUs containing goodwill, an impairment test is performed at least annually. As at 30 June 2023: a. An assessment of the indicators of impairment or impairment reversal was required to be undertaken by the Group and impairment testing was performed for the Lihir and Telfer CGUs, as set out in Note 12 of the financial report. b. The Red Chris and Brucejack CGUs have been tested for impairment due to the associated goodwill balances. c. On 15 May 2023, the Group entered into a binding Scheme Implementation Deed (‘SID’) with Newmont Corporation (‘Newmont’) to acquire 100% of issued share capital of the Group. The consideration under the SID represents a premium over the net assets of the Group as at 30 June 2023. Accordingly, the Group considered if previous impairment of the Telfer and Lihir CGU assets, other than goodwill, should be reversed, concluding that an impairment reversal was not required. The recoverable amount of the Telfer, Lihir, Red Chris and Brucejack CGUs determined by the Group are based on the forecast gold and copper prices, discount rates, foreign exchange rates, the historical performance and future mine plans including capital expenditure requirements. Determination as to whether or not an impairment charge or reversal relating to an asset or CGU is required involves significant judgement relating to future results and plans for each asset and CGU. Further disclosures relating to the assessment of impairment can be found in Note 12 of the financial report. How our audit addressed the key audit matter We evaluated the Group’s assessment of indicators of impairment or impairment reversal and the Group’s calculations of the recoverable amount of each CGU within their impairment testing. With the involvement of our valuation specialists, we assessed the reasonableness of the Board approved cash flow projections, the value ascribed to unmined resources, exploration potential and key macro-economic assumptions used in the impairment models. The Group used internal and external experts to provide geological, metallurgical, mine planning and technological information to support key assumptions in the impairment models. We have examined the information provided by the Group’s experts, including assessment of the competence, qualifications and the objectivity of the internal and external experts, the methodology applied, and we considered the information supporting the inputs used in the impairment models. We assessed the reasonableness of the forecast cashflows against the past performance of the CGUs. We assessed key assumptions such as gold and copper prices, discount rates, foreign exchange rates, mine operating costs and capital expenditures and performed sensitivity analysis around these key drivers of the cash flow projections. Having determined the change in assumptions (individually or collectively) that would be required for the CGUs to record an impairment charge or reversal, we considered the likelihood of such a movement in those key assumptions arising. We assessed the adequacy of the related financial report disclosures in Note 12. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 176 Independent Auditor’s Report continued 2. Mine rehabilitation provisions Why significant The Group has rehabilitation obligations to restore and rehabilitate land and environmental disturbances created by mine operations, including exploration and development activities. These obligations are determined through regulatory and legislative requirements across multiple jurisdictions in addition to policies and processes set by the Group. At 30 June 2023, the Group’s consolidated statement of financial position includes $505 million of mine rehabilitation provisions. The estimation of mine rehabilitation provisions is highly complex and judgemental with respect to the timing of the activities, the associated economic assumptions and estimated cost of the future activities. Disclosure in relation to mine rehabilitation provisions can be found in Note 19 of the financial report. How our audit addressed the key audit matter We evaluated the Group’s determination of the rehabilitation provisions. The Group used internal and external experts to support the estimation of the mine rehabilitation provisions. With the support of our environmental specialists, we assessed the competence, qualifications and objectivity of the internal and external experts and assessed the reasonableness of the assumptions in the closure plans and cost estimates used by the Group’s internal and external experts. We assessed whether the information provided by the Group’s internal and external experts was appropriately reflected in the calculation of the mine rehabilitation provisions. We assessed the reasonableness of economic assumptions, such as the discount and inflation rates that were applied in the calculations. We assessed the adequacy of the related financial report disclosures in Note 19. Information Other than the Financial Report and Auditor’s Report The Directors are responsible for the other information. The other information comprises the information included in the Group’s 2023 Annual Report other than the financial report and our auditor’s report thereon. We obtained the Directors’ Report that is to be included in the Annual Report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the Annual Report after the date of this auditor’s report. Our opinion on the financial report does not cover the other information and we do not and will not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Newcrest Annual Report 2023 177 In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors. Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 178 Independent Auditor’s Report continued We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the Directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Audit of the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in the Directors' Report for the year ended 30 June 2023. In our opinion, the Remuneration Report of Newcrest Mining Limited for the year ended 30 June 2023, complies with section 300A of the Corporations Act 2001. Responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Ernst & Young Glenn Carmody Partner Melbourne 11 August 2023 Richard Bembridge Partner A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Newcrest Annual Report 2023 Shareholder Information ISSUED CAPITAL (ON 18 AUGUST 2023) Title of Class Ordinary TWENTY LARGEST SHAREHOLDERS AS AT 18 AUGUST 2023 Name HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED CITICORP NOMINEES PTY LIMITED J P MORGAN NOMINEES AUSTRALIA PTY LIMITED BNP PARIBAS NOMS PTY LTDNATIONAL NOMINEES LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2 CEDE AND CO HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA BNP PARIBAS NOMINEES PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM CITICORP NOMINEES PTY LIMITED CDS & CO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 MCCUSKER HOLDINGS PTY LTD 16 17 18 19 20 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED BNP PARIBAS NOMS PTY LTD PACIFIC CUSTODIANS PTY LIMITED BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD ARGO INVESTMENTS LIMITED Total SUBSTANTIAL SHAREHOLDERS 1 AS AT 18 AUGUST 2023 Name Allan Gray Australia Pty Ltd and related bodies corporate BlackRock Group (BlackRock Inc. and subsidiaries) State Street Corporation and subsidiaries Vanguard Group and controlled entities (1) As notified to Newcrest under section 671B of the Corporations Act 2001. (2) This number includes 21,581 American Depositary Receipts. DISTRIBUTION OF SHAREHOLDERS AS AT 18 AUGUST 2023 Size of Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and Over Total 179 Number of Shareholders Number of Shares 77,466 894,230,732 Number of Shares 360,273,432 166,339,934 140,475,205 29,731,715 23,267,970 15,274,498 9,705,525 7,998,454 7,158,385 6,926,636 6,465,677 4,504,268 3,073,509 2,760,663 2,095,000 2,075,285 1,965,954 1,756,849 1,540,410 1,424,403 794,813,772 % Issued Capital 40.29 18.60 15.71 3.33 2.60 1.71 1.09 0.90 0.80 0.77 0.72 0.50 0.34 0.31 0.23 0.23 0.22 0.20 0.17 0.16 88.88 Number of Shares 56,379,115(2) 87,666,192 54,568,016 44,719,262 % Issued Capital 6.30 9.80 6.11 5.00 Number of Shareholders Number of Shares % Issued Capital 59,745 15,304 1,585 805 27 17,554,623 32,967,733 11,081,390 28,648,891 803,978,093 1.96 3.69 1.24 3.20 89.91 77,466 894,230,732 100.00 The number of shareholders holding less than a marketable parcel of ordinary shares was 4,011 (based on the closing market price on 18 August 2023). 180 Shareholder Information continued DISTRIBUTION OF RIGHTS HOLDERS AS AT 18 AUGUST 2023 Size of Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and Over Total Number of Rights holders Number of Rights % Issued Rights 637 270 80 29 4 236,011 724,543 530,782 774,929 556,038 8 26 19 27 20 1,020 2,822,303 100.00 UNQUOTED EQUITY SECURITIES AS AT 18 AUGUST 2023 ON MARKET BUY-BACK The number of performance rights on issue under Newcrest’s Equity Incentive Plan was 2,822,303 and the number of holders of those performance rights was 1,020. RESTRICTED SECURITIES OR SECURITIES SUBJECT TO VOLUNTARY ESCROW Newcrest currently has no restricted securities or securities subject to voluntary escrow. VOTING RIGHTS Each ordinary shareholder present at a general meeting (whether in person, by proxy or by representative) is entitled to one vote on a show of hands or, on a poll, one vote for each fully paid ordinary share held. Performance Rights do not carry any voting rights. 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 Board has determined a final dividend of US 20 cents per share for the year ended 30 June 2023. An interim dividend of US 15 cents per share and a special dividend of US 20 cents per share were paid on 30 March 2023. Mandatory Direct Credit of dividends applies to shareholders with a registered address in Australia, Papua New Guinea or New Zealand. Those shareholders are unable to receive their dividend by way of cheque. Shareholders should provide or update their bank account details online or via a relevant form (see below Online Share Registry Information). The Dividend Reinvestment Plan (DRP) will not apply to the final dividend as the Newcrest Board has determined to suspend the DRP with effect from 11 August 2023. AMERICAN DEPOSITARY RECEIPTS Newcrest may also be traded in the form of American Depositary Receipts (ADRs) in the United States, over-the-counter market. Each ADR represents one Newcrest ordinary share. The program is administered on behalf of the Company by The Bank of New York Mellon. Contact details are set out in the Corporate Directory Section of this Report, which is inside the back cover. ADR holders are not members of the Company but may instruct The Bank of New York Mellon as to the exercise of voting rights pertaining to the underlying shareholding. During the 2023 financial year, the net movement for ADRs was an increase of 4,113,218 and at year-end a net 12,239,330 ADRs were outstanding. Newcrest currently has no on-market buy-back program. INVESTORS Investors can access Newcrest’s market releases, reports, presentations, dividend history, shareholder information, key dates, the Interactive Analyst CentreTM and other information through the investor section on the Company’s website (https://www.newcrest.com/investor-centre/overview). ONLINE SHARE REGISTRY INFORMATION Visit the Company’s Share Registry, Link Market Services, at www.linkmarketservices.com.au to access a wide variety of your holding information, make the following changes online or download forms. You can: – check your current holding and balances; – update your electronic communication instructions; – update your address and 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; and – download a variety of instruction forms. You can access your holding via your Portfolio login (you will need your password). If you do not have a Portfolio login please register for a Portfolio. To register, you will need your Securityholder Reference Number (SRN) or Holder Identification Number (HIN), which you will find on your holding record. You will also need the postcode recorded on your holding record. SHARE REGISTRY CONTACT INFORMATION You can also contact the Company’s Share Registry by calling 1300 554 474 within Australia or +61 1300 554 474 from outside Australia. More Share Registry contact details and the location of the company’s registers are set out in the Corporate Directory section of this Report, which is inside the back cover. ANNUAL REPORT You can access a full copy of the Annual Report online at www.newcrest.com. If you no longer wish to receive a hard copy of the Annual Report, log into your shareholding or contact our Share Registry to update your communication instructions. SCHEME BOOKLET Newcrest’s scheme booklet was announced on 8 September 2023 and subsequently distributed to shareholders. You can access a full copy of the scheme booklet online at www.newcrest.com. Newcrest Annual Report 2023 Five Year Summary 181 For the 12 months ended 30 June (1) 2023 2022 2021 2020 2019 Gold Production (ounces) Cadia Lihir Telfer Brucejack (2) Red Chris (3) Fruta del Norte (4) Gosowong (5) Total Copper Production (tonnes) Silver Production (ounces) Molybdenum Production (tonnes) All-In Sustaining Cost (US$ per ounce) (6) Cash Flow (US$m) Cash flow from operations Capital expenditure Exploration expenditure Free cash flow (7) Profit and Loss (US$m) Sales revenue Depreciation and amortisation Income tax expense Net profit after tax: – Statutory profit (8) – Underlying profit (9) Earnings per share and dividends (US cents per share) Earnings per share (EPS): – Basic EPS on statutory profit – Basic EPS on underlying profit Dividends (10) Financial Position (US$m) Total assets Total liabilities Total equity Ratios Leverage ratio (times) (11) Gearing (%) (12) Return on Capital Employed (%) (13) Issued Capital (million shares) at year end Gold Inventory (million ounces) (14),(15),(16) Ore Reserves (14) Measured and Indicated Mineral Resources (17),(18) Inferred Mineral Resources (17),(18) 596,879 670,013 348,823 286,003 39,342 164,008 – 560,702 687,445 407,550 114,421 42,341 143,723 – 764,895 737,082 416,138 – 45,922 129,285 – 843,338 775,978 393,164 – 38,933 16,422 103,282 912,777 932,784 451,991 – – – 190,186 2,105,068 1,956,182 2,093,322 2,171,118 2,487,739 133,149 120,650 1,384,969 1,021,719 660 1,093 1,605 1,181 143 404 4,508 891 298 778 778 87.0 86.8 55.0 17,521 5,809 11,712 0.7 11.1 9.0 894 64 130 25 277 1,043 1,680 1,417 120 (868) 4,207 750 357 872 872 103.4 103.4 27.5 17,359 5,694 11,665 0.6 10.2 11.4 893 61 120 21 142,724 944,521 – 911 2,302 1,119 115 1,104 4,576 673 504 1,164 1,164 142.5 142.5 55.0 14,714 4,590 10,124 (0.1) (1.8) 18.5 817 55 110 14 137,623 105,867 983,431 1,004,507 – 738 1,487 531 78 804 3,742 746 272 561 561 73.0 73.0 22.0 11,837 4,206 7,631 0.2 4.9 11.2 768 60 – 862 1,471 695 113 (621) 3,922 644 350 647 750 83.4 96.7 25.0 13,242 4,629 8,613 0.3 6.8 13.8 816 57 110 12 (1) All financial data presented in this summary is quoted in US dollars unless otherwise stated. (2) Newcrest completed the Pretium transaction on 9 March 2022. In accordance with accounting standards, the acquisition date has been determined to be 25 February 2022. All Brucejack figures relating to FY22 represent the period since Newcrest’s acquisition. (3) Represents Newcrest’s 70% share of the unincorporated Red Chris Joint Venture. Production outcomes for 2020 are reported from the date of acquisition (15 August 2019). (4) Represents Newcrest’s attributable share of 32%, through its 32% equity interest in Lundin Gold Inc. (5) Production from Gosowong is shown up to the divestment date of 4 March 2020. (6) Includes Newcrest’s 32% attributable share of Fruta del Norte through its 32% equity interest in Lundin Gold Inc. (7) Free cash flow is calculated as cash flows from operating activities less cash flows relating to investing activities. (8) Statutory profit is profit after tax attributable to the owners of the Company. (9) Underlying profit is profit or loss after tax before significant items attributable to owners of the Company. (10) Dividends declared/determined in respect of each financial year. 182 Five Year Summary continued (11) Calculated as net debt divided by EBITDA of the preceding 12 months. Calculated as at 30 June. (12) Calculated as net debt divided by net debt and total equity. Calculated as at 30 June. (13) Calculated as EBIT expressed as a percentage of average total capital employed (net debt and total equity). (14) Reserves and Resources are as at 30 June 2023 for 2023, 30 June 2022 for 2022, 31 December 2020 for 2021, 31 December 2019 for 2020 and 31 December 2018 for 2019. (15) For confidence classification breakdown of tonnes and grades refer Table 5 for Mineral Resources on Page 27, Table 6 for Inferred Resources on Page 28 and Table 11 for Ore Reserves on Page 31. (16) All data reported on a 100% asset basis. Data with respect to 2021, 2020 and 2019 has been converted to 100%. (17) In August 2021, Newcrest announced an updated Ore Reserve and Mineral Resource estimate for Cadia East (refer Newcrest release titled “Cadia PC1-2 Pre-Feasibility Study delivers attractive returns” dated 19 August 2021). The reserves for Cadia East comprise a portion of the reserves for the Cadia operations. The estimates included in that release are not reflected in the estimates quoted on this page (as estimates for the remainder of the Cadia operations have not been updated since their effective date) and supersede the estimates for Cadia East included in Newcrest’s release titled “Annual Mineral Resource and Ore Reserves Statement – 31 December 2020” dated 11 February 2021. (18) Measured and Indicated and Inferred Mineral Resource estimates are not stated under column 2019 as estimates for these years were prepared prior to Newcrest’s secondary listing on the Toronto Stock Exchange in October 2020 and are not in accordance with NI 43-101. The Resource estimates as at 31 December 2019 were restated and republished in Newcrest’s release titled “Annual Mineral Resources and Ore Reserves Statement – as at 31 December 2020” dated 11 February 2021. Newcrest Annual Report 2023 Disclaimers 183 Forward Looking Statements This document includes forward looking statements and forward looking information within the meaning of securities laws of applicable jurisdictions, including within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. We intend the forward-looking statements contained in this communication to be covered by the safe harbor provisions of such securities laws. All statements other than statements of historical fact in this communication or referred to or incorporated by reference into this communication are “forward looking statements” for purposes of these sections. Forward looking statements can generally be identified by the use of words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “target”, “anticipate”, “believe”, “continue”, “objectives”, “outlook” and “guidance”, or other similar words and may include, without limitation, statements regarding estimated reserves and resources, internal rates of return, expansion, exploration and development activities and the specifications, targets, results, analyses, interpretations, benefits, costs and timing of such activities; certain plans, strategies, aspirations and objectives of management, anticipated production, sustainability initiatives, climate scenarios, dates for projects, reports, studies or construction, expected costs, cash flow or production outputs and anticipated productive lives of projects and mines. Newcrest continues to distinguish between outlook and guidance. Guidance statements relate to the current financial year. Outlook statements relate to years subsequent to the current financial year. These forward looking statements involve known and unknown risks, uncertainties and other factors that may cause Newcrest’s actual results, performance, and achievements to differ materially from any future results, performance or achievements, expressed or implied by these forward looking statements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of resources or reserves, political and social risks, changes to the regulatory framework within which Newcrest operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation. In addition, with respect to the Newmont Transaction, relevant factors may include, among others: (1) the risk that the Newmont Transaction may not be completed in a timely manner or at all, (2) the failure to receive, on a timely basis or otherwise, the required approvals of the Newmont Transaction by Newmont stockholders or Newcrest shareholders or the required approval of the scheme of arrangement by the Australian court, (3) the possibility that any or all of the various conditions to the consummation of the Newmont Transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals), (4) the possibility that competing offers or acquisition proposals for Newcrest or Newmont will be made, (5) the occurrence of any event, change or other circumstance that could give rise to the termination of the SID, including in circumstances which would require Newcrest to pay a termination fee, (6) the effect of the announcement or pendency of the Newmont Transaction on Newcrest’s ability to retain and hire key personnel, its ability to maintain relationships with its customers, suppliers and others with whom it does business, or its operating results and business generally, (7) risks related to diverting management’s attention from Newcrest’s ongoing business operations, (8) the risk of litigation in connection with the Newmont Transaction, including resulting expense or delay, and (9) (A) those risks discussed in Newcrest’s Annual Report for the year ended 30 June 2023 and its Annual Information Form dated 13 December 2022, and (B) those risks discussed in other documents Newcrest files with the ASX and the Canadian Securities Administrators. For further information as to the risks which may impact Newcrest’s results and performance, please see the risk factors discussed in the Operating and Financial Review of this Annual Report for the year ended 30 June 2023 and the Annual Information Form dated 13 December 2022 which are available to view at www.asx.com.au under the code “NCM” and on Newcrest’s SEDAR profile. Forward looking statements are based on Newcrest’s current expectations and reflect Newcrest’s good faith assumptions, judgements, estimates and other information available as at the date of this document and/ or the date of Newcrest’s planning or scenario analysis processes as to the financial, market, regulatory and other relevant environments that will exist and affect Newcrest’s business and operations in the future. Newcrest does not give any assurance that the assumptions will prove to be correct. There may be other factors that could cause actual results or events not to be as anticipated, and any events are beyond the reasonable control of Newcrest. Readers are cautioned not to place undue reliance on forward looking statements, particularly in the current economic climate with the significant volatility, uncertainty and disruption caused by global events such as geopolitical tensions. Forward looking statements in this document speak only at the date of issue. Except as required by applicable laws or regulations, Newcrest does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in assumptions on which any such statement is based. Non-IFRS Financial Information Newcrest’s results are reported under International Financial Reporting Standards (IFRS). This document includes non-IFRS financial information within the meaning of ASIC Regulatory Guide 230: ‘Disclosing non-IFRS financial information’ published by ASIC and within the meaning of National Instrument 52-112 – Non-GAAP and Other Financial Measures published by the Canadian Securities Administrator. Such information includes: ‘Underlying profit’ (profit or loss after tax before significant items attributable to owners of the Company); ‘EBITDA’ (earnings before interest, tax, depreciation and amortisation, and significant items); EBIT (earnings before interest, tax and significant items); ‘EBITDA Margin’ (EBITDA expressed as a percentage of revenue); ‘EBIT Margin’ (EBIT expressed as a percentage of revenue); ‘ROCE’ (‘Return on capital employed’ and calculated as EBIT expressed as a percentage of average total capital employed (net debt and total equity)); ‘Interest coverage ratio’ (calculated as EBITDA adjusted for facility fees and discount unwind on provisions, divided by net interest payable (interest expense adjusted for facility fees, discount unwind on provisions and interest capitalised)); ‘Leverage ratio (Net debt to EBITDA)’ (calculated as net debt divided by EBITDA for the preceding 12 months); ‘Free Cash Flow’ (calculated as cash flow from operating activities less cash flow related to investing activities, with Free Cash Flow for each operating site calculated as Free Cash Flow before interest, tax and intercompany transactions); ‘Free Cash Flow before M&A activity’ (being ‘Free Cash Flow’ excluding acquisitions, investments in associates and divestments); and ‘AISC’ (All-In Sustaining Cost) and ‘AIC’ (All-In Cost) as per updated World Gold Council Guidance Note on Non-GAAP Metrics released November 2018. AISC will vary from period to period as a result of various factors including production performance, timing of sales and the level of sustaining capital and the relative contribution of each asset. AISC Margin reflects the average realised gold price less the AISC per ounce sold. 184 Disclaimers continued These measures are used internally by Newcrest management to assess the performance of the business and make decisions on the allocation of resources and are included in this document to provide greater understanding of the underlying performance of Newcrest’s operations. The non-IFRS information has not been subject to audit or review by Newcrest’s external auditor and should be used in addition to IFRS information. Such non-IFRS financial information/non-GAAP financial measures do not have a standardised meaning prescribed by IFRS and may be calculated differently by other companies. Although Newcrest believes these non-IFRS/non-GAAP financial measures provide useful information to investors in measuring the financial performance and condition of its business, investors are cautioned not to place undue reliance on any non-IFRS financial information/non-GAAP financial measures included in this document. When reviewing business performance, this non-IFRS information should be used in addition to, and not as a replacement of, measures prepared in accordance with IFRS, available on Newcrest’s website, the ASX platform and SEDAR. Reliance on Third Party Information This document contains information that has been obtained from third parties and has not been independently verified, including estimates and actual outcomes that relate to production and AISC for Fruta del Norte. No representation or warranty is made to the accuracy, completeness or reliability of the information. This document should not be relied upon as a recommendation or forecast by Newcrest. Long Term Outlook Newcrest released an indicative longer-term outlook in October 2021 based on the findings of the Cadia PC1-2 Pre-Feasibility Study dated 19 August 2021, and the Red Chris Block Cave, Havieron Stage 1 and Lihir Phase 14A Pre-Feasibility Studies dated 12 October 2021. The PFS findings are indicative only, subject to an accuracy range of ±25% and should not be construed as guidance. Newcrest released the Cadia PC1-2 Feasibility Study on 11 November 2022 and the Lihir Phase 14A Feasibility Study on 25 January 2023. Newcrest is currently progressing the other studies through the Feasibility Stage, which will take into account revised inflationary expectations and updated project economics. As a result, it is expected that the indicative longer-term outlook will be updated on completion of the remaining studies. Ore Reserves, Mineral Reserves and Mineral Resources Requirements As an Australian Company with securities listed on the Australian Securities Exchange (ASX), Newcrest is subject to Australian disclosure requirements and standards, including the requirements of the Corporations Act 2001 and the ASX. Investors should note that it is a requirement of the ASX Listing Rules that the reporting of Ore Reserves and Mineral Resources in Australia is in accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and that Newcrest’s Ore Reserve and Mineral Resource estimates and reporting comply with the JORC Code. Newcrest is also subject to certain Canadian disclosure requirements and standards, as a result of its secondary listing on the Toronto Stock Exchange (TSX), including the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101). Investors should note that it is a requirement of Canadian securities law that the reporting of Mineral Reserves and Mineral Resources in Canada and the disclosure of scientific and technical information concerning a mineral project on a property material to Newcrest comply with NI 43-101. Newcrest’s material properties are currently Cadia, Lihir, Red Chris and Wafi-Golpu. Copies of the NI 43-101 Reports for Cadia, Lihir and Wafi- Golpu, which were released on 14 October 2020, and Red Chris, which was released on 30 November 2021, are available at www.newcrest.com and on Newcrest’s SEDAR profile. Competent Person’s Statement The information in this document that relates to Mineral Resources and Ore Reserves as at 30 June 2023 has been extracted from the release titled “Annual Mineral Resources and Ore Reserves Statement – as at 30 June 2023” dated 11 August 2023 which is available to view at www.asx.com.au under the code “NCM” (the original release). Newcrest confirms that it is not aware of any new information or data that materially affects the information included in the original release and that all material assumptions and technical parameters underpinning the estimates in the original release continue to apply and have not materially changed. Newcrest confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original release. The information in this document that relates to the Exploration Target at Red Chris has been extracted from Newcrest’s release titled “Red Chris exploration success expands East Ridge Exploration Target delivering additional mining potential” dated 14 March 2023 (the original exploration release). The information in the original exploration release is based on and fairly represents information compiled by Mr F. MacCorquodale. Mr MacCorquodale is the General Manager – Greenfields Exploration and a fulltime employee of Newcrest Mining Limited. He is a shareholder in Newcrest Mining Limited and is entitled to participate in Newcrest’s executive equity long term incentive plan, details of which are included in Newcrest’s 2023 Remuneration Report. He is a Member of the Australian Institute of Geoscientists. Mr MacCorquodale has sufficient experience which is relevant to the styles of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the JORC Code and as a Qualified Person under NI 43-101. Mr MacCorquodale approves the disclosure of scientific and technical information contained in this document and consents to the inclusion of material of the matters based on his information in the form and context in which it appears. Technical and Scientific Information The technical and scientific information contained in this document relating to Cadia, Lihir and Red Chris were reviewed and approved by Craig Jones, Newcrest’s Interim Chief Operating Officer, FAusIMM and a Qualified Person as defined in NI 43-101. Newcrest Annual Report 2023 Company Events Scheme Meeting 13 October 2023 at 10:30am (Melbourne time) RACV City Club 501 Bourke Street Melbourne, Victoria 3000 Visit our website at www.newcrest.com to view our: key dates; current share price; market releases; annual, quarterly and financial reports; operations, project and exploration information; corporate, shareholder, employment and sustainability information; scheme booklet. Corporate Directory Investor Information Share Registries Registered and Principal Office Australia Newcrest Mining Limited Level 8, 600 St Kilda Road Melbourne, Victoria 3004 Australia T: +61 (0)3 9522 5333 F: +61 (0)3 9522 5500 E: investor.relations@newcrest.com.au www.newcrest.com Company Secretaries Maria Sanz Perez and Claire Hannon Newcrest Mining Limited Level 8, 600 St Kilda Road Melbourne, Victoria 3004 Australia T: +61 (0)3 9522 5333 F: +61 (0)3 9522 5500 E: ria.sanz@newcrest.com.au E: claire.hannon@newcrest.com.au Investor Relations Tom Dixon Head of Investor Relations Newcrest Mining Limited Level 8, 600 St Kilda Road Melbourne, Victoria 3004 Australia T: +61 (0)3 9522 5570 E: tom.dixon@newcrest.com.au Vlada Cvijetinovic Vice President Legal & Investor Relations – Americas 800–1066 W Hastings Street Oceanic Plaza Vancouver, BC V6E 3X2 Canada T: +1 604 335 9202 Link Market Services Level 12, 680 George Street Sydney, NSW 2000 Australia Locked Bay A14 Sydney South, New South Wales 1235 Australia T: 1300 554 474 (toll free within Australia) F: +61 (0)2 9287 0303 +61 (0)2 9287 0309* * For faxing of Proxy Forms only. 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