Newcrest Mining : Cadia expansion & Lihir recovery improvement projects approved

Market Release

9 October 2020

Cadia expansion & Lihir recovery improvement projects approved

Today the Newcrest Board approved two projects moving to the Execution phase, being Stage 2 of the Cadia Expansion Project and the Lihir Front End Recovery Project.

Key Points

Cadia Expansion Project - Stage 21,2

• Primarily comprises the addition of a second Coarse Ore Flotation circuit in Concentrator 1 and equipment upgrades in Concentrator 2, which are projected to result in:
  o Plant capacity increasing from 33mtpa to 35mpta o LOM gold recoveries increasing by 3.5%
  o LOM copper recoveries increasing by 2.7%
  o AISC3,4 reducing by an estimated $22 per ounce
• Estimated capital cost for Stage 2 is $175m, $5 million lower than the October 2019 estimate
• Timing for delivery remains on schedule, with completion expected in late FY22
• Attractive project economics, with a projected:

1. IRR of 21%3,4

1. Payback of 4.2 years3,4

Lihir Front End Recovery Project5,6

• Primarily comprises the installation of flash flotation and additional cyclone capacity, as well as cyclone efficiency upgrades, to improve grinding classification and reduce gold losses through the flotation circuits. This is projected to result in:
• 1. LOM gold recoveries increasing by 1.2%

• 1. Incremental LOM gold production increasing by 244koz7
• Estimated capital cost of $61 million
• Attractive project economics, with a projected:
• 1. IRR of 32%6,7

1. Payback of 2.6 years6,7

1. Stage 2 of the Cadia Expansion 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 Cadia Expansion Project are subject to all the necessary approvals, permits, internal and regulatory requirements and further works. The estimates are indicative only and are subject to market and operating conditions. They should not be construed as guidance.
2. As Cadia's functional currency is AUD, the Studies have been assessed in AUD. The outcomes for the Cadia Expansion Project - Stage 2 in this market release have been converted to USD using the following exchange rates: FY21 0.70, FY22 0.71, FY23 0.72, FY24 0.73 and FY25+
3. The production targets underpinning the estimates are shown on Page 3 in the graphs titled "Cadia's estimated gold and copper production".
4. The production targets underpinning the estimates are based on the utilisation of 100% of the Cadia East Ore Reserves, being 20moz
   Probable Reserves as at 31 December 2019 (see release titled "Annual Mineral Resources and Ore Reserves Statement - 31 December 2019" dated 13 February 2020), but subject to depletion for the period since 1 January 2020.
5. The Lihir Front End Recovery Project 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 Lihir Front End Recovery Project are subject to all the necessary approvals, permits, internal and regulatory requirements and further works. The estimates are indicative only and are subject to market and operating conditions. They should not be construed as guidance.
6. The production targets underpinning the estimates are based on the utilisation of 100% of the Lihir Ore Reserves, being 23moz Probable and Proven Reserves as at 31 December 2019 (see release titled "Annual Mineral Resources and Ore Reserves Statement - 31 December 2019" dated 13 February 2020), but subject to depletion for the period since 1 January 2020.
7. The production targets underpinning the estimates are shown on page 5 in the graphs titled "Estimated incremental gold production".

Newcrest Mining Limited - Level 8, 600 St Kilda Road, Melbourne -- www.newcrest.com

1

Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas said "It is an exciting time at Newcrest as we advance our growth pipeline with both of these projects adding value to our existing large scale, long life operations while we pursue the development of Red Chris and Havieron and exploration opportunities globally."

"Stage 2 of the Cadia Expansion Project increases plant capacity to 35mtpa, enabling an increase in gold and copper recoveries, an increase in production and a reduction in unit costs. Cadia is one of the largest, lowest cost, long life gold mines in the world due to the application of Newcrest's industry leading block caving technology, and this investment helps Cadia maintain this industry leading position."

"The Lihir Front End Recovery Project is expected to deliver additional production through an improvement in gold recoveries over the life of the mine. Lihir's long reserve life makes this improvement in gold recoveries particularly valuable to our shareholders."

"I am pleased that Newcrest is able to generate well paying jobs for people in Australia and Papua New Guinea over the next two years. Stages 1 and 2 of the Cadia Expansion Project are expected to generate direct employment in Australia of approximately 860 people at its peak, whilst the Lihir Front End Recovery project is expected to generate direct employment of approximately 150 people at its peak."

Mr Biswas further said "Both projects demonstrate how we are using innovation and our technical expertise to continually improve our operations. With a strong balance sheet, low cost production, a range of organic growth options and a strong exploration portfolio, Newcrest is well positioned for the future."

Cadia Expansion Stage 21,2

Stage 2 of the Cadia Expansion comprises a further expansion of nameplate capacity of the plant to 35mtpa, which is achieved by:

• Increasing throughput capacity in Concentrator 2 (Con 2) from 7mtpa to 9mtpa through crushing, grinding, cyclone, pumps and flotation upgrades; and
• Installation of a second Coarse Ore Flotation circuit on Concentrator 1 (Con 1) and additional upgrades to Con 1 to facilitate an increase in throughput capacity to up to 26 mtpa.

These works are scheduled for completion in late FY22, prior to the completion of PC2-3 mine development.

Stage 2 - Key financial metrics3,4

Key Project Metrics	Units	Value
NPV	US$m Real	325
IRR	%	21%
Capex	US$m Real	175
Payback	Years	4.2
AISC reduction	US$/oz	22
Target LOM gold recovery	%	80.3
Target LOM copper recovery	%	85.2

Newcrest Mining Limited - Level 8, 600 St Kilda Road, Melbourne - www.newcrest.com

2

Stage 1, which is already in execution, was designed to maintain production continuity at Cadia through the development of PC2-3 and increase the processing capacity to 33mtpa. Stage 1 comprises an upgrade to the materials handling system and debottlenecking of the Con 1 comminution circuit.

The rate of ore mined from Cadia is expected to vary over time according to draw rates, cave maturity and cave interaction as further caves are developed. From FY27 onwards, life of mine (LOM) Cadia mining rates are generally expected to be in the range of 33-35mtpa8, with an average of 34mtpa used for financial evaluation purposes. Higher mine production rates may be possible, subject to further studies.

At throughput rates of 34mtpa, gold recovery improvements from Stages 1 and 2 are expected to achieve LOM gold recoveries of 80.3% and LOM copper recoveries of 85.2% compared to Stage 1 baselines of 76.8% for gold and 82.5% for copper.

Cadia's estimated gold and copper production8

Con 2 - Proposed new facilities

New Tertiary

Grinding Mill

New Rougher

Jameson Cell

8 The production targets shown are based on the utilisation of 100% of the Cadia East Ore Reserves, being 20moz Probable Reserves as at 31

December 2019 (see release titled "Annual Mineral Resources and Ore Reserves Statement - 31 December 2019" dated 13 February 2020), but subject to depletion for the period since 1 January 2020. The targets shown are indicative only and should not be construed as guidance. Achievement of targets is subject to market and operating conditions.

Newcrest Mining Limited - Level 8, 600 St Kilda Road, Melbourne - www.newcrest.com

3

Con 1 - Proposed new Coarse Ore Flotation building

Lihir Front End Recovery Project5

The Lihir Front End Recovery Project aims to increase the overall Lihir processing plant gold recovery by improving grinding classification and reducing gold losses through the flotation circuits, through the installation of flash flotation and additional cyclone capacity on the High Grade Ore One (HGO1) circuit, as well as cyclone efficiency upgrades of the Flotation Grade Ore (FGO) circuit.

The flash flotation and cyclone upgrades target the following process improvements:

• Implement flash flotation to reduce mineral fines generated from overgrinding and send the higher- grade concentrate stream to the autoclaves
• Improve cyclone efficiency to achieve a reduction in unliberated coarse mineral particles entering the cyclone overflow, which are not recovered in conventional flotation.

Lihir Front End Recovery Project - Key financial metrics6,7

Metric	Units	Value
Incremental NPV	US$m Real	94
IRR	%	32
Payback	Years	2.6
Expansion capital expenditure	US$m Real	61
LOM average processing recovery improvements	%	1.2
LOM Incremental gold production9	koz	244

Newcrest Mining Limited - Level 8, 600 St Kilda Road, Melbourne - www.newcrest.com

4