subject: market release for personal use only · 4/1/2014 · level 9 . 600 st kilda road ....

LEVEL 9 600 ST KILDA ROAD MELBOURNE VICTORIA 3004 AUSTRALIA

PO BOX 6213 ST KILDA ROAD CENTRAL MELBOURNE 8008

T +613 9522 5333 F +613 9525 2996 www.newcrest.com.au

A MEMBER OF THE NEWCREST MINING GROUP

ABN 20 005 683 625

To: Company Announcements Office From: Peter Larsen Date: 1 April 2014 Subject: Market Release Please see the attached for immediate release to the market. Yours sincerely

Peter Larsen Company Secretary

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Market Release Newcrest Mining 1 April 2014

Newcrest releases Telfer and Lihir Technical Reports

Newcrest Mining Limited (Newcrest) today released Technical Reports on the Telfer Property in Western Australia, and the Lihir Property in Papua New Guinea, prepared in accordance with the requirements of Canadian National Instrument 43-101. Release of the Reports follows the release of Newcrest’s 2013 Resources and Reserves Statement for the twelve month period ended 31 December 2013, which included details of material changes to the Telfer Mineral Resource and Mineral Reserve, and the Lihir Mineral Resource and Mineral Reserve. The Technical Reports on each of the Telfer Property and the Lihir Property have been prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators (“NI 43-101”) and the provisions of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards – for Mineral Resources and Ore Reserves 2010 (“CIM Definition Standards”) for lodgement on CSA’s “System for Electronic Document Analysis and Retrieval” (SEDAR). The Mineral Reserve and Mineral Resource estimates in each Report have been prepared under the direction of a Qualified Person, as defined in NI 43-101, using accepted industry practice and have been classified in accordance with the JORC Code. Except as described below, there are no material differences between the definitions of Proven and Probable Mineral Reserves under the applicable definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM Definition Standards”) and the corresponding equivalent definitions in the JORC Code for Proved and Probable Ore Reserves. It is noted that under the CIM Definition Standards, the completion of a pre-feasibility study is the minimum prerequisite for the conversion of Mineral Resources to Mineral Reserves. The JORC Code 2012, which came into effect on 1 December 2013, prescribes completion of a pre-feasibility study as a minimum prerequisite to declare an Ore Reserve (the JORC equivalent of a Mineral Reserve); however this requirement of the JORC Code does not come into effect until 1 December 2014. A pre-feasibility study within the meaning of the CIM Definition Standards has not yet been completed in respect of Telfer Underground Vertical Stockwork Corridor (VSC) and O’Callaghans deposits and these have therefore been excluded from the Mineral Reserve estimates.

For further information, please contact: Investor Enquiries Media Enquiries Steve Warner Kerrina Watson T: +61 3 9522 5493 T: +61 3 9522 5593 E: [email protected] E: [email protected] This information is available on our website at www.newcrest.com.au

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mailto:[email protected]

Technical Report Newcrest Mining March 2014

TECHNICAL REPORT ON THE

TELFER PROPERTY IN

WESTERN AUSTRALIA AUSTRALIA

Prepared by Newcrest Mining Limited,

in accordance with the requirements of National Instrument 43-101, Standards for Disclosure of Mineral Projects,

of the Canadian Securities Administrators.

Qualified Persons: Mr Colin Moorhead BSc (Hons), FAusIMM

Effective Date of Report: 31 December 2013 For

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i Newcrest Mining – Technical Report on the Telfer Property - 31 December 2013

CONTENTS

1 SUMMARY ................................................................................................................. 1 Introduction and Terms of Reference ........................................................................ 1 1.1 Geology ........................................................................................................ 1 1.2 Mine Production ............................................................................................ 1 1.3 Mineral Resources ........................................................................................ 1 1.4 Mineral Reserves .......................................................................................... 2 1.5 Mining Operations ......................................................................................... 3

1.5.1 Main Dome and West Dome (Open Pit) ............................................. 3 1.5.2 Telfer Main Dome Underground (Underground) ................................ 4

1.6 Infrastructure and Concentrate Handling ....................................................... 6 1.7 Environment and Community Management .................................................. 6 1.8 Capital and Operating Costs ......................................................................... 6 1.9 Conclusions .................................................................................................. 7 1.10 Recommendations ........................................................................................ 7

2 INTRODUCTION ........................................................................................................ 8 2.1 General and Terms of Reference .................................................................. 8 2.2 Report Authors .............................................................................................. 8 2.3 Units of Measure and Currency ..................................................................... 9

3 RELIANCE ON OTHER EXPERTS ........................................................................... 11

4 PROPERTY DESCRIPTION AND LOCATION.......................................................... 12 4.1 Property Location ........................................................................................ 12 4.2 Land Tenure ............................................................................................... 13 4.3 Relevant Agreements.................................................................................. 18

4.3.1 Westwin Option Agreement ............................................................. 18 4.3.2 Acebell Option Agreement ............................................................... 18 4.3.3 Cape Lambert Withdrawal and Royalty Agreement ......................... 18 4.3.4 Martu Agreements ........................................................................... 19

4.4 Royalties Payable ....................................................................................... 19 4.4.1 Mount Isa Mines Limited .................................................................. 19 4.4.2 Mineral Commodities Limited .......................................................... 19

4.5 Environmental Liabilities ............................................................................. 19

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ..................................................................................................... 20

5.1 Accessibility ................................................................................................ 20 5.1.1 Road ............................................................................................... 20 5.1.2 Air Strip ........................................................................................... 20

5.2 Climate ....................................................................................................... 20 5.3 Local Resources ......................................................................................... 20 5.4 Infrastructure ............................................................................................... 20

5.4.1 Water Supply ................................................................................... 20 5.4.2 Electricity Generation ...................................................................... 21 5.4.3 Gas Supply ...................................................................................... 21 5.4.4 Port Facilities ................................................................................... 21 5.4.5 Mining Camp ................................................................................... 21 5.4.6 Auxiliary Infrastructure ..................................................................... 21

6 HISTORY .................................................................................................................. 22 6.1 Discovery .................................................................................................... 22

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6.2 Telfer Gold Mine Development History ........................................................ 22 6.2.1 Introduction ..................................................................................... 22 6.2.2 Oxide Mining ................................................................................... 22 6.2.3 Sulphide Reef Mining ...................................................................... 23 6.2.4 High Cyanide Soluble Copper Mining .............................................. 23 6.2.5 Telfer Main Dome Underground (Deeps) ......................................... 23

6.3 Historic Mineral Resources ......................................................................... 24 6.4 Summary .................................................................................................... 24

7 GEOLOGICAL SETTING AND MINERALIZATION ................................................... 26 7.1 Telfer .......................................................................................................... 29

7.1.1 Geology ........................................................................................... 29 7.1.2 Mineralization .................................................................................. 32

7.2 O'Callaghans .............................................................................................. 36 7.2.1 Geology ........................................................................................... 36 7.2.2 Mineralization .................................................................................. 37

7.3 Camp Dome ................................................................................................ 37 7.3.1 Geology ........................................................................................... 37 7.3.2 Mineralization .................................................................................. 38

8 DEPOSIT TYPES ..................................................................................................... 39 8.1 Telfer .......................................................................................................... 39 8.2 O'Callaghans .............................................................................................. 39 8.3 Camp Dome ................................................................................................ 40

9 EXPLORATION ........................................................................................................ 41 9.1 Telfer .......................................................................................................... 41 9.2 O'Callaghans .............................................................................................. 41 9.3 Camp Dome ................................................................................................ 42

10 DRILLING ................................................................................................................. 43 10.1 Drilling Programmes.................................................................................... 43 10.2 Survey Control ............................................................................................ 47 10.3 Geological Logging ..................................................................................... 48 10.4 Sampling Procedures .................................................................................. 48

11 SAMPLE PREPARATION, ANALYSES AND SECURITY ......................................... 49 11.1 Historical Sample Preparation, Analysis and Security ................................. 49 11.2 Sample Preparation and Analyses .............................................................. 50 11.3 Sample Security .......................................................................................... 53 11.4 Main Dome QAQC ...................................................................................... 54

11.4.1 Certified Reference Materials .......................................................... 54 11.4.2 Coarse Duplicates and Pulp Replicates ........................................... 55 11.4.3 Second Laboratory Checks ............................................................. 57

11.5 West Dome QAQC ...................................................................................... 58 11.5.1 Certified Reference Materials (CRMs) ............................................. 58 11.5.2 Coarse Duplicates and Pulp Replicates ........................................... 60 11.5.3 Second Laboratory Checks ............................................................. 61

11.6 Satellite Projects ......................................................................................... 62 11.6.1 Certified Reference Materials (CRMs) ............................................. 62 11.6.2 Coarse Duplicates and Pulp Replicates ........................................... 63 11.6.3 Second Laboratory Checks ............................................................. 63

11.7 Summary of QAQC January 2011 to December 2013 ................................. 63

12 DATA VERIFICATION .............................................................................................. 64

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13 MINERAL PROCESSING AND METALLURGICAL TESTING .................................. 65

14 MINERAL RESOURCE ESTIMATES ........................................................................ 67 14.1 Telfer Main and West Dome Mineral Open Pit Resource Estimate Summary68 14.2 Telfer Underground Mineral Resource Estimate .......................................... 72

14.2.1 Geology Model ................................................................................ 72 14.2.2 Drill Data and Compositing .............................................................. 74 14.2.3 Bulk Domain Grade Modelling ......................................................... 74 14.2.4 Reef Grade Modelling ...................................................................... 82 14.2.5 Density Modelling ............................................................................ 87 14.2.6 Final Model Construction and Validation .......................................... 88 14.2.7 Resource Classification ................................................................... 90

14.3 Comparison to Previous Mineral Resource Estimate................................... 91 14.4 Factors Affecting Mineral Resource Estimate .............................................. 91

15 MINERAL RESERVE ESTIMATES ........................................................................... 92 15.1 Introduction ................................................................................................. 92 15.2 Mineral Reserve Assumptions ..................................................................... 93

15.2.1 Commodity Prices and Exchange Rates .......................................... 93 15.2.2 Cost Estimates ................................................................................ 93

15.3 Telfer Main Dome Open Pit Mineral Reserve .............................................. 93 15.4 Telfer West Dome Open Pit Mineral Reserve .............................................. 94 15.5 Telfer Main Dome Underground Mineral Reserves ..................................... 96

15.5.1 Telfer UG SLC Mineral Reserve ...................................................... 96 15.5.2 Telfer UG Western Flanks Mineral Reserve .................................... 97 15.5.3 Telfer UG M Reef Mineral Reserve .................................................. 99

15.6 Comparison to Previous Mineral Reserve Estimate .................................. 100 15.6.1 Factors Affecting the Mineral Reserve Estimates .......................... 101

16 MINING METHODS ................................................................................................ 102 16.1 Telfer Main Dome and West Dome Open Pit ............................................ 102 16.2 Telfer Main Dome Underground ................................................................ 103

16.2.1 Telfer UG Sub-level Cave (SLC) .................................................... 103 16.2.2 Telfer UG Western Flanks ............................................................. 103 16.2.3 Telfer UG M Reefs Selective Mining .............................................. 104

17 RECOVERY METHODS ......................................................................................... 105

18 PROJECT INFRASTRUCTURE .............................................................................. 108 18.1 Access Roads ........................................................................................... 108 18.2 Tailings Management ................................................................................ 108 18.3 Water Supply ............................................................................................ 108 18.4 Power Supply ............................................................................................ 108 18.5 Gas Supply ............................................................................................... 109 18.6 Port Facilities ............................................................................................ 109 18.7 Other Site Infrastructure ............................................................................ 109

19 MARKET STUDIES AND CONTRACTS ................................................................. 110 19.1 Newcrest Concentrate Characteristics ...................................................... 110 19.2 Transport and Storage .............................................................................. 110 19.3 Newcrest Concentrate Destination Smelters ............................................. 110 19.4 Concentrate Treatment and Copper Refining Charges .............................. 110 19.5 Precious Metal Terms and Refining Charges ............................................ 111 19.6 Weighing, Sampling and Moisture Determination and Assays and Analyses111 19.7 Doré .......................................................................................................... 111

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19.8 Marketing Resources ................................................................................ 111

20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT .................................................................................................................. 112

20.1 Overview ................................................................................................... 112 20.2 Individual Environmental Issues ................................................................ 112

20.2.1 Environmental Approvals ............................................................... 112 20.2.2 Management of Acid Forming Waste ............................................. 113 20.2.3 Water Supply and Management .................................................... 114 20.2.4 Closure and Rehabilitation ............................................................. 114 20.2.5 Community and Social Issues ....................................................... 115 20.2.6 Other Environmental Issues .......................................................... 115

21 CAPITAL AND OPERATING COSTS ..................................................................... 116

22 ECONOMIC ANALYSIS .......................................................................................... 118

23 ADJACENT PROPERTIES ..................................................................................... 119

24 OTHER RELEVANT DATA AND INFORMATION ................................................... 120

25 INTERPRETATION AND CONCLUSIONS ............................................................. 121

26 RECOMMENDATIONS ........................................................................................... 122

27 REFERENCES ....................................................................................................... 123

28 QUALIFIED PERSONS' CERTIFICATES ............................................................... 126

TABLES

Table 1.1 Telfer Copper and Gold Mineral Resources at 31 December 2013 ................2 Table 1.2 O'Callaghans Polymetallic Mineral Resource at 31 December 2013 .............2 Table 1.3 Telfer Copper and Gold Mineral Reserves at 31 December 2013 ..................3 Table 1.4 Telfer Operations FY2013 Actual Production and Operating Costs* ..............7 Table 1.5 Telfer Operations FY2014 Cost and Capital Guidance ..................................7 Table 2.1 Persons who Prepared or Contributed to this Technical Report .....................8 Table 2.2 Key Terms and Abbreviations........................................................................9 Table 4.1 Telfer Tenure Details ................................................................................... 13 Table 4.2 Telfer Details of Licence Holders ................................................................. 16 Table 6.1 Summary of Project History ......................................................................... 25 Table 10.1 Main Dome Drilling up to December 2013 ................................................... 44 Table 10.2 West Dome Drilling up to December 2013 ................................................... 45 Table 10.3 Telfer Main Dome Underground Drilling up to December 2013 .................... 45 Table 14.1 Telfer Copper and Gold Mineral Resources at 31 December 2013 .............. 67 Table 14.2 O'Callaghans Polymetallic Mineral Resource at 31 December 2013 ........... 68 Table 14.3 Wireframes for Geological Model ................................................................ 74 Table 14.4 Basic statistics for gold grade (ppm) for all bulk domains (undeclustered) ... 77 Table 14.5 Example Indicator variogram models used in the MIK estimation of gold

grade for the VSC domain. .......................................................................... 78 Table 14.6 Search neighbourhood parameters for MIK estimation of gold and copper

grade in the bulk domains. .......................................................................... 79 Table 14.7 Variogram models used in the OK estimation of gold and copper grade for

the LLU and Oakover domains. ................................................................... 79

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Table 14.8 Search neighbourhood parameters for OK estimation of gold and copper grade in the LLU and Oakover bulk domains. .............................................. 80

Table 14.9 Grade caps implemented for bulk domains during the OK estimation of sulphur, arsenic and cobalt grade ................................................................ 80

Table 14.10 The linear regression equations used to estimate sulphur as a function of copper ......................................................................................................... 81

Table 14.11 The linear regression equations used to estimate arsenic as a function of sulphur ........................................................................................................ 81

Table 14.12 The linear regression equations used to estimate cobalt as a function of sulphur ........................................................................................................ 82

Table 14.13 Basic statistics for gold grade (ppm) and intercept length (m) for all reef domains ...................................................................................................... 82

Table 14.14 Variogram, models for the estimation of gold and copper grade in the reef estimation domains ..................................................................................... 84

Table 14.15 Search parameters for OK Tetra Modelling of gold and copper grade in the reef domains ............................................................................................... 84

Table 14.16 Variogram, models for the estimation of sulphur, arsenic and cobalt grade in reef domains ............................................................................................... 85

Table 14.17 Search parameters for OK Tetra Modelling of sulphur, arsenic and cobalt grade in the reef domains ............................................................................ 85

Table 14.18 The linear regression equation used to estimate sulphur as a function of copper ......................................................................................................... 86

Table 14.19 The linear regression equation used to estimate arsenic and cobalt as functions of sulphur ..................................................................................... 86

Table 14.20 Basic statistics for density data, by domain, with no length-weighting applied .................................................................................................................... 87

Table 14.21 Constant density values assigned to bulk domains ...................................... 88 Table 15.1 Telfer Main Dome Open Pit Mineral Reserve Estimate at 31 December 2013

.................................................................................................................... 94 Table 15.2 Telfer West Dome Open Pit Mineral Reserve Estimate at 31 December 2013

.................................................................................................................... 95 Table 15.3 Telfer UG SLC Mineral Reserve Estimate at 31 December 2013 ................ 97 Table 15.4 Telfer Deeps Western Flanks Mineral Reserve Estimate at 31 December

2013 ............................................................................................................ 98 Table 15.5 Telfer UG M50 Reef Mineral Reserve Estimate at 31 December 2013 ...... 100 Table 17.1 Telfer Gold Production............................................................................... 106 Table 17.2 Telfer Production Statistics ........................................................................ 107 Table 21.1 Historical Production and Costs per Ounce of Gold Produced ................... 116 Table 21.2 Telfer Operations Gold and Copper Production, FY 2013* ........................ 116 Table 21.3 Telfer Operations Historical Capital Expenditure ....................................... 116 Table 21.4 Telfer Operations FY 2014 Cost and Capital Guidance ............................. 117

FIGURES

Figure 4.1 Telfer Location Map ..................................................................................... 12 Figure 7.1 Telfer Regional Geology .............................................................................. 26 Figure 7.2 Telfer Regional Stratigraphy ........................................................................ 27 Figure 7.3 Telfer Regional Geology .............................................................................. 28 Figure 7.4 Location of O'Callaghans and Camp Dome ................................................. 29 Figure 7.5 Telfer Local Stratigraphy ............................................................................. 30 Figure 7.6 Telfer Pre-Mining Structural and Stratigraphic Setting ................................. 32 Figure 7.7 Oblique Schematic View Looking North showing Key Mineralized Systems 33

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Figure 7.8 Schematic Cross Section of O'Callaghans Skarn Deposit ........................... 36 Figure 10.1 Cross Section 11300N through Main Dome (Open pit & UG) ...................... 43 Figure 10.2 Cross Section 11300N through West Dome (Open pit)................................ 44 Figure 10.3 Telfer Drill Location Plan ............................................................................. 46 Figure 11.1 BZ Assay Protocol ....................................................................................... 51 Figure 11.2 AY Assay Protocol ....................................................................................... 52 Figure 11.3 O'Callaghans Assay Protocol ...................................................................... 53 Figure 11.4 Gold Z-Scores from Main Dome January 2011 to December 2013 .............. 54 Figure 11.5 Copper Z-Scores from Main Dome January 2011 to December 2013 .......... 55 Figure 11.6 Main Dome Gold in Coarse Duplicates ........................................................ 56 Figure 11.7 Main Dome Gold in Pulp Replicates ............................................................ 56 Figure 11.8 Main Dome Gold in Second Laboratory Checks .......................................... 57 Figure 11.9 Main Dome Copper in Second Laboratory Checks ...................................... 58 Figure 11.10 Gold Z-Scores from West Dome January 2011 to December 2013 ............. 59 Figure 11.11 Copper Z-Scores from West Dome January 2011 to December 2013 ......... 59 Figure 11.12 West Dome Gold in Coarse Duplicates ....................................................... 60 Figure 11.13 West Dome Gold in Pulp Replicates ............................................................ 60 Figure 11.14 West Dome Gold in Second Laboratory Checks .......................................... 61 Figure 11.15 West Dome Copper in Second Laboratory Checks ...................................... 62 Figure 11.16 Gold Z-Scores from Satellites from January 2011 to December 2013 ......... 62 Figure 11.17 Copper Z-Scores from Satellites from January 2011 to December 2013 ..... 63 Figure 14.1 Cross Section 13000N through West Dome Open Pit ................................. 71 Figure 14.2 Cross Section 11300N through West Dome Open Pit ................................. 71 Figure 14.3 The reef domains (red) and bulk domains estimated (E-W section looking

north at 11300mN). ..................................................................................... 73 Figure 14.4 The reef and bulk domains estimated .......................................................... 76 Figure 14.5 Log-probability plot for composite gold grade, per bulk domain ................... 77 Figure 14.6 Log-probability plot for composite gold grade, per bulk domain ................... 83 Figure 14.7 Cross Section 11300N through Main Dome UG .......................................... 90 Figure 15.1 Telfer West Dome Location Relative to Main Dome and Telfer Deeps ........ 95 Figure 15.2 Telfer UG SLC remaining Life of Mine Design - Isometric View ................... 97 Figure 15.3 Plan View showing Telfer UG Western Flanks ............................................ 99 Figure 15.4 Typical Cross Section through M Reefs ..................................................... 100 Figure 16.1 Western Flanks Proposed Mine Layout - Isometric View ........................... 104 Figure 17.1 Telfer Treatment Plant - Basic Process Flow ............................................. 106 Figure 18.1 Natural Gas Supply Network ..................................................................... 109

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1 Newcrest Mining - Telfer Property Report - 31 December 2013

1 SUMMARY

Introduction and Terms of Reference

The annual Mineral Resources and Mineral Reserves update of Newcrest Mining Limited (Newcrest) of Melbourne, Australia has recently been completed and includes material changes to the Telfer property (Telfer or the Property).

This Technical Report (the Report) on Telfer in the State of Western Australia, Australia has been prepared by Newcrest as an update in response to material changes in the Telfer Mineral Resource and Mineral Reserve released on the 14 February 2014 in Newcrest’s Annual Resources and Reserves Statement-31 December 2013, which can be found on its website at www.newcrest.com.au and at www.sedar.com.

The Report was prepared in accordance with the requirements of National Instrument 43-101 (NI 43-101), “Standards of Disclosure for Mineral Projects”, of the Canadian Securities Administrators (CSA) for lodgement on CSA’s “System for Electronic Document Analysis and Retrieval” (SEDAR).

1.1 Geology

The Telfer Gold Mine is 100% owned by Newcrest and is located within the Great Sandy Desert of Western Australia, approximately 450km by road southeast of Port Hedland and 680km northeast of Newman.

The project area is comprised of granted mining leases that contain gold and copper mineralization characterized as bimodal in nature with relatively high grade stratabound reefs and spatially associated lower grade stockworks hosted within Proterozoic sediments. Deep weathering depleted the copper in the upper sections of the orebody, whilst the underlying resource retained both copper and gold content.

Historical gold production was processed using gravity and cyanide leaching processes. The current operation consists of both open pit and underground operations. Ore processing facilities now exploit the large gold and copper sulphide resources by flotation producing a gold rich copper concentrate and doré recovered from gravity circuits. Additional small tonnages of oxide material are processed through dump leach circuits.

1.2 Mine Production

In the financial year (FY) ending 30 June 2013, Telfer milled 21.5Mt of ore producing 525koz of gold and 26.5kt of contained copper. Cash costs for the year are reported at A$1,022/oz Au after other by-product credits.

1.3 Mineral Resources

The 31 December 2013 Mineral Resource update has been based on a detailed review completed by Newcrest of all Telfer production sources to take into account Newcrest’s current view of long term metal prices, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades and physical mining parameters. This has resulted in the most marginal ounces being removed and this has been reflected in changes to Mineral Resource estimates. The Measured and Indicated Mineral Resources for Telfer as at 31 December 2013 include a material reduction of approximately 5.2Moz of gold to 13Moz of gold, compared with the 31 December 2012 estimate of 18.2Moz of gold.

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This reduction has primarily come from West Dome and Main Dome open pit Mineral Resources as a result of the review of long term economic assumptions.

Table 1.1 lists Telfer gold and copper Mineral Resources at 31 December 2013. The Main Dome and West Dome open pit Mineral Resources are reported inside optimization shells to reflect that part of the resource model for which there are reasonable prospects for eventual economic extraction. Mineral Resources are reported inclusive of Mineral Reserves. Vertical Stockwork Corridor ("VSC"), Sub-Level Cave ("SLC"), Western Flanks and underground selective reefs external to the SLC are reported as Telfer Underground Mineral Resources.

Table 1.1 Telfer Copper and Gold Mineral Resources at 31 December 2013 Tonnes

(Mt) Au

(g/t) Cu (%)

Au (Moz)

Cu (Mt)

Measured Resource Main Dome Stockpiles 24 0.40 0.09 0.3 0.02

Total Measured Resource 24 0.40 0.09 0.3 0.02 Indicated Resources

Main Dome Open Pit 210 0.67 0.09 4.5 0.18 West Dome Open Pit 170 0.66 0.06 3.6 0.10 Telfer Underground 96 1.5 0.33 4.7 0.31 Other Satellite Deposits 0.57 4.2 0.03 0.1 <0.01

Total Indicated Resource 480 0.84 0.12 13 0.59 Inferred Resources

Main Dome Open Pit 2.6 0.56 0.09 0.05 <0.01 West Dome Open Pit 1.1 0.46 0.06 0.02 <0.01 Telfer Underground 53 0.95 0.21 1.6 0.11 Camp Dome 14 - 0.37 - 0.05 Other Satellite Deposits 1.7 2.58 0.08 0.14 <0.01

Total Inferred Resource 73 0.79 0.23 1.8 0.17 Notes: 1. The figures above include those resources converted to reserves

2. Rounding may cause some computational discrepancies 3. Telfer Underground includes SLC, VSC, Western Flanks and M Reef Mineral Resources

Table 1.2 lists the Mineral Resource for the O'Callaghans polymetallic deposit.

Table 1.2 O'Callaghans Polymetallic Mineral Resource at 31 December 2013 Tonnes

(Mt) WO3 (%)

Zn (%)

Pb (%)

Cu (%)

Indicated Resource 69 0.34 0.55 0.27 0.29 Inferred Resource 9 0.25 0.15 0.07 0.24

1.4 Mineral Reserves

The 31 December 2013 Mineral Reserve update has been based on a detailed review completed by Newcrest of all Telfer production sources to take into account Newcrest’s current view of long term metal prices, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades and physical mining parameters. This has resulted in the most marginal ounces being removed and this has been reflected in changes to Mineral Reserve estimates. The Mineral Reserves for Telfer as at 31 December 2013 include a material reduction of approximately 5.3Moz of gold to 5.6Moz of gold,

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compared with the 31 December 2012 estimate of 10.9Moz of gold. This reduction has primarily come from the West Dome and Main Dome open pit Mineral Reserves as a result of the review of long term economic assumptions.

Table 1.3 lists Telfer gold and copper Mineral Reserves at 31 December 2013.

Table 1.3 Telfer Copper and Gold Mineral Reserves at 31 December 2013 Tonnes

(Mt) Au

(g/t) Cu (%)

Au (Moz)

Cu (Mt)

Proven Mineral Reserves Main Dome Open Pit Stockpiles 24 0.40 0.09 0.3 0.02

Total Proven Mineral Reserves 24 0.40 0.09 0.3 0.02 Probable Mineral Reserves

Main Dome Open Pit 74 0.95 0.10 2.3 0.08 West Dome Open Pit 73 0.68 0.06 1.6 0.05 Telfer Underground 37 1.2 0.21 1.5 0.08

Total Probable Mineral Reserves 180 0.90 0.11 5.3 0.20 Notes: 1. The cut offs applied are variable and are described in the text of the report

2. Metal prices used, gold - US$1,250/oz, copper - US$2.70/lb 3. Rounding may cause some apparent computational discrepancies

1.5 Mining Operations

The original mining operations at Telfer commenced in 1977 and continued until October 2000 over which time they produced approximately 6Moz of gold. Production was suspended due to escalating costs, with the operations placed on care and maintenance until feasibility studies for redevelopment of the mine were completed.

Modern operations recommenced with mining production from the open pits in late 2004 and commissioning of two process trains recovering gold as well as recovering copper as a valuable by-product.

The recommencement of underground operations in 2006 created opportunities to augment production from the main open pits through the selective mining of deeper, dispersed, higher grade areas that could not be economically extracted with surface mining techniques. There are numerous aspects to the current and developing underground mining areas within the Telfer operation with differing mining techniques matched to specific ground conditions.

The original design production capacity of the redeveloped open pit production was 17Mtpa with an additional 4Mtpa scheduled for production from underground mining. The feasibility study recognized that the mining rate could achieve in excess of 18Mtpa when softer ore was being mined. Since commissioning, the production from underground operations has increased to approximately 6Mtpa and open pit ore makes up the remainder of the plant feed. The combined open pit and underground mining operations fed the mill with 21.5Mt of ore in the year ending 30 June 2013.

1.5.1 Main Dome and West Dome (Open Pit)

Mining methods at Main Dome and West Dome are the same. Current mining activities at the Telfer open pits are conducted via conventional truck and shovel operations, standard waste rock dumps and stockpiling and reclaim of lower grade ore. An excavator configured

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load fleet is utilised to selectively extract ore material from a total twelve metre design bench height via three 4m high ‘flitches’. The 4m ‘flitches’ are used in order to reduce ore dilution and loss. Bulk waste is stripped via two 6m ‘flitches’. Productivities, availabilities and utilisations used within the production schedule have been based on current performance.

The current mining fleet employed within the Telfer open pit includes:

• 2 x CAT 6060 excavators; • 2 x Caterpillar 994 class front end loaders; • Up to 32 x Caterpillar 793 class rigid body off-highway dump trucks; and • Various ancillary equipment (drills, dozers, graders, etc.)

Open pit operations within the Main and West Dome pits have traditionally focused on the selective extraction of the ore material within the Mineral Reserve through the use of the site excavator fleet. This configuration of this equipment, and selective ore mining approach adopted for ore mining, has led to the use of 12m benches comprising of three 4m ‘flitches’.

Reef and adjacent waste, as well as the edges of stock work ore, are selectively mined, while broad areas of stock work ore and waste are bulk mined. Some near-surface oxidised stock work is dump leached and this is bulk mined. All other ore is fed to the processing plant and is referred to as direct float ore. Direct float ore is hauled to the ROM and normally direct tipped into the two gyratory crushers, but with allowance for stockpiling and rehandling a percentage of the direct float ore on the ROM pad. Dump leach ore is dumped for leaching on existing pads to the west of Main Dome and to the east of West Dome. Waste is used for tailings storage facility construction or delivered to a dump south of the Main Dome pit and west of the West Dome pit. Of the total waste to be mined, approximately 20% has been identified as potentially acid-forming and will continue to be segregated into confined cells within the waste dump and encapsulated using non-acid-forming waste.

Ore and waste zones are all blasted on standard pattern spacing with 12m benches irrespective of the subsequent mining method being either a selective approach utilizing the excavator flitch extraction or a bulk shovel/loader configuration. However, blast drill hole diameter and explosive powder factors are adjusted to account for the varying mining methods. All blast hole drilling is undertaken with either hammer or rotary drill rigs depending upon the required hole size and rock characteristics.

Geological and geotechnical conditions are complex and a number of batter failures, and in some cases multiple batter failures, have occurred. The pit has an extensive array of sensing equipment providing real time monitoring of pit wall stability. Mining practices include standoff periods after blasting against a high wall and installation of wall reinforcement in places. Back analysis of these failures informs future pit slope design parameters for pit optimization and design.

1.5.2 Telfer Main Dome Underground (Underground)

The Telfer underground consists of the Telfer Sub-level Cave (SLC) and selective M Reef operations. The Western Flanks is yet to be mined. The deposits are beneath the Main Dome open pit and previously known as Telfer Deeps

The Telfer SLC is being mined using the sub-level cave method. SLC involves the development of a series of parallel cross-cuts through the orebody in a regular geometrical

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pattern. Ore is progressively recovered from drawpoints developed in the crosscuts. As material is loaded from a drawpoint, broken ore above the extraction level progressively mixes with material from higher levels in the cave. Once a predetermined draw tonnage is loaded from the drawpoint, loading ceases and the next ring is fired. As the process continues the rock overlying the mining footprint progressively caves, as does the rock immediately adjacent to the caved area.

Loaded ore is tipped down an ore pass system to the haulage level where it is trucked to the underground crushing station. A hoisting shaft facilitates transport of ore to surface, from a hoist depth of approximately 1,100m.

A decline provides access for the transport of personnel and materials from a portal entry in the open pit to the base of the underground mine.

All major infrastructure is in place to service the current mine plan. Development is well in advance of the current production horizons with all main orebody access points in place. Production level development is currently being carried out on the penultimate planned production level.

The mine design layout follows an established geometry employed since production commenced in 2006. As the design and operation of the Telfer Deeps SLC are mature there is minimal risk associated with the mining method and design used in the preparation of the Mineral Reserve estimate.

The mining method for extraction of M Reef resources is narrow vein, shallow dipping sub-level open stoping (SLOS). Electric scraping is employed to recover blasted material due to the shallow dip of the orebody. The extraction design incorporates a 1.1m slot rise that establishes each stope, with a 5m wide square rib pillar between adjacent stopes. The slot rises are excavated as a blasted whinze rise. Where geotechnical considerations allow, intermediate rib pillars are incorporated to facilitate maximum extraction.

A minimum mining width of 1.8m was used to estimate planned dilution. All dilution material was assumed to have zero grade and a density of 2.7 t/m3. M Reef material is trucked to a surface stockpile in the vicinity of the portal. The open pit mining fleet rehandles the material to ROM stockpiles.

The planned mining method for the Western Flanks is a flat-dipping modified SLC. The mining process for the Telfer SLC and Western Flanks SLC are essentially the same, with the key difference being the flat dipping nature of the Western Flanks resource requiring a series of steps in the SLC layout. This modification impacts the draw rate and mining recovery assumptions and the planned Western Flanks assumptions are appropriately adjusted relative to the Telfer Deeps SLC cave draw assumptions.

It is planned that material mined from the Western Flanks will be extracted by trucking a short distance to the existing 1,100m hoisting shaft facility where it will then be hoisted to surface. The Western Flanks will also be serviced by the existing single portal entry for transport of material and men into the mine.

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1.6 Infrastructure and Concentrate Handling

On-site mineral processing infrastructure includes a gravity circuit, carbon-in-leach (CIL) circuit, and dump leach pads produce a doré which accounts for approximately 25% of the mine's gold production. Production from these circuits is smelted on site prior to being transported securely to a third party refinery.

The flotation circuit produces a copper-gold concentrate that is trucked to Port Hedland for shipping to smelters. Newcrest has long term relationships with most regional smelters in Japan and Korea and well as with certain smelters in China. Newcrest also has contracts with merchants in Switzerland and Singapore.

Electrical power requirements for mining and processing equipment are met by two power stations at Telfer. The Primary Power Station (PPS) comprises three GE LM6000 gas turbines and the Secondary Power Station (SPS) comprises eight diesel generators. This provides a maximum rating of installed power generation at Telfer of 150MW. Natural gas supply for the turbines is fed from a dedicated 450km purpose-built pipeline.

The site is a fly-in fly-out operation with a work force of approximately 1,100 full time equivalent (FTE) staff and contractors. The accommodation facilities on site comprise a total of 1,733 rooms to service the numerous rosters in place for these personnel. The operation is serviced by an all-weather airstrip.

1.7 Environment and Community Management

Telfer is a relatively large (total disturbance more than 4,000ha) and complex operation, but is not confronted by environmental or community challenges likely to significantly constrain current and future operations. This reflects its remote, desert location and an absence of significant biodiversity and conservation issues, together with a proven history of responsible environmental management. Sound relationships have been developed with the indigenous traditional landowners (Martu), who hold one of the largest Native Title Determinations in Australia over Telfer and its associated tenements.

Statutory environmental approvals are obtained and environmental performance is reported to regulators through standard protocols for assessment of monitoring results. Compliance is supported by the ongoing implementation of environmental management plans to manage key risks.

A closure plan was developed in 2010 for Telfer and is scheduled to be updated in 2014.

Agreements were in place with the Martu people in respect of Telfer for the purposes of the Telfer expansion project (2002-2005). There are current negotiations underway to seek to put in place a comprehensive agreement to support future operations at Telfer.

1.8 Capital and Operating Costs

Telfer actual production and operating costs for FY 2013 are shown in Table 1.4. The Newcrest financial year closes on 30 June each year.

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Table 1.4 Telfer Operations FY2013 Actual Production and Operating Costs*

Telfer Unit FY13 Actual Gold Production koz 525 Copper Production kt 26 Total Site Cash Costs A$M 850 Waste Stripping and Ore Inventory A$M -198 Third Party Smelting, Refining and Transporting A$M 60 Royalty A$M 29 Depreciation A$/oz 389

*Costs included in table exclude applicable by-product credits.

FY2014 cost and capital guidance for Telfer, as released 12 August 2013, is shown in Table 1.5.

Table 1.5 Telfer Operations FY2014 Cost and Capital Guidance

Telfer Unit FY14 Guidance Cash cost (including by-product credits) 1 A$M 490-540 On-site exploration expenditure A$M 10-11 Production Waste stripping A$M 20-25 Sustaining capital A$M 60-70 Corporate, rehabilitation, other A$M 11-17 All-in sustaining cost A$M 590-660 Production Waste Stripping2 A$M 20-25 Sustaining Capital2 A$M 60-70 Projects and development capital A$M - Total capital expenditure A$M 80-90

1 Costs assume AUD:USD 0.96, copper price US$3.30/lb, silver price US$22.0/oz 2 Duplicated above under All-in sustaining costs and under Capital expenditure

1.9 Conclusions

Telfer Gold Mine is an established operation with a long history to support development of plans to exploit the available Mineral Resources.

Factors that may have a material impact on the Telfer Gold Mine include those discussed in the risks section of Newcrest’s annual operating and performance review which forms part of Newcrest’s Full Year Financial Results for the year ended 30 June 2013, which can be found on its website at www.newcrest.com.au and at www.sedar.com.

1.10 Recommendations

Telfer is an established mining operation with Mineral Reserves sufficient for an extended mine life. In view of the nature of Telfer's mining operations and the substantial Mineral Reserve inventory, no recommendations are included.

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2 INTRODUCTION

2.1 General and Terms of Reference

This Technical Report (the Report) on the Telfer Property (Telfer) in the State of Western Australia, Australia has been prepared by Newcrest Mining Limited (Newcrest) of Melbourne Australia, as an update in response to material change in the Telfer Mineral Resource and Mineral Reserve.

The Report was prepared in accordance with the requirements of National Instrument 43-101 (NI 43-101), "Standards of Disclosure for Mineral Projects", of the Canadian Securities Administrators (CSA) for lodgement on CSA's "System for Electronic Document Analysis and Retrieval" (SEDAR).

2.2 Report Authors

The overall Report was assembled by Mr Kevin Gleeson under the direction of the Qualified Person (QP) Colin Moorhead, with contributions from other Newcrest employees. A listing of details of the authors of the Report, together with those who assisted and sections for which they are responsible or to which they contributed is contained in Table 2.1.

Table 2.1 Persons who Prepared or Contributed to this Technical Report Qualified Person

Position Employer Independent of Newcrest

Date of Last Site

Visit

Professional Designation

Sections of Report

Qualified Persons responsible for the preparation and signing of this Technical Report C Moorhead Executive General

Manager Minerals Newcrest Mining Limited

No Jan 13-14 2014

FAusIMM (CP) All Sections

Other persons who assisted the Qualified Person K Gleeson Head of Mineral

Resource Management

Newcrest Mining Limited

No Aug 2013 MAusIMM Compilation of Report

L Bowyer Manager Land Tenure


No - N/A 4

P Griffin Head of Processing Operations


No Aug 2013 MAusIMM 13, 17

J Biggam Mineral Resource Manager-Telfer

Newcrest Mining Limited No Site

based MAusIMM 14

R Secis Manager-Telfer Mine Planning

Newcrest Mining Limited No Dec 2013 MAusIMM 15, 16

A de Sousa General Manager - Marketing and Logistics


No Sept 2011

NA 19

Blair Sands Head of Health and Environment


No - N/A 20

K Kerr General Manager-Commercial and Planning

Newcrest Mining Limited No July 2011 CA (Chartered

Accountant)

21,22

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Mr Colin Moorhead was employed at Telfer between 1991 and 1997 and has visited the Telfer site on numerous occasions in his current role including several occasions during 2013 at which time he inspected both underground and surface aspects of the mining operations in addition to the processing and infrastructure facilities. Mr Moorhead is currently an employee of Newcrest and accepts Qualified Person responsibility for the Report. Mr Moorhead last visited the Telfer operations in January 2014. Mr Kevin Gleeson and Mr Paul Griffin are employees of Newcrest who visit Telfer to review relevant aspects of the operation. Mr James Biggam is an employee of Newcrest and has been appointed as the Competent Person for reporting Telfer Mineral Resources under the JORC Code1. Mr Ron Secis is an employee of Newcrest and has been appointed as the Competent Person for reporting Telfer Ore Reserves under the JORC Code1.

This Report is based on internal information (listed in Section 27), site visits undertaken by the Qualified Person, and discussions with other Newcrest personnel.

This Report is effective as of 31 December 2013.

2.3 Units of Measure and Currency

Throughout this Report, measurements are shown in metric units and currency in Australian dollars unless otherwise stated. Table 2.2 includes key terms used and their abbreviations.

Table 2.2 Key Terms and Abbreviations Abbreviation Unit/Term Abbreviation Unit/Term AHD Australian height datum NSR Net Smelter Return AAS Atomic Absorption Spectrometry NAF Non-Acid Forming BWI Bond Ball Work Index µm One millionth of a meter Cu Copper PC Panel Caves m3 Cubic metres % Percent CN Cyanide pa Per annum DWi Drop Weight /oz Per ounce (Troy) EA Environmental Assessment /lb Per pound (avdp) ELs Exploration Licenses /t Per tonne Au Gold ICP-OES Plasma-optical Emission Spectrometry g/t Grams /t PAF Potentially Acid Forming g/t Au Grams /t of gold lb Pound (avdp) HGPR High Pressure Grinding Rolls PFS Prefeasibility study ICP Inductively-Coupled Plasma QAQC Quality Assurance Quality Control Fe Iron RPD Relative Paired Difference kg Kilogram(s) RWi Rod Mill Work Index km Kilometre(s) NPV Net Present Value koz Kilo ounce SAG Semi-autogenous grinding ktpa Kilotonne per annum km2 Square kilometres kWh/t Kilowatt-hours per tonne m2 Square metres

1 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code 2012, effective 1 December 2013, prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC).

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Abbreviation Unit/Term Abbreviation Unit/Term Pb Lead SLC Sub-Level Caving l Litre S Sulphur m Metre(s) t Tonne(s) Mt Million tonnes TJ Terra Joule(s) Mtpa Million tonnes per annum TSF Tailings Storage Facility MW Megawatts t/m3 Tonnes per cubic metre mm Millimetres W Tungsten Moz Million ounces (troy) WO3 Tungsten trioxide MLs Mining Leases WSMD Weighing, Sampling and Moisture

Determination Mo Molybdenum wmt Wet metric tonnes mRL Metres above a Reduced Level

set at 5,000m below AHD Zn Zinc

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3 RELIANCE ON OTHER EXPERTS

The Qualified Persons relied, in respect of legal and environmental aspects, upon the work of certain Experts listed below. To the extent permitted under NI 43-101, the Qualified Persons disclaim responsibility for these sections of the Report.

The following disclosure is made in respect of each of these Experts:

Ms L Bowyer, Manager Land Tenure, Newcrest:

• Report, opinion or statement relied upon: Information on mineral tenure and status, title issues, royalty obligations, etc.

• Extent of reliance: full reliance following a review by the Qualified Person.

• Portion of Technical Report to which disclaimer applies: Section 4, excluding Section 4.3.

Mr B Sands, Head of Health and Environment, Newcrest:

• Report, opinion or statement relied upon: Information on environmental, permitting, and social/community matters.


• Portion of Technical Report to which disclaimer applies: Section 20.

Mr A de Sousa, General Manager, Marketing & Logistics, Newcrest:

• Summary report on Newcrest marketing.

• Extent of reliance: status of Newcrest’s sales arrangements.

• Portion of Technical Report to which disclaimer applies: Section 19.

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4 PROPERTY DESCRIPTION AND LOCATION

4.1 Property Location

The 100% owned Telfer Gold Mine is located in the Great Sandy Desert in the Paterson Province of Western Australia, approximately 450km east-southeast of Port Hedland. The project site is 1310km by air and 1900km by road from Perth and falls within the boundaries of the East Pilbara Shire, an area covering 386,000km2. The project is located at 21º42'44" S latitude, 122º12'25" E longitude. The location of the project is illustrated in Figure 4.1.

Figure 4.1 Telfer Location Map

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4.2 Land Tenure

Newcrest currently has tenure over the mine site through a series of mining leases, exploration licenses, general purpose leases and miscellaneous licenses that cover all the infrastructure in the immediate vicinity of the mine site, including the open pit and underground mining areas, village, plant site, power station and bore fields. All the mining leases on which development for the project will take place were granted before 1994. The extensions to the bore fields are located on miscellaneous licenses granted more recently.

Currently held leases at 31 December 2013 consist of 34 granted mining leases, 17 granted exploration licenses and 18 granted prospecting licenses. Newcrest also has 22 mining lease applications and 5 exploration license applications in progress. Total tenement area is approximately 1,696 km2. Tables 4.1 and 4.2 summarize the details of each of the leases and the licenses held.

Table 4.1 Telfer Tenure Details Lease Lease Type Lease

Status Grant Date Expiry Date Area

(km2) E45/975 E - Exploration License Granted 10/05/1990 9/05/1998 8.30 E45/1070 E - Exploration License Granted 15/08/1991 14/08/1996 4.67 E45/1168 E - Exploration License Granted 6/05/1992 5/05/1999 25.20 E45/1705 E - Exploration License Granted 13/08/1996 12/08/2001 5.60 E45/1957 E - Exploration License Granted 24/08/1998 23/08/2003 2.80 E45/2448 E - Exploration License Granted 11/10/2006 10/10/2013 81.20 E45/2727 E - Exploration License Granted 12/07/2010 11/07/2015 22.40 E45/2930 E - Exploration License Granted 4/07/2008 3/07/2018 2.80 E45/2931 E - Exploration License Granted 4/07/2008 3/07/2018 5.60 E45/2932 E - Exploration License Granted 4/07/2008 3/07/2018 134.40 E45/2962 E - Exploration License Granted 6/01/2009 5/01/2014 53.20 E45/2963 E - Exploration License Granted 19/01/2009 18/01/2014 128.80 E45/3100 E - Exploration License Granted 9/06/2009 8/06/2014 98.00 E45/3254 E - Exploration License Granted 9/06/2009 8/06/2014 89.60 E45/3255 E - Exploration License Granted 9/06/2009 8/06/2014 2.80 E45/3261 E - Exploration License Granted 27/05/2009 26/05/2014 64.40 E45/3384 E - Exploration License Granted 8/02/2011 7/02/2016 5.60 E45/3425 E - Exploration License Application - - 103.60 E45/3447 E - Exploration License Application - - 103.60 G45/1 G - General Purpose Lease Granted 18/12/1982 17/12/2024 2.00 E45/4112 E - Exploration License Application - - 47.60 E45/4302 E - Exploration License Application - - 16.80 E45/4303 E - Exploration License Application - - 58.80 G45/2 G - General Purpose Lease Granted 18/12/1982 17/12/2024 2.00 G45/3 G - General Purpose Lease Granted 18/12/1982 17/12/2024 2.00 G45/4 G - General Purpose Lease Granted 18/12/1982 17/12/2024 1.00 L45/3 L - Miscellaneous License Granted 12/01/1983 17/12/2024 1.00 L45/68 L - Miscellaneous License Granted 20/12/1991 19/12/2016 0.04 L45/69 L - Miscellaneous License Granted 20/12/1991 19/12/2016 0.12 L45/73 L - Miscellaneous License Granted 24/07/1992 23/07/2017 0.13 L45/79 L - Miscellaneous License Granted 19/08/1994 18/08/2014 0.14

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Lease Lease Type Lease Status

Grant Date Expiry Date Area (km2)

L45/80 L - Miscellaneous License Granted 19/08/1994 18/08/2014 0.03 L45/99 L - Miscellaneous License Granted 23/08/2000 22/08/2021 0.23 L45/100 L - Miscellaneous License Granted 28/07/2000 27/07/2021 18.91 L45/101 L - Miscellaneous License Granted 20/07/2001 19/07/2022 13.15 L45/104 L - Miscellaneous License Granted 19/02/2001 18/02/2022 0.59 L45/106 L - Miscellaneous License Granted 15/06/2001 14/06/2022 45.45 L45/107 L - Miscellaneous License Granted 15/06/2001 14/06/2022 25.00 L45/110 L - Miscellaneous License Granted 23/10/2003 22/10/2024 66.11 L45/139 L - Miscellaneous License Granted 19/08/2004 18/08/2025 2.43 L45/165 L - Miscellaneous License Granted 20/03/2008 19/03/2029 1.25 M45/6 M - Mining Lease Granted 18/12/1982 17/12/2024 10.00 M45/7 M - Mining Lease Granted 18/12/1982 17/12/2024 10.00 M45/8 M - Mining Lease Granted 18/12/1982 17/12/2024 10.00 M45/9 M - Mining Lease Granted 18/12/1982 17/12/2024 4.50 M45/10 M - Mining Lease Granted 18/12/1982 17/12/2024 10.00 M45/11 M - Mining Lease Granted 18/12/1982 17/12/2024 10.00 M45/33 M - Mining Lease Granted 22/08/1984 21/08/2026 10.00 M45/203 M - Mining Lease Granted 4/02/1986 3/02/2028 9.99 M45/204 M - Mining Lease Granted 4/02/1986 3/02/2028 9.99 M45/205 M - Mining Lease Granted 4/02/1986 3/02/2028 10.00 M45/206 M - Mining Lease Granted 4/02/1986 3/02/2028 10.00 M45/207 M - Mining Lease Granted 4/02/1986 3/02/2028 10.00 M45/208 M - Mining Lease Granted 4/02/1986 3/02/2028 10.00 M45/209 M - Mining Lease Granted 4/02/1986 3/02/2028 10.00 M45/210 M - Mining Lease Granted 4/02/1986 3/02/2028 7.50 M45/211 M - Mining Lease Granted 4/02/1986 3/02/2028 10.00 M45/247 M - Mining Lease Granted 19/05/1987 18/05/2029 9.00 M45/248 M - Mining Lease Granted 19/05/1987 18/05/2029 6.00 M45/249 M - Mining Lease Granted 5/06/1987 4/06/2029 9.48 M45/364 M - Mining Lease Granted 19/05/1988 18/05/2030 5.26 M45/399 M - Mining Lease Granted 17/01/1989 16/01/2031 10.00 M45/400 M - Mining Lease Granted 17/01/1989 16/01/2031 10.00 M45/532 M - Mining Lease Granted 4/06/1992 3/06/2034 10.00 M45/533 M - Mining Lease Granted 4/06/1992 3/06/2034 10.00 M45/576 M - Mining Lease Granted 3/06/1993 2/06/2014 9.96 M45/580 M - Mining Lease Granted 10/08/1993 9/08/2014 10.00 M45/581 M - Mining Lease Granted 10/08/1993 9/08/2014 10.00 M45/612 M - Mining Lease Granted 26/07/1994 25/07/2015 4.37 M45/620 M - Mining Lease Granted 23/11/1994 22/11/2015 9.99 M45/621 M - Mining Lease Granted 23/11/1994 22/11/2015 7.60 M45/622 M - Mining Lease Granted 23/11/1994 22/11/2015 7.40 M45/631 M - Mining Lease Granted 23/11/1994 22/11/2015 9.85 M45/632 M - Mining Lease Granted 23/11/1994 22/11/2015 9.41 M45/633 M - Mining Lease Granted 23/11/1994 22/11/2015 6.31 M45/709 M - Mining Lease Application - - 9.50 M45/710 M - Mining Lease Application - - 9.35

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Lease Lease Type Lease Status

Grant Date Expiry Date Area (km2)

M45/720 M - Mining Lease Application - - 10.00 M45/721 M - Mining Lease Application - - 9.99 M45/722 M - Mining Lease Application - - 9.93 M45/737 M - Mining Lease Application - - 0.06 M45/738 M - Mining Lease Application - - 2.55 M45/739 M - Mining Lease Application - - 2.07 M45/763 M - Mining Lease Application - - 10.00 M45/764 M - Mining Lease Application - - 9.98 M45/765 M - Mining Lease Application - - 9.98 M45/772 M - Mining Lease Application - - 4.65 M45/775 M - Mining Lease Application - - 6.49 M45/835 M - Mining Lease Application - - 8.73 M45/858 M - Mining Lease Application - - 6.25 M45/859 M - Mining Lease Application - - 0.53 M45/860 M - Mining Lease Application - - 7.72 M45/861 M - Mining Lease Application - - 7.90 M45/862 M - Mining Lease Application - - 0.90 M45/920 M - Mining Lease Application - - 0.50 M45/931 M - Mining Lease Application - - 0.80 M45/994 M - Mining Lease Application - - 1.22 P45/2596 P - Prospecting License Granted 16/01/2009 15/01/2017 0.17 P45/2597 P - Prospecting License Granted 16/01/2009 15/01/2017 0.51 P45/2681 P - Prospecting License Granted 30/01/2009 29/01/2017 0.07 P45/2698 P - Prospecting License Granted 19/06/2009 18/06/2017 0.46 P45/2699 P - Prospecting License Granted 19/06/2009 18/06/2017 1.82 P45/2848 P - Prospecting License Granted 7/08/2013 6/08/2017 0.24 P45/2849 P - Prospecting License Granted 7/08/2013 6/08/2017 0.28 P45/2850 P - Prospecting License Granted 7/08/2013 6/08/2017 0.19 P45/2851 P - Prospecting License Granted 7/08/2013 6/08/2017 0.38 P45/2852 P - Prospecting License Granted 7/08/2013 6/08/2017 1.93 P45/2853 P - Prospecting License Granted 7/08/2013 6/08/2017 1.91 P45/2854 P - Prospecting License Granted 7/08/2013 6/08/2017 1.96 P45/2855 P - Prospecting License Granted 7/08/2013 6/08/2017 0.08 P45/2856 P - Prospecting License Granted 7/08/2013 6/08/2017 0.04 P45/2857 P - Prospecting License Granted 7/08/2013 6/08/2017 0.11 P45/2858 P - Prospecting License Granted 7/08/2013 6/08/2017 0.11 P45/2859 P - Prospecting License Granted 7/08/2013 6/08/2017 0.29 P45/2860 P - Prospecting License Application - - 1.83 P45/2861 P - Prospecting License Granted 7/08/2013 6/08/2017 1.02

Total 1,696.44

Total Granted 1,235.12

Total Applications 461.32

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Table 4.2 Telfer Details of Licence Holders Lease Holder % Holder %

E45/975 Newcrest Mining Limited 100 - - E45/1070 Newcrest Mining Limited 100 - - E45/1168 Newcrest Mining Limited 100 - - E45/1705 Newcrest Mining Limited 100 - - E45/1957 Newcrest Mining Limited 70 Newcrest Operations Limited 30 E45/2448 Westwin Investments Pty Ltd 100 - - E45/2727 Acebell Holdings Pty Ltd 100 - - E45/2930 Newcrest Mining Limited 70 Newcrest Operations Limited 30 E45/2931 Newcrest Mining Limited 70 Newcrest Operations Limited 30 E45/2932 Newcrest Mining Limited 100 - - E45/2962 Newcrest Operations Limited 100 - - E45/2963 Newcrest Operations Limited 100 - - E45/3100 Newcrest Operations Limited 100 - - E45/3254 Newcrest Operations Limited 100 - - E45/3255 Newcrest Operations Limited 100 - - E45/3261 Newcrest Operations Limited 100 - - E45/3384 Newcrest Operations Limited 100 - - E45/3425 Newcrest Operations Limited 100 - - E45/3447 Newcrest Operations Limited 100 - - E45/4112 Newcrest Operations Limited 100 - - E45/4302 Newcrest Operations Limited 100 - - E45/4303 Newcrest Operations Limited 100 - - G45/1 Newmont Pty Ltd 70 Newcrest Operations Limited 30 G45/2 Newmont Pty Ltd 70 Newcrest Operations Limited 30 G45/3 Newmont Pty Ltd 70 Newcrest Operations Limited 30 G45/4 Newmont Pty Ltd 70 Newcrest Operations Limited 30 L45/3 Newmont Pty Ltd 70 Newcrest Operations Limited 30 L45/68 Newcrest Mining Limited 100 - - L45/69 Newmont Pty Ltd 70 Newcrest Operations Limited 30 L45/73 Newcrest Mining Limited 100 - - L45/79 Newcrest Mining Limited 100 - - L45/80 Newcrest Mining Limited 100 - - L45/99 Newcrest Mining Limited 100 - - L45/100 Newcrest Mining Limited 100 - - L45/101 Newcrest Mining Limited 100 - - L45/104 Newcrest Mining Limited 100 - - L45/106 Newcrest Mining Limited 100 - - L45/107 Newcrest Mining Limited 100 - - L45/110 Newcrest Mining Limited 100 - - L45/139 Newcrest Mining Limited 100 - - L45/165 Newcrest Operations Limited 100 - - M45/6 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/7 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/8 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/9 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/10 Newmont Pty Ltd 70 Newcrest Operations Limited 30

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Lease Holder % Holder % M45/11 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/33 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/203 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/204 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/205 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/206 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/207 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/208 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/209 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/210 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/211 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/247 Newcrest Mining Limited 70 Newcrest Operations Limited 30 M45/248 Newcrest Mining Limited 70 Newcrest Operations Limited 30 M45/249 Newmont Pty Ltd 70 Newcrest Operations Limited 30 M45/364 Newcrest Mining Limited 70 Newcrest Operations Limited 30 M45/399 Newcrest Mining Limited 100 - - M45/400 Newcrest Mining Limited 100 - - M45/532 Newcrest Mining Limited 100 - - M45/533 Newcrest Mining Limited 100 - - M45/576 Newcrest Mining Limited 100 - - M45/580 Newcrest Mining Limited 100 - - M45/581 Newcrest Mining Limited 100 - - M45/612 Newcrest Mining Limited 100 - - M45/620 Newcrest Mining Limited 100 - - M45/621 Newcrest Mining Limited 100 - - M45/622 Newcrest Mining Limited 100 - - M45/631 Newcrest Mining Limited 100 - - M45/632 Newcrest Mining Limited 100 - - M45/633 Newcrest Mining Limited 100 - - M45/709 Newcrest Mining Limited 70 Newcrest Operations Limited 30 M45/710 Newcrest Mining Limited 70 Newcrest Operations Limited 30 M45/720 Newcrest Mining Limited 100 - - M45/721 Newcrest Mining Limited 100 - - M45/722 Newcrest Mining Limited 100 - - M45/737 Newcrest Mining Limited 100 - - M45/738 Newcrest Mining Limited 100 - - M45/739 Newcrest Mining Limited 100 - - M45/763 Newcrest Mining Limited 100 - - M45/764 Newcrest Mining Limited 100 - - M45/765 Newcrest Mining Limited 100 - - M45/772 Newcrest Mining Limited 70 Newcrest Operations Limited 30 M45/775 Newcrest Mining Limited 70 Newcrest Operations Limited 30 M45/835 Newcrest Mining Limited 100 - - M45/858 Newcrest Mining Limited 100 - - M45/859 Newcrest Mining Limited 100 - - M45/860 Newcrest Mining Limited 100 - - M45/861 Newcrest Mining Limited 100 - -

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Lease Holder % Holder % M45/862 Newcrest Mining Limited 100 - - M45/920 Newcrest Mining Limited 100 - - M45/931 Newcrest Mining Limited 100 - - M45/994 Newcrest Mining Limited 70 Newcrest Operations Limited 30 P45/2596 Newcrest Mining Limited 70 Newcrest Operations Limited 30 P45/2597 Newcrest Mining Limited 70 Newcrest Operations Limited 30 P45/2681 Newcrest Operations Limited 100 - - P45/2698 Newcrest Operations Limited 100 - - P45/2699 Newcrest Operations Limited 100 - - P45/2848 Newcrest Operations Limited 100 - - P45/2849 Newcrest Operations Limited 100 - - P45/2850 Newcrest Operations Limited 100 - - P45/2851 Newcrest Operations Limited 100 - - P45/2852 Newcrest Operations Limited 100 - - P45/2853 Newcrest Operations Limited 100 - - P45/2854 Newcrest Operations Limited 100 - - P45/2855 Newcrest Operations Limited 100 - - P45/2856 Newcrest Operations Limited 100 - - P45/2857 Newcrest Operations Limited 100 - - P45/2858 Newcrest Operations Limited 100 - - P45/2859 Newcrest Operations Limited 100 - - P45/2860 Newcrest Operations Limited 100 - - P45/2861 Newcrest Operations Limited 100 - -

4.3 Relevant Agreements

4.3.1 Westwin Option Agreement

Westwin Investments Pty Ltd granted Newcrest an option to purchase E45/2448 for $1M and a 1.5% NSR royalty. An option payment of $20,000 per year is payable. The option is due to expire in November 2014. This agreement does not relate to producing tenements.

4.3.2 Acebell Option Agreement

Acebell Holdings Pty Ltd granted Newcrest an option to purchase E45/2727 for $500,000 and a 1.5% NSR royalty. Option payments of $10,000 on satisfaction of the conditions precedent, $15,000 one year thereafter and $20,000 the following year are payable. The option is due to expire in March 2014 and negotiations are continuing to extend this option agreement. This agreement does not relate to producing tenements.

4.3.3 Cape Lambert Withdrawal and Royalty Agreement

Cape Lambert Iron Ore Ltd agreed to withdraw a prior mining tenement application in favour of an application by Newcrest Operations Limited (E45/3100). Consideration for withdrawing the application is an annual exploration payment of $10,000 and a royalty of 1.5% NSR in the event of mineral production from the tenement area. This agreement does not relate to producing tenements.

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4.3.4 Martu Agreements

Agreements were in place with the holders of native title in respect of Telfer for the purposes of the Telfer expansion project (2002-2005). There are current negotiations with the holders of native title to seek to put in place a comprehensive agreement to support future operations at Telfer.

4.4 Royalties Payable

4.4.1 Mount Isa Mines Limited

The royalty is in favour of Mount Isa Mines Limited. In respect of gold, it is $10/oz and in respect of minerals (other than gold) it is 2% of the NSR. This agreement does not relate to producing tenements.

4.4.2 Mineral Commodities Limited

The royalty is in favour of Minerals Commodities Limited. In respect of gold it is $10/oz and in respect of minerals (other than gold) it is 1.5% of the NSR. This agreement does not relate to producing tenements.

4.5 Environmental Liabilities

The Department of Mines & Petroleum in Western Australia holds a total of $33,894,900 as unconditional performance bonds.

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5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

5.1 Accessibility

5.1.1 Road

Road access to the Telfer site consists of public roads vested in Main Roads Western Australia and the Shire of East Pilbara along with a section of private roadway owned and maintained by the Telfer Mining Operations. Road transport to and from Telfer generally focuses on the approximately 450km route to Port Hedland for heavy haulage of copper-gold concentrates and import of consumables to the mine site.

A secondary route is available to the south through Newman and ultimately Perth.

5.1.2 Air Strip

Telfer is located approximately 1,300km from Perth via air travel and the site is serviced by a Newcrest-owned dedicated all-weather air strip capable of handling small to medium sized aircraft. The site is a fly-in fly-out (FIFO) operation serviced by personnel living in Perth and other centres with regular flights as the primary means of access to the site. The airstrip also facilitates urgent supply access for mission critical items and emergency recovery capabilities via the Royal Flying Doctor Service.

5.2 Climate

The climate of the region is characterized by hot summers (January average daily temperatures exceed 40°C) and warm winters (July average daily temperatures exceed 10°C). Rainfall is strongly seasonal and occurs between December and March and is usually associated with remnant cyclones and thunderstorm activity. Average annual rainfall is 366mm and average annual evaporation is 4160 mm.

5.3 Local Resources

The remote Telfer mine site is located in a sparsely populated area at the edge of the Great Sandy Desert. Seasonal conditions vary between arid and semi-arid, with vegetation cover being limited to sparse drought-tolerant low ground cover. These environmental conditions essentially offer little value to the requirements of an active mine site, which in turn necessitates the importation of the vast majority of materials and personnel to operate the site.

5.4 Infrastructure

5.4.1 Water Supply

Telfer mine site relies on abstraction of groundwater from a series of proximately located bores for both raw and potable water requirements. Current abstraction rates average approximately 57Ml/d from an installed total bore field peak capacity of 80Ml/d.

Non-potable applications of the abstracted water include the mine processing circuits, dust suppression, wash down and fire fighting. Treated potable water is supplied to the camp facilities and strategically located personnel access points throughout the mining project.

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5.4.2 Electricity Generation

There are currently two permanent power stations at Telfer. The Primary Power Station (PPS) comprises three GE LM6000 gas turbines and the Secondary Power Station (SPS) comprises eight diesel generators. The PPS was originally designed to operate in an N+1 configuration, that is, two duty and one standby. As the power demand has increased since commissioning of the PPS, there are currently 12 approximately 1MW Aggreko rental gas engines supplementing the LM6000s. The SPS is available as a backup.

The rated output of each gas turbine in normal mode is 43MW, but can be operated at 47MW in SPRINT mode. This provides a maximum rating of installed permanent power generation at Telfer of approximately150MW.

5.4.3 Gas Supply

The volume of feed gas required to supply the electrical generation gas turbine plant was impractical to transport to site by road or rail. Therefore, a dedicated, purpose built 450km natural gas pipeline was installed to feed natural gas from Port Hedland to the Telfer site. Newcrest has contracted pipeline capacity of 26TJ/day.

The pipeline is operated by APA Group for sole supply of gas to the Telfer and Nifty mines. Gas is supplied under contract by Santos and Apache Energy. The contract is valid for supply to December 2019.

5.4.4 Port Facilities

Copper-gold concentrate produced from the Telfer site is exported to customers, mainly in East Asia, via the Port Hedland harbour facilities. The substantial municipal port facilities at Port Hedland cater for the export of various mineral types from around the Pilbara region.

Telfer mineral concentrates are transferred from road transportation to storage and onto ship via a dedicated facility owned by the Port Hedland Port Authority.

5.4.5 Mining Camp

Telfer was historically operated as a live-in township of dedicated mine workers and support staff prior to the suspension of operations in 2000. Today the site is designated as a FIFO operation with a work force of approximately 1,100 full time equivalent (FTE) staff and contractors. The accommodation facilities on site comprise a total of 1,733 rooms. Numerous rosters are in place for these personnel.

The original permanent camp was converted to provide transient accommodation under the FIFO arrangements.

5.4.6 Auxiliary Infrastructure

Operation of a large scale mine in a remote locality requires the site to be largely self-sufficient. Specific items of infrastructure are required to supply, maintain and service the requirements of machinery and personnel. Therefore, numerous items of significant infrastructure are located and maintained as part of the ongoing Telfer mining operations. Items include fuel storage, laboratory, workshops, stores buildings, lay-down areas, effluent disposal systems and administration offices.

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6 HISTORY

6.1 Discovery

The Bureau of Mineral Resources (Australian Geological Survey organization) first geologically mapped the Telfer district in 1959. Gold and copper mineralization was not identified during this mapping.

Prospectors and exploration companies targeted the Telfer district in the late 1960s and early 1970s as a copper province.

In 1971, Day Dawn Minerals NL undertook a regional sampling program in the district under the direction of R Thompson. Anomalous copper and gold values were returned from gossanous outcrops that were sampled at Main Dome (Tyrwhitt, 1995).

6.2 Telfer Gold Mine Development History

6.2.1 Introduction

From the recognition of gold-bearing gossans in 1971 and the commencement of mining activities in 1977 up to the suspension of operations in 2000, Telfer Gold Mine produced almost 6Moz of gold.

Five million ounces of gold were produced from the oxidized and leached cap of a large gold-copper system using open pit mining methods, and almost 1Moz came from sulphide ore produced using underground mining methods to extract high grade mineralization. Prior to suspension of operations in late 2000, the annual gold production from both the open pit and underground operations was approximately 300koz.

6.2.2 Oxide Mining

An intensive exploration and resource drilling program was undertaken by Newmont Pty Ltd from 1972 to 1975. This program defined an open pit reserve of 3.8Mt @ 9.6 g/t Au containing in excess of 1Moz of contained gold (Turner, 1982) mainly comprising oxide ore from the Middle Vale Reef (MVR).

In 1975, BHP Gold bought into the project with 30% ownership as a consequence of the foreign ownership legislation introduced by the Australian Federal Government at the time. Newmont and BHP Gold subsequently merged their Australian assets to form Newcrest Mining Limited in 1990.

Mining commenced during 1975 at Main Dome and reached full production of 0.5 Mtpa in 1977. Mineral Resources and Mineral Reserves were maintained at 2Moz and 1Moz of contained gold respectively in the early part of Telfer's mine life (Chamberlain, 1990).

Initially, ore processing was by milling, cyanidation and Merrill-Crowe type gold recovery. During the 1980s, the potential was recognized for a large, low grade oxide resource in Main Dome and to the northwest in West Dome. This resulted in the introduction of a mill expansion in 1986 to increase crushing and grinding capacity, including conversion from Merrill-Crowe type gold recovery to a carbon in leach (CIL) circuit.

Further extensive metallurgical testwork led to the establishment of a dump leach operation which commenced in 1988, with an initial processing rate of 4Mtpa. Dump leach feed cut-off

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grades were gradually lowered during the 1990s to allow an increase to the mill feed ore head grade. By the late 1990s, Telfer was treating:

• 2.5Mtpa of high grade oxide ore through the mill and CIL circuit

• 15Mtpa of low grade oxide ores by dump leaching.

6.2.3 Sulphide Reef Mining

In 1989, a sulphide flotation circuit was established to process MVR supergene-sulphide ore, initially from open pit sources and in 1990, from underground. This circuit utilized bulk flotation to recover both copper and gold into a concentrate of saleable grade.

Exploration programs during the 1990s successfully delineated additional reefs on the eastern flank of Main Dome. These reefs, which include the M10, M12 and M30, were mined using narrow vein underground mining methods.

By the late 1990s, Telfer was treating 0.3Mtpa of sulphide ore through sequential flotation to produce copper concentrates for off-site treatment and pyrite concentrate for gold recovery by intensive cyanidation and CIL treatment.

6.2.4 High Cyanide Soluble Copper Mining

Prior to 2000, open pit mining had been largely confined to the production of oxide ore. The majority of the open pit mining focused on areas with cyanide soluble copper levels of less than 400ppm to provide ore amenable to conventional cyanide leach processing and dump leaching.

However, during 2000, open pit production was becoming constrained by a combination of increasing stockwork sulphide mineralization and high cyanide soluble copper material, neither of which could be economically processed through the existing treatment plant or dump leach operation.

The increase in open pit copper grades in the feed to CIL and dump leach impacted adversely on cyanide costs, copper and cyanide concentrations in tailings and gold bullion quality. A Sulphidization, Acidification, Recovery, Treatment (SART) facility was installed and commissioned shortly before operations were suspended in late 2000. The SART plant was introduced for copper and cyanide recovery from the leach liquors from the plant resulting in improvement of both treatment economics and the environmental quality of the plant tailings.

6.2.5 Telfer Main Dome Underground (Deeps)

The I30 quartz reef was discovered in 1991 using surface diamond drilling as part of an exploration program to test for potential gold and copper mineralization within the Main Dome at 1000m below surface (mbs). A mining feasibility study was completed in 1995 which focused on the extraction of the I30 quartz reef using narrow vein reef mining methods. Based upon the recommendations from this study and Board approval, the I30 Decline access was subsequently established and reached the M50 Reef in July 1997.

The I30 Decline was halted in 1997 based on the results of the Telfer Gold Mine Strategic Review which identified a series of mining risks not previously identified in the earlier feasibility study. These risks related to insufficient drilling of the eastern limb of the I30 quartz reef and also the poor ground conditions being experienced in the MVR reef.

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A conceptual study was established in early 1998 to review the mining potential of the I30 Quartz Reef and associated high grade reefs. This study was designated the I Series Project (ISP). The ISP Prefeasibility Study defined the existence of gold and copper mineralization on the eastern limb of the I30 Quartz Reef as well as an additional eight hanging wall reefs and three footwall reefs. Underground mining studies defined cut and fill and room and pillar on the western flank of the I30 Quartz Reef, up-hole retreat mining method in the vertical limb of the I30 Quartz Reef and the Telfer M-Reef, long hole stoping method on the moderate dipping I30 Quartz Reef east flank mineralization. Evaluation of underground haulage options identified truck haulage via a decline as the most viable option for the reserve of 1Mt @ 15.6 g/t Au and 2.6% Cu. Evaluation of the ore treatment options recommended modification of the flotation circuit of the existing sulphide treatment plant to accommodate the increased underground reserve.

The resource definition activities from the ISP Prefeasibility Study identified the potential for a large tonnage lower gold and copper grade stockwork surrounding the I30 Quartz Reef. This material was referred to as the Helmsman conceptual resource and formed the basis of the underground Telfer resource assessed in the Feasibility Study commissioned in 2000 and completed in September 2002. This feasibility study designs and recommendations were adopted and formed the basis for the modern operations.

6.3 Historic Mineral Resources

Historic Mineral Resources are not reported here as are available in Newcrest annual reports.

6.4 Summary

A summary of the project history through to the completion of the current feasibility study and commencement of current operations is shown in Table 6.1.

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Table 6.1 Summary of Project History Date Stage Event

1971 - Telfer orebody discovered

1975 - Newmont Australia and BHP Gold commence initial project development

1977 - First production from initial project

1986 - Mill expansion and conversion to CIL circuit

1988 - Dump Leach operation established

1989 - Sulphide Flotation Circuit established for sulphide MVR processing

1990 - Newmont Australia and BHP Gold merge to form Newcrest

1991 - I30 Quartz Reef first discovered

1994 - Trial of underground M-Reef processing

1995 - Pyrite Leach Circuit commissioned for M-Reef processing

1995 - Initial Feasibility Study on the I30 Quartz Reef - start of the I30 decline development

July 1997 - Telfer strategic review - shut down of the I30 decline development

1998 - Conceptual study on the I30 Quartz Reef and associated reefs. ISP Prefeasibility Study approved

2000 - SART plant commissioned to process high CNSCu ore

2000 - Initial project placed on care and maintenance

Aug 2000 1 Feasibility Study stage 1 approved for the Telfer Open Pit and Telfer Deeps

Apr 2001 1 Feasibility Study stage 1 extension approved

Aug 2001 - Decline access established to the I30 reef system

Jul 2001 2 Feasibility Study stages 2 to 5 approved

Sep 2002 4 Feasibility Study completed

Feb 2005 - Gold production from current two train plant configuration commences

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7 GEOLOGICAL SETTING AND MINERALIZATION

Telfer is located within the north-western exposure of the Palaeoproterozoic to Neoproterozoic Paterson Orogen (formerly Paterson Province). The Paterson Orogen includes the Palaeoproterozoic Rudall Complex, Neoproterozoic Yeneena Supergroup (Throssell Range and Lamil Groups), and the Neoproterozoic Tarcunyah Group of the northwest Officer Basin (Figure 7.1). The Yeneena Supergroup hosts the Telfer Mining District and consists of a 9km thick sequence of marine sedimentary rocks that unconformably overlie the Palaeoproterozoic Rudall Complex.

Figure 7.1 Telfer Regional Geology

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The Yeneena Basin covers an area of approximately 24,000km2 and consists of a middle to upper Proterozoic succession of calcareous and argillaceous siltstones, sandstones and carbonate sediments of the Yeneena Supergroup Figure 7.2. The Yeneena Basin unconformably overlies the Pilbara Craton and the Manganese Subgroup of the Bangemall Basin on its western boundary and the Rudall Complex Inlier on a south-eastern boundary. The Yeneena Basin is unconformably overlain by the Karara Basin to the southeast, by the Savory Basin to the southwest, by unconformable Phanerozoic sediments of the Canning Basin along the northern and eastern boundaries and the Officer Basin along the south-eastern boundary.

Figure 7.2 Telfer Regional Stratigraphy

The Telfer District is highlighted by the presence of north-northwest/south-southeast and northwest-southeast trending moderate to tight fold patterns in the Lamil Group sedimentary rocks, oriented slightly asymmetric to the southwest. These fold patterns are aligned with the Pilbara Craton and Rudall Complex boundaries respectively. In the Telfer region, the two fold patterns overprint each other and are intruded by discordant granites (Figure 7.3).

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The interference of these fold patterns in the Lamil Group rocks formed doubly plunging domal structures characteristic of the Telfer district. Domes vary from tight (e.g. Tims Dome) to open and rounded (e.g. Telfer and 17 Mile Hill Domes).

The Paterson Province contains two suites of Neoproterozoic granitic intrusions that have a close spatial and possibly genetic relationship to mineralization in the Telfer district. Intrusions are subdivided into two granite trends, the Mount Crofton to Minyari Granite trend, and the Wilki to O'Callaghans Granite trend, based upon petrographic and major element geochemical studies. These intrusions were emplaced episodically over a prolonged period ranging from approximately 600 to 650 million years.

Figure 7.3 Telfer Regional Geology

Mineral Resources reported for the Telfer mining centre consist of:

• open pit stockwork and reef mineralization in Telfer Main Dome and West Dome;

• stockwork and reef mineralization mined underground in the sub-level cave (SLC) mining operation;

• stockwork mineralization in the vertical stockwork corridor (VSC) below the SLC;

• poly-metallic skarn mineralization at O'Callaghans (Figure 7.4);

• lode, vein and stockwork mineralization at Camp Dome (Figure 7.3).

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Figure 7.4 Location of O'Callaghans and Camp Dome

7.1 Telfer

7.1.1 Geology

Gold and copper mineralization at Telfer consists of stratiform reefs and stockworks hosted by sedimentary rocks of the Malu Formation of the Lamil Group. The Lamil Group comprises relatively weakly deformed and metamorphosed Proterozoic sediment units northeast of the Camel-Tabletop Fault. The important attributes of the Lamil Group are the presence of abundant carbonate units, and weakly developed penetrative deformation.

Two very different aged granitoid suites are present in the Telfer region.

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The older Tabletop Suite intrudes the Tabletop Terrane (inferred basement to the Lamil Group) on the southeast of Telfer. The suite is composed of tonalities and leucogranites which are generally non to weakly magnetic and ilmenite bearing.

The Telfer granitoid suite consists of the strongly magnetic Crofton granites and the weakly to nonmagnetic Minyari granitoids. The Crofton granites occur mainly in a northeast corridor which corresponds to a major geological discontinuity. Similarly, Minyari granitoids occur mainly in a northwest corridor which also corresponds to a major geological discontinuity.

The O'Callaghans granite to the south of Telfer is strongly altered and is not readily grouped with either of the other suites. The O'Callaghans granite is directly associated with complex gneiss and skarn zones, including magnetite skarns with a strong aeromagnetic expression. It is the only granite in the region known to be associated with extensive hydrothermal alteration systems and metal anomalies (W-Cu-Bi-Mo-Sn-Pb-Zn).

Stratigraphy

The Telfer area stratigraphy has been divided into five formations that are subdivided into members (Figure 7.5).

Figure 7.5 Telfer Local Stratigraphy

The Telfer Formation is regarded as a transitional formation between the arenaceous Malu Formation and carbonate-rich Puntapunta Formation and consists of a sequence of interbedded argillites and arenites. The Telfer Formation is subdivided informally at Telfer into:

• Camp Sandstone;

• Outer Siltstone which hosts to the E-Reef mineralization horizons.

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The Malu Formation conformably overlies the Isdell Formation and consists of a massive to thickly bedded, metamorphosed, fine to medium grained quartzite and quartz sandstone with occasional thin interbeds of siltstone and mudstone. This is the host for mineralization in the M-Reefs and stockwork domains and is subdivided into:

• Rim Sandstone.

• Median Sandstone.

• Middle Vale Siltstone which hosts the Middle Vale Reef.

• Footwall Sandstone which hosts extensive footwall stockwork and disseminated pyrite mineralization.

• Lower Vale Siltstone hosts to localized reef mineralization;

• Upper Malu Quartzite Member laminated siltstones preferentially host the M-Reefs which include the M10, M12, M20, M28, M30, M35, M40, M45, M50, M55 and M60 Reefs;

• Middle Malu Member including Lower Limey Unit and I30 Reef;

• Lower Malu Quartzite Member.

The Isdell Formation is the stratigraphically lowest formation in the north-eastern zone of the Yeneena Basin and is a poorly sorted, mixed carbonate and clastic sequence. The formation comprises various types of dolomite ranging from fine grained, laminated to clastic and stromatolitic varieties. To date this formation has not been intersected in the deepest drilling at Telfer.

Structure

The topography at the Telfer mine site is dominated by two large scale asymmetric dome structures with steep west dipping axial planes (Figure 7.6). Main Dome is located in the southeast portion of the mine and is exposed over a strike distance of 3km north-south and 2km east-west before plunging under transported cover. West Dome forms the topographical high in the northwest quadrant of the mine and has similar dimensions to Main Dome. Both fold structures have shallow to moderately dipping western limbs and moderate to steep dipping eastern limbs.

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Figure 7.6 Telfer Pre-Mining Structural and Stratigraphic Setting

Five monocline-anticline structures were mapped in surface and underground exposures and logged in drill holes in Main Dome and West Dome. These strike north-south and are typically up to 1km in strike length and 50m to 200m wide. They form double plunging structures with axial planes orientated 35º to 50º to the west. The monocline/anticline structures commence and terminate as open fold structures, whilst the central portions of the monocline/anticlines typically have steep east limbs which in some areas are overturned. The I30 monocline is the best defined of these structures, having been intersected in underground development and diamond drill holes. These structures have a close spatial relationship to the location of economic gold-copper mineralization within both the Open Pit and Telfer Underground.

Several fault sets were identified by drill hole logging and geological mapping. They include:

• West shallow to moderate dipping fault systems, semi-parallel to the monocline-anticline fold structure;

• Northwest moderate dipping fault set;

• Southwest moderate dipping fault set;

• Northeast striking fault set (Graben Fault set);

• East-west striking near vertical fracture set (Leader Hill vein set).

7.1.2 Mineralization



• stockwork and reef mineralization mined underground in the Telfer Underground SLC mining operation;

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• stockwork mineralization in the VSC below the SLC.

Mineralization within the Telfer deposit is controlled by structure and lithology. Several styles of mineralization were recognized, namely narrow high-grade reefs, pod-like mineralized bodies, sheeted vein-sets and large areas of low grade stockwork mineralization, with the latter forming the majority of the sulphide resource (Figure 7.7). The primary mineralization was overprinted by surface weathering processes.

Figure 7.7 Oblique Schematic View Looking North showing Key Mineralized Systems

The sulphide mineralization is characterized by fresh sulphides, predominantly pyrite and chalcopyrite. The main copper minerals listed in order of occurrence are chalcopyrite, chalcocite and bornite with minor cobaltite and nickel-sulphide. Primary gold generally occurs as free grains, on sulphide boundaries and to a minor degree with silica grains.

Primary gold mineralization is typically associated with pyrite/chalcopyrite sulphides and quartz/dolomite gangue. There is a correlation between vein frequency and gold grade.

Weathering locally modified the mineralization, to depths typically up to 200m, with the boundary between oxide and primary mineralization being irregular. The weathering profile produced local areas of supergene enrichment where the copper to sulphur ratio is characteristically higher. Supergene minerals include gold with limonite/goethite, malachite and chrysocolla in the depleted oxide zone, giving way to chalcocite, pyrite, digenite, covellite, tenorite and cuprite at depth in primary mineralization. The copper to sulphur ratio decreases with depth below the supergene zones. Copper is, in general, more mobile in these supergene area zones than gold. The depth of oxidation is closely related to the structural framework and typically exists to approximately 200m below surface, although local areas show oxidation down faults in excess of 500m below surface.

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The primary controls on narrow vein reefs, stockwork veining and breccia formation are listed below in order of importance:

• stratigraphy;

• north-south monocline-anticline folds;

• west dipping thrust faults;

• conjugate fault corridor;

• northeast striking, northwest dipping corridor boundaries;

• northwest striking, southwest dipping corridor boundaries;

• east-west vertical structures.

Reef Mineralization

The highest concentration of gold and copper grades occurs within bedding sub-parallel reef systems. In Main Dome a total of 21 reef structures were identified from drill hole data or mapping of surface and underground exposures within the Open Pit Mineral Resource, and include 10 E-Reefs within the Outer Siltstones, the MVR within the Middle Vale Siltstone and the M10 to M50 series of reefs within the Malu Formation. The primary characteristics of the reef systems are:

• broadly concordant to lithological boundaries;

• laterally extensive (greater than 1km) both along strike and dip;

• true thickness of 0.1m to 1.2m, averaging between 0.3m and 0.7m;

• high relative nugget effect;

• variable dip varying from flat at the crest of Main Dome to about 40º on the eastern flank of Main Dome;

• gold grade is typically high but variable: 5 g/t Au to 50 g/t Au;

• copper grade ranges between 0.2% Cu and 1.5% Cu.

Characteristics of the dominant Main Dome reefs are outlined below.

Middle Vale Reef (MVR) is the most extensive of the M-Reefs and was mined in open cut workings in Main Dome and West Dome as well as in underground development on the eastern flank of Main Dome. The MVR lies semi-parallel to bedding within the Middle Vale Siltstone, generally close to the hanging wall of the Footwall Sandstone. It has an average thickness of 1m and ranges up to 3m. The MVR is an auriferous quartz-pyrite-chalcopyrite reef or its oxidized equivalent.

M10 and M12 reefs were intersected in underground development and drilling and extend more than 2km north-south and more than 500m down dip in the eastern flank of Main Dome. The thickness of the reefs ranges from 0.1m to 2m, typically 0.45m thick in areas mined by underground development. The M10 reef occurs 100 m stratigraphically below the MVR and 12m above the M12 reef. The reefs consist of silica and pink, grey and white dolomite. Sulphide minerals are mainly pyrite and chalcopyrite oxidized to chalcocite, digenite, bornite, covellite and native copper in the transition zone.

M35 reef lies 200m stratigraphically below the M10 reef and occurs as a discontinuous reef in a strongly sheared sandstone and siltstone zone up to 2m thick. High gold grades are

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found within the sheared zone with or without typical reef mineralogy being present. In areas where a typical reef mineral assemblage is present (silica-dolomite-sulphide), gold grades range between 43 g/t Au and 144 g/t Au.

M40 reef lies 250m stratigraphically below the M10 reef and 50m above the M50 reef and is typically 0.2m to 0.6m in thickness. Gold grades vary from 5 g/t Au to 80 g/t Au, with an average grade of 16 g/t Au. It is irregularly developed within a heavily dolomitized sandstone/siltstone layer known as the Upper Limey Unit which has undergone strong carbonate alteration.

M45 reef is typically 2m thick and forms either a sericite-pyrite shear plane or reef with similar mineralogy to the middle unit of the M50 reef sequence. The structure was only identified in the eastern flank of Main Dome and occurs 25m stratigraphically below the M40 and 25m above the M50 reef. Gold and copper grades are typically less than 10 g/t Au and 1% Cu respectively.

M50 reef occurs 300m stratigraphically below the M10 reef and is composed of three visually distinguishable units. The upper unit is formed from black, fine to medium grained carbonaceous siltstone with disseminated sulphides, fine white dolomite veins, and pyrite-chalcopyrite veins. The unit has a thickness from 0.1m to 0.4m with a true average thickness of 0.2m. Gold grades range from 3 g/t Au in fresh rock to 6.4 g/t Au in oxidized areas. The middle unit of the M50 reef is consists of typical reef mineral assemblages and ranges from 0.1m to 2m in thickness. There is an abundance of primary chalcocite in this reef, with highest concentrates around the Graben Fault, which cross cuts the M50 reef. Gold grades range between 5 g/t Au and 94 g/t Au and average 34.6 g/t Au in fresh rock. The lowest unit of the M50 reef system comprises a 0.2m to 0.5m thick calcareous sandstone.

I30 Quartz Reef is a stratabound quartz-carbonate-sulphide vein that occurs approximately 900m to 1000m below surface at the contact of the Middle Malu Member and the Lower Limey Unit (LLU). It contributes a significant proportion of the gold and copper in the Telfer Deeps SLC Mineral Resource. Drilling delineated the I30 Quartz Reef over an area of 875m (north-south) by 160m (east-west) in the southeast corner of Main Dome. The geometry of the I30 Quartz Reef is controlled by the intersection of the I30 monocline fold structure, a north-south trending reverse fault and a near vertical north-east trending fault corridor. The quartz reef has a maximum true thickness of 10m in the hinge of the I30 Monocline, and thins to a true thickness of 0.5m on the flanks of the fold structure. The I30 Quartz Reef mineralization is characterized by a gangue of quartz, grey, white and pink dolomite, calcite and rare siderite. The dominant sulphide minerals are pyrite and chalcopyrite.

Stockwork Mineralization

Stockwork mineralization is characterized by narrow, often discontinuous veins that crosscut stratigraphy. Large domains of stockwork mineralization were defined in the open pits and also within the Telfer Deeps and Vertical Stockwork Corridor Mineral Resources. Stockwork mineralization is best developed in the axial zones of Main Dome and West Dome and is discordant to lithological boundaries, although some stratigraphic units have more abundant stockworks than others and vein intensity within stockwork can be greater adjacent to reefs. Stockworks are laterally extensive, between 0.1km to 1.5km scale and the geometry of the stockwork zones is related to structure and stratigraphy.

Stockwork mineralization can also include areas of breccia dominated by quartz, carbonate and sulphides.

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7.2 O'Callaghans

The O'Callaghans poly-metallic deposit is located approximately 10km south of the Telfer Gold Mine.

7.2.1 Geology

The O'Callaghans deposit lies at the contact between the Proterozoic Puntapunta Formation and the O'Callaghans granite. The Puntapunta Formation conformably lies between the Wilki Formation and the Telfer Formation, and considered to be outer carbonate shelf deposits consisting of well-bedded, clastic dolomite and limestone, with lesser amounts of calcareous sandstone and siltstone. The O'Callaghans granite was identified at around 350m below surface based on diamond drilling intercepts and geophysical surveys. Drilling defined a zone of poly-metallic skarn mineralization up to 60 m thick above the granite/limestone contact.

The O'Callaghans granite is variably altered and is not readily grouped with other regional granitic suites. The O'Callaghans granite is directly associated with complex skarn zones, including pyrite/pyrrhotite/magnetite skarns with a strong magnetic expression. It is the only granite known to be associated with extensive hydrothermal alteration systems and metal anomalies (W-Cu-Bi-Mo-Sn-Pb-Zn).

Folded Puntapunta Formation sedimentary rocks appear to be overprinted by variable metamorphic alteration. Sulphide mineralization related to high temperature metasomatic skarn formation is consistent with a rapid onset of amphibolite facies contact metamorphic alteration of the host rocks (tremolite/hornblende + biotite). This forms an irregular metamorphic contact aureole above the O'Callaghans granite stock and is a valuable visual aid in recognizing onset and distribution of sulphide mineralization. These relationships are shown schematically in Figure 7.8.

Figure 7.8 Schematic Cross Section of O'Callaghans Skarn Deposit

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The skarn mineralization and metamorphic aureole overlies a massive, sub-horizontal, poorly mineralized, quartz flooded zone, which in turn overlies weakly foliated granite. Contact with the granite is relatively sharp.


The O'Callaghans deposit is a polymetallic skarn deposit located at the contact between limestone of the Puntapunta Formation and an intrusive granite. The main skarn is identified as calc-silicate rock containing more than 10% sulphides generally surrounded by a halo of calc-silicates with less than 10% sulphides.

Tungsten, copper, zinc and lead are considered potentially economically extractable. However elevated levels of molybdenum and silver are also present. Tungsten-bearing minerals include both scheelite and wolframite. Gold is not present in economically significant amounts. Elevated levels of fluorine are also recorded. Metal zoning is identified within the overall skarn with two areas of elevated zinc and lead broadly associated with a tungsten mineral species change from scheelite to wolframite.

7.3 Camp Dome

Camp Dome is located 20km by road north of the Telfer mine site. Access is via the main Telfer to Port Hedland road then northeast along the existing tracks.

7.3.1 Geology

The Camp Dome copper deposit is interpreted to be located in the Middle Malu Member to Lower Malu Member of the Malu Formation folded into a composite dome structure in a similar stratigraphic and structural setting as the deposits at the Telfer Gold Mine.

Camp Dome is hosted by Middle to Lower Malu Member of the Malu Formation estimated to be in excess of 500m thick. The Lower Malu Member is a competent, thickly bedded (up to 10m) to faintly laminated, fine to medium grained siliceous turbidite quartz sandstone, with minor interbedded siltstone and carbonate sandstone units. Dark, carbonaceous siltstone/shale units occur towards the base and top of the member. The Lower Malu Member is interpreted to have been deposited as a prograding turbidite fan, with the presence of carbonaceous shale suggesting a deep marine environment.

Near surface alteration in the central Camp Dome area is characterized by strong pervasive quartz and white mica, with or without iron oxides (after sulphides), with zones of intense silicification associated with quartz veining. At depth, strong phyllic and potassic alteration and contact metamorphic textures are recorded. Petrologic descriptions include alteration assemblages of biotite, potassic feldspar, muscovite, carbonate (calcite, dolomite), sulphides, tourmaline and rutile overprinting the sandstones and pelites.

Deep weathering is present over the Camp Dome area typically with complete oxidation to 80m to 100m below surface and partial oxidation noted up to 250m below surface. The deep weathering of primary sulphides is interpreted to have resulted in the copper-enrichment blanket at the oxidation interface.

The complex domal structure comprises 17 Mile Hill Dome and two subsidiary domes (Camp Dome and Pajero Dome). Camp Dome is within a doubly plunging anticline forming a large northwest trending open fold with similar characteristics to Telfer Dome.

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The Camp Dome mineralization is a satellite copper-only deposit with quartz/sulphide veins hosted in folded sedimentary rocks. Weathering of primary mineralization resulted in a chalcocite-rich and associated secondary copper blanket at the oxidation boundary. No significant gold grades were intersected in drill holes.

Mineralization at Camp Dome is interpreted to occur in two forms:

1. Primary mineralization associated with high sulphide consisting of quartz/pyrite/pyrrhotite/chalcopyrite/scheelite veins, breccias and stockworks. The main zone of primary mineralization occurs on the western limb of the axial position of Camp Dome and dips at approximately 30º to the southeast along the strike of the fold axis.

2. Secondary supergene copper formed at the weathering boundary beneath a near-surface leach horizon. The secondary copper mineralization was confirmed at depths typically between 55m and 120m, although locally more widely distributed. Chalcocite is the dominant secondary copper mineral, with minor malachite at the top of the supergene profile. Subordinate chrysocolla and native copper was recorded. The top of the supergene blanket is typically located at the base of strong oxidation, with moderately oxidized rocks hosting the bulk of secondary copper mineralization.

The supergene zone extends approximately 1000m along the direction of the fold axis of Camp Dome and approximately 750m normal to the axial plane. Thickness ranges from a few metres up to 54m.

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8 DEPOSIT TYPES


• Open pit stockwork and reef mineralization in Telfer Main Dome and West Dome;

• Stockwork and reef mineralization mined underground in the SLC operation and selective reef mining;

• Stockwork mineralization in the VSC below the SLC;

• Poly-metallic skarn mineralization at O'Callaghans;

• Lode, vein and stockwork mineralization at Camp Dome and Telfer Satellites (a group of deposits peripheral to the mine).

8.1 Telfer

Gold and copper mineralization at Telfer is hosted within stratiform reefs and stockwork domains in Proterozoic metasediments. Mineralization is controlled by structure and lithology with narrow high-grade stratiform reefs, pod-like mineralized bodies, sheeted vein-sets and large areas of low-grade stockwork mineralization. The primary mineralization was overprinted by surface weathering processes.

The sulphide mineralization is characterized by fresh sulphides, predominantly pyrite and chalcopyrite. Primary gold mineralization is typically associated with pyrite/chalcopyrite sulphides and quartz/dolomite gangue. There is a correlation between vein frequency and gold grade.

The highest concentration of gold and copper occurs within bedding sub-parallel reef systems. The primary characteristics of the reef systems are:

• Broadly concordant to lithological boundaries;

• Laterally extensive (greater than 1km) both along strike and dip;

• True thickness of 0.1m to 1.2m, averaging between 0.3m and 0.7m;

• High relative nugget effect;

• Variable dip varying from flat at the crest of Main Dome to about 40º on the eastern flank of Main Dome;

• Gold grade is typically high but variable: 5 g/t Au to 50 g/t Au;

• Copper grade ranges between 0.2% Cu and 1.5% Cu.

8.2 O'Callaghans

The O'Callaghans deposit is a polymetallic skarn deposit located at the contact between limestone of the Puntapunta Formation and an intrusive granite. The Main Skarn is identified as calc-silicate rock containing more than 10% sulphides generally surrounded by a halo of calc-silicates with less than 10% sulphides.

Tungsten, copper, zinc and lead are considered potentially economically extractable however elevated molybdenum and silver are also present. Tungsten-bearing minerals include both scheelite and wolframite. Gold is not present in economically significant amounts. Elevated levels of fluorine are also recorded. Metal zoning was identified within

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the overall skarn with two areas of elevated zinc and lead broadly associated with a tungsten mineral species change from scheelite to wolframite.

8.3 Camp Dome

The Camp Dome mineralization is a copper-only deposit with quartz/sulphide veins hosted in folded sedimentary rocks. Weathering of primary mineralization resulted in a chalcocite-rich and associated secondary copper blanket at the oxidation boundary. No significant gold grades were intersected in drill holes.

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9 EXPLORATION

9.1 Telfer

The Bureau of Mineral Resources (Australian Geological Survey organization) first geologically mapped the Telfer district in 1959. Gold and copper mineralization was not identified during this mapping. The Telfer district was targeted as a copper province in the late 1960s and early 1970s.

In 1971, Day Dawn Minerals NL undertook a regional sampling program in the district under the direction of R. Thompson. Anomalous copper and gold values were returned from gossanous outcrops that were sampled in Main Dome. An intensive exploration and resource drilling program was undertaken by Newmont Pty Ltd from 1972 to 1975. Mining of oxide MVR reef commenced during 1975 and reached full production in 1977.

Ongoing exploration identified the potential for a large, low grade oxide Mineral Resource in Main Dome and to the northwest in West Dome. This resulted in the introduction of a mill expansion in 1986 and establishment of a dump leach operation which commenced in 1988.

Further exploration of the supergene and sulphide part of the Main Dome MVR reef led to the development in 1989 of a sulphide flotation circuit initially to treat high grade open pit sulphides and subsequently sulphides mined from underground.

Exploration during the 1990s delineated additional reefs on the eastern flank of Main Dome. These reefs, which include the M10, M12 and M30, were mined using narrow vein underground mining methods.

Deep exploration drilling in 1991 lead to the discovery the I30 Quartz Reef and associated stockwork mineralization. Initial plans involved selective mining of the I30 reef but identification of subsidiary reefs and associated stockworks indicated that a large tonnage lower gold and copper grade scenario centred on the I30 Quartz Reef was possible.

Low grade open pit mining had been restricted to oxide material that could be treated on the dump leach. Drilling targeted at Main Dome reefs intersected low grade sulphide mineralization and exploration and resource definition drilling from 2000 to 2002 was targeted at identifying a large tonnage low grade copper gold Mineral Resource that could be treated in a large scale sulphide floatation plant.

9.2 O'Callaghans

Geophysical exploration between 1972 and 1983 identified the presence of a granitoid in the O'Callaghans area. A high resolution ground magnetics survey was carried out over several airborne magnetic anomalies during 1984. Seven diamond drill holes were completed in 1985 to test a discrete magnetic anomalies for possible skarn mineralization associated with the granitoid. The drilling, together with deflation lag sampling and mapping, confirmed the presence of a zoned system of poly-metallic skarn mineralization above the granitoid.

A grid of reverse circulation drill holes during the 1980s and 1990s failed to intersect the skarn mineralization, although one deep drill hole in 1987 to the northwest of the main skarn intersected the granitoid contact. One diamond drill hole was drilled during 1991 that intersected thin skarn mineralization.

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Nineteen diamond drill holes were completed during 2008 to further test the extent of skarn mineralization and to infill the grid to 200 m in the main mineralized area. During 2009 and 2010, 157 diamond drill holes were completed to infill the grid to 100m centres over the main mineralization.

A Mineral Resource was first reported in 2009 and revised in 2010 and has not been updated since.

9.3 Camp Dome

The 17 Mile Hill Dome adjacent to Camp Dome, originally pegged by Carr Boyd Minerals in 1973, was explored under a number of joint ventures. Supergene copper mineralization was first intersected at Seventeen Mile Hill in the mid-1980s. Drilling through 1989 to 1992 indicated supergene copper mineralization however the absence of gold anomalism resulted in the prospect being downgraded and no further work being undertaken before the tenure was surrendered in 1998.

During April 2008, new high-resolution airborne magnetic data was collected over the project, which delineated a magnetic target. Reverse circulation drilling in 2009 confirmed the presence of a supergene copper blanket, returning anomalous copper grades associated with chalcocite, malachite ±chalcopyrite and diamond drilling has intersected sulphide lode mineralisation below weathering.

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10 DRILLING

10.1 Drilling Programmes

Resource definition drilling at Telfer comprises a combination of reverse circulation and diamond drilling completed over years of mining operations. Pre-1998 drilling mainly affects areas that were mined prior to the restart of mining in 2003. Prefeasibility and Feasibility Study drilling was used for the 2002 Telfer Feasibility Study and part of the area covered by this drilling has been mined since 2003.

Drill hole data available for 2013 Mineral Resource estimates is largely based on Prefeasibility and Feasibility Study drilling but includes additional resource definition drilling, and reverse circulation grade control drilling conducted during the period January 2003 to December 2013 (refer Figure 10.1 and Figure 10.2 with drill traces overlain on the resource block model). Grade control drilling was used to create reference models to validate the resource estimates.

During the prefeasibility and feasibility study, Main Dome was drilled to a nominal 25m x 25m spacing in the area of most mineralization (10500mN to 11500mN) down to the M12 reef horizon. The drill hole spacing decreases beyond this depth. Table 10.1 lists the drilling completed in Main Dome (including both open pit and underground drilling).

Figure 10.1 Cross Section 11300N through Main Dome (Open pit & UG)

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Table 10.1 Main Dome Drilling up to December 2013 Period Program Type Metres Number

Pre 1998 Grade Control RC 60,559 4,280

Resource Definition Surface RC 227,977 3,253

and Exploration Surface DDH 77,048 613

Underground DDH 52,851 241

Total

418,434 8,146

Prefeasibility Grade Control RC 23,230 1,779 January 1998 to September 1999 Resource Definition Surface RC 48,126 341



Geotech Surface DDH 704 1

Total

90,975 2,209

Feasibility Study Stage 1 Grade Control RC 7,614 1,190 October 1999 to July 2000 Resource Definition Surface RC 110,199 862

and Exploration Underground RC 3,030 44


Total

129,246 2,124

Feasibility Study Stage 2 Geotech Surface RC 980 7 August 2000 to December 2002

Surface DDH 3,748 8

Underground DDH 40 2

Total

4,768 17

January 2003 to December 2013

Grade Control Geotech Resource Definition and Exploration

RC Surface DDH Underground DDH Surface RC Underground DDH

957 3550 2437

757 3274

343 20 6 5

19 Total 10975 393

Figure 10.2 Cross Section 11300N through West Dome (Open pit)

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West Dome is covered by drill hole spacing of nominally 25m x 25m down to the base of the Footwall Sandstone in the southern part of West Dome and to the base of the Outer Siltstone in the northern part of West Dome. Outside of these areas the resource development drilling spacing is highly variable but broadly spaced at 50m x 50m and 100m x 100m. Additional exploration, resource definition and reverse circulation grade control drilling from January 2003 to December 2013 are also included Table 10.2 which lists the drilling available for West Dome for the 2013 Mineral Resource estimates.

Table 10.2 West Dome Drilling up to December 2013 Period Program Type Metres Number

Pre 1998 Grade Control RC 36,683 1,349

Resource Definition Surface RC 228,200 2,678


Total

297,073 5,237

Prefeasibility Grade Control RC 30,521 1,821 January 1998 to September 1999 Resource Definition Surface RC 10,250 81


Total

47,229 1,930

Feasibility Study Stage 1 Resource Definition Surface RC 18,379 161 October 1999 to July 2000 and Exploration

Total

129,246 2,124 Feasibility Study Stage 2 Geotech Surface DDH 309 1 August 2000 to December 2002

January 2003 to December 2013

Resource Definition and Exploration

Surface RC Surface DDH

5083

49498

50

87 Total 54581 137

Drilling from surface identified mineralization in Telfer Deeps (now known as the Telfer Main Dome Underground). In addition, drilling from underground specifically targeted this mineralization for prefeasibility and feasibility studies. Table 10.3 lists the drilling available for Telfer Main Dome Underground for the 2013 Telfer mineral resource estimate and includes drilling conducted during the period January 2003 to December 2013 which was available for the Telfer Main Dome Underground Mineral Resource estimate.

Table 10.3 Telfer Main Dome Underground Drilling up to December 2013 Period Program Type Metres Number

Existing and Pre-Feasibility Resource Definition Underground DDH 24,135 119

and Exploration

Feasibility Study Stage 1 Deeps Infill Surface DDH 5,660 27

Bulk Sampling Drilling Surface DDH 2,184 26

Development Underground DDH 759 23

Feasibility Study Stage 2 Geotech Underground DDH 702 5 January 2003 to December 2013

Resource Definition and Exploration

Surface DDH Underground DDH

3353 73781

2 218

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Figure 10.3 Telfer Drill Location Plan

Telfer drill location plan is shown in Figure 10.3

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Drilling procedures changed over the history of the Telfer deposit. Drilling at any time in the past used protocols and certified reference materials (CRMs) in line with industry practice at the time. Early diamond drilling tended to be NQ diameter but more recent drilling was HQ diameter unless reduction was necessary to complete a drill hole. Early reverse circulation drilling used crossover subs with face sampling hammers used for more recent drilling.

All drilling completed as part of the 2002 Telfer Feasibility Study followed the drilling protocols outlined below. Unless stated otherwise, all subsequent drilling and sampling has followed the same or very similar protocols.

A local grid covers the whole of the Telfer mine area (Telfer Mine Grid 2002). It is oriented with grid north at 44º west of magnetic north.

The Telfer natural surface topography is based on surface surveys prior to the commencement of mining. Topographic surveys of the pits were completed on a monthly basis during mining, with an aerial survey carried out once a year to pick up the surrounding stockpiles, waste dumps, leach pads and tailings dams. The natural surface is used, together with the current pit topographic survey, to deplete the Mineral Resource estimate for surface mining, remove any surface dumps or tailings dams and deplete areas that are backfilled.

10.2 Survey Control

Surface drilling rigs were positioned using surveyed collar pegs and lined up using compass lines. The dip of each hole was established using an inclinometer. Drill hole collars were surveyed by mine surveyors on completion of the drill hole.

Several different down hole survey methods were utilized at Telfer at different times. These included:

• Down hole electronic multi-shot camera;

• Eastman single shot camera;

• Gyroscopic;

• Miniature Multi-shot Tool (MMT);

• Tropari.

For prefeasibility and feasibility study drilling, diamond and reverse circulation drill holes were surveyed using a down hole gyroscopic surveying tool during drilling. Where holes were shallower than 50º and the gyroscopic tool could not operate efficiently, an MMT was used. Diamond drill holes were also surveyed approximately every 30m during drilling using a single shot Eastman camera.

At drill hole completion, each hole was fully surveyed, with readings taken at 10m intervals using the gyroscopic tool, or if shallower than 50o, using the MMT.

Underground drill rigs were positioned using string lines between the fore and back sights with an inclinometer to align the rig mast at the correct dip angle. Collar locations were surveyed prior to and after drilling by underground mine surveyors.

All diamond drill holes were down hole surveyed every 25m during drilling using a single shot Eastman camera. On completion, holes were down hole surveyed using an MMT.

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10.3 Geological Logging

Diamond and reverse circulation drill holes were geologically logged for lithology, alteration, mineralization, veining, vein percent and structure. Logging information was recorded and validated prior to merging into the database. All drill core was photographed, either using conventional slide film or a digital camera, prior to cutting the core for sampling.

10.4 Sampling Procedures

Reverse Circulation

For prefeasibility and feasibility study drilling, sampling used riffle splitters, field split duplicates, inclusion of certified reference materials and coarse blanks, as well as quality assurance testing of components of the process to provide confidence in the location and representivity of the sample.

Reverse circulation drilling samples were collected at 1 m spacing through a 1:8 riffle splitter attached to the drill rig cyclone. The splitter produced a bulk reject that was bagged (numbered) into plastic bags and stored temporarily for reference and logging. A primary split of 2kg to 5kg was achieved through the 1/8 chute. All of the primary assay sample was collected into a calico bag and placed inside the bulk reject plastic bag for identification.

Some early reverse circulation drilling was sampled at 0.5m intervals and grade control drilling associated with defining reefs reduced the sample interval to 0.5m through the reef zone. Areas within the Telfer pits that were generally being defined for dump leach feed were drilled and sampled at 2m down hole intervals.

Once fully sampled, the entire hole was collected and barcoded (numbered). Barcoding involves attaching plastic tags with a barcode and number to the calico bag. The process was established with a series of checks to ensure that all samples were collected and all appropriate barcodes attached to bags. The barcoded calico bags were collected and delivered to the analytical laboratory in Telfer.

Diamond Drilling

The sampling of diamond drill core follows a detailed protocol to maximize sampling precision. The geologist logging the core defines all sample intervals. Mineralized and important lithological contacts are not crossed by sample intervals. The geologist also allocates the assay type. All reef and suspected high grade samples are submitted for screen fire assay gold and an expanded multi-element suite. All other core is submitted for fire assay gold and selected multi-elements.

Most prefeasibility and feasibility diamond drilling was HQ3 but before 1998 NQ diameter was more common. Most diamond drill core is sampled as half-core, with the exception of geotechnical samples, which were sampled as whole core. Minimum and maximum sample sizes are 20cm and 1m respectively. The samples were collected into the specified intervals, barcoded and submitted to the Telfer laboratory for sample preparation.

All drilling, sampling and assaying protocols for the Telfer Main Dome Underground follow the same procedures as those used for the open pit. All data was subjected to systematic QAQC and validation processes prior to estimation. Typical sample length for diamond samples is 1m down hole.

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11 SAMPLE PREPARATION, ANALYSES AND SECURITY

11.1 Historical Sample Preparation, Analysis and Security

Telfer has a long history of exploration, resource development and grade control drilling in a variety of deposits on the Telfer property.

Historical assay quality control protocols in place prior to 1998 reflect common industry practices at that time, but protocols were subsequently revised for prefeasibility and feasibility study drilling between 1998 and 2002, in line with changes in industry standard practices. Pre-1998 practices showed no evidence of significant quality control issues, based on repetition of the results of drilling post 1998.

The data from 1998 to 2002 (prefeasibility and feasibility study data) received on certified reference materials, blanks and field split duplicates occasionally show some issues on a batch basis. These issues are reported monthly. In general the data provides confidence in assay results. Rare examples of sample swapping, invalid grades or batch bias are recognized and corrections made.

Second laboratory check analysis was conducted. The copper data shows a much higher precision than gold for the same pulps. The gold precision is low due in part to the difficulty of producing an homogenous sample because of the grinding characteristics of gold in sample preparation. There was minimal bias between the two laboratories for gold (-0.8%) and copper (0.5%).

Three Mineral Resource estimates (VSC, O'Callaghans and Camp Dome) rely on drill hole data collected after the 2002 feasibility study and up to December 2011. Routine assay quality control protocols were in place for these drilling programmes.

For VSC, several commercial laboratories were used. For gold assays overall bias ranged from -5.3% to +1.1% for gold and -5.8% to +2.9% for copper depending on the laboratory used compared to the certified reference materials. All of the gold second laboratory checks show that there are no major differences between the pairs of laboratories used. There are minor differences and low bias but these are within the individual sample precision bounds.

For O’Callaghans polymetallic deposit overall biases compared to certified reference material was -1.5% for tungsten, +0.5% for copper, +0.2% for lead and +1.2% for zinc. The bias for tungsten against the Canadian wolframite primary CRM is -5.5% and the lead and zinc biases against the highest grade base metal CRM are -1.1% and +2.0% respectively. Generally there appears to be no significant QAQC issues at O’Callaghans other than a possible 5% low-bias in wolframite-bearing samples.

Camp Dome copper deposit analysis was performed at a both commercial and Newcrest laboratories. Pulp duplicate analysis indicated 68% better than 10% AMPRD and a one standard deviation precision of 3.6% for pairs averaging 200 ppm Cu or greater.

In the Qualified Person’s opinion the QAQC data indicates the historical (prior to 2011) sample preparation, security and analytical procedures have been adequate and results independently verified and as such the data is deemed acceptable input into the Mineral Resource estimate.

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The sample preparation, analysis and security have essentially remained unchanged since December 2011. That is laboratories and analytical methods and QAQC protocols (insertion of certified reference materials (5%) and blanks (2.5%), and the collection of at least one form of coarse duplicate (5%) and one form of pulp duplicate (5%) and monthly QAQC reporting). Additional QAQC protocols since December 2011 include despatching a representative suite of samples every one to two months to Perth for independent analysis by a second laboratory. Security, data storage, verification and validation procedures remain unchanged.

A complete description of the historical sample preparation, analysis and security of Telfer (up to and including 2011) is contained in the “Technical Report on the Telfer Property in Western Australia, Australia” 31 December 2011 and available on the Newcrest website at www.newcrest.com.au and also available at www.sedar.com.

This section of the technical report summarizes sample preparation, analysis and security and QAQC for data acquired in period January 2011 to December 2013 from three main projects areas:

• Main Dome open pit and underground;

• West Dome open pit and deep exploration; and

• Telfer Satellites is a group of prospects peripheral to the mine (primarily Camp Dome). The bulk of the Telfer Satellites work in the past couple of years has been at Camp Dome.

There has been no new resource drilling on the O’Callaghans project.

11.2 Sample Preparation and Analyses

The Telfer laboratory processes the samples through a drying, crushing, and pulverizing process to produce a pulped product with the minimum standard of 90% passing 75μm. The pulverizers utilized are Labtechnics LM5. The pulp packet is dispatched via air freight to commercial laboratories for analysis.

Samples from reef and high grade stockwork mineralization are submitted for assay according to the BZ protocol (Figure 11.1). The BZ suite includes a screen fire assay for gold. The use of screen fire assays for all reef and high grade material is based on the view that the technique reduces the impact of coarse gold on the precision of the assay. Data produced during feasibility show that screen fire assays have better precision but have no bias relative to normal fire assay gold. All other samples are submitted for assay according to the AY protocol (Figure 11.2).

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Figure 11.1 BZ Assay Protocol

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Figure 11.2 AY Assay Protocol

A separate sample preparation and assay protocol was developed for the O'Callaghans skarn mineralization. Most drilling in mineralization is diamond drilling and half core samples are submitted to the laboratory and prepared using the protocol outlined in Figure 11.3. Analyses in mineralization are carried out using inductively coupled plasma mass spectrometry (ICP-MS).

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Figure 11.3 O'Callaghans Assay Protocol

11.3 Sample Security

The security of samples is controlled by tracking samples from drill rig to database.

Reverse circulation and diamond core drill holes samples are collected and barcoded (numbered) by complete drill hole. Barcoding involves attaching plastic tags with a barcode and number to the calico bag. The process was established with a series of checks to ensure that all samples were collected and all appropriate barcodes attached to bags. The barcoded calico bags are collected and delivered to the analytical laboratory in Telfer.

The drill hole information is stored in a commercial SQL geological database. The collection of data from initial establishment of collar locations and drill hole naming through to logging and assaying are controlled to minimize the risk of importing incorrect or duplicated information. The systems have automatic validation checks, with all data validation overseen by senior geologist on site with independent verification undertaken by corporate

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resource personnel prior to modelling. The database data import routines and validation is controlled by corporate database personnel. Assay results were merged electronically.

A detailed validation process is applied to all data entering the drill hole database. The validation process is multi-staged, requiring input from geologists, surveyors, assay laboratories and down hole surveyors if applicable. All variations from expected values are returned by the database administration for approval by supervising personnel.

All samples recorded as missing are coded and checks are carried out for overlaps or gaps in the samples. This procedure allows for sample tracking at all points of the handling and analytical process. Details of all sample movement are recorded in a database table. Dates, drill hole identification numbers, sample ranges, and the analytical suite requested are recorded with the dispatch of samples to analytical services. Any discrepancies logged on receipt of samples by the analytical services providers are validated.

11.4 Main Dome QAQC

11.4.1 Certified Reference Materials

A matrix-matched certified reference material (CRM) is inserted into a batch of samples with a frequency of about 5%. All of the CRMs in use here and elsewhere at Telfer were prepared by a commercial provider between 1999 and 2003. The CRMs cover a wide range of concentrations from background to extremely high grade. They have been certified for a variety of elements beyond the gold and copper discussed here. The CRMs are supplied in small envelopes holding 60g to 100g so are not blind to the laboratory, although the laboratory does not know the identity of the individual standard.

There have been 2039 gold CRMs inserted in Main Dome area in period from January 2011 to December 2013. These give a bias of 0% (figure 11-4) over the entirety of the 2011, 2012 and 2013 calendar years.

Figure 11.4 Gold Z-Scores from Main Dome January 2011 to December 2013

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Outlying values, particularly negative values, were very common early in the period but have since become rare events. The red moving average has been near constant at 0 for most of the review period.

Copper CRMs (figure 11-5) shows a similar pattern to gold with many outliers and otherwise imprecise data at the start of the period followed by a period of high quality data, then a brief period of slightly more outliers and then precise and reasonably accurate data for the remainder of the period under review. The median bias for the entire period was +1.5%, a figure which had been maintained steadily for the last 1000 CRMs. Prior to that period bias peaked at about 3.5% and had a minimum of around -1.5%.

Figure 11.5 Copper Z-Scores from Main Dome January 2011 to December 2013

Coarse blanks are included in all jobs and go through the same sample preparation and analysis steps as the routine samples. The main purpose of a coarse blank is to reveal any evidence of contamination during sample preparation, should it be occurring. They also serve a worthwhile purpose in providing assurance that the order of samples has not been swapped. Only two of 1406 blanks reported gold above the error threshold of 0.3 ppm. Copper blanks were similarly consistent.

11.4.2 Coarse Duplicates and Pulp Replicates

Coarse duplicates are collected to assess how representative the sample taken for pulverising is of the material crushed. There were over 550 coarse duplicates collected and analysed for gold (figure 11-6). Coarse duplicates have not been analysed for any other elements. The calculated precision was 34.0%, somewhat higher than desirable. After removing the low grade samples (gold concentration less than 20 x detection limit) the precision was calculated to be 27.6%, slightly the upper target level of 25%.

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Figure 11.6 Main Dome Gold in Coarse Duplicates

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Telfer Main Dome Gold in Coarse Duplicates

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Pulp replicates are second samples taken from the same Kraft envelope as the primary sample. They are used to assess whether the sample taken from the envelope is representative of the envelope’s contents. The target level for gold in pulp replicates is 10% at more than 10 times the detection limit. For other elements it is generally 8%. There are almost 4500 pulp replicates (figure 11-7) in the dataset and they have been analysed only for gold.

Figure 11.7 Main Dome Gold in Pulp Replicates

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The precision for the set with a pair average of 0.2 g/t or better was 24%, which is outside the target level. Removing obvious outliers improved the precision to 16.1%, which is still outside the target level. The likely causes for this situation is coarse gold present that is not being comminuted during pulverising, leaving the kraft envelope inhomogeneous.

11.4.3 Second Laboratory Checks

Second laboratory checks are also undertaken for both gold and copper.

For gold there were 1642 pairs of assays from Main Dome that were analysed initially by Newcrest Laboratory Services Orange (NLSO) and subsequently by the commercial laboratory Genalysis using method FA50AAS or FA25AAS.

Figure 11.8 Main Dome Gold in Second Laboratory Checks

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Telfer Main Dome Gold in Second Lab Checks

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Examination of figure 11-8 shows that the two laboratories have similar average results but the spread of results either side of X=Y is greater than expected. There is little doubt that some of the outliers are due to human error, such as mislabelling a sample or pairing the wrong samples, rather than to slight analytical errors. The precision was calculated to be 38% when the samples with gold results less than 20 x detection limit were removed.

There is no systematic disagreement between the laboratories on gold concentration and thus no reason to question the gold results as a whole.

For copper there were 1660 usable copper check analyses carried out by Genalysis following original analysis by NLSO gave a precision figure of 20.7% (figure 11-9) for data pairs with average copper below 50 ppm removed.

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Figure 11.9 Main Dome Copper in Second Laboratory Checks

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Telfer Main Dome Copper in Second Lab Checks

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The comparison between original laboratory and secondary laboratory was good but the spread of outliers was larger than expected. There is no systematic disagreement between the laboratories over copper concentrations and no material flaw in the copper analyses globally.

11.5 West Dome QAQC

11.5.1 Certified Reference Materials (CRMs)

There were 2031 West Dome CRMs analysed for gold between the beginning of 2011 and the end of 2013. Median bias over that period was 0.0%. Examination of figure 11-10 shows that the bias has been relatively steady since late in 2011. Before that the bias was on average lower and cyclic. There are more outliers and 3sd errors than expected.

Early copper analyses used an aqua regia digest whereas more recent analyses have followed a 4-acid attack. The two forms of digest are indicated on figure 11-10 where the aqua regia digest is shown in orange and the 4-acid attack in blue. Bias for the two methods was +0.4% (aqua regia) and -0.3%. The 4 acid digest results have fewer outliers but this could be related more to experience at the laboratory than to any fundamental difference in the methods. Both methods have slightly worse precision than they should have

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Figure 11.10 Gold Z-Scores from West Dome January 2011 to December 2013

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Figure 11.11 Copper Z-Scores from West Dome January 2011 to December 2013

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Coarse blanks are included in all jobs and go through the same sample preparation and analysis steps as the routine samples.

Only one of 1453 blanks analysed for gold failed but the concentration was so high (1.5g/t) that contamination is very unlikely and a swap with another sample or standard seems more likely. Eight aqua regia copper blanks failed with most of the failures were just above the acceptance limit and are not statistically significant.

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Almost 1200 coarse duplicates, collected from the crusher product, gave 19.9% precision (figure 11.12), below the target maximum of 25% when samples with grades lower than 20 x detection limit were removed (note only 93 samples had grades above 0.2 g/t Au). Coarse duplicates have been analysed for gold only.

Figure 11.12 West Dome Gold in Coarse Duplicates

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Figure 11.13 West Dome Gold in Pulp Replicates

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Telfer West Dome Gold in Pulp Replicates

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Of the 4100 pulp replicate analyses for gold (figure 11-13) available, only 455 have a pair average greater than or equal to 20 x detection limit. The precision calculated from this data is 20.1% and approximately 1 in 4 has a relative difference worse than 20%. With low grade samples removed the precision is 20.1%, similar to the coarse duplicates. The duplicate data suggest there is no material issue with the original assays.


Approximately 1530 West Dome samples have been sent to commercial laboratory Genalysis in Perth for check assaying for gold and copper. Precision of the gold data set of 150 gold pairs with pair average above 0.2 g/t was acceptable at 22.4%.

Figure 11.14 West Dome Gold in Second Laboratory Checks

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Telfer West Dome Gold in Second Lab Checks

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Apart from a few outliers as shown in figure 11-14, overall the check grades confirm the original gold grades.

There were two different methods used for copper analysis at NLSO and three different check methods. The three combinations that occurred most often (each more than 400 times) had precision of 13.9%, 13.7% and 10.4% for pair averages greater than 20 x detection limit. This is consistent with the level of precision expected for samples analysed at two different laboratories. Overall the check grades confirm the original copper grades.

Apart from a few outliers as shown in figure 11-15, overall the check grades confirm the original copper grades.

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Figure 11.15 West Dome Copper in Second Laboratory Checks

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11.6 Satellite Projects

11.6.1 Certified Reference Materials (CRMs)

There have been over 700 Telfer satellite deposit CRMs analysed for gold in the period January 2011 to December 2013. The gold median bias for the Satellites CRMs is -0.25%. Figure 11-16 shows that the dataset is particularly noisy (especially in the first half of the data). Much of the noise appears to come from mislabelled CRMs, particularly the noise that extends beyond -6 z-score.

Figure 11.16 Gold Z-Scores from Satellites from January 2011 to December 2013

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The 400 copper CRMs show a relatively variable z-score chart and shows evidence of between-batch bias. Median bias is 1% but bias starts the period at close to +4% and drops gradually to about -2% and then climbs again to +2%.

Figure 11.17 Copper Z-Scores from Satellites from January 2011 to December 2013

Of the 600 blanks only one exceeds the upper limit for gold and that by only a small amount. Seven 2-acid digest copper values are above the upper limit, including one that reports over 1.2% instead of less than 50 ppm. All four-acid digest copper results were inside the acceptable limits.


Duplicate samples or field splits are pairs of samples taken from a structure (e.g. sample mound.) Duplicate samples can be taken from residue cones, sampling cones, stockpiles, outcrop etc. excluding diamond core. For the most part the duplicate samples from this project were collected from reverse circulation percussion drill rigs. None of the 282 duplicate samples returned a result better than 0.2 g/t gold.

Copper precision was 14.1% with grades up to about 480 ppm. The gold pulp replicate precision of 25.1% is acceptable.


Approximately 320 samples from the satellite projects were reanalysed at Genalysis in Perth. Gold precision at 20 x detection limit was calculated to be 41.8% but only 16 samples had a pair average better than 0.2 g/t gold however this is not statistically significant.

11.7 Summary of QAQC January 2011 to December 2013

While minor QAQC issues have been identified in all three projects analysed, the QAQC protocols suggest that the original assay data is robust with no evidence of a material issue.

In the Qualified Person’s opinion the data is adequate for the purpose intended. The sample preparation, security, and analytical procedures are of industry standard. As such the data is deemed acceptable input into the Mineral Resource estimate.

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12 DATA VERIFICATION

The Qualified Person has, through examination of internal and public Newcrest documents, personal inspections on site and discussions with other Newcrest personnel, verified the data in this Report and satisfied himself that the data is adequate for the purpose of this Report.

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13 MINERAL PROCESSING AND METALLURGICAL TESTING

Telfer ore is mined from both open pit and underground sources. The gold and copper mineralization, which is hosted within reef and stockwork domains, is defined in three principal sites described as Main Dome, Telfer Underground (SLC) and West Dome. The Telfer sequence is generally oxidized to a depth of up to 200m below surface with sulphide ore beneath, albeit with localized weathering along permeable structures to approximately 500m below surface.

The Main Dome open pit ore comprises dominant chalcocite and lesser chalcopyrite (at the approximate ratio of 80% to 20%) while underground ore is dominant chalcopyrite and lesser chalcocite (again in the approximate ratio of 80% to 20%). Plant feed is made up of approximately 75% open pit and 25% underground ore which translates to an overall feed ratio of approximately 65% chalcocite and 35% chalcopyrite. West Dome ore is of a more variable copper mineralogy, dependent on positioning in the ore body.

Pyrite represents the major sulphide gangue mineral. Sulphide flotation is the principal mechanism utilized for the recovery of gold and copper minerals, although gravity processing is also applied to recover coarse free gold liberated by grinding.

Gold is present as free gold with particle sizes varying from coarse to fine. The finer gold fraction is locked in both the copper and pyrite minerals. Approximately one quarter of gold produced is recovered as coarse free gold from gravity processing. However the majority of the gold is associated with the copper mineralization and is recovered as part of the copper flotation concentrate. Together these products account for approximately 94% of gold production with a further small contribution being extracted from the pyrite mineralization via a cyanide leach process.

The current processing plant at Telfer has been producing since November 2004, such that the metallurgical aspects of the treatment process have largely been defined within the normal vagaries of an operating plant. The copper concentrate typically assays 13% Cu to 19% Cu, although it also contains between 50 g/t Au and 90 g/t Au. Although the copper grade of the concentrate may be low given the primary chalcocite and chalcopyrite mineralization, the gold content provides significant value and represents a major component of the concentrate. The principal diluent in the copper concentrate comprises non-sulphide gangue that is present primarily as a result of entrainment in the froth during flotation.

The sulphide minerals generally respond well to the standard sulphide flotation regime. However because localized weathering can occur at depth along permeable structures, a reduced flotation response can occur on occasions due to ore oxidization.

The copper concentrate is otherwise quite clean by contemporary standards. The ore does contain some cobaltite, an arsenic sulfosalt which is recovered to the copper concentrate within the sulphide flotation regime. Its occurrence in the deposit is monitored and the arsenic level in the ore is controlled by blending to ensure that the arsenic assay in the copper concentrate does exceed contractual limits. F

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Historically the majority of the plant production was sourced from the Main Dome and Telfer Underground ores. During 2012 West Dome transitional ore was introduced to the current processing plant on a continuous basis for the first time. West Dome ore is characterised by higher pyrite levels and fine locking of the copper minerals and gold in the pyrite. The flotation response of the West Dome ore is generally similar to that for the Main Dome open pit ore for the principal sulphide mineralization provided that a suitably fine final grind size is applied to liberate the copper minerals, albeit in conjunction also with a more aggressive pyrite depression regime.

The installation of regrind mills (ISAMills) to enhance liberation of the copper sulphide minerals in the West Dome ore as well as additional cleaner flotation capacity (Jameson Cells) has provided a means of maintaining the quality of the copper concentrate.

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14 MINERAL RESOURCE ESTIMATES

Newcrest has reported a Mineral Resource estimate for Telfer as at 31 December 2013. The Mineral Resources have been prepared under the direction of Competent Persons under the JORC Code using accepted industry practice and have been classified and reported in accordance with the JORC Code.

There are no material differences between the definitions of Measured, Indicated and Inferred Mineral Resources under the CIM2 Definition Standards and the equivalent definitions in the JORC Code3.



• stockwork and reef mineralization mined underground in the Telfer Main Dome;

• lode, vein and stockwork copper mineralization at Camp Dome;

• poly-metallic skarn mineralization at O'Callaghans; and

• Telfer Satellite deposits.

Table 14.1 lists Telfer gold and copper Mineral Resources at 31 December 2013. Mineral Resources are reported inclusive of Mineral Reserves.

Table 14.1 Telfer Copper and Gold Mineral Resources at 31 December 2013 Tonnes

(Mt) Au

(g/t) Cu (%)

Au (Moz)

Cu (Mt)

Measured Resource Main Dome Stockpiles 24 0.40 0.09 0.3 0.02

Total Measured Resource 24 0.40 0.09 0.3 0.02 Indicated Resources

Main Dome Open Pit 210 0.67 0.09 4.5 0.18 West Dome Open Pit 170 0.66 0.06 3.6 0.10 Telfer Underground 96 1.5 0.33 4.7 0.31 Other Satellite Deposits 0.57 4.2 0.03 0.1 <0.01

Total Indicated Resource 480 0.84 0.12 13 0.59 Inferred Resources

Main Dome Open Pit 2.6 0.56 0.09 0.05 <0.01 West Dome Open Pit 1.1 0.46 0.06 0.02 <0.01 Telfer Underground 53 0.95 0.21 1.6 0.11 Camp Dome 14 - 0.37 - 0.05 Other Satellite Deposits 1.7 2.58 0.08 0.14 <0.01

Total Inferred Resource 73 0.79 0.23 1.8 0.17 Notes: 1. The figures above include those resources converted to reserves

2. Rounding may cause some computational discrepancies 3. Telfer Underground includes SLC, VSC, Western Flanks and M Reef Mineral Resources

Table 14.2 lists the Mineral Resource for the O'Callaghans polymetallic deposit.

2 Canadian National Instrument 43-101. 3 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code 2012,

effective 1 December 2013, Prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC).

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Table 14.2 O'Callaghans Polymetallic Mineral Resource at 31 December 2013 Tonnes

(Mt) WO3 (%)

Zn (%)

Pb (%)

Cu (%)

Indicated Resource 69 0.34 0.55 0.27 0.29 Inferred Resource 9 0.25 0.15 0.07 0.24

The 31 December 2013 Mineral Resource update has been based on a detailed review completed by Newcrest of all Telfer production sources to take into account Newcrest’s current view of long term metal prices, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades and physical mining parameters. This has resulted in the most marginal ounces being removed and this has been reflected in changes to Mineral Resource estimates. The Measured and Indicated Mineral Resources for Telfer as at 31 December 2013 includes a material reduction of approximately 5.2Moz of gold to 13Moz of gold, compared with the 31 December 2012 estimate of 18.2Moz of gold. This reduction has primarily come from West Dome and Main Dome open pit Mineral Resources as a direct result of the review of long term economic assumptions.

The Main Dome and West Dome open pit Mineral Resources are reported inside optimization shells to reflect that part of the resource model for which there are reasonable prospects for eventual economic extraction. A notional spatial constraint using metal prices of US$1,400/oz for gold and US$4.00/lb for copper and an exchange rate of US$0.80:A$1.00 is applied for the purpose of excluding from the Mineral Resource material that does not have a reasonable prospect of eventual economic extraction. The Mineral Resource estimates are reported at a value cut-off based on expected metallurgical treatment options and calculated using US$1,350/oz for gold and US$3.10/lb for copper and an exchange rate US$0.80:A$1.00.

The Camp Dome Mineral Resource is reported within a similar optimization shell with a copper grade cut-off of 0.13% Cu.

Telfer Main Dome Underground (formerly known as Telfer Deeps) is being mined using a non-selective SLC mining method and selective mining on M Reef areas as appropriate. The total volume of the estimate classified as Indicated or Inferred Mineral Resource that is expected to be recovered in an SLC mining operation, including internal dilution, is reported as the Mineral Resource estimate. The expected SLC mined volume is based on a cut-off incorporating SLC mining costs and metallurgical recoveries based on testwork. The selective M Reef Mineral Resources do not include mining dilution.

The O'Callaghans polymetallic Mineral Resource estimate comprises the in situ estimate of the main mineralized horizon where drill hole spacing is sufficient to permit Indicated or Inferred Mineral Resource classification. No grade or economic value cut-off was applied to this volume for reporting, with the exception of a minimum mining height of 5m as there is a reasonable expectation that the main mineralized horizon is available for eventual economic extraction.

14.1 Telfer Main and West Dome Mineral Open Pit Resource Estimate Summary

The Telfer Main Dome Mineral Resource estimate was re-evaluated in 2011. The restart of mining operations at Telfer in 2003 was based on Mineral Resource estimates developed during the Telfer Feasibility Study in 2002. The 2011 estimate followed re-examination of geological controls on grade distribution, evaluation of different estimation methods and

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assessment of recent mining reconciliation up to 2010. For the December 2013 Mineral Resource estimate the same methodology was applied with additional drill holes added into the West Dome area only (approximately ~46 additional reverse circulation drill holes). The purpose of these holes was to provide data to support an improved sulphur estimation to assist with recovery modelling. Main Dome resource estimate remained unchanged from 2011.

The Mineral Resource model for the Telfer open pits is composed of estimates for gold, copper and density. Attributes required for modelling metallurgical recovery and value estimation including cyanide soluble copper, sulphur and rock type. Weathering attributes also included in the model.

The Telfer Reefs (M-Reefs) are geologically relatively uniform in nature in terms of thickness being stratabound. Grade distribution within the reefs is relatively consistent in that the high-grade areas are relatively uniform in the average (high) grades while low grade areas are consistently lower average grades. Grade partitions are used to domain the reefs into high-grade, medium-grade and low-grade domains using an indicator estimation methodology.

The M-Reefs are sampled by diamond core, RC drilling and face samples (where underground development and mining are present). Since sample support is not consistent (core and face samples are based on geological intervals while RC samples are constant 1m lengths), accumulations are used to estimate the metal (grade x vertical height) in a 2D grid, and grades are back calculated by dividing the estimated accumulation by the estimated vertical height. The same accumulation variogram and search neighbourhood are used to estimate both accumulations and vertical heights to ensure consistency problems do not arise.

Underground mining of some of the reefs revealed that in the high-grade domains the diamond and RC samples were negatively biased in relation to the face samples for gold (the diamond and RC samples were under calling gold grades, which was also verified when processing this material though the Telfer process plant). The face samples in the high-grade domains were a closer representation of the reconciled grade. To correct for this bias in the diamond core and RC samples a high-grade (HG) mapping process was developed; (1) face samples were transformed to a Normal Distribution and hermite polynomials were used to construct a continuous Gaussian Distribution; the two products of this process are “Transformation” and “Back-Transformation” functions which can be used to freely move any sample from real space to Gaussian space; (2) diamond and RC samples are also transformed to a Normal Distribution; (3) the face sample Back-Transformation function is then used to back transform the diamond and RC samples to real space with bias adjusted grades. The adjusted gold grades are then used to estimate accumulations and back calculated grades. Areas with no underground sampling but suggesting a possible data bias are designated medium-grade (MG), and approximately 50% of the HG bias adjustments is applied. Whilst it is acknowledged that the MG transformation values are somewhat arbitrary, it is also considered that there is a strong possibility that mineralised material adjacent to the high-grade domains will exhibit some component of positive bias. It is estimated that the MG transformation contributes approximately 2-3% of the total M-Reef metal content. No transform was applied to the low-grade (LG) areas. Modest top-cuts were applied to gold and copper grades to remove obvious outliers before transformation.

All M-Reef estimates are on parent blocks of 12.5m x 12.5m projected onto a horizontal plane using 2D accumulations. The metal for each of the blocks is mapped to its corresponding centroid in 3D space, and then divided by the height of the 3D blocks to back calculate a 3D grade; this process is to ensure that volumetric differences between 3D

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modelled wireframe volumes (on a block by block basis) and estimated vertical widths from accumulation do not contribute to any metal biases.

The stockwork gold mineralisation is highly positively skewed with Coefficient of Variation of between 1.9 and 3.8. Additionally, a significant proportion of the metal is contained in a disproportionate number of high-grade samples. Ordinary Kriging (OK) has been demonstrated to be sub-optimal for estimating such highly variable material. Multiple Indicator Kriging (MIK) is considered best suited for this type of mineralisation. Gold and copper were estimated using MIK. The type of MIK is the e-type estimate; that is directly estimating the model blocks with the average grade of the cumulative indicator distribution.

The indicator thresholds were selected such that each bin has a consistent balance of number of samples and the quantity of metal. The first 5 grade cut-offs are selected to correspond as practically as possible with the 15th, 30th, 45th, 60th and 75th percentile of the composite distribution. Higher grade bins are added in approximate steps of 15% of the de-clustered metal contribution. Indicator variography was then undertaken on gold and copper ensuring that nuggets increased and ranges decreased consistently in modelling progressively higher cut-offs; this minimizes order relational problems in the MIK estimates. MIK bin grades were assigned de-clustered average grade of the samples in each bin, except for the top bin which was assigned the de-clustered median grade.

Sulphur, arsenic and cobalt estimates were also undertaken due to their importance when managing concentrate quality. In the past, assays for sulphur, arsenic and cobalt have been conducted on a selective basis. Workable correlations exist between gold, copper, sulphur, arsenic and cobalt. Regressions are used to “estimate” sulphur, arsenic and cobalt values in the composite database, allowing ordinary kriging to be used to estimate the values into the block model.

The block sizes in the resource model are 6.25m x 6.25m x 4m for the selective reef areas and 12.5m x 12.5m x 12m for the bulk stockwork. The individual reef seam models are re-blocked to 6.25m x 6.25m x 4m and combined with the stockwork model to create the final resource model. All modelling and estimations are done in commercially available software supplemented with specialised algorithms coded within the package as required.

A volume of approximately 200 million tonnes was selected for the ground truth model (GTM) in Main Dome. This volume has been extensively sampled using closed spaced RC grade control and production blast holes. The GTM is considered to be an accurate estimate (it is insensitive to estimation technique due to being totally data driven) for benchmarking the resource model with wide spaced drilling within a common volume. The estimation parameters for the Main Dome resource model were refined such that the grade-tonnage curves for the models matched closely. These learnings from the refinements were applied to West Dome resource estimates.

The Main Dome Mineral Resource model is composed of estimates for gold, copper and density. Attributes required for metallurgical recovery and value estimation including cyanide soluble copper, sulphur, rock type and weathering are also included in the model.

The data used for the 2011 Mineral Resource estimate is largely the same as that used in the 2002 Telfer Feasibility Study. Drilling between 2002 and 2010 largely consisted of grade control reverse circulation (RC) drilling and grade control sampling of blast holes in areas already mined that provide little additional data for the Mineral Resource estimate. These data were used to develop a GTM for areas mined between 2003 and 2010 as a means of assessing geological control on grade estimation and evaluation of estimation methods and to test the veracity of the modelling used to develop the 2011 resource estimate. As a result of the evaluation of boundary analysis, diffusion testing and visual analysis, gold and

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copper grade domains that were used in the 2002 Mineral Resource estimate were discarded, as were a number of data calibrations that had been applied to adjust for drill hole type and data spacing. Refer to Figures 14.1 and 14.2 for examples cross sections.

A complete technical description of the Mineral Resource estimation of Telfer for Main Dome and West Dome open pits is contained in the “Technical Report on the Telfer Property in Western Australia, Australia” 31 December 2011 available on the Newcrest website at www.newcrest.com.au and also at www.sedar.com.

Figure 14.1 Cross Section 13000N through West Dome Open Pit

Figure 14.2 Cross Section 11300N through West Dome Open Pit

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14.2 Telfer Underground Mineral Resource Estimate

The gold and copper mineralization in Telfer Main Dome Underground occurs as narrow vein reefs which are sub-parallel to stratigraphy, stockworks which are largely discordant to stratigraphy and as mineralization associated with crosscutting structures. All mineralization styles have similar mineralogy comprising a quartz-dolomite-sulphide assemblage. Higher gold and copper grades are associated with reefs, crosscutting structures and areas of intense pyrite and chalcopyrite vein and replacement style mineralization.

The Main Dome Mineral Resource is centred on mineralisation currently being mined in the Main Dome Pit and Underground Areas. The primary underground mining method is sub level caving (SLC) with a subordinate component of more selective stoping of high grade M Reefs.

The 2013 Telfer Main Dome Underground Model Re-estimation described in this report is based on the information from approximately 10,500 resource definition drill holes, variously collared at both surface and underground, which have produced approximately 44,400 down hole composites. These holes are from all periods of operations up to mid-2013 and comprise Sub-level Cave (SLC), Vertical Stockwork Corridor, Western Flanks and selective M Reefs. Previously these resources were modelled and estimated separately but the 2013 underground mineral resource estimate is based on an integrated geological interpretation.

Final Mineral Resource estimation parameters were selected based on knowledge gained from the re-estimation of the Main Dome Open Pit Resource Area in 2011 and subsequent reconciliation performance.

The Telfer Main Dome Underground Mineral Resource model comprises estimates for gold, copper, sulphur, arsenic, cobalt and in-situ density. Six “bulk” domains and five reefs were estimated within the Main Dome Underground model. Multiple Indicator Kriging (MIK) was used to estimate stockwork-type gold and copper mineralisation, in four of the bulk domains. Ordinary Kriging (OK) was used for gold and copper estimation in all five reef domains, and in two of the bulk domains that are reef-like in character. OK, in conjunction with linear regression, was used to estimate sulphur, arsenic and cobalt in all of the domains.

The resource was classified on the basis of estimation confidence and economic potential.

14.2.1 Geology Model

In August 2013, Newcrest undertook a full re-estimation of the resource model underpinning the Telfer Underground Mineral Resource and Mineral Reserve. The re-estimation extends from the base of the open pit portion of the Telfer Main Dome project (at 12m below the M50 Reef) down to 3700mRL.

The re-estimation includes the M-Reef horizons (from M60 downward), the A Reefs, B30 Reef, LLU (including the I30 Reef), Oakover Vein, Vertical Stockwork Corridor (VSC) and intervening Stockwork mineralisation (see Figure 14.3). The A Reefs were bundled into an “A Reef Block”, inclusive of inter-reef stockwork-type mineralisation, in order to simplify the estimation of this portion of the deposit. Given that the method of mining is SLC, with very limited scope for selectivity, this was considered to be a reasonable compromise. The B30 and M-Reefs were estimated using single intercept composites whilst the remaining “bulk” domains were estimated using 4m down hole composites. Grades were estimated for gold, copper, sulphur, arsenic and cobalt.

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Figure 14.3 The reef domains (red) and bulk domains estimated (E-W section looking north at 11300mN).

The geological model was revised by Newcrest geologists in preparation for the re-estimation work and was used to define the estimation domains. In addition to the constraining geological units described above, boundary testing resulted in the separation of the Stockwork domain into Upper and Lower portions for estimation, with the Middle Malu-Lower Limey Unit boundary being the divide. The gold and copper grade transition across this boundary was considered to be a hard boundary for estimation.

To mitigate the problems associated with the high nugget nature of some of the bulk domains (Stockwork Upper, Stockwork Lower, VSC and A-Reef Block), a non-linear estimation technique, Multiple Indicator Kriging (MIK), was used. This method had previously been implemented in the Telfer Main Dome Open Pit model (Cube, 2011) and was found to reconcile well when compared to the close-spaced grade control production data.

The more tabular estimation domains (LLU, Oakover, M-Reefs and B30) were estimated using Ordinary Kriging (OK).

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14.2.2 Drill Data and Compositing

Drill data used for the 2013 resource estimate included resource definition diamond drilling, underground diamond drilling and resource definition reverse circulation drilling.

Grade composites were generated using the available resource definition drill data and the 3-D wireframes from the geological model. Many of the wireframe volumes overlap, reflecting the overprinting nature of various mineralising events at Telfer. The following priority sequence for mineralisation was implemented, with domains higher on the list being deemed to be dominant over those lower down the list:

1. B30 and M-Reefs – single intercepts conforming to distance between hangingwall and footwall surfaces. Wireframe models are not always snapped to intercepts – wireframe boundaries are smoothed.

2. LLU – 4m downhole composites;

3. VSC– 4m downhole composites;

4. Oakover– 4m downhole composites;

5. A-Reef Block– 4m downhole composites;

6. General Stockwork–4m downhole composites.

Table 14.3 Wireframes for Geological Model Vulcan Wireframe File Name Description

TEU_cube_12m_below_m50_strat.00t Top of model surface situated 12m below the M50 reef; separates the Telfer Main Dome UG model (this study) from the Telfer Main

Dome Open Pit Model

TEU_UMM-MMM_201309.00t DTM stratigraphic surface separating the Upper Malu from the Middle Malu

TEU_MMM-LLU_201309.00t DTM stratigraphic surface separating the Middle Malu from the Lower Limey Unit

teu_rf_m60_hw_fw_201308.00t M60 reef hangingwall and footwall DTM surfaces




TEU_Rf_B30_HWFW_201308.00t B30 reef hangingwall and footwall DTM surfaces

TEU_LLU_FWHW_201308.00t Closed solid wireframe representing the LLU estimation domain

TEU_VSC_STK_201309.00t Closed solid wireframe representing the VSC estimation domain

TEU_NDV-Oakover_201307.00t Closed solid wireframe representing the Oakover estimation domain

TEU_A-Reef_Block_201308.00t Closed solid wireframe representing the A Reef Block estimation domain

14.2.3 Bulk Domain Grade Modelling

The bulk domains in this study were defined as the VSC, A Reef Block, Stockwork, Oakover, and LLU. The latter two estimation domains, although possessing a reef-like morphology, were considered to be thick enough to estimate using a 3-D approach and 4m down hole composites (as opposed to using single intercepts). The vast majority of grade

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estimation work for the bulk domains was undertaken using commercially available software.

Boundary contact analysis for gold and copper grade was performed on the following domains:

1. A Reef Block versus LLU;

2. A Reef Block versus Stockwork;

3. A Reef Block versus VSC;

4. VSC versus Stockwork;

5. VSC versus Oakover;

6. VSC versus LLU;

7. LLU versus Stockwork;

8. Upper Malu versus Middle Malu (test within the Stockwork);

9. Middle Malu versus Volume below Middle Malu/Lower Limey Unit (test within the Stockwork).

The boundary analyses for both elements reveal that the majority of the domain boundaries resulting from the geological review are hard. The only notable exception to this was the A Reef versus VSC boundary and the Upper Malu versus Middle Malu boundary within the Stockwork. Since the A Reef Block includes a large volume of stockwork-type material mixed with a small volume contribution from the thin reefs within, its grade tenor is similar to that of the VSC, which essentially represents a relatively intense vein stockwork – however, the two domains have differing structural controls and orientations.

A distinct hard boundary was detected within the Stockwork at the boundary between the Middle Malu and Lower Limey Unit which is situated immediately below the Middle Malu. On the basis of this evidence, it was decided to subdivide the Stockwork into Upper and Lower portions using this contact surface.

Diffusion tests were conducted in the massive bulk domains (VSC, A Reef Block and Stockwork). Grade is considered to be diffusive when, under translation from low to high grade areas, passes through an area of intermediate grade. If the grade transitions are sudden and unrelated to the distance of translation, the model is of the “mosaic” type. The MIK method is theoretically more suited to mosaic conditions. A good test of diffusion is to plot a matrix of cross indicator variograms divided by indicator variograms. The cross variogram of two grade indicators is divided by the variogram of the indicator at the lower of the two cut-offs. The structured portion of the quotient plot is indicative of the distance over which the grade is diffusive when transitioning across the higher cut-off boundary.

The diffusion tests demonstrate that although there is only some diffusive behaviour in the three domains under investigation, the range of this diffusivity is generally no more than 10m. This, along with the knowledge that MIK performed well in the Stockwork above the M50 reef (Main Dome open pit resource model), when applied to wide spaced resource definition drilling, resulted in the decision to use MIK to estimate grade in the bulk domains.

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Visual analysis of the composited gold grades confirms the nature of the boundaries tested quantitatively above. In the gross sense, the strong structural control exerted by the Main Dome axial plane and Monocline axial plane, and particularly their intersection lineation, is clearly observed in the spatial distribution of gold (Figure 14.4). The VSC mineralisation conforms strongly to these structures, as does the intensity of mineralisation within the LLU and A Reef Block. Another visually observable phenomenon is the greater mineralisation intensity in the Stockwork Lower immediately below the LLU domain. This enhanced mineralisation is spatially associated with the overlying high grade LLU domain.

Figure 14.4 The reef and bulk domains estimated

Note: E-W section looking north at 11300mN with composite gold grades overlaid (to 150m either side of section).

Exploratory data analysis was undertaken on the bulk domains with a statistical summary, by bulk domain, of the combined DDH and RC 4m composite data for gold, copper, sulphur, arsenic and cobalt (Table 14.4 and figure 14.5 are examples of gold statistics). It is clearly evident from summary statistics and log-probability plots that the VSC, Stockwork and A Reef have a highly variable gold distribution, with coefficient of variation (CoV) varying between 3.17 and 4.44. The Oakover and LLU domains have somewhat lower CoV’s of 2.24 and 1.79, respectively, due to their more homogeneous mineralisation style, but are still considered to be highly variable. The bulk domain copper, sulphur, arsenic and cobalt grade data also reflect a generally high level of variability.

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Table 14.4 Basic statistics for gold grade (ppm) for all bulk domains (undeclustered)

Domain LLU VSC Oakover A Reefs Stwk Upper Stwk Lower Estcode 4400 6000 7000 3000 1130 1170

N 1 105 5 868 365 5 565 13 248 17 792 Min 0.01 0.01 0.01 0.01 0.01 0.01 Max 98.91 125.89 45.11 54.92 24.87 68.83

Mean 5.73 1.24 1.70 0.63 0.14 0.37 Median 2.08 0.29 0.47 0.11 0.04 0.05 Std Dev 10.28 4.10 3.81 1.98 0.55 1.65

Coeff Var 1.79 3.30 2.24 3.17 4.00 4.44

Figure 14.5 Log-probability plot for composite gold grade, per bulk domain

Ordinary Kriging is considered to be sub-optimal for estimating such highly variable material without the need for aggressive top-cuts, due to the potential over-representation of the extreme end of the data distribution. A non-linear method such as Multiple Indicator Kriging (MIK) is likely to be better suited for dealing with these highly variable data sets. As a consequence, it was decided to use MIK to estimate gold and copper grade in the VSC, A Reef Block, Stockwork Upper and Stockwork Lower domains. Due to the generally lower variability and lower data count, it was decided to use OK in the LLU for gold and copper estimation in the Oakover domains.

Multi-element assaying, inclusive of sulphur, arsenic and cobalt, only became routine at Telfer since 1999. For this reason, a significant proportion of the drill holes used in this study only contain selective information for these three elements. Visual inspection of the composite values shows that sulphur values are generally relatively high where selective sampling has taken place, suggesting that multi-element analyses prior to 1999 were conducted on the basis of observing significant sulphides in the core. The extent of selective sampling is particularly problematic in the A Reef Block and Stockwork Upper domains, where just 49% and 33% respectively, as a proportion of the gold assays, were assayed for sulphur. It was therefore decided to use a combination of OK and linear regression methods to calculate estimates for sulphur, arsenic and cobalt in the bulk estimation domains.

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Gold and Copper Estimation – Multiple Indicator Kriged Domains

As previously mentioned, MIK was implemented for gold and copper estimation in the VSC, A Reef Block, Stockwork Upper and Stockwork Lower domains. The following process and philosophy was followed to define indicator cut-off grades for MIK estimation:

1. For the lower portion of the grade distribution, no more than 15% to 20% of the samples were allowed to fall within any given grade bin.

2. The cumulative metal distribution for samples was calculated by sorting the composites from lowest to highest grade and then cumulatively summing the sample grades and expressing as a percentage. No more than approximately 10% of the metal contribution was allowed to fall into any given grade bin.

3. A cumulative distribution function (cdf), based on the grade sample data, was plotted on a graphically, using very small steps for high resolution.

4. Bin statistics were calculated and examined, with special attention being paid to the ratio of the mean to the median in each bin.

Table 14.5 Example Indicator variogram models used in the MIK estimation of gold grade for the VSC domain.

Indicator Nugget

Spherical 1 Spherical 2 Isatis Rotation (Mathematician)

sill major (m)

semi (m)

minor (m) sill major

(m) semi (m)

minor (m) Az Ay Ax

Au >= 0.05 0.117 0.391 35 20 8 0.492 800 250 30 -90 0 65

Au >= 0.15 0.250 0.333 35 20 8 0.417 450 200 30 -90 0 65

Au >= 0.3 0.320 0.340 30 15 8 0.340 275 125 30 -90 0 65

Au >= 0.6 0.383 0.447 20 15 8 0.170 200 115 28 -90 0 65

Au >= 1 0.505 0.354 20 15 8 0.141 150 90 20 -90 0 65

Au >= 1.5 0.545 0.303 15 10 8 0.152 125 85 20 -90 0 65

Au >= 2.5 0.583 0.250 15 10 8 0.167 100 70 15 -90 0 65

Au >= 3.5 0.632 0.195 15 10 8 0.172 80 55 15 -90 0 65

Au >= 5 0.645 0.161 15 10 8 0.194 75 55 15 -90 0 65

Au >= 7.5 0.658 0.132 15 10 8 0.211 65 55 15 -90 0 65

Au >= 10 0.714 0.107 15 10 8 0.179 50 50 15 -90 0 65

Au >= 20 0.789 0.105 10 10 8 0.105 50 50 15 -90 0 65

Au >= 25 0.791 0.104 10 10 8 0.104 50 50 15 -90 0 65

An example of indicator variogram model used for VSC domain is shown in Table 14.5.

The local rotation functionality provided by software provider was used during MIK estimation to define the search neighborhoods. For each target block, a unique rotation can be set and used to control both the variogram model and search neighbourhood rotation.

The search neighbourhood parameters used for MIK are summarised in Table 14.6 below.

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Table 14.6 Search neighbourhood parameters for MIK estimation of gold and copper grade in the bulk domains.

Domain Element

Block Discretisation Min

Samp Max Samp

Search Radii (m) Isatis Rotation (Mathematician)

x y z major semi minor Az Ay Ax VSC Au 5 5 3 12 40 330 160 50

Dynamic rotation applied to variogram model and search ellipsoid

A Reef Block Au 5 5 3 12 40 330 160 50

Stwk Upper Au 5 5 3 12 40 330 160 50

Stwk Lower Au 5 5 3 12 40 330 160 50

VSC Cu 5 5 3 12 40 410 190 50

A Reef Block Cu 5 5 3 12 40 410 190 50

Stwk Upper Cu 5 5 3 12 40 410 190 50

Stwk Lower Cu 5 5 3 12 40 410 190 50

Gold and Copper Estimation – Ordinary Kriged Domains

Gold and copper grades for the LLU and Oakover domains were estimated using Ordinary Kriging (OK). The Oakover gold grade was capped at 20ppm, on the basis of the shape of the grade distribution and spatial considerations. Gold grade for LLU was left uncapped as was copper grade for both Oakover and LLU.

Gold and copper variogram models were generated by transforming the data to Gaussian space and back-transforming the resulting variogram model to raw space, as no robust experimental variography could be obtained in raw space alone. The modelled back-transformed variogram parameters are summarised in Table 14.7.

Table 14.7 Variogram models used in the OK estimation of gold and copper grade for the LLU and Oakover domains.

Element (Domain) Nugget


sill major (m)

semi (m)


(m) semi (m)

minor (m) Az Ay Ax

Au (LLU) 0.568 0.231 20 20 20 0.202 220 220 220

Isotropic

Cu (LLU) 0.603 0.178 20 20 20 0.219 220 220 220

Au (Oakover) 0.621 0.168 20 20 20 0.211 130 130 130

Cu (Oakover) 0.516 0.242 20 20 20 0.242 200 200 200

The variogram and search neighbourhood parameters were dynamically varied for the LLU estimation runs, based on the same stratigraphy-parallel rotations described in Section 3.9.7.3. The Oakover, being a tabular shape had the search orientation set at a constant AZ = 0; AY = -45; AX = 0 under the Mathematician convention. Full search neighbourhood parameters are displayed in Table 14.8.

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Table 14.8 Search neighbourhood parameters for OK estimation of gold and copper grade in the LLU and Oakover bulk domains.

Domain Element Block Discretisation Min

Samp Max

Samp Search Radii (m) Isatis Rotation

(Mathematician)

x y z major semi minor Az Ay Ax

LLU Au 5 5 3 3 24 500 375 100 Dynamic rotation applied to variogram and search

ellipsoid LLU Cu 5 5 3 3 24 500 375 100

Oakover Au 5 5 3 3 24 500 500 100 0 -45 0

Oakover Cu 5 5 3 3 24 500 500 100 0 -45 0

Sulphur, Arsenic and Cobalt Estimation

As previously noted, selective sampling for sulphur, arsenic and cobalt was undertaken prior to 1999. This is of particular significance in the Stockwork Upper and A Reef Block domains, where the degree of selective sampling is relatively high. It was decided to use a combination of OK and linear regression to calculate grade estimates for these three elements.

Grade caps were implemented for estimation of sulphur, arsenic and cobalt. These caps were chosen primarily on the basis of identification of outlier values in the grade distributions. Note that no grade caps were considered necessary in the LLU domain.

Table 14.9 Grade caps implemented for bulk domains during the OK estimation of sulphur, arsenic and cobalt grade

Domain Element Grade Cap Units

VSC S 30 wt%

VSC As 2000 Ppm

VSC Co 2000 Ppm

Oakover S 30 wt%

Oakover As 2000 Ppm

Oakover Co 1000 Ppm

A Reef Block S 30 wt%

A Reef Block As 4000 Ppm

A Reef Block Co 3000 Ppm

Stwk Upper S 30 wt%

Stwk Upper As 2000 Ppm

Stwk Upper Co 2000 Ppm

Stwk Lower S 30 wt%

Stwk Lower As 3000 Ppm

Stwk Lower Co 2000 Ppm

Sulphur, arsenic and cobalt variogram models were generated by transforming the data to Gaussian space and back-transforming the resulting variogram model to raw space, as no robust experimental variography could be obtained in raw space alone. The same domain specific variogram and search rotation strategies for the MIK and OK estimation of gold and copper were applied during the OK estimation of sulphur, arsenic and cobalt.

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Blocks estimated by OK and having a Slope of Regression (SoR) greater than or equal to 0.8 were selected as having been robustly estimated for sulphur, arsenic and cobalt. Those blocks not considered robust were designated for estimation using a linear regression approach. This involved replacement of any block estimates generated by OK but having a SoR less than 0.8.

Since gold and copper are the only two grade variables not to suffer from the problem of selective sampling, regression on one or both of these variables is the only meaningful option. With the exception of the Stockwork Lower, it is evident that:

1. Sulphur estimates are significantly better correlated with copper than with gold.

2. The correlation between sulphur and copper is better than between arsenic and copper or between cobalt and copper.

The scatter plots also show that that there are at least two sulphur populations. One of these is reasonably well correlated with copper and therefore most likely a reflection of the presence of copper sulphides such as chalcopyrite. The other population shows no relation to copper at all and is probably indicative of variable pyrite enrichment not associated with the mineralisation. The relationship between sulphur and copper is therefore only weak to moderate, but appears to be the best candidate for a regression of sulphur.

Table 14.10 summarizes the linear regression equations used to estimate sulphur as a function of copper for blocks where slope of regression was less than 0.8.

Table 14.10 The linear regression equations used to estimate sulphur as a function of copper

Regression Equation Applied To: S = 11.827 * Cu Stwk Lower, Stwk Upper, A Reef Block S = 6.077 * Cu VSC S = 8.593 * Cu Oakover S = 8.072 * Cu LLU

Sulphur is observed to be moderately to well correlated with both arsenic and cobalt and as such arsenic and cobalt used linear regression as a function of sulphur for blocks where the slope of regression was less than 0.8.

Table 14.11 and Table 14.12 summaries the linear regression equations used to estimate arsenic and cobalt respectively as a function of sulphur for blocks where slope of regression was less than 0.8.

Table 14.11 The linear regression equations used to estimate arsenic as a function of sulphur

Regression Equation Applied To: As = 32.095 * S Stwk Lower, Stwk Upper, A Reef Block As = 29.411 * S VSC As = 47.130 * S Oakover As = 59.026 * S LLU

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Table 14.12 The linear regression equations used to estimate cobalt as a function of sulphur

Regression Equation Applied To: Co = 21.323 * S Stwk Lower, Stwk Upper, A Reef Block Co = 36.995 * S VSC Co = 25.070 * S Oakover Co = 34.296 * S LLU

It is noted that the regressed estimates for sulphur, arsenic and cobalt are of lower confidence than gold or copper and are primarily used for concentrate quality predictions and not directly for Mineral Resource or Mineral Reserve estimates.

14.2.4 Reef Grade Modelling

The Main Dome underground reef domains have been defined on the basis of geological, mineralisation and structural information. The following reefs were estimated: B30, M60, M65, M68 and M70.

Exploratory data analysis was undertaken on the reef domains with a statistical summary, by reef domain, of the combined DDH and RC intercept data for gold, copper, sulphur, arsenic, cobalt and intercept length. (Table 14.13 and figure 14.6 are examples of gold statistics). It is clearly evident from summary statistics and log-probability plots that the reef domains have highly variable gold and copper distributions, with CoV’s varying between 1.58 and 2.68 for gold and between 1.97 and 2.41 for copper. The sulphur, arsenic and cobalt grade data reflect a somewhat lower level of variability.

Table 14.13 Basic statistics for gold grade (ppm) and intercept length (m) for all reef domains

Domain B30 M60 M65 M68 M70 Estcode 430 260 265 268 270

Variable Au (ppm)

Length Au (m)

Au (ppm)

Length Au (m)

Au (ppm)

Length Au (m)

Au (ppm)

Length Au (m)

Au (ppm)

Length Au (m)

N 123 123 98 98 96 96 83 83 113 113 Min 0.005 0.05 0.005 0.05 0.005 0.10 0.005 0.05 0.005 0.10 Max 34.87 10.00 58.50 3.86 52.95 6.00 45.00 1.75 17.00 2.80

Mean 3.39 1.89 4.80 0.59 2.74 0.67 2.14 0.65 1.38 0.57 Median 1.77 1.55 0.70 0.38 0.52 0.45 0.29 0.60 0.56 0.43 Std Dev 5.35 1.38 9.14 0.54 6.49 0.73 5.74 0.36 2.66 0.49

Coeff Var 1.58 0.73 1.91 0.91 2.37 1.09 2.68 0.55 1.93 0.85

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Figure 14.6 Log-probability plot for composite gold grade, per bulk domain

An assessment of the difference between a 2-D estimation methodology and a length-weighted conventional 3-D OK estimation methodology was undertaken on the gold variable of the B30 domain. The 2-D methodology uses an estimate of the metal accumulation in conjunction with a secondary estimate of the vertical reef thickness to appropriately account for composite data of varying length. The length-weighting methodology accounts for the varying vertical widths in a single pass. There is little difference between the two estimated outcomes evident across all cut offs. On the basis of the tests undertaken on gold in the B30 domain, length-weighted OK was selected as the preferred methodology for all reef estimates.

Gold and Copper Estimation – Ordinary Kriged Domains

No grade caps were implemented for the reef intercept data. Gold and copper variogram models were generated by transforming the data to Gaussian space and back-transforming the resulting variogram model to raw space, as no robust experimental variography could be obtained in raw space alone. The modelled variogram parameters are summarised in Table 14.14.

Gold and copper grades were estimated using the Vulcan implementation of projection unfolding technique (Tetra Modelling). This process uses two designated surfaces to guide the orientation and the extent of the vertical component of the search ellipse. A pair of surfaces for each reef domain was created by copying the applicable hanging and footwall surfaces down and up by 10m, or, in the case of the B30 domain, 20m. The strength of the vertical anisotropy is variable and is determined during the estimation process, based on an initial proportion value of the distance between the two surfaces at the block centroid position. Table 14.15 shows the search radii and initial proportion value defined for the estimation of gold and copper.

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Table 14.14 Variogram, models for the estimation of gold and copper grade in the reef estimation domains



sill major (m)

semi (m)


(m) semi (m)

minor (m) Az Ay Ax

Au (B30) 0.197 0.218 25 25 25 0.585 210 210 210

Isotropic

Cu (B30) 0.380 0.299 30 30 30 0.321 250 250 250

Au x VW (B30) 0.169 0.198 25 25 25 0.633 210 210 210

Cu x VW (B30) 0.443 0.252 30 30 30 0.305 290 290 290

Au (M60) 0.402 0.298 30 30 30 0.300 230 230 230

Cu (M60) 0.461 0.270 30 30 30 0.270 275 275 275

Au (M65) 0.453 0.175 30 30 30 0.372 190 190 190

Cu (M65) 0.383 0.358 25 25 25 0.259 75 75 75

Au (M68) 0.397 0.164 30 30 30 0.439 235 235 235

Cu (M68) 0.410 0.265 25 25 25 0.325 240 240 240

Au (M70) 0.383 0.311 20 20 20 0.306 140 140 140

Cu (M70) 0.345 0.319 30 30 30 0.336 290 290 290

Table 14.15 Search parameters for OK Tetra Modelling of gold and copper grade in the reef domains

Domain Element Azimuth Plunge Dip Search Radii Minor Proportion

Value major semi

B30 Au 350 0 0 450 450 0.4

B30 Cu 350 0 0 450 450 0.4

M60 Au 350 0 0 300 300 0.4

M60 Cu 350 0 0 300 300 0.4

M65 Au 350 0 0 350 350 0.4

M65 Cu 350 0 0 350 350 0.4

M68 Au 350 0 0 250 250 0.4

M68 Cu 350 0 0 250 250 0.4

M70 Au 350 0 0 350 350 0.4

M70 Cu 350 0 0 350 350 0.4

A total metal sum was calculated for each block in the seam model. The Vulcan seam model was regularised to 12.5mE x 12.5mN x 12mRL and reef proportions were calculated as part of this process. The metal for each reef in each regular block was summed. The proportion and metal attributes were exported to a csv format file, which was then loaded into Isatis. The reef block grades were back-calculated in Isatis by dividing the imported metal by the product of the reef proportion and the regular block volume.

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Sulphur, Arsenic and Cobalt Estimation

Sulphur, arsenic and cobalt variogram models were generated in raw space for B30 and M70. No robust experimental variography could be obtained for M60, M65 and M68. It was decided to apply the M70 variogram models to M60, M65 and M68. The modelled variogram parameters are summarised in Table 14.16.

Table 14.16 Variogram, models for the estimation of sulphur, arsenic and cobalt grade in reef domains



sill major (m)

semi (m)


(m) semi (m)

minor (m) Az Ay Ax

S (B30) 0.162 0.284 60 60 60 0.554 125 125 125

Isotropic

As (B30 0.200 0.243 80 80 80 0.557 140 140 140 Co (B30) 0.192 0.242 80 80 80 0.567 140 140 140 S (M70) 0.373 0.627 45 45 45 - - - -

As (M70) 0.293 0.707 50 50 50 - - - - Co (M70) 0.249 0.751 45 45 45 - - -

Sulphur, arsenic and cobalt grades were estimated using the Vulcan implementation of projection unfolding technique. Table 14.17 shows the search radii and initial proportion value defined for the estimation of sulphur, arsenic and cobalt.

Table 14.17 Search parameters for OK Tetra Modelling of sulphur, arsenic and cobalt grade in the reef domains

Domain Attribute Azimuth Plunge Dip Search Radii Minor Proportion

Value major semi

B30 As 350 0 0 600 600 0.4

B30 S 350 0 0 650 650 0.4

B30 Co 350 0 0 600 600 0.4

M60 As 350 0 0 400 400 0.4

M60 S 350 0 0 400 400 0.4

M60 Co 350 0 0 400 400 0.4

M65 As 350 0 0 500 500 0.4

M65 S 350 0 0 500 500 0.4

M65 Co 350 0 0 500 500 0.4

M68 As 350 0 0 400 400 0.4

M68 S 350 0 0 400 400 0.4

M68 Co 350 0 0 400 400 0.4

M70 As 350 0 0 350 350 0.4

M70 S 350 0 0 350 350 0.4

M70 Co 350 0 0 350 350 0.4

A block discretisation setting of 5 x 5 x 1 (X x Y x Z) and a minimum of 2 and maximum of 15 composite data were used.

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Consistent with the bulk domains blocks estimated by OK and having a Slope of Regression greater than or equal to 0.8 were selected as having been robustly estimated for sulphur, arsenic and cobalt. Those blocks not considered robust were designated for estimation using a linear regression approach. This included replacement of any block estimates generated by OK but having a SoR less than 0.8.

Since both gold and copper are the only two variables not to suffer from the problem of selective sampling, it was decided that regression on one or both of these variables is the only reasonable option. It is evident that:

1. The M70 results are of limited use – the negative correlations between sulphur and copper, as well as arsenic and copper are clearly unreasonable and probably due to a paucity of robustly estimated block data. M70 was therefore not granted further consideration.

2. For B30, sulphur estimates are significantly better correlated with copper than with gold.

3. The correlation between sulphur and copper is better than between arsenic and copper or between cobalt and copper.

As for the bulk domains, the scatter plots show at least two sulphur populations. The relationship between sulphur and copper is therefore only weak to moderate, but appears to be the best candidate for a regression of sulphur.

Sulphur is observed to be moderately to well correlated with both arsenic and cobalt.

Table 14.18 summarizes the linear equations used to estimate sulphur as a function of copper. Table 14.19 summarizes the linear regression equations used to estimate arsenic and cobalt respectively as a function of sulphur for blocks. All regressions apply to blocks where slope of regression was less than 0.8.

Table 14.18 The linear regression equation used to estimate sulphur as a function of copper

Regression Equation Applied To: S = 17.732 * Cu B30, M60, M65, M68, M70

Table 14.19 The linear regression equation used to estimate arsenic and cobalt as functions of sulphur

Regression Equation Applied To: As = 76.605 * S B30, M60, M65, M68, M70 Co = 68.191 * S B30, M60, M65, M68, M70

As was the case for the bulk domains, it should be clearly understood that the regressed estimates in the reefs for sulphur, arsenic and cobalt are of lower confidence than gold or copper and are primarily used for concentrate quality predictions and not directly for Mineral Resource or Mineral Reserves.

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14.2.5 Density Modelling

Density samples were flagged by estimation domain using Surpac and subsequent density estimation was implemented in Isatis.

Basic statistics for density were evaluated and are shown in Table 14.20. Mean density broadly corresponds with the gold and copper grade tenor of the estimation domain, as would be expected since the presence of sulphides and mineralisation are correlated to some degree. The reef domains, LLU and Oakover show greater density variability than the remainder of the bulk domains. However, the density variability in all the domains is generally very low with CoV’s ranging between 0.03 and 0.14. It is clear that the reef domains and LLU show evidence of bimodality, which is probably a reflection of highly variable sulphide content, with massive sulphide development in places. The difference between the statistics with and without length-weighting was checked and is considered to be immaterial.

The following decisions were taken with respect to estimation methodology, based on the results of the exploratory data analysis:

1. Global mean densities were assigned to the Oakover, VSC, A Reef Block and Stockwork Upper and Lower domains due to their unimodal nature and/or relatively low variability.

2. Density estimates for all of the reef domains and the LLU would be calculated using OK.

Table 14.20 Basic statistics for density data, by domain, with no length-weighting applied

Estimation Domain B30 M60 M65 M68 M70 LLU Oakover VSC A

Reefs Stwk Upper

Stwk Lower

N 94 35 34 42 39 2 190 1 031 11 331 7 621 11 635 8 316

Min 2.69 2.36 2.72 2.65 2.63 2.34 2.39 2.00 2.17 2.31 2.29

Max 3.95 3.61 4.62 3.63 3.93 5.26 5.17 4.11 4.83 6.24 4.63

Mean 3.11 3.07 3.05 2.91 3.00 3.24 2.90 2.80 2.83 2.77 2.82 Trim Mean

(95th Perc.)

3.10 3.07 3.02 2.90 3.00 3.23 2.79 2.87 2.81 2.77 2.81

Std Dev 0.33 0.30 0.43 0.25 0.33 0.47 0.30 0.12 0.15 0.09 0.15

Coeff Var 0.11 0.10 0.14 0.09 0.11 0.14 0.10 0.04 0.05 0.03 0.05

10th Perc. 2.77 2.73 2.76 2.68 2.69 2.78 2.73 2.72 2.73 2.70 2.72

95th Perc. 3.69 3.53 3.94 3.45 3.78 4.07 3.47 2.97 3.03 2.89 3.03

Assigned block densities for some of the bulk domains are as listed in Table 14.21. The A Reef Block, Oakover and Stockwork Upper domains were assigned the length-weighted, 95th percentile trimmed sample mean values. The VSC and Stockwork Lower domains were assigned length-weighted, untrimmed sample mean values.

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Table 14.21 Constant density values assigned to bulk domains Domain Assigned Density Value (t/m3)

Stockwork Upper 2.77 Stockwork Lower 2.81

VSC 2.80 Oakover 2.85

A reef Block 2.81

Density was estimated for all reef domains and the LLU bulk domain using OK. Density sample values were capped to the 95th percentile for the LLU and M65 domains, resulting in top cap values of 4.07t/m3 and 3.94t/m3, respectively. A single variogram model, obtained from the LLU domain, was used to estimate density for all reef domains and the LLU domain as robust variography could not be obtained directly for reefs due to a paucity of data points.

Unique neighbourhoods, whereby all data points were used in the estimation of each block, were used for the reef domains. This approach is feasible where the number of data points is not too great to make inversion of the kriging matrix impossible. In the case of the LLU domain, a standard moving neighbourhood was used. The use of a relatively small moving neighbourhood for the LLU domain meant that a number of blocks were not estimated, in areas distal to the available density data points. The uninformed blocks were assigned a constant value of 3.23t/m3, which represents the mean of the LLU data trimmed to the 95th percentile.

14.2.6 Final Model Construction and Validation

The grade and density estimates for all reef domains and bulk domains, were combined into single grade and density values for each 12.5mE x 12.5mN x 12mRL block.

Grade estimates were combined according to the following process:

1. A combined bulk domain grade zbulk was calculated by tonnage-weighting of the individual bulk domain grade estimates.

2. A combined reef domain grade zreef was calculated by tonnage-weighting of the individual reef domain grade estimates.

3. A final, combined grade estimate per block was calculated according to the following formula:

zfinal = ((zbulk * tonnesbulkfin)+ (zreef * tonnesreef)) / (tonnesbulkfin + tonnesreef)

A series of model validations was undertaken on both bulk and reef domains.

Check estimates for gold and copper grade were run using OK for those domains estimated with MIK (Stockwork Upper, Stockwork Lower, A Reef Block and VSC). Similarly, moving average check estimates were run for gold and copper for the remaining two domains (LLU and Oakover).

Check estimates for sulphur, arsenic and cobalt were run using the moving average method. Check estimates for the LLU and Oakover domains were also run in Vulcan, using

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OK and the Tetra modelling approach. Globally, the Isatis OK estimates for grade (those used to compile the resource) compare very well to the Vulcan results.

The most reliable comparison method is that between the main estimates and check estimates. With the exception of sulphur in the Stockwork Lower domain, the agreement between main and check estimate global means is within 10%, and often much better than that. The MIK gold and copper main estimates are generally higher in grade than the check OK estimates in the relevant bulk domains. This is believed to be because of the effect of the grade caps used for the OK check estimates. It is evident in the LLU and Oakover domains, where the OK main estimate and moving average check estimate both using the same capped sample values, that the gold and copper grade comparisons are more balanced.

Swath plots were generated for all elements estimated, per bulk domain. For gold and copper, swath plots were generated in northing, easting and RL directions. For sulphur, arsenic and cobalt, only those blocks considered to be robustly estimated (SoR >= 0.8) were plotted, with the swath plots limited to northing slices.

The swath plots generally demonstrate that the estimates honour the conditioning sample data well. For gold and copper grade, the previously discussed difference between the MIK main estimates and OK check estimates, due to grade capping in the OK check estimates, is clearly visible – this is most marked in the two Stockwork sub-domains, a fact which is also reflected in the global statistics reviewed in the previous section. While the estimates generally follow the plots of sample grades quite closely, there are places where they depart from one another even for declustered samples. This generally occurs in areas where sample clustering and/or estimation volume effects are evident and cannot be satisfactorily accounted for by cell declustering of the samples.

The plot of sulphur OK main estimates versus sulphur moving average check estimates in the Stockwork Lower domain shows that the area of major difference is south of 11200N, where there is a relatively high degree of selective sampling for sulphur.

The bulk domain estimates were checked visually by viewing the estimates and sample grades in 3-D and in 2-D sections. In all cases, the estimates were seen to be satisfactorily honouring the data.

For the reef estimates a series of random checks were undertaken to ensure that the gold and copper metal was calculated correctly, in Vulcan, per block in the seam model. Swath plots were generated for all elements estimated, per bulk domain. For gold and copper, swath plots were generated in northing, easting and RL directions. For sulphur, arsenic and cobalt, only those blocks considered to be robustly estimated (SoR >= 0.8) were plotted with the swath plots limited to northing slices.

Agreement between the sample data (vertical width-weighted) and the vertical width-weighted OK estimates is observed to be good throughout. It is clear from the swath plots that the estimates for the reef domains have honoured the sample data.

The vast bulk of the model volume was informed by the assignment of constant density values. These assignments were validated by visual inspection, as were the OK density estimates for the reef domains and the LLU domain. In all cases, the estimates were observed to be honouring the sample data.

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On balance, the grade and density estimates are considered to be sound, and there is sufficient evidence that the sample data have been honoured.

14.2.7 Resource Classification

The combined grade and density estimates were reviewed as a Vulcan block model. As part of this review, Newcrest undertook the classification of the Mineral Resource. The following process was followed:

1. A Vulcan shell, delimiting the volume where the kriging SoR for gold grade was greater than 0.7, was created.

2. The value algorithm for economic blocks, using Newcrest price assumptions, was run and all economic blocks were flagged in the block model.

3. The previous classification and SLC footprint were displayed on screen.

4. The combination of points 1, 2, and 3 were used to visually interpret the Indicated Mineral Resource volume, which was wireframed for the mineable shapes.

5. All remaining blocks which were flagged as being economic were classified as Inferred.

The Mineral Resource classification is considered appropriate for the resource estimate.

Figure 14.7 Cross Section 11300N through Main Dome UG

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14.3 Comparison to Previous Mineral Resource Estimate

Newcrest has reported a Mineral Resource estimate for Telfer as at 31 December 2013. Newcrest has completed a detailed review of all production sources to take into account Newcrest’s current view of long term metal price, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades and physical mining parameters.

This has resulted in the most marginal ounces being removed and these are reflected in changes to Mineral Resources. The Measured and Indicated Mineral Resources for Telfer as at 31 December 2013 includes a material reduction of approximately 5.2Moz of gold to 13Moz of gold, compared with the 31 December 2012 estimate of 18.2Moz of gold. This reduction has primarily come from West Dome and Main Dome open pit Mineral Resources as a direct result of the review of long term economic assumptions.

14.4 Factors Affecting Mineral Resource Estimate

Telfer Gold Mine is an established operation with a long history to support development of plans to exploit the available Mineral Resource estimate.

The Mineral Resource estimates are based on long term capital and operating costs assumptions based on the current operating cost base modified for changing activity levels and reasonable cost base reductions over the life of the mine. Any material change in long term cost base or metal price assumptions may impact the Mineral Resource estimate.

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15 MINERAL RESERVE ESTIMATES

15.1 Introduction

The 31 December 2013 Mineral Reserve update has been based on a detailed review completed by Newcrest of all Telfer production sources to take into account Newcrest’s current view of long term metal price, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades and physical mining parameters. This has resulted in the most marginal ounces being removed and this has been reflected in changes to Mineral Reserve estimates. The Mineral Reserves for Telfer as at 31 December 2013 includes a material reduction of approximately 5.3Moz of gold to 5.6Moz of gold, compared with the 31 December 2012 estimate of 10.9Moz of gold. This reduction has primarily come from the West Dome and Main Dome open pit Mineral Reserves.

The Mineral Reserve estimates reported in this release have been prepared under the direction of a Qualified Person, as defined in NI 43-101, using accepted industry practice and have been classified in accordance with the JORC Code. Except as described below, there are no material differences between the definitions of Proven and Probable Mineral Reserves under the applicable definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM Definition Standards”) and the corresponding equivalent definitions in the JORC Code for Proved and Probable Ore Reserves.

It is noted that under the CIM Definition Standards, the completion of a pre-feasibility study is the minimum prerequisite for the conversion of Mineral Resources to Mineral Reserves. The JORC Code 2012, which came into effect on 1 December 2013, prescribes completion of a pre-feasibility study as a minimum prerequisite to declare an Ore Reserve (the JORC equivalent of a Mineral Reserve); however this requirement of the JORC Code does not come into effect until 1 December 2014.

A pre-feasibility study within the meaning of the CIM Definition Standards has not yet been completed in respect of Telfer Underground Vertical Stockwork Corridor (VSC) and O’Callaghans deposits and these have therefore been excluded from the Mineral Reserve estimates.

The Mineral Reserves at Telfer comprise:

• Main Dome open pit Mineral Reserve;

• West Dome open pit Mineral Reserve;

• Telfer UG Sublevel Cave underground Mineral Reserve;

• Telfer UG Western Flanks underground Mineral Reserve;

• Telfer UG M Reef underground Mineral Reserve.

The quoted Main Dome open pit Mineral Reserve includes surface stockpile reserves originating from all mining areas of the Telfer operations. The SLC, Western Flanks and M Reef are collectively known as Telfer Main Dome Underground (formerly Telfer Deeps). The Mineral Reserves were prepared under the direction of the Qualified Person, Mr Colin Moorhead, using accepted industry practice and were classified and reported as at 31 December 2013 in accordance with the NI43-101 Reporting standards.

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15.2 Mineral Reserve Assumptions

15.2.1 Commodity Prices and Exchange Rates

The following assumptions were used to prepare the December 2013 Mineral Reserve estimates:

• Gold Price US$1250/oz

• Copper Price US$2.70/lb

• Exchange rate A$1.00 = US$0.80.

15.2.2 Cost Estimates

Mining costs and pit optimizations used in the 2013 Mineral Reserve estimate have been updated since the previous Mineral Reserve estimate. The Mineral Reserves include mineralization which, when delivered to the pit rim or mine portals, contains metal with a recovered value greater than the cost of all subsequent processes including the fixed cost of operating those processes.

The mine design that supports the Mineral Reserves has been based on the LOM plan developed specifically for mineral reserve reporting. Operating cost estimates used in the preparation of the Mineral Reserves mine design have been developed from the same LOM plan. Mining costs are developed from first principles using assumed unit costs that reflect actual mine performance. Haul truck productivity assumptions are estimated for each origin and destination combination. Drill and blast costs reflect the different physical properties of all ore and waste materials.

15.3 Telfer Main Dome Open Pit Mineral Reserve

The Telfer Main Dome open pit is currently the major source of ore production within the Telfer operations. The regional geology of the Main Dome is characterized by deep weathering of the surface mineralized reef formation which reduced the copper content of the ore, overlying a less weathered ore with higher proportions of copper associated with the gold.

Mine production from the Main Dome open pit in the year to June 2013 was reported to be 12Mt of ore for a total movement of 64Mt of material. The current LOM schedule supporting the Mineral Reserve assumes Main Dome mining continuing until 2024. Production activity focus alternates between Main Dome and the adjoining West Dome open pit during this time period.

The Telfer Main Dome Mineral Reserve as at 31 December 2013 is shown in Table 15.1. The majority of the Mineral Reserve is classified as Probable and was converted from the Indicated Mineral Resources using appropriate modifying factors. The minor portion of Proven Mineral Reserve reflects stockpiled ore awaiting treatment.

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Table 15.1 Telfer Main Dome Open Pit Mineral Reserve Estimate at 31 December 2013

Mineral Reserve

Classification

Mt Gold

(g/t)

Copper

(%)

Gold

(Moz)

Copper

(Mt) Proven 24 0.40 0.09 0.3 0.02 Probable 74 0.95 0.10 2.3 0.08 Total 98 0.81 0.10 2.6 0.10

Note: Rounding may cause some computational discrepancies

A specific cut-off grade was not used in estimating the Mineral Reserves. Rather each block within the resource model is assigned a value based on an estimate of its potential net commercial value. Net values are calculated on a payable metal basis taking into account metal prices, metallurgical recoveries, processing costs and realization costs, but excluding mining costs that are common to both ore and waste mining.

Mineralization is classified according to the Telfer Geomet Profit Algorithm (GPA) which incorporates assumptions about assigning process route to derive the net revenue available from any given resource model block. This methodology leads to a profit balance, breakeven type selection of high grade ore, low grade ore, mineralized waste or waste based upon a block's resulting net value.

The resource models were depleted to the estimated end of December 2013 survey surface. All material within the zone of influence of the underground SLC was allocated as waste so that it was excluded from the open pit estimate.

The preparation of Mineral Reserve estimates for Telfer Main Dome follows industry standard processes:

• Input assumptions are collated and signed off.

• Pit optimization is run with Whittle software to generate a range of pit shells at different gold prices.

• Pit shells are selected that generate the maximum discounted value.

• Selected pit shells are used as the basis for final limits and phase designs. The final limits pit design is based on the revenue factor 1.0 pit shell.

• Final limit and phase pit designs are interrogated for tonnes and grades applying appropriate cut off values, and exported to mine scheduling software.

• Mine scheduling and financial modeling confirms a practical and economical mine schedule.

• Mineral Reserves are generated from Indicated Resources within the final pit limits.

15.4 Telfer West Dome Open Pit Mineral Reserve

The Telfer West Dome open pit reserve is located approximately 3km northwest of the existing Main Dome open pit (refer Figure 15.1). The West Dome pits are currently on care and maintenance with mining activity focusing on Main Dome. West Dome had been mined

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for the previous two years up until July 2013. Mine production from the West Dome open pit in the year to June 2013 was reported to be 19Mt of ore for a total movement of 25Mt of material.

Figure 15.1 Telfer West Dome Location Relative to Main Dome and Telfer Deeps

Main Dome

West Dome

Main Dome Underground

West Dome open pit reserve has generally similar geological and metallurgical characteristics to the Main Dome open pit reserve, albeit with more sulphur and more complexity of the copper occurrence. The current LOM schedule supporting the Mineral Reserve assumes production recommencing from West Dome in 2015 and continuing until 2020.

The Telfer West Dome Mineral Reserve as at 31 December 2013 is shown in the Table 15.2. The whole of the Mineral Reserve is classified as Probable based upon derivation from the Indicated Mineral Resources.

Table 15.2 Telfer West Dome Open Pit Mineral Reserve Estimate at 31 December 2013

Reserve Classification

Mt Gold (g/t)

Copper (%)

Gold (Moz)

Copper (Mt)

Proven - - - - - Probable 73 0.68 0.06 1.6 0.04 Subtotal 73 0.68 0.06 1.6 0.04

Note: Rounding may cause some computational discrepancies

The reserve modelling methodology adopted for the West Dome Mineral Reserve is similar to that undertaken with the Main Dome Mineral Reserve, with each block within the orebody model being assigned a value based on an estimate of its potential net commercial value. Net values are calculated on a payable metal basis taking into account metal prices, metallurgical recoveries, processing costs and realization costs but excluding mining costs that are common to both ore and waste mining.

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Mineralization is classified according to the Telfer Simplified Profit Algorithm (SPA) which incorporates assumptions about assigning process route to derive the net revenue available from any given resource model block. This methodology leads to a profit balance, breakeven type selection of high grade ore, low grade ore, mineralized waste or waste based upon a block's resulting net value.

The resource models were depleted to the end of December 2013 survey surface.

The preparation of Mineral Reserve estimates for Telfer West Dome is consistent with Main Dome and follows industry standard processes:





• Final limit and phase pit designs are interrogated for tonnes and grades applying appropriate cut off values, and exported to mine scheduling software.



15.5 Telfer Main Dome Underground Mineral Reserves

The Telfer Main Dome Mineral Reserves comprise the bulk mining areas of Sub-level Cave (SLC), Western Flanks and selective mining areas of M Reefs.

15.5.1 Telfer UG SLC Mineral Reserve

The Telfer SLC underground mine is located beneath the operating Main Dome open pit. The SLC extracts the high grade mineralized reef system with surrounding low grade stockworks.

The SLC commenced production in 2006 and currently supplies approximately 5.5Mtpa of ore to the Telfer processing facility via an underground crusher, shaft hoisting system and overland conveyer. The current LOM schedule supporting the Mineral Reserve assumes production from the SLC continuing until 2018.

The Telfer SLC Mineral Reserve as at 31 December 2013 is shown in Table 15.3. The Mineral Reserve is classified as Probable and is derived solely from Indicated Mineral Resources. The Mineral Reserve estimate is based on the block model used to report the December 2013 Mineral Resource for Telfer Underground.

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Table 15.3 Telfer UG SLC Mineral Reserve Estimate at 31 December 2013 Reserve

Classification Mt Gold

(g/t) Copper

(%) Gold (Moz)

Copper (Mt)


The reserve process utilises the SLC estimation process developed by Newcrest and referred to as the Newcrest sub-level cave optimiser (NSO). The Mineral Reserve is classified using a net value, rather than cut-off grade to take into account the contributions of gold and copper. This value has been calculated using the revenue minus the cost of transport, treatment and refining costs and royalty as well as considering the site operating costs used for cut off determination. The site operating costs include incremental mining cost, processing cost, relevant site General and Administration costs and relevant sustaining capital costs.

The NSO was developed internally by Newcrest and subjected to external review. This model applies the concepts of recovering ore over multiple extraction levels and estimating the dilution entering the ore flow. The model is based on full scale cave marker trials, takes into consideration the actual drawn tonnages from overlying drawpoints and is calibrated using production reconciliation data.

Material is classified as ore or waste based on its net value, rather than a cut-off grade, to account for the contributions of both gold and copper. The cut-off value used in the Mineral Reserve estimate includes mining cost, processing cost and combined site general and administration costs applicable sustaining capital costs.

Figure 15.2 shows the remaining LOM design for the Telfer Deeps SLC.

Figure 15.2 Telfer UG SLC remaining Life of Mine Design - Isometric View

15.5.2 Telfer UG Western Flanks Mineral Reserve

The Telfer UG Western Flanks (WF) underground mining area is located adjacent to the operating Sub Level Cave (SLC) on the western side located beneath the current operational Main Dome Open Pit within the Telfer Gold Mine Operations. The Western

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Flanks comprise a series of high grade veins and a reef horizon. The latest resource model considers additional drilling information and is now modelled to suit a bulk mining method and is considered an extension to current SLC mine operations.

As yet, there has been no production from the Western Flanks area.

The Telfer UG Western Flanks Mineral Reserve as at 31 December 2013 is shown in Table 15.4. The Mineral Reserve is classified as Probable and is derived solely from Indicated Mineral Resources. The Mineral Reserve estimate is based on the block model used to report the December 2013 Mineral Resource for Telfer.

Table 15.4 Telfer Deeps Western Flanks Mineral Reserve Estimate at 31 December 2013


Mt Gold (g/t)

Copper (%)

Gold (Moz)

Copper (Mt)



Figure 15.3 shows the Telfer UG Western Flanks in relation to the existing Telfer UG SLC development, pictured at the top of the figure. The Lower Limey Unit zone is shown in blue and the Oakover Unit zone is shown in brown.

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Figure 15.3 Plan View showing Telfer UG Western Flanks

500 metres

Mine GridNorth

500 metres

Mine GridNorth

15.5.3 Telfer UG M Reef Mineral Reserve

The Telfer UG M Reefs underground mine is located beneath the current operational Main Dome Open Pit within the Telfer Gold Mine Operations with economic zones comprising M30, M35, M40 and M50 Reefs. Gold and copper mineralisation is in the largely structurally controlled reefs, veins and stock works hosted by sedimentary rocks of the Proterozoic age. Mining of the M Reefs recommenced in July 2009 having previously been mined in the 1990s. M35 is currently the only producing reef, with M50 under development and M30 & M40 due to commence development during 2014.

The Telfer UG M Reefs Mineral Reserve as at 31 December 2013 is shown in Table 15.5. The Mineral Reserve is classified as Probable and is derived solely from Indicated Mineral Resources. The Mineral Reserve estimate is based on the block model used to report the December 2013 Mineral Resource for Telfer.

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Table 15.5 Telfer UG M50 Reef Mineral Reserve Estimate at 31 December 2013 Reserve

Classification Mt Gold

(g/t) Copper

(%) Gold (Moz)

Copper (Mt)



Figure 15.4 Typical Cross Section through M Reefs

15.6 Comparison to Previous Mineral Reserve Estimate

Newcrest has reported a Mineral Reserve estimate for Telfer as at 31 December 2013. Newcrest has completed a detailed review of all production sources to take into account Newcrest’s current view of long term metal price, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades and physical mining parameters.

This has resulted in the most marginal ounces being removed and this is reflected in changes to Mineral Reserves. The Mineral Reserves for Telfer as at 31 December 2013 includes a material reduction of approximately 5.3Moz of gold to 5.6Moz of gold, compared with the 31 December 2012 estimate of 10.9Moz of gold. This reduction has primarily come from the West Dome and Main Dome open pit Mineral Reserves as a direct result of the review of long term economic assumptions.

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15.6.1 Factors Affecting the Mineral Reserve Estimates

The relevant factors that could materially affect the Telfer Mineral Reserve include:

• Operating cost assumptions;

• Resource model confidence;

• Mining assumptions;

• Metallurgical assumptions.

Capital and operating costs have been determined based on the current operating cost base modified for changing activity levels and reasonable cost base reductions over the life of the mine. Ore dilution and recovery loss is specifically accounted for in this resource modelling process and no additional mining dilution or recovery factors are applied to the Telfer Open Pit Mineral Reserve estimate. This assumption is supported by the actual reconciliation between resource model and mill performance at Telfer to date being within an acceptable uncertainty range for the style of mineralisation under consideration. All metallurgical assumptions and potential geo-metallurgical paths are based on actual performance of the current processing operations which includes processing of ore sources included in the Mineral Reserve. Sensitivity analysis was conducted on the key input parameters of cost base, head grade and recovery and found to be robust.

The Main Dome open pit operation incorporates an active cave zone from the Telfer Deeps Sub Level Cave (SLC) operation within the pit limits. Situated on the western side of the Main Dome operations, the cave zone represents an area within the Mineral Reserve model that has either ‘subsided’ or has the potential to subside within the planned operation of the Telfer Deeps SLC. This area has therefore been excluded from the Mineral Reserve estimate due to the diluted nature of the material within its influence and is considered a conservative approach. No other factors are considered significant enough to materially affect the Mineral Reserve estimate.

Additional underground Mineral Reserve potential is from the Vertical Stockwork Corridor Mineral Resource. A PFS level study is currently underway to confirm the economic viability of the VSC and is expected to be completed by 1 December 2014. The planned mining method for the Telfer VSC is a continuation of the Telfer UG Sub Level Cave (SLC) with the key difference being the transition to longitudinal SLC layout as the resource narrows at depth.

Additional Mineral Reserve potential also exists from the polymetallic underground deposit at O’Callaghans which is also subject to PFS level studies expected to be completed by 1 December 2014.

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16 MINING METHODS

16.1 Telfer Main Dome and West Dome Open Pit

Mining methods at Main Dome and West Dome are the same. Current mining activities at the Telfer open pits are completed via conventional truck and shovel operations, standard waste rock dumps and stockpiling and reclaim of lower grade ore. An excavator configured load fleet is utilised to selectively extract ore material from a total twelve metre design bench height via three 4m high ‘flitches’. The 4m ‘flitches’ are used in order to help reduce ore dilution and loss. Bulk waste is stripped via two 6m ‘flitches’. Productivities, availabilities and utilisations used within the production schedule have been based on current performance.

The current mining fleet employed within the Telfer open pit includes:

• 2 x CAT 6060 excavators;

• 2 x Caterpillar 994 class front end loaders;

• Up to 32 x Caterpillar 793 class rigid body off-highway dump trucks; and

• Various ancillary equipment (drills, dozers, graders, etc.)

Open pit operations within the Main and West Dome pits have traditionally focused on the selective extraction of the ore material within the Mineral Reserve through the use of the sites excavator fleet. This configuration of this equipment, and selective ore mining approach adopted for ore mining, has led to the use of 12m benches comprising of three 4 m ‘flitches’.

Reef and adjacent waste, as well as the edges of stockwork ore, are selectively mined, while broad areas of stock work ore and waste are bulk mined. Some near-surface oxidised stock work is dump leached and this is bulk mined. All other ore is fed to the processing plant and is referred to as direct float ore. Direct float ore will be hauled to the ROM and normally direct tipped into the two gyratory crushers, but with allowance for stockpiling and rehandling a percentage of the direct float ore on the ROM pad. Dump leach ore is dumped for leaching on existing leach pads to the west of Main Dome and to the east of West Dome. Waste will be used for tailings storage facility construction or delivered to a dump south of the Main Dome pit and west of the West Dome pit. Of the total waste to be mined, 20% has been identified as potentially acid-forming and will continue to be segregated into confined cells within the waste dump and enveloped with non-acid-forming waste.

Ore and waste zones are all blasted on standard pattern spacing with 12m benches irrespective of the subsequent mining method being either a selective approach utilizing the excavator flitch extraction or a bulk shovel/loader configuration. However, blast drill hole diameter and explosive powder factors are adjusted to account for the varying mining methods. All blast hole drilling is undertaken with either hammer or rotary drill rigs depending upon the required hole size and material strength.

Geological and geotechnical conditions are complex and a number of batter failures, and in some cases multiple batter failures, have occurred. The pit has an extensive array of sensing equipment providing real time monitoring of pit wall stability. Mining practices include standoff periods after blasting against a high-wall and installation of wall reinforcement in places. Feedback from failure back analysis informs future pit slope design parameters for pit optimization and design.

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16.2 Telfer Main Dome Underground

16.2.1 Telfer UG Sub-level Cave (SLC)

The Telfer UG SLC is being mined using the SLC method. SLC involves the development of a series of parallel cross-cuts through the orebody in a regular geometrical pattern. Ore is progressively withdrawn from drawpoints in the crosscuts. As material is loaded from a drawpoint, the ore progressively mixes with material from higher levels in the cave. Once a predetermined draw tonnage is loaded from the drawpoint, loading ceases and the next ring is fired. As the process continues the rock overlying the mining footprint progressively caves, as does the rock immediately adjacent to the caved area.

Loaded ore is tipped down an ore pass system to the haulage level where it is trucked to the underground crushing station. A hoisting shaft facilitates transport of ore to surface, from a hoist depth of approximately 1,100m.

A decline provides access for the transport of personnel and materials from a portal entry in the open pit to the base of the underground mine.

All major infrastructure is in place to service the current mine plan. Development is well in advance of the current production horizons with all main orebody access points in place. Production level development is currently being carried out on the penultimate planned production level.

The mine design follows an established geometry employed since production commenced in 2006. As the design and operation of the Telfer UG SLC are mature there is minimal risk associated with the mining method and design used in the preparation of the Mineral Reserve estimate.

16.2.2 Telfer UG Western Flanks

The planned mining method for the Western Flanks (WF) is a flat-dipping modified Sub Level Cave (SLC). The mining process at Telfer UG SLC and Western Flanks SLC are essential the same with the key difference being the flat dipping nature of the Western Flanks resource requiring a series of steps in the SLC layout as shown in Figure 16.1. This modification impacts the draw rate and mining recovery assumptions and the planned Western Flanks assumption are appropriately adjusted relative to the Telfer UG SLC cave draw assumptions.

It is planned that material mined from the Western Flanks will be extracted by trucking a short distance to the existing 1,100m hoisting shaft facility where it will then be hoisted to surface. The Western Flanks will also be serviced by the existing single portal entry for transport of material and men into the mine.

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Figure 16.1 Western Flanks Proposed Mine Layout - Isometric View

16.2.3 Telfer UG M Reefs Selective Mining

The mining method for extraction of M Reef resources is narrow vein, shallow dipping sub-level open stoping (SLOS). Electric scraping is employed to recover blasted material due to the shallow dip of the orebody. The extraction design incorporates a 1.1m slot rise that establishes each stope, with a 5 m wide square rib pillar between adjacent stopes. The slot rises are excavated as a blasted whinze rise. Where geotechnical considerations allow, intermediate rib pillars are incorporated to facilitate maximum extraction.

A minimum mining width of 1.8m was used to estimate planned dilution. All dilution material was assumed to have zero grade and a density of 2.7 t/m3.

Ore recovery was estimated for each stope based on its dip. The recovery factor is estimated using the formula (2 x Reef Dip in degrees + 10). Hence where the stope dips at 45º or steeper, all diluted material was deemed recoverable (2 x 45 + 10 = 100%), whereas for a reef dip of 30º, the recovery of diluted stope material was estimated at 70% (2 x 30 + 10 = 70%).

M Reef material is trucked to a surface stockpile in the vicinity of the portal. The open pit mining fleet rehandles the material to ROM stockpiles.

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17 RECOVERY METHODS

Processing operations at Telfer initially commenced in 1977 as a gold leach operation that treated the oxidized ore near the surface of the deposit. A flotation plant was added in 1991 to separately process copper ore from the deeper zones in the deposit. Site operations were suspended in 2000 when the level of cyanide soluble copper in the gold ore essentially caused its processing to be uneconomic.

A subsequent feasibility study that was completed in November 2002 identified an optimum strategy for processing a combination of open pit and underground ore through a single treatment route. The rationale of this project assessment focused on maximizing the value that might be obtained from both the copper and the gold in the ore to generate a gold-bearing copper concentrate as well as gold doré. A new treatment plant was constructed on-site and commissioned in late 2004. Two products are generated, namely gold doré and a gold bearing copper concentrate, with approximately 25% of the Telfer gold production reporting to the doré and the balance reporting in the copper concentrate as based upon the average production statistics over the past five years.

Minor amounts of oxide ore are scheduled for processing in a dump leach operation as an adjunct to the main treatment route, with the dump leach output being incorporated within the overall gold doré production total.

The feed ore for the Telfer treatment plant is sourced from both open pit and underground mining operations. Owing to the range of ore types with differing mineralization of both gold and copper, together with variation in ore hardness, the treatment flowsheet is relatively complex. Two parallel process trains have been incorporated through the grinding and flotation circuits in the treatment plant which has a nominal throughput capacity of 20Mtpa of ore. In practice however, the throughput rate generally varies between 17Mtpa and 23Mtpa depending upon the ore characteristics. There is a general operating strategy to blend ore on the coarse ore stockpile in order to control the feed to the treatment plant in terms of the ore grade and hardness.

The general flowsheet schematic for each of the two parallel process lines is illustrated in Figure 17.1 from which the overall complexity of the treatment process may be noted. The circuit was designed to maximize the recovery of the value minerals, starting with a flash flotation and gravity recovery section within the grinding circuit intended to capture the coarse free copper and gold mineralization that is liberated early in the process route. The milled product from the grinding stage passes to the copper flotation circuit where the residual copper is recovered, together with a proportion of the gold that is associated with the copper minerals as well as a proportion of liberated gold. Approximately 5% of the gold in the ore is within the pyrite mineralization which reports to the copper circuit tailings. Tailings from the copper circuit are therefore processed through the pyrite flotation circuit from which the recovered pyrite concentrate is processed through a cyanidation leach circuit for final gold extraction. The gold is extracted from the leach liquor by means of adsorption onto activated carbon followed by stripping and electrowinning. F

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Figure 17.1 Telfer Treatment Plant - Basic Process Flow

The gold production from the overall Telfer operation for the past seven years is summarized in Table 17.1 where the distribution of the recovered gold between the different processing sequences can be seen.

Table 17.1 Telfer Gold Production Production

Year Ounces Distribution of Recovered Gold

(%) Gravity Dump Pyrite Conc. Total Gravity Dump Pyrite Conc. Total

2012-2013 128,411 30,718 16,681 349,690 525,500 24.4 5.8 3.2 66.5 100 2011-2012 138,074 17,491 20,855 636,696 540,115 25.6 3.2 3.9 67.3 100 2010-2011 165,070 5,508 27,048 423,668 621,291 26.6 0.9 4.4 68.2 100 2009-2010 189,789 6,966 35,509 456,646 688,909 27.5 1.0 5.2 66.3 100 2008-2009 161,573 19,604 24,390 423,540 629,108 25.7 3.1 3.9 67.3 100 2007-2008 150,606 32,583 24,349 382,677 590,217 25.5 5.5 4.1 64.8 100 2006-2007 168,504 34,109 31,866 392,601 627,077 26.9 5.4 5.1 62.6 100

The general production statistics for the treatment plant operation are summarized in Table 17.2 covering the eight year period since plant startup. It will be noted that the production output in terms of tonnes of copper and ounces of gold are consistent with increased proportions of West Dome transitional ore being processed in 2012 and 2013, with acceptable recoveries achieved through the installation of new regrind mills and cleaner cell installations. In the current financial year, the processing plant is treating Main Dome open pit ore again (Stage 4 Cutback) and gold recoveries are back to historic levels.

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Table 17.2 Telfer Production Statistics Produc'n

Year Tonnes Milled

Feed Grade Conc. Grade Rec Cu (%)

Gold Recovery (%) Production

% Cu g/t Au % Cu g/t Au Grav. Flot'n Pyrite Leach

Total t Cu oz Au**

2012-2013 2011-2012 2010-2011

21,542,552 21,485,162 22,748,595

0.17 0.19 0.18

1.00 0.95 1.01

15.9 16.1 16.8

50.3 58.3 68.8

74.2 76.9 79.2

18.7 20.9 22.4

50.3 55.4 57.3

2.7 3.2 3.7

71.7 79.4 81.7

26,453 31,235 32,078

525,500 540,115 621,291

2009-2010 21,894,106 0.19 1.10 16.9 69.0 84.7 24.5 69.0 4.6 88.1 34,815 688,909

2008-2009 18,788,116 0.20 1.14 17.2 68.7 87.0 23.6 61.4 3.2 88.2 32,905 629,108

2007-2008 18,267,273 0.20 1.13 19.0 84.3 73.3 22.3 57.4 3.8 83.5 26,771 590,217

2006-2007 20,571,935 0.21 1.16 20.5 90.5 65.1 21.8 50.7 4.4 76.9 27,820 627,077

2005-2006* 20,620,359 0.28 1.18 25.5 97.9 66.2 19.0 60.0 2.6 81.6 37,775 639,607 * Excludes commissioning production from underground of 10,409 oz gold and 599 t copper **Includes dump leach.

Contemporary processing techniques and current day technology are utilized throughout the operation. The equipment is maintained to a high standard, consistent with good operating practice. With the plant having been constructed in 2004, the process equipment is modern, with individual items being generally of a large size as appropriate to the 20.5 Mtpa ore treatment rate that was averaged over the eight years since plant startup as noted in the production data reported in Table 17.2. Assessment of de-bottlenecking opportunities continues as a means of increasing the product output. The dual train nature of the plant design allows for duplication of equipment items and minimization of the necessary spare parts inventory.

Overall, the process plant is considered to be well managed and maintained according to contemporary operating standards.

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18 PROJECT INFRASTRUCTURE

18.1 Access Roads

Roads used to access Telfer consist of public roads vested in Main Roads Western Australia and the Shire of East Pilbara and a private road owned and maintained by the Telfer Gold Mine. Road transport to and from Telfer generally focuses on either Port Hedland or Newman, with Port Hedland being of primary interest with respect to export of concentrates and import of consumables to the mine.

18.2 Tailings Management

The existing tailings storage facility 7 (TSF7) located at the Telfer Gold Mine, is described as an integrated waste landform in that the tailings storage is surrounded by a mine waste dump where the inner compacted embankment is constructed against, and supported by, the existing mine waste dump. TSF7 is approximately 2.5km in diameter. The embankment will be raised in 3m lifts using upstream construction methods to a final design height of approximately 60m.

18.3 Water Supply

Telfer mine site relies on abstraction of groundwater for its water supply to support various applications during operation. The water quality is segregated into two main types being raw and potable water. Telfer has five operating raw water borefields and three potable water borefields with hundreds of monitoring bores.

The raw water supply is derived from a network of 54 operating raw water production bores, located in five borefields, with an installed capacity of 80.1Ml/d. The current water delivery is approximately 57Ml/d.

The potable water supply is derived from six operating potable water supply production bores, located in three borefields, with an installed capacity of 6Ml/d.

An additional 2Ml/d of groundwater is derived from groundwater inflows reporting to the Telfer Underground operations. This water is of poor quality and is suitable for dust suppression purposes only.

The total annual abstraction from all water sources has a daily average of 57Ml/d, which can vary mainly depending on ore processing needs. Newcrest holds an abstraction license to take water from all of these bores.

18.4 Power Supply

There are currently two permanent power stations at Telfer. The Primary Power Station (PPS) comprises three GE LM6000 gas turbines and the Secondary Power Station (SPS) comprises eight diesel generators. The PPS was originally designed to operate in an N+1 configuration, that is, two duty and one standby. As the power demand has increased since commissioning of the PPS, there are currently 12 approximately 1MW Aggreko rental gas engines supplementing the LM6000s. The SPS is available as a backup.

The rated output of each gas turbine in normal mode is 43MW, but can be operated at 47MW in SPRINT mode. This provides a maximum rating of installed permanent power generation at Telfer of approximately150MW.

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18.5 Gas Supply

Natural gas is transported from the Western Australian coast to Telfer via a 450 km purpose-built pipeline operated by APA Group. Gas is supplied under contract by Santos and Apache Energy. The contract is valid for supply to December 2019.

The supply pipeline for Telfer is illustrated in Figure 18.1.

Figure 18.1 Natural Gas Supply Network

The gas supply and transport network involves multiple supply points and utilizes capacity in multiple pipelines. Newcrest has contracted pipeline capacity of 26TJ/day.

18.6 Port Facilities

Concentrates produced at Telfer are exported from the port of Port Hedland. The substantial municipal port facilities at Port Hedland cater for the export of various mineral types from around the Pilbara region.

Newcrest established concentrate storage and ship loading facilities at the port. The operation of these facilities is contracted to a logistics contractor.

18.7 Other Site Infrastructure

The Telfer Operation includes a range of supporting infrastructure typical of a large remote mine site. The range of facilities includes an all-weather airstrip, accommodation and messing facilities, fuel storage facility, laboratory, workshops, stores building and lay-down areas, effluent disposal systems and administration offices.

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19 MARKET STUDIES AND CONTRACTS

19.1 Newcrest Concentrate Characteristics

The Telfer copper concentrate typically assays 13% to 19% Cu. The gold-in-concentrate grade is estimated to assay between 50 g/t Au and 90 g/t Au. The concentrate contains arsenic which is controlled by blending to ensure the levels stay within levels acceptable to destination smelters.

19.2 Transport and Storage

Concentrate from Telfer is transported by road to Port Hedland. The concentrate is unloaded at Port Hedland and stored in an enclosed concentrate storage facility. The storage facility infrastructure is owned by Newcrest and is constructed on land under long term lease to Newcrest from the Port Hedland Port Authority. Concentrate shipments are made in parcels of approximately10,000wmt in most instances.

Newcrest seeks long-term contracts with reputable ship owners and/or operators to mitigate exposure to volatility in shipping charges, otherwise shipments are made on spot vessel charters.

The precious metal grades of Telfer concentrates are deemed high by industry standards, making these concentrates attractive to smelters that are efficient in their recovery of precious metals. This means that a large proportion of the gold and silver entering the smelting circuit should be recovered through in-house precious metals recovery facilities after the copper cathode production stage. For those smelters without such facilities, the tank-house slimes containing precious metals must be on-sold to a third party for refining, for which a commercial penalty may be incurred.

19.3 Newcrest Concentrate Destination Smelters

Telfer concentrate competes with concentrates from a number of large mines in the Asia-Pacific region, including Grasberg, Batu Hijau, Boddington and Ok Tedi. Telfer's geographical location provides a competitive advantage in terms of freight costs and delivery time to Asian markets compared to suppliers from Europe, Africa and the Americas.

Newcrest has long term relationships with most regional smelters in Japan and Korea and well as with certain smelters in China. Newcrest also has contracts with merchants in Switzerland and Singapore. Telfer concentrate sales contracts are currently in place with smelters in Japan, Korea, China and the Philippines. Two long-term contracts are also in place with merchants. Spot sales will also take place from time to time depending on product availability and market conditions.

19.4 Concentrate Treatment and Copper Refining Charges

For standard grade for copper concentrates (22% to 30% Cu), direct mine-smelter treatment charges over the past ten years have varied from US$45/t to US$92/t of concentrate, and refining charges from US¢4.5/lb to US¢9.2/lb payable Cu. These terms are for long term frame contracts between major producers and Asian smelters. The treatment and refining charges attributable to Telfer concentrates will vary according to the specification of the material sold and may, from time to time, exceed the above parameters.

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19.5 Precious Metal Terms and Refining Charges

The quantity of gold payable by the smelter can vary widely. However, for smelters in Japan and Korea, a fairly standard scale of gold metal deductions has emerged over the years. This scale varies from no gold payable if the gold content is below 1 g/t, up to 97% to 97.5% of the gold payable if the gold content exceeds 20 g/t in the concentrate.

For very high gold contents of 50 g/t to 90 g/t, payable gold can be as high as 98.5%, as seen for some Newcrest concentrate sales. Contents in excess of 40 g/t to 50 g/t can reasonably expect to attract a payable rate of 97.5% to 98.00% of analytical gold content.

The level of refining charge is extremely important for high gold concentrates and this may be as high as US$8.00 per payable oz gold. Over the last 10 years, the refining charge for gold in Newcrest's long term contracts ranged from ~US$4.00/oz to ~US$6.00/oz.

19.6 Weighing, Sampling and Moisture Determination and Assays and Analyses

Weighing, sampling and moisture determination (WSMD) for provisional invoice purposes takes place at Port Hedland for shipments to all destinations. Generally, WSMD on shipments to Chinese and Indian smelters for final invoice purposes also takes place at Port Hedland. For smelters in the Philippines, Japan and Korea, WSMD for final invoice purposes is undertaken at the ports of discharge.

This differentiation between ports of discharge and receiving smelters is common in the market due to a lack of veracity in the accuracy of measurements and procedures at some ports of discharge. Where WSMD for final invoice purposes is undertaken at the port of loading, it is typical for a weight franchise of 0.10% to 0.25% to be deducted from the shipment weight (in favour of the buyer).

19.7 Doré

Gold doré bars contain approximately 70% to 90% gold with the balance as other precious metals such as silver, with a small amount of waste. The doré produced at Telfer is security transported by air freight from the mine site to a refinery for further processing.

The doré bars are smelted and refined to gold bars of 99.99% purity and silver bars. The refined silver is usually credited to the refiner to offset the refining cost or sold on the open market.

Within the Asia-Pacific region, there are a number of acceptable refineries which have the capacity to refine doré; in the West Australian Mint refinery (WAM) in Perth, WA, W.C Heraeus – Precious Metals in Hong Kong, Logam Mulia in Indonesia and new refineries in India as well as a number of established refineries in Europe and the Middle-East. Currently WAM in Perth is the preferred refiner.

19.8 Marketing Resources

Newcrest's Marketing & Freight Department is based in Melbourne, Australia. Transactions are executed using the MineMan system and revenue and costs are recorded in the overall accounting system SAP. Marketing intelligence is currently sourced from Wood Mackenzie, Platt’s and Metal Bulletin. Other publications are also considered from time to time.

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20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT

20.1 Overview

Telfer is a relatively large (total disturbance more than 4,000 ha) and complex operation, but is not confronted by environmental or community challenges likely to significantly constrain current and future operations. This reflects its remote, desert location and an absence of significant biodiversity and conservation issues, together with a proven history for responsible environmental management. Sound relationships have been developed with the indigenous traditional landowners (Martu), who hold one of the largest Native Title Determinations in Australia over Telfer and its associated tenements.

Statutory environmental approvals are obtained and environmental performance is reported to regulators through standard protocols for assessment of monitoring results. Compliance is supported by the ongoing implementation of environmental management plans to manage key risks.

Some mine waste is potentially acid forming, but this material is effectively managed through progressive encapsulation in purpose-designed waste stockpiles. Moreover, the low rainfall climate further reduces the risk of Acid and Metalliferous Drainage (AMD). Acid drainage from PAF tailings is a small risk in the medium term but is an important consideration for long term mine plans and closure planning

Terrestrial ecosystems carry few rare or otherwise conservation-sensitive species, and ground disturbance is carried out in accordance with government issued clearing permits, based on detailed flora and fauna assessments. An ongoing program of stygofauna and troglofauna (groundwater and cave dwelling fauna) continues to demonstrate the low probability of the project having significant impacts on the local and regional subterranean ecosystems.

Water supply from regional groundwater systems involves total abstractions significantly smaller than licensed amount of 29.7Gl per annum, and the lack of other potential users of this resource makes socio-political concerns about resource allocation an improbable occurrence.

A closure plan was developed in 2010 for Telfer and is scheduled to be updated in 2014.

Opportunities to utilise the mining fleet have been taken into consideration during closure option analysis. However, the availability of the fleet for closure activities is dependent on mine plans to maximise ore recovery. Engineering options for appropriate rehabilitation of tailings storage facilities is also a key component of closure planning.

20.2 Individual Environmental Issues

20.2.1 Environmental Approvals

Statutory approvals under the Western Australian Environmental Protection Act (EP Act) provide the umbrella approval for the project. These approvals are reflected in Ministerial Approvals (issued by the Minister for the Environment - Nos. 605 and 606). The approvals include both environmental commitments made by Newcrest and conditions applied by the Minister acting primarily on the recommendations of the Environmental Protection Authority (EPA), which coordinated detailed assessment by government agencies of potential

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environmental impacts and proponent-proposed management plans to manage those impacts.

Performance against Ministerial Approval conditions is reported on a regular basis and reviewed by government. No significant non-compliance has occurred.

Beneath the EP Act approval are secondary permits and licenses. An EP Act license (to operate), issued by the Department of Environment Regulation (DER) contains environmental performance conditions which are being met without significant non-compliance.

DER, or the Department of Mines and Petroleum (DMP) on authority delegated by DER, also issues clearing permits as required. These permits are assessed on the basis of flora and fauna studies conducted by Telfer, against a local and regional conservation-estate background.

The project is also governed through approval of mining proposals which are approved by the DMP under the Mining Act. This approval has a strong focus on closure and rehabilitation, as well as other technical mining-environmental issues, and can only be obtained after satisfaction of EP Act requirements; it is in that sense secondary to the EP Act approval.

Licenses to abstract groundwater are issued by the Department of Water (DoW), and subject to regular review of performance, especially in terms of quantitative and qualitative impacts on the local and regional water resource. No significant negative impacts are reported, in fact, the volume of groundwater abstracted by Telfer is well below the licensed volume.

Other, minor licenses and permits (dangerous goods, poisons, etc.) are obtained and managed on a routine basis.

20.2.2 Management of Acid Forming Waste

On a life-of-mine basis, approximately 20% of mine waste is PAF. While the desert environment minimizes the risk of significant generation of acid drainage, the PAF material is managed on an ongoing basis to mitigate the potential for future liabilities. As part of the mine plans, PAF material is delivered to specific stockpiles with non-acid forming (NAF) and acid-consuming (AC) waste. Monitoring to date has shown no evidence of significant generation of AMD.

The PAF material is placed on a separately drained base of NAF/AC material. The ultimate depth of NAF/AC cover is guided by ongoing studies aimed at facilitating construction of engineered 'store-and-release' covers which allow infiltrated rainfall to be evaporated from the cover soil and/or transpired by the vegetation established on the stockpiles, thereby avoiding passage of sufficient water and oxygen into the stockpile core to oxidize the sulphides in the PAF material and produce AMD.

Some tailings are also PAF, but the risk of generation of acid drainage from tailings has been assessed as low and long term management of tailings is the subject of ongoing studies allied with those described above for PAF mine waste.

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20.2.3 Water Supply and Management

Telfer's water supply is sourced from local groundwater with decant return from the TSF offsetting the demand to some extent. Groundwater is abstracted in accordance with a license issued by DoW and involves annual reporting of volumes used, impacts on groundwater levels and assessment of chemical quality. With no other potential users of significant quantities of groundwater in this sparsely populated area, reduced access to this resource is assessed as low.

No significant impacts on groundwater levels and quality have been measured. Changes that do occur generally reflect irregular recharge from low frequency but high volume rainfall events associated with the passage of tropical cyclones or the rain bearing depressions into which those cyclones transform during passage inland from the Pilbara coast.

The aquifers around Telfer are confined and have little connection to local regional aquifers.

Groundwater monitoring around operational areas, especially the TSF, show no significant negative impacts on quality to date. Should such impacts develop, interception and use in the process of contaminated groundwater would protect the broader environment. After decommissioning, the groundwater mound beneath the TSF will naturally subside, decreasing the risk of long term, broad scale impacts.

20.2.4 Closure and Rehabilitation

The Closure Plan for Telfer is reviewed and updated to meet regulatory and corporate requirements on an on-going basis. Ongoing studies to support closure planning include landform stability and the design of 'store-and-release' covers to ensure long term isolation of PAF material from water and oxygen ingress that could produce AMD. Kinetic (column leaching) studies of PAF material (mine waste, tailings and dump leach material) are also conducted as required, to more accurately define the potential risk of AMD and design of control measures. Landform studies centre on replication of locally occurring mesas as the basic design for structures, especially waste stockpiles. The mesa model involves steep slopes at the top of the structure, decreasing downslope to create a concave batter. Studies on natural mesas identify size distribution of surface rocks and other soil components with downslope distance, to provide requisite landform stability. Other studies identify the abundance and diversity of plant species on natural local landforms.

Trials were conducted to assess the stability against erosion of different surface treatments clearly demonstrating that mixing blocky sandstone/quartzite material (greater than 100mm diameter) with topsoil (rock mulch) provides superior stability, and thus superior plant establishment, compared with topsoil treatment alone. However, the processes for practical application of this methodology as part of long term landform designs are still being considered along with alternative options (e.g. spreading blocky material as an armour, especially on the steeper upper slopes of constructed mesas, either with topsoil underneath, or without topsoil and allow weathering to provide niche habitats for plant establishment over time).

A closure plan was developed in 2010. The 2010 closure cost estimate was developed, based on detailed work programs and unit costs typical of the regional industry. The closure plan is scheduled for update in 2014. The current plan was based on detailed designs for different areas (waste stockpiles, TSFs, dump leach pads, process area, etc.) and realistic unit costs for the various closure and rehabilitation activities required. This estimate was based on the assumption that the current mining fleet would be used to construct 'store-

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and-release' covers and rock-topsoil armour covers. Updates to the plan would assess the validity of this assumption and consider whether alterative options for construction of covers may be required.

The mine rehabilitation and restoration provision for the Newcrest Group at 30 June 2013 was A$317M.

20.2.5 Community and Social Issues

The Traditional Owners of the land where Telfer is located are known collectively as the Martu people and they have been granted a native Title Determination over a very large area of land (only slightly smaller than NSW) which completely encompasses the Telfer tenements. The original Telfer tenements were established prior to 1994 and are therefore held to have extinguished Native Title, but some of the more recent tenements granted, and areas of potential future interest, will be subject to the Right To Negotiate provisions of the Native Title Act.

Agreements were in place with the Martu people in respect of Telfer for the purposes of the Telfer expansion project (2002-2005). There are current negotiations underway to seek to put in place a comprehensive agreement to support future operations at Telfer.

20.2.6 Other Environmental Issues

Compliance with statutory requirements for occupational health and safety generally ensures that environmental noise standards for potential impacts on offsite receptors are easily met. Moreover, the location of the accommodation centre, remote from the mine and plant area, and the absence of near neighbours, eliminates amenity impacts.

Air quality is not considered to be a major environmental hazard. Fugitive dust is controlled using spray-equipped trucks on high traffic areas. Natural gas is used to generate most of the site's power requirements.

Spills and incidents are tracked as part of regular environmental reporting to the regulator and corporate. Where incidents or spills occur they are remediated and prevention measures applied.

The landfill facility is managed as part of ongoing operations related to the large FIFO population of employees at Telfer. An electric fence has been installed around the facility to prevent access by dingoes (wild dogs) and this is supplemented by a near daily backfilling of waste material as required by licence conditions. Telfer operates programs aimed at workforce awareness of dingo ecology and discourages activities which would foster population growth (e.g. feeding) and ingress into inhabited areas.

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21 CAPITAL AND OPERATING COSTS

Production and operating costs for Telfer for FY2011 to FY2013 are set out in Table 21.1. The Newcrest financial year closes on 30 June each year.

Table 21.1 Historical Production and Costs per Ounce of Gold Produced Telfer Unit 2011 2012 2013

Gold Production oz 621,291 540,114 525,500

Mine A$/oz 492 820 951

Mill A$/oz 346 408 476

Administration and Others A$/oz 138 179 191

Third Party Smelting Refining and Transportation A$/oz 103 127 114

Royalties A$/oz 56 61 56

By Product Credits A$/oz -463 -472 -387

Waste Stripping and Ore Inventory Adjustments A$/oz 2 -339 -377

Cash Cost A$/oz 674 783 1,022

Depreciation and Amortization A$/oz 291 333 389

Total Cost A$/oz 965 1,116 1,411

Telfer actual production and operating costs for FY2013 are shown in Table 21.2.

Table 21.2 Telfer Operations Gold and Copper Production, FY 2013*

Telfer Unit FY13 Actual Gold Production koz 525 Copper Production kt 26 Total Site Cash Costs A$M 850 Waste Stripping and Ore Inventory A$M -198 Third Party Smelting, Refining and Transporting A$M 60 Royalty A$M 29 Depreciation A$/oz 389

*Costs included in table exclude applicable by-product credits.

Capital expenditure for FY2011 to FY2013 is set out in Table 21.3.

Table 21.3 Telfer Operations Historical Capital Expenditure Telfer FY 2011 Actual

A$M FY 2012 Actual

A$M FY 2013 Actual

A$M Site Expenditure* 66.5 96.3 83.4 Major Projects 10.0 138.2 114.9 Total Capital Expenditure 76.5 234.5 198.3

*Site expenditure excludes capital relating to production stripping activity

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FY2014 cost and capital guidance for Telfer, as released 12 August 2013, is shown in Table 21.4.

Table 21.4 Telfer Operations FY 2014 Cost and Capital Guidance

Telfer Unit FY14 Guidance Cash cost (including by-product credits) 1 A$M 490-540 On-site exploration expenditure A$M 10-11 Production Waste stripping A$M 20-25 Sustaining capital A$M 60-70 Corporate, rehabilitation, other A$M 11-17 All-in sustaining cost A$M 590-660 Production Waste Stripping2 A$M 20-25 Sustaining Capital2 A$M 60-70 Projects and development capital A$M - Total capital expenditure A$M 80-90

1 Costs assume AUD:USD 0.96, copper price US$3.30/lb, silver price US$22.0/oz 2 Duplicated above under All-in sustaining costs and under Capital expenditure

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22 ECONOMIC ANALYSIS

Telfer is an established mining operation with both underground and open pit mining operations.

In the reporting year to June 2013, the Newcrest realized gold price was A$1,550/oz and copper price was A$3.38/lb. Telfer's cash cost of production for the same period was A$1,022/oz after applying copper credits.

As a producing issuer Newcrest is not required to provide an economic analysis as provided in Item 22 of NI 43-101 Form 1.

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23 ADJACENT PROPERTIES

Properties adjacent to Newcrest's Telfer tenements have no material impact on Telfer's Mineral Resources or Mineral Reserves.

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24 OTHER RELEVANT DATA AND INFORMATION

No additional data or information is required to make the Report understandable and not misleading.

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25 INTERPRETATION AND CONCLUSIONS

Telfer Gold Mine is an established operation with a long history to support development of plans to exploit the available Mineral Resources.

Factors that may have a material impact on the Telfer Gold Mine include those discussed in the risks section of Newcrest’s annual operating and performance review which forms part of Newcrest’s Full Year Financial Results for the year ended 30 June 2013, which can be found on its website at www.newcrest.com.au and at www.sedar.com.

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26 RECOMMENDATIONS

Telfer is an established mining operation with Mineral Reserves sufficient for an extended mine life. In view of the nature of Telfer's mining operations and the substantial Mineral Reserve inventory, no significant recommendations are included.

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27 REFERENCES

AMC Consultants (Canada) Ltd 31 December 2011 Technical Report on the Telfer Property, Western Australia, Australia. NI43-101 Technical Report.

AMC Consultants Pty Ltd, June 2012: Telfer Strategic Review.

Beck Engineering, July, 2013: CONCEPTUAL ANALYSIS OF A FLAT DIPPING SLC concept for the Western Flank.

Bennelongia 2009: Stygofauna Monitoring report.

Chamberlain, 1990 (page 22)

Department of Environmental and Conservation 2007: Licence issued under Environmental Protection Act 1986.

Department of Mines and Petroleum 2009: Inspection Report (letter to Newcrest dated 23 June 2009.

Excel file: West Dome Bulk Sample Metallurgical Results 2011.

GHD Pty Ltd, October 2011, "Power Generation and Distribution Expansion Options, Phase 2 Options Assessment Report", Draft Internal Report

Minister for the Environment and Heritage 2002: Implementation approval statement No. 605 issued 1 October 2002.

Minister for the Environment and Heritage 2002: Implementation approval statement No. 606 issued 1 October 2002.

MWH 2010: Annual Borefield Monitoring Review 2009-2010 GWL No. 150758(9).

Newcrest Mining Limited (Aug 13) 2012/13 Full Year Financial Results Presentation. Greg Robinson (Managing Director and CEO) and Gerard Bond (Finance Director and CFO)

Newcrest Mining Limited (Jul 13) June 2013 Quarterly Report, www.newcrest.com.au

Newcrest Mining Limited (Jul 12) June 2013 Quarterly Report, www.newcrest.com.au

Newcrest Mining Limited (Sep 13) 2013 Annual Report, www.newcrest.com.au

Newcrest Capital Expenditure Reconciliation (SAP), FY13, FY12, FY11

Newcrest 2004: Telfer Operations - Waste Dump Management Plan TP-REP-10-MN-0014_A

Newcrest 2007: Telfer Operations - Acid & Metalliferous Drainage: Encapsulation & Monitoring Procedure E10-02 15 PRO_2.

Newcrest 2009: Telfer Operations - Subterranean Fauna Management Plan (2009-2013) E08-01 19 PLA_3.

Newcrest 2010: Annual Environment Report 1 July 2009 – 30 June 2010 700-600-EN-REP-0026

Newcrest 2010: Telfer Operations - Port Hedland Copper Concentrate Facility Annual EMP Audit Report 2011 E26 108 REP.

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Newcrest 2011: Bonds Status (internal report).

Newcrest Mining Limited. 2010, O'Callaghans Concept Study Progress Update, September 2010, Newcrest Mining Limited unpublished report.

Newcrest Mining Limited. 2013, Telfer Main Dome Underground Area Mineral Resource Re-Estimate, Internal Newcrest Mining Limited Report.

Newcrest Mining Limited. 2014, Telfer Deeps MR December 2013 Ore Reserves L1 L2 Report, AUS TEL MRF OR 12-13, Newcrest Mining Limited unpublished report.

Newcrest Mining Limited. 2014, Telfer Deeps SLC December 2013 Ore Reserves L1 L2 Report, AUS TEL SLC OR 12-13, Newcrest Mining Limited unpublished report.

Newcrest Mining Limited. 2014, Telfer Deeps VSC December 2013 Ore Reserves L1 L2 Report, AUS TEL VSC OR 12-13, Newcrest Mining Limited unpublished report.

Newcrest Mining Limited. 2014, Telfer Deeps EXT to SLC December 2013 Ore Reserves L1 L2 Report, AUS TEL WFL OR 12-13, Newcrest Mining Limited unpublished report.

Newcrest Mining Limited. 2014, TEL OP December 2013 JORC Code 2012 edition level 1 and 2 Report and Table 1 Report , AUS TEL MDO/WDO OR 12-13, Newcrest Mining Limited unpublished report.

Site_Weekly_Info_-_FY13_-_TEL_-_Rev_0.xlsx

Newcrest Mining Limited. August 2011, "Full Year Results 2010 – 2011" Presentation by Greg Robinson (Newcrest MD and CEO)

Newcrest Mining Limited. Camp Dome Mineral Resource Estimate Telfer Gold Mine, Western Australia. September 2011. Internal Newcrest Mining Limited Report

Newcrest Mining Limited. O'Callaghans Mineral Resources and Ore Reserves Report 2010. Internal Newcrest Mining Limited Report

Newcrest Mining Limited. Stratagem 2011: Telfer Optimization Project and O'Callaghan's/Trotman's Project Approvals Strategy

Newcrest Mining Limited. Telfer Gold Mine 2010: Closure Cost Assessment 2010 (internal report).

Newcrest Mining Limited. Telfer Main Dome Open Pit Area Mineral Resource Estimate Telfer Gold Mine, Western Australia. September 2011. Internal Newcrest Mining Limited Report

Newcrest Mining Limited. Telfer Project Feasibility Study, Nov 2002, Internal Newcrest Mining Limited Report

Newcrest Mining Limited. Telfer Underground External to SLC Mineral Resource. July 2011. Internal Newcrest Mining Limited Report

Newcrest Mining Limited. Telfer Vertical Stockwork Corridor Mineral Resources Report 31 July 2011. Internal Newcrest Mining Limited Report

Newcrest Mining Limited. Telfer West Dome Open Pit Area Mineral Resource Estimate Telfer Gold Mine, Western Australia. September 2011. Internal Newcrest Mining Limited Report

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pdf file: Monthly Telfer Operations Report June 10

pdf file: Monthly Telfer Operations Report June 11 XLIT

pdf file: Telfer Ore Processing Costs

pdf file: Telfer Ore Processing Historical FY Results – Data

Tyrwhitt 1995 (page 22).

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28 QUALIFIED PERSON’S CERTIFICATE

Colin Moorhead Newcrest Mining Limited Level 8, 600 St Kilda Road MELBOURNE VIC 3004

I, Colin Moorhead, BSc, FAusIMM, do hereby certify that I am Executive General Manager, Minerals, employed by Newcrest Mining Limited.

1. I am a graduate of the University of Melbourne and hold a Bachelor of Science (Hons.) in Geology with a geophysics major.

2. I am a Fellow of the Australasian Institute of Mining and Metallurgy.

3. I have worked as a geologist for a total of 27 years since my graduation from university. My relevant experience includes 18 years fulfilling the roles of exploration geologist, mine geologist, geology manager and technical services manager at Newcrest's Australian open pit and underground mining operations, two years as geology manager at Newcrest's Indonesian mining operation, two years as General Manager Technical Services responsible for technical excellence and resources and reserves governance and six years in the role of Executive General Manager, Minerals responsible for exploration, mine geology and resources and reserves governance throughout Newcrest.

4. I have read the definition of "Qualified Person" set out in National Instrument 43- 101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfil the requirements to be a "Qualified Person" for the purposes of NI 43-101.

5. I am responsible for the preparation of the Technical Report titled Technical Report on the Telfer Property, dated 31 December 2013. I visited the Telfer Project between 13 and 14 January 2014.

6. I have had prior involvement with the property that is the subject of the Report. This involvement is via my role as Executive General Manager, Minerals with Newcrest between 2008 and present, as well as fulfilling the roles of Mine Geologist, Supervisor Underground Geology, Superintendent Open Pit Geology and Chief Geologist at Telfer Gold Mine between 1991 and 1997.

7. I am not independent of the issuer applying all of the tests in Section 1.5 of National Instrument 43-101.

8. I have read National Instrument 43-101 and Form 43-101F1, and the Report has been prepared in compliance with that instrument and form.

9. As of the effective date of the Report, to the best of my information, knowledge and belief, the part(s) of the Report for which I am responsible contains all scientific and technical information that is required to be disclosed to make the Report not misleading.

31 December 2013

Original signed by

Colin Moorhead

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Technical Report Newcrest Mining March 2014

Prepared by Newcrest Mining Limited in accordance

with the requirements of National Instrument 43-101,

Standards for Disclosure of Mineral Projects,

of the Canadian Securities Administrators.

Qualified Person: Mr Colin Moorhead BSc (Hons), FAusIMM

Effective Date of Report: 31 December 2013

TECHNICAL REPORT ON THE LIHIR PROPERTY

IN PAPUA NEW GUINEA

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i Newcrest Mining – Technical Report on the Lihir Property - 31 December 2013

CONTENTS

1 SUMMARY ................................................................................................................. 6 Introduction and Terms of Reference ........................................................................ 6 1.1 Geology ........................................................................................................ 6 1.2 Mine Production ............................................................................................ 6 1.3 Mineral Resources ........................................................................................ 6 1.4 Mineral Reserves .......................................................................................... 7 1.5 Infrastructure ................................................................................................. 7 1.6 Environmental and Community Management ................................................ 8 1.7 Capital and Operating Costs ......................................................................... 8 1.8 Conclusions .................................................................................................. 9 1.9 Recommendations ........................................................................................ 9

2 INTRODUCTION ...................................................................................................... 10 2.1 General and Terms of Reference ................................................................ 10 2.2 Report Authors ............................................................................................ 10 2.3 Units of Measure and Currency ................................................................... 11

3 RELIANCE ON OTHER EXPERTS ........................................................................... 13

4 PROPERTY DESCRIPTION AND LOCATION.......................................................... 14 4.1 Property Location ........................................................................................ 14 4.2 Land Tenure ............................................................................................... 14 4.3 Royalties, payments or other agreements ................................................... 17

4.3.1 Integrated Benefits Package Agreement ......................................... 17 4.3.2 Mining Royalty ................................................................................. 17

4.4 Environmental Liabilities ............................................................................. 17

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ................................................................................................... 18 5.1 Topography Elevation and Vegetation ........................................................ 18 5.2 Climate ....................................................................................................... 20 5.3 Natural Hazards .......................................................................................... 20 5.4 Access ........................................................................................................ 20 5.5 Surface Rights ............................................................................................ 21

6 HISTORY .................................................................................................................. 22 6.1 Project Ownership ....................................................................................... 22 6.2 Exploration .................................................................................................. 22 6.3 Historic Mineral Resources ......................................................................... 22 6.4 Production ................................................................................................... 23

7 GEOLOGICAL SETTING AND MINERALIZATION ................................................... 24 7.1 Regional Geology ....................................................................................... 24 7.2 Deposit Geology ......................................................................................... 24

7.2.1 Geological Setting ........................................................................... 24 7.2.2 Alteration ......................................................................................... 26 7.2.3 Mineralization .................................................................................. 26

8 DEPOSIT TYPES ..................................................................................................... 27

9 EXPLORATION ........................................................................................................ 28

10 DRILLING ................................................................................................................. 29 10.1 Overview ..................................................................................................... 29 10.2 Drilling Statistics .......................................................................................... 29 10.3 Drilling Conditions ....................................................................................... 31

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10.4 Hole Surveying............................................................................................ 31 10.5 Core Orientation .......................................................................................... 31 10.6 Core Recovery ............................................................................................ 32 10.7 Logging and Sampling ................................................................................ 32

11 SAMPLE PREPARATION, ANALYSES AND SECURITY ......................................... 33 11.1 Historical QA/QC Summary ......................................................................... 33 11.2 Drill Core Sampling ..................................................................................... 33 11.3 Sample Preparation .................................................................................... 34 11.4 Analysis ...................................................................................................... 34 11.5 QA/QC Procedures ..................................................................................... 35 11.6 Certified Reference Materials (2011 to 2013) .............................................. 35

11.6.1 Blanks ............................................................................................. 36 11.6.2 Coarse Duplicates ........................................................................... 37 11.6.3 Pulp Replicates ............................................................................... 37

11.7 Comparison of Second Laboratory with Lihir Historical Data ....................... 38 11.8 Additional QA/QC Practices Adopted .......................................................... 40 11.9 QA/QC Summary ........................................................................................ 41

12 DATA VERIFICATION .............................................................................................. 42

13 MINERAL PROCESSING AND METALLURGICAL TESTING .................................. 43 13.1 Introduction ................................................................................................. 43 13.2 Ore Type and Mineralogy ............................................................................ 43 13.3 Gold Recovery ............................................................................................ 44

14 MINERAL RESOURCE ESTIMATES ........................................................................ 45 14.1 Introduction ................................................................................................. 45 14.2 Mineral Resources ...................................................................................... 45 14.3 Modeling and Estimation ............................................................................. 45

14.3.1 Geological Interpretation and Domaining ......................................... 45 14.3.2 Compositing and Exploration Data Analysis .................................... 47 14.3.3 Grade Capping ................................................................................ 49 14.3.4 Variography ..................................................................................... 50 14.3.5 Estimation Parameters .................................................................... 51

14.4 Resource Model Validation ......................................................................... 52 14.5 Resource Classification ............................................................................... 53 14.6 Comparison to Previous Mineral Resource Estimate................................... 54 14.7 Factors Affecting Mineral Resource Estimate .............................................. 54

15 MINERAL RESERVE ESTIMATES ........................................................................... 55 15.1 Introduction ................................................................................................. 55 15.2 Mineral Reserve Assumptions ..................................................................... 55

15.2.1 Commodity Prices and Exchange Rate ........................................... 55 15.2.2 Ore Processing Rates and Metallurgical Recovery .......................... 56 15.2.3 Operating Cost Estimates ................................................................ 56 15.2.4 Cut-off Grade ................................................................................... 56

15.3 Lihir Mineral Reserve .................................................................................. 56 15.3.1 Mineral Reserve Estimate................................................................ 56 15.3.2 Production Reconciliation ................................................................ 58 15.3.3 Estimation Procedure ...................................................................... 59

15.4 Comparison to Previous Mineral Reserve Estimate .................................... 60 15.5 Factors Affecting the Mineral Reserve Estimate .......................................... 60

16 MINING METHODS .................................................................................................. 62 16.1 Mining Operations ....................................................................................... 62

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16.2 Mine Schedule ............................................................................................ 63 16.3 Geotechnical, Geothermal and Hydrological Considerations ....................... 63 16.4 Future Plans ............................................................................................... 64

17 RECOVERY METHODS ........................................................................................... 65 17.1 Introduction ................................................................................................. 65 17.2 Existing Operations ..................................................................................... 66

17.2.1 Crushing and Milling ........................................................................ 66 17.2.2 Flotation .......................................................................................... 66 17.2.3 Pressure Oxidation .......................................................................... 66 17.2.4 CCD Washing, Neutralization and Gold Recovery ........................... 67 17.2.5 Residue Tailings .............................................................................. 67 17.2.6 Process Reagents ........................................................................... 67

17.3 Plant Performance ...................................................................................... 67

18 PROJECT INFRASTRUCTURE ................................................................................ 69 18.1 Mine Infrastructure ...................................................................................... 69 18.2 Power ......................................................................................................... 69 18.3 Water .......................................................................................................... 70 18.4 Public Roads ............................................................................................... 70 18.5 Port Facilities .............................................................................................. 70 18.6 Air Services ................................................................................................. 71 18.7 Housing....................................................................................................... 71

19 MARKET STUDIES AND CONTRACTS ................................................................... 73

20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT .................................................................................................................. 74 20.1 Statutory Environmental Approvals and Compliance ................................... 74 20.2 Waste and Tailings Management ................................................................ 74 20.3 Community and Social Issues ..................................................................... 75 20.4 Mine Closure ............................................................................................... 75

21 CAPITAL AND OPERATING COSTS ....................................................................... 77 21.1 Historical Costs ........................................................................................... 77 21.2 Forecast Costs ............................................................................................ 78

22 ECONOMIC ANALYSIS ............................................................................................ 79

23 ADJACENT PROPERTIES ....................................................................................... 80

24 OTHER RELEVANT DATA AND INFORMATION ..................................................... 81

25 INTERPRETATION AND CONCLUSIONS ............................................................... 82

26 RECOMMENDATIONS ............................................................................................. 83

27 REFERENCES ......................................................................................................... 84

28 QUALIFIED PERSON’S CERTIFICATE .................................................................... 87

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iv Newcrest Mining – Technical Report on the Lihir Property - 31 December 2013

TABLES

Table 1.1 Lihir Mineral Resource Estimate at 31 December 2013 .................................7 Table 1.2 Lihir Mineral Reserves Estimate at 31 December 2013 .................................7 Table 1.3 Lihir FY 2013 Actual Operating Cost .............................................................8 Table 1.4 Lihir FY 2014 Cost and Capital Guidance ......................................................8 Table 2.1 Persons who Prepared or Contributed to this Technical Report ................... 10 Table 2.2 Terms and Abbreviations ............................................................................. 11 Table 4.1 Lihir Property Land Tenure Details .............................................................. 15 Table 10.1 Drilling Statistics to 31 December 2013 ....................................................... 30 Table 11.1 Lihir Assay Techniques and Detection Limits .............................................. 35 Table 11.2 Precision of second laboratory pulp check assaying at ALS Brisbane and

NLSO when compared to Historical Lihir analysis ....................................... 39 Table 14.1 Lihir Mineral Resource Estimate at 31 December 2013 ............................... 45 Table 14.2 Lihir Modeling Domains for Au, Ag, As, Cu & Mo compared to Interpreted

Fault Domain ............................................................................................... 48 Table 14.3 Lihir Modeling Domains for Sulphide Sulphur compared to Interpreted Fault

Domain ........................................................................................................ 48 Table 14.4 Lihir Modelling Domains for Dry Bulk Density compared to Interpreted

Alteration Domain ........................................................................................ 49 Table 14.5 Grade Caps Applied to Lihir Resource Estimation ....................................... 49 Table 14.6 Gold Variogram Models ............................................................................... 50 Table 14.7 Lihir Block Model Parameters ...................................................................... 51 Table 14.8 Lihir Search Neighbourhood Parameters for Gold Estimation ...................... 52 Table 15.1 Lihir Mineral Reserve Estimate at 31 December 2013 ................................. 57 Table 15.2 Lihir Production Reconciliation .................................................................... 59 Table 16.1 Lihir Current Mine Production Fleet ............................................................. 62 Table 17.1 Lihir Processing Performance for the Year Ending 30 June 2013 ................ 68 Table 21.1 Historical Production and Costs per Ounce of Gold Produced ..................... 77 Table 21.2 Lihir FY 2013 Actual Operating Cost ........................................................... 77 Table 21.3 Historical Capital Expenditure ...................................................................... 77 Table 21.4 Lihir FY 2014 Costs and Capital Guidance .................................................. 78

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FIGURES

Figure 4.1 Property Location ........................................................................................ 14 Figure 4.2 Lihir Island Exploration and Mining Tenements ........................................... 16 Figure 5.1 Lihir Island Physiography ............................................................................ 19 Figure 7.1 Regional Geological Framework .................................................................. 24 Figure 7.2 Lihir Island Geology ..................................................................................... 25 Figure 8.1 Conceptual Genetic Model for Gold Deposition at Lihir................................ 27 Figure 10.1 Cross Section 9400E ................................................................................... 29 Figure 10.2 Drill Hole Locations and Topography ........................................................... 30 Figure 10.3 Drilling Operations at Lihir ........................................................................... 31 Figure 11.1 Lihir gold z-scores ....................................................................................... 36 Figure 11.2 Lihir sulphide z-score .................................................................................. 36 Figure 11.3 Lihir Coarse Gold Duplicates, Precision = 9.1% .......................................... 37 Figure 11.4 Lihir Coarse Sulphide Duplicates, Precision = 13.6% .................................. 37 Figure 11.5 Lihir Gold Pulp Replicates, Precision = 8.8% ............................................... 38 Figure 11.6 Lihir Sulphide Pulp Replicate, Precision = 5.1% .......................................... 38 Figure 11.7 Comparison of the Historical Lihir site laboratory with ALS for Gold ............ 39 Figure 11.8 Comparison of the Historical Lihir site laboratory with NLSO for Gold ......... 40 Figure 14.1 Graphical representation of the different fault domains (North top). ............. 46 Figure 14.2 3D Representation of Lihir Alteration Domains, Looking North-West ........... 47 Figure 14.3 Cross Section 9400E through resource block model ................................... 54 Figure 15.1 Lihir Final Pit Limits and Phase Locations ................................................... 58 Figure 17.1 Simplified Process Flow Sheet .................................................................... 65

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6 Newcrest Mining – Technical Report on the Lihir Property - 31 December 2013

1 SUMMARY

Introduction and Terms of Reference

The annual Mineral Resources and Mineral Reserves update of Newcrest Mining Limited (Newcrest) of Melbourne, Australia has recently been completed and includes materials changes to the Lihir Property (Lihir or the Property).

This Technical Report (the Report) on Lihir in the Province of New Ireland, Papua New Guinea (PNG) has been prepared by Newcrest as an update in response to material changes in the Lihir Mineral Resource and Mineral Reserve released on the 14 February 2014 in Newcrest’s Annual Resources and Reserves Statement-31 December 2013, which can be found on its website at www.newcrest.com.au and at www.sedar.com.

The report was prepared in accordance with the requirements of National Instrument 43- 101 (NI 43-101), “Standards of Disclosure for Mineral Projects”, of the Canadian Securities Administrators (CSA) for lodgement on CSA’s “System for Electronic Document Analysis and Retrieval” (SEDAR).

1.1 Geology

The Lihir Gold Mine is 100% owned by Newcrest and was acquired through the acquisition of Lihir Gold Limited in August 2010. The Property is located on Niolam Island, approximately 900km north-east of Port Moresby in PNG. As Niolam Island is the principal island of the Lihir group, it is generally referred to as Lihir island. The Property comprises a group of mining and exploration tenements that host epithermal gold mineralization within a Pleistocene volcanic caldera complex.

Exploration has identified several adjacent and partly overlapping mineral deposits in the Luise Caldera, which are collectively called the Ladolam Deposit. The principal components are called Lienetz, Minifie, Kapit and Coastal. This is also essentially the sequence in which the pits are mined. The limits of the mineralization have not been completely defined and are open at depth, along strike and to the east (currently limited by the Pacific Ocean).

1.2 Mine Production

In the financial year (FY) ending 30 June 2013, Lihir mined 29.6 million tonnes (Mt) of ore and milled 6.9Mt of ore to produce 649 thousand ounces (oz) of gold. Cash cost for the year was A$689 per oz.


The 31 December 2013 Mineral Resource update has been based on a detailed review completed by Newcrest of all Lihir production sources to take into account Newcrest’s current view of long term metal price, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades and physical mining parameters.

This has resulted in the most marginal ounces being removed and this has been reflected in changes to Mineral Resources. The Measured and Indicated Mineral Resources for Lihir as at 31 December 2013 includes a material reduction of approximately 4.2Moz of gold to 51Moz of gold, compared with the 31 December 2012 estimate of 55.2Moz of gold.

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The Lihir Mineral Resources as at 31 December 2013 are presented in Table 1.1. They comprise Measured Resources, which are the low, medium and high grade stockpiles; as well as Indicated and Inferred Resources. There are no Measured Resources in the insitu orebody model.

Table 1.1 Lihir Mineral Resource Estimate at 31 December 2013

Resource Classification

Tonnes (Mt)

Gold Grade (g/t)

Contained Gold (Moz)

Measured 100 2.2 7.2 Indicated 660 2.1 44 Inferred 130 2.1 8.4

Notes: 1. Cut-off grade 0.9 g/t Au based on a gold price of US$1,350/oz 2. Reported within pit shell developed using gold price of US$1,400/oz

3. The figures above include those resources converted to reserves

1.4 Mineral Reserves

The 31 December 2013 Mineral Reserve update has been based on a detailed review completed by Newcrest of all Lihir production sources to take into account Newcrest’s current view of long term metal price, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades. This has resulted in the most marginal ounces being removed and this has been reflected in changes to Mineral Reserve estimates. The Mineral Reserves for Lihir as at 31 December 2013 includes a material reduction of approximately 3.7Moz of gold to 29Moz of gold, as against the 31 December 2012 estimate of 32.7Moz of gold.

The Proven Mineral Reserve estimate is generated from estimates of stockpiled ore that is classified as a Measured Mineral Resource. There are currently numerous separate stockpiles containing high grade, medium grade and low grade ore. The Probable Mineral Reserve estimate is generated from Indicated Mineral Resources within the final pit limits generated by the life-of-mine (LOM) plan.

Lihir Mineral Reserves as at 31 December 2013 are presented in Table 1.2.

Table 1.2 Lihir Mineral Reserves Estimate at 31 December 2013


Tonnes (Mt)

Gold Grade (g/t)


Proven 100 2.2 7.2 Probable 290 2.3 21.8

Notes: 1. Cut-off grade of 1 g/t Au based on a gold price of US$1,250/oz

1.5 Infrastructure

Lihir has established the normal range of infrastructure expected of a large remote mining operation. The construction and ongoing servicing of the mine and related infrastructure required the construction of port facilities, an upgrade of the existing airstrip, the development of accommodation facilities and infrastructure services to support the operation. All key services required for the mine were constructed by the property owners i.e. power, water supply, roads, and other infrastructure.

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Most travel to and from the island is via aircraft, however, sea passenger services do operate to local islands. Marine facilities are established and service oil tankers, general cargo ships, passenger ferries, and work boats.

1.6 Environmental and Community Management

Prior to the discovery of gold at Lihir, the population of the Lihir island group was approximately 7,100. The economy was centered on subsistence agriculture and the population lived in many small villages around the island.

Environmental, social, and community issues have been managed through pro-active planning, and the development of environmental management systems and protocols based on thorough baseline studies and modeling.

1.7 Capital and Operating Costs

Lihir actual operating cost for FY2013 in Australian dollars is shown in Table 1.3. The Newcrest financial year closes on 30 June each year.

Table 1.3 Lihir FY 2013 Actual Operating Cost

Lihir Island Unit FY13 Actual

Gold Production koz 649

Total site cash costs A$M 650

Waste stripping and ore inventory A$M (227)

Third party smelting refining and transporting A$M 3

Royalty A$M 21

Depreciation A$/oz 206

Lihir cost and capital guidance for FY 2014 in Australian dollars is shown in Table 1.4.

Table 1.4 Lihir FY 2014 Cost and Capital Guidance

Lihir Island Unit FY14 Guidance

Cash Cost (including by-product credits)1 A$M 670 – 735

On-site exploration expenditure A$M 1 – 2

Production Waste Stripping2 A$M 140 – 155

Sustaining Capital2 A$M 150 – 165

Corporate, rehabilitation and other A$M 2 – 3

All-in sustaining cost A$/oz 965 – 1,060



Projects and development capital A$M 2 – 5

Total capital expenditure A$M 295 – 350 1 Costs assume AUD:USD 0.96, silver price US$22.0/oz 2 Duplicated above under All-in sustaining costs and under Capital expenditure

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1.8 Conclusions

Lihir Gold Mine is an established operation with a long history to support development of plans to exploit the available Mineral Resources.

Factors that may have a material impact on the Lihir Gold Mine include those discussed in the risks section of Newcrest’s annual operating and performance review which forms part of Newcrest’s Full Year Financial Results for the year ended 30 June 2013, which can be found on its website at www.newcrest.com.au and at www.sedar.com.

1.9 Recommendations

Lihir is an established mining operation with Mineral Reserves sufficient for an extended mine life. In view of the nature of Lihir and the substantial Mineral Reserve inventory, no recommendations are included.

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2 INTRODUCTION

2.1 General and Terms of Reference

This Technical Report (the Report) on the Lihir Property (Lihir or the Property) in the Province of New Ireland, Papua New Guinea (PNG) has been prepared by Newcrest Mining Limited (Newcrest) of Melbourne, Australia as an update in response to material changes in the Lihir Mineral Resource and Mineral Reserve.

The Report was prepared in accordance with the requirements of National Instrument 43-101 (NI 43-101), “Standards of Disclosure for Mineral Projects”, of the Canadian Securities Administrators (CSA) for lodgment on CSA’s “System for Electronic Document Analysis and Retrieval” (SEDAR).

2.2 Report Authors

The overall Report was assembled by Mr Kevin Gleeson under the direction of the Qualified Person (QP) Colin Moorhead, with contributions from other Newcrest employees. A listing of details of the authors of the Report, together with those who assisted and sections for which they are responsible or to which they contributed is contained in Table 2.1.

Table 2.1 Persons who Prepared or Contributed to this Technical Report

Qualified Person Position Employer Independent

of Newcrest Date of

Site Visit Professional Designation

Sections of Report

Qualified Person responsible for the preparation and signing of this Technical Report

C Moorhead Executive General Manager Minerals

Newcrest Mining Limited No Jan18-20

2014 FAusIMM (CP) All Sections

Other person who assisted the Qualified Person

Expert Position Employer Independent of Newcrest

Date of Site Visit

Professional Designation

Sections of Report

K Gleeson Head of Mineral Resource

Management


No March 2013 MAusIMM Compilation of Report

L Bowyer Manager Land Tenure

Newcrest Mining Limited No - N/A 4

P Griffin Head of Processing Operations


No Nov 2013 MAusIMM 13, 17

S Perkins Manager-Minerals

& Technical Services Lihir

Newcrest Mining Limited No Site based MAusIMM 14

S Butt Group Manager Mine Planning

Newcrest Mining Limited No August

2013 MAusIMM 15, 16

Albert de Sousa

General Manager- Marketing &

Logistics

Newcrest Mining Limited No - N/A 19

Blair Sands Head of Health and Environment


No Aug 2013 N/A 20

K Kerr General Manager-Commercial and

Planning

Newcrest Mining Limited No Oct 2012 CA (Chartered

Accountant)

21,22

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Mr Colin Moorhead is currently an employee of Newcrest and accepts Qualified Person responsibility for the Report. Mr Moorhead last visited the Lihir operations in January 2014. Mr Kevin Gleeson and Mr Paul Griffin are employees of Newcrest who visit Lihir to review relevant aspects of the operation. Mr Stephen Perkins is an employee of Newcrest and has been appointed as the Competent Person for reporting Lihir Mineral Resources under the JORC Code1. Mr Steven Butt is an employee of Newcrest and has been appointed as the Competent Person for reporting Lihir Ore Reserves under the JORC Code1.

This Report is based on internal Newcrest information (listed in Section 27), site visits undertaken by the Qualified Person (QP) and discussions with other Newcrest personnel.

This Report is effective as of 31 December 2013.

2.3 Units of Measure and Currency

Throughout this Report, measurements are in metric units and currency is expressed in Australian dollars, United States dollars and PNG kina. Table 2.2 includes key terms used and their abbreviations.

Table 2.2 Terms and Abbreviations

Unit/Term Abbreviation Unit/Term Abbreviation

Acidity or basicity pH Mining Easement ME

Acid Rock Drainage ARD Megawatts MW

Carbon-In-Leach CIL Mining Leases MLs

Counter-current decantation CCD Metres Reduced Level mRL

Cubic metres m3 Million Ounces Moz

Cubic metres per hour m3/hr Net Present Value NPV

Cyanide CN Net Smelter Return NSR

Dead weight tonnes DWT Non-Acid Forming NAF

Deep sea tailings placement DSTP One millionth of a metre micron

Department of Environment and Conservation DEC Ordinary Kriging OK

Dry bulk density DBD Papua New Guinea PNG

Environmental Impact Statement EIS Papua New Guinea kina PGK

Environment management system EMS Percent %

Exploration Licences ELs Per annum pa

Flotation grade ore FGO Per cubic metre /m3

Gold Au Per kilowatt hour /kWh

Grams per tonne g/t Per troy ounce /oz

Grams per tonne of gold g/t Au Per tonne /t

Heavy fuel oil HFO Potentially Acid Forming PAF

High grade ore HGO Pre-feasibility study PFS

Integrated Benefits Package IBP Pyrite Py

1 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code 2012, effective 1 December 2013, prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC).

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Unit/Term Abbreviation Unit/Term Abbreviation

Kilogram(s) kg Quality Assurance Quality Control QA/QC

Kilograms per cubic metre kg/m3 Reverse Circulation RC

Kilometre(s) km Run-Of-Mine ROM

Kilometre(s) per hour km/h Semi-autogenous grinding SAG

Kilo (thousand) ounces (troy) koz Square kilometres km2

Kilotonne per annum ktpa Square metres m2

Kilowatt kW Tailings Storage Facility TSF

Kilowatt-hours kWh Tonne(s) t

Kilovolts KV Tonnes per cubic metre t/m3

Internal diameter ID Tonnes per day tpd

Life-Of-Mine LOM Tonnes per hour tph

Life of province plan LOPP Uniform Conditioning UC

Lihir Sustainable Development Plan LSDP Volt(s) V

Litre l Weak acid dissociable cyanide CNWAD

Metre(s) m Wet metric tonnes wmt

Million Tonnes Mt – –

Million Tonnes per annum Mtpa – –

Millimetres mm – –

Million ounces (troy) Moz – –

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3 RELIANCE ON OTHER EXPERTS

The Qualified Person has relied, in respect of legal, environment, marketing and commercial aspects, upon the work of certain Experts listed below. To the extent permitted under NI 43-101, the Qualified Person disclaims responsibility for these sections of the Report.

The following disclosure is made in respect of each of these Experts:

Ms L Bowyer, Manager Land Tenure, Newcrest:

• Report, opinion or statement relied upon: Information on mineral tenure and status, title issues, royalty obligations, etc.


• Portion of Report to which disclaimer applies: Section 4, excluding Section 4.3.

Mr B Sands, Head of Health and Environment, Newcrest:

• Report, opinion or statement relied upon: Information on environmental, permitting, and social/community matters.


• Portion of Report to which disclaimer applies: Section 20.

Mr A de Sousa, General Manager, Marketing & Logistics, Newcrest:

• Summary report on Newcrest marketing.

• Extent of reliance: status of Newcrest’s sales arrangements.

• Portion of Report to which disclaimer applies: Section 19.

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4 PROPERTY DESCRIPTION AND LOCATION

4.1 Property Location

The Lihir operations are on Niolam Island which is part of the Lihir Group in the Province of New Ireland, PNG. The island, generally referred to as Lihir Island as it is the largest island in the Lihir Group, is located approximately 900km north-north-east of the national capital Port Moresby. The Property is located at approximately 3o06’54”S latitude, 152o38’27”E longitude. The location is shown in Figure 4.1. Lihir consists of a single open pit mine from which ore is processed on site to produce gold doré.

Figure 4.1 Property Location

4.2 Land Tenure

Mine development and operations at Lihir are conducted in accordance with the agreed development plans stipulated in the mining development contract i.e. the Approved Proposal For Development (APFD) and Special Mining Lease Number 6 (SML 6) (Department of Mining and Petroleum, 1995) signed by the Independent State of PNG in 1995 (Department of Attorney General, 1995).

The Property consists of SML 6, two granted Mining Leases (MLs) and one granted Exploration Licence (EL), plus a number of miscellaneous mining purpose and easement leases. The total area under licence is approximately 257km2. The registered holder for all tenure is Lihir Gold Limited and the total statutory annual expenditure commitment for the project is PGK150,000.

Lihir

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SML 6 expires 16 March 2035 and EL485 expires 31 March 2014. An extension of term application from 1 April 2014 to 31 March 2016 has been lodged for EL485.

Details of leases and licences are provided in Table 4.1 and Figure 4.2.

Table 4.1 Lihir Property Land Tenure Details

Lease Lease Type Lease Status Grant Date Expiry Date Area km2

EL485 EL - Exploration Licence Granted 19/06/1983 31/03/2014 231.49

LMP34 LMP - Lease for Mining Purpose Granted 21/07/1995 16/03/2035 0.34





ME71 ME - Mining Easement Granted 21/07/1995 16/03/2035 0.06



ML125 ML - Mining Lease Granted 21/07/1995 20/07/2015 0.48

ML126 ML - Mining Lease Granted 21/07/1995 20/07/2015 0.24

SML6 SML - Special Mining Lease Granted 17/03/1995 16/03/2035 17.39

Total 257.2

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Figure 4.2 Lihir Island Exploration and Mining Tenements

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4.3 Royalties, payments or other agreements

4.3.1 Integrated Benefits Package Agreement

A revised Integrated Benefits Package Agreement (IBP) was signed in 2007 with the Lihir Mining Area Landowners Association and the Nimamar Rural Local-Level Government (NRLLG). The IBP sets out the heritage and compensation arrangements for the local landowners, with the main objectives of ensuring that development in Lihir occurs in parallel with mining, is balanced across the island, is sustainable and is stable.

The revised IBP sets out a framework for:

• Financial commitments over five years, totaling PGK107M.

• Commitments to assist the Lihir people to establish commercial ventures on Lihir Island, including participation in mining related activities.

• Developing the capability and capacity of the Lihir people to manage their own affairs.

• Implementing all incomplete projects agreed to under the original IBP.

• Compensation associated with land affected by mining and related operations.

• Requirements associated with rehabilitation and mine closure.

The above agreement is currently being reviewed. Final terms of the revised agreement are still being negotiated.

4.3.2 Mining Royalty

A royalty of 2% of gold revenue (net of refining and transport costs) is payable, divided between federal, provincial governments, and local level governments and landowners.

4.4 Environmental Liabilities

The Mineral Resource Authority in PNG holds a total of PGK111,000 in security deposits for compliance with obligations under the Mining Act 1992 and as prescribed under the Mining Regulations 1992.

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5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

5.1 Topography Elevation and Vegetation

Lihir Island is formed around extinct volcanoes and is approximately 20km long by 10km wide with an area of 197 km2 (Figure 5.1). The mine is located within the Luise Caldera of the Luise Volcano which is located on the east coast of the island. The caldera is an extinct volcanic crater that is geothermally active. It has a 6km by 4km elliptical crater with steep walls reaching 600m above sea level. Several hundred thousand years ago the eastern (seaward) part of the caldera collapsed, with debris flows extending 25km to 40km eastward such that the submerged slope now forms the base of Luise Harbour.

Natural vegetation on the island is predominantly tropical rain forest. At the mine site, flooding effects are generally limited to a need for increased pit sump pumping, an increase in local backwater and occasional inundation of the Luise Harbour foreshore region.

Soils are naturally highly mineralized and contain elevated heavy metal concentrations. The gold mineralization within the Luise Caldera is hosted within volcanic and intrusive rocks and breccias that have undergone extensive alteration.

Parts of the narrow coastal plain, particularly in the northern and eastern areas, have formed on coral platforms. This includes the regions around the Putput ore processing plant, Londolovit town site and Kunaye Airport.

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Figure 5.1 Lihir Island Physiography

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5.2 Climate

Lihir Island is located at latitude 3° south and does not experience distinct wet or dry seasons. Lihir experiences high rainfall, averaging about 3.9 m per annum, with mean relative humidity of 80%. Periods of rainfall extremes often, but not always, correlate with the El Niño Southern Oscillation.

Air temperatures at Lihir are relatively constant from month to month, with daily air temperatures ranging between 21.1°C and 33.7°C. Temperatures at the mine site range from 21.0°C to 34.2°C while the sea temperature remains relatively constant at approximately 27°C to 28°C throughout the year.

Winds close to sea level are generally light, with monthly mean wind speeds of less than 5 knots. There are two wind seasons of variable duration. Between May and September/October, winds are mainly from the south-east and east and between December and March, winds are mainly from the north and west. November and April are transitional months. Luise Caldera has a noticeable effect on wind flow. Wind speeds at the mine site are light and variable and range from 0.6 km/h to 16.6 km/h.

Lihir lies north of the cyclone belt, which is at latitude 10° to 20° south; however, high-intensity, short-duration storms with accompanying winds do occur which do not affect normal operational activities.

Air quality at Lihir is affected by both natural and anthropogenic emissions. Natural air emissions include hot springs and geothermal discharges that release steam and other gases including H2S. These vary in intensity throughout the year. Anthropogenic emissions arise from mining operations, power generation and ore processing activities, and from local community activities such as road use, and subsistence agricultural burn-offs.

5.3 Natural Hazards

PNG extends across several major tectonic plate boundaries and is one of the most seismically active regions in the world. Lihir Island is located in the West Melanesian Arc seismic source zone where earthquakes of up to magnitude eight have been recorded. Most earthquakes in the region result from strike-slip movement but some occur along steeply dipping reverse faults resulting in a strong vertical motion component and have potential to generate local tsunamis. Both tsunami and earthquake risks have been assessed and incorporated into the project design criteria.

Volcanic activity on Lihir Island is limited to remnant hydrothermal venting in the Luise Caldera in the form of hot springs and fumaroles. Steam and gas (including H2S) naturally discharge within the pit area and along the Kapit beach and near shore region. The hydrothermal reservoir temperatures can reach 100°C at the water table and exceed 200°C at depth. Isolated geothermal activity in the form of hot springs is evident elsewhere on the island, such as within the southern Kinami caldera.

5.4 Access

Prior to the discovery of gold at Lihir, the population of the Lihir Island group was approximately 7,100. The economy was centred on subsistence agriculture and the population lived in many small villages around the island.

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The construction and ongoing servicing of the mine and related infrastructure required the construction of port facilities, an upgrade of the existing airstrip, the development of accommodation facilities, and infrastructure services to support the operation. Most travel to and from the island is via aircraft, however, sea passenger services do operate to local islands. Marine facilities are established to service oil tankers, general cargo ships, passenger ferries, and work boats.

All key services required for the mine were constructed by the Property owners i.e. power, water supply, roads, and other infrastructure.

A mine village has been constructed at Londolovit to house mine staff, contractors and families who are not Lihir residents (that is a component of the workforce commutes on FIFO rosters), as the local area is unable to supply the workforce required by the mine. The mining leases are accessed by sealed road from Londolovit, which is approximately four kilometres north of the mine.

5.5 Surface Rights

Lihir has been granted rights to undertake mining and processing of gold and related activities, through negotiations with the state and local government, and landowners in the area.

Newcrest holds a granted mining lease, but there are some areas of the lease where agreements are not yet in place with local landowners or the community.

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6 HISTORY

6.1 Project Ownership

In 1982, gold mineralization was discovered on Niolam Island leading to a major exploration campaign by a joint venture between Kennecott Exploration and Niugini Mining Limited.

In 1992, Kennecott Mining completed a feasibility study. culminating in the PNG Government granting a Special Mining Lease in 1995 to the Lihir Joint Venture Project comprising Rio Tinto Limited (Rio Tinto) and Niugini Mining Limited.

In 1995, Lihir Gold Limited (LGL) was established to own and operate the Lihir Gold Mine on behalf of joint venture between Kennecott Mining and Rio Tinto Limited. Construction started in the same year and first gold was poured in 1997.

In 2005, Rio Tinto divested itself from the joint venture.

In August 2010, Newcrest Mining Limited acquired LGL by scheme of arrangement.

6.2 Exploration

The first systematic mineral exploration in the region was undertaken by the PNG Bureau of Mineral Resources and the Geological Survey of PNG between 1969 and 1974.

Gold mineralization at Lihir was initially discovered in 1982 by a joint venture between Kennecott Exploration and Niugini Mining. Geologists sampled pyritized, silicified outcrops and boulders along the beach of the harbour, adjoining Luise Caldera on the east side of Lihir Island. These samples were highly anomalous in gold grades.

Semi-detailed mapping, soil samples, rock chips and hand-cut trenches made in 1983 outlined surface gold mineralization in the Luise Caldera, ultimately identifying four areas of gold mineralization within the Luise Caldera i.e. Minifie, Lienetz, Coastal and Kapit.

Diamond drilling commenced in the Coastal area in 1983, and continued in conjunction with bulldozer trenching in both the Coastal and Lienetz areas throughout 1984. By the end of 1984, the presence of a potential large gold resource had been confirmed and in 1985 the drilling program was expanded to include reverse circulation (RC) drilling in order to delineate oxide Mineral Resources. The Minifie area, immediately south of Lienetz, was drill-intersected in 1986 and the first drill hole in the Kapit area found a thick section of potentially economic gold mineralization in late 1987.

In addition to drilling that has continued through to 2013, exploration work has included detailed topographic, geochemical and geophysical surveying, surface geological mapping, trenching, auger sampling, specific gravity determinations, hydrogeology, petrology and mineralogy studies.

6.3 Historic Mineral Resources

Historic Mineral Resources are not reported here as they are available in Newcrest and various owners’ annual reports.

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6.4 Production

Production commenced from Lihir in 1997 and has generated cumulative production in excess of 10Moz of gold since start up. Production statistics are presented in Table 6.1.

Table 6.1 Historical Mill Production from Lihir

Period Mill

Throughput (t 000's)

Feed Grade (g/t Au)

Gold Recovery (%)

Gold Production

(oz)

Jan – Dec 1997 717 6.69 88.0 135,975

Jan – Dec 1998 2,352 6.94 93.7 530,000

Jan – Dec 1999 2,911 7.04 95.1 625,147

Jan – Dec 2000 3,413 6.01 91.6 606,311

Jan – Dec 2001 3,619 6.18 90.0 647,942

Jan – Dec 2002 3,828 5.46 89.6 607,087

Jan – Dec 2003 3,926 4.95 88.0 550,772

Jan – Dec 2004 4,158 5.11 88.5 599,399

Jan – Dec 2005 3,482 5.98 89.7 595,966

Jan – Dec 2006 4,344 5.14 90.2 650,811

Jan – Dec 2007 4,816 5.25 86.0 700,211

Jan – Dec 2008 6,154 4.76 82.5 771,456

Jan – Dec 2009 6,509 4.99 81.3 853,391

Jan – Jun 20101 3,316 4.37 81.9 377,199

Jul 2010 – Jun 20112 6,285 4.62 83.4 790,974

Jul 2011 – Jun 2012 6,042 3.96 81.1 604,336

Jul 2012 – Jun 2013 6,941 3.41 85.2 649,340

Total 72,813 5.09 86.4 10,296,317 Notes: 1. This is a 6 month period

2. Now reporting financial period

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7 GEOLOGICAL SETTING AND MINERALIZATION

7.1 Regional Geology

The Bismarck Archipelago is located in north-east PNG (Figure 7.1) and includes the islands of New Britain, New Ireland, Bougainville and the Solomons. Lihir Island is one of four volcanic island groups that form a chain parallel to the New Ireland coast line called the Tabar to Feni Chain. The islands in this chain are volcanic of largely Pliocene age to recent rising from a submarine platform. The island chain has a varied but predominately shoshonitic composition.

Figure 7.1 Regional Geological Framework

7.2 Deposit Geology

7.2.1 Geological Setting

Lihir Island is formed from the remnants of five volcanoes (Figure 7.2). Lihir operations are located within the youngest volcano, the Luise Caldera on the eastern side of the island (approximately one million years old), although gold mineralization itself dates from 0.15 to 0.90 million years. The Island Group lies along a north-north-east (~025°) trending submarine ridge. The most prominent faults on Lihir Island are normal faults striking 040° to 050° and dipping 40 to 50° to the north-west.

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Figure 7.2 Lihir Island Geology

Exploration has identified several adjacent and partly overlapping mineral deposits in the Luise Caldera, which are collectively called the Ladolam Deposit. The principal component deposits are called Lienetz, Minifie, Coastal and Kapit. The limits of the mineralization have not been completely defined and are open at depth, along strike and to the east (currently limited by the Pacific Ocean).

Gold mineralization in the caldera is hosted within volcanics, intrusives, and breccias which have undergone extensive alteration. Two major alteration episodes have been identified which have destroyed much of the original host rock lithologies, and due to this an “ore type” classification has been developed based largely upon various combinations of alteration, hardness, the degree of brecciation and/or leaching of matrix material, and the presence of late stage anhydrite veining.

Whilst this is more a metallurgical classification than a geologic one, it has proved useful in determining many of the mining and processing characteristics of the orebody and the host rocks. The ore types are roughly sub-horizontal in occurrence and form a fairly consistent vertical sequence of clay-rich rock, grading into white mica-feldspar rock, then feldspar-biotite and, at depth, into feldspar-biotite-anhydrite rock.

Within and at the boundaries of the ore types, geological structure is also a major influence on the localization of higher gold grades in the ore bodies.

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7.2.2 Alteration

Two major alteration episodes have been identified. There was an earlier and deeper “porphyry style” event resulting in potassic alteration grading laterally into propylitic alteration. This was followed by a later and higher level epithermal event producing argillic, advanced argillic, phyllic, and lower temperature potassic alteration.

Early stage potassic alteration occurred, associated with the emplacement of alkalic stocks within the volcanic edifice, with peripheral and broadly contemporaneous propylitic alteration.

Sudden collapse of the volcanic edifice is interpreted to have resulted in the rapid depressurizing of the system and subsequent telescoping of “epithermal style” alteration and associated gold mineralization upon the porphyry environment. Argillic and advanced argillic alteration assemblages developed through continued geothermal activity, driven by post mineralization magmatism. Geothermal activity continues.


Gold is the only metal of economic significance present within the Luise Caldera. A number of mineralization styles have been recognized, ranging from early porphyry to late stage epithermal mineralization. Two of these represent economically significant phases of gold mineralization at Lihir.

• The most important is refractory potassium feldspar-sulphide mineralization. In this association, gold occurs primarily as sub-micron size particles in sulphide minerals. Overall sulphide content is relatively high, with the average sulphur grade of the reserves being above 6%. The main sulphide mineral is pyrite, with the marcasite form present as an accessory mineral and rare arsenopyrite.

Gold also occurs as small (less than 100 micron) blebs within fine pyrite crystals. The sulphides are characterized by their fine grained nature, and have been deposited through wholesale flooding and deposition within all host rocks, imparting a sooty, dark grey coloring to the host rocks. Within the Lienetz and Kapit orebodies (and in some localized portions of Minifie) this style of mineralization has been associated with strong leaching of the original lithologies creating pinhole to open, vughy textures.

Cavities of up to 10m in extent have been encountered in Lienetz. This secondary porosity is thought to have been the result of dissolution of host rock by hot alkaline fluids as a result of boiling.

• The second significant style of gold mineralization occurs as a low sulphidation quartz-chlorite-bladed anhydrite association, more typical of epithermal style mineralization, deposited through the mixing of magmatic fluids with oxidizing near-surface water. Occasional free gold, up to several millimetres in size, has been observed in association with this mineralization style.

Mineralization occurs as discrete fracture filled veins through all levels of the deposits, and is inferred to be an overprinting style of epithermal mineralization associated with the cooling of the active geothermal system within the Luise Caldera. It is also characterized by relatively high, though erratic, gold grades when compared with the high sulphidation style of mineralization.

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8 DEPOSIT TYPES

A model for gold emplacement at Lihir is presented in Figure 8.1. Listric faults (developed during the collapse of the Luise volcanic edifice) acted as conduits for hot magmatic fluids rising towards the surface. Extensive phreatomagmatic brecciation which developed after the unloading of the system by edifice collapse is interpreted to have provided sites of increased permeability and fluid mixing.

High sulphidation refractory gold deposition subsequently occurred along these feeder structures and closely linked breccia units. Clay rich, argillically altered material acted as a cap to the system, with gold deposition penetrating into this overlying material constrained to strongly developed structures only. As the system cooled, low sulphidation, epithermal style gold mineralization developed as discrete, generally narrow (<10 cm), structurally controlled mineralized veins or vein sets, closely associated with the listric feeder structures of the earlier high sulphidation mineralization.

Figure 8.1 Conceptual Genetic Model for Gold Deposition at Lihir

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9 EXPLORATION

The first systematic mineral exploration in the region was undertaken by the PNG Bureau of Mineral Resources and the Geological Survey of PNG between 1969 and 1974. In their report (which was released in 1982), it detailed the hydrothermal alteration and geothermal activity evident on Lihir Island and suggested that it was a favorable geologic environment for epithermal gold mineralization.

Gold mineralization at Lihir was initially discovered in 1982 by a joint venture between Kennecott Exploration and Niugini Mining. Geologists sampled pyritized, silicified outcrops and boulders along the beach of the harbour, adjoining Luise Caldera on the east side of Lihir Island. These samples were highly anomalous in gold grades.

In November 1982, the PNG Government lifted a moratorium previously imposed on the issuance of new prospecting authorities, and on the same day the participants in the Joint Venture applied for a prospecting authority (now called an EL) covering the whole of Lihir Island and part of Luise Harbour. This prospecting authority was issued seven months later.

Semi-detailed mapping, soil samples, rock chips and hand-cut trenches made in 1983 outlined surface gold mineralization in the Luise Caldera, ultimately identifying four areas of gold mineralization within the Luise Caldera i.e. Minifie, Lienetz, Coastal and Kapit.

Diamond drilling commenced in the Coastal area in 1983, and continued in conjunction with bulldozer trenching in both the Coastal and Lienetz areas throughout 1984. Although all holes intersected mineralization, extensive disseminated gold mineralization was first discovered in hole L13-3 at Lienetz. By the end of 1984, the presence of a potential large gold resource had been confirmed and in 1985 the drilling program was expanded to include reverse circulation (RC) drilling in order to delineate oxide Mineral Resources. The Minifie area, immediately south of Lienetz, was drill-intersected in 1986 and the first drill hole in the Kapit area found a thick section of potentially economic gold mineralization in late 1987.

Newcrest exploration drilling from 2010 has focused on delineating the extent of mineralization in the Kapit North East area. This mineralization extends up to and beyond the current seaward constraint (proposed coffer dam).

In addition to drilling, exploration work has included detailed topographic, geochemical and geophysical surveying, surface geological mapping, trenching, auger sampling, specific gravity determinations, hydrogeology, petrology and mineralogy studies. No significant exploration activities were conducted in 2013.

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10 DRILLING

10.1 Overview

Drilling is the primary source of data for Mineral Resource estimation at Lihir. Data is sourced from a number of methods including diamond coring, reverse circulation (RC) drilling and rotary drilling (used for grade control sampling). All data is used for interpretation with only the diamond and RC drilling used for grade estimation.

10.2 Drilling Statistics

Figure 10.1 shows drill hole traces overlaying resource block model on cross section 9400E and Figure 10.2 shows drill hole locations at Lihir. Table 10.1 summarizes the drilling statistics of the Property to date. The majority of drilling for resource estimation is diamond drill core, comprising PQ (84.8 mm core diameter), HQ (63.5 mm core diameter) and NQ (47.6 mm core diameter).

There were 63 diamond drill holes for 22,157.5m drilled in the period from January 2012 to December 2013 inclusive (included in the total Property to date drilling of 2,568 drill holes for 512,987m as detailed in Table 10.1).

Figure 10.1 Cross Section 9400E

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Figure 10.2 Drill Hole Locations and Topography

Table 10.1 Drilling Statistics to 31 December 2013

Drilling Type Number of Holes Drilled

Metres Drilled (m)

Diamond drilling 1,636 400,804 RC Percussion drilling 700 33,076 Open Hole percussion drilling 232 79,106 Total 2,568 512,987

N

1,000 m

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10.3 Drilling Conditions

Lihir is an active geothermal area and all drilling activities are established carefully to ensure that drilling is safely conducted when zones of high pressure steam are intersected (Figure 10.2).

Figure 10.3 Drilling Operations at Lihir

10.4 Hole Surveying

All completed drill hole collars are surveyed by the mine surveyors.

A variety of methods have been used to measure down-hole deviation (dip and azimuth), including conventional camera, electronic single shot and gyroscopic methods. The majority of the holes have been surveyed using conventional camera methods. At present, single shot electronic surveys are completed at an initial depth of 50m and thereafter every 50m down hole.

10.5 Core Orientation

Very little core orientation is performed on site as the ground conditions down hole are generally quite poor due to broken or faulted ground and high clay contents in the upper sections of the deposit. This makes it very difficult to transfer orientation lines or match between runs.

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10.6 Core Recovery

There are only minor zones of lost core or poor core recovery and usually restricted to broken or faulted ground and high clay contents in the upper sections of the deposit. Core recovery is generally excellent with core recoveries around 99%.

10.7 Logging and Sampling

All diamond drill holes are processed in-house. Core photography, geological and structural logging, bulk density measurements and geotechnical data are collected prior sampling and assaying. Logging data are entered into the database via a laptop computer.

At the completion of drill core logging, the geologist defines which intervals of a drill hole are to be cut for analysis. All recent drilling is analyzed on 2m intervals on the metre mark. PQ series and HQ series drill core is sampled by cutting the core in half with a diamond blade saw. NQ series core is not cut in half as the entire section is sampled so that sample support is maintained.

All data collection and sampling is conducted on site at the Lihir core processing facility, which includes logging sheds, core cutting, and storage areas.

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11 SAMPLE PREPARATION, ANALYSES AND SECURITY

11.1 Historical QA/QC Summary

Historical QA/QC (up to and including 2011) performance at Lihir has been relatively poor and all control measures used indicate that there have been problems at the mine with sample mix-ups, swaps and mislabeling of control samples, and by inference the routine drill samples.

The data for gold analysis suggested there is a systematic negative bias in the Lihir assay laboratory performance for gold of the order of negative 5%.

The data for sulphide sulphur analysis suggests there is a systematic positive bias in the Lihir assay laboratory performance for sulphur of the order of 15-20%. The positive bias is considered to be due to the degradation of the Labfit procedure over time such that it measured total sulphur rather than the sulphide sulphur the procedure was established for and also the procedure used to generate the expected value of the CRMs. It is noted that sulphide sulphur assays are used for metallurgical characterization and are not directly applied to Mineral Resource and Mineral Reserve estimates.

Historical QA/QC results do not suggest there is a serious bias in the performance of the Lihir laboratory in terms of gold analysis. Therefore whilst there are concerns over the accuracy of individual samples, this problem does not translate into a concern at a global level.

In the Qualified Person’s opinion the QA/QC data indicates the historical (prior to 2011) sample preparation, security and analytical procedures have been adequate and results independently verified and as such the data is deemed acceptable input into the Mineral Resource estimate.

A complete description of the historical QA/QC of Lihir (up to and including 2011) is contained in the “Technical Report on the Lihir Property in Papua New Guinea” 31 December 2011 and available on the Newcrest website at www.newcrest.com.au and also available at www.sedar.com.

QA/QC performance for the period 2011 to 2013 inclusive is detailed in Sections 11.6 onwards

11.2 Drill Core Sampling

Lihir has a well maintained core logging and storage facility at the mine where all logging and sampling activities take place.

After core logging, a cut-line is drawn on the core and the core is photographed. Intact and competent drill core is cut in half along the cut-line using a diamond saw. Where the core is too soft to be cut with a diamond saw, a knife is used to cut the core in the core tray. Where the core is too broken or brittle to be cut by the saw, the fragments are manually sampled.

The standard sampling interval is 2m. The left hand half of the core is placed in a calico bag marked with the appropriate sample number and sent to the laboratory for sample preparation and assaying. The remaining half core is stored in the original trays on pallets at the core processing facility.

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Gold and sulphur reference material and blanks are inserted at a ratio of 1:20 and recorded on the dispatch sheet.

11.3 Sample Preparation

Lihir has a sample preparation facility at the mine and all routine drill core samples are processed on site.

Sample preparation for analysis is as follows:

• Samples are dried in an oven at 160°C for several hours.

• Samples are crushed to 10 mm maximum diameter and split to a maximum weight of 3 kg using a riffle splitter.

• Split samples are dried in an oven at 160°C for several hours.

• Each 3 kg sample is pulverized using a Labtechnics LM5 pulverizing mill to specified grind parameters of 90% passing 106 micrometers.

• A 200 g sub-sample is collected for analysis and submitted to the assay laboratory.

11.4 Analysis

Lihir has an assay laboratory at the mine and all routine drill core samples are processed on site. Samples are analyzed routinely for gold, copper and sulphide sulphur. Results are recorded electronically and sent to the Geology Department to be uploaded to the resource database for checking and validation.

The basic analytical scheme is unchanged from that used historically (summarized in Table 11.1), but there has been a great deal of time and effort put into improving both the precision and accuracy of gold fire assays. Initiatives taken include: engaging a highly experienced fire assay specialist to recommend changes to procedure, optimising the fire assay flux for Lihir ore, extensive retraining of fire assay operators and chemists, increasing supervision, and documenting procedures to be followed. Sulphide sulphur analyses have also come under a great deal of scrutiny; the original method has been identified as inappropriate and likely to lead to bias and precision issues. Improved methods have been identified and the necessary instrumentation purchased, implemented and training of site staff continues. This process is being implemented for mill control samples initially and will be standard for all future resource drilling for sulphide sulphur analysis.

The three Newcrest laboratories (Orange, Telfer and Lihir) are now working collaboratively and this has had the benefit of allowing highly trained and experienced chemists to visit other sites and implement changes that will lift standards across the Group.

In addition there has been a programme of multi-element analysis of old drill samples designed to fingerprint the Lihir mineralization and produce vectors to mineralization for future work. Initially the multi-element analyses were carried out by independent commercial laboratory (ALS Brisbane) using aqua regia and then 4-acid digest (HF-HClO4-HNO3-HCl) mixed ICP-OES – ICP-MS. Subsequently, the multi-element work was transferred to the Newcrest Laboratory Services facility at Orange (NLSO) in NSW. NLSO used similar analytical methods to those used by ALS.

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Table 11.1 Lihir Assay Techniques and Detection Limits

Au Fire assay with 25 g charge and Atomic Absorption Spectroscopy (AAS) finish. Detection limit of 0.01 ppm (g/t).

Cu

Primary analysis with 0.5 g sample using digestion by mixed acid (perchloric, hydrochloric and nitric) digest followed by Inductively Coupled Plasma-Optical Emission Spectrometry (ICP-OES). Ore grade (>1%) mixed acid digest for Cu >= 1% with flame AAS finish. Detection limit of 0.01%.

Sulphide S The sample is ignited at high temperature in a stream of oxygen. The resulting sulphur dioxide is measured by an infra-red detector using a Carbon/Sulphur analyser. S detection limit of 10 ppm.

11.5 QA/QC Procedures

All assays are checked and verified in accordance with the Newcrest Resource Development Quality Assurance Quality Control (QA/QC) and database management procedures. QA/QC procedures have been in place for all of the historic drilling programs at Lihir.

A detailed QA/QC program is in place for ongoing assessment of sampling and analytical procedures. The process currently involves submission and analysis of:

• Blind submissions of certified reference material (CRMs) to Lihir laboratory.

• Duplicates from the LM5 pulverizer pulp, assayed during the same batch.

• Blind resubmission of pulps to Lihir laboratory.

• Replicate submissions of pulps to an alternative laboratory for analysis.

• Replicate submissions of coarse duplicates to an alternative laboratory for analysis (from 2012 Newcrest Laboratory Services-Orange).

• Submission of coarse blank samples (Non-Lihir Island barren rock samples).

• Checks on grind and crush size from the sample preparation steps.

• Visits to the laboratory for confirmation of actual procedures applied.

• Monthly QA/QC meetings with laboratory personnel.

A monthly report is prepared for the site Mineral Resource Manager detailing QA/QC performance and an annual report is prepared to support the documentation of the Mineral Resource estimate.

11.6 Certified Reference Materials (2011 to 2013)

Refer to section 11.1 for historical QA/QC summary (up to and including 2011).

From the beginning of 2011 to the end of 2013 there were 1600 CRMs analyzed for gold. The median bias for that period was -4% (i.e. on average the assay results were 4% below the CRM preferred value).

Figure 11.1 shows the pattern of results expressed in z-score units (one z is the same as one standard deviation). Data have been curtailed at both ends; any z-score greater than 6 has been attributed a value of 6 and any with a z-score below -6 has been attributed -6. This reduces the impact of the outliers, many of which are a product of the poor precision at Lihir. The red moving average line shows that the bias oscillated around -2 standard

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deviations (equivalent to about -5%) for much of the time followed by a period of reverse bias and then more moderated bias (-3 to -4%) and improved precision.

Figure 11.1 Lihir gold z-scores

The median bias for sulphide blanks was +18.8%. The moving average (Figure 11.2) wavers about z = + 2 (equivalent to a bias of about 22%) before diminishing slowly to z = 0. Work carried on at the laboratory, initially with the intention of removing the sulphur bias, has shown that the method used for the determination of sulphide was fundamentally flawed but significant improvements in bias have been achieved by refining the current method.

Figure 11.2 Lihir sulphide z-score

11.6.1 Blanks

There were almost 500 gold blanks analyzed during the three year period 2011 to 2013 inclusive). Of these seven had excessive gold analyses, indicative of contamination or swapped sample material. Sulphide blanks were similar with approximately 16 similar over range points. Points that have been investigated nearly always turn out to have been the subject of a blunder (e.g. inserting a standard instead of a blank) rather than contamination.

-6

-4

-2

0

2

4

6

0 200 400 600 800 1000 1200 1400 1600

z-sc

ore

instance

Lihir Gold z-scores 2011-13

Au z-sc

MA51

-6

-4

-2

0

2

4

6

0 200 400 600 800 1000 1200 1400 1600

z-sc

ore

Instance

Lihir Sulphide z-scores 2011-13

S z-score

MA51

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11.6.2 Coarse Duplicates

Approximately 600 coarse duplicates have been collected as splits from the crusher. The primary sample and duplicate are analyzed in the same job, generally within the same fire assay batch within the job. Gold precision (Figure 11.3) was calculated to be 9.1% at one standard deviation and sulphur precision (Figure 11.4) was 13.6%. Both figures are within the target level of 25% that applies within the company for coarse duplicates. These figures suggest that the split taken from the crusher is representative of the crushed material.

Figure 11.3 Lihir Coarse Gold Duplicates, Precision = 9.1%

Figure 11.4 Lihir Coarse Sulphide Duplicates, Precision = 13.6%

11.6.3 Pulp Replicates

Pulp replicates are additional samples taken from the primary Kraft envelope and are part of the laboratory’s internal QA/QC. They are expected to have a precision of 10% or better for

0.001

0.01

0.1

1

10

100

0.001 0.01 0.1 1 10 100

Dup

licat

e Au

Original Au

Lihir Coarse Duplicates - AuP=9.1%

Au coarse

X=Y

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gold and 8% or better for the ICP suite. For gold samples greater than 0.2 g/t the pulp replicate precision was 8.8% (Figure 11.5). For sulphur samples greater than 1% the precision was 5.1% (Figure 11.6). Both results are in line with expectations.

Figure 11.5 Lihir Gold Pulp Replicates, Precision = 8.8%

Figure 11.6 Lihir Sulphide Pulp Replicate, Precision = 5.1%

11.7 Comparison of Second Laboratory with Lihir Historical Data

As part of the multi-element programme conducted in 2011 to 2013 on historic drill pulps, the opportunity was taken for gold and sulphur to be determined at an independent commercial laboratory (ALS Brisbane) with a smaller quantity of analyses being carried out

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by NLSO. Sulphur was part of the ICP package while gold was determined by fire assay. This would allow further assessment of historical QA/QC performance of historical data.

Table 11.2 and the Figures 11.7 & 11.8 show the gold relationship between results from the second laboratories when compared to Lihir site laboratory for historical data.

Table 11.2 Precision of second laboratory pulp check assaying at ALS Brisbane and NLSO when compared to Historical Lihir analysis

Au Precision

(Au > 0.2 g/t)

# of samples S Precision # of samples

ALS 21.2% 6994 45.9% 11250

NLSO 17.3% 537 45.6% 924

When comparing samples for gold grades > 0.2 g/t ALS the one standard deviation precision was calculated to be 21.2% while for the much smaller NLSO set the precision was marginally better at 17.3%%. Note the company target precision when comparing a primary laboratory and an independent second laboratory is 15%.

Figure 11.7 Comparison of the Historical Lihir site laboratory with ALS for Gold

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Figure 11.8 Comparison of the Historical Lihir site laboratory with NLSO for Gold

Figure 11.7 and Figure 11.8 compare independent second laboratory analyses to historical Lihir gold analysis (entire data sets). These outliers on Figures 11.7 and 11.8 (that is results far off the red line) are most likely to be evidence historical sample swaps.

Table 11.2 also confirms the poor precision of the historical sulphide sulphur analysis.

The Lihir laboratory has during 2013 changed over to the Leco method of sulphide sulphur determination and this has dramatically improved the analytical performance in mill results. Future resource data acquisition will be done by the Leco method.

Second lab checks of historical assay data have demonstrated that the gold analyses at Lihir have been reasonably accurate with acceptable precision. Sulphide sulphur second laboratory checks have confirmed the historical data to be based on a technique that has degraded over time and better represents a total sulphur analysis. Improvements have subsequently been made to both analytical methods.

11.8 Additional QA/QC Practices Adopted

In addition to the QC sample types discussed above there are several other practices that assist in keeping QA/QC foremost in the minds of those preparing and working with the data that have been adopted during 2012 to 2013 inclusive.

• Peer sampling audits and observations are carried out on a semi-regular basis and the results discussed with the sampling crew, core cutter etc.

• Fortnightly meetings are held with the laboratory during which time topics such as QA/QC and turnaround time are discussed.

• Every 20 to 25 samples a size analysis is carried out on the pulp to ensure that pulps are being prepared to the agreed grainsize (95 % passing 106 micrometres). Whenever the sample fails to meet the size requirement, standing instructions state that samples half-way back to the last passing standard are to be reprepared and sized before analysis

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• Once a month, whenever samples have been generated or results returned, a QA/QC report is prepared and sent to Melbourne office where it is examined and summarised and the summary included in a monthly company-wide QA/QC report to management.

• A QA/QC issues register is maintained so that every issue to do with sampling, sample preparation, analysis and storage of results is listed so that action taken is documented and the frequency of specific types of issue assessed so that preventative steps can be taken where appropriate.

• Certain procedure are carried out on the much more numerous production blast hole samples that are not undertaken on resource development samples. These include the blind resubmission of samples to the assay laboratory to monitor laboratory reproducibility. The resubmission of blast hole samples allows on-going monitoring of the Lihir laboratory whilst resource drilling is on hold.

11.9 QA/QC Summary

There has been a great deal of work undertaken to resolve the QA/QC problems described in the “Technical Report on the Lihir Property in Papua New Guinea” 31 December 2011. The work undertaken has been successful for gold analysis although the introduction of best practice procedures, especially for sulphide sulphur determination, has been a slower task than was envisaged.

The number of outliers due to mix-ups, swaps and mislabelling of individual samples and boxes of samples has been cut dramatically and precision is now largely under control. The source of the sulphide bias and poor precisions has been identified and the bias has been eliminated elsewhere in the operation (mill production analysis) through the introduction of appropriate instrumentation, procedures and training. Identical instrumentation and analytical techniques are will be implemented for future resource development programs.

QA/QC results for 2011 to 2013 period and checks on historical data do not suggest there is a serious bias in the performance of the Lihir laboratory in terms of gold analysis. Therefore whilst there can be concerns over the accuracy of individual samples, this problem does not translate into concern at a global level.

QA/QC results suggest there is a significant positive bias in the performance of the Lihir laboratory in terms of sulphide sulphur analysis, both historically and the period 2011 to 2013 inclusive. This is believed to be due to Lihir laboratory using an analytical technique and instrumentation that has degraded over time and lead to poor precision and bias over time. Improved bias performance is observed late in the period 2011 to 2013 and the adoption of new instrumentation, procedures and training have significantly improved sulphur precision and bias for mill production samples. It is noted that sulphide sulphur assays are used for metallurgical characterization and are not directly applied to Mineral Resource and Mineral Reserve estimates as they use gold only based cut-off.

In the Qualified Person’s opinion the data is adequate for the purpose intended. The sample preparation, security, and analytical procedures are of industry standard, with every effort being made to improve as discussed above. As such the data is deemed acceptable input into the Mineral Resource estimate.

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12 DATA VERIFICATION

The Qualified Person has, through examination of internal and public Newcrest documents, personal inspections on site and discussions with other Newcrest personnel, verified the data in this Report and is satisfied that the data is adequate for the purpose of this Report.

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13 MINERAL PROCESSING AND METALLURGICAL TESTING

13.1 Introduction

The Lihir gold processing facility commenced operations in 1997 treating high grade ore (HGO) with lower grade ore stockpiled for later processing. The tonnes of ore processed has progressively increased since plant start-up, with an annual gold production of 649kozs in year ending June 2013. The original process plant flow sheet consisted of ore grinding, auto-thermal whole ore oxidation in pressure autoclaves, followed by gold recovery from washed oxidized slurry using conventional Carbon-In-Leach (CIL) cyanidation. The plant has been expanded with the installation of a flotation plant installed in 2007 which allows the sulphur content of lower grade ore types to be increased in autoclave feed.

In 2008, a decision was made to undertake a further major expansion to the plant. The expansion is now complete. The processing technology and flow sheet selected for the upgrade is as per previous operations. The current process plant operations and the changes to be introduced with the major plant upgrade are described in Section 17 of this report.

A second flotation plant was installed in 2013 to allow an increased tonnage of low sulphur ore to be processed. Most of this ore is originating from the previously stockpiled grade ores.

A significant amount of metallurgical testwork was undertaken as part of the original feasibility for the project. The range of ore types to be treated in future operations are now well understood from 14 years of continuous operations. The metallurgical parameters of various ore types from the deposit are well established, and therefore no major new test work programs have been undertaken as part of the recent plant upgrade implementation.

13.2 Ore Type and Mineralogy

Metallurgical test work undertaken as part of the original Lihir Feasibility Study (FS) showed that the ore is refractory. Direct cyanidation of finely ground ore yielded less than 30% gold extraction, and coarse gold is extremely rare. Gold present in ore is principally as auriferous pyrite and accessory marcasite. Other base metal sulphides and sulfosalts (such as chalcopyrite, sphalerite, arsenopyrite, and tennantite-tetrahedrite) are also present at minor and trace levels. The ore generally contains low levels of arsenic, principally as an impurity in pyrite. After a number of oxidative test work campaigns in the original FS, whole ore pressure oxidation was selected for Lihir over other processes tested, including flotation and roasting, bio-oxidation and whole ore roasting.

Metallurgical test work and operating experience at site has shown that there are main five rock types of increasing hardness identified as:

• Argillic Clay

• Advanced Argillic

• Leached Soak Domain

• Boiling Zone

• Anhydrite Sealed

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Comminution test work undertaken on the various rock types as part of the feasibility studies allows prediction of the hardness properties of each block of ore, and prediction of plant power requirements.

The target sulphur content in slurry to the autoclave is in the range 5-7% to ensure auto-thermal operation of the autoclave. Ore blending and flotation plants operation is undertaken in a manner to maintain this feed sulphur content.

13.3 Gold Recovery

The mean gold recovery over the 12 month period ending June 2013 was 85%. Ore treated in the flotation plant has a lower overall recovery due to gold losses in flotation tail.

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14 MINERAL RESOURCE ESTIMATES

14.1 Introduction

The 31 December 2013 Mineral Resource update has been based on a detailed review completed by Newcrest of all Lihir production sources to take into account Newcrest’s current view of long term metal prices, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades and physical mining parameters. This has resulted in the most marginal ounces being removed and this has been reflected in changes to Mineral Resource estimates. The Measured and Indicated Mineral Resources for Lihir as at 31 December 2013 includes a material reduction of approximately 4.2Moz of gold to 51Moz of gold, compared with the 31 December 2012 estimate of 55.2Moz of gold.

The Mineral Resources have been prepared under the direction of Competent Persons under the JORC Code using accepted industry practice and have been classified and reported in accordance with the JORC Code.

There are no material differences between the definitions of Measured, Indicated and Inferred Mineral Resources under the CIM Definition Standards and the equivalent definitions in the JORC Code.

Mineral Resources comprise the open pit Mineral Resources plus surface ore stockpiles. Open pit resources are reported inclusive of Mineral Reserves and represent the resources located inside a pit shell developed using a gold price of US$1,400 per oz. A cut-off criterion of 0.9 g/t Au has been applied to Mineral Resources for reporting purposes in December 2013, based on a gold price assumption of US$1,350 per oz.


Table 14.1 presents the Lihir Mineral Resources. Mineral Resources comprise Measured Resources, which are the low, medium and high grade stockpiles; as well as Indicated and Inferred Resources. There are no Measured Resources reported from the block model.

Table 14.1 Lihir Mineral Resource Estimate at 31 December 2013

Resource Classification

Tonnes (Mt)

Gold Grade (g/t)


Measured 100 2.2 7.2 Indicated 660 2.1 44 Inferred 130 2.1 8.4

Notes: 1. Cut-off grade of 0.9 g/t Au based on a gold price of US$1,350/oz 2. Reported within pit shell developed using gold price of US$1,400/oz 3. The figures above include those resources converted to reserves

14.3 Modeling and Estimation

14.3.1 Geological Interpretation and Domaining

An updated resource block model was developed in 2012 and is the basis of the 2013 Mineral Resource estimate. Geological interpretation of ore type and gold domains is based on drilling information nominally spaced at 35m intervals in cross section and 10m intervals in plan.

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The Lihir mineralised envelope is approximately 3km x 1.5km x 0.5km (along strike, down dip and thickness). The limits of the mineralization have not been completely defined and are open at depth, along strike and to the east (currently limited by the Pacific Ocean).

The Lihir orebody has been domained by site geologists via two methods;

• Structural domains (9) - developed using interpreted fault boundaries, and,

• Alteration (Ore Type) domains (5) - based on the major alteration types present in the deposit.

Figure 14.1 Graphical representation of the different fault domains (North top).

The nine structural domains have been interpreted i.e. southern background, western background, Borefields, Minifie West, Coastal, Kapit North-East, Minifie East, Lienetz and Kapit (Figure 14.1).

Five alteration styles have been interpreted i.e. Argillic, Anhydrite sealed, Boiling Zone, Leached-soaked, and Advanced Argillic (Figure 14.2).

Western Background

Kapit

Borefields

Southern Background

Coastal

Minifie East

Minifie West

Lienetz

Kapit North-East

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Figure 14.2 3D Representation of Lihir Alteration Domains, Looking North-West

14.3.2 Compositing and Exploration Data Analysis

Drill hole data was composited at 6m intervals for gold prior to flagging by mineralization and alteration domains. The drill hole data was also composited at 2m intervals for estimating sulphur and copper which are important for process considerations. The drill holes were composited down hole without any boundary constraints to ensure that no data was lost adjacent to boundaries.

The 9 fault domains and 5 alteration domains that were flagged in the initial data set were reduced to 5 estimation domains for Au, As, Ag, Cu & Mo. Sulphide sulphur was estimated in a combination of both fault domains and alteration domains. CaCO3 has been estimated into two alteration domains. The Exploratory Data Analysis (EDA) below was used to determine the estimation domaining strategy.

Exploration data analysis consisted of the following:

1. Basic Statistics - tabulation of mean grades, variability (CV).

2. Scatterplots of Au and S - to establish relationships (if any)

3. Top Cut Assessment - to identify risk metal (if any)

4. Slice Plots of grade by easting, northing and level – to capture variability within global and geological domains.

5. Contact Analysis – to check for ‘abrupt’ or ‘gradational’ boundaries.

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6. Q-Q Plots and preliminary variogram comparisons - to further support the choice of 'Estimation' domains.

Based on this review, Newcrest adopted the following criteria for grade estimation:

• For gold grade estimation, the 14 initial structural and alteration domains were consolidated into five domains (Table 14.2).

• For sulphur grade estimation, the 14 initial structural alteration domains were consolidated into ten domains (Table 14.3).

• For dry bulk density (DBD), three domains were created matching subsets of the initial alteration domains (Table 14.4).

• For carbonate grade estimation, the 14 initial structural and alteration domains were consolidated into two domains.

Table 14.2 Lihir Modeling Domains for Au, Ag, As, Cu & Mo compared to Interpreted Fault Domain

Model Domain Code Interpreted Fault Domain Code Description

8 8 Lienetz 9 9 Kapit

12 1 & 2 Background 56 5 & 6 Coastal & Kapit NE

347 3, 4 & 7 Minifie

Table 14.3 Lihir Modeling Domains for Sulphide Sulphur compared to Interpreted Fault Domain

Model Domain

Code

Interpreted Fault Domain

Code

Interpreted Alteration Domain

Code Description

1 4 2 Minifie Argillic 2 4 3 Minifie Boiling 3 4 5 Minifie Anhydrite 4 3 & 7 2 Borefields Argillic 5 3 & 7 3 Borefields Boiling 6 3 & 7 5 Borefields Anhydrite 7 2, 5, 6, 8 & 9 2 Argillic 8 2, 5, 6, 8 & 9 3 Boiling 9 2, 5, 6, 8 & 9 5 Anhydrite

10 1 2, 3 & 5 Southern waste

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Table 14.4 Lihir Modelling Domains for Dry Bulk Density compared to Interpreted Alteration Domain

Model DBD Domain Codes

Interpreted Alteration Domain

Code Description

BDOM1 1 Advanced Argillic 2 Argillic

BDOM2 3 Boiling Zone 4 Leached Soaked

BDOM3 5 Anhydrite Sealed

14.3.3 Grade Capping

Two methods were used to assess the risk metal for gold;

1. Raw histograms. The histograms were reviewed to ensure that outliers were not unnecessarily given too much weighting. Hermite polynomials fit a continuous curve, so care must be taken to ensure that the volume under the curve is not inflated because of an outlier.

2. Metal per Composite assessment. This involved answering a relatively simple question - What proportion of metal is contained by the top 1% of the declustered samples? As a working guide, top cuts are chosen to limit the top 1% of samples to approximately 5% of the contained metal.

Assessment of the need to cap high grades was made by reviewing the raw histograms, and by a metal per composite assessment, i.e. reviewing how much metal is contained by the top 1% of the declustered samples. As a working guide, top cuts are chosen to limit the top 1% of samples to approximately 5% of the contained metal.

Table 14.5 documents the grade caps applied for the 2013 Lihir resources.

Table 14.5 Grade Caps Applied to Lihir Resource Estimation

Gold Sulphur Dry Bulk Density Carbonate

Domain Cap (g/t) Domain Cap (%) Domain Cap (gm/cm3) Domain Cap (%)

8 30 1 – BDOM1 2.97 23 23 9 30 2 – BDOM3 – 5 35 12 8 3 – BDOM5 3.20

56 30 4 25

347 50 5 – 6 – 7 40 8 28 9 18 10 –

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14.3.4 Variography

Variography was completed for gold, sulphur, copper, dry bulk density, arsenic, sliver and molybdenum.

The variogram models for each estimation domain were aligned to the average orientation of each domain wireframe because none of the experimental variograms were structured enough to demonstrate unambiguous directions of continuity. As a result, the interpreted plane of maximum continuity for the majority of domains dips at a shallow angle to the north-east.

The variogram models were generally interpreted as being isotropic in the plane with shorter ranges perpendicular to the plane of maximum continuity.

Raw experimental variograms were generally un-interpretable due to the highly skewed distributions of gold and the variography was performed on Gaussian transformed data and the back-transformed variograms were utilized for interpolation.

The nugget effect was obtained from the down hole variograms of the 6m composites. In general, the nuggets were in the range 20-40%.

The gold variograms models are presented in Table 14.6.

Table 14.6 Gold Variogram Models Nugget Structure 1 Structure 2

Gold Estimation Domain 8 (Top Cap of 30 g/t) Sill 1.35 1.55 1.09

Proportion of Total 33.8% 38.8% 27.3%

Range D1 (m) 122 665

Range D2 (m) 110 480

Range D3 (m) 97 250

Rotation (Isatis Geology) 100 0 0



Range D1 (m) 97 340

Range D2 (m) 90 265 Range D3 (m) 85 155

Rotation (Isatis Geology) 70 -10 0



Range D1 (m) 70 410

Range D2 (m) 70 410

Range D3 (m) 70 410


Gold Estimation Domain 56 (Top Cap of 30 g/t) Sill 1.8 2 0.96


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Range D1 (m) 85 820

Range D2 (m) 80 510

Range D3 (m) 80 300




Range D1 (m) 110 495

Range D2 (m) 75 495

Range D3 (m) 70 225

Rotation (Isatis Geology) 80 -20 -20

14.3.5 Estimation Parameters

A three dimensional block model was created to gold, sulphur, copper, dry bulk density, arsenic, sliver and molybdenum as summarized in Table 14.7.

Table 14.7 Lihir Block Model Parameters Variable X (m) Y (m) Z (m) Minimum 7800 2200 500 Maximum 11480 6600 1532 Block Size 20 20 12 No. of Blocks 184 220 86

Uniform Conditioning (UC) was used to estimate local recoverable resources within 100m x 100m x 12m panels for gold and into 200m x 200m x 12m panels for sulphur, arsenic, silver, molybdenum, carbonate and copper. The UC estimate was based on a selective mining unit of 20m x 20m x 12m. This technique estimates the tonnage and grade of mineralization which can be extracted as smaller selective mining units from large blocks (panels) estimated by OK. UC estimates the proportions of recoverable mineralization in each panel without specifying the actual locations within these blocks.

The estimates were then post processed utilizing Localized Uniform Conditioning (LUC) into 20m x 20m x12m blocks. In this process spatial grades are estimated that conform to the proper grade-tonnage curves obtained by the UC method, as well as maintaining the relative spatial grade distribution pattern approximated by direct kriging of the small blocks.

Ordinary Kriging (OK) was used for the local estimation of density.

A summary of the search neighborhood parameters for gold is presented in Table 14.8.

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Table 14.8 Lihir Search Neighbourhood Parameters for Gold Estimation

Domain Orientation Dimensions Angular sectors

Min Samples/Opt Samples per

sector Discretization

Max No of Samples per

hole 8 100 0 0 665x480x250 4 4 / 6 10x10x2 4 9 70 -10 0 560x440x275 4 4 / 6 10x10x2 4 12 90 0 0 550x550x550 4 4 / 6 10x10x2 4 56 50 0 0 900x550x325 4 4 / 6 10x10x2 4

347 80 -20 -20 754x475x340 4 4 / 6 10x10x2 4

NB – Orientations provided in Isatis Geology Rotation nomenclature.

The UC/LUC approach is summarized as:

1. Gaussian transformation of variables and construction of back-transformed functions using Hermite polynomials.

2. Support correction using the Discrete Gaussian Model.

3. Conditioning by panel grades.

4. Preparation of grade-tonnage curves to validate the UC estimates against the theoretical selectivity curves.

5. Conversion of the UC model to a LUC model, to estimate gold into a new block model of size 20 m x 20 m x 12 m.

14.4 Resource Model Validation

The Lihir resource model for gold has been extensively validated by:

• Comparison to Ground Truth Model which is based on blast holes (where possible).

• Comparison of the UC grade-tonnage curves against the theoretical Discrete Gaussian Model.

• Comparison of the slice statistics of each variable with the corresponding block estimates

• Comparison of various declustered grades with the various estimated grades (and Metal at Risk analysis)

• Locally comparing drill holes and estimated blocks in cross-section and plan, and

• Comparing the resource model to the previous estimate by area and level.

A ground truth model was created for the mined areas - Lienetz and Minifie. The data set includes 68,841 blast hole samples of mixed lengths, but the majority are close to 12m bench composites (with some 6m bench composites). The average spacing of blast hole samples is in the range of 5.5 to 6.5m. The UC model has been compared to the Inverse Distance ground truth model via grade-tonnage curves.

The UC estimate has been compared (by domain) to a Discrete Gaussian Model (a theoretical grade-tonnage curve based on the data). For all domains, the grade-tonnage curve comparisons between the UC estimate and the DGM's are +/- 5% for tonnes and grades at all cut-offs for gold.

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The Resource model was the comparison of the various declustered grades, with the various estimated grades. The “Metal at Risk” is therefore the difference between the metal provided by any of the declustered grades minus the metal provided by the Resource estimate(s). For gold and sulphur the “Metal at Risk” by domain is generally between 0 and -10% (Estimate < Benchmark Metal).

The estimates for the minor elements of sulphur, copper, dry bulk density, arsenic, sliver and molybdenum have been validated via two methods:

• Comparison of the slice statistics of each variable with the corresponding block estimates; and

• Comparing the basic statistics of the estimate to the composites by domain.

The global comparisons between composite and block grades are within 5% for most domains and variables. All estimates are considered to be robust.

14.5 Resource Classification

All stockpiles at Lihir are reported as Measured Resources.

The Mineral Resource has been classified into Measured, Indicated and Inferred after assessing the following factors: drill hole spacing (only areas drilled to 70m x70m drill density have been classified as Indicated Resource), style of mineralization and geological continuity, data quality and associated QA/QC, grade continuity and proposed mining selectivity and scale of mining.

Two methods have been used to determine the optimal drill spacing for Indicated and Inferred Resource classification at Lihir:

• Variogram method which analyses proportions of the sill, and

• An extension variance method.

For Indicated Resource classification, wireframes have been constructed based on the average weighted drill spacing of 70m x 70m (and constrained to 25m beyond the extent of drilling).

For Inferred Resource classification, wireframes have been constructed based on the average weighted drill spacing of 150m x 150m (and constrained to 50m beyond the extent of drilling). The data spacing and distribution is sufficient to establish geological and grade continuity appropriate for Mineral Resource estimation and classification and supported by historical reconciliation to actual production.

The only Measured Mineral Resources are in stockpiles which have been grade controlled via blast holes sampling at the time and tracked using the mining tracking and recording systems. Stockpile models have been built using the best available data.

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Figure 14.3 Cross Section 9400E through resource block model

14.6 Comparison to Previous Mineral Resource Estimate

Newcrest has reported a Mineral Resource estimate for Lihir as at 31 December 2013. Newcrest has completed a detailed review of all production sources to take into account current view of long term metal price, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades and physical mining parameters.

This has resulted in the most marginal ounces being removed and these are reflected in changes to Mineral Resources. The Measured and Indicated Mineral Resources for Lihir as at 31 December 2013 includes a material reduction of approximately 4.2Moz of gold to 51Moz, as against the 31 December 2012 estimate of 55.2Moz of gold.

14.7 Factors Affecting Mineral Resource Estimate

Lihir Gold Mine is an established operation with a long production history to support development of plans to exploit the available Mineral Resources.

The Mineral Resource estimates are based on long term capital and operating costs assumptions based on the current operating cost base modified for changing activity levels and reasonable cost base reductions over the life of the mine. Any material change in long term cost base or metal price assumptions may impact the Mineral Resource estimate.

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15 MINERAL RESERVE ESTIMATES

15.1 Introduction

The 31 December 2013 Mineral Reserve update has been based on a detailed review completed by Newcrest of all Lihir production sources to take into account Newcrest’s current view of long term metal prices, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades. This has resulted in the most marginal ounces being removed and this has been reflected in changes to Mineral Reserve estimates. The Mineral Reserves for Lihir as at 31 December 2013 includes a material reduction of approximately 3.7Moz of gold to 29Moz of gold, compared with the 31 December 2012 estimate of 32.7Moz of gold.

The Mineral Reserve estimates reported in this release have been prepared under the direction of a Qualified Person, as defined in NI 43-101, using accepted industry practice and have been classified in accordance with the JORC Code. Except as described below, there are no material differences between the definitions of Proven and Probable Mineral Reserves under the applicable definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM Definition Standards”) and the corresponding equivalent definitions in the JORC Code for Proved and Probable Ore Reserves.

It is noted that under the CIM Definition Standards, the completion of a pre-feasibility study is the minimum prerequisite for the conversion of Mineral Resources to Mineral Reserves. The JORC Code 2012, which came into effect on 1 December 2013, prescribes completion of a pre-feasibility study as a minimum prerequisite to declare an Ore Reserve (the JORC equivalent of a Mineral Reserve); however this requirement of the JORC Code does not come into effect until 1 December 2014.

Mineral Reserves at Lihir comprise the Lihir open pit Mineral Reserve and surface ore stockpiles. The Mineral Reserves have been prepared under the direction of Competent Persons under the JORC Code using accepted industry practice and have been initially classified and reported in accordance with the JORC Code. The Mineral Reserves are reported at 31 December 2013.

There are no material differences between the definitions of Proven and Probable Mineral Reserves under the CIM Definition Standards and the equivalent definitions in the JORC Code. The Lihir Mineral Reserves comply with the CIM Definition Standards.

15.2 Mineral Reserve Assumptions

15.2.1 Commodity Prices and Exchange Rate

Lihir Mineral Reserves were estimated using a gold price of US$850 per oz to define pit limits, which was completed in June 2011 and has not been updated. There was no contributing revenue from any other minor elements. Selling costs of US$4.66 per oz for refining, 2.0% for royalties and a 0.25% mining levy were applied to estimate the revenue received. Mineral Reserves within the final pit limits were reported for December 2013 using a cut-off grade based on an updated gold price of US$1250 per oz and updated selling costs of US$5.81 per oz for refining. For December 2013 reporting, royalty and mining levy remained consistent with June 2011 assumptions.

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15.2.2 Ore Processing Rates and Metallurgical Recovery

The installed capacity of the Lihir ore processing facilities to approximately 12Mtpa, with further upgrades planned to increase capacity to 15Mtpa. Newcrest has forecast a reduction in unit fixed processing costs as a result of the increased throughput of the ore processing facilities. This has been factored into the Mineral Reserve estimation process in the form of cut-off grade calculations and reduced ore processing costs.

Mineral Reserves were estimated using ore processing recovery estimations completed by the ore processing team and provided as a series of recovery formulae. Recovery relationships are complex and were converted to a simplified linear relationship for use in pit optimization software. Newcrest has assumed for pit optimization that ore processing recoveries will be improved by an additional 1% of recovery through process improvements as a result of the plant expansion.

15.2.3 Operating Cost Estimates

The mine design that supports the Mineral Reserves has been based on the Life of Mine (LOM) plan developed specifically for Mineral Reserve reporting. Operating cost estimates used in the preparation of the mine design supporting the Mineral Reserves have been developed from the same LOM plan.

15.2.4 Cut-off Grade

The Mineral Reserves comprise all mineralized material, that when delivered to the pit rim, has a recovered value greater than the cost of all of the downstream processes, including the expected fixed site costs that are projected to be applicable at the time the material is processed.

Lihir Mineral Reserves are reported at a cut-off grade of 1 g/t Au.

As the Lihir operation is constrained by the ore tonnes that can be processed by the mill, the lower grade fraction of ore is currently stockpiled in long term stockpiles and the higher grade fraction processed through the mill. As a result, the majority of low grade stockpiles are expected to be processed at the end of the mine life when mining operations have been completed. The cut-off grade for this material has therefore been calculated based on the estimated costs of a small reclaim fleet re-handling ore from long term stockpiles for processing through the mill.

15.3 Lihir Mineral Reserve

15.3.1 Mineral Reserve Estimate

The December 2013 Lihir Mineral Reserves are based on the Mineral Resource model used to prepare the December 2013 Mineral Resource estimate and a LOM plan prepared specifically for reporting Mineral Reserves. The December 2013 resource estimate is described in Section 14. The Mineral Reserves as at 31 December 2013 are shown in Table 15.1.

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Table 15.1 Lihir Mineral Reserve Estimate at 31 December 2013

Mineral Reserve Classification Tonnes (Mt)

Gold Grade (g/t)


Stockpiles Proven Reserve 100 2.2 7.2 Probable Reserve – – –

Lihir Pit Proven Reserve – – – Probable Reserve 291 2.3 21.8 Total 391 2.3 29.0

Notes: 1. Cut-off grade of 1 g/t Au based on a gold price of US$1,250/oz 2. Rounding may cause apparent computational discrepancies in totals

The Proven Mineral Reserve estimate is generated from estimates of the tonnage and grade of stockpiled ore that is classified as a Measured Mineral Resource. There are currently numerous separate stockpiles that are recorded and monitored using mine site recording software and reconciled through regular stockpile surveys. Most of the stockpiled ore is within long-term ore stockpiles, with the three largest stockpiles at Kapit Flat, Minifie and Kapit North containing approximately 80% of the tonnes. The economic viability of the Lihir stockpiles has been assessed using the same approach applied to the in-situ pit reserve. This cut-off grade approach accounts for the calculated metallurgical recovery based on the grade of each stockpile and the long term site cost base assumptions including reclaim, ore processing, site general and administration and relevant sustaining costs.

The Probable Mineral Reserve estimate is generated from Indicated Resources within the final pit limits identified in the LOM plan. The LOM plan has been developed from pit optimization, phase and final limits designs, and a detailed production schedule, in which multiple phases have been used to derive a practical production schedule over the life of Lihir. Multiple phases operate at any time within the Lihir pit to provide a continuous feed blend to the ore processing plant.

The planned final dimensions of the pit are approximately 2,000m by 1,400m, with a final depth of approximately 300m below sea level. A plan showing final pit limits and the location of each phase is shown in Figure 15.1.

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Figure 15.1 Lihir Final Pit Limits and Phase Locations

The Lihir Mineral Reserve has been prepared using accepted industry practice and has been classified and reported in accordance with the guidelines of the JORC 2012 Code. The mine planning processes used for the estimate are logical and well documented.

Inferred Mineral Resources have not been included within the Lihir Mineral Reserve.

15.3.2 Production Reconciliation

Lihir Mineral Reserves are supported by close reconciliation of tonnes (-5%), gold grade (+2%) and contained gold ounces (-3%) between the mine plan depletion and mill production. A summary of recent reconciliation for the period January 2012 to December 2013 is shown in Table 15.2.

N

1,000 m

N

1,000 m

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Table 15.2 Lihir Production Reconciliation

Tonnes (Mt) Gold Grade

(g/t) Contained Gold (Moz)

Resource Model Depletion

Total Mined Depletion 27.41 2.38 2.10

Total As Mined

Total Mined Depletion 26.60 2.47 2.11

Mill Reconciled

Total Milled (Mined & SP Reclaim) 26.06 2.43 2.03

Variance (% Resource Model to Mill Reconciled)

Total Variance -5% +2% -3%

15.3.3 Estimation Procedure

Lihir is a mature gold mining operation that has been in production since 1996. Inputs to mine planning and pit optimization are based on operating practice and regularly reviewed mine planning forecasts. Information is available to confirm mine planning parameters in the following areas.

• Orebody model to production reconciliations are available to calibrate the resource model against past production and determine how well previous models were able to forecast mine production. Reconciliations showed that no additional ore loss and dilution needed to be included within the model used to generate Mineral Reserves.

• Equipment operating parameters such as availability, utilization, operating efficiency, required ancillary equipment hours and equipment productivity are available to determine annual operating hours and annual production rates. These parameters were used to determine mine production levels and equipment requirements in the LOM plan used to support the Mineral Reserve ultimate pit design.

• Operating costs such as equipment operating and maintenance costs, labour costs, explosives costs, dewatering and other associated costs are available and were used to estimate operating costs. These operating costs have been used in the LOM plan used to support the Mineral Reserve ultimate pit design.

The Mineral Reserve process for Lihir follows industry standard processes, the key steps are:





• Final limit and phase pit designs are interrogated for tonnes and grades applying appropriate cut off grades, and exported to mine scheduling software.

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The pit optimization process underpinning Mineral Reserve estimation is well documented. An independent review of the Reserve process was completed after the last update of the ultimate pit limit in June 2011. This report concluded that the Reserve was prepared using accepted industry practice and is classified and reported in accordance with the JORC Code.

Inferred Mineral Resource blocks were included within the pit optimization, but were not reported within the Mineral Reserve. Inferred Mineral Resources constitute approximately 1% of tonnes within final pit limits above the cut-off grade.

15.4 Comparison to Previous Mineral Reserve Estimate

Newcrest has reported a Mineral Reserve estimate for Lihir as at 31 December 2013. Newcrest has completed a detailed review of all production sources to take into account the Newcrest’s current view of long term metal price, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades and physical mining parameters.

This has resulted in the most marginal ounces being removed and these are reflected in changes to Mineral Reserves. The Mineral Reserves for Lihir as at 31 December 2013 includes a material reduction of approximately 3.7Moz of gold to 29Moz of gold, compared with the 31 December 2012 estimate of 32.7Moz of gold.

15.5 Factors Affecting the Mineral Reserve Estimate

The relevant factors that could materially affect the Lihir Mineral Reserve include:

• Cost assumptions

• Resource model confidence

• Mining assumptions

• Metallurgical assumptions

• Infrastructure assumptions

Capital and operating costs have been determined based on the current operating cost base modified for changing activity levels and reasonable cost base reductions over the life of the mine. Ore dilution and recovery loss is specifically accounted for in this resource modeling process and no additional mining dilution or recovery factors are applied to the Lihir Open Pit Mineral Reserve estimate. This assumption is supported by the actual reconciliation between resource model and mill performance at Lihir project to date being within an acceptable uncertainty range for the style of mineralization under consideration. Metallurgical inputs to the Mineral Reserve estimate are generally consistent with current operating practices and experience. Sensitivity analysis was conducted on the key input parameters of costs, grade and recovery which confirmed the estimate to be robust.

The Lihir is an operating mine and has the most of the necessary infrastructure in place for its continued operation to support the Mineral Reserve. Additional infrastructure is required for the Kapit orebody for the construction of a coffer dam across Luise Harbour and relocation of some existing site infrastructure. Modifications to the comminution circuit to

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achieve a 15Mtpa processing rate and power station upgrades are also required; allowances for these activities have been included in the economic evaluation of the Mineral Reserve estimate.

There are agreements in place with landholders of Lihir. There are community and compensation agreements in place with landowners at Lihir for the purposes of current and future operations. Those agreements are subject to periodic review, with current review on-going. Naturally occurring risks that might have a material impact upon the Lihir Mineral Reserve are discussed in the risks section of Newcrest’s annual operating and performance review and include the potential impacts of seismic activity.

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16 MINING METHODS

16.1 Mining Operations

Production mining operations at Lihir are conducted by Newcrest using their own equipment fleet and workforce. A separate mining contractor operation using a smaller pioneering fleet is developing new areas on the steeply dipping caldera slopes. Production mining uses a fleet of 500t class hydraulic face shovels loading into 135t rear dump haul trucks. Ore and waste is drilled and blasted on 12m benches and mined in a single pass, except where excessive heave has required a second lift for safety reasons. The ground is frequently too hot for conventional explosives, requiring high temperature blasting products and specialized blasting procedures for mining in hot ground.

Ore is mined to stockpiles segregated by gold and sulphur grade. Ore is blended off ROM stockpiles by front end loaders and 90t haul trucks into the crusher according to a blend plan provided by the ore processing plant. An additional small stockpile of crushed ore is maintained by a contractor with a mobile crusher in case of crusher breakdowns.

Waste rock from the mine is either dumped into 1,500t barges for off-shore submarine disposal or stockpiled for used as construction fill. Submarine disposal is carefully planned and controlled to achieve a continuous rill slope along the steeply dipping sea floor and prevent uncontrolled slumping triggering a tidal surge event.

The current mining fleet used at Lihir is listed in Table 16.1.

Table 16.1 Lihir Current Mine Production Fleet

Equipment Type Description Size Number Mine Production

Loading Equipment

Terex O&K RH200 500 t 2 Terex O&K RH120 250 t 1

Caterpillar 992 front end loader 600 kW 3

Haul Trucks Caterpillar 785 135 t 15

Dozers Caterpillar D10 430 kW 6 Graders Caterpillar 16H 220 kW 1 Ancillary Caterpillar 385 excavator 85 t 1 Drills Ingersoll Rand D45 – 3 Barges Bottom dump barge 1,500 t 2

Contractor

Loading Equipment Various 190 t 1 Various 120 t 1

Haul Trucks Caterpillar 777 90 t 5 Various 40 t 10

Mobile equipment fleet requirements fluctuate over the life of the mine and are driven by waste stripping of future phases and scheduled stockpile re-handle movements. Appropriate cost provisions are included in the Mineral Reserve process to cover these fluctuations.

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The grade control of ore is managed by sampling blast-holes. Assay analysis of the samples is completed through an on-site laboratory. Ore block tonnes and grades are uploaded into a truck dispatch system which tracks mine production and records the tonnes and grades of ore blocks mined for orebody reconciliation and ore stockpile monitoring in commercial reconciliation software.

16.2 Mine Schedule

The Lihir pit comprises three separate mining areas in Minifie, Lienetz and Kapit. These areas have been further sub-divided into 7 separate zones for mine scheduling purposes. Current mining at Lihir is focused on the Minifie and Lienetz pits, with future mining extending to the Kapit mineralized area that is adjacent to the existing pits. Development of this pit requires relocation of some of the existing low grade ore stockpiles and construction of a coffer-dam within Luise Harbour.

Mining production rates are determined by the throughput of the ore processing plant. The mining schedule has been completed to target high free cash flows. This is achieved by balancing timing of low cost stockpile reclaim against development timing and rate of future mining phases to provide high grade ore feed to the ore processing plant. This assumed mining operation projected date for completion is 2047 and the ore processing operation projected date for completion is 2049.

Phase 9 is currently being mined with stockpile reclaim making up mill feed requirements. On average approximately 30 Mt of material is planned for mining and stockpile re-handle each year with fluctuations driven by waste stripping of future phases and stockpile re-handle movements. The remaining LOM strip ratio is about 2:1 (waste:ore).

16.3 Geotechnical, Geothermal and Hydrological Considerations

Pit geotechnical control is through a complex pit slope model containing 53 geotechnical zones across the three pit areas based on lithology, structure, and level within the pit. Inter-ramp angles vary from 12 to 55°, with batter angles from 25 to 70°. Slope failures have occurred, including a major failure of the caldera wall in the Kapit area in 2005. Geotechnical design is undertaken by independent engineering consultants and is independently reviewed on an annual basis.

Horizontal pit wall holes are drilled to allow dewatering and controlled venting of steam to depressurize pit walls. The mine undertakes probe hole drilling to identify cavities within the rock mass and measure rock temperatures prior to blasting and for input to the development of a temperature block model for the deposit. Extensive prism, pit face radar and geotechnical monitoring of pit slopes and seismic monitoring is also undertaken. Earthquake, tsunami and landslide events have been recorded at the site.

Lihir receives high annual rainfall and has extensive groundwater volumes which are managed through a pit dewatering program and surface water management facilities incorporated into pit designs. Pit dewatering bores are located outside the pit or on pit berms to intercept as much groundwater as possible and minimize groundwater seepage into the pit. Groundwater is highly saline and is discharged into the ocean.

Pit perimeter diversion drains are installed on a 50m wide drainage berm sloping at 3% to intercept as much surface runoff as possible from the caldera, which is diverted around the

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mining operation and into the ocean. Remaining surface runoff, groundwater seepage and rainfall is collected by 16m wide drainage berms incorporated into pit designs and directed into sumps. Water is then pumped by in-pit dewatering pumps to external holding dams before discharge into the ocean. In-pit water is acidic from contact with sulphide rocks.

Geothermal depressurization for Kapit pit mining has been underway since 2004 using a program of steam relief and monitoring wells. Pressure trends to date indicate that depressurization will be sufficient to allow mining to proceed in accordance with current life-of-mine plans. Maintenance of steam relief wells is critical to the successful mining of the Kapit pit

Newcrest maintains a Geo-hazard Management Plan to identify and manage the various geotechnical and geothermal hazards on site. The plan recognizes and details controls for hazards such as:

• Earthquakes and tsunamis

• Slumping from sub-sea barging operations

• Slumping of pit walls

• Slumping of ore stockpiles

• Geothermal outbursts

• Cavities

• Inrush of water from the sea or perimeter drains

16.4 Future Plans

Future upgrades to the ore processing plant are required to reach capacity of 15Mtpa, additional power generation capacity is also required. Expansion of the mine into the ROM area will require the relocation or construction of new maintenance workshops and mine offices.

Later expansion of the mine into the Luise Harbour will require the construction of an off-shore coffer-dam to allow the enclosed portion of the harbour to be dewatered. The coffer-dam will be a significant structure, designed to be approximately 200m wide and will be engineered to cope with earthquake and tsunami events. A 100m wide buffer zone between the toe of the coffer-dam and crest of the pit has been included in the design. The final design for the coffer-dam will be completed by an independent specialist engineering firm and will be independently reviewed.

Infrastructure costs are considered during mine planning by including the cost for construction or relocation of significant infrastructure before that mining area can be developed. Examples of this are where the relocation of a stockpile needs to be included before a mining area can begin or where the coffer-dam needs to be constructed before pit development in that area can proceed.

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17 RECOVERY METHODS

17.1 Introduction

Gold present in ore from Lihir consists primarily of sub-micron size particles in sulphide minerals and is therefore refractory to conventional gravity and cyanidation gold recovery techniques. The sulphide minerals must be oxidized to release the gold to make it amenable to cyanide leaching. The oxidation process selected for treatment of ore at Lihir is pressure oxidation whereby the ore is oxidized as a slurry using nearly pure oxygen. Heat evolved from the oxidation is controlled within operating limits to maximize the oxidation rate.

The Lihir gold processing facility commenced operations in 1997 treating High Grade Ore (HGO) with lower grade ore stockpiled for later processing. Gold production has increased progressively since start up. The original process plant flow sheet consisted of ore grinding followed by auto-thermal whole ore oxidation in three pressure autoclaves, and then recovery of gold from washed oxidized slurry using conventional cyanidation techniques. The plant facilities were expanded in 2007 with the addition of a flotation plant which allows the sulphur content of lower grade ore types known as flotation grade ore (FGO) to be increased in autoclave feed. A second flotation plant was installed in 2013.

A major plant expansion approved in 2008 involved the installation of one additional large autoclave as well as additional crushing; grinding, thickening, oxygen and cyanide leach plant facilities. Figure 17.1 presents the current process flow sheet, including all the additional processing operations added as part of the plant expansion.

Figure 17.1 Simplified Process Flow Sheet

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17.2 Existing Operations

17.2.1 Crushing and Milling

Ore is crushed in two primary crushing circuits. The first circuit consists of a 42-65” gyratory crusher and Abon toothed rolls crusher. Competent ore is crushed in the gyratory crusher and softer ore types in the Abon crusher. Both crushers discharge on to an overland conveyor up to a radial stacker for stockpiling ahead of the grinding circuits, providing mainly high grade ore to the third milling circuit (known as HGO2 circuit) installed as part of the major plant expansion.

The second primary crushing, installed for the plant expansion, consists of two jaw crushers operating in parallel. This circuit typically receives more competent lower grade ores and supplies the FGO and HGO mills via a separate overland conveyor and radial stacker.

Summarizing, there are now three grinding circuits. One circuit (HGO2) treats high grade ore that is fed direct to the downstream oxidizing autoclaves, The second and third circuits (FGO circuit and HGO circuit) grind lower sulphur grade material known as “flotation grade” ore which feed the flotation plants. All three grinding circuits have a primary semi-autogenous grinding mill (SAG), followed by a secondary ball mill in closed circuit with classifying hydrocyclones. The HGO and HGO2 circuits include two cone crushers for crushing pebbles exiting the SAG mill. The current capacity of the HGO, FGO and HGO2 mills is approximately 3.5, 4.0 and 4.5 Mtpa respectively, with an optimization program in place to increase further. Ground ore is thickened and washed with raw water to minimize chloride concentration in autoclave feed.

17.2.2 Flotation

Ground flotation grade ore from the FGO circuit Mill is subjected to simple bulk rougher flotation in a single roughing stage consisting of a bank of five 150m3 flotation tank cells (2007 installation). Ground flotation ore from the HGO circuit Mill is processed by five 300m3 flotation tank cells (2013 installation). The mass recovery to flotation concentrate is high at approximately 35-40%. The flotation concentrate is thickened to 50-55% solids (%w/w) and then blended with direct ore slurry to achieve the required target autoclave feed sulphide grade.

17.2.3 Pressure Oxidation

Thickened ore slurry is pumped to the three parallel autoclave circuits, and a fourth larger autoclave installed as part of the last major plant expansion. The fourth autoclave is 2.2 times the capacity of the existing three autoclaves. Conventional gold processing Sherritt autoclave technology at a temperature of 205°C and a pressure of 2,650 kPa is utilized. Feed slurry is first preheated in heat recovery vessels before being pumped under pressure to each of the six-compartment agitated autoclave vessels. Pure oxygen (O2) from four operating cryogenic oxygen plants (includes a 70tph oxygen plant installed as part of the major plant expansion), is injected into the autoclaves to oxidize approximately 90% of the contained sulphide minerals. Each autoclave has a heat recovery circuit involving a single stage of steam flashing and the flashed steam is used in the direct contact pre-heater vessel.

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17.2.4 CCD Washing, Neutralization and Gold Recovery

Oxidized slurry passes through two trains of two stage counter-current decantation (CCD) circuit, where it is washed with process water and seawater as required minimizing slurry acidity. Note that a second train of CCD washing, neutralization, CIL and tailings disposal system was installed as part of the major plant expansion to handle the additional feed from the fourth autoclave.

The washed slurry is then neutralized with lime slurry prepared from slaking imported quicklime, and then gold is recovered from the neutralized slurry by cyanide leaching using conventional CIL technology and a series of agitated tanks. The slurry is conditioned with lime in the first tank and cyanide is added to the second tank. The slurry is then agitated with granulated carbon in the remaining tanks and passes through the tanks while the carbon is retained by screens.

Loaded carbon from the CIL circuit is stripped of gold in an elution system. The gold is eluted from carbon using hot caustic/cyanide solution and the carbon is then rinsed with water. The resulting gold solution is circulated through electro-winning cells where gold is recovered through electroplating to form a gold sludge. The sludge is dried and then smelted to produce doré bars which are shipped to a refinery. Barren carbon is regenerated in a rotary kiln.

17.2.5 Residue Tailings

The CIL leach residue tailings are detoxified by formation of strong metal complexes such as ferrocyanide, and through dilution with seawater (cooling water return) in the junction box upstream of the de-aeration tank.

Under these conditions weak acid dissociable cyanide (CNWAD) converts to stable ferrocyanide. The tailings gravitate to a common disposal system which also collects the flotation tailings; remaining CCD wash water as well as oxygen plant and power plant cooling water return streams. The tailings disposal method is by deep sea tailings placement (DSTP). The combined stream flow discharges through a de-aeration tank to the ocean via a pipeline outfall at a depth of 128 m below sea level. The depth of the outfall discharge is below the surface mixing layer of the ocean. Being denser than the receiving seawater, the tailings gravitate down the steep submarine slope.

17.2.6 Process Reagents

Key processing reagents are lime and cyanide. Quick lime is imported in dedicated shipping containers. Cyanide is imported as sodium cyanide briquettes in one tonne bags and then dissolved in water for distribution to the cyanidation circuit. Other minor reagents are for flotation (collector and frother) and flocculent for thickening. Grinding balls are imported in sea containers and stored in bunkers.

17.3 Plant Performance

Actual plant operating performance for the 12 months ending June 2013 is presented in Table 17.1.

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Table 17.1 Lihir Processing Performance for the Year Ending 30 June 2013 Parameter Value

HGO Ore Milled Mt 3.083

Au g/t 3.61

FGO Ore Milled Mt 2.813

Au g/t 3.21

HGO2 Ore Milled* Mt

Au g/t 1.044 3.44

Overall Gold Recovery % 85 Gold Production Moz 0.649

* The HGO2 Mill was commissioned during the year and does represent a full production year

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18 PROJECT INFRASTRUCTURE

18.1 Mine Infrastructure

Mine facilities, including ROM ore stockpiles, crushing facilities, pit dewatering wells and mine support facilities, are located in the Ladolam Creek valley, immediately to the north of the ultimate pit boundary.

The ore processing plant is on the northwestern side of Putput Point on the relatively flat land adjacent to the shoreline and on the more gentle lower slopes of the eastern end of the caldera.

Support buildings include a main office, laboratory, training building, warehouse and bond store, plant workshop, and an emergency and security services building. An environmental laboratory has been built, and field and laboratory equipment provided for air and water sampling, steam gauging, sediment sampling, fish sampling, weather monitoring, oceanographic monitoring and industrial hygiene measurements.

Haul roads join the ultimate pit boundary to the crushing facilities and ROM stockpiles at Ladolam and to the barge loading dock in Luise Harbour. The haul road to that dock extends northwards along the shoreline to the low grade ore stockpile for Kapit.

Haul roads are designed for 140t rear dump trucks, and have a width of 23m between berms or shoulders. Road construction comprised a crushed rock base course on a sub-base of broken weak rock or coronous material.

Facilities for handling and transport of the various fuels, reagents, and consumables required by the processing plant are located near the general ship berth and the processing plant.

Heavy fuel oil (HFO) discharges from oil tankers to two bulk storage tanks using the supplying tanker's pumps. These HFO tanks measure 36.6m in diameter by 14.6m high and have a total capacity of 26,500 tonnes. An estimate of average HFO consumption is 205t/d.

Using the supplying tanker's pumps, distillate (diesel fuel oil) discharges to two bulk storage tanks of 18.3m diameter by 14.6m high. These tanks have a total capacity of 6000 tonnes. Average distillate consumption is estimated at 70 t/d.

18.2 Power

Power is produced at site by a combination of HFO reciprocating engines and geothermal steam turbines.

The HFO power supply consists of twelve 6.3MW units, and ten 8.8MW units

Geothermal power commenced in 2003. The initial geothermal plant was a pilot project consisting of a single 6MW back pressure steam turbine. The success of this pilot plant led to a 30MW geothermal power station commissioned in 2005 and then a 20MW extension which was commissioned in 2007. The plant was designed and built by external contractors and is now operated and maintained by mine power station staff. The steam wells supplying the station are located around the mine pit area. Steam supply has declined in recent years with no active drilling program to replace steam supply.

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The existing total mine site power demand is around 105MW with geothermal power providing approximately 20MW and the balance from the HFO-fired generators.

18.3 Water

Fresh water required for mine and processing operations, as well as township requirements is sourced from a small weir on the Londolovit River approximately 8km north of the processing plant. The water storage capacity behind the weir is relatively small, but due to the consistent rainfall all year the weir continuously overflows and provides water to downstream users.

Raw water is primarily utilized in the grind thickeners to facilitate washing of ground ore for control of ore chloride concentrations. Four large turbine pumps supply the plant via a pipeline which discharges to both the plant raw water storage tank and the thickener circuit. Supply capacity reduces under short term drought conditions. Sea water substitution measures are implemented under drought conditions.

Following completion of the major plant expansion, and a change in the mine plan, the raw water demand has increased marginally to 4,000 m3/hr. The additional supply requirement has been achieved with the installation of a second pipeline to the existing weir and connection of a natural fresh water spring within the caldera. This spring also provides some drought risk mitigation.

18.4 Public Roads

A public road was constructed from the village of Putput to the accommodation centre at the Londolovit plantation, and from there to the airstrip at Kunaie and on to the limestone quarry at Tanandon. Existing road alignment between Putput and Londolovit was used where practicable, with the road widened and strengthened to carry passenger vehicles, buses and trucks.

A public road from Putput to Palie Mission has also been widened and improved, and an island ring road has been completed from Palie Mission to Kunaie village. Public roads are 6.5m wide, with a coronous pavement.

18.5 Port Facilities

Port facilities are installed to service oil tankers, general cargo ships, passenger ferries and work boats. Putput wharf can berth general cargo ships of up to 13,000 dead weight tonnes (DWT), and oil tankers of up to 12,000 DWT, with draughts to 10m. The wharf is 78m long and is constructed from steel sheet piling. General cargo ships breast against the wharf, from where most holds are accessible without warping. For fuel unloading at the wharf, oil tankers secure in position from mooring dolphins constructed on the edge of the coral reef away from each end of the wharf.

Small boats with a draught up to 2m berth in a harbour excavated in the coral platform. Several small boats service the western side of Lihir Island and the outlying islands of Mahur, Masahet and Mali. Permanent marine facilities have been constructed at these locations for passenger loading and unloading.

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18.6 Air Services

The Lihir airstrip is located at Kunaie and has a runway 1,200m long and 23m wide, with an unsealed coronous surface. It complies with the requirements for a standard PNG Class X airstrip and is suitable for use by a variety of small passenger aircraft up to 40 passengers.

The airstrip includes a taxiway and aircraft parking area for up to three aircraft. Runway lighting is provided for night operations, and there is a non-directional beacon to aid navigation.

A terminal building next to the aircraft parking area contains arrival and departure facilities and baggage handling equipment. Fuel storage and distribution facilities, equipped with regulation fire-fighting equipment, are sited adjacent to the aircraft parking area.

18.7 Housing

The Londolovit accommodation centres provide housing for senior staff living on site with their families and a number of government employees. Single persons’ quarters are provided for commuting personnel. Kitchens and dining rooms, with toilet blocks, laundries, and offices have been constructed to service the accommodation centre.

Raw water is pumped from the Londolovit valley to a tank and water treatment plant for filtration and chlorination, before being distributed throughout the accommodation centre via a network of underground water mains. Fire protection is by a series of fire hydrants on the potable water mains, with pressure boosting during fire-fighting by diesel and electric fire pumps.

Sewage disposal is through underground gravity sewers, which flow to two sewage pumping stations. The sewage is then pumped to a packaged treatments plant, one located in Upper Londolovit and one near Lakunbut Creek. The treated effluent drains through a gravity pipeline extending from the treatment plant to the shoreline near the Lakunbut Creek outlet and continuing as a sub-sea pipeline to a depth of 30m.

Power supply is distributed by overhead power lines, and street lighting and area lighting is provided throughout the accommodation centre area.

Recreation facilities comprise a recreation centre, two tennis courts, a swimming pool, a general purpose sports field, a basketball court, two gymnasiums, a squash court, children’s playground, and barbecue areas.

Community facilities have been constructed including:

• Police station.

• Local and National Government Offices.

• Community Relations and Business Development Offices.

• Business Development area including supermarkets, maintenance shops, office spaces, and general trade.

• Bank, post office, and amenities block.

• Open market.

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• Medical centre consisting of an eight-bed ward, a two-bed ward, an X-ray and treatment room, a trauma receival area, delivery room, a dental treatment room, pharmacy, and two consultation rooms.

• Central bus station.

• International primary school.

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19 MARKET STUDIES AND CONTRACTS

Lihir produces gold doré containing 91% to 97% gold, 1.5% to 5.5% silver and 3% to 5% base metals. The bullion bars are securely transported by air freight from the mine site to a refinery for further processing.

Within the Asia-Pacific region, there are a number of acceptable refineries which have the capacity to refine doré; the West Australian Mint refinery (WAM) in Perth, WA, W.C Heraeus – Precious Metals in Hong Kong, Logam Mulia in Indonesia and new refineries in India as well as a number of established refineries in Europe and the Middle-East. Currently WAM in Perth is the preferred refiner.

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20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT

20.1 Statutory Environmental Approvals and Compliance

Mine development and operations (i.e. processing) at Lihir commenced in 1997 in accordance with the agreed development plans stipulated in the approved Proposal for Development submitted by the company, which forms the basis of the Mining Development Contract (MDC) and the subsequently issued Special Mining Lease (SML 6). The original Environmental Plan associated with mine development was completed in 1995 (NSR, 1995) and approved by the PNG Environment Minister.

The mine prepared an Environmental Impact Statement (EIS) under the Environment Act (2000) to incorporate all existing environmental permits into two new permits, including an extension to the mine life of 14 years out to 2039, increases to total ore and waste mining tonnages, increases to total tailing disposal and an enlarged mine footprint (LGL, 2005). The EIS was subsequently approved by the PNG Department of Environment and Conservation (DEC) in 2008, with new environmental permits issued for mine discharges and water abstraction being issued in October 2008 (DEC, 2008a and 2008b).

Newcrest completed a major plant upgrade in 2013 to expand the production of Lihir which did not require any change to the current rate of mining or to the extent of the pit footprint. Instead, additional ore processing was made possible by increasing the rate of processing for stockpiled low-grade ore and increases to tailing disposal. An EIS for the expansion was submitted to the PNG DEC (Coffey, 2009) and was approved by the PNG Environment Council in February 2011. The existing discharge and abstraction permits were updated in March 2012.

A regulatory approved Environmental Management and Monitoring Plan is used to manage and monitor the predicted environmental impacts associated with the project (LGL, 2013). In addition, an annual environmental report is prepared and submitted to the PNG DEC (LGL, 2013). Newcrest has an operating environmental management system (EMS), which is ISO14000 certified.

20.2 Waste and Tailings Management

Lihir operations comprise an open pit mine, ore processing plant, and associated supporting infrastructure. Higher-grade ore is processed via pressure oxidation and carbon-in-leach cyanidation methods, with lower grade ore stockpiled for later processing. Lihir operates an ISO 14001 certified Environmental Management System (EMS), which assists in the planning and implementation of environmental management measures.

Lihir uses deep sea tailings placement (DSTP). In view of the heavy rainfall typically experienced on Niolam Island, the lack of suitable area for a tailings storage facility and the high seismicity of the region, DSTP was the preferred tailings placement method for Lihir. The plant tailings are premixed with sea water within the confines of the mining lease before being placed offshore. Baseline studies were undertaken prior to the approval by PNG environmental authorities and commencement of the DSTP. Regular monitoring is undertaken to verify the operational performance of the system and are subject to the regulatory criteria established by the PNG Department of Environment and Conservation. Waste rock from the mine is either used for construction purposes or transported in barges for off-shore submarine disposal. Submarine disposal is carefully planned and controlled to

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achieve a continuous rill slope along the steeply dipping sea floor and to prevent uncontrolled slumping triggering a rise in water levels.

Given that the waste rock and tailing materials contain sulphide minerals (including pyrite), submerging these materials prevents oxidation and potential generation of acid and metalliferous drainage (ARD).

Newcrest has conducted numerous studies to investigate the performance of the DSTP system including potential impacts from mine derived sediment, waste rock and tailing disposal (CSIRO, 2009). The PNG Government has also conducted studies on the DSTP system independently of Newcrest (SAMS, 2008). The studies have found that the system performs according to approved environmental permits and regulatory monitoring requirements.

Management of ARD is an ongoing focus for the mine as part of an integrated planning process. There is potential for ARD to be generated from medium term storage of ore stockpiles prior to processing. This requires management of runoff and drainage to ensure discharges comply with environmental and operating permits. Medium and long term planning is applied to process ore stockpiles as soon as practicable to help mitigate potential environmental impacts and realize economic benefits.

Current monitoring data indicates that ore stockpiling at the site and exposure of sulphidic ore and waste rock at the pit wall areas does not appear to result in any significant increases in acidity or metal concentrations in Luise Harbour, possibly due to interaction with groundwater, geothermal brine and seawater at the site.

20.3 Community and Social Issues

Newcrest’s ongoing commitment to sustainable development on Lihir Island is encapsulated in its Community and Environment Policy (2013). Commitments to the local community around compensation and community development are embodied in a revised Integrated Benefits Package (IBP) Agreement signed in 2007, which incorporates the Lihir Sustainable Development Plan (LSDP). The IBP is currently being reviewed. Final terms of the revised agreement are still being negotiated. The LSDP is the overall implementation plan and provides a framework for future development initiatives to be aligned and focused over the life of the project. Through these actions, Newcrest has made a strong commitment to support the local population and to prepare the community for a post mining environment.

Newcrest has in place a Social Impact Monitoring Program (LGL, 2009) via which the company monitors social issues related to the mine and uses the reports to develop mitigation strategies in consultation with the local community. The overall approach to social and community related issues on Lihir align well with the requirements of the International Council for Mining and Metals (ICMM) performance standards and Equator Principles (EPFI, 2009).

Newcrest has established a good working relationship with the local communities and occasional disruptions due to disputes are relatively minor in nature, although there have been infrequent issues that have been more significant in terms of resolution.

20.4 Mine Closure

In compliance with regulatory requirement the company commissioned a conceptual mine closure plan in 1995, which was submitted to the PNG government, and which has been

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updated three times since (LMC 1999, LGL, 2005 and 2011). The latest of these studies indicates that at mine closure the harbour waste platform/coffer-dam will be left in place but modified to allow flooding of the pits with tidal flushing of the final void.

Ore stockpiles will be processed and stockpile footprint areas will be remediated and rehabilitated. The LSDP flags the potential for transfer of mine assets to the community or the State on closure, subject to negotiation at the time. The importance for closure planning is that both liability and risk are extinguished as soon as title is restored to the State, following at least a five year post-closure monitoring program.

The mine rehabilitation and restoration provision for the Newcrest Group at 30 June 2013 was A$317M.

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21 CAPITAL AND OPERATING COSTS

21.1 Historical Costs

Lihir cash costs for the year ending June 2013 averaged A$689/oz.

Recent unit operating costs for Lihir for FY2011 to FY2013 are set out in Table 21.1, with actual operating costs for FY2013 in Australian dollars presented in Table 21.2. Table 21.3 presents historical capital costs in United States dollars for FY2011 to FY2013.

Table 21.1 Historical Production and Costs per Ounce of Gold Produced

Item Units 2011 2012 2013

Gold Production (oz) 790,974 604,336 649,340

Mine (A$/oz) 252 339 331

Mill (A$/oz) 192 271 381

Administration and Others (A$/oz) 175 252 290

Third Party Smelting Refining and Transportation (A$/oz) 4 4 4

Royalties (A$/oz) 30 36 32

By Product Credits (A$/oz) (1) (1) (1)

Waste stripping and Ore Inventory Adjustments (A$/oz) (233) (342) (349)

Cash Cost (A$/oz) 419 560 689

Depreciation and Amortization (A$/oz) 162 165 206

Total Cost (A$/oz) 581 725 895

Table 21.2 Lihir FY 2013 Actual Operating Cost

Lihir Island Unit FY13 Actual

Gold Production koz 649

Total site cash costs A$M 650

Waste stripping and ore inventory A$M (227)

Third party smelting refining and transporting A$M 3

Royalty A$M 21

Depreciation A$/oz 206

Table 21.3 Historical Capital Expenditure

FY 2011*

Actual US$M

FY 2012 Actual US$M

FY 2013 Actual US$M

Sustaining 197 231 304

Development 34 4 17

Feasibility 0 21 14

Expansionary 374 537 421

Total capital expenditure 605 793 756 *Relates ten month period of ownership

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21.2 Forecast Costs

FY2014 cost and capital guidance for Lihir, as released 12 August 2013, is shown in Table 21.4.

Table 21.4 Lihir FY 2014 Costs and Capital Guidance

Lihir Island Unit FY14 Guidance

Cash Cost (including by-product credits)1 A$M 670 – 735

On-site exploration expenditure A$M 1 – 2



Corporate, rehabilitation and other A$M 2 – 3

All-in sustaining cost A$/oz 965 – 1,060

Production Stripping2 A$M 140 – 155


Projects and development capital A$M 2 – 5

Total capital expenditure A$M 295 – 350 1 Costs assume AUD:USD 0.96, silver price US$22.0/oz 2 Duplicated above under All-in sustaining costs and under Capital expenditure

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22 ECONOMIC ANALYSIS

Lihir was developed in 1995 and is a well-established mining and ore processing operation.

In the reporting year to June 2013, the Newcrest realized gold price was A$1,550/oz. Lihir's cash cost of production for the same period was A$689/oz.

As a producing issuer Newcrest is not required to provide an economic analysis as laid out in Item 22 of NI 43-101 Form 1.

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23 ADJACENT PROPERTIES

There are no adjacent properties to Lihir and there is no other mining undertaken elsewhere on Lihir Island.

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24 OTHER RELEVANT DATA AND INFORMATION

No additional data or information is required to make the Report understandable and not misleading.

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25 INTERPRETATION AND CONCLUSIONS


Factors that may have a material impact on the Lihir Gold Mine include those discussed in the risks section of Newcrest’s annual operating and performance review which forms part of Newcrest’s Full Year Financial Results for the year ended 30 June 2013, which can be found on its website at www.newcrest.com.au and at www.sedar.com.

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26 RECOMMENDATIONS


In view of the nature of Lihir and the substantial Mineral Reserve inventory, no recommendations are included.

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27 REFERENCES

AMC Consultants (Canada) Ltd 31 December 2011 Technical Report on the Lihir Property. Papua New Guinea. NI43-101 Technical Report.

Coffey (2009). Environmental Impact Statement. Million Ounce Plant Upgrade Project. Report No. CR 235_50_V4 prepared by Coffey Natural Systems Pty Ltd for LGL Pty Ltd, October 2009.

CSA (2011). Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects, Form 43-101F1 Technical Report, and Companion Policy 43-101CP (The New Mining Rule). Canadian Securities Administrators, June 2011.

DEC (2004). Guideline for conduct of Environmental Impact Assessment and Preparation of Environmental Impact Statement. Information Guideline No. GL-Env/02/2004. Department of Environment and Conservation. Waigani, Papua New Guinea.

DEC (2008a). Environment Permit WD-L3 (191) issued to Lihir Gold under Section 65 of the Environment Act 2000 to carry out works within SML 6, ME73, ME72, ME71, ML126, LMP35, LMP38, LMP39, LMP40, ML125, LMP34 and LMP1, (the “premises”) on Lihir Island in New Ireland Province; and to discharge wastes into the environment from the premises while carrying out a Level 3 (Sub-category 17.1) activity associated with mining activities which require the issue of a Special Mining Lease under the Mining Act 1992. Issued 15 October 2008.

DEC (2008b). Environment Permit WE-L3 (143) issued to Lihir Gold under Section 65 of the Environment Act 2000 to extract water from surface and groundwater sources within the premises on Lihir Island in New Ireland Province while carrying out a Level 3 (Sub-category 17.1) activity associated with mining activities which require the issue of a Special Mining Lease under the Mining Act 1992. Issued 15 October 2008.

DEC (2008c) Social Impact Assessment Guideline. Department of Environment and Conservation. Waigani, Papua New Guinea.

Department of Attorney General (1995). Mining Development Contract for the Lihir Gold Project on Lihir Island, New Ireland Province. Department of Attorney General. Waigani, Papua New Guinea. 17 March 1995.

DoMP (1995). Grant: Special Mining Lease No. 6. Office of the Registrar of Tenements. Department of mining and Petroleum. Papua New Guinea. March 1995.

EPFI (2009). Equator Principles. A WWW publication accessed on 20 August 2011 from http://www.equator-principles.com.

EGi (2007). Lihir Gold Mine. Acid Rock Drainage Management Program. Geochemical Characterisation of Mine Rock and Site Visit Report. Report No. 2008/772 prepared by Environmental Geochemistry International Pty Ltd for Lihir Gold Limited, June 2007.

IBP (2007). Integrated Benefits Package Revised Agreement. An agreement between LMALA, NRLLG and LGL (commonly referred to as the Lihir Sustainable Development Plan (LSDP). Lihir Island.

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http://www.equator-principles.com/


Klohn Crippen Berger Ltd (2011) - Draft report 550-0807-002-PM-RPT-0003[1]. Internal Use Only

LGL (2005a). Lihir Gold Mine Environmental Impact Statement for Production Improvement Program, Volume B – Main Report. Report prepared by Lihir Gold Limited, Papua New Guinea.

LGL (2005b). Lihir Gold Mine.- Mine Closure Plan Update 2004. Final Report. December. Report prepared by Klohn Krippen for Lihir Gold Limited, Papua New Guinea.

LGL (2009a). Environmental Management and Monitoring Program – Operations Phase (2009-2012). Report prepared by Lihir Gold Limited, Papua New Guinea.

LGL (2009b) Lihir Community Health Plan 2009-2013. A report prepared by Lihir Gold Limited, Papua New Guinea.

LGL 2010. Annual Environmental Report 2010. Volume 1: Main Report. Prepared by Lihir Gold Limited, Papua New Guinea.

NML (2010). Newcrest Mining Limited – LOP Plan October 2010. Internal Use Only.

NML (2011a). Newcrest Mining Limited – Lihir, 5YP & FY12 Mining Operational Plan – May 2011. Mine Department – Internal Use Only.

NML (2011b). Newcrest Mining Limited – Lihir Mineral Resource Detailed Report – June 2011. Internal Use Only.

NML (2011c). Newcrest Mining Limited – Lihir Resource Development QA/QC Review – September 2011. Internal Use Only.

NML (2011d). Newcrest Mining Limited – Lihir Resource Data Preparation Procedure. Internal Use Only.

NML (2011e). Newcrest Mining Limited – Lihir Domain Interpretation. Internal Use Only.

NML (2011f). Newcrest Mining Limited – Lihir BLT Report December 2010. Internal Use Only.

NML (2011g). Newcrest Mining Limited – Lihir 2011 Reserves Report Final. Internal Use Only.

NML (2012a). Newcrest Mining Limited – Lihir Ore Reserve Report, Dec 2011 Revision: L1 & L2. Issued: 2 January 2012.

NML (2012b). Newcrest Mining Limited – Lihir Open Pit Mineral Resource, Dec 2013 Revision: L1 & L2.

NML (2013a). Newcrest Mining Limited – LGO OR Report L3 Dec-13. Internal Use Only.

NML (2013b). Newcrest Mining Limited – LGO MR Report L3 Dec-13. Internal Use Only.

NML (2013c) 2012/13 Full Year Financial Results Presentation. Greg Robinson (Managing Director and CEO) and Gerard Bond (Finance Director and CFO)

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NML (2013d) June 2013 Quarterly Report, www.newcrest.com.au

NML (2013e) June 2013 Quarterly Report, www.newcrest.com.au

NML (2013f) 2013 Annual Report, www.newcrest.com.au

NML Capital Expenditure Reconciliation (SAP), FY13, FY12, FY11

NSR 1995. Lihir Project Final Environmental Plan – Volume 2: Main Report. Report prepared by NSR Environmental Consultants Pty Ltd for Lihir Management Company Pty Ltd, Australia.

NSR 2000. Seafloor Sediment Sampling Study. Report prepared for Lihir Management Company Pty Ltd, CR 235_39_v1 March 2000.

Scottish Association for Marine Science (SAMS) 2008. Draft general guidelines for mining operations in Papua New Guinea involving deep sea tailings placement DSTP. Independent evaluation of deep sea mine tailings placement in PNG: part of the Mining Sector Support Programme (MSSP), funded by the European Union.

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28 QUALIFIED PERSON’S CERTIFICATE

Colin Moorhead Newcrest Mining Limited Level 8, 600 St Kilda Road Melbourne, Victoria 3004 Australia 1. I, Colin Moorhead, do hereby certify that I am the Executive General Manger,

Minerals employed by Newcrest Mining Limited.

2. I am a graduate of the University of Melbourne and hold a Bachelor of Science (Hons.) in Geology with a geophysics major.

3. I am a Fellow of the Australasian Institute of Mining and Metallurgy.

4. I have worked as a geologist for a total of 27 years since my graduation from university. My relevant experience includes 18 years fulfilling the roles of exploration geologist, mine geologist, geology manager and technical services manager at Newcrest’s Australian open pit and underground mining operations, two years as geology manager at Newcrest’s Indonesian mining operation, two years as General Manager Technical Services responsible for technical excellence and resources and reserves governance and six years in the role of Executive General Manager, Minerals responsible for exploration, mine geology and resources and reserves governance throughout Newcrest.

5. I have read the definition of “Qualified Person” set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfil the requirements to be a “Qualified Person” for the purposes of NI 43-101.

6. I am responsible for the Technical Report titled Technical Report on the Lihir Operations Property in Papua New Guinea, dated 31 December 2013 (the Report). I last visited the Lihir property between 18 January and 20 January 2014.

7. I have had prior involvement with the property that is the subject of the Report. This involvement is via my role as Executive General Manager, Minerals with Newcrest where I am the executive responsible for exploration, mine geology and resource and reserves governance throughout Newcrest.

8. I am not independent of the issuer applying all of the tests in Section 1.5 of National Instrument 43-101.

9. I have read National Instrument 43-101 and Form 43-101F1, and the Report has been prepared in compliance with that instrument and form.

10. As of the effective date of the Report, to the best of my information, knowledge and belief, the part(s) of the Report for which I am responsible contains all scientific and technical information that is required to be disclosed to make the Report not misleading.

31 December 2013

Original signed by

Colin Moorhead

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subject: market release for personal use only · 4/1/2014 · level 9 . 600 st kilda road ....

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