Half Year Results FY22

(figures are in US$ except where stated)
Newcrest advances profitable growth agenda^1,2,3,4,5

• Creating a brighter future for people through safe and responsible mining

• More than six years fatality free
• Development of the Group Net Zero Emissions Roadmap is currently in progress
• Rollout of Respect@Work program continues under a dedicated project team

• On track to deliver Group FY22 guidance⁶

• Statutory profit and Underlying profit of $298 million^7,8
• All-In Sustaining Cost (AISC) of $1,194/oz^8,9 delivering an AISC margin of $502/oz^8,10
• Cash flows from operating activities of $423 million

• Advancing Newcrest's global organic growth portfolio

• Newcrest Board approved the Cadia PC1-2, Red Chris Block Cave, Havieron Stage 1 and Lihir Phase 14A Pre-Feasibility Studies to the Feasibility Stage with works advancing on all projects
• Approval received for Cadia to increase its permitted processing capacity to 35Mtpa¹¹
• West Dome Stage 5 cutback underway, supporting the continuity of operations at Telfer
• Major increases across Mineral Resources and Ore Reserves separately announced today, including an increase in gold Ore Reserves by 10% to 54 million ounces^12,13

• Newcrest to acquire Pretium Resources Inc., owner of the Brucejack mine in British Columbia¹⁴

• Addition of a Tier 1 large scale, long life, low cost mine to Newcrest's unrivalled portfolio of assets
• Immediate increase in Newcrest's gold production by 300koz pa to well above 2Moz^6,12,15,16
• Accretive to Newcrest's EBITDA and cash flow
• Immediate operational and financial diversification in a Tier 1 jurisdiction
• Growth in a region where Newcrest already operates and has strong existing relationships
• Significant near mine and district-scale exploration opportunity with exciting potential to realise resource and reserve growth
• Transaction approved by Pretivm securityholders, with completion expected in the March 2022 quarter¹⁴

• Strong balance sheet and delivering strong shareholder returns

• Strong balance sheet well within financial policy targets, with net debt of $469 million, leverage ratio of 0.2 times and a gearing ratio of 4.5% at 31 December 2021
• Significant liquidity at 31 December 2021 with $3.2 billion in cash and committed undrawn bank facilities
• Sale of royalty asset portfolio generated $37.5 million
• Total dividends paid in the current period of US 40 cents per share
• Fully franked interim dividend of US 7.5 cents per share

Melbourne, Australia--(Newsfile Corp. - February 16, 2022) - Newcrest Mining Limited (ASX: NCM) (TSX: NCM) (PNGX: NCM) Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas, said, "We have taken a big step forward in our profitable growth agenda during the first half of FY22. The depth and quality of our global organic growth portfolio was demonstrated through the announcement of the findings of the Cadia PC1-2, Red Chris Block Cave, Havieron Stage 1 and Lihir Phase 14A Pre-Feasibility Studies. Each of these studies indicate excellent rates of return and we are projecting a material growth in our operating margin and Cash flow over the next decade. Progressing each one of these studies makes compelling financial sense and we are excited by the significant potential beyond the base case projections."

"The transaction will enable Newcrest to expand in one of the premium gold districts in the world and increase our production to well over two million ounces of gold per year until at least 2030. We are confident that our long life, high margin production will be delivered at an extremely competitive All-In-Sustaining Cost."

"The outlook for the commodities that we mine is strong, and we have additional opportunities to further enhance our gold and copper production profile. Our team continues to pursue the potential for further open pit and underground opportunities to extend the life of Telfer, the development of Wafi-Golpu and potentially Namosi, all of which represent upside opportunity to our current base case projections."

"We have also progressed plans to expand Cadia during the period, Red Chris and Havieron continue to deliver exceptional drilling results, and we are already working with the Pretivm team to drive further shareholder value at Brucejack. We also safely delivered the replacement and upgrade of the SAG mill motor at Cadia, which is now operating at full capacity, setting us up for a strong second half of FY22 and beyond for Cadia."

"Safety remained our top priority with zero fatalities recorded, we progressed our sustainability agenda and continued to deliver initiatives as part of our ambition to build an inclusive workplace culture, where all our people can thrive and excel, including through the rollout of our Respect@Work program. Our balance sheet remains strong and we are well positioned to both support our growth projects and deliver shareholder returns during this growth phase."

"Following a solid start to the financial year, Newcrest is well placed to deliver a strong second half, to continue to pursue profitable growth, and to progress our Forging an Even Stronger Newcrest plan," said Mr Biswas.

Summary of Operating and Financial Results

Refer to the Company's "ASX Appendix 4D and Financial Report" released on 17 February 2022, and the Management Discussion and Analysis in particular, for more detail on the Company's financial results.

Dividend Policy

Newcrest looks to pay ordinary dividends that are sustainable over time having regard to its cash flow generation, its reinvestment options in the business and external growth opportunities, its financial policy metrics and its balance sheet strength. Newcrest targets a total annual dividend payout of 30-60% of free cash flow generated for the financial year, with the annual total dividends being at least US15 cents per share on a full year basis.

Having regard to the abovementioned considerations, the Newcrest Board has determined that an interim fully franked dividend of US 7.5 cents per share will be paid on Thursday, 31 March 2022.

The record date for entitlement is Monday, 28 February 2022.

The financial impact of the interim dividend amounting to $61 million, based on Newcrest's existing issued capital at 31 December 2021, has not been recognised in the Consolidated Financial Statements for the half year. The Company's Dividend Reinvestment Plan remains in place.

The declaration of any future dividend remains at the discretion of the Newcrest Board, having regard to circumstances prevailing at that time.

COVID-19 Update

To date, Newcrest has not experienced any material COVID-19 related disruptions to production or to the supply of goods and services. Some project activities have experienced a level of disruption with efforts being made to minimise their impact on the overall cost and schedule. The operating cost of managing COVID-19 risks in the current period was approximately $32 million (of which $27 million was related to Lihir), which included additional costs related to flights, transport, rosters, leave, screening and testing.

Newcrest now expects that the total cost of managing COVID-19 for the 2022 financial year will be in the order of $50-60 million, up from the $35-45 million estimated at the start of the financial year. The increase in COVID related costs is driven by Lihir and reflects the impacts of Government restrictions on travel, absenteeism, isolation requirements and logistical challenges.

There remains a risk of COVID-19 disruptions across all operations and this continues to be closely managed. All of Newcrest's operations have business continuity plans and contingencies in place which seek to minimise disruptions to the operations in the event that a significant number of operational employees and/or contractors contract the virus. It is expected that these plans will enable operations to effectively manage the COVID-19 risk to production schedules and if there are any material impacts, Newcrest will inform the market in line with its continuous disclosure obligations.

Summary of Half Year Financial Results

Statutory profit and Underlying profit were both $298 million in the current period.

Underlying profit of $298 million was lower than the prior period primarily due to the planned replacement and upgrade of the Cadia SAG mill motor (completed in November 2021), and lower production at Lihir due to the expected decline in grade as the mine plan transitioned into Phase 15, heavy rainfall limiting access to high grade ore (additional pumping has been installed) and major maintenance activity.

The current period reflected lower gold and copper sales volumes (driven by lower production), a lower realised gold price, higher concentrate freight costs due to the global tightness and challenges in the sea freight market, and the unfavourable impact on operating costs from the strengthening of the Australian dollar against the US dollar. Operating costs were also impacted by labour and consumable cost pressures due to rising demand, constrained supply and underlying commodity price increases. Newcrest continues to collaborate with its suppliers to identify ways to manage these cost pressures.

This was partially offset by a higher realised copper price, lower income tax expense as a result of the Company's decreased profitability in the current period, lower overall operating costs due to the lower sales volumes, lower gold price and volume linked costs such as royalties, a lower depreciation expense, and an increase in Newcrest's share of profits from its associates.

Underlying profit

Figure 1

To view an enhanced version of Figure 1, please visit:
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Free cash flow

Free cash flow of negative $303 million was lower than the prior period, primarily due to the lower earnings (EBITDA), unfavourable net working capital movements and increased investment in major capital projects at Cadia, Red Chris, Havieron and Lihir that underpin the expected future growth of Newcrest. This was partially offset by lower interest payments due to debt refinancing and the early repayment of corporate bonds in prior periods.

In the current period, Newcrest received net pre-tax cash flows of $68 million from the Fruta del Norte financing facilities (acquired in April 2020 for $460 million). This is reflected within the cash flow statement as $38 million in operating cash flow (interest payments received) and $30 million in investing cash flow (primarily principal repayments received).

Balance Sheet