Investor Centre / Annual Report 2020

Managing Director’s Review

Sandeep Biswas
Managing Director

  • Zero fatalities or life-changing injuries during the period.

  • Newcrest produced 2.2 million ounces of gold.

  • Refreshed our Diversity and Inclusion Strategy.

  • We are in a strong financial position as we move into our next growth chapter.


During the period we had no fatalities or life-changing injuries.

On an underlying basis, we recorded a total recordable injury frequency rate of 2.01 per million hours worked, which is a 13% improvement on the prior year. Including Red Chris, our total recordable injury frequency rate was 2.6 per million hours worked which reflects that Red Chris currently has a higher average injury rate than our other Newcrest operations.

Our Safety Transformation Plan has been in place for almost five years and is continuing to yield benefits. We are implementing our Safety Transformation Plan at Red Chris following our acquisition in August 2019 which is starting to help deliver improvements in Red Chris’ injury rates, as reported over the course of the year.

We can never be complacent when it comes to safety and our aim remains to eliminate fatalities and life-changing injuries from our business.

I am pleased to report that we did not have any positive cases of COVID-19 across our workforce in the financial year. Subsequent to the end of the financial year, we had our first positive case of COVID-19 detected in an employee who was in isolation, having returned to Lihir. The controls we had in place were effective in detecting COVID-19 and ensuring that it was not spread to others at Lihir and there was no interruption to our business. Our track record and implementation of effective preventative actions has only been possible through the support of our host communities and governments in the jurisdictions in which we operate and the adherence to safe practices by our people. We will remain vigilant on this front to ensure the risk of further infection and interruption to our business and the wider community is minimised while COVID-19 remains an enduring challenge for society.

For the financial year, Newcrest produced 2.2 million ounces of gold at an All-In Sustaining Cost of $862 per ounce, generating a statutory and underlying profit of $647 million and $750 million respectively. During the period Newcrest invested ~$1.3 billion to acquire a 70% interest in, and operatorship of, the Red Chris mine in Canada, as well as additional investments in Lundin Gold to increase our interest to 32% together with the acquisition of finance facilities for the Fruta del Norte mine which increase our direct exposure to the cashflows generated by this Tier 1 asset.

To fund the acquisition of finance facilities for the Fruta del Norte mine and future organic growth options such as the declines at both Havieron and Red Chris, Newcrest undertook a successful equity raising for A$1.2 billion in the period. We also took the opportunity to refinance our existing corporate bonds in the period, which allowed us to lower the cost of our debt and smooth and extend our debt maturity profile.

Cadia had another outstanding year, producing 843koz of gold and achieving record mined tonnes from Cadia East at a volume equivalent to 31.8mtpa and a record annualised mill throughput rate of 34.2mpta in the June quarter. This strong operating performance enabled Cadia to generate record free cash flow of $991 million.

Newcrest produced


of gold for the financial year

All-In Sustaining Cost


per ounce

Underlying profit


As foreshadowed throughout the year, Lihir’s performance in the period was impacted by the presentation of difficult mining and geothermal conditions and an increase to the strip ratio as the mine transitions to the Kapit orebody. This resulted in a higher proportion of stockpile material being delivered to the process plant which impacted head grades and recovery. Lihir produced 776koz of gold and delivered free cash flow of $233 million in the period.

Telfer produced 393koz of gold and generated $51 million of free cash flow, which was a $43 million improvement on the prior year.

In March 2020 we finalised the sale of our 75% interest in the Gosowong mine for total consideration of $90 million.

During the period we announced that we had earned a 40% interest in the Havieron project, located 45km east of our Telfer operation. The Havieron project is operated by Newcrest under a farm-in agreement with Greatland Gold Plc. Under the terms of the farm-in Newcrest can earn up to a 70% interest through expenditure of $65 million and the completion of a series of exploration and development milestones.

Drilling results to date continue to expand and demonstrate the continuity of higher grade mineralisation and have identified mineralised breccias proximal to higher grade mineralisation. Newcrest has recently obtained the mining lease for the project which is necessary to be able to commence a decline, which will allow us to accelerate the exploration and development timetable for this exciting new orebody. We hope to start work on the decline by the end of calendar year 2020 or early 2021.

We currently have two drilling programs underway at Red Chris. The first is in the East Zone and is designed to obtain geological, geotechnical and metallurgical data to support future studies for underground block cave mining. The second is the Brownfields Exploration Program which is focused on searching for higher grade mineralisation within the Red Chris porphyry corridor. 

"Newcrest has a history of delivering value through the application of technology and innovation. Our current leading position within the gold industry in block cave mining is a direct outcome of this."

In the East Zone, infill resource drilling results since acquisition have confirmed the presence of multiple discrete higher grade ‘pods’ of mineralisation. Drilling results returned to date continue to confirm the potential of finding additional discrete high grade ‘pods’ of mineralisation in the porphyry corridor.

Newcrest has a history of delivering value through the application of technology and innovation. Our current leading position within the gold industry in block cave mining is a direct outcome of this. As the world’s remaining ore deposits become deeper and lower grade, block cave mining with its high productivity and low operating costs has become the underground mining method of choice when the orebody warrants it.

We are pleased to announce that we have now delivered five breakthrough successes against our Technology and Innovation Pillar, with the successful trialling of a new generation of high temperature electronic detonators at Lihir and the completion of our undercutless caving trial at Telfer.

Over the course of the financial year we continued to integrate our sustainability objectives and targets throughout the business. During the financial year we received formal endorsement from the International Council on Mining and Metals (ICMM) confirming that our Sustainability Framework fully aligns to the ICMM membership requirements.

We also progressed the implementation of our sustainability-related Climate Change, Water Stewardship, Biodiversity and Social Performance policies.

The achievements made throughout the year would not have been possible without the commitment of our people. Our people at Lihir, Telfer and Red Chris agreed to extended rosters to support the operations following the COVID-19 pandemic, whilst people at Cadia and our corporate offices have had to adapt to working from home where possible in these unprecedented circumstances.

During the year, the Board and Executive Committee supported an initiative to refresh our Diversity and Inclusion Strategy to leverage our strengths, address our gaps and develop a multi-year action plan to meet our aspirations. Our continued focus under this strategy is to increase the representation of women across our business globally, especially in management and leadership positions, and improve the representation of indigenous and local and national employees globally.

We enter the new financial year in a strong financial position as we move into our next growth chapter. Thank you to our people, shareholders, suppliers, customers and local communities for your continued support.

Sandeep signature

Sandeep Biswas

Managing Director and 
Chief Executive Officer

  1. Excluding Gosowong from the date of divestment and excluding Red Chris in its first part year of Newcrest operation.

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