Investor Centre / Annual Report 2020

Newcrest’s Value Proposition

Delivering on commitments

$3.5bn

Free cash flow delivered over 6.5 years

Newcrest strives to deliver on its commitments. In FY20, Newcrest successfully delivered on a number of these, including:

  • Another year free of fatalities and life-changing injuries and a further reduction in underlying injury rates.

  • Continued to grow and diversify the Company with the addition of a 70% interest in, and operatorship of, the Red Chris mine in British Columbia, Canada.

  • Returned capital to shareholders, with a total dividend of US25 cents per share, in accordance with our dividend policy.

  • Established a A$20 million Community Support Fund to support our host communities with the COVID-19 pandemic.

  • Continued development of two potentially world-class exploration projects at Havieron and Red Chris.

Long reserve life

52moz1

Gold Ore Reserves

With an estimated 52 million ounces of Gold Ore Reserves, Newcrest’s Reserve Life was approximately 24 years at 30 June 20202

 

Financially Robust

Net debt

$624m

Leverage

0.3times

Gearing

6.8%

Liquidity coverage

$3.45bn

Across May and June 2020, Newcrest successfully raised A$1.2bn of equity through a A$1.0bn placement to institutional investors and a A$200m Share Purchase Plan. The funds raised were used to fund the acquisition of finance facilities for the Fruta del Norte mine, with the remainder directed to funding Newcrest’s organic growth options such as the commencement of declines at both Havieron and Red Chris.

On 13 May 2020, Newcrest issued US$1.15bn of senior unsecured notes, comprising 10-year bonds totalling US$650m (maturing in 2030) and 30-year bonds totalling US$500m (maturing in 2050). The proceeds from the new bonds were used to repay all of the Company’s notes due in 2021 and to repay all but $380m of the notes due in 2022.

The combined transactions have ensured that Newcrest’s balance sheet remains strong, smooths and extends Newcrest’s weighted average debt maturity profile to ~16 years (previously ~7 years) and secures long term debt funding at coupons much lower than the existing corporate bonds.

Newcrest’s net debt at 30 June 2020 was $624m. This comprises $2,013m of capital market debt, lease liabilities of $58m and $4m relating to a loan acquired through the acquisition of Red Chris, less $1,451m of cash.

At 30 June 2020, Newcrest had $3,451m of liquidity coverage, comprising $1,451m of cash and $2,000m in committed undrawn bilateral bank debt facilities with maturity periods ranging from 2021 to 2023.

Newcrest’s financial objectives are to meet all financial obligations, maintain a strong balance sheet to withstand cash flow volatility, be able to invest capital in value-creating opportunities, and be able to return excess cash generated to shareholders. Newcrest looks to maintain a conservative level of balance sheet leverage.

Increased shareholder returns — Full Year Dividends (CPS)

  1. See page 30 of the full Annual Report. An updated Reserves and Resources statement will be issued in February 2021.
  2. Reserve life is indicative and calculated as proven and probable gold reserves (contained metal) as at 31 December 2019 divided by gold production for the 12 months ended 30 June 2020. The reserve life calculation does not take into account future production rates or gold recovery rates and therefore estimates of reserve life do not necessarily equate to operating mine life. 

Safety and Sustainability