Exploration and long-term reserve replacement are core elements of any successful mining business.

Strategy and Review

Exploration Pie Graphs

Strategy

Exploration discovery remains Newcrest’s key driver for value adding growth and for maximising shareholder returns over the long term. A key objective of our exploration strategy is to control large mineral districts with the aim of securing sustainable long-life mining operations whilst enhancing the potential for repeat discoveries.

The principal targets for Newcrest’s exploration are porphyry gold-copper, epithermal gold and sediment-hosted gold deposits. Operationally, our continued emphasis is on minimising fixed overhead costs and maximising funds available for drilling.

Newcrest’s exploration strategy is biased towards exploring recognised mining or mineral districts and focusses on deeper drilling. Our approach continues to acknowledge the importance of time and patience in the discovery process and the need for reliable and consistent exploration funding.

Newcrest’s exploration remains predominantly Australian-focussed with a brownfields emphasis. Internationally, we have broadened our area of search with initial efforts concentrated in the USA and Peru, to complement exploration in Indonesia.

The Newcrest Board recognises that continued strong support for the exploration program is essential to the Company’s future sustainability. To ensure viability of the reserve replacement program and the potential to make ongoing discoveries, the exploration budget will be progressively increased over the next four years.

2003/04 year in review

The success of our exploration activities is demonstrated by Group Mineral Resources increasing in 2003/04 by 9 million ounces to 62 million ounces of gold and by 1.2 million tonnes copper to 5 million tonnes of copper. Ore Reserves remained at 28 million ounces of gold and copper increased by 39 thousand tonnes to 1,439 thousand tonnes during the year, after mining depletion.

Annual exploration expenditure for the year was $45.4 million, a large part of which was spent on drilling programs at Ridgeway Deeps, Cadia East, Cracow, Kencana and Toguraci. Our exploration expenditure is forecast to increase to $52 million in the 2004/05 year.

Mine area exploration

Cadia District, New South Wales
Cadia East
At Cadia East further deep drilling and pre-feasibility mining studies enabled the release of an upgraded audited Mineral Resource estimate in February 2004 and a further increase at 30 June 2004. The new estimate is an increase of 8.4 million ounces of gold and 1.2 million tonnes of copper over the June 2003 estimate, resulting in a Mineral Resource of 18 million ounces of gold and 2.9 million tonnes of copper. The resource consists of:

Cadia East is a gold-copper porphyry style of deposit which is presently estimated to extend to a depth of more than 1,500 metres below surface. The deeper underground resource remains open to the east, west and at depth. Surface drilling is continuing on the underground mineralisation to evaluate a possible western extension of a high-grade zone and the surrounding lower-grade mineralisation. It is anticipated that additional drilling will increase the size of the underground resource.

Ridgeway
At Ridgeway, further deep drilling increased the pre-mining resource by 270,000 ounces of gold and 17,000 tonnes of copper when compared to the 2002/03 result, but after mining depletions, the overall change in the Ridgeway resource is a decrease of 230,000 ounces of gold and 34,000 tonnes of copper.

The newly identified mineralisation is located immediately below the existing Ridgeway orebody and extends the deposit to 1,300 metres below surface. Deeper drilling is continuing as the deposit remains open at depth.

Junction Reefs (earning 51 percent)
In the Junction Reefs joint venture area, along strike of the Cadia discoveries, drilling continued at the Warrengong prospect.

A long interval of modest but encouraging mineralisation was recorded. Additional drilling is planned for 2004/05.

Gosowong, Indonesia (82.5 percent)

Gosowong Extended (Kencana Shoot)
Kencana is a body of epithermal gold mineralisation located one kilometre south of the Gosowong pit. The first audited Mineral Resource estimate for the prospect was released in February 2004.

A combined Indicated and Inferred Mineral Resource of 0.69 million tonnes at 41 grams per tonne of gold for 0.92 million ounces has been estimated for Newcrest’s share of the north-western, more closely drilled part of the deposit.

The mineralisation remains open to the south-east and at depth. Drilling is currently focussed on investigating the south-eastern extension of the mineralisation and on defining its lower and upper boundaries. Significant high-grade intersections have been recorded 200 metres south-east of the resource envelope.

Toguraci
An updated resource was estimated for Toguraci. This resource includes gold mineralisation in the Kayu Manis and Damar structures.

Telfer District, Western Australia

Telfer Regional Exploration
Telfer’s regional exploration was focussed on Trotman’s Dome, which has the most extensive evidence of gold mineralisation outside of Telfer Dome. Trotman’s Dome is located approximately 30 kilometres south-east of Telfer. Planned fieldwork for the latter part of 2003/04 was delayed due to the impact of Cyclone Monty and Cyclone Fay.

Drilling in the first half of 2003/04 was concentrated on the Backdoor prospect and indicated that the mineralised breccia thins to the west but remains open to the east, where it appears to be better developed at depth. Drilling in the latter part of the 2003/04 year was planned to investigate the effect of sample type and size on drilling results, but this program was delayed by adverse weather conditions. The results of this investigation when completed in 2004/05 will influence the future direction of exploration at Backdoor, although deeper core drilling is planned to investigate the eastern part of the breccia.

Discovery exploration drilling for 2004/05 will be focussed on Connaughton’s Dome, Tim’s Dome and in the Grace and Parallel Range areas.

Cracow, Queensland (70 percent)
The strategy of identifying gold-mineralised structures with widely spaced discovery drilling, whilst mine development proceeded, led to the discovery of mineralisation in the Sterling structure. Gold mineralisation for future resource definition drilling has now been identified in the Sterling, Klondyke North, Roses Pride, Sovereign, Empire and Phoenix structures; in addition to the Royal and Crown shoots.The Sterling structure is located about 300 metres to the west of the Empire structure. Additional drilling is continuing on Sterling to broadly outline the mineralisation. Drilling results from the Sovereign structure indicated possible enhancements to this mineralisation. Further broadly spaced drilling is needed before systematic resource definition drilling is undertaken on the additional six identified gold mineralised structures.

Discovery drilling for additional gold mineralised structures will continue in 2004/05 on areas surrounding the Crown and Royal shoots, and on identified targets in the eastern part of the Cracow goldfield.

Greenfields Exploration

Ashburton, Western Australia
In the Ashburton district the search for ‘Carlin’ style sediment-hosted gold mineralisation continued. Over the past five years widely spaced discovery drilling has identified numerous gold anomalies in oxidised sediments scattered over a 200 kilometre distance.

During the year Newcrest increased its interest in the Ashburton joint ventures with Sipa Resources Limited from 70 percent to 80 percent, by carrying Sipa funding contributions during exploration. In addition Newcrest secured access to the Mt Olympus mine area, where deep drilling has not been conducted previously.

Field work in the second half of 2003/04 was disrupted by cyclones Fay and Monty. Prior to this interruption additional elevated gold values in oxidised sediments were recorded from drilling at the Electric Dingo, Cleopatra North, Romulus and Merlin prospects. These results included 18 metres at 3.0 grams per tonne of gold from 70 metres at Cleopatra North and 17 metres at 3.2 grams per tonne of gold from 64 metres at Romulus.

Moderate gold grades were recorded in unoxidised sediments at the Anthiby Well prospect and this was encouraging in the search for primary (unoxidised) gold mineralisation. Results include 8 metres at 3.1 grams per tonne of gold and 5 metres at 4.3 grams per tonne of gold from depths below surface of less than 100 metres.

Deeper drilling at Anthiby Well and other prospects, including the Mt Olympus mine, is planned for 2004/05.

Americas
Drilling continued at a number of project areas in Nevada.

A small exploration office was opened in Lima, Peru, to progress a modest discovery exploration program in the region.

Outlook

Exploration in 2004/05 will continue to be focussed on a small number of projects domestically and offshore.

Resource definition drilling programs will continue at Cadia East, Ridgeway Deeps, Telfer Deeps and Kencana. Discovery drilling will continue at Cracow, Telfer District and Ashburton and on greenfields projects elsewhere in Australia and the Americas.

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