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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

CONTENTS

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

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

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

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

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

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

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

6.2

6.3
6.4

ii

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
Historic Mineral Resources ......................................................................... 24
Summary ....................................................................................................24

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

DEPOSIT TYPES .....................................................................................................39


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

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

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

iii

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 Dor .......................................................................................................... 111

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

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
Table 1.2
Table 1.3
Table 1.4
Table 1.5
Table 2.1
Table 2.2
Table 4.1
Table 4.2
Table 6.1
Table 10.1
Table 10.2
Table 10.3
Table 14.1
Table 14.2
Table 14.3
Table 14.4
Table 14.5
Table 14.6
Table 14.7

iv

Telfer Copper and Gold Mineral Resources at 31 December 2013 ................2


O'Callaghans Polymetallic Mineral Resource at 31 December 2013 .............2
Telfer Copper and Gold Mineral Reserves at 31 December 2013 ..................3
Telfer Operations FY2013 Actual Production and Operating Costs* ..............7
Telfer Operations FY2014 Cost and Capital Guidance ..................................7
Persons who Prepared or Contributed to this Technical Report.....................8
Key Terms and Abbreviations........................................................................9
Telfer Tenure Details ...................................................................................13
Telfer Details of Licence Holders .................................................................16
Summary of Project History .........................................................................25
Main Dome Drilling up to December 2013 ...................................................44
West Dome Drilling up to December 2013 ...................................................45
Telfer Main Dome Underground Drilling up to December 2013....................45
Telfer Copper and Gold Mineral Resources at 31 December 2013 ..............67
O'Callaghans Polymetallic Mineral Resource at 31 December 2013 ...........68
Wireframes for Geological Model ................................................................74
Basic statistics for gold grade (ppm) for all bulk domains (undeclustered) ...77
Example Indicator variogram models used in the MIK estimation of gold
grade for the VSC domain. ..........................................................................78
Search neighbourhood parameters for MIK estimation of gold and copper
grade in the bulk domains. ..........................................................................79
Variogram models used in the OK estimation of gold and copper grade for
the LLU and Oakover domains. ...................................................................79

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

Table 14.8
Table 14.9
Table 14.10
Table 14.11
Table 14.12
Table 14.13
Table 14.14
Table 14.15
Table 14.16
Table 14.17
Table 14.18
Table 14.19
Table 14.20
Table 14.21
Table 15.1
Table 15.2
Table 15.3
Table 15.4
Table 15.5
Table 17.1
Table 17.2
Table 21.1
Table 21.2
Table 21.3
Table 21.4

Search neighbourhood parameters for OK estimation of gold and copper


grade in the LLU and Oakover bulk domains. ..............................................80
Grade caps implemented for bulk domains during the OK estimation of
sulphur, arsenic and cobalt grade................................................................80
The linear regression equations used to estimate sulphur as a function of
copper 81
The linear regression equations used to estimate arsenic as a function of
sulphur 81
The linear regression equations used to estimate cobalt as a function of
sulphur 82
Basic statistics for gold grade (ppm) and intercept length (m) for all reef
domains ......................................................................................................82
Variogram, models for the estimation of gold and copper grade in the reef
estimation domains .....................................................................................84
Search parameters for OK Tetra Modelling of gold and copper grade in the
reef domains ...............................................................................................84
Variogram, models for the estimation of sulphur, arsenic and cobalt grade in
reef domains ...............................................................................................85
Search parameters for OK Tetra Modelling of sulphur, arsenic and cobalt
grade in the reef domains ............................................................................85
The linear regression equation used to estimate sulphur as a function of
copper ........................................................................................................86
The linear regression equation used to estimate arsenic and cobalt as
functions of sulphur .....................................................................................86
Basic statistics for density data, by domain, with no length-weighting applied
........................................................................................................87
Constant density values assigned to bulk domains......................................88
Telfer Main Dome Open Pit Mineral Reserve Estimate at 31 December 2013
........................................................................................................94
Telfer West Dome Open Pit Mineral Reserve Estimate at 31 December 2013
........................................................................................................95
Telfer UG SLC Mineral Reserve Estimate at 31 December 2013 ................97
Telfer Deeps Western Flanks Mineral Reserve Estimate at 31 December
2013 ........................................................................................................98
Telfer UG M50 Reef Mineral Reserve Estimate at 31 December 2013 ......100
Telfer Gold Production...............................................................................106
Telfer Production Statistics ........................................................................107
Historical Production and Costs per Ounce of Gold Produced ...................116
Telfer Operations Gold and Copper Production, FY 2013* ........................116
Telfer Operations Historical Capital Expenditure .......................................116
Telfer Operations FY 2014 Cost and Capital Guidance .............................117
FIGURES

Figure 4.1
Figure 7.1
Figure 7.2
Figure 7.3
Figure 7.4
Figure 7.5
Figure 7.6

Telfer Location Map ..................................................................................... 12


Telfer Regional Geology .............................................................................. 26
Telfer Regional Stratigraphy ........................................................................ 27
Telfer Regional Geology .............................................................................. 28
Location of O'Callaghans and Camp Dome ................................................. 29
Telfer Local Stratigraphy ............................................................................. 30
Telfer Pre-Mining Structural and Stratigraphic Setting ................................. 32

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

Figure 7.7
Figure 7.8
Figure 10.1
Figure 10.2
Figure 10.3
Figure 11.1
Figure 11.2
Figure 11.3
Figure 11.4
Figure 11.5
Figure 11.6
Figure 11.7
Figure 11.8
Figure 11.9
Figure 11.10
Figure 11.11
Figure 11.12
Figure 11.13
Figure 11.14
Figure 11.15
Figure 11.16
Figure 11.17
Figure 14.1
Figure 14.2
Figure 14.3
Figure 14.4
Figure 14.5
Figure 14.6
Figure 14.7
Figure 15.1
Figure 15.2
Figure 15.3
Figure 15.4
Figure 16.1
Figure 17.1
Figure 18.1

vi

Oblique Schematic View Looking North showing Key Mineralized Systems 33


Schematic Cross Section of O'Callaghans Skarn Deposit ........................... 36
Cross Section 11300N through Main Dome (Open pit & UG) ...................... 43
Cross Section 11300N through West Dome (Open pit)................................ 44
Telfer Drill Location Plan ............................................................................. 46
BZ Assay Protocol ....................................................................................... 51
AY Assay Protocol....................................................................................... 52
O'Callaghans Assay Protocol ...................................................................... 53
Gold Z-Scores from Main Dome January 2011 to December 2013 .............. 54
Copper Z-Scores from Main Dome January 2011 to December 2013.......... 55
Main Dome Gold in Coarse Duplicates ........................................................ 56
Main Dome Gold in Pulp Replicates ............................................................ 56
Main Dome Gold in Second Laboratory Checks .......................................... 57
Main Dome Copper in Second Laboratory Checks ...................................... 58
Gold Z-Scores from West Dome January 2011 to December 2013 ............. 59
Copper Z-Scores from West Dome January 2011 to December 2013 ......... 59
West Dome Gold in Coarse Duplicates ....................................................... 60
West Dome Gold in Pulp Replicates ............................................................ 60
West Dome Gold in Second Laboratory Checks .......................................... 61
West Dome Copper in Second Laboratory Checks ...................................... 62
Gold Z-Scores from Satellites from January 2011 to December 2013 ......... 62
Copper Z-Scores from Satellites from January 2011 to December 2013 ..... 63
Cross Section 13000N through West Dome Open Pit ................................. 71
Cross Section 11300N through West Dome Open Pit ................................. 71
The reef domains (red) and bulk domains estimated (E-W section looking
north at 11300mN). ..................................................................................... 73
The reef and bulk domains estimated .......................................................... 76
Log-probability plot for composite gold grade, per bulk domain ................... 77
Log-probability plot for composite gold grade, per bulk domain ................... 83
Cross Section 11300N through Main Dome UG .......................................... 90
Telfer West Dome Location Relative to Main Dome and Telfer Deeps ........ 95
Telfer UG SLC remaining Life of Mine Design - Isometric View ................... 97
Plan View showing Telfer UG Western Flanks ............................................ 99
Typical Cross Section through M Reefs..................................................... 100
Western Flanks Proposed Mine Layout - Isometric View ........................... 104
Telfer Treatment Plant - Basic Process Flow ............................................. 106
Natural Gas Supply Network ..................................................................... 109

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

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 Newcrests
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 43101 (NI 43-101), Standards of Disclosure for Mineral Projects, of the Canadian Securities
Administrators (CSA) for lodgement on CSAs 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 dor 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 Newcrests
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.

Newcrest Mining - Telfer Property Report - 31 December 2013

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)

24

0.40

0.09

0.3

0.02

24

0.40

0.09

0.3

0.02

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

Measured Resource
Main Dome Stockpiles
Total Measured Resource
Indicated Resources

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

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

Inferred Resources

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)

Indicated Resource
Inferred Resource

1.4

WO3
(%)

Zn
(%)

Pb
(%)

Cu
(%)

69

0.34

0.55

0.27

0.29

0.25

0.15

0.07

0.24

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 Newcrests
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,
2

Newcrest Mining - Telfer Property Report - 31 December 2013

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

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

180

0.90

0.11

5.3

0.20

Probable Mineral Reserves

Total Probable Mineral Reserves

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

Newcrest Mining - Telfer Property Report - 31 December 2013

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-acidforming 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
4

Newcrest Mining - Telfer Property Report - 31 December 2013

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 sublevel 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.

Newcrest Mining - Telfer Property Report - 31 December 2013

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 dor 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.

Newcrest Mining - Telfer Property Report - 31 December 2013

Table 1.4

Telfer Operations FY2013 Actual Production and Operating Costs*


Telfer

Unit

FY13 Actual

Gold Production

koz

525

Copper Production

kt

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

26

*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

Cash cost (including by-product credits)


On-site exploration expenditure

Unit
1

FY14 Guidance

A$M

490-540

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

A$M

20-25

Sustaining Capital

A$M

60-70

Projects and development capital

A$M

Total capital expenditure

A$M

80-90

Production Waste Stripping

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 Newcrests annual operating and performance review which forms part
of Newcrests 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.

Newcrest Mining - Telfer Property Report - 31 December 2013

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 43101 (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
Qualified
Person

Persons who Prepared or Contributed to this Technical Report


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

K Gleeson

Head of Mineral
Resource
Management

L Bowyer

Manager
Tenure

Land

Newcrest
Mining Limited

No

N/A

P Griffin

Head of Processing
Operations

Newcrest
Mining Limited

No

Aug 2013

MAusIMM

13, 17

Newcrest
Mining Limited

No

Site
based

MAusIMM

14

Newcrest
Mining Limited

No

Dec 2013

MAusIMM

15, 16

Newcrest
Mining Limited

No

Jan 1314 2014

FAusIMM (CP)

Other persons who assisted the Qualified Person


Newcrest
No
Aug 2013 MAusIMM
Mining Limited

J Biggam

Mineral Resource
Manager-Telfer

R Secis

Manager-Telfer
Mine Planning

All Sections

Compilation
of Report

A de Sousa

General Manager Marketing


and
Logistics

Newcrest
Mining Limited

No

Sept
2011

NA

19

Blair Sands

Head of Health and


Environment

Newcrest
Mining Limited

No

N/A

20

K Kerr

General ManagerCommercial
and
Planning

Newcrest
Mining Limited

No

July 2011

CA (Chartered
Accountant)

21,22

Newcrest Mining - Telfer Property Report - 31 December 2013

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 Code 1.
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

Abbreviation

Unit/Term

AHD

Australian height datum

NSR

Net Smelter Return

AAS

Atomic Absorption Spectrometry

NAF

Non-Acid Forming

BWI

Bond Ball Work Index

One millionth of a meter

Cu

Copper

PC

Panel Caves

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

km

kWh/t

Kilowatt-hours per tonne

Unit/Term

Square kilometres
Square metres

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).

Newcrest Mining - Telfer Property Report - 31 December 2013

Abbreviation

Abbreviation

Unit/Term

Lead

SLC

Sub-Level Caving

Litre

Sulphur

Metre(s)

Tonne(s)

Mt

Million tonnes

TJ

Terra Joule(s)

Mtpa

Million tonnes per annum

TSF

Tailings Storage Facility

Tonnes per cubic metre

MW

Megawatts

t/m

mm

Millimetres

Tungsten

Moz

Million ounces (troy)

WO3

Tungsten trioxide

WSMD

Weighing, Sampling and Moisture


Determination
Wet metric tonnes

MLs

10

Unit/Term

Pb

Mining Leases

Mo

Molybdenum

wmt

mRL

Metres above a Reduced Level


set at 5,000m below AHD

Zn

Zinc

Newcrest Mining - Telfer Property Report - 31 December 2013

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.

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

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

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

11

Summary report on Newcrest marketing.

Extent of reliance: status of Newcrests sales arrangements.

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

Newcrest Mining - Telfer Property Report - 31 December 2013

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 2142'44"
S latitude, 12212'25" E longitude. The location of the project is illustrated in Figure 4.1.
Figure 4.1

12

Telfer Location Map

Newcrest Mining - Telfer Property Report - 31 December 2013

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
Lease

13

Telfer Tenure Details


Lease Type

Lease
Status

Grant Date

Expiry Date

Area
2
(km )

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

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

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

5.60

2.00

Newcrest Mining - Telfer Property Report - 31 December 2013

Lease

14

Lease Type

Lease
Status

Grant Date

Expiry Date

Area
2
(km )

L45/80

L - Miscellaneous License

Granted

19/08/1994

18/08/2014

L45/99

L - Miscellaneous License

Granted

23/08/2000

22/08/2021

0.03
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

Newcrest Mining - Telfer Property Report - 31 December 2013

Lease

Lease Type

Lease
Status

Grant Date

Expiry Date

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

15

Area
2
(km )

461.32

Newcrest Mining - Telfer Property Report - 31 December 2013

Table 4.2
Lease

16

Telfer Details of Licence Holders


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

Newcrest Mining - Telfer Property Report - 31 December 2013

Lease

17

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

Newcrest Mining - Telfer Property Report - 31 December 2013

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
4.3.1

Relevant Agreements
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.

18

Newcrest Mining - Telfer Property Report - 31 December 2013

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
4.4.1

Royalties Payable
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.

19

Newcrest Mining - Telfer Property Report - 31 December 2013

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 coppergold 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 40C) and warm winters (July average daily temperatures exceed
10C). 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
5.4.1

Infrastructure
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.

20

Newcrest Mining - Telfer Property Report - 31 December 2013

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 selfsufficient. 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.

21

Newcrest Mining - Telfer Property Report - 31 December 2013

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
6.2.1

Telfer Gold Mine Development History


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

22

Newcrest Mining - Telfer Property Report - 31 December 2013

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.

23

Newcrest Mining - Telfer Property Report - 31 December 2013

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.

24

Newcrest Mining - Telfer Property Report - 31 December 2013

Table 6.1
Date

25

Summary of Project History


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

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

Apr 2001

Feasibility Study stage 1 extension approved

Aug 2001

Decline access established to the I30 reef system

Jul 2001

Feasibility Study stages 2 to 5 approved

Sep 2002

Feasibility Study completed

Feb 2005

Gold production from current two train plant configuration commences

Newcrest Mining - Telfer Property Report - 31 December 2013

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

26

Telfer Regional Geology

Newcrest Mining - Telfer Property Report - 31 December 2013

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 southeastern 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).
27

Newcrest Mining - Telfer Property Report - 31 December 2013

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:

28

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).

Newcrest Mining - Telfer Property Report - 31 December 2013

Figure 7.4

7.1
7.1.1

Location of O'Callaghans and Camp Dome

Telfer
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.

29

Newcrest Mining - Telfer Property Report - 31 December 2013

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:

30

Camp Sandstone;

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

Newcrest Mining - Telfer Property Report - 31 December 2013

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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 35 to 50 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 monoclineanticline 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

Mineral Resources reported for the Telfer mining centre consist of:

32

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

stockwork and reef mineralization mined underground in the Telfer Underground SLC
mining operation;
Newcrest Mining - Telfer Property Report - 31 December 2013

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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 40 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
34

Newcrest Mining - Telfer Property Report - 31 December 2013

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 pyritechalcopyrite 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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Newcrest Mining - Telfer Property Report - 31 December 2013

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

36

Schematic Cross Section of O'Callaghans Skarn Deposit

Newcrest Mining - Telfer Property Report - 31 December 2013

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.
7.2.2

Mineralization

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 copperenrichment 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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Newcrest Mining - Telfer Property Report - 31 December 2013

7.3.2

Mineralization

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 30 to the southeast along the strike of the
fold axis.

2.

Secondary supergene copper formed at the weathering boundary beneath a nearsurface 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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Newcrest Mining - Telfer Property Report - 31 December 2013

DEPOSIT TYPES

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 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 veinsets 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 40 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

39

Newcrest Mining - Telfer Property Report - 31 December 2013

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 chalcociterich and associated secondary copper blanket at the oxidation boundary. No significant gold
grades were intersected in drill holes.

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Newcrest Mining - Telfer Property Report - 31 December 2013

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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

43

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

Newcrest Mining - Telfer Property Report - 31 December 2013

Table 10.1

Main Dome Drilling up to December 2013


Period

Pre 1998

Program

Type

Grade Control

RC

Resource Definition

Surface RC

and Exploration

Surface DDH
Underground DDH

Total

Number

60,559

4,280

227,977

3,253

77,048

613

52,851

241

418,434

8,146

Prefeasibility

Grade Control

RC

23,230

1,779

January 1998 to September 1999

Resource Definition

Surface RC

48,126

341

and Exploration

Surface DDH

11,521

89

7,394

46

Underground DDH
Geotech

Surface DDH

Total
Feasibility Study Stage 1

Grade Control

RC

October 1999 to July 2000

Resource Definition

Surface RC

and Exploration

Underground RC
Underground DDH

Total
Feasibility Study Stage 2

Geotech

Surface RC

August 2000 to December 2002

Surface DDH
Underground DDH
Total
Grade Control
Geotech

January 2003 to December 2013


Resource Definition
and Exploration

RC
Surface DDH
Underground DDH
Surface RC
Underground DDH

Total

Figure 10.2

44

Metres

704

90,975

2,209

7,614

1,190

110,199

862

3,030

44

8,403

36

129,246

2,124

980

3,748

40

4,768

17

957
3550
2437
757
3274

343
20
6
5
19

10975

393

Cross Section 11300N through West Dome (Open pit)

Newcrest Mining - Telfer Property Report - 31 December 2013

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

Pre 1998

Program

Type

Grade Control

RC

Resource Definition

Surface RC

and Exploration

Surface DDH

Total

Metres

Number

36,683

1,349

228,200

2,678

32,191

245

297,073

5,237

Prefeasibility

Grade Control

RC

30,521

1,821

January 1998 to September 1999

Resource Definition

Surface RC

10,250

81

and Exploration

Surface DDH

6,458

34

Total
Feasibility Study Stage 1

Resource Definition

Surface RC

October 1999 to July 2000

and Exploration

Feasibility Study Stage 2

Geotech

Surface DDH

Resource
Definition
and Exploration

Surface RC

Total

47,229

1,930

18,379

161

129,246

2,124

309

5083

50

49498

87

54581

137

August 2000 to December 2002


January 2003 to December 2013

Surface DDH
Total

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

Underground DDH

24,135

119

Existing and Pre-Feasibility

Resource Definition

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

January 2003 to December 2013

Resource
Definition
and Exploration

Surface DDH
Underground DDH

3353
73781

2
218

and Exploration

45

Newcrest Mining - Telfer Property Report - 31 December 2013

Figure 10.3

Telfer Drill Location Plan

Telfer drill location plan is shown in Figure 10.3

46

Newcrest Mining - Telfer Property Report - 31 December 2013

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 44 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 50 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.

47

Newcrest Mining - Telfer Property Report - 31 December 2013

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.

48

Newcrest Mining - Telfer Property Report - 31 December 2013

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 OCallaghans 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 OCallaghans 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 Persons 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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Newcrest Mining - Telfer Property Report - 31 December 2013

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 OCallaghans 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 75m. 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).

50

Newcrest Mining - Telfer Property Report - 31 December 2013

Figure 11.1

51

BZ Assay Protocol

Newcrest Mining - Telfer Property Report - 31 December 2013

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).

52

Newcrest Mining - Telfer Property Report - 31 December 2013

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

53

Newcrest Mining - Telfer Property Report - 31 December 2013

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

54

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

Newcrest Mining - Telfer Property Report - 31 December 2013

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%.

55

Newcrest Mining - Telfer Property Report - 31 December 2013

Figure 11.6

Main Dome Gold in Coarse Duplicates


Telfer Main Dome Gold in Coarse Duplicates
10

Duplicate Result (g/t Au)

AuCD

0.1

X=Y

0.01

0.001
0.001

0.01

0.1
Original Result (g/t Au)

10

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 envelopes 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


Telfer Main Dome Gold in Pulp Replicates
100

Replicate Result (g/t Au)

10

1
Au PR
X=Y

0.1

0.01

0.001
0.001

56

0.01

0.1
1
Original Result (g/t Au)

10

100

Newcrest Mining - Telfer Property Report - 31 December 2013

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


Telfer Main Dome Gold in Second Lab Checks
100

Genalysis Result (g/t Au)

10

Au
X=Y

0.1

0.01

0.001
0.001

0.01

0.1
1
NLSO Result (g/t Au)

10

100

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.

57

Newcrest Mining - Telfer Property Report - 31 December 2013

Figure 11.9

Main Dome Copper in Second Laboratory Checks

Telfer Main Dome Copper in Second Lab


Checks
1000000

Genalysis Result (ppm Cu)

100000

10000

1000

Cu
X=Y

100

10

1
1

10

100
1000
10000
NLSO Result (ppm Cu)

100000

1000000

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

58

Newcrest Mining - Telfer Property Report - 31 December 2013

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

Telfer West Dome Gold z-scores 2011-2013 incl


6
4

z-score

2
0

Au
MA51

-2
-4
-6
0

300

600

900

1200

1500

1800

2100

instance

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

Telfer West Dome Copper z-scores 2011-13 incl


10.00
8.00
6.00
4.00
z-score

2.00

Cu (aqua regia)

0.00

Cu (four acid)

-2.00

CuMA101-2a

-4.00

CuMA101-4a

-6.00
-8.00
-10.00
0

200

400

600

800
instance

1000

1200

1400

1600

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.

59

Newcrest Mining - Telfer Property Report - 31 December 2013

11.5.2

Coarse Duplicates and Pulp Replicates

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

Telfer West Dome Gold in Coarse


Duplicates
10

Duplicate Result (g/t Au)

0.1

Au
X=Y

0.01

0.001
0.001

0.01

0.1
Original Result (g/t Au)

10

Figure 11.13 West Dome Gold in Pulp Replicates


Telfer West Dome Gold in Pulp Replicates
100

Pulp Replicate Result (g/t Au)

10

1
Au
X=Y
0.1

0.01

0.001
0.001

60

0.01

0.1
1
Original Result (g/t Au)

10

100

Newcrest Mining - Telfer Property Report - 31 December 2013

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.
11.5.3

Second Laboratory Checks

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
Telfer West Dome Gold in Second Lab Checks
100

Genalysis Check Result (g/t Au)

10

Au
X=Y

0.1

0.01

0.001
0.001

0.01

0.1
1
Original Result (g/t Au)

10

100

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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Newcrest Mining - Telfer Property Report - 31 December 2013

Figure 11.15 West Dome Copper in Second Laboratory Checks

Telfer West Dome Copper in Second Lab


Checks

Genalysis Check Result (ppm Cu)

100000

10000

1000
Series1
100

X=Y

10

1
1

10

100
1000
10000
Original Result (ppm Cu)

100000

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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.
11.6.2

Coarse Duplicates and Pulp Replicates

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.
11.6.3

Second Laboratory Checks

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 Persons 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.
63

Newcrest Mining - Telfer Property Report - 31 December 2013

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.

64

Newcrest Mining - Telfer Property Report - 31 December 2013

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.

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Newcrest Mining - Telfer Property Report - 31 December 2013

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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 CIM 2 Definition Standards and the equivalent
definitions in the JORC Code 3.
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 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

24

0.40

0.09

0.3

0.02

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

Total Measured Resource


Indicated Resources

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

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

Inferred Resources

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
3

67

Canadian National Instrument 43-101.


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).

Newcrest Mining - Telfer Property Report - 31 December 2013

Table 14.2

O'Callaghans Polymetallic Mineral Resource at 31 December 2013


Tonnes
(Mt)

Indicated Resource
Inferred Resource

WO3
(%)

Zn
(%)

Pb
(%)

Cu
(%)

69

0.34

0.55

0.27

0.29

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 Newcrests
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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Newcrest Mining - Telfer Property Report - 31 December 2013

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 BackTransformation 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 lowgrade (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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Newcrest Mining - Telfer Property Report - 31 December 2013

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 reblocked 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 gradetonnage 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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Newcrest Mining - Telfer Property Report - 31 December 2013

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.

71

Figure 14.1

Cross Section 13000N through West Dome Open Pit

Figure 14.2

Cross Section 11300N through West Dome Open Pit

Newcrest Mining - Telfer Property Report - 31 December 2013

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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 reestimation 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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Newcrest Mining - Telfer Property Report - 31 December 2013

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 Stockwork4m 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_m65_hw_fw_201308.00t

M65 reef hangingwall and footwall DTM surfaces

teu_rf_m68_hw_fw_201308.00t

M68 reef hangingwall and footwall DTM surfaces

teu_rf_m70_hw_fw_201308.00t

M70 reef hangingwall and footwall DTM surfaces

TEU_Rf_B30_HWFW_201308.00t

B30 reef hangingwall and footwall DTM surfaces

14.2.3

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

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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 CoVs 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.

76

Newcrest Mining - Telfer Property Report - 31 December 2013

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

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.
77

Newcrest Mining - Telfer Property Report - 31 December 2013

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.
Spherical 1

Indicator

Isatis Rotation
(Mathematician)

Spherical 2

Nugget
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

0.492

800

250

30

-90

65

Au >= 0.15

0.250

0.333

35

20

0.417

450

200

30

-90

65

Au >= 0.3

0.320

0.340

30

15

0.340

275

125

30

-90

65

Au >= 0.6

0.383

0.447

20

15

0.170

200

115

28

-90

65

Au >= 1

0.505

0.354

20

15

0.141

150

90

20

-90

65

Au >= 1.5

0.545

0.303

15

10

0.152

125

85

20

-90

65

Au >= 2.5

0.583

0.250

15

10

0.167

100

70

15

-90

65

Au >= 3.5

0.632

0.195

15

10

0.172

80

55

15

-90

65

Au >= 5

0.645

0.161

15

10

0.194

75

55

15

-90

65

Au >= 7.5

0.658

0.132

15

10

0.211

65

55

15

-90

65

Au >= 10

0.714

0.107

15

10

0.179

50

50

15

-90

65

Au >= 20

0.789

0.105

10

10

0.105

50

50

15

-90

65

Au >= 25

0.791

0.104

10

10

0.104

50

50

15

-90

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.

78

Newcrest Mining - Telfer Property Report - 31 December 2013

Table 14.6

Search neighbourhood parameters for MIK estimation of gold and


copper grade in the bulk domains.

Domain

Eleme
nt

VSC

Au

Block
Discretisation
x

Min
Samp

Max
Samp

12

40

Isatis
Rotation
(Mathematician)

Search Radii (m)


major

semi

minor

330

160

50

A Reef Block

Au

12

40

330

160

50

Stwk Upper

Au

12

40

330

160

50

Stwk Lower

Au

12

40

330

160

50

VSC

Cu

12

40

410

190

50

A Reef Block

Cu

12

40

410

190

50

Stwk Upper

Cu

12

40

410

190

50

Stwk Lower

Cu

12

40

410

190

50

Az

Ay

Ax

Dynamic rotation applied to


variogram
model
and
search ellipsoid

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 backtransformed 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.
Spherical 1

Element
(Domain)

Isatis Rotation
(Mathematician)

Spherical 2

Nugget
sill

major
(m)

semi
(m)

minor
(m)

sill

major
(m)

semi
(m)

minor
(m)

Au (LLU)

0.568

0.231

20

20

20

0.202

220

220

220

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

Az

Ay

Ax

Isotropic

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.

79

Newcrest Mining - Telfer Property Report - 31 December 2013

Table 14.8

Search neighbourhood parameters for OK estimation of gold and


copper grade in the LLU and Oakover bulk domains.
Block Discretisation

Domain

Min
Samp

Element
x

Isatis Rotation
(Mathematician)

Search Radii (m)

Max
Samp

major

semi

minor

Az

Ay

Ax

LLU

Au

24

500

375

100

LLU

Cu

24

500

375

100

Oakover

Au

24

500

500

100

-45

Oakover

Cu

24

500

500

100

-45

Dynamic rotation applied to


variogram and search
ellipsoid

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

30

wt%

VSC

As

2000

Ppm

VSC

Co

2000

Ppm

Oakover

30

wt%

Oakover

As

2000

Ppm

Oakover

Co

1000

Ppm

A Reef Block

30

wt%

A Reef Block

As

4000

Ppm

A Reef Block

Co

3000

Ppm

Stwk Upper

30

wt%

Stwk Upper

As

2000

Ppm

Stwk Upper

Co

2000

Ppm

Stwk Lower

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.

80

Newcrest Mining - Telfer Property Report - 31 December 2013

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

81

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

Newcrest Mining - Telfer Property Report - 31 December 2013

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 CoVs 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
Domain

B30

M60

M65

M68

M70

Estcode

430

260

265

268

270

Variable

82

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

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)

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

10.00

58.50

3.86

52.95

6.00

45.00

1.75

17.00

2.80

Max

34.87

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

Newcrest Mining - Telfer Property Report - 31 December 2013

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 lengthweighted 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.

83

Newcrest Mining - Telfer Property Report - 31 December 2013

Table 14.14

Variogram, models for the estimation of gold and copper grade in the
reef estimation domains
Spherical 1

Element
(Domain)

Isatis Rotation
(Mathematician)

Spherical 2

Nugget
sill

major
(m)

semi
(m)

minor
(m)

sill

major
(m)

semi
(m)

minor
(m)

Au (B30)

0.197

0.218

25

25

25

0.585

210

210

210

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

Az

Ay

Ax

Isotropic

Search parameters for OK Tetra Modelling of gold and copper grade in


the reef domains
Search Radii
major

semi

Minor Proportion
Value

450

450

0.4

450

450

0.4

300

300

0.4

350

300

300

0.4

350

350

350

0.4

Cu

350

350

350

0.4

M68

Au

350

250

250

0.4

M68

Cu

350

250

250

0.4

M70

Au

350

350

350

0.4

M70

Cu

350

350

350

0.4

Domain

Element

Azimuth

Plunge

Dip

B30

Au

350

B30

Cu

350

M60

Au

350

M60

Cu

M65

Au

M65

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.

84

Newcrest Mining - Telfer Property Report - 31 December 2013

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
Spherical 1

Element
(Domain)

Nugget

S (B30)
As (B30
Co (B30)
S (M70)
As (M70)
Co (M70)

0.162
0.200
0.192
0.373
0.293
0.249

Isatis Rotation
(Mathematician)

Spherical 2

sill

major
(m)

semi
(m)

minor
(m)

sill

major
(m)

semi
(m)

minor
(m)

0.284
0.243
0.242
0.627
0.707
0.751

60
80
80
45
50
45

60
80
80
45
50
45

60
80
80
45
50
45

0.554
0.557
0.567
-

125
140
140
-

125
140
140
-

125
140
140
-

Az

Ay

Ax

Isotropic

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

Domain
B30

Search parameters for OK Tetra Modelling of sulphur, arsenic and


cobalt grade in the reef domains

Attribute

Azimuth

Plunge

Dip

Search Radii
major

semi

Minor Proportion
Value

As

350

600

600

0.4

B30

350

650

650

0.4

B30

Co

350

600

600

0.4

M60

As

350

400

400

0.4

M60

350

400

400

0.4

M60

Co

350

400

400

0.4

M65

As

350

500

500

0.4

M65

350

500

500

0.4

M65

Co

350

500

500

0.4

M68

As

350

400

400

0.4

M68

350

400

400

0.4

M68

Co

350

400

400

0.4

M70

As

350

350

350

0.4

M70

350

350

350

0.4

M70

Co

350

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.

85

Newcrest Mining - Telfer Property Report - 31 December 2013

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

Table 14.19

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

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.

86

Newcrest Mining - Telfer Property Report - 31 December 2013

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 CoVs 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
Estimation
Domain

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


applied

B30

M60

M65

M68

M70

LLU

Oakover

VSC

A
Reefs

Stwk
Upper

Stwk
Lower

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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Newcrest Mining - Telfer Property Report - 31 December 2013

Table 14.21

Constant density values assigned to bulk domains


3

Domain

Assigned Density Value (t/m )

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
88

Newcrest Mining - Telfer Property Report - 31 December 2013

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 widthweighted 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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Newcrest Mining - Telfer Property Report - 31 December 2013

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

90

Cross Section 11300N through Main Dome UG

Newcrest Mining - Telfer Property Report - 31 December 2013

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
Newcrests 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 Newcrests
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
OCallaghans 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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Newcrest Mining - Telfer Property Report - 31 December 2013

Table 15.1

Telfer Main Dome Open Pit Mineral Reserve Estimate at 31 December


2013
Mineral
Reserve
Classification

Mt

Gold

Copper

Gold

Copper

(g/t)

(%)

(Moz)

(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

94

Newcrest Mining - Telfer Property Report - 31 December 2013

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
Proven

Mt

Gold
(g/t)
-

Copper
(%)

Gold
(Moz)

Copper
(Mt)

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.
95

Newcrest Mining - Telfer Property Report - 31 December 2013

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:

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.

15.5 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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Newcrest Mining - Telfer Property Report - 31 December 2013

Table 15.3

Telfer UG SLC Mineral Reserve Estimate at 31 December 2013


Reserve
Classification
Proven

Mt

Gold
(g/t)

Copper
(%)

Gold
(Moz)

Copper
(Mt)

Probable

17

0.91

0.23

0.5

0.04

Subtotal

17

0.91

0.23

0.5

0.04

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

15.5.2

Telfer UG SLC remaining Life of Mine Design - Isometric View

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
97

Newcrest Mining - Telfer Property Report - 31 December 2013

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
Reserve
Classification

Mt

Gold
(g/t)

Copper
(%)

Gold
(Moz)

Copper
(Mt)

Probable

15

0.98

0.16

0.5

0.03

Subtotal

15

0.98

0.16

0.5

0.03

Proven

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 15.3 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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Newcrest Mining - Telfer Property Report - 31 December 2013

Figure 15.3

Plan View showing Telfer UG Western Flanks

Mine Grid
North

500 metres

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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)

Proven

Probable

3.4

0.25

0.5

0.01

Subtotal

3.4

0.25

0.5

0.01

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 15.4

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
Newcrests 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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Newcrest Mining - Telfer Property Report - 31 December 2013

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 OCallaghans 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

16.2.3

Western Flanks Proposed Mine Layout - Isometric View

Telfer UG M Reefs Selective Mining

The mining method for extraction of M Reef resources is narrow vein, shallow dipping sublevel 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
45 or steeper, all diluted material was deemed recoverable (2 x 45 + 10 = 100%), whereas
for a reef dip of 30, 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 goldbearing copper concentrate as well as gold dor. A new treatment plant was constructed
on-site and commissioned in late 2004. Two products are generated, namely gold dor and
a gold bearing copper concentrate, with approximately 25% of the Telfer gold production
reporting to the dor 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 dor 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.

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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


Ounces

Production
Year

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

2012-2013
2011-2012
2010-2011

Feed Grade

Conc. Grade

% Cu

g/t Au

% Cu

g/t Au

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

2009-2010

21,894,106

0.19

1.10

16.9

2008-2009

18,788,116

0.20

1.14

17.2

2007-2008

18,267,273

0.20

1.13

2006-2007

20,571,935

0.21

2005-2006*

20,620,359

0.28

Rec
Cu
(%)

Gold Recovery (%)

Production

Grav.

Flot'n

Pyrite
Leach

Total

t Cu

oz Au**

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

69.0

84.7

24.5

69.0

4.6

88.1

34,815

688,909

68.7

87.0

23.6

61.4

3.2

88.2

32,905

629,108

19.0

84.3

73.3

22.3

57.4

3.8

83.5

26,771

590,217

1.16

20.5

90.5

65.1

21.8

50.7

4.4

76.9

27,820

627,077

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 AsiaPacific 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 US4.5/lb to US9.2/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 Dor
Gold dor bars contain approximately 70% to 90% gold with the balance as other precious
metals such as silver, with a small amount of waste. The dor produced at Telfer is security
transported by air freight from the mine site to a refinery for further processing.
The dor 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 dor; 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,
Platts 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 noncompliance.
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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Newcrest Mining - Telfer Property Report - 31 December 2013

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

621,291

540,114

525,500

Gold Production

oz

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

-339

-377

Cash Cost

A$/oz

674

783

1,022

Depreciation and Amortization

A$/oz

291

333

389

A$/oz

965

1,116

1,411

Total Cost

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

Total Site Cash Costs

A$M

850

Waste Stripping and Ore Inventory

A$M

-198

26

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

Site Expenditure*

FY 2011 Actual
A$M

FY 2012 Actual
A$M

FY 2013 Actual
A$M

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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

Cash cost (including by-product credits)


On-site exploration expenditure

Unit
1

FY14 Guidance

A$M

490-540

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

A$M

20-25

Sustaining Capital

A$M

60-70

Projects and development capital

A$M

Total capital expenditure

A$M

80-90

Production Waste Stripping

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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 Newcrests annual operating and performance review which forms part
of Newcrests 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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Newcrest Mining - Telfer Property Report - 31 December 2013

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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
Environmental Protection Act 1986.

2007:

Licence

issued

under

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-MN0014_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-ENREP-0026
Newcrest 2010: Telfer Operations - Port Hedland Copper Concentrate Facility Annual EMP
Audit Report 2011 E26 108 REP.
123

Newcrest Mining - Telfer Property Report - 31 December 2013

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
O'Callaghan's/Trotman's Project Approvals Strategy

Optimization

Project

and

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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Newcrest Mining - Telfer Property Report - 31 December 2013

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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Newcrest Mining - Telfer Property Report - 31 December 2013

28

QUALIFIED PERSONS 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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Newcrest Mining - Telfer Property Report - 31 December 2013