To: Company Announcements Office From: Peter Larsen Date: 2 March 2012 Subject: Toronto Stock Exchange Listing - Gosowong Technical Report

To: Company Announcements Office
LEVEL 9
600 ST KILDA ROAD From: Peter Larsen
MELBOURNE
VICTORIA 3004 Date: 2 March 2012
AUSTRALIA
For personal use only
Subject: Toronto Stock Exchange Listing – Gosowong

PO BOX 6213
ST KILDA ROAD CENTRAL
Technical Report
MELBOURNE 8008
T +613 9522 5333 In relation to Newcrest Mining Limited’s secondary listing on the Toronto
F +613 9525 2996 Stock Exchange (“TSX”), please find attached for immediate release and for
www.newcrest.com.au the information of the market:
• Technical Report on the Gosowong Property in North Maluku

Province, Indonesia dated December 31, 2011.
The attached Report is referred to in the Newcrest Annual Information Form

(“AIF”) for the Fiscal Year Ended June 30, 2011 dated as of February 27,
2012, lodged on the ASX contemporaneously and as filed with the Canadian
regulatory authorities.
Important note:
With respect to the reporting of Newcrest’s resources and reserves which are
required to be reported in accordance with the Australasian Code for
Reporting of Exploration Results, Minerals Resources and Ore Reserves
(“The JORC Code”) 2004 edition, readers of the AIF and accompanying
technical reports are expressly referred to Newcrest’s December 2011
Resources and Reserves Statement lodged with ASX on 10th February 2012.
Canadian regulations require Ore Reserves and Mineral Resources to be

reported in accordance with National Instrument 43-101 – Standards of
Disclosure for Mineral Projects of the Canadian Securities Administrators (“NI
43-101”) and the provisions of the Canadian Institute of Mining, Metallurgy
and Petroleum (CIM) Definition Standards – for Mineral Resources and Ore
Reserves 2010 (“CIM Definition Standards”).
As noted above, Australian regulations require ore reserves and resources to

be reported in accordance with The JORC Code.
A comparison of the respective requirements of NI 43-101 and The JORC

Code is contained at page 14 (and following) of the AIF under the heading
“Mineral Reserves and Mineral Resources”.
Yours sincerely
Peter Larsen
Deputy Company Secretary
A MEMBER OF THE
NEWCREST MINING GROUP
ABN 20 005 683 625
AMC Mining Consultants (Canada) Ltd
BC0767129
Suite 1330, 200 Granville Street

Vancouver BC V6C 1S4
CANADA
T +1 604 669 0044
F +1 604 669 1120
E amccanada@amcconsultants.ca
TECHNICAL REPORT ON THE GOSOWONG

PROPERTY
IN
NORTH MALUKU PROVINCE
INDONESIA
Prepared for Newcrest Mining Limited
by
AMC Mining Consultants (Canada) Ltd in accordance with the requirements of

National Instrument 43-101, Standards for Disclosure of Mineral Projects, of the
Canadian Securities Administrators.
Qualified Persons:
Mr Malcolm Dorricott BEng (Mining), FAusIMM (CP)
Mr Rolly Nice FAusIMM
Mr Colin Moorhead BSc (Hons), FAusIMM
AMC 711037
Effective Date of Report: 31 December 2011
ADELAIDE BRISBANE MELBOURNE PERTH UNITED KINGDOM VANCOUVER TORONTO

+61 8 8201 1800 +61 7 3839 0099 +61 3 8601 3300 +61 8 6330 1100 +44 1628 778 256 +1 604 669 0044 +1 416 640 1212
www.amcconsultants.com
NEWCREST MINING LIMITED
Technical Report on the Gosowong Property
CONTENTS
EXECUTIVE SUMMARY
1 SUMMARY ..............................................................................................................9
1.1 Geology .......................................................................................................9
1.2 Mine Production ..........................................................................................9
1.3 Mineral Resources ......................................................................................9
1.4 Mineral Reserves ........................................................................................10
1.5 Gosowong Open Pit Mine ...........................................................................11
1.6 Kencana Underground Mine .......................................................................11
1.7 Toguraci Underground Project....................................................................11
1.8 Tailings Reclamation Project ......................................................................12
1.9 Infrastructure and Mineral Processing ........................................................12
1.10 Environmental Management .......................................................................12
1.11 Capital and Operating Costs .......................................................................13
1.12 Conclusions .................................................................................................14
1.13 Recommendations ......................................................................................15
2 INTRODUCTION ....................................................................................................16
2.1 General and Terms of Reference ...............................................................16
2.2 Report Authors ............................................................................................16
2.3 Units of Measure and Currency ..................................................................17
3 RELIANCE ON OTHER EXPERTS ........................................................................20
4 PROPERTY DESCRIPTION AND LOCATION ......................................................21
4.1 Property Location ........................................................................................21
4.2 Land Tenure ................................................................................................21
4.3 Relevant Agreements .................................................................................22
4.3.1 PT Aneka Tambang Persero Joint Venture ....................................22
4.4 Environmental Liabilities .............................................................................22
5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY ...................................................................................................23
5.1 Topography, Elevation and Vegetation ......................................................23
5.2 Access .........................................................................................................23
5.3 Climate ........................................................................................................24
5.4 Surface Rights .............................................................................................24
6 HISTORY ................................................................................................................25
6.1 History of Project Development ..................................................................25
6.2 Historical Production ...................................................................................25
7 GEOLOGICAL SETTING AND MINERALIZATION ...............................................27
7.1 Regional Geology........................................................................................27
7.2 Deposit Geology..........................................................................................28
7.2.1 Cover Sequence..............................................................................31
Gosowong Property December 31 2011.docx i

7.2.2 Volcanic Rocks ................................................................................32

7.2.2.1 Kayasa Formation...............................................................32
7.2.2.2 Gosowong Formation .........................................................32
7.2.3 Intrusive Rocks ................................................................................33
7.2.4 Hydrothermal Alteration ..................................................................33
7.2.5 Mineralization ..................................................................................34
7.2.6 Structure ..........................................................................................35
7.2.7 Oxidation .........................................................................................36
8 DEPOSIT TYPES ...................................................................................................37
9 EXPLORATION ......................................................................................................38
10 DRILLING................................................................................................................40
10.1 Surface Diamond Drilling ............................................................................41
10.2 Underground Drilling ...................................................................................42
10.3 Underground Sampling ...............................................................................43
11 SAMPLE PREPARATION, ANALYSES, AND SECURITY....................................44
11.1 Sample Preparation ....................................................................................44
11.2 Chemical Analysis .......................................................................................45
11.3 Assay Quality Assurance and Quality Control ...........................................46
11.3.1 Toguraci QA/QC 2008–2010 ..........................................................46
11.3.1.1 Certified Reference Materials ........................................47
11.3.1.2 Pulp Blanks ....................................................................49
11.3.1.3 Pulp Duplicates ..............................................................49
11.3.1.4 Laboratory Duplicates ....................................................50
11.3.1.5 Laboratory Replicates ....................................................50
11.3.1.6 Screen Fire Assays ........................................................51
11.3.1.7 Second Laboratory Samples .........................................53
11.3.2 Kencana ..........................................................................................54
11.3.2.1 Certified Reference Materials ........................................54
11.3.2.2 Pulp Duplicates ..............................................................57
11.3.2.3 Second Laboratory Samples .........................................60
11.4 Sample Security ..........................................................................................61
12 DATA VERIFICATION ............................................................................................63
13 MINERAL PROCESSING AND METALLURGICAL TESTING .............................64
13.1 Metallurgical Testwork ................................................................................64
13.2 Comminution Testwork ...............................................................................65
13.3 Leaching Testwork ......................................................................................66
13.4 Grind Size – Recovery Relationship ...........................................................68
13.5 Oxygen Uptake ...........................................................................................68
13.6 Liquid-Solid Separation ...............................................................................70
13.7 Rheology .....................................................................................................71
13.8 Other Investigations ....................................................................................71
14 MINERAL RESOURCE ESTIMATES.....................................................................73
Gosowong Property December 31 2011.docx ii

Rounding may cause some computational discrepancies in totals .......................73

14.1 Kencana Mineral Resource Estimate .........................................................73

14.1.1 Mineralization Modeling and Domaining .........................................74
14.1.2 Compositing and Descriptive Statistics...........................................78
14.1.3 Data Analysis ..................................................................................79
14.1.3.1 K1 Vein...........................................................................79
14.1.3.2 K2 Vein...........................................................................86
14.1.3.3 K Link .............................................................................90
14.1.4 Variography .....................................................................................93
14.1.4.1 K1 Main Zone.................................................................94
14.1.4.2 K1 Stockwork .................................................................95
14.1.4.3 K2 Main Zone.................................................................95
14.1.4.4 K2 Stockwork .................................................................96
14.1.4.5 K Link Main Zone ...........................................................96
14.1.4.6 K Link Stockwork ...........................................................97
14.1.5 Grade Estimation.............................................................................97
14.1.6 Resource Classification...................................................................99
14.2 Toguraci Mineral Resource Estimate .........................................................99
14.2.1 Mineralization Domaining ................................................................101
14.2.2 Compositing ....................................................................................103
14.2.3 Composite Statistics ........................................................................103
14.2.4 Simulation of Bonanza Zone ...........................................................106
14.2.5.1 Damar and BOD-Yahut Grade Estimation ....................108
14.2.5.2 Midas, Kayu Manis and Wulan Grade Estimation.........109
14.2.6 Mineral Resource Classification .....................................................109
14.3 Gosowong Mineral Resource Estimate ......................................................110
14.3.1 Geological Interpretation .................................................................110
14.3.2 Composite Statistics ........................................................................111
14.3.4 Resource Classification...................................................................113
15 MINERAL RESERVE ESTIMATES ........................................................................114
Rounding may cause some computational discrepancies in totals .......................114
15.1 Mineral Reserve Assumptions ....................................................................114
15.1.1 Commodity Prices and Exchange Rate ..........................................114
15.1.2 Cost Estimates ................................................................................115
15.2 Gosowong Cutback Mineral Reserve .........................................................115
15.2.1 Underpinning Assumptions .............................................................115
15.2.2 Mine Design and Evaluation ...........................................................115
15.2.3 Modifying Factors ............................................................................116
15.2.4 Checks on Estimation .....................................................................116
15.3 Kencana Mineral Reserve ..........................................................................116
Rounding may cause some computational discrepancies in totals ...........117
Gosowong Property December 31 2011.docx iii



15.4 Toguraci Mineral Reserve ...........................................................................119
Rounding may cause some computational discrepancies in totals ...........120
15.5 Reclaimable Tailings Mineral Reserve .......................................................123
16 MINING METHODS ................................................................................................126
16.1 Gosowong Cutback .....................................................................................126
16.1.1 Mining Method .................................................................................126
16.1.2 Geotechnical and Hydrological Conditions .....................................126
16.1.3 Production Rate...............................................................................126
16.1.4 Pre-Stripping ...................................................................................126
16.1.5 Mining Fleet .....................................................................................127
16.2 Kencana Underground Mine .......................................................................127
16.2.1 Mining Method .................................................................................127
16.2.1.1 Ore Loss and Dilution ....................................................127
16.2.2 Geotechnical and Hydrological Conditions .....................................128
16.2.3 Production Rate...............................................................................128
16.2.4 Mining Fleet .....................................................................................128
16.3 Toguraci Underground Mine .......................................................................129
16.3.1 Mining Methods ...............................................................................129
16.3.1.1 Ore Loss and Dilution ....................................................129
16.3.2 Geotechnical and Hydrological Considerations ..............................130
16.3.3 Production Rate...............................................................................130
16.3.4 Mining Fleet .....................................................................................130
16.4 Reclamation of Mill Tailings ........................................................................131
16.4.1 Mining Method .................................................................................131
16.4.2 Production Rate...............................................................................132
16.4.3 Mining Fleet .....................................................................................132
17 RECOVERY METHODS.........................................................................................133
17.1 Process Plant Flowsheet ............................................................................133
17.2 Plant Performance ......................................................................................134
18 PROJECT INFRASTRUCTURE .............................................................................136
18.1 Port Facility..................................................................................................136
18.2 Electrical Power Generation and Reticulation ............................................136
18.3 Tailings Storage Facility ..............................................................................136
18.3.1 Tailings Management ......................................................................137
18.4 Camp ...........................................................................................................137
18.5 Sewage .......................................................................................................138
Gosowong Property December 31 2011.docx iv

18.6 Aerodrome...................................................................................................138
18.7 Water ...........................................................................................................138

18.8 Miscellaneous Infrastructure .......................................................................138
19 MARKET STUDIES AND CONTRACTS ................................................................139
19.1 Refining Arrangement .................................................................................139
19.2 Sales ...........................................................................................................139
19.2.1 Demand ...........................................................................................139
19.2.2 Supply ..............................................................................................139
20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY
IMPACT ..................................................................................................................141
20.1 Overview .....................................................................................................141
20.2 Individual Environmental Issues .................................................................141
20.2.1 Statutory Environmental Approvals and Compliance .....................141
20.2.2 Water Supply and Management .....................................................142
20.2.3 Flora and Fauna Conservation .......................................................142
20.2.4 Acid Mine Drainage .........................................................................142
20.2.5 Noise and Dust Management .........................................................143
20.2.6 Waste Management ........................................................................143
20.2.7 Closure and Rehabilitation ..............................................................143
20.2.8 Community Issues ...........................................................................144
20.2.9 Security Issues ................................................................................144
21 CAPITAL AND OPERATING COSTS ....................................................................145
21.1 Historical Costs ...........................................................................................145
21.2 Future Costs ................................................................................................145
22 ECONOMIC ANALYSIS .........................................................................................147
23 ADJACENT PROPERTIES ....................................................................................148
24 OTHER RELEVANT DATA AND INFORMATION .................................................149
25 INTERPRETATION AND CONCLUSIONS ............................................................150
26 RECOMMENDATIONS ..........................................................................................151
27 REFERENCES .......................................................................................................152
28 QUALIFIED PERSONS’ CERTIFICATES ..............................................................154
TABLES
Table 1.1 Gosowong Mineral Resource Estimate at 31 December 2011 ..........................10
Table 1.2 Gosowong Mineral Reserve Estimate at 31 December 2011 ............................10
Table 1.3 Gosowong FY 2011 Actual Production and Operating Costs* ..........................13
Table 1.4 Gosowong FY 2012 Operating Cost Estimate* ..................................................14
Table 1.5 Toguraci Capital Expenditure Estimate ..............................................................14
Table 2.1 Persons Who Prepared or Contributed to this Technical Report .......................16
Gosowong Property December 31 2011.docx v

Table 2.2 Terms and Abbreviations ....................................................................................18

Table 6.1 Historical Production ...........................................................................................26

Table 11.1 Sample Analysis Methods ..................................................................................46
Table 11.2 Certified Values for CRMs Used Since 2004 .....................................................47
Table 11.3 Median Bias for CRMs by Grade Range ............................................................47
Table 13.1 PTNHM Process Plant Comminution Testwork Results (2011) .........................65
Table 13.2 Leach Gold Extraction Results Testwork 2007 and 2008 ..................................67
Table 14.1 Mineral Resources at Gosowong at 31 December 2011 ...................................73
Table 14.2 Kencana Domains and ZONECODE Field .........................................................79
Table 14.3 K1 Summary Statistics by Estimation Domain ...................................................84
Table 14.4 K1 Risk Adjusted Summary Statistics by Estimation Domain ............................85
Table 14.5 K1 Stockwork Summary Statistics ......................................................................86
Table 14.6 K2 Summary Statistics ........................................................................................88
Table 14.7 K2 Risk Adjusted Summary Statistics ................................................................89
Table 14.8 K2 Stockwork Summary Statistics ......................................................................90
Table 14.9 K Link Summary Statistics ..................................................................................91
Table 14.10 K Link Risk Adjusted Summary Statistics ...........................................................92
Table 14.11 K Link Stockwork Summary Statistics ................................................................93
Table 14.12 Variogram Models for K1 Main Zone ..................................................................95
Table 14.13 Variogram Models for K1 Stockwork ..................................................................95
Table 14.14 Variogram Models for K2 Main Zone ..................................................................96
Table 14.15 Variogram Models for K2 Stockwork ..................................................................96
Table 14.16 Variogram Models for K Link Main Zone ............................................................96
Table 14.17 Variogram Models for K Link Stockwork ............................................................97
Table 14.18 Kencana Volume Model Parameters ..................................................................97
Table 14.19 K1 Estimation Parameters ..................................................................................98
Table 14.20 K2 Estimation Parameters ..................................................................................98
Table 14.21 K Link Estimation Parameters ............................................................................98
Table 14.22 Toguraci Domain Codes .....................................................................................102
Table 14.23 Geological Composite Gold Grade Statistics and Cut Statistics........................104
Table 14.24 Geological Composite Silver Grade Statistics and Cut Statistics ......................104
Table 14.25 Damar Variogram Models ...................................................................................108
Table 14.26 BOD Yahut Variogram Models ...........................................................................108
Table 14.27 Midas, Kayu Mains and Wulan Variogram Models ............................................109
Table 14.28 Gosowong Vein Zone Gold Composite Statistics ..............................................112
Table 14.29 Gosowong Vein Zones Silver Composite Statistics ...........................................112
Table 14.30 Gosowong Variogram Models ............................................................................112
Table 14.31 Volume Model Parameters .................................................................................113
Table 15.1 Summary of Gosowong Mineral Reserve by Operation .....................................114
Table 15.2 Gosowong Cutback Mineral Reserve at 31 December 2011 .............................115
Table 15.3 Kencana 31 December 2011 Mineral Reserve Estimate by Deposit.................117
Table 15.4 Kencana Historical Cut–off Grades ....................................................................117
Table 15.5 Toguraci 31 December 2011 Mineral Reserve Estimate by Deposit .................120
Table 15.6 Comparison of December 2011 and June 2011 Cut-off Grades .......................121
Table 15.7 Reclaimable Tailings 31 December 2011 Mineral Reserve Estimate ................123
Gosowong Property December 31 2011.docx vi

Table 16.1 Historical Kencana Production............................................................................128

Table 16.2 Planned Toguraci Mobile Fleet ...........................................................................131

Table 17.1 Historical Production ...........................................................................................135
Table 21.1 Historical Production and Costs per Ounce of Gold Produced ..........................145
Table 21.2 Gosowong FY 2012 Operating Cost Estimate* ..................................................146
Table 21.3 Toguraci Capital Expenditure Estimate ..............................................................146
FIGURES
Figure 4.1 Property Location ............................................................................................ 21

Figure 5.1 Average Monthly Rainfall at Gosowong ......................................................... 24
Figure 7.1 Tectonic Setting of Eastern Indonesia (Hall, 2002) ........................................ 28
Figure 7.2 Geology of the Gosowong Region .................................................................. 29
Figure 7.3 Gosowong District Schematic Stratigraphy .................................................... 30
Figure 7.4 Gosowong Gold Deposits and Prospective Corridors .................................... 31
Figure 10.1 Orientation of Grids at Toguraci, Gosowong and Kencana ........................... 41
Figure 11.1 Gosowong Laboratory Sample Preparation Protocol ..................................... 45
Figure 11.2 Z-score Control Charts for All CRMs Over Time ............................................ 48
Figure 11.3 Relative Pair Difference Plot for Pulp Duplicates ........................................... 49
Figure 11.4 Relative Pair Difference Plot for Laboratory Pulp Duplicates ........................ 50
Figure 11.5 Relative Pair Difference Plot for Laboratory Replicates ................................. 51
Figure 11.6 Coarse Gold Proportion compared to Gold Grade ......................................... 52
Figure 11.7 Comparison of Screen Fire Assays and Original Assays .............................. 53
Figure 11.8 Relative Pair Difference Plot for Second Laboratory Assays ......................... 54
Figure 11.9 Z-score Control Charts for Gold for All CRMs, April 2007–Feb 2008 ............ 55
Figure 11.10 Z-score Control Charts for Gold for All CRMs, Mar 2008–Mar 2009 ............. 55
Figure 11.11 Z-score Control Charts for Silver for All CRMs, April 2007–Feb 2008 .......... 56
Figure 11.12 Z-score Control Charts for Silver for All CRMs, Mar 2008–Mar 2009 ........... 56
Figure 11.13 RDP Plots of Gold Assays for Pulp Duplicates, April 2007–Feb 2008 .......... 57
Figure 11.14 RDP Plots of Gold Assays for Pulp Duplicates, Mar 2008–Mar 2009 ........... 58
Figure 11.15 RPD Plot of Silver Assays for Pulp Duplicates, April 2007–Feb 2008 ........... 59
Figure 11.16 RPD Plot of Silver Assays for Pulp Duplicates, Mar 2008–Mar 2009 ............ 59
Figure 11.17 RPD Plot of Gold and Silver Assays for External Laboratory Duplicates, April
2007–Feb 2008 ............................................................................................... 60
Figure 11.18 RPD Plot of Gold and Silver Assays for External Laboratory Duplicates, Mar
2008–Mar 2009 ............................................................................................... 61
Figure 13.1 Grind Size Distribution and Gold Extraction Relationship .............................. 68
Figure 13.2 Sample D372 Oxygen Uptake ........................................................................ 69
Figure 13.3 Sample D373 Oxygen Uptake ........................................................................ 69
Figure 13.4 Thickener Underflow Pulp Density vs Grind Size ........................................... 71
Figure 14.1 K1 Section at 19 875 N Showing Vein and Stockwork Boundaries ............... 75
Figure 14.2 K2 Section at 19 615 N Showing Vein and Stockwork Boundaries ............... 76
Figure 14.3 K Link Oblique Section Centred on 19 540 N Showing Vein and Stockwork
Boundaries ...................................................................................................... 77
Figure 14.4 Plan Projection of Kencana Vein Domains used for Resource Estimation ... 78
Gosowong Property December 31 2011.docx vii

Figure 14.5 K1 Long Projection Looking West Showing Two Metre Composites ............. 80
Figure 14.6 Log-probability Plot of K1 Gold Grades in Two Metre Composites in

Drillholes and Grade Control Samples ........................................................... 81
Figure 14.7 Log-probability Plot of K1 Gold and Silver Grades in Two Metre Composites82
Figure 14.8 Log-probability Plot of K1 Gold Grades in Main Zone Subdomains .............. 83
Figure 14.9 Log-probability Plot of K1 Silver Grades in Main Zone Subdomains ............. 84
Figure 14.10 Log-probability Plot of K1 Stockwork Gold and Silver Grades in Two Metre
Composites ..................................................................................................... 86
Figure 14.11 K2 Long Projection Looking West Showing Two Metre Composites ............. 87
Figure 14.12 Log-probability Plot of K2 Gold and Silver Grades in Two Metre Composites88
Figure 14.13 Log-probability Plot of K2 Stockwork Gold and Silver Grades in Two Metre
Composites ..................................................................................................... 89
Figure 14.14 K Link Projection Looking North Showing Two Metre Composites................ 90
Figure 14.15 Log-probability of K Link Gold and Silver Grades in Two Metre Composites 91
Figure 14.16 Log-probability of K Link Stockwork Gold and Silver Grades in Two Metre
Composites ..................................................................................................... 93
Figure 14.17 Toguraci Veins at 5,000 m RL ...................................................................... 100
Figure 14.18 Plan of Toguraci Vein Wireframes ................................................................ 102
Figure 14.19 Toguraci Main Zones Log-probability Plot Cut Gold Composite Grades ..... 105
Figure 14.20 Toguraci Main Zone Log-probability Plot Cut Silver Composite Grades ..... 106
Figure 14.21 Damar Main Zone BZ Indicator Probability Map .......................................... 107
Figure 14.22 Plan Projection of Gosowong Epithermal Vein Domains ............................. 111
Figure 15.1 Plan Area of Reclaimable Tailings ................................................................ 124
Figure 15.2 Section of Reclaimable Tailings.................................................................... 125
Appendix A Gosowong Process Flowsheet
Gosowong Property December 31 2011.docx viii

1 SUMMARY
Newcrest Mining Limited (Newcrest) indirectly owns a majority shareholding (82.5%) in the
Gosowong Property (Gosowong) located in the North Maluku Province, Indonesia. The
minority shareholding is owned by PT Aneka Tambang—a limited liability, state-controlled,
semi-privatized mining company. The property is operated by PT Nusa Halmahera Minerals
(PTNHM).
For the purpose of reporting mineral resources and mineral reserves, Newcrest is reporting
100% of the assets, but has a beneficial interest of only 82.5%.
1.1 Geology
Gold mineralization of economic interest is of the low-sulfidation epithermal deposit type in

quartz vein structures that occur within a sequence of Tertiary volcanic and intrusive rocks
overlain by Quaternary age volcanic cover. Gold occurs within the quartz vein structures,
which vary from solid vein/lode to breccia containing both wallrock and quartz vein clasts, to
stockwork or sheeted veins, to fracture fill, cavity fill or as clasts within a fault.
Porphyry style mineralization has been found in the district but economic deposits have not
been identified to date.
1.2 Mine Production
In financial year ending (FYE) June 2011, PTNHM milled 0.59 Mt of ore producing
0.46 Moz of gold and 0.28 Moz of silver. Gold production represents approximately 17% of
Newcrest’s total gold production. Cash cost for the year is reported at A$329 /oz of gold.
1.3 Mineral Resources
Mineral resource estimates for Gosowong at 31 December 2011 are summarized in Table
1.1.
Gosowong Property December 31 2011.docx 9

Table 1.1 Gosowong Mineral Resource Estimate at 31 December 2011

Tonnes Au Ag Gold Silver

Operation
(Millions) (g/t) (g/t) (Moz) (Moz)
Indicated Resource
Kencana 2.4 18 11 1.4 0.9
Toguraci 1.2 21 46 0.8 1.8
Gosowong Pit 0.53 7.7 24 0.1 0.4
Tailings 0.64 2.8 4.6 0.1 0.1
Stockpiles 0.03 14 21 0.01 0.02
Total 4.8 15 21 2.4 3.2
Inferred Resource
Toguraci 0.32 9.3 20 0.1 0.2
Notes: 1. The cut-offs applied are variable and are described in the text of the report.
2. The figures above include those resources converted to reserves.
3. Newcrest is reporting 100% of the assets, but has a beneficial interest of only 82.5%.
4. Rounding may cause some computational discrepancies in totals
1.4 Mineral Reserves
Mineral reserve estimates for Gosowong at 31 December 2011 are summarized in Table
1.2.
Table 1.2 Gosowong Mineral Reserve Estimate at 31 December 2011

Gold Silver Contained Contained
Reserve Tonnes Grade Grade Au Ag
Deposit Classification (Million) (g/t) (g/t) (Moz) (Moz)
Gosowong Cutback Proved – – – – –
Probable 0.53 6.4 17 0.1 0.3
Kencana Proved - - - - -
Probable 2.5 15 9.7 1.2 0.8
Toguraci Proved – – – – –
Probable 1.4 14 31 0.6 1.4
Tailings Proved – – – – –
Probable 0.64 2.8 4.6 0.1 0.1
Stockpiles Proved
Probable 0.03 14 21 0.01 0.02
Total Proved - - - - -
Probable 5.1 12 16 2.0 2.6
Total Proved + Probable 5.1 12 16 2.0 2.6
Notes: 1. The cut-offs applied are variable and are described in the text of the report.
2. Gold price used US$1,400/oz. Silver price used, US$25/oz.
3. Newcrest is reporting 100% of the assets, but has a beneficial interest of only 82.5%.
4. Rounding may cause some computational discrepancies in totals

1.5 Gosowong Open Pit Mine

The Gosowong Open Pit commenced in March 1999 and was suspended in May 2002 due
to wall failure. A cutback of the Gosowong Open Pit commenced in October 2010 with early
works commencing in July 2010. The cutback will allow remediation of earlier wall failures
and will deepen the pit to recover additional ore.
The cutback is being carried out as a staged approach using a conventional truck and
shovel mining method employing small capacity trucks and excavators.
The remaining mineral reserve in the cutback totals 0.53 Mt grading 6.4 g/t gold and
17 g/t silver. Total planned life-of-mine waste movement is 14 Mt, for a stripping ratio of
approximately 31:1. Total planned material movement is 0.6 Mt per month with completion
of mining scheduled in 2012.
1.6 Kencana Underground Mine
Kencana is an established underground mine with a consistent history of high-grade

production. Decline development at Kencana commenced in July 2005 and the first
underground ore was mined in March 2006. The mineral reserve at Kencana is contained
within three vein structures: The K1, the K2 and the K Link. Mining is currently scheduled to
continue until FYE June 2016.
The predominant mining method used at Kencana is underhand cut-and-fill (UHCAF). This
is a reliable but relatively high cost mining method, suitable for high-grade deposits hosted
in poor ground conditions, such as those prevalent at Kencana. Longhole stoping (LHS) is
used at Kencana in areas of lower grade and better ground conditions.
The remaining mineral reserve at Kencana totals 2.5 Mt grading 15 g/t gold and 9.7 g/t
silver. The production rate is scheduled to remain at 0.5-0.6 Mtpa until ramping down in the
final two years of mine life.
1.7 Toguraci Underground Project
Open pit mining at Toguraci occurred from 2003 to 2006.
By August 2011 the feasibility study for the Toguraci underground mine was completed,
and surface works and decline development had already commenced. Mining of five distinct
but closely situated orebodies is planned. Three of these orebodies have previously been
mined by open pit methods.
All planned mining at Toguraci is based on extraction by underground mining methods. Two
mining methods will be used: LHS with backfill in the subvertical orebodies and overhand
cut-and-fill (OHCAF) in the flatter dipping orebody. Both methods are conventional, proven
technologies, are highly mechanized, are easily understood by mine planners and miners,
and allow good ore recovery.

The remaining mineral reserve at Toguraci totals 1.4 Mt grading 14 g/t gold and 31 g/t
silver. Production is scheduled to commence in the last quarter of FYE June 2012, ramping
up to approximately 0.3 Mtpa. The mine is expected to have a five year life.
1.8 Tailings Reclamation Project
The mineral processing operation conducted in the early years of the Gosowong project
treated higher grade feed material and achieved lower recoveries than the current
operation. Consequently, a significant quantity of readily accessible mill tailings at low, but
economic gold grades is located in the engineered tailings storage facility (TSF).
Reclamation of some of these tailings is occurring.
Excavators and rigid body dump trucks are used to remove tailings from the TSF and
transport them to elevated drying pads, where free draining and evaporation occurs. The
dried tailings will be re-handled and transported to the mill for re-processing.
At the beginning of September 2011, tailings grading 3 g/t gold were being reclaimed and
stacked for drying. The reclamation rate was about 60 ktpm. Reclamation activities are
scheduled to continue until March 2012.
Tailings reprocessing has not yet commenced but is scheduled to begin in

May 2012. Newcrest expects that feed rates will be about 10 ktpm with an expected
extraction of about 1 koz gold per month.
The mineral reserve for the reclaimable tailings is 0.64 Mt grading 2.8 g/t gold and
4.6 g/t silver.
1.9 Infrastructure and Mineral Processing
Gosowong includes the normal range of infrastructure expected of a professionally

operated, small-tonnage, high-grade mining operation.
Mineral processing of ore occurs on site to produce gold doré bars. The extraction of gold
from the Gosowong ores is considered conventional. Crushing, grinding, gravity separation
of free gold, cyanide dissolution of gold, clarification, and filtration precede the production of
a gold doré. The Logam Mulia refinery in Jakarta is contracted to refine 100% of Gosowong
doré.
1.10 Environmental Management
Gosowong is located in a sparsely populated region in the north of the island of Halmahera.
The terrain is steep, hilly and heavily forested. The region is equatorial and experiences a
tropical climate, characterized by high rainfall. Mining related operations dominate the land
use within the existing mining leases. Surrounding areas are mainly zoned as either
“protected” or “production” forests, and the Forestry Department and the Indonesian
government dominate land ownership in the region.

No villages or other formal settlements are located within the mine boundary. The nearest
village to Gosowong is located approximately 10 km east of the mine. The main economic
activity of local people is subsistence farming and fishing.
Gosowong provides an excellent example of sound environmental management. This

performance is based on thorough pre-disturbance baseline studies, pre-emptive planning
of impact-amelioration programs and rigorous monitoring and assessment programs, which
allow quick confirmation of compliance with quantitative thresholds; and subsequent review
and modification of environmental management plans.
Statutory approvals, the primary one of which flows from the Indonesian AMDAL—an
environmental impact assessment process—have been obtained in a timely fashion, and
performance is regularly reported to national and local agencies.
Community relations are responsibly managed through a community development program

that focuses on self-help rather than donation, and is aimed at facilitating long-term
development of the community.
There appears to be no technical or environmental issue likely to constrain the operation in

the foreseeable future.
1.11 Capital and Operating Costs
During FYE June 2011, A$57M was expended on capital projects at Gosowong, as part of
the Gosowong Expansion Project. A total of 17% of Newcrest’s annual exploration budget
of A$126M (or approximately A$21M) was spent in Indonesia, on and around the
Gosowong project.
Actual production and operating costs for FYE June 2011 are shown in Table 1.3.
Table 1.3 Gosowong FY 2011 Actual Production and Operating Costs*
Gosowong (100%) Unit FY11 Actual

Gold Production koz 463
Total site cash costs A$M 145
Stripping and ore inventory A$M (13)
Third party smelting refining and transporting A$M 2
Royalty A$M 26
Depreciation A$/oz 147
*Costs included in table exclude applicable by‐product credits

Future Costs
Exploration expenditure in FYE June 2012 is expected to be in the range A$25–30M, with
drilling campaigns planned for the Toguraci corridor and other regional targets.
Newcrest’s estimate for FYE June 2012 operating costs is summarized in Australian dollars
in Table 1.4.
Table 1.4 Gosowong FY 2012 Operating Cost Estimate*
Gosowong (100%) Unit FY12 Estimate

Total site cash costs A$M 165 - 175
Stripping and ore inventory A$M 3-8
Third party smelting refining and transporting A$M 2-4
Royalty A$M 25 - 30
Depreciation A$/oz 160 - 170
*Cost ranges included in table exclude applicable by product credits
A significant component of planned future capital expenditure for the Gosowong site is the
development of the Toguraci mine. The total capital estimate for the project, derived during
the recent feasibility study, to be expended between FYE June 2011 and FYE June 2016, is
set out in US$ in Table 1.5.
Table 1.5 Toguraci Capital Expenditure Estimate

Capital Cost
Item
(US$M)
Mine Capital Development 75.2
Mobile Equipment 21.4
Surface Infrastructure 25.8
Underground Infrastructure 6.1
Indirects EPCM 0.7
Technical Services 0.5
Contingency 6.2
Early Works Program 21.5
Total 157.5
1.12 Conclusions
Gosowong is a high-grade gold mine with substantial mineral reserves and excellent
prospectivity for the discovery of additional resources. The new Toguraci underground mine
is expected to begin production in FYE June 2012, serving as a second mining front and

supplementing production from the Kencana mine as Kencana production gradually

reduces.
At current gold prices, the mining operation is very robust.
1.13 Recommendations
Gosowong is an established mining operation with mineral reserves sufficient for a mine life
of several years.
Newcrest has sophisticated procedures for investigating and evaluating mineral resources,
and in developing projects for their efficient exploitation.
In view of the nature of Gosowong’s mining operations and the substantial mineral reserve
inventory, no recommendations are included.

2 INTRODUCTION
2.1 General and Terms of Reference
This Technical Report (the Report) on the Gosowong Property in the North Maluku
Province, Indonesia has been prepared by AMC Mining Consultants (Canada) Ltd (AMC) of
Vancouver, Canada on behalf of Newcrest Mining Limited of Melbourne, Australia, in
contemplation of a proposed listing of Newcrest on the Toronto Stock Exchange.
It has been prepared in accordance with the requirements of National Instrument 43-101
(NI 43-101), “Standards of Disclosure for Mineral Projects”, of the Canadian Securities
Administrators for lodgment on CSA’s “System for Electronic Document Analysis and
Retrieval” (SEDAR).
2.2 Report Authors
A listing of the authors of this Report, together with the sections for which they are
responsible, is given in Table 2.1.
Table 2.1 Persons Who Prepared or Contributed to this Technical Report
Qualified Indep of Date of Professional Sections of

Position Employer
Person Newcrest Site Visit Designation Report
Qualified Persons Responsible for the Preparation and Signing of This Technical Report
AMC
Principal Mining 10 and 11
M Dorricott Consultants Yes FAusIMM (CP) 1–11, 16, 18–28
Engineer July 2010
Pty Ltd
R. W Nice &
Metallurgical 6 Sept
R Nice Assoc Pty Yes FAusIMM 13, 17
Engineering Consultant 2011
Ltd
Executive General Newcrest
C Moorhead No Aug 2011 FAusIMM 12,14,15
Manager Minerals Mining Ltd
Other Experts Upon Whose Contributions the Qualified Persons Have Relied
Indep of Date of Professional Sections of
Expert Position Employer
Newcrest Site Visit Designation Report
AMC
D Carville Principal Geologist Consultants Yes Nov 2009 MAusIMM 7–11
Pty Ltd
AMC
Principal Mining 14 and 15 All except 7–15,
E Gleeson Consultants Yes MAusIMM (CP)
Engineer July 2011 17, 20
Pty Ltd
John
Environmental Affairs
C John Consulting Yes Oct 2005 MAusIMM 20
Consultant
Services
Australian Tenement Newcrest
L Bowyer No No N/A 4 (part)
Manager Mining Ltd

Mr Dorricott, a consulting mining engineer, visited the Gosowong operation in July 2010
and inspected the underground workings of the Kencana mine, the Gosowong Open Pit
mine, the Toguraci and Midas open pits, the processing plant, the tailings storage facility,
the pastefill plant and other surface infrastructure.
Mr Nice, a metallurgical engineering consultant, visited the Gosowong site in September

2011 and inspected the processing plant and related surface infrastructure.
Mr Moorhead is an employee of Newcrest and accepts Qualified Person responsibility for

the reporting of mineral resources and reserves in this report.
Mr Carville, a consulting geologist, visited the Gosowong operation in November 2009 and
inspected an underground resource drilling operation, sample handling and logging
techniques, the core storage facility and the sample preparation and assaying laboratory.
Mr Gleeson, a consulting mining engineer, visited the Gosowong operation in July 2011 and
inspected the underground workings of the Kencana mine, the Gosowong Open Pit mine,
the Toguraci decline, the tailings reclamation project, and the surface infrastructure.
Dr John, an environmental consultant, visited the Gosowong site in October 2005 and
inspected the Gosowong Open Pit, the mill and camp area, the Kencana portal and
workshop areas, and the tailings storage area.
The Technical Report is based on information provided by Newcrest, a list of which is

contained in Section 27, site visits undertaken by Qualified Persons, and on discussions
with Newcrest personnel.
Newcrest was provided with a draft of this report to review for factual content and
conformity with the brief.
This report is effective 31 December 2011.
2.3 Units of Measure and Currency
Throughout this Report, measurements are in metric units and currency in Australian
dollars unless otherwise stated. Table 2.2 includes key terms used and their abbreviations.

Table 2.2 Terms and Abbreviations

Unit/Term Abbreviation Unit/Term Abbreviation

Acidity or basicity pH Mining Purposes Leases MPLs
Australian height datum AHD Net Present Value NPV
Average Abrasion Index Ai Net Smelter Return NSR
Atomic Absorption AA Non-Acid Forming NAF
Atomic Absorption Spectrometry AAS One millionth of a metre µm
Bond Ball Work Index BWI Panel Caves PC
3
Cubic metres m Percent %
3
Cubic kilometres per annum km /a Per annum pa
3
Cubic metres per hour m /hr Per cubic metre /m3
Cyanide CN Per kilowatt hour /kWh
Diameter dia Per ounce (Troy) /oz
Drop Weight DWi Per pound (avdp) /lb
Dry Metric Tonnes dmt Per tonne /t
Engineering, procurement, and Plasma-optical Emission
EPCM ICP-OES
contract management Spectrometry
Environmental Assessment EA Potentially Acid Forming PAF
Exploration Licences ELs Pound (avdp) lb
Fire Assay FA Pre-feasibility study PFS
Forest Reefs Volcanics FRV Pyrite Py
Gold Au Pyrite doré Py doré
Quality Assurance Quality
Grams /t g/t QA/QC
Control
Grams /t of gold g/t Au Refining Charge RC
Hangingwall HW Relative Paired Difference RPD
High Pressure Grinding Rolls HGPR Reverse Circulation RC
Inductively-Coupled Plasma ICP Rod Mill Work Index RWi
Kilogram(s) kg SAG Mill Competency SMC
3
Kilograms per cubic metre kg/m Semi-autogenous grinding SAG
Kilometre(s) km Standard Operating Procedures SOP
2
Kilotonne per annum ktpa Square kilometres km
2
Kilowatt kW Square metres m
Kilowatt-hours kWh Sublevel Caving SLC
Kriging Neighbourhood Analysis KNA Tailings Storage Facility TSF
Litre l Thousand ounces (Troy) koz
Metre(s) m Tonne(s) t

Unit/Term Abbreviation Unit/Term Abbreviation

3
Million tonnes Mt Tonnes per cubic metre t/m
Million tonnes per annum Mtpa Tonnes per day tpd
Megawatts MW Tonnes per hour tph
Millimetres mm Volt(s) V
Weighing, Sampling and
Million ounces (Troy) Moz WSMD
Moisture Determination
Million years before now Ma Wet metric tonnes wmt
Mining Leases MLs

3 RELIANCE ON OTHER EXPERTS

The Qualified Persons have 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, Australian Tenement Manager, Newcrest Mining Limited:
• 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(s).
• Portion of Technical Report to which disclaimer applies: Section 4.
Dr C John, Environmental Affairs Consultant, John Consulting Services:
• Report, opinion or statement relied upon: Review and reporting of environmental and
community relations matters.
• Extent of reliance: full reliance following a review by the Qualified Person(s).
• Portion of Technical Report to which disclaimer applies: Section 20.

4 PROPERTY DESCRIPTION AND LOCATION

4.1 Property Location
Gosowong is on the island of Halmahera, located in the North Halmahera Regency, North
Maluku Province in the Republic of Indonesia, and is approximately 2,450 km north-east of
the national capital, Jakarta. The property is located at approximately 1°10’N latitude,
127°42’E longitude. The location is shown in Figure 4.1.
Figure 4.1 Property Location
Gosowong currently consists of four areas of operation: the Kencana underground mine
(Kencana), the Gosowong Open Pit mine, a mill tailings reclamation project and the
Toguraci underground mine development project (Toguraci). Ore from each producing mine
is processed on site to produce gold doré. First production from Toguraci is expected in
early 2012. The forest utilization permit (Borrow and Use Permit for the Forestry Area) for
Toguraci was issued by the Indonesian Ministry of Forestry and final approval from the
Ministry for Energy & Mineral Resources is proceeding.
4.2 Land Tenure
PT Nusa Halmahera Minerals (PTNHM) operates the gold mines and processing plant at
Gosowong. PTNHM is an Indonesian company with shareholdings of 82.5% owned by
Newcrest Singapore Holdings Pte Ltd and 17.5% owned by PT Aneka Tambang. For the
purpose of reporting mineral resources and mineral reserves, Newcrest is reporting 100%

of the assets. Actual metal production is marketed by PTNHM and the owners receive a
distribution of profits through dividends.
Tenure over all Gosowong deposits is covered by a 6th generation Contract of Work (CoW)
No.B.143/PRES/3/1997. In accordance with Article 4 (3) of the CoW, PTNHM has, on three
occasions, relinquished title to areas covered by the original CoW, reducing the area from
1,672,967 hectares to 29,622 hectares. The current COW activity area is set forth in the
decree of the Minister of Energy and Mineral Resources No.271.K/34.02/DJB/2007, dated 2
May 2007.
4.3 Relevant Agreements
4.3.1 PT Aneka Tambang Persero Joint Venture
Based on a Joint Venture Agreement between Newcrest Singapore Pte Ltd and PT Aneka
Tambang Persero (ANTAM), Newcrest has conducted reconnaissance exploration activities
in almost all the area of ANTAM’s North Maluku concessions since 1992. Following the
signing of the CoW on 28 April 1997 between the Government of Indonesia and PTNHM, all
of ANTAM’s concession areas were incorporated into the PTNHM CoW area. The active
mining areas lie completely within the boundary of PTNHM’s CoW area, giving PTNHM
exclusive rights to exploit gold and other minerals in this area.
4.4 Environmental Liabilities
An environmental bond of 766,751,015 Indonesian Rupiah (IDR) (equivalent to

approximately US$85,000) represents the balance of the reclamation guarantee for the
period 2009-20011 and a new amount for 2012. The new bond is due for submission before
the end of February 2012.
PTNHM’s closure cost estimate of US$20M is considered to be realistic, as it is based on

detailed breakdowns of work requirements and unit rates that actual closure work in recent
years has shown to be applicable to Gosowong.
Acid drainage from encapsulated acid-forming material (see also Section 20.2.4) is a
theoretical risk in the long term, but the demonstrable success achieved since 2004
engenders confidence that this risk is small. It is this very success that has been the basis
of reduction of environmental bonds in the past, and likely in the immediate future.

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND

PHYSIOGRAPHY
5.1 Topography, Elevation and Vegetation
Gosowong is in the north of the island of Halmahera. The region is characterized by steep,
hilly, forested terrain that is frequently cut by watercourses. The island hosts several active
volcanoes.
The Gosowong mining areas, processing plant and camp are located in steep terrain, with
steep valleys and hills. The engineered tailings storage facility is located at a lower
elevation that is a gently sloping, undulating, low-relief area (AGC Woodward Clyde
(1998)). Elevations across the project area vary from approximately 80 m to 260 m above
sea level.
The vegetation within the Gosowong project area is generally primary forest belonging to
the lowland vegetation type, characteristic of tropical regions less than 1,000 m above sea
level. The forest has been classified as Dipterocarp Forest due to the dominance of Hiru
(Vatica papuana).
Mining related operations dominate the land use within the existing mining leases.
Surrounding areas are mainly zoned as either protected or production forests.
5.2 Access
The CoW area is located in a sparsely populated region that has little existing infrastructure
not directly associated with the Gosowong project. The mine is accessed by unsealed road
connecting to the Trans-Halmahera Highway. Newcrest maintains a barge port facility on
Kao Bay approximately 10 km from Gosowong.
The mine has been serviced by small fixed-wing aircraft and helicopter services that have
flown from the international airport at the city of Manado direct to aerodromes on site.
The nearest commercial airport to Gosowong is at the regional city of Ternate. Ternate is
accessed from site by an overland and sea journey of approximately 3.5 hours.
The mine generates electricity for its own use with diesel powered generators. Process
makeup water is sourced from a local river, from the engineered tailings storage facility, and
from the Kencana mine decant ponds.
No villages or other formal settlements are located within the mine boundary. The nearest
village to Gosowong is located approximately 10 km east of the mine. There are a number
of informal settlements in the area, including a settlement that has developed along the
Trans Halmahera Highway near the main entrance to the mine.
The population of North Halmahera in 2005 comprised more than 220,000 people
distributed into 260 villages. Most people are both farmers and fishermen, and have a

modest economic life style. On average, each farmer in the Kao District owns two hectares
of land for agricultural usage with the agriculture sector producing coconuts, coffee, rice
and other crops. Aquaculture sector produce includes prawns and fish such as puffer fish,
grouper, snapper, tuna and Spanish mackerel (PTNHM, 2008a).
The Forestry Department (41%) and the Indonesian government (32%) dominate land
ownership in the region.
5.3 Climate
Gosowong is in an equatorial region and experiences a tropical climate, characterized by

high rainfall and frequent heavy falls, high humidity, and a temperature range of
20°C – 35°C. An annual rainfall of approximately 2,500–3,000 mm falls throughout the year.
July to September are generally the drier months of the year with an average of less than
150 mm/month, with the rest of the year averaging greater than 250 mm/month
(AGC Woodward Clyde, 1998). Rainfall data collected by PTNHM over the last 11 years at
the Gosowong Open Pit is in Figure 5.1.
Figure 5.1 Average Monthly Rainfall at Gosowong
350
300
Monthly Rainfall (mm)
250
200
150
100
50
5.4 Surface Rights
The PTNHM has agreements recognized by both Local and Central Governments that
allow operations at the Gosowong gold fields.

6 HISTORY
6.1 History of Project Development
In 1992, Newcrest and ANTAM commenced joint exploration over an area covering some
17,000 km2 of Halmahera and adjacent islands in the North Maluku Province of eastern
Indonesia. Economic gold grades contained in quartz adularia veining were first recognized
in trenches at the Gosowong prospect in May 1994. An inferred resource of 0.9 Mt at 24 g/t
gold and 30 g/t silver, containing 0.771 Moz of gold, was initially identified. A Sixth
Generation CoW between the Government of Indonesia and PTNHM was approved in April
1997. The Newcrest Board immediately approved an interim capital expenditure of
US$9.3M to complete an engineering study, construction of a mine exploration access road
and construction camp; and to progress project permitting. By August 1998, the Project
Final Feasibility Study and the Environmental Impact Study had been approved by the
Indonesian Government. Construction began in September 1998. Pre-strip activities and
haul road construction at the Gosowong Open Pit commenced in March 1999. The first ore
was delivered to the run of mine pad in early June, and the first gold was poured at
Gosowong on 25 July 1999.
Social unrest in North Maluku Province impacted the Gosowong mine in the September
quarter of 1999 and operations were suspended on two occasions. Mining of the Gosowong
Open Pit was discontinued in May 2002 due to failure of the upper south wall. Processing of
low-grade ore ceased in April 2003 when stockpiles were exhausted.
Approval to mine the Toguraci Pit was granted in May 2003 and development of the mine
commenced in July 2003. Operations were suspended from October to December 2003
while the mine was occupied by illegal miners. First gold production from the pit occurred in
February 2004. Mining concluded in October 2006.
Kencana was the third mine and the first underground project to be developed at
Gosowong. Decline development at Kencana commenced in July 2005 and the first
underground ore was mined in March 2006. Production continues to the present time.
A cutback of the Gosowong Open Pit commenced in October 2010. The cutback will allow
remediation of earlier wall failures and will deepen the pit to recover additional ore.
The feasibility study for the Toguraci underground mine was completed in August 2011.
Surface works and decline development had already commenced. First ore production is
planned for FYE June 2012.
6.2 Historical Production
The last five years of historical production from Gosowong site is listed in Table 6.1.

Table 6.1 Historical Production

Contained Plant Metal Tails

Mine Mill Head Grade
Metal Recovery Production Grades
Year
Production Feed Gold Gold Gold Gold Gold
(Mt) (Mt) (g/t) (Moz) (%) (Moz) (g/t)
2011 8.40 0.59 25.44 0.484 95.8 0.463 1.09
2010 0.57 0.58 24.88 0.463 95.4 0.443 1.12
2009 0.45 0.43 32.27 0.441 90.4 0.400 2.98
2008 0.30 0.31 43.20 0.428 92.3 0.400 2.81
2007 0.57 0.31 37.36 0.376 94.2 0.348 2.77
Mine production includes ore and waste.

7 GEOLOGICAL SETTING AND MINERALIZATION

Gold mineralization at Gosowong, incorporating the Gosowong, Kencana and Toguraci

deposits is of the low-sulphidation epithermal deposit type in quartz vein structures that
occur within a sequence of Tertiary volcanic and intrusive rocks overlain by Quaternary age
volcanic cover.
7.1 Regional Geology
The Gosowong gold deposits are located on the island of Halmahera. The Maluku Sea,
west of Halmahera, is a zone of collision between the opposing Sangihe and Halmahera
volcanic arcs. The Maluku Sea microplate is actively being subducted at the convergence
of North Sulawesi and Halmahera (Figure 7.1). This zone of double convergence is thought
to be the only active example in the world of an arc-arc collision zone.

Figure 7.1 Tectonic Setting of Eastern Indonesia (Hall, 2002)

Eastward subduction of the Maluku Sea plate beneath Halmahera and the Philippine Sea
plate since the Paleogene has produced four superimposed volcanic arcs in west
Halmahera. The four volcano-sedimentary formations have been termed the Bacan
Formation (probably Paleogene), the Gosowong Formation (probably Upper Miocene), the
Kayasa Formation (Pliocene), and the Quaternary Volcanic Formation, which remains
volcanicly active. The volcanic formations are separated by major regional angular
unconformities that represent significant hiatuses (Marjoribanks, 1997).
7.2 Deposit Geology
The geology of the Gosowong District comprises a Tertiary sequence of volcanic and
volcaniclastic units intruded by dioritic intrusives and overlain by late Tertiary and
Quaternary cover (Figure 7.2).

Figure 7.2 Geology of the Gosowong Region

The Tertiary volcanic sequence comprises the basement Gosowong Formation of basaltic
to andesitic lavas, autobreccia and volcaniclastic deposits, unconformably overlain by the
Kayasa Formation, consisting of dacitic lavas, autobrecciated lavas, volcaniclastic deposits
and pyroclastics (Figure 7.3). The Tertiary intrusive units include several porphyritic dioritic
intrusions and dykes that are coeval with the volcanics.

Figure 7.3 Gosowong District Schematic Stratigraphy

All economic gold and silver mineralization discovered to date at Gosowong is of low-
sulphidation epithermal style. This low tonnage, high-grade gold mineralization occurs
within small shoots that form at dilational sites along the host quartz vein structures. The
epithermal veining is superimposed on earlier porphyry mineralization and often the two
types are spatially associated. District-scale structural controls on mineralization are evident
and include north, north-west and north-east trends. Within the Gosowong goldfield two
broadly north trending structural corridors focus the epithermal mineralization (Figure 7.4).
Within the interpreted corridors, the shoots are developed at sites of structural complexity
where there are strike and/or dip changes, intersecting structures, links and/or jogs

developed. Other controls on mineralization include the stratigraphy, host lithology

(volcanics, volcaniclastics, mudstone) and proximity to dioritic intrusives.
Figure 7.4 Gosowong Gold Deposits and Prospective Corridors
Subeconomic porphyry copper-gold mineralization is associated with dioritic intrusive,

which occur along interpreted north-north-east trending, arc parallel corridors. The porphyry
mineralization is dominated by vein hosted-bornite, chalcopyrite and pyrite within potassic
altered diorite and volcanic rocks.
7.2.1 Cover Sequence
Alluvial and colluvial cover is developed mostly along the banks of larger drainages such as
the Ngoali, Tobobo, Matat and Bora rivers, and consists of clay-rich soils, muds, riverine
coarse sands and cobbles, and rare boulder deposits. Alluvium is rarely developed to
significant depths on ridges or spurs where it seldom exceeds 5 m depth.
A Quaternary sequence of pyroclastic units previously referred to as the Dufadufa

pyroclastic sequence has formed along ridges. The sequence of pyroclastics is a
combination of subaerial fall and possibly flow deposits. It consists of poorly consolidated,

poorly to well-sorted, massive to bedded volcanic ash, pumice and other volcanic
fragments. The unit is unaltered, is not mineralized and has been observed widely in both
field mapping and drilling.
7.2.2 Volcanic Rocks
7.2.2.1 Kayasa Formation
The Kayasa Formation is interpreted to unconformably overlie the Gosowong Formation

where dipping beds of the Gosowong Formation are interpreted to terminate abruptly
against interpreted shallow dipping Kayasa Formation. The volcanic rocks consist of a
series of fine to medium grained intermediate dacitic feldspar phyric lavas, auto-brecciated
lavas and volcaniclastic deposits. The rocks are characterized by rare subrounded quartz
phenocrysts and have previously been described in the field as quartz andesite. The
Kayasa Formation is typically unaltered to weakly propylitic (regional alteration), in contrast
with the often strongly altered Gosowong Formation. Radiometric age dating (40Ar/39Ar)
from the Kayasa Formation has indicates a 3.7 Ma age.
7.2.2.2 Gosowong Formation
The Gosowong Formation is the oldest stratigraphic unit in the district and consists of two
massive submarine volcanic packages distinguished by their composition and stratigraphic
position: the Andesitic Package and the Basaltic Package. Radiometric age dating
(40Ar/39Ar) of basalt and andesite from the Gosowong Formation has yielded ages ranging
from 2.6 Ma to 5.4 Ma. U-Pb zircon isotope dating has returned 3.73 ± 0.22 Ma from
andesitic lava of the Gosowong Formation. Irregular contacts characterized by
hyaloclastite, peperite, and quenched margins indicate that these units were deposited onto
or into unconsolidated sediments, probably in a submarine environment.
The Andesitic Package consists of a series of fine grained intermediate plagioclase feldspar
phyric lavas, auto-brecciated lavas and volcaniclastic units. The volcaniclastic units include
conglomerates, sandstones and mudstone. Lava units are grey to greenish in color and fine
grained with plagioclase and lesser mafic phenocrysts in a fine grained groundmass of
interlocking plagioclase crystals, glass and oxides. Volcaniclastic units are typically
polymictic, with well-sorted subrounded clasts in a clast-supported matrix. The
volcaniclastic mudstone is characterized by its hematite content considered to indicate
palaeo-oxidation in a shallow marine environment.
The Basaltic Package conformably underlies the Andesitic Package. The base of the
basaltic unit has not been intersected in drilling suggesting that it has a thickness of over
650 m. It consists of a series of fine-grained intermediate augite, pyroxene phyric lavas and
volcaniclastic units. The volcaniclastic deposits include conglomerates and sandstones.
Lava units are dark grey to greenish in color and fine grained, with augite and plagioclase
phenocrysts in a fine grained groundmass of interlocking plagioclase, augite and apatite
crystals, glass and oxides.

7.2.3 Intrusive Rocks

Porphyritic intrusive rocks of dioritic composition intrude the Gosowong Formation

throughout the district. Evidence from drill core suggests that several intrusive phases are
present that are very similar in composition and texture, and can often only be distinguished
by observing cross-cutting relationships. Large intrusive bodies have been recognized in
the Gosowong District in the Bora, Tobobo, Matat and Ngoali porphyries. These are
interpreted to have intruded along a north-north-east trending, arc-parallel intrusive corridor.
In addition to these larger bodies, small narrow dykes have been intersected in drilling
further afield across the goldfield although orientation data is limited. The dykes typically
become more abundant with proximity to the larger intrusive bodies.
The porphyritic intrusive rocks are dominantly dioritic in composition, containing

plagioclase, ferromagnesian minerals and quartz phenocrysts. U-Pb zircon isotope dating
returned 3.51 ± 0.18 Ma from diorite at the Toguraci deposit.
Toguraci mineralization is spatially associated with the dioritic intrusives comprising the
Bora porphyry. A series of subvertical to dipping dykes have intruded basaltic volcanics that
together form the host rocks to the subeconomic Bora porphyry mineralization and the
Toguraci low-sulphidation epithermal gold mineralization. The intrusives have a variety of
orientations including moderate to steep or vertical dips and north, north-east and north-
west strikes. The geometry of the intrusives locally control the orientation of the quartz vein
structures.
7.2.4 Hydrothermal Alteration
Palaeo-weathering comprised predominantly of hematitic alteration of sediments and a

regional propylitic alteration event (chlorite, epidote, pyrite, calcite) associated with regional
metamorphism is overprinted by hydrothermal alteration. The major hydrothermal alteration
types in the Gosowong District are associated with the porphyry intrusives, the overprinting
epithermal quartz veining and later, post-mineralization faulting. Mineralogy of alteration
assemblages is influenced by lithology and reflects the host rock composition.
Alteration types from surface mapping and drilling are summarized as:
• Silicic: quartz, chalcedony, adularia, illite, Mg chlorite and pyrite.

• Argillic: - illite, quartz chalcedony, adularia, Mg Fe chlorite, smectite and pyrite.
• Propylitic (vein related): epidote, Fe chlorite, smectite, calcite and pyrite.
• Propylitic (regional): epidote, Fe chlorite, albite and pyrite.
• Potassic (porphyry related): orthoclase, biotite, magnetite and quartz.
• Advanced argillic: alunite, kaolinite, dickite, diaspore, pyrophyllite and quartz.

Three main types of hydrothermal alteration are recognized to have a distinct zoning
around the epithermal mineralization. The zoning comprises silicic alteration adjacent to the
vein zone, argillic alteration enveloping the vein particularly at the upper levels, and
propylitic (vein related) alteration in the footwall and hangingwall as a slightly more distal
halo (up to 50 m) to the mineralization. At Toguraci, epithermal related silicic and argillic
alteration overprints early potassic (biotite-magnetite) hydrothermal alteration associated
with the Bora porphyry as narrow selvedges around the gold-bearing quartz vein structures.
The vein-related propylitic alteration at Toguraci is less distinctive compared to that
observed around Gosowong and Kencana shoots, which have less porphyry-related
alteration of the host rocks.
7.2.5 Mineralization
Two styles of mineralization are present within the Gosowong District. Economic low-
sulphidation epithermal vein style mineralization occurs at Gosowong, Toguraci and
Kencana. Subeconomic porphyry copper-gold mineralization has been observed at Bora
(Toguraci), Tobobo, Ngoali, and Matat.
Porphyry copper and gold mineralization is characterized by stockwork and sheeted

quartz-magnetite-bornite-chalcopyrite-pyrite-molybdenite veins. Quartz vein stockworks are
best developed at or near lithology contacts (i.e. between diorite and basalt). Veins are
typically 1–5 mm thick (up to 20 mm) with density ranges from 10–100 veins per metre
constituting 1–10% quartz by volume. Veins are pale to dark grey, locally with fine grained
sulphide lining open-centre cavities or along vein selvedges. Disseminated and or fracture
mineralization is generally not widespread. Gold mineralization has a close association to
copper, and thus better gold grades often occur in the bornite-chalcopyrite zones. Veins are
cross-cut by low-sulphidation epithermal mineralization.
Gold and silver mineralization occurs within veining typical of low-sulphidation epithermal
structures. The mineralization occurs within the quartz vein structures, which vary from solid
vein/lode to breccia containing both wallrock and quartz vein clasts to stockwork or sheeted
veins, to fracture fill, cavity fill or as clasts within a fault. Vein mineralogy includes
assemblages of quartz, adularia, amethyst, gold, clay, carbonate, chalcedony, chlorite,
epidote, hematite and sulphide. Quartz vein textures include bladed, crystalline, cockade,
colloform, comb, drusy, vuggy, crustiform, cryptocrystalline, massive, moss and
saccharoidal.
At least four main phases of quartz veining occur in the Gosowong District.
Crystalline quartz is the most common vein phase. It typically forms stockworks of
textureless quartz. Minor features include: open-space quartz crystals, chalcedony, bladed
carbonate, quartz replacing bladed carbonate, amethyst and clay replacing adularia. This
phase of quartz veining is low gold grade (less than 5 g/t Au) with a high silver-to-gold ratio.
Subsequent phases of quartz veining overprint and brecciate this phase.

Banded quartz-adularia is volumetrically the largest mineralizing event. It is characterized

by chalky white crustiform and colloform-banded veins and breccias, with dark,
fine-grained, sulphide-rich banding (with occasional visible gold). This phase is usually
moderate to high grade (10 g/t Au to 50 g/t Au) with a high silver-to-gold ratio. It has a
geochemical signature of gold, silver, lead, antimony, selenium, tellurium, tungsten, copper
and lithium. The rhythmic crustiform banding, abundance of adularia, and platy calcite
pseudomorphs suggest that this type of mineralization was deposited in response to the
boiling of hydrothermal fluids at shallow levels.
Banded quartz-chlorite is volumetrically minor, but is the highest gold grade event. It
typically develops as fine bands and selvages around quartz veins and fragments and
consists of colloform banded quartz, sulphides, gold and chlorite and green clays (possibly
illite or smectite). The quartz-chlorite phase is more prevalent in the core of the
mineralization, but also occurs in re-activated quartz veins and structures in the
unmineralized host rock. It generally grades 10 g/t Au to 100 g/t Au with a high gold-to-
silver ratio. Very high gold grade (“bonanza”) mineralization is typically contained within the
quartz-chlorite zone. In the Gosowong pit the quartz-chlorite phase occurred in a separate
shoot to the quartz-adularia, but at Kencana it overprints and is overprinted by
quartz-adularia and other later phases.
Sulphidic silica is considered to be the last phase of mineralization. It is comprised of

interstitial poorly crystalline, ultra fine-grained molybdenite and minor pyrite formed along
late stage shears and fractures and infilled cavities. It is typically intertwined with massive
quartz and chalcedony. Gold grades are usually between 20 g/t Au and 50 g/t Au with a
high silver-to-gold ratio.
7.2.6 Structure
Low-sulphidation epithermal gold mineralization occurs in shoots that form at dilational sites
along quartz vein host structures. Faulting and fracturing in the Gosowong district is
complex and extensive with multiple structural orientations and fault generations. Major
structural trends in the district are north, north-west and north-east.
Mineralization in the Gosowong and Toguraci shoots is mainly hosted in north-trending

structures whilst the Kencana system is interpreted as a north-west fault segment along a
larger scale north-trending structure. Quartz veining with subeconomic gold mineralization
is also developed within other north-west (i.e. Lempung, T-Fault, Putri) and east-trending
structures (i.e. Ruwait, Langsat, Tobobo) indicating that these orientations are also
important for mineralization. North-east and some east-trending structures may post-date
mineralization.
At Toguraci the structural system is characterized by a series of relatively narrow,

predominantly steep-dipping and generally north-trending, subparallel quartz vein
structures. Links, jogs and splays between the main mineralized quartz vein can also host
gold mineralization. Most of the main vein structures (Damar, Midas, Kayu Manis and

Wulan) are subvertical to steeply dipping towards the west whereas the western-most
structures (BOD and Yahut) have shallower dips of up to 40° towards the east and intersect
the other structures at depth. High-grade gold mineralization in small shoots is often located
at changes in dip and strike along the main vein structures and in some of the small
dilational links and jogs between them. In most of the Toguraci shoots, moderate to steep
northerly plunges to the very high gold grades are probably located in response to flexures
and fault intersections.
7.2.7 Oxidation
Steep terrain and high rainfall (approximately 3 m per annum) in the Gosowong district
result in a dynamic erosional environment. Total oxidation depths are typically 2–6 m but up
to 25 m has been observed. In resource estimation, the base of total oxidation is delineated
by the base of saprock.

8 DEPOSIT TYPES
Economic gold mineralization mined in the Kencana, Toguraci and Gosowong deposits
occurs in low-sulphidation epithermal gold and silver veins hosted by Tertiary andesitic and
basaltic volcanics.
Gold occurs within the quartz vein structures, which vary from solid vein/lode to breccia
containing both wallrock and quartz vein clasts to stockwork or sheeted veins, to fracture
fill, cavity fill or as clasts within a fault. Three quartz vein types host gold mineralization:
• Banded quartz-adularia hosts moderate to high gold grades (10 g/t Au to 50 g/t Au)
with a high silver-to-gold ratio.
• Banded quartz-chlorite hosts the highest gold grades (10 g/t Au to 100 g/t Au) with a
high gold-to-silver ratio.
• Sulphidic silica hosts moderate to high gold grades (20 g/t Au and 50 g/t Au) with a
high silver-to-gold ratio.
Porphyry style mineralization has been located in the district but economic deposits have
not been identified to date.

9 EXPLORATION
This section of the report includes historical resource and reserve estimates. A Qualified
Person has not done sufficient work to classify the historical estimates as current mineral
resources or mineral reserves. Newcrest is not treating the historical estimate as current
mineral resources or mineral reserves.
Prior to Newcrest commencing exploration in 1992, no history of gold mining or record of

gold mineralization in north Halmahera existed.
The Gosowong deposit was discovered in 1995 and exploration has been continuous in the
Gosowong district since that time. The discovery history is summarized below.
• July 1992: KP398 prospecting rights granted.

• November 1992: Exploration commenced.
• September 1993: Gosowong vein outcrop discovered.
• May 1994: Economic gold grades contained in quartz adularia veining were first
recognized in trenches at the Gosowong prospect.
• May 1995: Gosowong high-grade vein intersected in drilling.
• March 1996: Gosowong Inferred Mineral Resource estimated at 0.9 Mt grading
24 g/t Au (0.77 Moz).
• 1999 to 2002: Mining of the Gosowong Open Pit.
• May 2000: Toguraci vein outcrop discovered.
• August 2000: Toguraci high-grade vein intersected in drilling.
• December 2001: Toguraci Indicated Mineral Resource estimated at 0.23 Mt grading
40 g/t Au and Inferred Mineral Resource estimated at 0.18 Mt grading 10 g/t Au (total
of 0.361 Moz).
• 2003 to 2006: Mining of the Toguraci Open Pit.
• January 2003: Kencana K1 Vein high-grade vein intersected in drilling.
• February 2004 to June 2009: Continued exploration of, and progressive mineral
resource estimates for, Kencana K1 Vein, K2 Vein, K Link and Toguraci.
• June 2009: Damar North very high grade mineralization discovered in drilling.
• August 2009: Yahut structure very high grade mineralization discovered in drilling.
• June 2010: Toguraci Mineral Resource and Mineral Reserve additions.
Mining at Gosowong commenced in 1999 and has seen mining of the Gosowong deposit
(1999 to 2002) and Toguraci deposits (2003 to 2006) through open cut methods. Mining of

the Kencana deposit through underground methods commenced in 2006 and is continuing
in the K1, K2 and K Link Veins. Exploration is conducted over the CoW area beyond the
Gosowong, Toguraci and Kencana deposits involving mapping, stream sampling and
drilling.

10 DRILLING
Resource estimation at the K1, K2 and K Link Veins relies on surface and underground
diamond drilling and underground face sampling. Resource estimation at Toguraci and
Gosowong relies only on surface diamond drilling.
Data collection in the Toguraci and Gosowong areas refer to the Gosowong grid system,
which is parallel to UTM with grid north at 000 UTM. In the Kencana area, data collection
refers to the Kencana grid, which is rotated 45° to UTM so that grid north is 315 UTM
(Figure 10.1).
All work undertaken in the Gosowong district has been completed by PTNHM and related
companies. There is no historical data from work by others. Core from drilling completed
before the start of mining the Gosowong Open Pit (before 1999) was sampled at the
Gosowong site and sample preparation and assaying was completed at commercial
laboratories in Jakarta. Assays from that drilling only affect the remnant resource in the
Gosowong Open Pit. Core from diamond drilling programs at Toguraci and Kencana has
been processed at the Gosowong core facility, including geotechnical and geological
logging, digital core photography and core sampling. Core samples have been prepared
and analysed for gold at the Intertek Testing Services (Intertek) laboratory on site at
Gosowong before being sent to the Intertek laboratory in Jakarta for multi element
analyses. All surveys, geological, geotechnical and assay data is compiled into a database
on site.
Topographic information is based on detailed topographic survey in addition to an airborne

laser scanning survey and detailed surface survey around open pit and underground mining
operations.
All data is managed by the geological and support team on site. Data collected from
geotechnical and geological logging and drilling data (collar, survey) are recorded by site
geologists and support staff enters the data into a site database. Databases are backed up
daily to an on-site server and a weekly copy sent to Brisbane.

Figure 10.1 Orientation of Grids at Toguraci, Gosowong and Kencana

10.1 Surface Diamond Drilling
Diamond drilling is carried out by drilling contractors using wireline drilling methods and a
triple tube system. Most drilling is HQ3 diameter (61.1 mm) but some deeper drillholes are
started in PQ3 diameter (83.1 mm diameter) to approximately 100 m below surface and
reduced to HQ3 for completion. In difficult drillholes or in drillholes where wedging was
necessary, core diameter might be reduced to NQ3. Where possible reverse circulation
(RC) precollars were used instead of PQ3 core and drilled from surface to up to 300 m
depending on ground conditions, direction and position of the target. All mineralized
intercepts were drilled using diamond drill core.
Drillholes are drilled as inclined holes to intercept the steeply dipping vein structures at an
optimum angle. Drillhole design depths varied but usually included a minimum 50 m past
the target depth.
Proposed drillhole collar positions are initially located by tape and compass from existing
drillhole collars or grid line pegs and in many cases a number of drillholes are collared from
the same drill sites. During or after drilling the collars are surveyed by surveyors.
Drill rigs are set up on the drill site using a compass to align drilling azimuth and
clinometers to check inclination. Downhole surveys have been obtained using different
instruments over time but most recently using a Reflex Ez-Trac instrument. A single survey

at 15 m or 18 m is followed by surveys generally at about 50 m downhole spacing.

Downhole surveys are checked daily against expected orientation.
All data collection and sampling is conducted on site at the Gosowong core processing
facility, which includes a logging shed, core cutting and storage areas. Following receipt of
core from the drill rig, core is marked (measured and annotated for downhole depth) prior to
geotechnical and geological logging. Sampling is conducted after other data collection is
completed and verified.
Drill core is logged for lithology, alteration, fault, epithermal veining, porphyry veining,
structure, and sulphides. Earlier logging relied on hard-copy log sheets but recent logging
has used personal digital assistants (PDAs) for digital logging with core logging software
where data can be loaded onto a computer for verification before being combined with the
database. Sample intervals are identified and recorded with geological information.
Collar positions and downhole logs are validated on sections and plans and compared with
results. Collar coordinates can be verified against surveyor’s reports and physical ground
locations. Assay data is validated against the certificates of analysis from the laboratory.
Downhole surveys can be checked against driller’s records. The data entry of the logging
and sampling can be assessed against the hard copy drill logs (for data prior to digital
logging).
For resource definition drilling, the nominal spacing is 25 m for classification of the resource
estimate as Indicated Resource.
10.2 Underground Drilling
Before the start of mining at Kencana, resource estimation was based on surface diamond
drilling and when decline access was achieved, underground diamond drilling was used to
supplement surface drilling for short term planning and grade control. The drillholes are a
key determinant of the location of vein boundaries and provide close-spaced data for grade
estimation. Underground drillhole samples have been used in subsequent revisions of
resource estimates.
Underground diamond drilling is carried out by a contractor using LM30, LM75, and LMA90
drilling rigs. Drilling follows an operating procedure that is designed to provide a safe work
place as well as achieve good quality samples. Drillhole spacing can vary depending on the
initial purpose of the drilling, although all data is subsequently used in resource estimation.
Grade control drilling is to delineate the vein at 10–12.5 m intervals. Drillhole length is
generally 75–100 m. Resource definition drilling delineates the vein at 25 m spacing and
drillholes are often 150–300 m in length.
The drillhole collar is set up by the geologist and the first survey is at 15 m downhole and
then every 30 m. Surveys are monitored to make sure the drillhole follows the drilling plan.

Drillhole collars are surveyed by underground surveyors. Photographs of core are taken at
the rig as a precaution against core damage in transport.
Drill core handling for logging and sampling is the same as for surface diamond drilling.
10.3 Underground Sampling
As mining the Kencana K1 Vein progressed, faces and cross-cuts in veins were sampled to
provide detailed grade information for short term planning and grade control. These
samples have been used in subsequent revisions of resource estimates in conjunction with
surface and underground diamond drilling. This process has subsequently been followed in
the Kencana K2 and K Link veins.
Underground sampling follows an operating procedure that is designed to provide a safe

work place as well as achieve good quality samples. Face samples are taken after wall
scaling has been completed for each 3 m cut and the top half of the face has been meshed.
Sample numbering distinguishes face and wall samples from other types of samples. A
sample number control system is in place to prevent duplicate numbers and
mis-identification of samples. Samples are taken left to right across the face as this is
consistent with the data entry system. The face is marked for each sample with a maximum
length of 1 m in vein or stockwork and up to 1.5 m in apparent waste rock acknowledging
lithological boundaries. The minimum sample length is 0.4 m. Samples are taken to ensure
that equal amounts of rock are sampled along the interval and softer or more friable rock is
not preferentially sampled. The target weight for each sample is 2.0–2.5 kg.
A photograph is taken with the samples in place as a means of ensuring the correct
location.
Walls of crosscuts are sampled and mapped to identify the hanging wall and footwall
contacts of the vein and stockwork mineralization. Wall sampling extends across the vein
and stockwork acknowledging lithological boundaries following the same protocol as face
sampling and extending up to 3 m into apparent waste where possible.
Face and wall sample locations are measured by the underground surveyors where
possible otherwise the distance and direction of the sample from a survey station is
recorded. The width, height and profile of the face are recorded on a mapping sheet along
with geological information.

11 SAMPLE PREPARATION, ANALYSES, AND SECURITY

11.1 Sample Preparation
PT Nusa Halmahera Minerals (PTNHM) applies standard procedures for the preparation
and sampling of drill core adopting best practice to ensure quality assurance throughout the
process of core markup, digital core photography, geotechnical logging, geological logging,
through to core cutting, sampling and sample dispatch.
Sample intervals are determined by geologists, with intervals based on geology taking into
account core diameter and core loss. Sample lengths are normally one metre broken at
geological features such as vein and alteration boundaries. Sample intervals are annotated
on the core and core tray inserts and core is cut in half using a diamond tipped saw. If the
core is highly fractured or highly weathered and sampling cannot be completed with the
saw, cuttings are generally sampled by a trowel. If core in a mineralized vein is badly
broken or core is expected to break during cutting it can be taped together before cutting.
Cut sheets for core sampling are prepared detailing the intervals and sample identification
numbers for core cutting technicians. This is supervised by the core shed supervisor and
geologists, and conducted in accordance with the standard sampling procedures.
Intersections expected to return significant gold grade are supervised more closely to
ensure that the sample numbers and intervals on the cutting sheet match the sample
placed into the sample bags. This includes supervised sampling of mineralized zones.
Samples are assigned a unique sample number with the prefix HC followed by a six digit
number obtained from prepared sample cards. All cut core samples are placed into calico
bags clearly marked with the assigned sample identification number for the defined cut
interval and placed into polyweave sacks for transport to the laboratory.
Where possible, sample batches are prepared to make up a full fire assay batch of 50 pots.
Every fire assay batch of 50 pots includes 42 client samples, three duplicates, two
replicates, two standards and one blank (client samples comprise 38 to 40 samples and two
to four blind standards).
Core samples are moved from the core shed directly to the on-site laboratory run by
Intertek with batches tracked in a sample register. Sample preparation at the on-site
laboratory is outlined in Figure 11.1. Samples that are outside expected mineralized veins
can be sent for sample preparation to an Intertek laboratory in Manado so that the on-site
laboratory is focused on mineralized samples. The Manado laboratory follows the same
sample preparation protocol.

Figure 11.1 Gosowong Laboratory Sample Preparation Protocol

11.2 Chemical Analysis
Gold assays are completed at the on-site laboratory using fire assay on a 50 g charge with
atomic absorption spectrometry (AAS) finish. The on-site laboratory is operated by Intertek
under a contractual arrangement with PTNHM. Analyses for silver, copper, lead and zinc,
are completed using AAS and arsenic, antimony and molybdenum using pressed powder
X-ray fluorescence (XRF) at the Intertek laboratory in Jakarta. Since January 2011, minor
elements have been analysed at Genalysis in Townsville, Australia. The Intertek analysis
methods and detection limits are listed in Table 11.1.

Table 11.1 Sample Analysis Methods

Element Detection Limit (ppm) Laboratory Code Method

Au 0.02 FA51, FAS1A Fire assay, 50 g charge, AAS finish
Au 0.02 FAS1 Fire assay, 30 g charge, AAS finish
Au 0.005 FAS1B Fire assay, 50 g charge, AAS finish
Fire assay, 50 g charge, gravimetric finish
Au 0.1 FA12
Method for high-grade samples > 80 ppm
Cu 2
Pb 4 GA02 Hydrochloric/perchloric acid digestion, AAS finish
Zn 2
Ag 0.1 GA03 Hydrochloric/perchloric acid digestion, AAS finish
As 1
Sb 1 XR01 Pressed powder XRF
Mo 1
11.3 Assay Quality Assurance and Quality Control
Assay quality assurance/quality control (QA/QC) is routinely conducted for sampling from
surface underground resource definition drilling and underground face sampling. QA/QC for
Toguraci surface diamond drilling has been assessed separately as part of the evaluation of
mineral resources for underground mining.
11.3.1 Toguraci QA/QC 2008–2010
The QA/QC results for Toguraci are summarized in a report covering surface diamond
drilling between January 2008 and May 2010.
Assay QA/QC for the Toguraci drilling consisted of:
• Certified reference material at a nominal frequency of one in 20 samples.

• Pulp blanks at a nominal frequency of one per batch, but only for part of the period.
• Pulp duplicates at about two per sample batch depending on the expectation of
mineralization. Only submitted for part of the period.
• Laboratory duplicates at a rate of about one per sample batch.
• Laboratory replicates at a rate of about one per sample batch.
• Screen fire assaying (irregular submission).
• Check samples analysed at a different laboratory (irregular submission).

11.3.1.1 Certified Reference Materials

During the period of the Toguraci drilling, 16 certified reference materials (CRM) were used
at the Gosowong laboratory, all supplied by Ore Research and Exploration Pty Ltd and all
but the two highest grade standards are commercial CRMs (Table 11.2). Some have been
produced from epithermal mineralization but others have a different matrix. Only the two
high-grade CRMs are matrix-matched.
Table 11.2 Certified Values for CRMs Used Since 2004

Relative Standard Relative Standard
Certified Value
CRM Count Deviation Deviation (Actual)
(g/t Au)
(%) (%)
10Pb 7.15 68 2.66 2.57
15Pa 1.02 2 2.94 1.99
15Pb 1.06 538 2.83 2.94
16b 2.21 60 3.17 3.88
18Pa 3.36 6 2.98 1.81
18Pb 3.63 174 1.93 2.68
60b 2.57 340 4.28 3.27
60P 2.6 3 3.46 1.35
61d 4.76 46 2.94 2.52
61Pa 4.46 16 3.03 3.16
62d 10.5 242 3.14 2.17
62Pb 11.38 2 3.43 0.31
68a 3.89 32 3.86 3.24
7Pb 2.77 122 1.99 3.45
GOS-02A 48.7 15 1.85 2.9
GOS-02B 51.2 11 1.76 4.08
During the period of Toguraci drilling (2008–2010), 1,677 CRMs were analysed for gold.
The median bias for all gold data is +1.9 % (Table 11.3); however, the bias tends to
increase as grade increases, before falling in the highest class (> 20 g/t Au). Bias for the
individual CRMs tends to be positive but varies between –1.4 % and +5.4 %. The reason
for this behavior has not been determined.
Table 11.3 Median Bias for CRMs by Grade Range

CRMs CRMs CRMs CRMs CRMs
All CRMs
< 3 g/t Au > 3 g/t Au > 6 g/t Au > 10 g/t Au > 20 g/t Au
Median Bias % 1.89 1.13 2.48 4.61 4.76 1.56

Figure 11.2 shows z-score charts and a cumulative bias trace for all CRMs over the period.
The z-score indicates how many standard deviations an observation is above or below the
expected value. The overall trend of the cumulative bias trace is upwards indicating a
positive bias. Significant episodes of localized bias are marked with rectangles. The blue
rectangle marks an episode of negative bias and the red rectangles indicate distinct periods
of positive bias. Values outside a two standard deviation limit, even in the times of local
bias, tend to be solitary. More often than not, an out-of-limit result is followed by one that is
inside the limit.
Figure 11.2 Z-score Control Charts for All CRMs Over Time

Overall, the CRM result was concluded to be acceptable (total bias +1.9 %) but there is a
suggestion that bias increases with increasing grade and is +4.7% for CRMs reporting more
than 10 g/t Au.
11.3.1.2 Pulp Blanks
Pulp blanks were inserted into laboratory batches over part of the period reported. The
blanks are zero concentration standards supplied by Ore Research and Exploration Pty Ltd.
Blanks are intended to reveal any contamination in the analytical process but pulp blanks
do not undergo sample preparation and so are not subject to the same sources of
contamination. All of the 62 blanks submitted in the period returned values below the
detection limit. There is no evidence of laboratory contamination.
11.3.1.3 Pulp Duplicates
Pulp duplicates were inserted into the sample stream up until the end of 2009 but were
discontinued because the laboratory was including similar duplicates as internal QA/QC.
Coarse duplicates have not been submitted. A total of 811 pulp duplicate pairs have been
reported. Pulp duplicates returned a coefficient of variation (precision) of 17% for all data
and 6% for data with a pair average grade greater than 10 times the detection limit.
The relative difference plot (Figure 11.3) shows that the relative pair difference is nearly
constant from about 0.5 g/t Au, indicating that precision is nearly constant from that point
and that paired results are less reliable at average grades below about 0.5 g/t Au.
Figure 11.3 Relative Pair Difference Plot for Pulp Duplicates

Duplicates have been taken from the pulp rather than from the crusher product. The
precision is acceptable for all data and very good for average grades greater than 10 times
the detection limit but only reflects the laboratory’s analytical precision, not the precision of
sample preparation and division.
11.3.1.4 Laboratory Duplicates
The laboratory analysed pulp duplicates as part of its internal QA/QC. They are taken as a
second pulp from the pulverizer. A total of 404 pairs of results were available and results
are expected to be very similar to the pulp duplicates. The laboratory duplicates have
coefficient of variation (precision) for all data of 22.8% and 4.8% for results above 0.2 g/t
Au. As with the pulp duplicates, the relative pair difference (Figure 11.4) is nearly constant
from about 0.5 g/t Au, indicating that precision is nearly constant and that paired results are
less reliable at average grades below that level.
Figure 11.4 Relative Pair Difference Plot for Laboratory Pulp Duplicates
11.3.1.5 Laboratory Replicates
The laboratory replicates are taken from the original pulp, unlike the laboratory duplicates
which are a separate pulp split. The laboratory replicates typically have fewer sources of
variance than the laboratory duplicate and are expected to have better precision. The 276
assays of laboratory replicates (Figure 11.5) have an overall precision of 20.6% and a
precision of 5.1% when restricted to results with an average of greater than 0.2 g/t Au.
These are not significantly different to the laboratory duplicates. The laboratory pulp
replicates have a relative pair difference that is nearly constant from about 0.5 g/t Au,

indicating precision that is nearly constant but less reliable at average grades below that
level.
Figure 11.5 Relative Pair Difference Plot for Laboratory Replicates
11.3.1.6 Screen Fire Assays
Screen fire assaying has been carried out on 140 samples screened at 200 mesh (75 µm)
to provide information on the presence of coarse gold and repeat analysis using a high-
quality analytical method. The mean percentage of the total gold in the coarse fraction was
5.1% (median 2.1%), ranging from 0.2% to 54%. Of these samples, 33 had more than 5%
of the gold in the coarse fraction and of those, six had grades in excess of 6 g/t Au and
more than 15% of the gold in the coarse fraction (Figure 11.6). A scatter plot of the screen
fire assay results against the original assays is included at Figure 11.7.

Figure 11.6 Coarse Gold Proportion compared to Gold Grade

There is no apparent relationship between the proportion of gold in the coarse fraction and
either the proportion of the sample that is coarse grained or the overall gold grade. Higher
grades do not equate to an increase the proportion of coarse gold.
The precision between the average of the two fire assays for the sieved fractions and the
original assay was 37.4% compared to about 22% for pulp duplicates. This may indicate
that variance is introduced at the coarse splitting stage when the original sample was taken
from the rest of the material.

Figure 11.7 Comparison of Screen Fire Assays and Original Assays

11.3.1.7 Second Laboratory Samples
A total of 59 pulps were submitted to the Intertek laboratory in Jakarta for gold fire assay.
The samples came from eight sample batches originally assayed at the Gosowong
laboratory. Original assays ranged from 0.04 g/t Au to 211 g/t Au.
The Gosowong laboratory data has a bias of about –6% relative to the Jakarta check
assays. The relative bias is almost constant with grade (in the range –5.6% to –6.7%).
Figure 11.8 shows the relative difference between the data with many results above the
zero line, tailing off at higher grade. Note that the Gosowong laboratory returned a positive
bias in CRMs.

Figure 11.8 Relative Pair Difference Plot for Second Laboratory Assays
11.3.2 Kencana
Documentation of QA/QC for Kencana assays is carried out periodically coinciding with a
significant revision of the Kencana mineral resource estimates. The most recent QA/QC for
Kencana is documented in reports to the year ended February 2008 and the year ended
March 2009 which covers significant drilling of the K2 Vein, K Link and deeper parts of the
K1 Vein.
Assay QA/QC for Kencana for the period of the two reports consisted of:
• Certified reference material at a nominal frequency of one in 20 samples.

• Pulp duplicates at about two per sample batch depending on the expectation of
mineralization.
In addition, the 2008 report documents blind resubmissions to the primary laboratory and to
an external laboratory.
11.3.2.1 Certified Reference Materials
During the 2008 reporting period, 11 different CRMs were used for gold assay with 212
CRM samples submitted for assay in 112 sample batches. No sample batches were
resubmitted. Of the CRM assays for gold performed, 10 were within the warning limit
(greater than two but less than three standard deviations from the certified value) and nine
failed to meet specification (greater than three standard deviations from the certified value).
Two extreme assays were considered to be outliers because they were well outside
expected results where a batch was supported by another CRM.

During the 2009 reporting period, 16 CRMs were used for gold assay with 416 CRM
samples submitted for assay in 220 sample batches. No sample batches were resubmitted.
Of the samples submitted, 17 CRM assays for gold were within the warning limit, nine failed
to meet specification, and 10 extreme assays were considered to be outliers where they
were well outside expected results where a batch was supported by another CRM.
Figure 11.9 and Figure 11.10 show z-score charts for gold grades for all CRMs for the two
reporting periods. The z-score shows the variation from the expected value in terms of
standard deviations. The March 2008 to March 2009 period shows a consistent positive
bias for the entire period. This is consistent with the positive bias indicated by CRMs at
Toguraci. This doesn’t appear to be the case in the April 2007 to February 2008 period
although there is a distinct negative bias during the middle of the period.
Figure 11.9 Z-score Control Charts for Gold for All CRMs, April 2007–Feb 2008
Figure 11.10 Z-score Control Charts for Gold for All CRMs, Mar 2008–Mar 2009

Six CRMs were used for silver assay during the 2008 reporting period with 107 CRM
samples submitted for assay in 69 sample batches. Six CRM assays for silver were within
the warning limit and five were considered to be outliers because they were well outside
expected results. Eight CRMs were used for silver assay during the 2009 reporting period
with 216 CRM samples submitted for assay. Of the samples submitted, 11 CRM assays for
silver were within the warning limit and four were considered to be outliers because they
were well outside expected results.
Almost all the CRM silver assays show a positive bias (Figure 11.11 and Figure 11.12).
Figure 11.11 Z-score Control Charts for Silver for All CRMs, April 2007–Feb 2008
Figure 11.12 Z-score Control Charts for Silver for All CRMs, Mar 2008–Mar 2009

11.3.2.2 Pulp Duplicates

A total of 163 pulp duplicates were collected as a second split from the pulverizer for gold
assay during the 2008 reporting period and assayed in the same batch as the original
sample. Of these, 91 duplicates returned gold assays greater than 0.2 g/t Au. The mean of
duplicate assays was 2.4% lower than the mean of original assays and 90% of the
duplicate paired data was within 6% relative paired difference (RPD), which is an
acceptable level. As with the Toguraci pulp duplicates, these results reflect the laboratory’s
analytical precision, not the precision of sample preparation and division.
During the 2009 reporting period, 453 pulp duplicates were submitted for gold assay.
Of these, 252 samples returned gold grades greater than that over 0.2 g/t Au. The mean of
duplicate assays was 0.08% higher than the mean of original assays and 90% of the
duplicate paired data was within 7.1% RPD, which is an acceptable result.
Figure 11.13 and Figure 11.14 show RPD plots of gold assays pulp duplicates for the 2008
and 2009 reporting periods.
Figure 11.13 RDP Plots of Gold Assays for Pulp Duplicates, April 2007–Feb 2008

Figure 11.14 RDP Plots of Gold Assays for Pulp Duplicates, Mar 2008–Mar 2009
A total of 149 pulp duplicates were collected as a second split from the pulverizer for silver
assay during the 2008 reporting period and assayed in the same batch as the original
sample. The mean of duplicate assays was 0.3% lower than mean of original assays and
90% of the duplicate paired data was within 22% RPD. This is a poorer result than for gold
assays.
During the 2009 reporting period, 384 pulp duplicates were submitted for silver assay.
Of these, 206 samples returned silver grades greater than 1 g/t Ag. The mean of duplicate
assays was 0.13% higher than the mean of original assays and 90% of the duplicate paired
data was within 10% RPD, which is an acceptable result.
Figure 11.15 and Figure 11.16 show RPD plots of silver assays pulp duplicates for the 2008
and 2009 reporting periods.

Figure 11.15 RPD Plot of Silver Assays for Pulp Duplicates, April 2007–Feb 2008
Figure 11.16 RPD Plot of Silver Assays for Pulp Duplicates, Mar 2008–Mar 2009

11.3.2.3 Second Laboratory Samples

Blind check assays at an external laboratory were only conducted in the 2008 reporting
period. The mean of external laboratory assays for gold was 3.05% higher than the original
assay and 90% of the assays were within 13.9% RPD of mean paired samples compared
with an acceptable result of 10% (Figure 11.17 and Figure 11.18).
A total of 63 pulp samples were submitted to the external laboratory for silver analysis. Of
these assays, 90% were within 14% RPD. The mean of the external laboratory assays was
4% higher than the original assays.
Figure 11.17 RPD Plot of Gold and Silver Assays for External Laboratory Duplicates,
April 2007–Feb 2008

Figure 11.18 RPD Plot of Gold and Silver Assays for External Laboratory Duplicates,
Mar 2008–Mar 2009
11.4 Sample Security
Samples for gold analysis are under the supervision of PTNHM and controlled by sample
and batch control through sampling and sample preparation to the laboratory. The on-site
laboratory is run under contract by Intertek with assay QA/QC protocols in place. Routine
monitoring of QA/QC results by PTNHM and meetings between PTNHM and Intertek to
review safety, performance, and other issues ensure compliance with protocols.
Drill core from exploration and resource definition drilling where significant gold grade is
expected (e.g. visible gold, quartz adularia vein in lode position) are closely monitored with
a senior geologist supervising each stage in the core handling and sampling process to
minimize errors in sampling procedures and misallocation of sample data. Core is
transported as soon as practicable to the secure core facility and if that is not possible core
is locked at the drill site. The geologist must be present while these intervals are being
sampled and the sample submission sheet indicates that a barren flush should be applied
as part of sample preparation.
Assay results are provided by the laboratories as standard interchange format (SIF) that are
received electronically and imported into the database by the database administrator with a
number of import verification tests.

The half-core remaining after sampling is stored in a covered facility at the Gosowong site
and is available for re-logging, re-sampling and metallurgical sampling. Bulk residues from
crushing and pulverizing, and a master pulp are retained at the Gosowong storage facility.
Core from earlier Gosowong pit drilling (pre-1999) was not retained. All core was
photographed and half-core sampled before disposal.

12 DATA VERIFICATION
The Qualified Persons have, through examination of internal and public Newcrest
documents, personal inspections on site and discussions with Newcrest personnel, verified
the data in this Technical Report and satisfied themselves that the data is adequate for the
purpose of this report.

13 MINERAL PROCESSING AND METALLURGICAL TESTING

13.1 Metallurgical Testwork
The best metallurgical testing available is that of the operating plant. The most recent
review of the Gosowong operation was based on the premise that it was an operating mine
and no formal testwork programs were occurring. The recent Feasibility Study for the
Toguraci underground mine stated that:
“During the execution of this study the limited availability of diamond drill core did not
allow any further metallurgical testwork to be carried out. ….The process plant will not
be changed for the Toguraci ore.”
AMC accepts this statement and the philosophy supporting the lack of metallurgical
testwork for any future plant expansion. AMC also notes that three of five orebodies at
Toguraci have previously been mined by open pit methods and processed in the existing
processing plant.
Table 17.1 summarizes the Key Performance Indicators (KPIs) for the plant and shows that
for the most part, the metallurgy has been consistent with recoveries averaging 95% for the
past eight years. In recent years, throughput has steadily increased, but the introduction of
finer grinding has allowed the recoveries to return to 95% or better following a period of
lower recoveries. This improvement has also been achieved with declining head grades.
However, AMC notes that in the study to support the plant expansion from 45 tph to 65 tph
conducted in 2008, there were reports of varying metallurgical response. In the 2008
Gosowong Extension Project Feasibility Study, a significant amount of investigation was
undertaken. From this 2008 testwork, a number of metallurgical parameters were
re-established:
• Leach recovery (extraction) continues to increase with decreasing grind size

distribution to a perceived limit of 80% passing 10 microns (P80 = 10 µm).
• At an optimum grind size distribution of P80 = 25–30 µm the expected gold recovery
would be in the order of 95%.
• Thickening performance decreases gradually from the P80 = 75 µm to P80 = 25 µm and
dramatically as the size distribution becomes finer than P80 = 25 µm.
It was determined that some variation arose from the presence of a silver-rich telluride
called petzite (Ag3AuTe2). The problem with the petzite was reported to exist only with one
set of samples and eventually was resolved using high cyanide concentrations in leach,
which is a common solution when treating sulfide ores. As a result, PTNHM has determined
that the petzite should not be a problem for treating the ores in the future.

13.2 Comminution Testwork

More recently, in 2011, some comminution testwork was conducted on samples taken from
the mill feed stream while comminution circuit surveys were conducted. This work was done
by Orway Mineral Consultants (OMC) to assist a recent study that was completed in August
2011, and is being used to support plans for a possible plant expansion to 105 tph. The
OMC review also analysed operating data to determine circuit efficiencies.
Testwork results are summarized in Table 13.1. These Bond Work Indices results indicate
that the ores are of moderate to high competency whereas the A*b index suggests
“average” competency. The table also shows some results from previous work conducted in
2007. If one accepts the concept that work index error limits are ±1 kWh/t then the results
are generally similar for both sets of data. The Bond Abrasion index suggests an
abnormally high wear parameter probably related to high silica content in the ore feed. The
breakage parameters also agree and the A*b factors confirm average competency of the
materials from Kencana.
Table 13.1 PTNHM Process Plant Comminution Testwork Results (2011)

Parameter Units Average 2011 Average 2007
Bond Rod Mill Work Index RWi kWh/t 20.9 19.4
Bond Ball Mill Work Index BWi (106 µm) – 20.2 Na / 20.3
Bond Ball Mill Work Index BWi (53 µm) – 22.2 24.4 / 21.3
Bond Abrasion Index Ai – – 1.1638
SMCC Breakage Parameter – – –
A – 64.6 55.4
b – 0.68 0.92
A*b – 43.9 51.0
ta – 0.45 0.48
3
DWi kWh/m 5.81 –
Mia kWh/t 18.5 –
Mih kWh/t 13.3 –
Mic kWh/t 6.9 –
SG – 2.67 2.58

13.3 Leaching Testwork

During the 2008 Feasibility Study, the main focus for metallurgy and leaching was to test
two specific samples from the Kencana underground deposit. The two samples DSD372
and DSD373 were tested to investigate:
• The relationship of final grind size distribution versus gold extraction.

• The need for oxygen to assist leach recovery and kinetics.
• The effect of the addition of lead nitrate to assist extraction and kinetics.
These two samples are not considered entirely representative based on the reported head
grades of 167.5 g/t gold for DSD372 and 51.0 g/t gold for DSD373. Sample representivity
will always be a problem for deposits such as Gosowong, however, extraction results will
have to be adjusted to account for such high head grades. Nevertheless, the information
gained from testing these samples is useful.
The testwork results that are available relate to Kencana samples, and were conducted in
2007 and 2008 with the results tabulated in Table 13.2.

Table 13.2 Leach Gold Extraction Results Testwork 2007 and 2008
Test P80 NaCN Dissolved O2 Extraction (hrs) Residue Head Grade (g/t)
Sample pH
No (µm) (Beg/end) (Beg/end) 12 24 48 (g/t) Calc Assayed
2008 Testwork
3130 32 9.4 0.05/0.02 4.5/8.6 29.4 41.6 45.2 70.40 127.7 167.5
DSD372 3132 32 9.4 0.05/0.02 5.3/8.5 28.3 31.2 39.1 84.80 130.0 167.5
3133 32 10.3 0.05/0.02 4.8/23.6 44.8 51.9 56.7 54.30 125.3 167.5
3127 32 9.3 0.05/0.027 2.7/8.2 85.5 90.8 91.6 3.83 45.4 51.0
DSD373 3128 32 9.7 0.05/0.007 3.0/8.3 94.3 96.8 97.2 1.15 40.4 51.0
3129 32 9.5 0.05/0.015 2.3/18.3 95.1 96.2 98.3 0.80 44.2 51.0
2007 Testwork
226 W HM 20 45 – – – – 87.5 91.3 0.81 9.3 10.2
DSD 107 HM 21 45 – – – – 95.2 95.9 0.39 9.5 10.1
DSD 276 HM 22 45 – – – – 97.7 95.5 0.79 17.4 18.1
230 HM 23 45 – – – – 94.5 94.2 1.03 17.7 17.9
175 HM 24 45 – – – – 98.1 95.6 0.63 14.4 15.6
DSD 162RHM 25 45 – – – – 104.1 98.0 0.56 27.6 30.5
KSU 04 HM 26 45 – – – – 88.4 97.1 1.17 39.7 38.0
DSD 80 HM 27 45 – – – – 104.1 98.8 0.47 39.0 39.3
DSD 152 HM 28 45 – – – – 94.0 98.4 0.45 27.2 23.9
DSD 233 HM 29 45 – – – – 92.1 98.6 0.55 39.4 32.1
DSD 132 HM 30 45 – – – – 97.4 98.0 0.80 39.1 37.9
DSD 187 HM 31 45 – – – – 91.1 95.9 1.70 41.1 40.1
DSD 179 HM 32 45 – – – – 100.8 95.6 1.19 26.9 26.7
286 HM 33 45 – – – – 99.6 98 1.27 64.2 59.6
249 HM 34 45 – – – – 92.4 94.8 4.46 86.2 82.0
DSD 127 HM 35 45 – – – – 97.8 96.9 4.16 132.0 122.0
The 2008 testwork was of limited value due to the very high grades. The 2007 testwork was
more representative and, based on the recent actual operating results for treating the
Kencana material, agree quite accurately with residual grades and extractions. The
calculated and assayed head grade agreement for the 2008 samples was not good,
whereas for the 2007 testwork results were reasonable to good.
The plant operating recoveries generally agree with the 2007 extractions reported in
Table 13.2, given that the Gosowong plant has 30 hrs leach retention time and there are
minor solution losses in the counter-current decantation (CCD) circuit.

13.4 Grind Size – Recovery Relationship

The results of the grind size relationship can be effectively illustrated using Figure 13.1,
which has been extracted from the Feasibility Study report for the Gosowong Extension
Project.
It is evident that the finer the grind size distribution the better the extraction. Extractions
would be better at even finer grinds, but comminution costs tend to escalate at finer grinds,
and downstream processing such as CCD thickening is detrimentally affected at finer size
distributions. As a result, PTNHM opted to specify P80 = 30 µm.
Figure 13.1 Grind Size Distribution and Gold Extraction Relationship
13.5 Oxygen Uptake
The Gosowong leach circuit is equipped with a 2.4 tpd Oxygen Pressure Swing Adsorption
(PSA) plant. The 2008 testwork studied the oxygen (O2) uptake and determined that the
two samples were quite different in O2 uptake, with the more difficult D372 requiring more
O2. Figure 13.2 and Figure 13.3 illustrate the differences.

Figure 13.2 Sample D372 Oxygen Uptake

Figure 13.3 Sample D373 Oxygen Uptake

The O2 absorption or uptake rate varies dramatically between the two samples for the first
2–3 hrs, but both eventually settle at very close to 0.02 mg/L/min at the 30 hr point. The
calculations pointed to the fact that no extra O2 production was necessary and the
subsequent operating KPIs have confirmed this decision.
The absorption calculations were conducted at an absorption efficiency of only 15%, which
is extremely low. A more acceptable efficiency would be closer to 50%. However, even at
the low efficiency, the O2 absorption would not be a problem with the existing PSA unit,
even with the increase to 65 tph. AMC has been advised that the site is investigating the
use of viscosity modifiers (see Section 13.1.2.4), which would benefit the absorption rate
and possibly assist with a potential increase in throughput to 105 tph.
13.6 Liquid-Solid Separation
The Gosowong flowsheet incorporates the Merrill-Crowe precipitation process to recover

gold from solutions. As such, the Merrill-Crowe system requires clean and
de-aerated solutions. In order to ensure clear solutions and maximum recovery of the
precious metal values from the leached pulp, a CCD washing circuit is necessary. The CCD
circuit comprises a series of settling vessels called thickeners. The original PTNHM circuit
utilized a series of seven thickeners. During the expansion study, the thickening
characteristics had to be assessed using the Kencana samples. In addition to the CCD
circuit, a pre-leach thickener is included in the flowsheet to allow the leach feed slurry pulp-
density to operate at not more than 45% solids by weight.
The testwork in 2007 was conducted by the reputable vendor, Outotec, who also supplied
the existing thickener units. The testwork showed that to allow the expansion to 65 tph the
existing 8 m diameter thickener could be duplicated and the two units could handle 50% of
the flow each, or the existing unit could be replaced by a new 12 m diameter unit. This was
true even with the finer grind. PTNHM decided to proceed with a duplicate pre-leach unit
and to install a second bank of seven CCD thickeners. Figure 13.4 illustrates the
relationship between grind size distribution and underflow density for the existing pre-leach
unit. The existing unit when the plant originally operated at P80 = 75 µm suffered a reduction
in throughput from 50 tph to 45 tph while maintaining an underflow density of 52% solids
down to 48% solids. The testwork indicated the thickener would operate at 53.5 tph at P80 =
45 µm, 51.5% solids at P80 = 25 µm and 42.3% solids at P80 = 10 µm. Therefore, the
testwork results have been down-rated as per Figure 13.4.
Based on these curves, the thickeners would probably operate at an underflow density of
49% solids and a P80 = 30 µm. On this basis, the CCD circuit with seven stages would have
an overall efficiency of 99.8% according to the circuit model study. AMC was advised that
solution grade in the tailings from the last CCD unit ran about 0.1 g/t gold, which is very
close to the model prediction of 0.097 g/t gold.

Figure 13.4 Thickener Underflow Pulp Density vs Grind Size

13.7 Rheology
The rheological investigations undertaken in 2008 were restricted to investigating slurries at

P80 = 106 µm, and the conclusions from that work suggest that there would be no slurry
handling problems relating to rheology.
AMC was advised by site personnel that they considered there may be some viscosity
problems associated with the leach pulps that have a grind size distribution of P80 = 30 µm.
The concern was that the leach pulp was too viscous and there may be difficulties with
leaching kinetics with cyanide and with O2 distribution. The plant performance does not give
any indication of such problems. Investigations at the finer grind are recommended,
especially given the possibility of a throughput increase to 105 tph.
13.8 Other Investigations
During 2007 and 2008 and recently, PTNHM has undertaken a number of studies
investigating comminution circuit configuration, CCD efficiency and tertiary grinding.
These studies have formed the basis of design for the existing comminution and CCD
circuits. The benefits for leaching derived from the finer grind size of the tertiary grinding
circuit have been confirmed by testwork and modeling. Recently, PTNHM had a reputable

Australian firm, OMC, study comminution with a view to possibly increasing throughput to
105 tph. As a result of this review, including a site survey, OMC recommended:
• The primary circuits remain unchanged with the original SAG/Ball Mill and the new
closed circuit SAG mill.
• The hydrocyclones for the ball mill circuit would need to be changed to a smaller size
in order to achieve better classification efficiencies.
• The tertiary Vertimill circuit hydrocyclones would have to be increased in number in
order to properly treat about 70 tph.
• In order to achieve the 105 tph throughput rate, the recommendation was to increase
the number of Vertimills from one to three.
These points will be considered by PTNHM in its 105 tph upgrade study that has
commenced.

14 MINERAL RESOURCE ESTIMATES

Mineral resources have been estimated at Gosowong for Kencana, Toguraci and the
Gosowong open pit. A mineral resource is also reported for part of the TSF where poor
recovery in the treatment plant during early stages of treatment of very high-grade Kencana
mineralization resulted in gold loss to tailings. This part of the TSF is an identifiable volume
and has been sampled to estimate the gold and silver grade. Recovery of the high-grade
tailings commenced in mid-2011.
Mineral resources are reported inclusive of mineral reserves.
Resource estimation is based on the geological interpretation of epithermal veins and

stockworks and estimation of gold and silver grades within the geological framework.
Mineral resources at Gosowong at 31 December 2011 are listed in Table 14.1. The mineral
resources have been prepared under the direction of Qualified Persons 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 Definition Standards and the
equivalent definitions in the JORC Code. Newcrest is reporting 100% of the mineral
resources, but has a beneficial interest of 82.5%.
The Kencana mineral resource is reported at a 3 g/t Au cut-off, Toguraci at a 2 g/t Au cut-
off, and Gosowong at 0.7 g/t Au cut-off.
Table 14.1 Mineral Resources at Gosowong at 31 December 2011

Tonnes Au Ag Gold Silver
(Millions) (g/t) (g/t) (Moz) (Moz)
Indicated Resource
Kencana 2.4 18 11 1.4 0.9
Toguraci 1.2 21 46 0.8 1.8
Gosowong Pit 0.53 7.7 24 0.1 0.4
Tailings 0.64 2.8 4.6 0.1 0.1
Stockpiles 0.03 14 21 0.01 0.02
Total 4.8 15 21 2.4 3.2
Inferred Resource
Toguraci 0.32 9.3 20 0.1 0.20
Rounding may cause some computational discrepancies in totals
14.1 Kencana Mineral Resource Estimate
The Kencana mineral resource estimate is based on drillhole data available at 24 March
2010 and grade control data available at 18 November 2010. A mix of surface and
underground resource definition drilling and grade control data was used in the estimates

for all mineralized domains. Grade control data predominantly consists of face chip
samples, however, sludge holes and wall chip samples have been selectively incorporated
where there is insufficient coverage of other data types.
14.1.1 Mineralization Modeling and Domaining
The domains used to estimate volumes and constrain grade estimation were mainly based
on geological interpretation using logging and core photography. Interpreted domains are
geologically and statistically distinct and provide a robust basis for resource estimation.
Mineralized zone interpretations were developed in conjunction with site geologists.
All compositing, descriptive statistics, geostatistical analysis and estimation was based on
the first gold and silver assay without averaging with other assay fields.
Drillhole and grade control data were manually coded on the basis of the mineralization
interpretation.
The interpretation of the K1 Vein is comprised of the major epithermal vein zone
(Main Zone) with a small epithermal vein interpreted in the hanging wall of the Main Zone
between 4,875 m RL and 4,900 m RL. The Main Zone is offset slightly by a fault at its
southern end. The vein strikes north in the Kencana grid and dips to the east at about 45°.
It is surrounded by stockwork mineralization, part of which is reported in the mineral
resource. Figure 14.1 shows a section at 19 875 N showing the interpreted vein and
stockwork boundaries and surface and underground diamond drillholes.

Figure 14.1 K1 Section at 19 875 N Showing Vein and Stockwork Boundaries

Recent interpretation of the K1 Vein below 4,900 m RL differs from previous interpretations
in that the main mineralized structure has been widened in some areas to incorporate what
was previously interpreted as several narrow mineralized structures into one broader zone.
The K2 Vein consists of a single high-grade epithermal vein offset from the K1 Vein and
strikes north in the Kencana grid and dips east at about 32°. Figure 14.2 shows a section at
19 615 N showing the interpreted vein and stockwork boundaries and surface and
underground diamond drillholes.

Figure 14.2 K2 Section at 19 615 N Showing Vein and Stockwork Boundaries

The K Link mineralization also consists of a high-grade epithermal vein structure connecting
the K1 and K2 Veins. It strikes 055 in the Kencana grid and dips south-east at about 58°.
Figure 14.3 shows an oblique section centred at 19 540 N showing the interpreted vein and
stockwork boundaries and surface and underground diamond drillholes.

Figure 14.3 K Link Oblique Section Centred on 19 540 N Showing Vein and
Stockwork Boundaries
A separate smaller vein structure of a similar orientation to K Link is located to the south of
the K2 Vein.
Figure 14.4 shows a plan projection of the interpreted veins and drillhole traces.

Figure 14.4 Plan Projection of Kencana Vein Domains used for Resource
Estimation
14.1.2 Compositing and Descriptive Statistics
Surface and underground drillhole samples and face samples were flagged with a field
name (ZONECODE) to identify the mineralization domain (Table 14.2).

Table 14.2 Kencana Domains and ZONECODE Field

ZONECODE Domain
1101 K1 Main Zone
1102 K1 Main Zone Hangingwall
1104 K1 Main Zone Southern End
1901 K1 Stockwork
2101 K2 Main Zone
2901 K2 Stockwork
3101 K Link Main Zone
3103 K Link Main Zone South
3901 K Link Stockwork
Downhole compositing was carried out for each mineralized zone with the ZONECODE
field controlling compositing. A downhole composite length of two metres was used for all
zones with a ‘best fit’ approach applied where the composite length is optimized over the
coded interval to eliminate short residuals assays.
14.1.3 Data Analysis
14.1.3.1 K1 Vein
The K1 Vein main zone and its southern fault offset form the main epithermal mineralized
lode. Figure 14.5 shows a long projection looking west of two metre downhole composite
gold grades for surface and underground diamond drilling and grade control samples that
includes face samples, wall samples, and selected sludge holes.

Figure 14.5 K1 Long Projection Looking West Showing Two Metre Composites
Population statistics of different sample types were examined to evaluate whether the
different sample types could be considered to be a single population for grade estimation.
Data from drilling and face sampling were compared for samples above 4,900 m RL where
both data types have full coverage. The log-probability plot for gold grades (Figure 14.6)
shows a strong similarity between the sample types and the data were combined for grade
estimation.

Figure 14.6 Log-probability Plot of K1 Gold Grades in Two Metre Composites in

Drillholes and Grade Control Samples
The populations for gold and silver grades show very similar distributions (Figure 14.7) over
much of the grade range except at very high grades where the gold grade distribution
reflects a small number of very high-grade samples not reflected in the silver grade
distribution.

Figure 14.7 Log-probability Plot of K1 Gold and Silver Grades in Two Metre
Composites
Composite gold grades were compared for parts of the main mineralized domain, separated
into:
• Main Zone above 4,900 m RL

• Main Zone below 4,900 m RL
• Main Zone southern fault offset
• Main Zone hangingwall
Figure 14.8Figure 14.8 shows that these subdomains have slightly different gold grade
populations and each of these subdomains was treated separately for grade estimation.

Figure 14.8 Log-probability Plot of K1 Gold Grades in Main Zone Subdomains

Figure 14.9 shows a similar difference in distributions for silver grades.

Figure 14.9 Log-probability Plot of K1 Silver Grades in Main Zone Subdomains

Summary statistics for gold and silver in the estimation domains are listed in Table 14.3.
Table 14.3 K1 Summary Statistics by Estimation Domain

Above 4,900 m RL Below 4,900 m RL K1 South K1 Hangingwall
Au Ag Au Ag Au Ag Au Ag
Number 7,169 7,147 8,893 8,853 105 102 1,084 1,076
Minimum (g/t) 0.03 0.10 0.01 0.05 0.09 0.2 0.21 0.90
Maximum (g/t) 5,015 1,513 899 1,658 330 160 1,363 953
Mean (g/t) 74.19 92.14 23.72 31.26 42.81 29.03 52.93 48.92
Standard Deviation 177.72 148.86 40.31 83.81 52.84 29.65 104.92 85.59
Coefficient of Variation 2.40 1.62 1.70 2.68 1.23 1.02 1.98 1.75

Metal risk analysis and high-grade top-cuts were applied separately to each estimation
domain. Grade sensitivity analyses were undertaken to assess the potential gold metal
sensitivity of individual composites to data clustering and risk adjustment through top-cuts.
Only two composites contribute more than 1% of contained gold metal within the K1 Main
Zone upper domain because most of the very high values occur in the current mining area
and are supported by high data density. A single drillhole in the K1 Main Zone lower domain
contributes about 15% of declustered gold metal content for this domain.
The metal risk analysis was used as a guide to grade top-cuts for each estimation domain.
Summary statistics are shown in Table 14.4. Grade maxima indicate the risk-adjusted
grades. The risk adjustment strategy applied to the K1 Main Zone reduces the total gold
metal content by about 4.5%.
Table 14.4 K1 Risk Adjusted Summary Statistics by Estimation Domain

Above 4,900 m RL Below 4,900 m RL K1 South K1 Hangingwall
Au Ag Au Ag Au Ag Au Ag
Number 7,169 7,147 8,893 8,853 105 102 1,084 1,076
Minimum (g/t) 0.03 0.10 0.01 0.05 0.09 0.20 0.21 0.90
Maximum (g/t) 1,500 1,500 400 700 125 125 1,000 953
Risk Adjusted Metal 4.5% – 4.0% – 11.0% – 4.0% –
Cut Mean (g/t) 71.72 92.14 23.43 29.96 37.73 28.69 52.02 48.92
Standard Deviation 143.08 148.84 36.57 69.12 35.34 29.29 95.00 85.59
Coefficient of Variation 2.00 1.62 1.56 2.31 0.94 0.99 1.83 1.75
Figure 14.10 and Table 14.5 show the log-probability plots and summary statistics for
two metre composites K1 stockworks. About 20% of the stockwork composite gold grades
are greater than the resource reporting cut-off grade of 3 g/t Au. Top-cuts of 30 g/t Au and
80 g/t Ag were applied to gold and silver respectively as a risk adjustment strategy.

Figure 14.10 Log-probability Plot of K1 Stockwork Gold and Silver Grades in

Two Metre Composites
Table 14.5 K1 Stockwork Summary Statistics

Au Cut Au Ag Cut Ag
Number 11,251 11,250 11,138 11,138
Minimum (g/t) 0.00 0.01 0.05 0.05
Maximum (g/t) 80 30 585 80
Mean (g/t) 2.38 2.32 7.65 6.98
Standard Deviation 4.33 3.73 19.15 12.57
Coefficient of Variation 1.82 1.61 2.51 1.80
14.1.3.2 K2 Vein
Figure 14.11 shows a long projection looking west of K2 Vein two metre composite gold
grades for combined surface and underground diamond drilling and grade control data.

Figure 14.11 K2 Long Projection Looking West Showing Two Metre Composites
As with the K1 Vein, surface and underground diamond drilling and grade control samples
were combined for grade estimation. The log-probability plot of gold and silver composite
grades (Figure 14.12) shows different populations for gold and silver in contrast to the
K1 Vein where gold and silver populations were almost identical. The K2 Vein gold-to-silver
ratio is 2:1 compared to 1:1 in the K1 Vein. Summary composite statistics are listed in
Table 14.6.

Figure 14.12 Log-probability Plot of K2 Gold and Silver Grades in Two Metre
Composites
Table 14.6 K2 Summary Statistics

Au Ag
Number 3,849 3,778
Minimum (g/t) 0.01 0.05
Maximum (g/t) 2,883 887
Mean (g/t) 58.55 23.78
Standard Deviation 130 45.96
Coefficient of Variation 2.22 1.93
Grade sensitivity analyses were undertaken to assess the potential gold metal sensitivity of
individual composites to data clustering and risk adjustment through grade top-cuts. A
metal risk analysis showed that only one composite contributed more than 1% of
declustered gold metal content to the K2 Main Zone. The metal risk analysis was used as a
guide to conclude that grade top-cuts of 800 g/t Au and 400 g/t Ag were appropriate.
Summary statistics for cut-grades are listed in Table 14.7. The risk adjustment strategy
applied to the K2 Main Zone reduces the total gold metal content by approximately 4%.

Table 14.7 K2 Risk Adjusted Summary Statistics

Au Ag
Number 3,849 3,778
Minimum (g/t) 0.01 0.05
Maximum (g/t) 800 400
Risk Adjusted Metal 3.7% –
Cut Mean (g/t) 55.41 23.18
Standard Deviation 91.60 38.01
Figure 14.13 and Table 14.8 show log-probability plots and summary statistics for two
metre downhole composites for K2 Stockworks. About 15% of the stockwork composite
gold grades are greater than the nominal resource reporting cut-off of 3 g/t Au. A grade
top-cut of 15 g/t Au was applied to both gold and silver as a risk adjustment strategy.
Figure 14.13 Log-probability Plot of K2 Stockwork Gold and Silver Grades in


Table 14.8 K2 Stockwork Summary Statistics

Au Cut Au Ag Cut Ag
Number 3,359 3,359 3,175 3,175
Minimum (g/t) 0.01 0.01 0.05 0.05
Maximum (g/t) 39.6 15.0 82.8 15.0
Mean (g/t) 1.69 1.63 1.48 1.41
14.1.3.3 K Link
Figure 14.14 shows a cross projection looking north of K Link Vein two metre composite
gold grades for combined surface and underground diamond drilling and grade control data.
Figure 14.14 K Link Projection Looking North Showing Two Metre Composites

Surface and underground diamond drilling and grade control samples were combined
for grade estimation. The log-probability plot of gold and silver composite grades
(Figure 14.15) shows very similar populations for gold and silver, comparable to K1 Vein
and in contrast to K2 Vein. The K Link gold-to-silver ratio is 1:1, which is similar to K1 Vein.
Summary composite statistics are listed in Table 14.9.
Figure 14.15 Log-probability of K Link Gold and Silver Grades in Two Metre
Composites
Table 14.9 K Link Summary Statistics

Au Ag
Number 1,407 1,189
Minimum (g/t) 0.01 0.10
Mean (g/t) 63.5 40.37

Grade sensitivity analyses were undertaken to assess the gold metal sensitivity to individual
composites and risk adjustment through grade top-cutting. A metal risk analysis showed
that 10 composites contributed more than 1% of contained gold metal in the K Link Main
Zone. It was determined that grade top-cuts of 800 g/t Au and 400 g/t Ag were appropriate.
A single composite contributes 4.4% of declustered gold metal. A separate adjustment of
300 g/t Au has been applied to that composite. Summary statistics of cut composites are
shown in Table 14.10. The risk adjustment strategy applied to the K Link Main Zone
reduces the total gold metal content by about 6.7%.
Table 14.10 K Link Risk Adjusted Summary Statistics

Au Ag
Number 1,407 1,189
Minimum (g/t) 0.01 0.10
Risk Adjusted Metal 6.7% –
Cut Mean (g/t) 60.53 38.72
Figure 14.16 and Table 14.11 show log-probability plots and summary statistics for
two metre downhole composites for K Link Stockworks. About 10% of the stockwork
composite gold grades are greater than the nominal resource reporting cut-off of 3 g/t Au.
A grade top-cut of 15 g/t Au was applied to both gold and silver as a risk adjustment
strategy.

Figure 14.16 Log-probability of K Link Stockwork Gold and Silver Grades in

Table 14.11 K Link Stockwork Summary Statistics

Au Cut Au Ag Cut Ag
Number 3,164 3,164 2,725 2,725
Minimum (g/t) 0.01 0.01 0.05 0.05
Maximum (g/t) 59.6 15.0 103 15.0
Mean (g/t) 1.27 1.22 2.15 1.90
14.1.4 Variography
Variography has been used to analyse the spatial continuity within the mineralized zones
and to determine appropriate estimation parameters.

The variogram modeling process generally followed these steps:

• Calculate and model the omni-directional or downhole variogram to characterize the

nugget effect.
• Calculate orientated variograms in three-dimensions to identify the plane of greatest
continuity.
• Calculate a fan of variograms within the plane of greatest continuity to identify the
direction of maximum continuity within the plane. Model the variogram in the direction
of maximum continuity and the orthogonal directions.
Variography was undertaken on Gaussian transformed, declustered 2 m cut composites of

combined drillhole and grade control data. The Gaussian variogram models were
back-transformed and modeled to obtain the appropriate variogram models for estimation.
14.1.4.1 K1 Main Zone
Experimental variography with lags of between 10 m and 30 m produced moderate nugget

effects for gold and silver with relative variances of 40% to 45%.
Directional variography for gold above the 4,900 m RL revealed well structured anisotropy
with a maximum range of 125 m plunging moderately towards the south-east.
Directional variography for gold below the 4,900 m RL revealed a well structured
omni-directional variogram with a maximum range of 90 m dipping moderately towards the
east.
The northern high-grade zone was estimated separately and the variogram direction
modified to reflect a more easterly plunging shoot direction.
The same variogram models were applied for both gold and silver estimation. Table 14.12
lists the variogram models for K1 Main Zone.

Table 14.12 Variogram Models for K1 Main Zone

Relative Major/Semi-Major Major/Minor

Range Azimuth Plunge Dip
Sill Ratio Ratio
Au and Ag Nugget 0.43 – – – – – –
> 4,900 m RL Structure 1 0.48 60 120 –41 20.5 1.5 12
– Structure 2 0.09 125 120 –41 20.5 1.8 13.9
Au and Ag Nugget 0.45 – – – – – –
< 4,900 m RL Structure 1 0.38 18 90 –48 0 3 3.6
North Structure 2 0.17 50 90 -48 0 3 2.1
Au and Ag Nugget 0.45 – – – – – –
< 4,900 m RL Structure 1 0.38 18 90 –48 0 1 3.6
– Structure 2 0.17 50 90 –48 0 1 2.1
14.1.4.2 K1 Stockwork
Experimental variography with a lag of 24 m revealed well structured omni-directional

variograms parallel with the plane of Main Zone mineralization with a maximum range of
160 m dipping moderately to the east. Maximum variogram ranges of 160 m and 220 m
were modeled for gold and silver respectively. Nugget effects for gold and silver were both
moderate to high with relative variances of 47% and 59% respectively. Table 14.13 lists the
variogram models for K1 Stockwork.
Table 14.13 Variogram Models for K1 Stockwork

Sill Ratio Ratio
Nugget 0.47 – – – – – –
Au Structure 1 0.39 25 90 –45 0 1 2.5
Structure 2 0.14 160 90 –45 0 1 10.7
Nugget 0.59 – – – – – –
Ag Structure 1 0.26 35 90 –45 0 1 2.3
Structure 2 0.15 220 90 –45 0 1 11
14.1.4.3 K2 Main Zone
Experimental variography with a lag of 10 m for gold revealed well structured

omni-directional behaviour within the plane of mineralization dipping moderately to the east.
Maximum variogram ranges of 60 m were modeled for gold and silver. Nugget effects for
gold and silver were both moderate with relative variances of 51%. Variography for silver
demonstrated almost identical spatial characteristics to gold and the gold variogram models
were applied to silver estimation. Table 14.14 lists the variogram models for K2 Main Zone.

Table 14.14 Variogram Models for K2 Main Zone

Relative Major/Semi-major Major/Minor

Sill Ratio Ratio
Nugget 0.51 – – – – – –
Au and
Structure 1 0.34 10 0 0 –35 1 2
Ag
Structure 2 0.15 60 0 0 –35 1 4
14.1.4.4 K2 Stockwork

omni-directional behavior parallel with the plane of Main Zone mineralization dipping
moderately towards the east. Maximum variogram ranges of 85 m were modeled for gold
and silver. Nugget effects for gold and silver were both moderate with relative variances of
31%. Variography for silver demonstrated almost identical spatial characteristics to gold
and the gold variogram models were applied to silver estimation. Table 14.15 lists the
variogram models for K2 Stockwork.
Table 14.15 Variogram Models for K2 Stockwork

Sill Ratio Ratio
Nugget 0.31 – – – – – –
Au and
Structure 1 0.37 25 0 0 –35 1 2.1
Ag
Structure 2 0.32 85 0 0 –35 1 2.8
14.1.4.5 K Link Main Zone

omni-directional behaviour within the plane of mineralization dipping moderate to steeply
towards the south-east. Maximum variogram ranges of 85 m were modeled for gold and
silver. Nugget effects for gold and silver were both moderate with relative variances of 48%.
Variography for silver demonstrated almost identical spatial characteristics to gold and the
gold variogram models were applied to silver estimation. Table 14.16 lists the variogram
models for K Link Main Zone.
Table 14.16 Variogram Models for K Link Main Zone

Sill Ratio Ratio
Nugget 0.48 – – – – – –
Au and
Structure 1 0.35 18 50 0 –60 1 1.8
Ag
Structure 2 0.16 85 50 0 –60 1 4.3

14.1.4.6 K Link Stockwork


omni-directional variograms parallel with the plane of Main Zone mineralization dipping
moderately towards the south-east. Maximum variogram ranges of 80 m were modeled for
gold and silver. Nugget effects for gold and silver were both moderate with relative
variances of 25%. Variography for silver demonstrated almost identical spatial
characteristics to gold and the gold variogram models were applied to silver estimation.
Table 14.17 lists the variogram models for K Link Stockwork.
Table 14.17 Variogram Models for K Link Stockwork

Sill Ratio Ratio
Nugget 0.25 – – – – – –
Au and
Structure 1 0.5 18 50 0 –55 1 1
Ag
Structure 2 0.24 80 50 0 –55 1 1
14.1.5 Grade Estimation
Grade estimation was based on a volume model with dimensions listed in Table 14.18.
Table 14.18 Kencana Volume Model Parameters

Minimum Maximum Model Extent
Easting 9 600 10 400 800
Northing 19 200 20 220 1 020
RL 4 450 5 050 600
X Dimension (m) 1 2 –
Y Dimension (m) 1.5 6 –
Z Dimension (m) 1 4 –
Grade estimation applied ordinary kriging into parent cells using the variogram models
defined for each geological domain and other parameters as listed in Table 14.19 to
Table 14.21.

Table 14.19 K1 Estimation Parameters

Main Main Zone Main Zone

Stockwork
Zone North Hangingwall
Minimum number of composites 6 4 6 6
Maximum number of composites 24 16 16 24
Search ellipse major range 125 125 125 125
Search orientation 120 90 90 90
Plunge of major axis –42 –45 –45 –45
Dip of major axis 21 0 0 0
Anisotropy major/semi-major 1.8 2.5 1 1.6
Anisotropy major/minor 5 5 5 5
Table 14.20 K2 Estimation Parameters

Main
Stockwork
Zone
Minimum number of composites 6 4
Maximum number of composites 24 24
Search ellipse major range 80 125
Search orientation 0 0
Plunge of major axis 0 0
Dip of major axis –35 –35
Anisotropy major/semi-major 1.0 1.0
Anisotropy major/minor 2 5
Table 14.21 K Link Estimation Parameters

Main Main Zone
Stockwork
Zone South
Minimum number of composites 6 6 6
Maximum number of composites 24 24 24
Search ellipse major range 80 85 125
Search orientation 50 50 50
Plunge of major axis 0 0 0
Dip of major axis –60 –45 –60
Anisotropy major/semi-major 1 1 1
Anisotropy major/minor 2 1 2
A global dry density of 2.57 t/m3 was assigned to all zones based on over 6,000 bulk
density determinations collected using a water immersion technique.

14.1.6 Resource Classification

The following items were considered for mineral resource classification:
• Geological continuity and mineralized volume: there is a high level of confidence in

the continuity and volume of all interpreted mineralized zones. The approach to
defining vein volume is based largely on geological attributes.
• Sample density and mining history: most of the Kencana mineral resources are either
developed from underground or drilled to around 25 m × 25 m spacing.
• Modeling technique: the 3-D modeling method and associated parameters is
considered appropriate for estimation of the Kencana deposits.
It was concluded that the remaining Kencana mineral resource is appropriately classified as
Indicated Resource.
14.2 Toguraci Mineral Resource Estimate
The Toguraci epithermal vein system consists of series of relatively narrow, predominantly
steep dipping and generally north trending, subparallel quartz vein structures with localized
links, jogs and splay structures that can also host mineralization. Most the main vein
structures (Damar, Midas, Kayu Manis and Wulan) are subvertical to steeply dipping
towards the west whilst the western-most structures (BOD and Yahut) have shallower dips
of up to 40° towards the east and intersect the vertical structures at depth. The expression
of the Toguraci veins at 5,000 m RL is shown in Figure 14.17.

Figure 14.17 Toguraci Veins at 5,000 m RL


High-grade gold mineralization in small ore-shoots is localized often at dip and strike
changes along the main vein structures and in some of the small dilational links and jogs
between them. Within most of the Toguraci shoots, a moderate to steep northerly plunge to
the bonanza gold grades can be mapped, most likely in response to flexures and fault
intersections.
At Toguraci, high-grade domains within the Main Zone (MZ) epithermal veins have been
modeled using a probability model developed using conditional simulation. In previous
estimates, the high-grade quartz-chlorite mineralization (Bonanza Zone: BZ) was
interpreted and estimated separately. However, the complex distribution of the
quartz-chlorite mineralization cannot be accurately modeled based on the drillhole data,
and in the revised estimate the quartz-adularia and quartz-chlorite mineralization are
included in one geological domain, and the high-grade part of the vein determined by
statistical modeling.
The narrow vein style of mineralization has lead to the use of a 2-D accumulation method of
estimation.
14.2.1 Mineralization Domaining
Interpretation of MZ mineralization for each of the veins and splays was completed on
cross-sections at drillhole spacing, which is typically on 25 m north sections. Sectional
interpretations of the main epithermal vein structure using geological logging and core
photography was completed over the strike extent of the project area. The interpretation
was digitized and a 3-D wireframe model of each of the veins produced. The interpretation
of MZ is based on geological attributes such as epithermal vein textures with no cut-off
grade applied. Figure 14.18 shows the layout in plan of Toguraci vein wireframes.

Figure 14.18 Plan of Toguraci Vein Wireframes

Samples within the MZ and associated splays are assigned a database code
(ZONECODE), which is used to control compositing and estimation (Table 14.22).
Table 14.22 Toguraci Domain Codes

ZONECODE Domain
5101 Damar Main Zone
6101 Kayu Manis Main Zone
6102 Kayu Manis Splay 1
6103 Kayu Manis Splay 2
7101 Wulan Main Zone
8101 Midas Main Zone
8102 Midas Splay 1
8103 Midas Splay 1
9101 BOD Yahut Main Zone

14.2.2 Compositing
The selection of the resource estimation method for narrow veins needs to take into
account the different support (sample length) of each drillhole intercept. Composting needs
to consider:
• Mineralized epithermal vein zone true thickness is variable, typically ranging from
0.1 m to 4 m in width.
• Undulating or variable zone geometry (dip and strike) and possible grade/thickness
trends within this variable geometry.
• Sampling has been taken over geological intervals creating samples of unequal
length or variable support.
• The continuity and geometry of the BZ within the MZ is quite variable making it
difficult to apply separate deterministic domaining to the BZ.
• Mining selectivity across the epithermal vein zones is unlikely due the narrow nature
of the mineralized structures.
• Drill spacing is variable but typically around 25 m N × 25 m E within the plane of
mineralization.
A method that allows estimation of metal content on a projected plane is considered to be

an appropriate approach. This approach is best achieved using geological intercept
composites and accumulation estimation.
MZ grades are composited across the entire coded interval resulting in a single geological
intercept composite at each intercept location. The geological composites are projected
onto a vertical 2-D plane approximately parallel with the vein. The mid-point of each
geological composite is assigned the horizontal width of the vein. The geological intercept
composites are not of equal support as the lode thickness varies and an additive variable is
created as the product of grade and thickness (metal accumulation). The accumulation a(x)
is defined as the product of thickness t(x) and grade z(x) assuming a constant density:
a(x) = t(x) . z(x)
14.2.3 Composite Statistics
Toguraci Main Zone is characterized by a small number of statistical outliers that have the
potential to influence a significant proportion of contained metal within each zone. An
analysis was undertaken to quantify the possible influence of extreme values and to
determine risk adjustments. The analysis examined the potential metal influence associated
with individual intercept composites. The declustered metal contribution for the
highest 10% of intercept gold and silver values for each Main Zone was examined. The
highest 10% of intercept gold grades contributed 55% to 65 % of contained metal with a
small number of composites contributing a large proportion of metal.

Top-cuts were selected to limit the effect of extreme values. Table 14.23 and Table 14.24
show composite statistics for original geological composites, cut values and cut statistics.
Table 14.23 Geological Composite Gold Grade Statistics and Cut Statistics
Damar Kayu Manis Wulan Midas BOD-Yahut
Number 158 92 55 75 175
Minimum (g/t) 0.01 0.03 0.03 0.01 0.01
Maximum (g/t) 307 370 161 625 820
Mean (g/t) 22 15 8.3 21 29
Standard Deviation 44 42 23 80 81
Coefficient of Variance 2.05 2.87 2.76 3.85 2.84
Top-cut (g/t) 140 100 140 85 160
Cut Mean (g/t) 19 12 7.9 11 29
Cut Standard Deviation 34 20 20 20 49
Cut Coefficient of Variance 1.74 1.75 2.57 1.88 1.67
Table 14.24 Geological Composite Silver Grade Statistics and Cut Statistics
Damar Kayu Manis Wulan Midas BOD-Yahut
Number 139 80 52 73 153
Minimum (g/t) 0.05 0.05 0.01 0.01 0.05
Maximum (g/t) 683 215 163 477 631
Mean (g/t) 52 12 13 29 50
Standard Deviation 115 27 25 66 106
Coefficient of Variance 2.24 2.25 1.92 2.25 2.13
Top-cut (g/t) 500 100 140 200 200
Cut Mean (g/t) 49 10 12.83 25 44
Cut Standard Deviation 106 17 23 42 64
Cut Coefficient of Variance 2.14 1.63 1.78 1.68 1.47
Figure 14.19 and Figure 14.20 show log-probability plots of cut gold and silver grades
respectively for geological composites.

Figure 14.19 Toguraci Main Zones Log-probability Plot Cut Gold Composite Grades

Figure 14.20 Toguraci Main Zone Log-probability Plot Cut Silver Composite Grades
14.2.4 Simulation of Bonanza Zone
MZ epithermal veins include shoot-like BZs occurring wholly within the plane of the main
epithermal vein. BZs require separate domaining for grade estimation to avoid over-
smoothing of high grades into adjacent lower-grade areas. BZs appear to have sharp grade
boundaries but the continuity and geometry of the zones is variable making it difficult to
interpret domains.
A sequential indicator simulation approach was used to objectively define the BZ and
surrounding MZ domains. Exploratory data analysis showed that a gold grade indicator of
around 10 g/t Au to 15 g/t Au resulted in good definition of the BZ shoots creating a
grade-based separation of BZ and surrounding MZ. The MZ domain was further split into a
low-grade and moderate-grade domain using a gold grade indicator of 2 g/t Au.
BZ is not evenly distributed throughout each MZ area and a localized BZ and MZ probability
was simulated at each location. BZ and MZ indicators were simulated using ordinary kriging
into each simulation grid node. An omni-directional variogram model based on the BZ

indicator threshold was used for simulation. This created a 2-D probability map of each
indicator. Figure 14.21 shows the BZ probability map for Damar as an example.
Figure 14.21 Damar Main Zone BZ Indicator Probability Map
100 simulations of the BZ and MZ indicators were performed into 2-D 1 m × 1 m grid nodes
generating a series of equally probable models and a statistically derived most
probable model can be determined. The most probable model was re-grouped into
12 m (N) × 8 m (RL) blocks where each larger block has an estimated proportion of each
mineralization zone.
During the grade estimation process density was assigned to each domain based on the
average of 577 determinations. All veins were assigned a density of 2.55 t/m3 except Kayu
Manis, which was assigned a density of 2.50 t/m3.

14.2.5.1 Damar and BOD-Yahut Grade Estimation

2-D ordinary kriging was used to estimate grade for the Damar and BOD-Yahut Main Zones
with geological composites for BZ or MZ separated on the basis of the gold grade
indicators. Variograms were modeled for the accumulation variable for each grade indicator
in the plane of each vein. Variography for the BZ was reasonably well structured for Damar
and BOD-Yahut. Omni-directional variogram models were fitted for all variables.
Variogram model parameters for Damar and BOD-Yahut for BZ and MZ are summarized in
Table 14.25 and Table 14.26.
Table 14.25 Damar Variogram Models

BZ MZ
Relative Sill Range Relative Sill Range
Nugget 0.39 – 0.35 –
Au x width Structure 1 0.50 35 0.09 34
Structure 2 0.11 100 0.56 100
Nugget 0.25 – 0.25 –
Ag x width Structure 1 0.06 34 0.04 44
Structure 2 0.67 100 0.71 175
Table 14.26 BOD Yahut Variogram Models

BZ MZ
Nugget 0.39 – 0.34 –
Structure 2 0.11 100 0.35 100
Nugget 0.25 – 0.43 –
Structure 2 0.67 100 0.33 175
Geological composites were separated on the basis of the gold grade indicators and
estimation of grades used an accumulation method where the gold and
silver accumulations and horizontal width were estimated on a 2-D vertical plane into
12 m N × 8 m RL blocks using ordinary kriging.
Final block grade is calculated by dividing the estimated accumulation by the estimated
width and weighted by the proportion of each mineralization type determined from the
simulation. The estimation of horizontal width used the same variogram models as for the
accumulations. An omni-directional search ellipse was used with radius 120 m and a
minimum of two and a maximum of 16 composites were allowed for successful estimation.

14.2.5.2 Midas, Kayu Manis and Wulan Grade Estimation

The Midas, Kayu Manis and Wulan estimates were completed using two methods. One
method was a similar approach to the BOD-Yahut estimates but the estimation of the metal
accumulation and width was simulated into 1 m × 1 m grid nodes and regrouped into
12 m N × 8 m RL blocks. The simulation was constrained within the most probable BZ and
MZ domains as previously determined by simulation.
The other method, which was subsequently used for mineral resource reporting,
incorporated direct simulation of grades into 1 m × 1 m grid nodes and regrouped into
12 m N × 8 m RL blocks. The simulation was constrained within the most probable BZ and
MZ domains as previously determined by simulation.
The two approaches to estimation returned results within 0.5% of each other.
An omni-directional search ellipse was used with radius 120 m and a minimum of three and
a maximum of 24 composites were allowed for successful estimation. Variogram models
are listed in Table 14.27.
Table 14.27 Midas, Kayu Mains and Wulan Variogram Models

BZ MZ
Nugget 0.32 – 0.35 –
Structure 2 – – 0.56 145
Nugget 0.25 – 0.25 –
Structure 2 0.67 100 0.71 175
Final block grade is calculated by dividing the estimated accumulation by the estimated
width.
14.2.6 Mineral Resource Classification
Most of the Toguraci mineral resource has been classified as Indicated Resource where
drilling is generally 25 m × 25 m or less. This level of drillhole spacing is regarded as
sufficient to demonstrate a high level of confidence in the geometry, continuity and grade of
the Toguraci Main Zones. Surrounding Main Zone or less well developed splay structures
have been classified as Inferred Resource where drill spacing is wider spaced or where
unresolved geological complexity exists. The Toguraci mineral resource is reported at a
4 g/t Au cut-off.

14.3 Gosowong Mineral Resource Estimate

The mineral resource estimate for mineralized remnants associated with the Gosowong
open pit was completed in January 2008.
14.3.1 Geological Interpretation
The main economic mineralized zones in the Gosowong mining area consist of a series of
north-striking, moderately east-dipping, narrow (0.3 m to 8 m) epithermal quartz veins.
Economic gold and silver mineralization primarily occurs in multi-phase banded
quartz-adularia and quartz-chlorite-sulphide veins, hydrothermal breccias and peripheral
stockworks.
The domains used to estimate the mineral resource are largely based on geological
attributes rather than grade criteria. Geological logging and core photography was used for
interpretation. All interpreted domains are geologically and statistically distinct and provide
a robust basis for resource estimation. All of the interpreted domains are MZ style
epithermal vein mineralization. There is no BZ style mineralization as occurs at Kencana
and Toguraci remaining below the Gosowong pit.
The interpretation and resource estimate has been completed using all available geological
information and the estimate depleted for the Gosowong open pit. Figure 14.22 shows a
plan projection of the epithermal vein domains.

Figure 14.22 Plan Projection of Gosowong Epithermal Vein Domains

14.3.2 Composite Statistics
Each mineralized zone intercept was manually assigned a database code (ZONECODE)
and composited to 2 m downhole controlled by the code. Compositing allowed residuals of
half the composite length or greater to be included as legitimate composites. Residuals less
than half the composite length were added to the adjacent full-length composite.
A small number of modest high-grade assay cuts were applied to gold and silver to limit the
influence of apparent statistical outliers. The high-grade cuts were applied in conjunction
with visual assessment with particular attention to the distribution of grades below the
Gosowong pit. Table 14.28 and Table 14.29 show summary statistics of raw and cut gold
and silver 2 m composites for all mineralized zones that remain below the pit.

Table 14.28 Gosowong Vein Zone Gold Composite Statistics

101 102 105 106

ZONECODE Au Cut Au Au Cut Au Au Cut Au Au Cut Au
(g/t) (g/t) (g/t) (g/t) (g/t) (g/t) (g/t) (g/t)
Number 247 247 34 34 12 12 18 18
Minimum (g/t) 0.03 0.03 1.23 1.23 1.03 1.03 0.31 0.31
Maximum (g/t) 1,046 400 183 100 107 100 43 43
Mean (g/t) 43 37 20 17 28 28 9.7 9.7
Standard Deviation 118 78 32 21 32 30 11 11
Coefficient of Variance 2.72 2.11 1.62 1.18 1.12 1.09 1.14 1.14
Table 14.29 Gosowong Vein Zones Silver Composite Statistics

101 102 105 106
ZONECODE Au Cut Au Au Cut Au Au Cut Au Au Cut Au
(g/t) (g/t) (g/t) (g/t) (g/t) (g/t) (g/t) (g/t)
Number 247 247 34 34 12 12 18 18
Minimum (g/t) 0.5 0.5 1.75 1.75 3.34 3.34 3 3
Maximum (g/t) 782 400 420 300 126 100 389 200
Mean (g/t) 48 46 123 111 39 37 75 65
Standard Deviation 86 72 131 105 35 29 89 55
Coefficient of Variance 1.81 1.58 1.06 0.95 0.89 0.8 1.18 0.84
Grade estimation used ordinary kriging with parameters determined from a study of
variography. Variograms were calculated for Gaussian transformed two metre cut
composites and back transformed to obtain the appropriate variogram models for
estimation. Separate variography was attempted for the different domains but only the
largest zone (ZONECODE 101) demonstrated reasonably structured experimental
variograms. These variogram models were used for estimating gold and silver in all zones.
The variogram models are listed in Table 14.30 for gold and silver respectively.
Table 14.30 Gosowong Variogram Models

Sill Ratio Ratio
Nugget 0.47 – – – – – –
Au Structure 1 0.06 30 90 –45 0 1 4
Structure 2 0.47 120 90 –45 0 1 4
Nugget 0.23 – – – – – –
Ag Structure 1 0.39 20 90 –45 0 1 4
Structure 2 0.38 100 90 –45 0 1 4

The volume model parameters are listed in Table 14.31. A minimum of six and a maximum
of 30 composites was allowed for successful estimation using a 150 m search ellipse along
strike and down dip.
Table 14.31 Volume Model Parameters

Minimum Maximum Model Extent
Easting 4 000 6 000 2 000
Northing 9 006.25 11 006.25 2 000
RL -100 400 500
X Dimension 0.78125 6.25 –
Y Dimension 1.5625 12.5 –
Z Dimension 0.625 5 –
A global bulk density of 2.5 t/m3 was assigned to all estimated zones, which reflects the
densities applied to previous estimates and other epithermal veins in the Gosowong area.
The estimate was depleted for open pit mining.
14.3.4 Resource Classification
The mineral resource estimate was classified as Indicated Resource on the basis of:
• A high level of confidence in the continuity and volume of all interpreted mineralized
zones confirmed by exposure in the Gosowong pit and historical grade control data.
• Vein volume is based largely on geological attributes rather than grade.
• Drilling to around 25 m × 25 m spacing. Previous mining production indicates that
robust mineral resource estimates can be consistently achieved at this drilling density.
• The modeling method and associated parameters are considered appropriate for
estimation of the deposit type.
• Risk adjustments in the form of high-grade cuts have been applied in some cases to
limit the influence of statistical outliers.

15 MINERAL RESERVE ESTIMATES

Mineral reserves at Gosowong comprise the Gosowong Open Pit Cutback mineral reserve,
the Kencana underground mineral reserve, the Toguraci underground mineral reserve, and
a mineral reserve based on the reclaimable mill tailings.
The mineral reserves have been prepared under the direction of Qualified Persons using
accepted industry practice and have been classified and reported in accordance with the
JORC Code1. There are no material differences between the definitions of Proven and
Probable Mineral Reserves under the CIM Definition Standards and the equivalent
definitions in the JORC Code. The mineral reserves are reported as at 31 December 2011.
The total mineral reserve for Gosowong is summarized by operation in Table 15.1.
Table 15.1 Summary of Gosowong Mineral Reserve by Operation

Reserve Tonnes
Deposit Grade Grade Au Ag
Classification (Million)
(g/t) (g/t) (Moz) (Moz)
Gosowong Cutback Proved – – – – –
Probable 0.53 6.4 17 0.1 0.3
Kencana Proved - - - - -
Probable 2.5 15 9.7 1.2 0.8
Toguraci Proved – – – – –
Probable 1.4 14 31 0.6 1.4
Tailings Proved – – – – –
Probable 0.64 2.8 4.6 0.1 0.1
Proved
Stockpiles
Probable 0.03 14 21 0.01 0.02
Total Proved - - - - -
Probable 5.1 12 16 2.0 2.6
Total Proved + Probable 5.1 12 16 2.0 2.6
15.1 Mineral Reserve Assumptions
15.1.1 Commodity Prices and Exchange Rate
The following commodity prices and exchange rate have been used to prepare the mineral
reserve estimates:
1
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code 2004
Edition, Effective December 2004, 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).

Gold price: US$1,400 /oz

Silver price: US$25.00 /oz

Exchange rate: A$1.00 = US$0.90
15.1.2 Cost Estimates
Cost estimates used in the preparation of the mineral reserves are based on recent
historical cost data and the most recent studies approved by Newcrest relating to the
exploitation of each of the deposits. The mineral reserves include material that when
delivered to the pit rim or mine portals has a recovered value greater than the cost of all
downstream processes including fixed costs.
Mine designs supporting the reserves have been based on the most recently approved
studies including feasibility and life-of-mine studies.
15.2 Gosowong Cutback Mineral Reserve
The Gosowong Cutback mineral reserve is shown in Table 15.2. The mineral reserve
estimate is an update of the 2010 statement that was based on a comprehensive mining
feasibility study undertaken by Newcrest.
Table 15.2 Gosowong Cutback Mineral Reserve at 31 December 2011

Reserve Tonnes Gold Grade Silver Grade Contained Au Contained Ag
Classification (Million) (g/t) (g/t) (Moz) (Moz)
Proved – – – – –
Probable 0.53 6.4 17 0.1 0.3
15.2.1 Underpinning Assumptions
The marginal cut-off grade (COG) for the Gosowong Cutback for December 2011 has been
lowered to 0.7 g/t Au, from a marginal COG of 1.3 g/t Au used in 2010. Lower grade ore <5
g/t Au will be stockpiled and used as mill feed whenever it will not displace higher grade
material.
15.2.2 Mine Design and Evaluation
Work undertaken in 2011 to update the mine plan and mineral reserve estimate included
regularisation of the resource block model to cells of dimensions 5 m × 2.5 m × 2.5 m to
properly account for dilution and recovery, a reduction in the marginal COG, and revision of
the slope angle on the south wall to reduce potential for batter scale instability.
The original mine design and reserve estimation process consisted of:
• Operating cost estimation derived by the Caterpillar Fleet Production simulator.

• Application of the Lerchs Grossman algorithm to determine the optimum open pit
shell.
• Detailed mine design, including design of berms and ramps, and consideration of
minimum mining widths, was conducted based on the optimum pit shell.
• Interrogation of the final mine design against a regularized block model and the
marginal COG to determine the mining inventory, summarized by bench.
The computer program Whittle Four-X was used for the open pit optimisation. The inputs to
this process are:
• Mineable resource model

• Product prices
• Mining costs
• Processing, realisation and administration costs
• Process recoveries
• Pit slope angles
The pit shell of minimum size that maximized Net Present Value was selected as the
preferred shell.
15.2.3 Modifying Factors
Regularization and re-interrogation of the design against the resource block model was
performed prior to the December 2011 Gosowong Cutback mineral reserve estimate. This
is an accepted practice to account for dilution and recovery.
15.2.4 Checks on Estimation
An external check was carried out on the June 2010 mineral reserve estimate for the
Gosowong Cutback and no issues were identified. External checks have not been carried
out on subsequent updates.
15.3 Kencana Mineral Reserve
Kencana hosts the majority of the mineral reserves for the Gosowong site. The Kencana
mineral reserve estimate as at 31 December 2011 (the Kencana 2011 Reserve) is in Table
15.3. It comprises three vein structures, the K1, the K2 and the K Link. All of the reserve is
classified as Probable.

Table 15.3 Kencana 31 December 2011 Mineral Reserve Estimate by Deposit


Deposit
Proved – – – – –
K1
Probable 1.2 13 11 0.5 0.4
Proved – – – – –
K2
Probable 0.8 20 9.2 0.5 0.2
Proved – – – – –
K Link
Probable 0.5 14 8.5 0.2 0.1
Proved - - - - -
Total
Probable 2.5 15 9.7 1.2 0.8
Proved +
Total 2.5 15 9.7 1.2 0.8
Probable
The methodology for deriving the COGs is outlined in the Kencana Ore Reserve Report
December 2011 (Report Number: Kencana OR 11-07 L3).
The metallurgical recoveries assumed for gold of 95.8% for FYE June 2011, 96.8% in FYE
June 2012 and 97% thereafter are based on historical performance and technical studies
on the planned mill upgrades to fine grinding. A silver process recovery of 80% has been
assumed throughout.
Operating costs used in the COG analysis have been based on actual costs for FYE June
2009, FYE June 2010 and FYE June 2011, and forecast estimates for FYE June 2012 and
the Five Year Plan estimates.
The COGs used for the Kencana June 2011 Reserve are compared to those endorsed by
the Newcrest Resources and Reserves Steering Committee in previous years in
Table 15.4.
Table 15.4 Kencana Historical Cut–off Grades

December
Type of Cut-off June 2011 2010 2010 2009
2011
Grade (US$1,000/oz) (US$1,000/oz) (US$750/oz) (US$650/oz)
(US$1,400/oz)
Break-even 6.1 g/t Au 7.5 g/t Au 4.8 g/t Au 8.5 g/t Au 10.0 g/t Au
Incremental 3.8 g/t Au 5.1 g/t Au 3.2 g/t Au 6.0 g/t Au 7.0 g/t Au
Marginal Pre-mining 3.0 g/t Au 3.0 g/t Au 1.8 g/t Au 3.0 g/t Au 3.0 g/t Au
Marginal Post-mining 1.0 g/t Au 1.0 g/t Au – – –
Where:

• Break-even covers all site costs (i.e. Mining, Milling, Administration, and Engineering).
• Incremental covers costs of Mining, Milling, and Engineering.

• Marginal Pre-mining variable costs excluding Engineering and Administration
(i.e. Mining and Milling).
• Marginal Post-mining variable costs excluding Engineering, Administration and Mining
(i.e. Milling).
The Break-even and Incremental COGs are used as the basis for determining the extents
of planned mining, and most planned production areas are above these COGs. The reserve
estimation process allows for inclusion of material within the mining plan above the
Marginal Pre-mining COG of 3.0 g/t Au that must be mined in order to access the target
production areas.
Newcrest has applied sophisticated mine design tools and processes to estimate the
mineral reserve.
An iterative design process was undertaken cognisant of the needs for:

• Appropriate application of the Incremental and Marginal COGs.
• Geotechnical constraints.
• Mining of low-grade zones to gain access to higher grade zones.
• Hangingwall and footwall dilution.
• Ground conditions and control measures as detailed in the Ground Control
Management Plan for Kencana.
When designing mining outlines for both UHCAF and LHS, the highest priority is to ensure
that all of the high-grade ore is included within the mining outline, even where this involves
high levels of design dilution. The mine design process aims to avoid non-essential
subeconomic excavation.
Before evaluation, the resource block model was depleted of areas mined up to the end of
December 2011. Additionally, a sequential process of evaluation of planned excavation and
corresponding depletion of the resource model was undertaken when evaluating each of
the planned excavation types: development (“fixed cross sectionals”), UHCAF (“outlines”),
and LHSs (“complex solids”). This process is used to prevent double counting of any
material. AMC regards this as good practice.


The relatively flat dip of the orebodies at Kencana (20°-70°) mean that mining outlines for
UHCAF stoping necessarily include significant planned dilution (approximately 30%) from
the hangingwall and footwall in minimising the loss of the high-grade ore.
Mining ore loss is negligible and unplanned dilution is minimal for the UHCAF method. A
tonnage factor of 107% is applied to most of K1, but no provision is made for the K1
Remnants above Sub-6, K2 or K Link.
Mining outlines for LHS are aligned (within practical limits) with the outline of the economic
portion of the orebody and hence contain minimal designed dilution. Additional operational
dilution (typically referred to as unplanned dilution) and ore loss inevitably occurs during
mining, mainly in the hangingwall stopes. For the 2011 Kencana Reserve, a tonnage factor
of 120% has been applied to most LHS. AMC considers this to be reasonable and
consistent with reconciliation results for LHS from previous years.
AMC considers the mining shapes and overall quantity of dilution to be reasonable.
As part of the Kencana 2011 Reserve review, AMC has carried out checks on the input
data and calculations used.
A small number of stopes in K1 Sub-9 and Sub-10, comprising 68 kt of the mineral reserve
have been subject to adjustment by a Tonnage Factor of 95%, but no dilution has been
accounted for. The tonnage involved is not material to the overall mineral reserve estimate.
15.4 Toguraci Mineral Reserve
The Toguraci mineral reserve estimate as at 31 December 2011 (the Toguraci Reserve) is
in Table 15.5.

Table 15.5 Toguraci 31 December 2011 Mineral Reserve Estimate by Deposit


Deposit
Damar Proved – – – – –
Probable 0.52 18 46 0.3 0.8
Midas Proved – – – – –
Probable 0.06 16 26 0.03 0.05
Yahut - BOD Proved – – – – –
Probable 0.68 12 25 0.3 0.5
Kayu Manis Proved – – – – –
Probable 0.09 7.9 6.5 0.02 0.02
Wulan Proved – – – – –
Probable 0.05 13 17 0.02 0.03
Total Proved – – – – –
Probable 1.4 14 31 0.6 1.4
Material contained in the Kayu Manis and Wulan orebodies contribute to the mineral
reserve, but designs for these orebodies are at a conceptual level and no detailed study
has been completed. The mine design contemplates recovery of the orebodies. The
shallow nature and easy accessibility of the deposits, their proximity to the existing plant
and the gold grades being similar to Kencana (with higher silver grades), indicate that these
veins are economically viable and suitable for inclusion in the mineral reserve.
Some of the orebodies at Toguraci were previously mined by open pit. The 2011 Toguraci
Reserve includes the downward extension of three of these orebodies (Damar, Midas and
Kayu Manis) and two unmined orebodies (Wulan and Yahut). All of the reserve is based on
extraction by underground mining. A 10 m pillar has been left around the base and walls of
the pit and this pillar is excluded from the mineral reserve.
The metallurgical recoveries assumed for gold of 95.8% for FYE June 2011, 96.8% in FYE
June 2012 and 97% thereafter are based on historical performance and technical studies
on the planned mill upgrades to fine grinding. A silver process recovery of 80% has been
assumed throughout.
Operating costs used in the COG analysis have been based on actual costs for FYE June
2009, FYE June 2010 and FYE June 2011 and forecast estimates for FYE June 2012 and
the Five Year Plan estimates.

The COGs used for the December 2011 Toguraci Reserve have been recalculated based
on the updated gold price (US$1,400/oz) and are compared with the corresponding June
2011 values in Table 15.6.
Table 15.6 Comparison of December 2011 and June 2011 Cut-off Grades
December 2011 June 2011
Type of Cut-off Grade
(US1,400/oz) (US1,000/oz)
Break-even 4.4 g/t Au 6.1 g/t Au
Incremental 3.4 g/t Au 4.7 g/t Au
Marginal Pre-mining 2.0 g/t Au 2.0 g/t Au
Marginal Post-mining 1.0 g/t Au 1.0 g/t Au
The Break-even and Incremental COGs are used as the basis for determining the extents
of planned mining, and most planned production areas are above these COGs. The stope
outlines are relatively insensitive to the change in cut-off grade and a re-design has not
been carried out. The lowest grade material included in the mineral reserve for Toguraci is
above the Marginal Pre-mining COG of 2.0 g/t Au. Based on mining to-date, planned
overbreak dilution has been reduced in orebodies where longhole stoping is planned. This
has reduced tonnage and increased grade in all Toguraci orebodies with the exception of
Yahut, which is planned to be mined by cut and fill.
The Marginal Pre-mining COG calculated in June 2011 of 2.9 g/t Au was moderated to 2.0
g/t Au after consideration of a number of factors, including:
• The desirability of consistency with 2010 values.

• Improved resource continuity, and therefore overall resource recovery, at the lower
COG.
• A requirement to mine lower grade material to access higher grade material.
• The expectation that actual operating costs, arising from the application of typically
low-cost mining methods, will be lower than those forecast, which were influenced by
the experience from Kencana, where a high cost mining method (UHCAF) is used.
The Marginal Pre-mining COG has not been altered as the calculated value reduces to
2.1g/t Au with the updated gold price.
At the time of the feasibility study, material contained in the designs for Kayu Manis and
Wulan orebodies (which contribute to the mineral reserve) were at a conceptual level and
no detailed study had been completed. The mine design now reflects recovery of these
orebodies and detailed designs have been completed. The shallow nature and easy
accessibility of the deposits, their proximity to the existing plant and the gold grades being
similar to Kencana (with higher silver grades), confirm that these veins are economically
viable and suitable for inclusion in the mineral reserve.

145 kt of material with an average grade of 2.5 g/t Au, containing 12 koz Au, with a diluted
grade between 2.0 g/t Au and 3.0 g/t Au has been included in the mineral reserve. This
represents approximately 10% of the 2011 Toguraci Reserve tonnage, but 2% of contained
ounces. Of this, 41 kt, or 3% of the 2011 Toguraci Reserve, is contained in long hole bench
stopes.
It should also be noted that the published mineral resource for Toguraci is stated at a COG
of 4.0 g/t Au. This unconventional situation means that some material converted to reserve
has not previously been reported as resource. This lower grade material included in the
reserve, but excluded from the resource, is generally contained in development drives that
must be mined to access the high-grade stopes, and within diluting material that results
from stope wall overbreak.
The mining methods will be LHS with backfill (also referred to as benching, or modified
Avoca stoping) in Midas, Damar, Kayu Manis and Wulan; and OHCAF in the flatter dipping
Yahut orebody. Both methods are conventional, proven technologies, are highly
mechanized, are easily understood by mine planners and miners, and allow good ore
recovery.
LHS level intervals have been designed at 20 m floor to floor. For OHCAF, 4 m lifts are
planned. Stope strike lengths have been designed to match local ground conditions, and
are expected to be typically in the 15–20 m range before backfilling is required. Cemented
rockfill sill pillars will be used at intervals to divide the mine into working panels and
increase the number of active working areas. This will avoid ore loss in non-recoverable
pillars.
When designing mining outlines for LHS, the highest priority has been to ensure that all of
the high-grade ore is included within the mining outline.
The process used to create mining outlines is:
1. Filter the resource block model at the incremental COG and colour code blocks by
resource category (Indicated or Inferred).
2. Locate ore drive levels to maximize recovery of the Indicated resource.
3. Manually digitize practical stope outlines in cross section at 5 m spacing, applying a
minimum mining width of 1.5 m.
4. Wireframe cross sections and evaluate wireframes in Mine2-4DTM to determine the
economic limits of stoping.
5. Design access and ore drive development to mine the economic stopes, including
capital development to connect the various levels and orebodies.
6. Export the design to EPSTM and apply mining factors for ore loss and dilution.


LHS ore loss has been estimated at 5%, based on LHS experience at Kencana and Cracow
(a previously owned Newcrest operation using similar mining practice). Full recovery has
been assumed for OHCAF stoping and development.
All LHS shapes include some design (planned) dilution. Additionally, operational
(unplanned) dilution averaging 36% has been applied to all stopes. Stoping dilution
assumes an average diluted stope width of 3 m, total overbreak of 1 m from hangingwall
and footwall, plus backfill dilution of 5%.
OHCAF shapes include an average of 42% design dilution. The percentage of design
dilution varies with orebody width. No operational ore loss or dilution have been allowed for
OHCAF and development headings.
Design development and OHCAF dilution occurs when narrow, high-grade veins are mined
using development drives of fixed minimum span. This dilution has automatically been
taken into account during design interrogation by mining design software.
Spot checks were conducted by AMC and no deviations from the reserve estimation
methodology described in Section 15.4.2 were detected.
15.5 Reclaimable Tailings Mineral Reserve
The Reclaimable Tailings are the smallest component of the total mineral reserve for the
Gosowong site. The mineral reserve estimate for the Reclaimable Tailings for December
2011 is in Table 15.7. All of the reserve is classified as Probable.
Table 15.7 Reclaimable Tailings 31 December 2011 Mineral Reserve Estimate

Reserve Tonnes Grade Grade Au Ag
Proved – – – – –
Probable 0.64 2.8 4.6 0.1 0.1
A plan view of the tailings included in the mineral reserve is located is shown in
Figure 15.1. The area is approximately 4.3 ha. The access causeway and sample drillhole
locations are identified.

Figure 15.1 Plan Area of Reclaimable Tailings

A section of the reclaimable tailings showing the measured distribution of grade is in

Figure 15.2. Sampling indicates that the material is stratified in discrete layers of consistent
grade. The average thickness of the material within the mineral reserve is 9.5 m. Layers 1
and 2 generally constitute the mineral reserve.

Figure 15.2 Section of Reclaimable Tailings

The mineral reserve has been converted from an Indicated mineral resource of 0.64 Mt
grading 2.8 g/t Au directly to a Probable mineral reserve.
Insufficient data was available to allow for external checks on the mineral reserve estimate.

16 MINING METHODS
16.1 Gosowong Cutback
The Gosowong Cutback is a small tonnage, high stripping ratio, extension to the previously
abandoned Gosowong Open Pit. It will produce moderate grade feed over a short mine life.
Mining of the Gosowong Cutback is currently occurring.
16.1.1 Mining Method
The Gosowong Cutback is carried out using a conventional truck and shovel mining method
employing small capacity trucks and excavators. Mining is planned as a staged cutback of
the existing pit that closed in 2002, due to failure of the upper reaches of the south wall that
occurred towards the end of the planned mining of the original pit.
16.1.2 Geotechnical and Hydrological Conditions
One aim of the cutback is to remediate the walls of the pit in preparation for mine closure.
The main area requiring rehabilitation is the upper southern wall of the pit. Since
commencement of the cutback, small failures have continued in the vicinity of argillic
alteration on the final pit wall. These failures have triggered a redesign of the final pit wall
with flattening of the southern pit wall angle to approximately 19.5°.
A large quantity of saturated fines has accumulated in the deepest part of the pit.
De-watering and mud removal operations are occurring.
16.1.3 Production Rate
Mining of the cutback commenced in July 2010 and is scheduled to take 30 months to
complete.
As at 30 June 2011, mining of the cutback had progressed from 250 m RL to 140 m RL,
and 7.8 Mt of overburden had been removed. No ore had been mined. The final planned pit
bottom is at 20 m RL. A total of 0.45 Mt of ore is scheduled for mining between 85 m RL
and 20 m RL. Total planned life-of-mine waste movement is 14 Mt, for a stripping ratio of
approximately 31:1.
Total planned monthly material movement averages 0.6 Mt.
16.1.4 Pre-Stripping
Pre-strip activities included removal of material outside the limit of the existing failure zone
and re-grading of wall slopes to provide long term stability. Waste rock is hauled to
dedicated waste dumps constructed around the existing main run of mine pad.
Encapsulation of potentially acid forming material within conventional “valley fill” waste

dumps occurs. Progressive rehabilitation of batters is planned to stabilize pit slopes and
prevent erosion.
16.1.5 Mining Fleet
The trucking fleet consists of mostly owner-operated 40 t articulated trucks, including

nine Caterpillar ADT740s and four Caterpillar ADT735s. The shovel fleet consists of
two Komatsu PC800s, and one PC400 backhoe excavator. A single Montabert drill rig is
used for drill and blast operations on conventional 5 m benches and 2.5 m mining flitches.
Mine labour is employed directly by PTNHM, while a contractor is engaged to maintain the
mining fleet.
16.2 Kencana Underground Mine
Kencana is an established underground mine with a consistent history of high-grade

production. The known reserve at Kencana is contained within three vein structures, the K1,
the K2 and the K Link. Mining is scheduled to continue until FYE June 2019.
The predominant mining method used at Kencana is UHCAF. Pastefill, containing a high
proportion of cement, is produced in a batch plant on surface and is reticulated by
boreholes and pipes to mined-out areas to provide support for mining of adjacent ore. This
method is a reliable but relatively high cost mining method, suitable for high-grade deposits
hosted in poor ground conditions, such as those prevalent at Kencana.
LHS is used at Kencana in areas of lower grade and better ground conditions, including
stockwork zones. LHS is the planned mining method for 26% of the remaining reserve at
Kencana.
16.2.1.1 Ore Loss and Dilution
The relatively flat dip of the orebodies at Kencana (20°–70°) means that where high ore
recovery is planned, the designed excavations for UHCAF stoping necessarily include
significant design dilution (approximately 30%) from the hangingwall and footwall.
Unplanned mining ore loss is negligible and operational dilution is minimal for the UHCAF
method. A tonnage factor, accounting for operational dilution, of 107% is applied to most of
K1, but no provision is required for the K1 Remnants above Sub-6, K2 or K Link.
Mining outlines for LHS are aligned—within practical limits—with the outline of the
economic portion of the orebody, and hence contain minimal design dilution. Additional
dilution and ore loss inevitably occurs during mining and a tonnage factor of 120% has
been applied to most LHSs.

16.2.2 Geotechnical and Hydrological Conditions

To date, the ground conditions associated with the K1, K2 and K Link orebodies have been
considered to vary between poor and very poor, and have been the main driver of the
decision to use the UHCAF mining method.
However, due to improved ground conditions and orebody geometry, the K1 orebody below
Sub 7 and the K Link orebody between Sub 10 and Sub 13 have been designed for LHS.
The Kencana mine uses transportable submersible pumps and fixed pump stations to
conduct routine mine de-watering. Water is pumped from the mine to surface decant ponds
before it is released. Decanted mud is typically gold bearing and is reprocessed. The
existing de-watering infrastructure is well suited to the duty, and ingress of water is not a
significant issue for the mine.
The historical production performance for Kencana is in Table 16.1.
Table 16.1 Historical Kencana Production

Ore Mined Gold Grade Silver Grade Contained Gold Contained Silver
Financial Year
(Mt) (g/t) (g/t) (Moz) (Moz)
2011 0.58 26 17 0.48 0.31
2010 0.57 25 16 0.45 0.29
2009 0.45 31 46 0.44 0.66
The production rate is scheduled to remain at 0.5–0.6 Mtpa until ramping down in the final
two years of mine life.
16.2.4 Mining Fleet
Mining is performed using conventional, diesel powered, rubber-tyred mobile mining

equipment.
The fleet consists of six Sandvik Axera two-boom mining jumbos (including four D7-420s
and two D7-260s), five 14 t Sandvik 514 LHDs, and six Hitachi AH400-D trucks, (including
two fitted with ejector trays), with a rated payload of 37 t. In addition, a Terex ITC312
roadheader is used for mining ore headings in poor ground. A number of ancilliary units
including a long-hole drill, scissor lift trucks, tool carriers, agitator trucks and shotcrete spray
rigs are also used. No fleet expansion is planned. Sustaining capital expenditure will be
required to maintain the current fleet capability.

16.3 Toguraci Underground Mine

The Toguraci underground mine is the second underground project to be developed at

Gosowong. Mining of five distinct but closely situated orebodies is planned. Three of these
orebodies, Damar, Midas and Kayu Manis, have previously been mined by open pit
methods; and two orebodies, Wulan and Yahut, have not. A feasibility study demonstrating
technical and economic viability of mining at Toguraci was completed in August 2011 and
decline development has already commenced. The mine is expected to have a life of
five years.
16.3.1 Mining Methods
All planned mining at Toguraci is based on extraction by underground mining methods. Two
mining methods will be used. They are LHS (also referred to as benching) with backfill in
the subvertical Midas, Damar, Kayu Manis and Wulan orebodies; and OHCAF in the flatter
dipping Yahut orebody. Both methods are conventional, proven technologies, are highly
mechanized, are easily understood by mine planners and miners, and allow good ore
recovery.
LHS level intervals have been designed at 20 m floor to floor. For OHCAF, 4 m lifts are
planned. Stope strike lengths have been designed to match local ground conditions, and
are expected to be in the 15–20 m range before backfilling is required. Backfill will typically
consist of unconsolidated rock, and the use of waste rock for backfilling will reduce the
requirement for development waste haulage to surface. Cemented rockfill sill pillars will be
used at intervals to divide the mine into working panels and increase the number of active
working areas. This will avoid ore loss in non-recoverable ore pillars.
16.3.1.1 Ore Loss and Dilution
LHS and OHCAF are methods that inevitably incur some ore loss and dilution. Sources of
design ore loss may include local irregularities in orebody boundaries that cannot be
recovered with long-hole drill and blast, and mineralized material contained within the
unrecoverable barrier pillar between the underground mine and the open pit. The mine
design has avoided planned ore loss in non-recoverable ore pillars by the use of artificial
cemented rockfill sill pillars. Unplanned ore loss occurs when ore is broken but cannot be
economically recovered, often due to high dilution by local stope wall failures. Unplanned
ore loss has been estimated at 5%, based on LHS experience at Kencana and
Cracow Gold Mine in Australia.
Design dilution, the inclusion of barren or subgrade material in designed stope shapes, will
be modest for the LHS areas due to the good continuity and regularity of the Toguraci
orebodies. Operational stoping dilution from wall overbreak of 1 m is expected and
additional dilution from over-excavation of floor and adjacent stope backfill material of 5%
has been allowed.

Design dilution of development drives and OHCAF areas occurs when narrow, high-grade
veins are mined using development drives of fixed minimum span. This dilution has
automatically been taken into account during design interrogation by mining design
software.
Unplanned development ore loss and design dilution has not been taken into account in the
Yahut orebody, where OHCAF is planned.
16.3.2 Geotechnical and Hydrological Considerations
Geotechnical investigations indicate that ground conditions will be better at Toguraci than at
the nearby Kencana mine. The rock mass ratings for the target orebodies at Toguraci are
typically in the 40–70 range, which corresponds to fair-to-good ground conditions.
For comparison, Kencana is typically classified in the 5–35 range, which corresponds to
poor-to-very-poor ground conditions. This will allow the use of the LHS and OHCAF
methods, which are typically lower cost alternatives to the UHCAF method used at
Kencana.
Two known major faults intersect the Toguraci area. Where possible, mine designs have
avoided interaction with those faults.
The Toguraci area is known to have hosted high temperature ground water, and a pit lake
currently exists in the abandoned Toguraci pit. Potential uncontrolled ingress of hot ground
water is a significant risk to timely project execution. Accordingly, de-watering of the pit lake
and ground water sources, including the Yahut orebody, will be undertaken from surface
before production begins. In addition, installation of a network of underground pump
stations and rising mains has been planned. The de-watering system has been designed
with a capacity of 70 L/s.
Production is scheduled to commence in the last quarter of FYE June 2012, ramping up to
approximately 0.3 Mtpa. The mine is expected to have a five year life.
16.3.4 Mining Fleet
A mining fleet of conventional, diesel powered, rubber-tyred mobile mining equipment has
been budgeted for the Toguraci project. Some of the equipment, including a development
jumbo drill rig, has already been acquired. The total planned fleet is listed in Table 16.2.

Table 16.2 Planned Toguraci Mobile Fleet

Number
Mobile Equipment Type
of Units
Hitachi AH400-D Truck 4
Sandvik LH514-14 Loader 4
Normet Utimec LF 600 Aggi Truck 2
Caterpillar IT28G 2
Sandvik DD420-60 Jumbo 4
Sandvik DS420 Cable Bolter 1
SOLO long hole drill 1
Normet Charmec 9825 BE Charge Wagon 2
Normet Spraymec 6050 WP Shotcreter 2
Toyota Landcruiser 4
16.4 Reclamation of Mill Tailings
The mineral processing operation conducted in the early years of the Gosowong project
treated higher grade feed material and achieved lower recoveries than the current
operation. Consequently, a significant quantity of readily accessible mill tailings at low, but
economic gold grades is located in the TSF. Reclamation of some of these tailings is
occurring.
The TSF now comprises a 32 ha area and has been compartmentalized into three areas
separated by causeways. The areas are:
• An area that contains approximately 600,000 m3 of tailings at approximately 3 g/t gold

containing approximately 60 kozs gold.
• A similar sized area at about 5 g/t gold for another 95 kozs gold.
• A third area that is the active deposition area and will not be reclaimed.
Waste rock causeways have been constructed within the TSF to provide access to the
areas where reclamation of tailings is planned.
Excavators and rigid body dump trucks are used to remove tailings from the TSF and
transport them to elevated drying pads, where free draining and evaporation occurs. These
moist tailings will be re-handled and transported to the mill for re-processing.


As at the beginning of September 2011, the 3 g/t gold deposit was being reclaimed and
stacked for drying. The reclamation rate was about 60 ktpm. Reclamation activities for this
sector are scheduled to continue until March 2012.
Reprocessing of reclaimed tailings is scheduled to begin in November 2012. Feed rates

have not been determined as yet and will depend upon a number of factors, including how
much material at higher grades is being delivered from the mines. PTNHM expects that
feed rates will be about 15 tph, which roughly equates to about 10 ktpm with an expected
extraction of about 1 koz gold per month. Considering overall mining and processing
efficiencies, the anticipated total gold recovery from the two TSF compartments is about
0.07 Mozs gold.
16.4.3 Mining Fleet
Local contractors are employed to perform the reclamation operations and use a
22 t Cat320D excavator and a 20 t Komatsu PC200 excavator fitted with a long reach
boom, with a small fleet of rigid body 20 t Hino dump trucks.

17 RECOVERY METHODS
17.1 Process Plant Flowsheet
The extraction of gold from the Gosowong ores can be considered conventional. The
process flowsheet is illustrated in Appendix A.
Ore delivered from the mines is stockpiled on the Run of Mine (ROM) stockpile and is fed to
either a conventional jaw crusher that breaks the ROM ore to less than 80 mm or a wobbler
feeder that separates fines and stickier wet material with material greater than 600 mm
being sent to the jaw crusher.
The crushed material is stockpiled using FELs and then fed to the grinding circuit using
FELs. Primary grinding is conducted in two separate circuits. The original Gosowong
grinding circuit comprises a semi-autogenous grinding (SAG) unit that operates in
open circuit with the discharge further ground in a closed circuit ball mill using
hydrocyclone classification. The hydrocyclones are set to cut at a size distribution
equivalent to P80 = 75 µm. The second grinding circuit utililizes a closed circuit SAG mill that
has hydrocyclone classification cutting also at P80 = 75 µm.
The underflow from the hydrocyclones in the original SAG/ball mill circuit returns to the mill
for further size reduction. A portion of this flow is sent to a Falcon high G-Force gravity
concentrator. This unit recovers the coarser gold in the slurry and delivers it to a vendor
packaged intensive cyanidation Inline Leach Reactor (ILR). The ILR dissolves the free gold
in a strong cyanide solution which is forwarded to the clarification filters, described below.
As discussed in Section 13, the Gosowong ores exhibit improving gold extractions at finer
grind size distributions, even as fine as P80 = 10 µm. However, because there are other
limiting factors related to thickening, it was decided in 2008 to install a tertiary grinding
stage that would allow all SAG mill circuit discharge to be further ground to P80 = 30 µm.
This unit, known as a Vertimill, grinds all the slurry discharge from the primary/secondary
grinding circuit using a connected power of 900 kW and 20 mm stainless steel media. The
Vertimill product is sized using a bank of smaller diameter hydrocyclones.
A second Falcon unit has been installed in the Vertimill hydrocyclone circuit. The Falcon
concentrate is also treated in an ILR with the pregnant liquor sent to the clarification filters.
The Falcon tailings return to the grinding mills while the ILR solids after leaching are sent to
the main slurry leach circuit.
PTNHM is considering plans to install a third Falcon/ILR set-up in the new SAG circuit.
Consideration is also being given to the possibility of sending the ILR liquors to a captive
electrowinning cell.
The hydrolcyclone overflow is treated in a thickener that separates the liquid and solids.
The thickener overflow, or clear decant liquor, is recycled as process water. The thickener
underflow at about 45% solids is then leached in a bank of six leach tanks in series. Sodium

cyanide is added to the slurry to allow dissolution of the very fine gold as an aurocyanide. In
normal cyanide leach circuits, lime is added to maintain a pH in the range 10.5–11.0. The
Gosowong ores are such that the ore is naturally slurried at a pH of almost 11.0, thus
negating the need to add lime. Oxygen is pumped into the leach slurry to further assist the
reaction. The oxygen is sourced from a vendor packaged PSA oxygen manufacturing plant.
After about 30 hrs of leach time, the slurry is discharged to two banks of thickeners with
each bank having seven stages. This operation is CCD (refer to Section 13.3) and allows
the solution that contains the gold to be removed from the first CCD unit, while the washed
waste solids or tailings at the end of the CCD process are discharged to a tailings cyanide
detoxification circuit.
The pregnant solution from the CCD circuit is clarified in a hopper/clarifier, and then filtered
in a bank of pressure pre-coat filters to remove all suspended solids. The filtered solution
exits this final clarification step, passes through a dearator and is then treated with zinc dust
to allow precipitation of a gold-zinc cement. This gold-zinc cement is then filtered in a plate-
and-frame filter press with the resulting filter cake being removed dried and calcined in an
oven for about 24 hrs. The calcine is then smelted in a tilting furnace with a flux comprising
borax flour and silica. Once properly smelted, the gold is poured into moulds. Sampling of
the gold doré is conducted using dip samplers when the metal is liquid. Slag is sampled at
the same time.
The doré bars at Gosowong generally assay about 45% gold and 47% silver, with the
remaining 8% being base metals. The doré bars are delivered to a refiner in Jakarta.
The tailings material from the last CCD is sent to a cyanide destruction circuit, which
comprises two tanks in series that provide for the destruction of free cyanide ions by adding
sulfur dioxide in the form of sodium meta-bisulfite. The detoxification is conducted at high
pH using lime and with a catalyst, copper sulfate, added. This process allows the reduction
of free cyanide at about 300 ppm to less than 1 ppm and generally at 0.5 ppm or lower
when measured in the decant liquor. The more common measurement is weakly acid
dissociable (WAD) cyanide, which is also consistently below 0.5 ppm.
PTNHM currently pumps tailings to the TSF via a set of three parallel pumps and three
separate 125 mm diameter lines.
17.2 Plant Performance
The plant has been performing quite well since inception, especially when considering
recovery. Plant utilization is approximately 95%. Details of individual circuit extractions are
not available, but overall end of year performance indicators are shown in Table 17.1.

Table 17.1 Historical Production

Mill Head Contained Plant Metal Tails

Feed Grade Metal Recovery Production Grade
Year
Gold Gold Gold Gold Gold
(Mt)
(g/t) (Moz) (%) (Moz) (g/t)
2011 0.59 25.44 0.484 95.8 0.463 1.09
2010 0.58 24.88 0.463 95.4 0.442 1.12
2009 0.43 32.27 0.441 90.4 0.400 2.98
2008 0.31 43.20 0.428 92.3 0.400 2.81
2007 0.31 37.36 0.376 92.6 0.348 2.77
2006 0.27 22.92 0.198 94.4 0.187 0.80
2005 0.25 28.10 0.228 97.8 0.223 0.61
2004 0.10 25.90 0.083 97.8 0.079 1.10
Throughput has been increasing annually while grade has varied, although it has been
decreasing steadily since FYE June 2008. Overall recoveries have been kept relatively
consistent at about 95% except for the period prior to the Vertimaill installation in May 2009.
The main performance indicator, gold production, has been consistently over 0.4 Moz p.a.
since FYE June 2008 and has also been increasing annually.
The projection for FYE June 2012 is reasonable for all indicators. Future years should
continue at these high recoveries and gold production rates, provided head grades are
maintained and good maintenance practices are continued. Operating costs will depend
somewhat on energy costs as well as future labor costs. An increase in throughput to
105 tph would be expected to result in marginal decreases to both operating costs per
tonne of ore processed and gold recovery.

18 PROJECT INFRASTRUCTURE
18.1 Port Facility
Gosowong is serviced by a barge-port facility located on Kao Bay approximately 10 km

from site.
18.2 Electrical Power Generation and Reticulation
There are two electrical generating plants at Gosowong. The original plant was based on
the use of medium speed generators using diesel fuel. This plant has five units of 1.2 MVA
each plus two 1.6 MVA units. The new power plant installed in 2010 and operating for about
six months has four low speed units rated at 3.5 MVA each. All units use Caterpillar
engines. The base load is now carried by the new plant while the older plant acts as a
back-up and minor “trim”. The plant power factor is about 0.8 and all engines are run at a
moderate 80% of capacity. Fuel consumption varies from about 0.21 L/kWh to about
0.24 L/kWh.
The new plant is well laid out, well ventilated and has external cooling systems. The older
plant, which is operating reasonably well, is less well laid out and experiences cooling
problems, especially in the Motor Control Centre.
The electrical generating plant historically has operated very well as evidenced by the high
overall processing plant utilization. Much of this reliability reflects very good maintenance
practices that are rigidly adhered to.
18.3 Tailings Storage Facility
The Gosowong TSF can be considered to consist of three subareas. The TSF comprises
about 32 ha total.
• The main storage area is bounded by the retention embankment in the south and
south-west, internal embankments to the north, and natural topography to the east.
• The “northern arms” are bounded by the internal embankments to the south and
natural topography (in some areas supplemented by small training embankments) on
the west, north and east.
The existing TSF polishing ponds are located to the north of the TSF, adjacent to existing
sediment ponds receiving the Kencana waste dump run-off and underground de-watering
flows. The existing perimeter embankments were lifted using “downstream” construction,
with the low permeability core of the new construction being keyed into the core of the
existing embankment, or into the natural foundation as applicable. Conservative upstream
and downstream embankment design slopes of 3 horizontal : 1 vertical were used, with an
embankment crest width of 6 m. The location of the emergency spillway is through the
natural ridge forming the eastern perimeter of the TSF, with discharge into a creek that joins

the Kobok River a short distance downstream of the TSF. The mine access road crosses
the spillway channel.
As of early September 2011, a new 8,000 m3 HDPE lined polishing pond was being
constructed in the same area and is expected to be operable by November 2011.
PTNHM is considering expansion of tailings storage capacity by construction of a new

engineered TSF at Kobok or extension of the existing facility to the west.
18.3.1 Tailings Management
Deposition is managed so that tailings form beaches grading to a decant pool in the vicinity
of the emergency spillway midway along the eastern side of the storage. This facilitates
long term drainage of run-off from the rehabilitated TSF surface. This is achieved by
managing tailings deposition from points along the northern, western and southern
perimeter of the storage. Tailings deposition practice is to use one or two single discharge
points, with the locations of these points being moved periodically to achieve the required
tailings distribution.
The Gosowong TSF was designed to operate with a maximum 1% per annum probability of
uncontrolled discharge through its emergency spillway, with the decant pool being
managed to maintain a freeboard of at least 1.5 m to the emergency spillway under normal
operating conditions. Pumped decant from the TSF is piped to polishing ponds to the north
of the storage area, sized to provide a nominal 36 hours retention.
18.4 Camp
A camp that caters to almost 2,000 employees services the mine. At any one time about
60% of the workforce is on site. The facilities include:
• Dormitory and single room accommodation

• Staff and non-staff messing facilities
• Convenience stores
• A wet mess
• A medical clinic
• Sporting facilities
• Community hall
• Mosque
• Church
• Helipad

18.5 Sewage
Sewage from the Gosowong camp accommodation, offices and process plant report to a
common main sewer designed to deliver by gravity to a proprietary Waste Water Treatment
Plant (WWTP). The WWTP consists of a subsurface wet well with duty/standby cutter lift
pumps delivering into a 13.5 m diameter covered aeration tank. The main aeration tank is
served by a recirculation aeration pump and handles anoxic and aerobic sequences,
producing activated sludge suitable for direct disposal to the environment.
18.6 Aerodrome
A sealed airstrip and terminal facility is located at Kobok, adjacent to the TSF, within 5 km
of the mine. The airstrip is capable of accommodating single and twin engine light aircraft
such as a Cessna Grand Caravan or De Havilland Twin Otter.
A helipad is located adjacent to the mine office and mill facility.
18.7 Water
The sole source of water for the Gosowong facility is the Tabobo River. Raw water is
pumped from the river to a pair of raw water holding tanks at the process plant.
PTNHM has considered the concept of recycling tailings decant.
18.8 Miscellaneous Infrastructure
The mine is serviced by miscellaneous items of infrastructure including modern

communication systems and suitably equipped workshops, a concrete batching plant,
explosive magazines, fuel farms, stores, lay down areas, a plant nursery, and air
compressors.

19 MARKET STUDIES AND CONTRACTS

19.1 Refining Arrangement
Mineral processing of ore occurs on site to produce gold doré bars. Under the prevailing
CoW, all refining of the doré must be done in Indonesia. The Logam Mulia refinery in
Jakarta is contracted to refine 100% of Gosowong doré. The doré bars are smelted to gold
bars and silver bars. It is the responsibility of the refinery to transport, store, handle and
distribute all metal from the site gold room to the refinery. This refinery is London Bullion
Market Association (LMBA) registered and thus provides a suitable outlet for Gosowong.
However, the reliance on the Logam Mulia refinery limits marketing options. Gold and silver
bars produced by Logam Mulia, although considered “good delivery” by the LBMA, are
produced as Kilobars (1,000 g) and not London “good delivery” bars (400 oz/12.4 kg).
Kilobars are preferred in Asia, and can be sold in the Middle East or exported and
re-smelted as London “good delivery” bars or other products for sale elsewhere.
19.2 Sales
Sale of Gosowong’s gold and silver is managed by Newcrest Treasury, a division of

Newcrest.
There are no existing forward sales contracts in place with all metal sold on the market at
spot price.
There are now few banks that deal in physical gold as the costs of moving, storage and
marketing are prohibitive. As a result, marketing options for the gold and silver produced at
Gosowong are limited. Over recent years, Newcrest has sold most of its gold and silver to
HSBC, ANZ and the Western Australian Mint. This practice is likely to continue.
19.2.1 Demand
Following the gold price’s first sustained breakthrough of US$1,000 /oz in September 2009,
it rose consistently to a FYE June 2011 high of US$1,578 /oz in April 2011. Escalation in
price has been driven by a weak US dollar and the wide acceptance of gold as a hedge
against inflation. European sovereign debt concerns and Middle East geopolitical unrest
further consolidated gold as a preferred risk diversifier against economic instability.
Central Banks collectively became, and continue to be, a net purchaser of gold in 2010—a
situation that last occurred in 1988.
19.2.2 Supply
World gold supply has been relatively static over the past decade at around 2.4–2.6 ktpa.
Scrap supply continues to be a significant influence and expands as the gold price rises.
Future aggregate gold mine production is expected to be limited by depletion and the

continued maturity of gold mines in South Africa. This will be offset by commissioning of
new mines, including significant projects in South America and expansion of Chinese
production capacity.
The industry consensus is that demand will continue to outweigh supply in the near future
due to investment demand. This provides a strong indicator that current gold price levels
should at least stabilize, if not continue to rise, in the near term.

20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY

IMPACT
20.1 Overview
Gosowong provides an excellent example of sound environmental management in an

environment that presents significant challenges, especially with protection of surface water
quality, management of potentially acid-forming waste, and rehabilitation of disturbed areas.
There is no environmental issue considered to pose a major risk in either the short or the
long terms.
This performance is based on thorough pre-disturbance baseline studies, pre-emptive

planning of impact-amelioration programs, and rigorous monitoring and assessment
programs, that allow quick confirmation of compliance with quantitative thresholds and
subsequent review and modification of environmental management plans.
Statutory approvals, the primary one of which flows from the Indonesian AMDAL—an
environmental impact assessment process—have been obtained in a timely fashion, and
performance is regularly reported to and discussed with national and local agencies.
Community relations are responsibly managed through a community development program

that focuses on self-help rather than donation, and is aimed at facilitating long-term
development of the community. Both local and regional groups are involved in assessment
of requests for support and prioritized allocation of resources, with micro-banking a critical
element of the program.
20.2 Individual Environmental Issues
20.2.1 Statutory Environmental Approvals and Compliance
The “umbrella” approval for the Gosowong operation is provided through the Indonesian
AMDAL process of environmental impact and assessment; secondary licences (e.g. water
discharge) are obtained as required.
AMDAL approvals are in place for the Gosowong Cutback, Toguraci underground and
TSFs, although minor changes may need to be approved in some instances—these are
considered minor, almost bureaucratic amendments. There are two options available for
future tailings storage: a new engineered TSF at Kobok or the expansion of the existing
TSF facility. Both options require a new AMDAL.
Forestry permits for disturbance of state-owned forest areas are obtained as required, with
appropriate compensation paid.
In September 2011, the Gosowong mine and supply chain was certified as fully compliant
with the International Cyanide Management Code.

Environmental performance to AMDAL requirements and commitments at Gosowong has

been generally of a high standard; predictably, minor exceedances have occurred, but none
has been of major environmental significance and have been promptly addressed by
changes in operational activities.
20.2.2 Water Supply and Management
The primary external source of water for the operation is the Tobobo River, with only some
1.5% of the base-flow of the river being abstracted—this small quantitative impact is
unlikely to cause significant impacts on river ecosystems.
Biological and physico-chemical monitoring of the Tobobo, both upstream and downstream
of the operation, continues to show no significant impacts. Occasionally, exceedances of
generic water-quality thresholds are recorded, but they have been shown to be transient
and/or of minor significance in a local context.
Excess water from the TSF is treated prior to release into the Kobok River under a protocol
that demands that the concentration of Free Cyanide does not exceed 0.1 mg/L. Ecological
and physico-chemical monitoring of the Kobok continues to demonstrate responsible
protection of the freshwater ecosystems. A greater risk is probably contamination of
freshwater systems from the activities of illegal miners, especially where mercury is used
for gold extraction—such activities take place at a number of locations in Indonesia,
including in the Gosowong area.
PTNHM has undertaken a number of studies to establish the extent of the impact of illegal
miners in the Gosowong area with a particular focus on the distribution of mercury in the
aquatic and marine environments.
20.2.3 Flora and Fauna Conservation
Prior to disturbance of vegetation, biological surveys are conducted to assess possible

impacts; such surveys are particularly detailed during AMDAL processes. Some species of
conservation significance are known to occur in the area and region, but the existence of
relatively large areas of comparable habitat make it improbable that any species would be
significantly affected when considered on a regional or national basis.
Moreover, rehabilitation carried out to date clearly demonstrates the capacity to reconstruct
ecosystems, which, at least in terms of functionality, if not original diversity and abundance,
provide valuable habitat for flora and fauna of the area.
20.2.4 Acid Mine Drainage
Some mine waste, primarily from open pit operations, is potentially acid forming (PAF), but
is “slow-lag” in nature, thus providing ample time for encapsulation with inert waste. Site-
specific geochemical tests, using techniques based on the best current scientific knowledge
of acid mine drainage processes, have been developed for Gosowong, allowing mine waste

to be characterized well in advance of its extraction; there is ample non-acid forming (NAF)
mine waste to allow encapsulation of PAF material over the life of the operation.
The effectiveness of encapsulation is evidenced in rehabilitation carried out more than

six years ago: waste stockpiles wherein PAF waste has been encapsulated with NAF
material have proven to be stable against erosion, and in some instances immediately
up-gradient from freshwater stream and pond systems in which birds and fish are
flourishing.
20.2.5 Noise and Dust Management
Noise management to meet occupational health requirements also provides a considerable

degree of compliance with environmental noise standards. Other than the mine workforce,
there are few residents likely to be significantly affected by environmental noise, although
the small numbers of complaints are dealt with responsibly and professionally.
Dust at Gosowong is managed primarily by suppression with water. Roads are watered as
required, and spray systems are fitted to materials handling systems, especially at transfer
points.
20.2.6 Waste Management
A sophisticated waste management program is operated at Gosowong. Recycling is a key

focus, particularly with waste oil and scrap metal. Landfilling of waste is minimal.
Incinerators are used to treat non-recyclable waste, and bioreactors treat putrescible waste
to produce a fertilizer/compost for use in rehabilitation.
20.2.7 Closure and Rehabilitation
Closure and rehabilitation plans have been regularly reviewed and refined since 2004.
Based on conceptual closure plans that identify the types of treatment required for different
areas, detailed programs have been developed. A closure cost estimate of some US$20M
was developed in 2010, and is considered to be a realistic assessment of liabilities.
The demonstrable effectiveness of the rehabilitation prescription for waste stockpiles is

referred to in Section 20.2.4. In particular, the control of erosion through use of
silt-fences and geotextile-lined and plastic-lined drains has been crucial to the success of
these initiatives.
The effectiveness of rehabilitation is also demonstrated by the fact that the environmental
performance bonds required by government for the original operations have largely been
recovered and redirected to subsequent operations.

20.2.8 Community Issues

The community development program at Gosowong is aimed at facilitating long-term

enrichment based on self-help, without development of a cargo-cult mentality.
Micro-banking is a crucial element of the program, with business-development initiatives in
agriculture, fishing, handicrafts and carpentry being supported.
Rural electrification is supported in villages and schools, with working groups, which include
local and regional representatives, taking primary responsibility for assessment of requests
and allocation of resources.
Support is also directed towards health programs and towards scholarships for school and
university students.
There is awareness of perceived “capacity to pay” becoming a basis for requests for
support, so that the self-help and infrastructure-development elements of the program are
emphasized. The community development program is thus considered to be responsible
and realistic.
In 1997, PTNHM established a Corporate Social Responsibility (CSR) fund, to receive and
disburse 1% of annual revenues. In 2009, this equated to approximately US$3.5M. This
fund is applied to community development initiatives across five subdistricts surrounding
the mine development area, with a total impacted population of some 30,000 persons.
Funds are apportioned on a per capita basis to each subdistrict, and each village has a
three person committee that establishes project priorities. PTNHM provides support and
assistance with the implementation of these projects and programs.
20.2.9 Security Issues
Illegal mining occurs in the vicinity of Gosowong but does not impact day-to-day mining
operations. The activity is well controlled via a security program involving a combination of
PTNHM security, contract security, Brimob (a paramilitary mobile brigade of the Indonesian
National Police), and local police. In recent years, there have been no major disruptions to
operations due to the presence of illegal miners.
The illegal miners’ processing activities occur downstream from the mine. Water sampling
in the immediate vicinity of the mine is regular and extensive and provides a clear view of
water quality immediately downstream of the mine and prior to any additional impacts
contributed by non-mine related activity occurring further downstream.
NGO criticism of the Gosowong mine is infrequent. The main anti-mine group in Indonesia,
WALHI, or Friends of the Earth, has a local branch in nearby North Sulawesi and has
occasionally raised isolated concerns in local media relating to alleged impacts of the mine
on the environment.

21 CAPITAL AND OPERATING COSTS

21.1 Historical Costs
Historical costs per ounce of gold produced are listed in Table 21.1.
Table 21.1 Historical Production and Costs per Ounce of Gold Produced
Item Units 2009 2010 2011
Gold Production (oz) 400,220 442,525 463,218

Mine (A$/oz) 167 134 158
Mill (A$/oz) 58 55 61
Administration and Others (A$/oz) 114 106 94
Third Party Smelting Refining and Transportation (A$/oz) 8 7 5
Royalties (A$/oz) 10 8 56
By Product Credits (A$/oz) (18) (11) (18)
Stripping and Ore Inventory Adjustments (A$/oz) (3) 3 (27)
Cash Cost (A$/oz) 336 302 329
Depreciation and Amortisation (A$/oz) 100 92 147
Total Cost (A$/oz) 436 394 476
During FYE June 2011, A$57M was expended on capital projects at Gosowong, as part of
the Gosowong Expansion Project. A total of 17% of Newcrest’s annual exploration budget
of A$126M (or approximately A$21M) was spent in Indonesia, on and around the
Gosowong project.
21.2 Future Costs
Exploration in FYE June 2012 is expected to cost A$25–30M, with drilling campaigns
planned for the Toguraci corridor and other regional targets.
Newcrest’s estimate for FYE June 2012 operating costs is summarized in Australian dollars
in Table 21.2.

Table 21.2 Gosowong FY 2012 Operating Cost Estimate*

Gosowong (100%) Unit FY12 Estimate

Total site cash costs A$M 165 - 175
Stripping and ore inventory A$M 3-8
Third party smelting refining and transporting A$M 2-4
Royalty A$M 25 - 30
Depreciation A$/oz 160 - 170
*Cost ranges included in table exclude applicable by‐product credits
A significant component of planned future capital expenditure for the Gosowong site is the
development of the Toguraci mine. The total capital estimate for the project, derived during
the recent feasibility study, to be expended between FYE June 2011 and FYE June 2016, is
set out in US$ in Table 21.3.
Table 21.3 Toguraci Capital Expenditure Estimate

Capital Cost
Item
(US$M)
Mine Capital Development 75.2
Mobile Equipment 21.4
Surface Infrastructure 25.8
Underground Infrastructure 6.1
Indirects EPCM 0.7
Technical Services 0.5
Contingency 6.2
Early Works Program 21.5
Total 157.5

22 ECONOMIC ANALYSIS
Gosowong is an established, producing site. No economic analysis has been performed.

23 ADJACENT PROPERTIES
No legal mining or exploration activities have been reported on adjacent properties.

Artisanal gold mining has occurred and continues in the Kao district.

24 OTHER RELEVANT DATA AND INFORMATION

No additional information is included.

25 INTERPRETATION AND CONCLUSIONS

Gosowong is a high-grade gold mine with substantial mineral reserves and excellent
prospectivity for the discovery of additional resources. The new Toguraci underground mine
is expected to begin production in FYE June 2012, serving as a second mining front and
supplementing production from the Kencana mine as Kencana production gradually
reduces.
At current gold prices, the mining operation is very robust.

26 RECOMMENDATIONS
Gosowong is an established mining operation with mineral reserves sufficient for a mine life
of several years.
Newcrest has sophisticated procedures for investigating and evaluating mineral resources,
and in developing projects for their efficient exploitation.
In view of the nature of Gosowong’s mining operations and the substantial mineral reserve
inventory, no recommendations are included.

27 REFERENCES
“Gosowong Extension Project – Feasibility Study Report”, Newcrest Mining Limited,

December 2008.
“Gosowong Gold Project – Mill Optimisation Report”, Orway Mineral Consultants, August
2011.
“Development and Projects Scope of Works – 105TPH Plant Upgrade Study”, Newcrest
Mining Limited, December 2010.
“Development and Projects Feasibility Study Report – Toguraci Underground Project”,

Newcrest Mining Limited, June 2011, 522-000-PM-RPT-0001 – Toguraci Feasibility Study
Rev G.
“Gosowong Monthly Report Jun10 TM1 xlit final”, Newcrest Mining Limited, July 2010.
“Gosowong Monthly Report TM1 Jun 11 XLIT”, Newcrest Mining Limited, July 2011.
“Gosowong Processing Flowsheet 050911”, Newcrest Mining Limited, September 2011.
“Gosowong Mill Performance_upto FY12”, Newcrest Mining Limited, September 2011.
“DailyWeeklyTSF_WQ Monitoring – 1”, Newcrest Mining Limited, September 2011.
“Newcrest Annual Report”, Newcrest Mining Limited, 1997-2011.
“Toguraci Ore Reserve June 2011 Report Number: Toguraci OR 11-07 L1_2”, Newcrest
Mining Limited, July 2011.
“Kencana Ore Reserve June 2011 Report Number: Kencana OR 11-07 L1_2”, Newcrest
Mining Limited, July 2011.
“Gosowong Ore Reserve June 2011 Report Number: Gosowong OR 11-07 L1_2”,
Newcrest Mining Limited, July 2011.
Gosowong Mineral Resource Report L1 and L2 December 2011
Gosowong Ore Reserve end December 2011. Report Number: Gosowong OR 11-12 L1_2
Kencana Ore Reserve end December 2011. Report Number: Kencana OR 11-12 L1_2
Toguraci Ore Reserve end December 2011. Report Number: Toguraci OR 11-12 L1_2
“PT Nusa Halmahera Minerals Gosowong Pit Cutback Feasibility Study”, Newcrest Mining
Limited, February 2010.

“Development and Projects Feasibility Study Report Toguraci Underground Project”,

Document Number 522-000-PM-RPT-0001 Rev G, Newcrest Mining Limited, August 2011.
“Energy and Metals Consensus Forecasts®” Survey Date, July 25, 2011.

28 QUALIFIED PERSONS’ CERTIFICATES

Colin Moorhead
Newcrest Mining Limited
Level 8, 600 St Kilda Road
MELBOURNE VIC 3004
Australia
1. I, Colin Moorhead, do hereby certify that I am the Executive General Manager, Minerals,
employed by Newcrest Mining Limited.
2. I am a graduate of the University of Melbourne and hold a Bachelor of Science (Hons) in
Geology with a geophysics major.
3. I am a Fellow of the Australasian Institute of Mining and Metallurgy.
4. I have worked as a geologist for a total of 24 years since my graduation from university. My
relevant experience includes 16 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 four years in the role of Executive
General Manager, Minerals, responsible for exploration, mine geology, and resources and
reserves governance throughout Newcrest.
5. 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.
6. I am responsible for the preparation of Sections 12, 14 and 15 of the Technical Report titled
Technical Report on the Gosowong Property in North Maluku Province Indonesia, dated 31
December 2011 (the Report). I visited the Gosowong property between August 8 and August 9
2011.
7. 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 role of Geology Manager at Gosowong Gold Mine in
2004 and 2005.
8. I am not independent of the issuer applying all of the tests in Section 1.5 of
National Instrument 43-101.
9. I have read National Instrument 43-101 and Form 43-101F1, and the Report has been
prepared in compliance with that instrument and form.
10. 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 2011
Original signed by:

Colin Moorhead

Roland Waynne Nice

R W Nice & Associates Pty Ltd

25/1-5 Russell Street
WOLLSTONECRAFT NSW 2065
Australia
I, Roland Nice (BSc, FAusIMM, LMCIM, MAIME, MIEAust, Chartered Engineer), do hereby certify
that I am the principal of R W Nice & Associates Pty Ltd.
1. I am a graduate of Queens University, Kingston Ontario with a Bachelor of Science in
Metallurgical Engineering.
2. I am a Fellow of the Australasian Institute of Mining and Metallurgy, a Chartered Engineer in
the Chemical College of the Institute of Engineers Australia, a Life Member of the Canadian
Institute of Mining, Metallurgy and Petroleum, and a member of the Society of Mining
Engineers of the Association of Mining, Metallurgical and Petroleum Engineers.
3. I have worked as a Metallurgical Engineer for a total of 45 years since my graduation from
university. My relevant experience includes plant operating and technical assessment such as
testwork design and process development and covers the following unit operations and unit
process:
i. Crushing, grinding, and all aspects of comminution including SAG milling operating and
design experience.
ii. Leaching of gold, uranium (both acid and carbonate), and base minerals such as nickel,
copper, lead, and zinc.
iii. Recovery of gold by zinc cementation and by carbon-in-pulp techniques.
iv. Treatment of refractory gold ores using bio-oxidation, ultra-fine grinding (Albion Process
and Activox process) and pressure oxidation techniques.
v. Treatment of cyanide residues using a number of technologies including the Inco
Process, Caro’s Acid, and AVR treatment.
vi. Washing of leached slurries using counter-current decantation (CCD) and filtration.
5. I am responsible for the preparation of Sections 13 and 17 of the Technical Report titled
Technical Report on the Gosowong Property in North Maluku Province Indonesia, dated 31
December 2011 (the Report). I visited the Gosowong Gold Project on 5 September 2011 for a
duration of two days.
6. I have not had prior involvement with the property that is the subject of the Report.
7. I am independent of the issuer applying all of the tests in Section 1.5 of National Instrument
43-101.

31 December 2011
Original signed by:
Roland Waynne Nice

Malcolm Dorricott
AMC Consultants Pty Ltd

Level 19, 114 William Street
MELBOURNE VIC 3000
Australia
1. I, Malcolm Dorricott, do hereby certify that I am a Principal Mining Engineer employed by AMC
Consultants Pty Ltd.
2. I am a graduate of the University of Queensland and hold a Bachelor of Engineering in Mining
Engineering.
3. I am a Fellow of the Australasian Institute of Mining and Metallurgy, a Chartered Professional
Engineer (Mining), and a Registered Professional Engineer in the discipline of mining
engineering in Queensland. I hold First Class Mine Managers’ Certificates of Competency in
Tasmania and Western Australia.
4. I have worked as a mining engineer for a total of 42 years since my graduation from university.
My relevant experience includes more than 10 years working as a mining engineer in
underground metalliferous mines, three years in the sale of mining equipment, 14 years as a
university academic teaching mining engineering subjects (including ore reserve estimation),
and almost 15 years as a mining consultant. As a consultant, I have estimated ore reserves of
gold mines and conducted several independent reviews of ore reserve estimates by others.
6. I am responsible for the preparation of Sections 1–11, 16, and 18–28 of the Technical Report
titled Technical Report on the Gosowong Property in North Maluku Province Indonesia, dated
31 December 2011 (the Report). I visited the Gosowong property in July 2010 for two days.
7. I have had prior involvement with the property that is the subject of the Report. This
involvement comprised an independent review of the estimate of ore reserves for Gosowong
Gold Mine in 2010 and provision of backfill advice for the Toguraci feasibility studies.
8. I am independent of the issuer applying all of the tests in Section 1.5 of National Instrument
43-101.
31 December 2011
Original signed by:
Malcolm Dorricott

APPENDIX A
Gosowong Process Flowsheet
Gosowong Property December 31 2011.docx

Gosowong Gold Project – Overall Flowsheet
ROM
Ore Cyclone
Cyanide Pack No 2
& Lime
Gravity
O/S Cyanide
Concentrator & Lime
Wobbler U/S Gravity

Feeder Gravity Cyclone
Cyclone Gravity Single
Jaw Concentrator In-line Leach Staged
Crusher Reactor No 1 SAG Mill
In-line Leach
Reactor No 2
Mill Feed Cyclone

Crushed By FEL Fine Pack No 1
Ore Ore
Tertiary Mill
Stockpile Stockpile
Cyclone
Pack
Pre-leach
Thickener (2x1)
Cyanide
& Lime
Ball Mill
SAG Mill
Primary Cyclone Vertimill® (1x)
Feed Hopper
Tertiary Mill Cyclone
Air Feed Hopper
CuSO4
Barren Solution Leach Tanks (1x6)
SMBS
Hopper
CCD Thickeners
Clarifier
(2x7) Pregnant
Vapour to Scrubbing (2x1) Solution
Zinc Powder
Detox Tank (1x2)
Tailings Dam
River
Clarifying Filter (4x1)

Zn Precipitation
Calcine Zn Precipitation Tank (1x)
Smelting Oven (2x) Filter (3x1)
Gold Doré Bars Cascade Moulds Oven (2x) Deaerator (1x)
February 2010

To: Company Announcements Office From: Peter Larsen Date: 2 March 2012 Subject: Toronto Stock Exchange Listing - Gosowong Technical Report

Enviado por

Dados do documento

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

To: Company Announcements Office From: Peter Larsen Date: 2 March 2012 Subject: Toronto Stock Exchange Listing - Gosowong Technical Report

Enviado por

Direitos autorais:

Formatos disponíveis

To: Company Announcements Office

Subject: Toronto Stock Exchange Listing – Gosowong

• Technical Report on the Gosowong Property in North Maluku

The attached Report is referred to in the Newcrest Annual Information Form

Canadian regulations require Ore Reserves and Mineral Resources to be

As noted above, Australian regulations require ore reserves and resources to

A comparison of the respective requirements of NI 43-101 and The JORC

Suite 1330, 200 Granville Street

TECHNICAL REPORT ON THE GOSOWONG

Prepared for Newcrest Mining Limited

AMC Mining Consultants (Canada) Ltd in accordance with the requirements of

Effective Date of Report: 31 December 2011

ADELAIDE BRISBANE MELBOURNE PERTH UNITED KINGDOM VANCOUVER TORONTO

Gosowong Property December 31 2011.docx i

7.2.2 Volcanic Rocks ................................................................................32

Gosowong Property December 31 2011.docx ii

Rounding may cause some computational discrepancies in totals .......................73

14.1 Kencana Mineral Resource Estimate .........................................................73

Gosowong Property December 31 2011.docx iii

15.3.3 Modifying Factors ............................................................................119

15.3.4 Checks on Estimation .....................................................................119

Gosowong Property December 31 2011.docx iv

18.7 Water ...........................................................................................................138

Gosowong Property December 31 2011.docx v

Table 2.2 Terms and Abbreviations ....................................................................................18

Table 6.1 Historical Production ...........................................................................................26

Gosowong Property December 31 2011.docx vi

Table 16.1 Historical Kencana Production............................................................................128

Table 16.2 Planned Toguraci Mobile Fleet ...........................................................................131

Figure 4.1 Property Location ............................................................................................ 21

Gosowong Property December 31 2011.docx vii

Figure 14.6 Log-probability Plot of K1 Gold Grades in Two Metre Composites in

Appendix A Gosowong Process Flowsheet

Gosowong Property December 31 2011.docx viii

Gold mineralization of economic interest is of the low-sulfidation epithermal deposit type in

1.2 Mine Production

1.3 Mineral Resources

Gosowong Property December 31 2011.docx 9

Table 1.1 Gosowong Mineral Resource Estimate at 31 December 2011

Tonnes Au Ag Gold Silver

1.4 Mineral Reserves

Table 1.2 Gosowong Mineral Reserve Estimate at 31 December 2011

Gosowong Property December 31 2011.docx 10

1.5 Gosowong Open Pit Mine

1.6 Kencana Underground Mine

Kencana is an established underground mine with a consistent history of high-grade

1.7 Toguraci Underground Project

Open pit mining at Toguraci occurred from 2003 to 2006.

Gosowong Property December 31 2011.docx 11

1.8 Tailings Reclamation Project

Tailings reprocessing has not yet commenced but is scheduled to begin in

1.9 Infrastructure and Mineral Processing

Gosowong includes the normal range of infrastructure expected of a professionally

1.10 Environmental Management

Gosowong Property December 31 2011.docx 12

Gosowong provides an excellent example of sound environmental management. This

Community relations are responsibly managed through a community development program

There appears to be no technical or environmental issue likely to constrain the operation in

1.11 Capital and Operating Costs

Table 1.3 Gosowong FY 2011 Actual Production and Operating Costs*

Gosowong (100%) Unit FY11 Actual

Gosowong Property December 31 2011.docx 13

Table 1.4 Gosowong FY 2012 Operating Cost Estimate*