Newcrest Mining Limited

Thank you. Good morning and welcome to, everyone.

With me today as well is our Managing Director and CEO, Sandeep Biswas; and our Finance Director and CFO, Gerard Bond. First, please note the company's disclaimers on the first slide of our presentation.

This relates to forward-looking statements, the use of non-IFRS financial information in the presentation and reliance on third-party information. As you may already be aware, Newcrest is a U.S.

dollar reporting entity and all dollar references made in this presentation refer to U.S. dollars unless otherwise specified.

I will now hand the call over to Sandeep.

Thanks, Chris, and good morning, everyone. Thanks for joining the call.

Today, Gerard and I will take you through our financial results for the last 6 months. So specifically, I'll focus on the progress we made in regards to safety then I'll touch on our strong set of numbers for the half year, followed by a review of our operational and financial performance.

Gerard will then discuss our financial results in more detail. Following Gerard, I will remind everyone about our disciplined and consistent approach to growth.

And finally, I'll summarize what we believe are the reasons why investors choose to invest in Newcrest and highlight the differences that help us make us unique within the gold industry. So first, a few comments on safety, we had an excellent half in terms of safety.

One measurable outcome of this is the continued improvement in our group TRIFR measure, down to 2.3 per million man-hours for the half. This is 12% lower than the corresponding period last year.

As this graph clearly shows, we've come a long way. But we're determined not to sit still.

We're continuing our relentless focus on our safety transformation program, which comprises NewSafe, Critical Control Management and Process Safety. The transformation is in full swing and is already demonstrating positive outcomes.

The Lihir Mine team, for example, is celebrating the achievement of 5 years without a loss time injury. The reason we do all this work around safety is to ensure everyone working in Newcrest goes home safely.

We had around 3.5 years without a fatality and this remains our overarching goal to be a company free of fatalities and life changing injuries. Let's now turn to our operational and financial highlights for the half year.

We produced 1.2 million ounces of gold and an All-In Sustaining Cost of $747 per ounce. We remain on track to achieve our production guidance for FY 2019, note here that we expect the second half production performance to be stronger than the first half due to fewer planned shutdowns.

We also expect our capital expenditure to be around the lower end of the guidance range. We more than doubled statutory and underlying profit for the half to $237 million with no significant items for the period.

Our operations generated $176 million of free cash flow, with this free cash flow applied to the payment of dividends and reduction of our net debt to $959 million. I'm particularly proud that we've generated $3.5 billion of cash since 2014 and in line with our dividend policy today we've announced a fully franked interim dividend of $0.075 per share.

Now, turning to the performance of our operations, I'll quickly touch on the key takeaways for the group and then go through each of our operations over the last six months. The group performed strongly this half.

Compared to the corresponding half last year, we increased gold production and reduced All-In Sustaining Cost per ounce. Our profit and free cash flow was higher than for the same half last year despite a lower gold and copper prices during the period.

And this half saw our lowest ever All-In Sustaining Cost on a per ounce basis. Much of this performance was driven by Cadia.

As this slide shows, Cadia performed outstandingly, achieving records in both gold and copper production. This performance is driven by the highest ever annualized throughput rate in a half of 29 million tonnes per annum, and higher head grades from PC2.

This increased throughput and grade resulted in lower unit operating costs, which together with a weaker Australian dollar and higher copper volumes powered Cadia to achieve a record low All-In Sustaining Cost of $131 per ounce for the half year. This is a margin of almost $1,100 an ounce or AUD 1,500 and AUD 1,600 per ounce in Aussie dollar terms.

In the period, Cadia also commenced the Early Works program for the development of PC2-3, the next macro-block, which will be one of many in the future of Cadia. At Lihir, we improved on gold produced against the corresponding half last year.

This was driven by an increase in head grade, partially offset by a reduced throughput. Lihir's mill throughput rate was negatively impacted by the processing of argillic ore from the open pit.

This ore is high in grade, but it's slower through the crushing and conveying systems due to the clayey consistency of the ore. We do expect Lihir will reach its 15 million tonnes per annum sustainable annualized mill throughput target by end of June 2019.

Lihir's All-In Sustaining Cost per ounce for the half improved compared to the corresponding period, reflecting lower sustaining capital and production stripping expenditure and higher gold grades in the current period. But it's AISC was higher than the immediately preceding half year, primarily due to lower production volumes.

As in previous years, we expect to see an improved production performance from Lihir in the second half of this financial year, due to fewer planned shutdowns and all other things being equal, this has a positive impact on unit cost. Telfer produced 215,000 ounces of gold in the half, which was fractionally lower than the corresponding prior period.

Lower mill throughput was offset by higher gold head grade and recovery. We continue to work hard to improve Telfer's operating performance prospects and financial performance.

We commissioned the trial ore sorting facility on mill scats, which is generating encouraging results. And we continue to test this technology and are looking at the possibility of installing this technology on the front-end of the milling circuit.

The work the team has done on improved recoveries has been first rate. And we continue to explore the potential for a lower cost block cave that could help make Telfer's vast resources more economically attractive.

Gosowong's half year gold production was lower than the prior year period, primarily reflecting substantially lower head grades. The impact of these lower grades was only partially offset by increased mill throughput rates, compared to the corresponding half last year.

Later in the presentation today we'll be summarizing what makes Newcrest unique in the gold industry. I'd like to highlight one of these now.

As the graph shows, we're the lowest cost major gold producer in our peer group. Gold production volume in of itself is not our objective, nor a proxy for value creation.

At Newcrest, we're about safely generating the most cash from our asset base and sensibly growing the business profitably, with a focus on creating value for our shareholders. Being low cost with strong free cash flow and the strong balance sheet, positions our company to weather the market cycles and also sensibly grow the business.

I'll now pass over to Gerard, who will outline Newcrest financial results for the half.

Thank you, Sandeep, and good morning, everyone. This slide shows our achievements for the half year, which include being on track to achieve production and cost guidance for the full year, and expecting to be around the bottom end of CapEx guidance for the year.

We achieved a record low All-In Sustaining Cost of $747 per announce. We generated $176 million of free cash flow.

There have now been 10 consecutive halves of positive free cash flow generated by Newcrest. And to be clear, this is not adjusted free cash flow or free cash flow before tax.

This is all operating cash flow including tax payments, less all investing cash flow including all investments in growth. The net of this is free cash flow, which we apply to pay dividends, reduce debt and/or buy shares to satisfy employee share scheme obligations.

We've reduced our net debt by a further $81 million in the 6 months and this strong financial performance has resulted in Newcrest being well within all four of its target financial metrics. I'll touch on this in more detail shortly.

Finally, having regard to Newcrest performance, balance sheet strength and outlook, the Board has determined to pay an interim dividend of $0.075 per share in line with our dividend policy. This is the same interim dividend amount as last year and represents around 33% payout of free cash flow.

This half we achieved an underlying profit of $237 million, more than doubling the profit compared to the same time last year. With no significant items, Newcrest statutory profit equaled the underlying profit for the half.

This is a clean result, which is matched by our clean balance sheet. Revenue increased by $30 million against the prior corresponding half, driven by higher copper prices - driven by higher gold and copper sales volumes being sufficient to offset the impact of lower realized gold and copper prices.

During the half, Newcrest retrospectively adopted AASB 15, which is the new revenue recognition standard. What this standard does is to apply the cost associated with the sale of concentrate as a reduction in revenue.

It had the effect as you can see on the graph of negatively impacting the reported revenue for the half by $66 million, but it positively impacts operating costs by the same amount, so it is no net impact on profit. On to operating costs - they were well managed in the period, in an environment where others are experiencing costs increase.

Our operating costs also benefited from the weakening Australian dollar against the US dollar. The period saw a $42 million reduction in depreciation expense, which reflects the lower asset base of Telfer, following the impairment recognized last year, also favorable exchange rate movements and lower production at Gosowong.

The improvement in corporate and other largely reflects the impact of foreign exchange gain in the current period, and this primarily relates to the restatement of US dollar denominated cash and concentrate receivables held by the group's Australian subsidiaries. Net financed costs were lower due to the accumulation of cash since the end of prior period.

And finally, income tax expense was higher in the period, in line with higher profit, at an effective tax rate on underlying profit of 32%. The effective tax rate was marginally higher than the Australian company tax rate of 30%, primarily driven by nondeductible exploration expenses.

On to cash flow, Newcrest generated a $176 million of free cash flow for the half, and that's 31% higher than the corresponding prior half. Cash flow from operating activities increased by $11 million over the corresponding period due to higher gold and copper sales volumes, particularly from Cadia.

This benefit from higher sales was partially offset by higher income tax payments on this high level of profitability and lower gold and copper prices compared to the prior period. Investing cash flow was $31 million, mainly due to lower stripping and sustaining CapEx at Lihir.

And it's important to point out again that the positive free cash flow, this half marks the 10 consecutive half of positive free cash flow generation, cumulatively delivering $3.5 billion of free cash flow over the five year period. As Sandeep highlighted, our expectations remains that the second half will be stronger in production sense in the first and our expectation like, in prior years is that the second half free cash flow to be higher than the first half.

Five years of positive, strong free cash flow has result in us been comfortably positioned within our financial policy metrics. Our leverage ratio has reduced to 0.6 times.

Our gearing ratio has decreased to 11.5%. Five years ago, the leverage ratio was 2.7 times and gearing was 34%, so you can see the balance sheet is substantially stronger today.

Our cash build increased our liquidity coverage to $3 billion, $2 billion of which consist of committed to undrawn bank facilities. Finally, we continue to retain our investment grade credit rating.

During the half S&P and Moody's increased our credit rating to BBB and Baa2, so we are even stronger in the investment grade band than before. I'll now hand back to Sandeep, who'll talk about our approach to growth.

Thanks, Gerard. So this time last year, I discussed Newcrest five pillars and the associated explorations, the way in which will take Newcrest forward.

As stated in our growth pillar, our exploration is to have exposure to five Tier 1 orebody by the end of calendar year 2020. And at our investor day on October 28, we highlighted our desire to have exposure to a further two to four Tier II assets over time.

We consider Cadia, Lihir, Wafi-Golpu and our interest in Fruta del Norte as Tier I exposures. We also have an equity interest in SolGold and though we don't currently consider it a Tier I exposure, we certainly hope that it will be one day.

Given the recent consolidation activity in our sector, I'd like to underline today that our disciplined approach to growth and profitable growth has not changed. First and foremost, value creation for our shareholders will always underpin our approach to growth.

In order of preference, we seek to achieve growth through progressing the organic growth options already in our portfolio of which we have many. Greenfield exploration, which has been central to the heritage of the company, early entry partnership with explorers with our level of activity in this space having been much elevated over the past two or so years.

And finally, acquisition - when we see the opportunity create value through application of our strong and unique technical capabilities. We have a healthy pipeline to material organic growth options, including the expansion of the Cadia processing plan and the development project, Wafi-Golpu.

In August last year, we announced the findings of our Cadia expansion prefeasibility study. The study to find the pathway that results in a highly efficient allocation of capital and an attractive IRR.

We've identified a low cost plant and underground materials handling expansion CapEx of approximately $58 million, enabling an increase in plant capacity to 33 million tonnes. This project has now been gated to feasibility, which is expected to be completed before the end of this calendar year.

As I've already touched on today, we are expecting to reach to 15 million tonnes per annum sustainable throughput target at Lihir by the end of June 2019. Considering that in FY '14 Lihir was processing just 10 million tonnes per annum.

Achieving our target would constitute a vast improvement in just five years. The Wafi-Golpu project is a really exciting growth opportunity for Newcrest.

First production is expected just under five years from the moment the PNG government granted Special Mining Lease. During the half the Wafi-Golpu joint venture signed a memorandum of understanding with the government of PNG.

The signing of the MoU gives us a confidence to commence a substantial work program. This will include amongst other things, the establishment of underground access for further drilling of the Golfu deposit, which is currently open at depth.

This project has the potential to become a Tier I operation with a multi-decade mine life, low cost production producing an average of approximately 266,000 ounces a year of gold and 161,000 tonnes of copper. I'll say that's 266,000 ounces of gold.

I wish it was tonnes. The 2018 investor day, we revealed our new approach to exploring for gold in Australia, what we call our undercover strategy.

Many people believe that Australia is a very mature exploration location, with limited potential for major discoveries.

Through the application of integrating vast data sets and data signs, we've developed new techniques, which give us the ability to look below perspective area undercover. We're also looking to the development of machine-learning technology to take this science to the next level.

There have been major discoveries in undercover areas, such as Olympic Dam, Carrapateena and Prominent Hill, we're combining our proven ability to mine at depth with this new approach to search deeper. We've drilled rigs up at Mount Isa in Queensland and the [Tana mine] [ph] in the northern territory.

We're also exploring in our Cadia district with drill rigs right now drilling kilometers holes with this philosophy in mind. We believe that by looking deeper, combined with bulk underground mining capability, changes the maturity clock in the exploration space for Australia to something potentially more attractive.

We continue to pursue new discoveries, we're partnering with junior explorers. Junior explorers provide tenements on the ground knowledge and the optionality to cover more perspective provinces.

Juniors are attracted to working with Newcrest because we are prepared not only to finance further drilling, but we also provide access to our very experienced exploration team to assist our partners with their drilling strategies. This will ensure they're able to accelerate and maximize their potential exploration results.

Since 2016, we've entered into more than 20 of these agreements of various forms with junior explorers and currently active in 17 of these. Our final pathway to achieve profitable growth is through M&A.

To be clear, we're not interested in doing M&A just for the sake of getting bigger. For us M&A needs to be squarely focused on delivering value to our shareholders.

We don't need to do M&A, we are in the enviable position of earning two of the world's premier longlife gold assets in Cadia and Lihir and we have a third being Golpu in our development pipeline and exposure to a fourth via indirect interest in Fruta del Norte. Newcrest, as I mentioned earlier is one of the lowest cost major gold producers and has a strong balance sheet, allowing us to weather market and investment cycles.

Our position on M&A has always been and remains that it is an option available to us. We'll look at opportunities, but firmly through a value lens.

And that M&A make sense, we were able to bring to be one of their key technical capabilities that ensures any transaction can deliver real value for our shareholders. We're motivated by cash and shareholder returns, not ounces.

Our technical capabilities, some of which are listed on this slide here enable us to mine and process virtually all gold and copper ore bodies. Some of the skills that set us apart from the pack in block caving and pressure oxidation of refractory ores, a unique mix of capabilities we believe gives us the ability to maximize the potential of not only our existing assets, but any new assets that come into our position.

So in closing, we believe that Newcrest has six competitive advantages in the gold industry: our unique long reserve life position, our cost to production, we aim to do what we say, we have organic growth options, the strength of our technical and exploration teams, and finally, we're focused on remaining financially robust. Combined, these elements make Newcrest a unique offering in the gold industry.

With that I'll pass to Chris, who will ask the questions that have been submitted online before opening the phone to further questions.

Thank you, Sandeep. We haven't received any questions so far online, so I'll open up to the telephone lines.

Good morning. Thank you very much.

Two quick ones for me, please. First of all with respect to Cadia, you talked about the block caving opportunity or potential opportunity for some time now, the ore sorting which clearly looks very, very exciting if it can be applied at a commercial scale.

With respect to the book value of Cadia, does that assume any of those developments to support book value or conversely if they don't - say, if they don't progress, how sustainable is the value of - the book value of Telfer, given that it continues to consume cash?

Yeah, I'm assuming all those questions are on Telfer. You did put Cadia, but I'm assuming you're just focusing on Telfer.

Sorry, yeah, I'm getting a bit old and tired. Yeah, Telfer, I'm sorry.

But in this you're always first in line, Michael. We appreciate that.

So in terms of the book value it's not - so these ore sortings and block caves are not factored into the book value. So I think that's the answer to your last question.

The ore sorting, as you know we've only tried it on the mill scats, but the work that we're doing on the ore also shows that you get similar type of upgrades. So that is potentially very exciting.

And in the block cave, we're not only looking at lower costs, this is where we're also trialing the under-catalyst [ph] block cave, which also could be a technology, which we are trialing at Telfer, but ultimately, it's something that we could use at Cadia in the future, given it has a series of block caves. And that's a - if you take out one of the levels, you can imagine what the cost savings are from being able to do that successfully.

Yeah, very exciting. Thank you.

Second question with respect to, is more an industry question, but tailings dams getting a lot of publicity after the second tragedy. Brazilian suggesting that they might outlaw upstream tailing dam, so that's what you use at Cadia.

Interested in how you position yourself, how the regulator responds to all the commentary that's out there, whether that potentially defers any re-commissioning of your tailings dam? And I guess, whether, given that you're now all underground, whether you'd generate sufficient rock if you were forced to convert to a downstream tailings method?

Look, overall, there is a lot of complexity in that question, Michael. And then this is something that it's clearly on our minds and the whole industry.

So one of the things that - before I come to address those questions - is the industry has to responds to this, so I'd say through the ICMA [ph], MCA and the World Gold Council. We have to give confidence that in our industry we can manage tailings facilities.

Look, I - the zoo [ph] may go to banning upstream lifts. I mean, Chile at the moment only does downstream lifts because of the seismic nature of the deposit.

This is one of the reasons we've gone to deep sea tailing at Wafi-Golpu by the way, when we did risk assessment terrestrial dams didn't stack up. I think we operate under MCOL [ph] guidelines here.

And I think we've been able to demonstrate that we do operate them well. I mean, the issue with Cadia, if I can touch on that is looking more and more like a foundational issue in that location only, which was just not picked up in the drilling right back when the dam foundations were examined.

So we're obviously learning from that and we're going through all that tailings dams and we're checking the foundations by drilling if necessary, not necessarily just believing it's all in place and using the latest technologies and knowledge. Now, whether the regulators move to do something like what Brazil is contemplating, I don't know.

I think it's up to us as an industry to demonstrate that whether it's upstream, downstream, center line or DSTP, whatever it is, that we're able to manage them more successfully than industry. I think that's the key, the key question and the key challenge here.

Thanks very much, Sandeep.

Hi, Sandeep. I was just looking at the reserve statement that you released today as well.

And it appears you've taken Namosi out, due to economic and technical issues. Just wondering if you could expand on this and whether strategically you might look to divest at all.

See, the reason we took the Namosi reserve and put it resource is what's clear to us is the original PP's ability study based on a period large throughput mine isn't economic. It's - I mean, the CapEx is too low, although the operating cost is quite low post that.

So the reason we put it to resource is we're now looking at applying some of those technology I talked about earlier. Maybe smaller tonnages, with ore sorting technology with course floatation, maybe looking at tailings there in a different way, all designed to bring down the capital cost and lower the footprint on the environment.

So while that work goes on, we'll push it to resource and if that work shows that it's economic we'll probably push it back into reserve once we have that confidence that that's a mine that we can make money from.

Thank you very much.

Good morning, guys. Just a follow-on from Michael's question on Telfer.

Obviously, it has been a challenging asset for some time. How do we give or how long do you give the asset in terms of that turnaround.

I know that you mentioned that you're looking at a number of different initiatives. But when do you say enough is enough given that it is no doubt going to be a cash strain going forward?

Well, it hasn't really been the cash drain in the past. I know that last half we had a negative $45 million or so.

But we're doing a lot of stripping during the period and various other things. So certainly we don't really want to cash losses from Telfer, and the management team has been totally focused on making sure that stays a positive number.

But there are still several million ounces of resources, if we can crack that - the technology that I just talked about and that does potentially give Telfer a very different future and also convert some of those resources into reserve. The other thing that is increasing obvious is that the whole Paterson region is opened up to exciting new potential discoveries and what have you, that Telfer's unique infrastructure, where you've got two sizeable mill trains, gas pipeline, good source of energy is also a very key asset, which could be using the future for being or to it not necessarily from the Telfer mine itself, so there is for whole range of reasons.

We don't want it to be a cash train and we determine that it's not, but it's an option value and technology development value is where we see the true benefit. And it's an Aussie dollar gold exposure as well and that - the Aussie seems to be headed in the right direction at least from this perspective.

Yeah, if I could just expand that - so in the period in the half and it's for all the other regions as Sandeep said, that it can realize further wave in the future, and the period in the half the Aussie dollar go - realized gold prices is at 16.94, the swap today is 18.40 so we actually have that Aussie dollar gold price exposure that should, although other things may equal benefit to help in the second half, even before the other improvements and option waves come into play.

Okay, thanks. And just in terms of a follow-up in regards to M&A - really appreciate your additional comments there.

You talked about how you want to sensibly grow the business, you put a number assets already in the portfolio there where you don't have a 100% shareholding, could you just maybe update us on the appetite to move those shareholdings to a 100% basis i.e. partners willing sellers, i.e.

other lending family open to selling it just a matter of pricing, just maybe we give us, because obviously Ecuador you have some favorable tax rulings there so it seems to be in even better place to do business, can you just maybe give us an update on where those discussions are at?

Okay, as you'd appreciate Sophie, I can't talk in detail on any business, very sensitive to our partners if we're going to talk about it, but the way you think about these assets is, first of all, it gives us that exposure. Then if there's opportunities in the future to increase that exposure, as long as it's good for our shareholder value and that then we'll take those opportunities as and when they come, but at the moment we are happy to be very supportive shareholders and we have as we're going to the future.

Okay, great. Thank you.

Good morning Sandeep, Gerard. Couple of questions from me.

Firstly, a bigger picture question on costs, you told about your costs and how well they performed during the period. And you mentioned that the peer group was under pressure, I think was the term.

What are the headwinds out there? Are they broad based?

What particular areas of cost line are they hitting and why are you not getting the same impact, firstly.

Yeah, thanks, Peter. We're pretty pleased on how costs have held up in the period, I think in no particular order.

I think we procure exceptionally smartly. We work well with the suppliers and we have a very good team that make sure that we get good deals that are mutually beneficial for the long period.

I think utilization of materials have also - we've also become very good at the Aussie dollar in an international sense, obviously helps us, but not in an Aussie dollar context, labor is getting tighter in the west and in some skills, it's getting tighter in the east and I think we've shared that view before, particularly with all the infrastructure work going on in the eastern state. Lead times for yellow groups has increased, but in our industry a lot of the input generally we've been able to see only a single digit inflation rate with one or two exceptions where we don't have much purchasing power.

Thanks, Gerard. But your tax rate, you told about the high tax rate because of non-deductible exploration, how should I think about that beyond the current half, is that an ongoing issue, going forward given your spend, actually restrictions of spend, so it's a low 30s number, a more accurate other than 30.

I think so, Pete. I think - if you look at our activity, we are doing more exploration oversees that's where when more drilling will occur, activity map which sits there in our briefing book and other material, you can see that we are more active internationally and to the extent that we're engaging in activity until and unless the conversion is something that is income-earning, we don't get the deduction for us.

So all the other things being equal and depending on the right of exploration spend, you could expect that that's more delta could continue.

Thank you. And Sandeep, just back to the semantic of M&A, I love you come to that sensible growth at company, that's fantastic, so thank you for that.

You've got portfolios that you've grown and sensible development of the company, the business part of that, you didn't mentioned the word divested during your presentation, but I know you've done a lot of divestment now, most notably just recently with the [indiscernible] West Africa? Could you just talk through the portfolio core, non-core [indiscernible] what else is out there, what balance do you need to achieve in the portfolio and given the gold price, is that near high, we should we expect about the divestment process from Newcrest.

Well as you know we are committed to divesting at least another 26% of Gosowong, as per the new CLW that was signed and that could end up being larger, right now. Telfer, as I've said, look, Telfer is available at a price, but right now we don't really want to sell it because we think there is more upside if you bring the Newcrest tonne of abilities to that.

For government, we're pretty clean, there is Cadia and Lihir and Wafi-Golpu have commented on the mercy. So I think it's all about getting those assets to their full potential and looking for growth opportunities through the drill bit, through our partners and potentially M&A, that's with a very strong balance sheet.

So we're a different company than we were five years ago. But we know how hard we worked to get here so what other decisions we make we want to be prudent as we go forward.

Just lastly for me, acquisitions, you've talked throughout your presentations about the capabilities of company and what you would do if something came up and was right. And you also talked about the technical capability - you haven't mentioned the financial capability, is that in a mission or is that because you don't have that capability to size and it's really the technical that drives it or–

It's given so if you look at the M&A market out there, right, I mean, I wouldn't say there is a whole bunch of Bakkens out there, right. So if you're going to go and buy something, we know we got the balance sheet to do it and we assume that you know, as you pointed out.

So if you go and buy something to really the stack the odds in your favor and get the rates of returns our shareholders want, you got to be able to bring something to it. I mean, there has to be other synergies or you have to be able to mine it better, process it better or look at deposits in a different way and unlock that value, otherwise, you're going to get lower rates of return, that's how we think about it and that's why I focus on technical.

We have the balance sheet and I think it's self-evident to everyone that we do have that.

Thanks, Sandeep. Thanks, Gerard.

Thanks for taking my question. Just two from me.

Firstly, just on the tailings dam study. When was that, I believe it was meant to be finalized at the end of CY '18, when would that be released and can you give us - or some understanding why it's been delayed.

And secondly on PC2, now you guys have mentioned that's fractured to service, but not breaking through. It seems like it's progressing a little slower than expected, can you please give an update on this?

Thanks.

So on the first one, so we expect the independent report in next couple of months, but look, this is a world-class group of people and they are going to the nth degree to arrive at the - not on the what the root cause is, which looks like it's a foundational issue in that area, but also what the trigger mechanisms are. And then more work and more drilling has been asked for and we've gone and done that we're giving them the samples.

So we expect in the next couple of months, but we have to respect their time on. And once that comes that and again it is imminent, and we'll obviously address the solution to the dam and also share the findings with the industry.

I think there's going to be some real earnings that will help contribute to the industry push to improve our performance as an industry in the tailings management area. On PC 2, look it is fractured, so when you get breakthrough the surface, it doesn't just happen one day that you suddenly - craters appears, there's cracks appear and you get some surface depressions and what have you.

So that's why we say it hasn't actually broken through yet, because you haven't got that full credit yet. And it's not delayed.

It's a little bit slower than PC1, but PC1 was exceptional. We reached surface there years before we expected it do so.

I'd say PC2 is progressing very well and on plan in relation to, well, in all things, but also the topic that you talk about. The important to note is once you've got that cracking at service, the air gap risk depletes almost zero.

So a big part of the benefit of breakthrough is going already. But we don't class it as full breakthrough, hence the change in terminology.

Sure, thanks a lot.

Thanks very much. Just one for me on Wafi-Golpu.

You said previously and also in the presentation today that you're expecting the SML to be granted in June of this year. Can you just remind us again of the kinds of things that you're hoping will accompany that SML in terms of the fiscal stability arrangements or any clarity around the potential buy-ins for the PNG government stake?

And secondly, also maybe just remind us of what the first year of CapEx might look like for that projects assuming new and also obviously the JV partner there or hoping to break ground effectively as soon as that SML has been granted. Thanks.

Yeah, so look, all of those things you mentioned, have to be in the special mine permits, so this is around royalty rates, tax rates, does this going to be permitted under the current mining code. At that point, the wish of the government in terms of their shareholding will also crystallize.

We have to have our agreements of - our landholder agreements in place. So the whole bunch of things that cumulate in the granting of that mining lease and all of that is all well progressed.

And that MOU is a milestone in addressing some of the key terms including fiscal stability terms. But it is an MOU and the whole plan is to finalize that into a binding agreement hopefully by the end of June.

As you know these things can vary, but the parties are committed to get into that date. And in relation to the first year CapEx, Gerard?

Yeah, so if - we released our briefing book. You may be familiar with, release that to the market.

Say, on Page 46, it's the same graph we've had now for a while and it shows that in 100% terms year one cash flow is post commencement with the SML to be $133 million. So our share of that is 50%.

And just for completeness reminder that in guidance this year for FY 2019, we're guiding to our spend being $40 million to $45 million on Golpu.

Does that answer your questions?

Yes, thank you. Sorry.

Thank you.

Thank you very much everybody. I think with no questions on line and no more on the phone we wrap today's conference.

So thank you everyone for listening.