Mgx Resources Limited · ASX:MGX
Mgx Resources — Mount Gibson Iron — Macquarie WA Emerging Leaders Conference October 2009
32 slides from Mgx Resources's conference presentation, Oct 27, 2009
Slide 1: Macquarie WA Emerging Leaders Conference
Macquarie WA Emerging Leaders Conference October 2009 For personal use only 1
Slide 2: Disclaimer
For personal use only Disclaimer This Document is Confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person, or published, in whole or in part, for any purpose without prior written approval from Mount Gibson Iron Limited. This Document is not a
Slide 3: Company overview
For personal use only Company overview • Australian based multi-operation hematite iron ore producer exporting to China • Increasing production from current Ore Reserves • 3 open pit mining centers within two geographic regions • Access to infrastructure • Experienced management team • Produces lump
Slide 4: Spot price & volume plunge
Spot price & volume plunge Fines spot price versus Benchmark price Event For personal use only – Rapid deterioration in the spot price for iron ore – Spot volumes evaporated – MGI customers sought to defer and cancel $200 shipments – MGI customers breached offtake agreements $190 $180 Action $170 –
Slide 5: Key investment themes
For personal use only Key investment themes 1 Quality assets 2 Solid growth profile 3 Earnings leverage to strong iron ore price outlook 4 Disciplined financial strategy & strong performance 5 Experienced - disciplined Board & executive team with proven track record … Mount Gibson has a strong inves
Slide 6: Quality assets
1 For personal use only Quality assets Koolan Island – 4 mtpa production Tallering Peak – 3 Mtpa production Extension Hill – 3 Mtpa production 6
Slide 7: Quality assets: Mid-West Region of Western Australia
1 Quality assets Mid-West Region of Western Australia For personal use only 7
Slide 8: Quality assets: Tallering Peak
1 Quality assets Tallering Peak Main Range Pits looking west - September 2009 For personal use only • Simple process – mine, crush, road, rail and load vessels • First hematite ore shipped Feb 2004 • Producing 3 Mtpa • 65% Lump & 35% Fines ratio • Remaining LOM contains quality high grade, low conta
Slide 9: Quality assets: Extension Hill
1 Quality assets Extension Hill For personal use only • Under development – first ore shipped March qtr 2011 • Low capital cost: $100m • Simple process – mine, crush, road, rail and load vessels • 3 Mtpa production rate • Low strip ratio • 50% Lump & 50% Fines ratio • Product sold over LOM • Operati
Slide 10: Koolan Island provides significant upside potential
1 Quality assets Koolan Island provides significant upside potential … For personal use only 10
Slide 11: Quality assets: Koolan Island
1 Quality assets Koolan Island Crushing, port & ship-loading facilities For personal use only • Ex BHP mine – closed 1992 • Historical BHP production 66.5% Fe, 3.48% SiO2, 0.69% Al2O3, 0.019% P, 0.3 LOI • Mine, crush and shipload • First hematite ore shipped June 2007 • Production ramping up to 4 Mt
Slide 12: Solid growth profile
2 Solid growth profile Sales growth to reach full production by 2011 … based on reserves For personal use only 12Mt 10Mt 8Mt tpa 6Mt 4Mt 2Mt 0Mt 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 Year Shipping - Tallering Peak Shipping - Koolan Island Shipping - Extension Hill 12
Slide 13: Organic & M&A growth opportunities
2 Solid growth profile Organic & M&A growth opportunities … For personal use only • Koolan: – Western side of the Island unexplored with known surface hematite identified – Exploration and Heritage Agreement executed – Heritage Impact Assessment completed – Work Program Clearance completed – Statuto
Slide 14: Earnings leverage to strong iron ore price
3 Earnings leverage to strong iron ore price Increasing trend in iron ore prices… For personal use only 250 10 Mount Gibson leveraged to Sales volume 9 Consensus Lump price increasing iron ore price 200 8 7 trend … Sales Million WMT 150 6 Current production with Usc / dmtu 100 8.0 9.5 5 4 9 developm
Slide 15: Disciplined financial strategy & strong performance
4 Disciplined financial strategy & strong performance 2005-2009 sales revenue 2005-2009 net profit For personal use only 450 433 425 113.3 400 100 Sales revenue (A$m) 350 CAGR 2005 – 2009: 53% CAGR 2005 – 2009: 33% NPAT (A$m) 300 250 47.81 200 163 50 42.6 150 23.5 100 77 73 13.5 50 0 0 2005A 2006A 2
Slide 16: Experienced, disciplined Board & executive team
5 Experienced - disciplined Board & executive team with proven track record For personal use only Mr Neil Hamilton Mr Luke Tonkin Mr Alan Rule Mr Cao Zhong Chairman Managing Director CFO Non-Executive Director LLB B.E., MAusIMM, AICD B.Comm, B.Acc, CA M.Eng, M.Econ • Appointed Non–Exec Chairman • Ap
Slide 17: Mount Gibson Attachments
For personal use only Mount Gibson Attachments 17
Slide 18: Company overview: Corporate
For personal use only Company overview Corporate • Issued capital 1075.2 million shares, 15.7 million options • Market cap1 A$1,344 million • Cash2 A$249 million • Total debt2 A$105 million • EV A$1,200 million • Index S&P/ASX 200 • Finance facilities A$170m (includes A$65m contingent debt) Financia
Slide 19: Mount Gibson key event timeline
Mount Gibson key event timeline $4.00 For personal use only $3.50 3 4 $3.00 Shares Trading Price (A$) Mount Gibson Ordinary $2.50 $2.00 5 $1.50 2 1 $1.00 $0.50 $0.00 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Tallerin
Slide 20: 2009 Financial results - P&L
2009 Financial results - P&L 12 months 12 months For personal use only ended ended % 30 June 30 June 2009 2008 Sales volume 000 wmt 5,398 5,343 1% Sales revenue $ mill 425.4 432.7 (2%) Other revenue $ mill 6.3 2.5 152% Total revenue $ mill 431.7 435.2 (1%) Cost of sales $ mill (293.5) (244.6) (20%)
Slide 21: 2009 Financial results - P&L
2009 Financial results - P&L Net Profit before tax ($ mill) For personal use only 170 163.9 (1.4) (5.9) (48.9) 150 130 110 (38.6) 90 (1.5) 70 61.7 50 2008 NPBT Sales volume Price, FX & Fe% Cost of Sales Other revenue Finance costs 2009 NPBT and costs • Average FOB costs including financing costs and
Slide 22: 2009 Financial results – Balance Sheet
2009 Financial results – Balance Sheet 12 months 12 months For personal use only ended ended % 30 June 30 June 2009 2008 Current assets $ mill 370.7 230.3 61% Total assets $ mill 1,112.9 894.0 24% Total senior debt $ mill 105.0 105.0 - Finance leases and HP’s $ mill 56.5 56.6 - Net assets $ mill 780
Slide 23: 2009 Financial results – Cash Flow
2009 Financial results – Cash Flow 12 months 12 months For personal use only ended ended % 30 June 30 June 2009 2008 Operating cash flows $ mill 99.5 45.8 43% Investing cash flows $ mill (50.2) (64.1) 100% Financing cash flows $ mill 124.2 6.2 (91%) Net (decrease) / increase in cash $ mill 173.5 (12
Slide 24: Ratios
For personal use only 2008 Ratios 0.80 0.74 0.73 0.70 EPS per share 0.60 0.58 NAV per share 0.50 0.40 0.30 0.27 0.21 0.20 0.14 0.10 0.08 0.06 0.06 0.04 0.04 0.00 30-Jun-04 30-Jun-05 30-Jun-06 30-Jun-07 30-Jun-08 30-Jun-09 -0.04 -0.10 24
Slide 25: Operations Key Statistics
Operations Key Statistics Key Statistics For personal use only Tallering Peak Koolan Island Extension Hill Combined Reserves and Resources1 Reserves (Mt) 12.2 30.2 14.3 56.7 Proven & Probable Mineral Resources (Mt) 14.9 67.7 22.1 104.7 Measured, Indicated & Inferred Reserve Specifications Fe % 61.8
Slide 26: Operations Key Statistics
Operations Key Statistics Key Statistics For personal use only Tallering Peak Koolan Island Extension Hill Combined Operations Data Annual production (Mtpa) 3 4 3 10 Expected minimum mine life 4 8 5 Lump : Fines ratio 65% : 35% 30% : 70% 50% : 50% Truck (km) 65 - 85 Rail (km) 107 - 240 Strip ratio (
Slide 27: Capital Intensity
Capital Intensity Mount Gibson’s projects have amongst the lowest capital intensity of any of its peers … For personal use only 200 ‘Greenfields’ infrastructure requirement 180 Balmoral South Magnetite Southdown 160 140 Capital intensity (US$/t) Karara magnetite 120 100 Rapid growth project 4 80 Par
Slide 28: Life of Mine Strip ratios
Life of Mine Strip ratios Life of Mine strip ratio’s decline over time … based on reserves For personal use only 14 12 10 Strip ratio (t:t) 8 6 4 2 0 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 Year Mining - Tallering Peak Mining - Koolan Island Mining - Extension Hill Mining - A
Slide 29: Tallering Peak
For personal use only Tallering Peak Access to infrastructure – full production 29
Slide 30: Koolan Island layout
Koolan Island layout Access to Koolan Island Main Pit and associated high grade is achieved whilst mining satellite pits … For personal use only Air strip East Pit Accommodation Camp Crushing Plant Mullet Pit Main Pit Ship Berth & Ship-loader Main West Pit 30
Slide 31: Koolan Island
Koolan Island Installed infrastructure – capacity 6Mtpa For personal use only 31
Slide 32: Attributions
For personal use only Attributions The information in this report relating to Mineral Resources is based on information compiled by Rolf Forster, who is a member of the Australasian Institute of Mining and Metallurgy. Rolf Forster is a consultant to Mount Gibson Mining Limited, and has sufficient ex
Mount Gibson Iron — Macquarie WA Emerging Leaders Conference October 2009 on 6ix