Newcrest Mining — H1 FY2019 Earnings Presentation
29 slides from Newcrest Mining's earnings presentation, February 2019
Slide 1: FY19 Half Year Results
NEWCREST FY19 Half Year Results Sandeep Biswas / Gerard Bond Managing Director and Chief Executive Officer / Finance Director and Chief Financial Officer
Slide 2: Disclaimer
Disclaimer Forward Looking Statements This presentation includes forward looking statements. Forward looking statements can generally be identified by the use of words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “continue”, “outlook” and “guidance”, or other similar
Slide 3: Newcrest Mining Limited
Newcrest Mining Limited Placeholder image
Slide 4: Safety Overview of HY19
Safety Overview of HY19 Site Results Financials Approach to growth Summary
Slide 5: Safety
Safety Continued improvement in TRIFR 3.7 3.3 2.4 2.3 FY16 FY17 FY18 H1 FY19 Safety Lihir Mine Zero Fatalities Transformation Department ~3.5 years fatality Maintaining Achievement free relentless focus 5 years since the last lost-time injury
Slide 6: Safety Overview of HY19
Safety Overview of HY19 Site Results Financials Approach to growth Summary
Slide 7: Half Year Highlights
Half Year Highlights Gold production Statutory & 1.2moz Underlying Profit AISC $747/oz $237m Free Cash Flow Interim dividend of $176m US 7.5 cents per share, fully franked Net debt $959m
Slide 8: Half year highlights
Safety Half year highlights Site Results Financials Approach to growth Summary
Slide 9: Production summary
Production Group summary Increased gold production compared to H1 FY18 Lowest ever AISC/oz for a half year Gold Production (koz) AISC ($/oz) 1,230 1,211 1,203 1,151 1,136 860 810 770 805 747 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 FY17 FY18 FY19 FY17 FY18 FY19
Slide 10: Cadia: Record breaking half
Record Cadia breaking half Record gold & copper production for a half year Record low AISC for a half year Gold Production (koz) AISC ($/oz) 453 374 301 299 246 258 217 205 135 131 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 FY17 FY18 FY19 FY17 FY18 FY19
Slide 11: Lihir: Optimising throughput for variable ore
Optimising Lihir throughput for variable ore Expected to achieve 15mtpa sustainable milling rate target by end of June 20191 Gold Production (koz) AISC ($/oz) 1,086 913 925 542 810 812 506 434 413 433 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 FY17 FY18 FY19 FY17 FY18 FY19 1 Subject to market and operating condi
Slide 12: Telfer: Focused on improving performance and costs
Focused on Telfer improving performance Promising preliminary results from installed ore sorting technology and costs Gold Production (koz) AISC ($/oz) 1,391 1,347 1,298 1,227 1,026 222 216 209 215 164 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 FY17 FY18 FY19 FY17 FY18 FY19
Slide 13: Gosowong: Lower gold head grades impact production
Lower gold Gosowong head grades impact Compared to H1 FY18 lower production from lower head grades production Gold Production (koz) AISC ($/oz) 1,076 949 867 825 687 173 123 128 124 102 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 FY17 FY18 FY19 FY17 FY18 FY19
Slide 14: Lowest cost major gold producer
Lowest cost AISC/oz for the most recently reported six months1 major gold producer 966 973 975 921 884 787 747 Newcrest Barrick Gold Agnico Eagle Goldcorp Anglogold Newmont Gold Fields 1 AISC/oz calculated for the 6 months ending 30 September Mining Mines 2 Ashanti Mining 2018 using gold sold (or at
Slide 15: Half year highlights
Safety Half year highlights Site Results Financials Approach to growth Summary
Slide 16: Delivering on financial commitments
Delivering on financial On track to achieve guidance commitments Shareholder • Production returns • Costs • US 7.5 cents per • Capital Expenditure share, fully franked Financial Metrics • Well within all four Low Cost Position policy metrics • AISC $747/oz Reduce Net Debt Generate Free • Net debt re
Slide 17: Doubled Underlying Profit
Doubled Underlying Profit ($m) Revenue Operating Costs Depreciation & $13 million $79 million Amortisation $53 million 10 (61) 22 42 11 5 237 52 99 (2) (66) 27 116 (81) 88 (25) 1 H1 FY18 Net finance costs H1 FY19 Copper price Operating costs Revenue deductions FX on operating costs Corporate and oth
Slide 18: $3.5bn free cash flow since 1 January 2014
$3.5bn of Cumulative free cash flow ($m) free cash flow since $3.5 Billion 1 January 2014 H2 Free Cash Flow H1 Free Cash Flow
Slide 19: Comfortably within all four financial policy targets
Leverage Ratio (Net Debt / EBITDA) Gearing Ratio Comfortably Target less than 2.0x (for Target less than 25% trailing 12 within all four months) 16.6% 15.9% financial policy 1.1x 1.2x 12.2% 11.5% targets 0.7x 0.6x 30 Jun 2017 31 Dec 2017 30 Jun 2018 31 Dec 2018 30 Jun 2017 31 Dec 2017 30 Jun 2018 31
Slide 20: Half year highlights
Safety Half year highlights Site Results Financials Approach to growth Summary
Slide 21: Our approach to growth
Our approach to growth Organic growth Greenfield exploration Early entry partnerships with explorers M&A, when we see the opportunity to create value through application of our strong & unique technical capabilities
Slide 22: Organic growth opportunities
Cadia Expansion Organic PFS findings suggested a plant expansion to 33mtpa for capex of ~$58m1 growth Feasibility study expected to be completed in H1 FY20 opportunities Lihir Expecting a sustainable milling rate of 15mtpa by end of June 20192 Wafi-Golpu 1 Subject to all necessary permits, regulator
Slide 23: Greenfield exploration – Undercover search space
Greenfield Gold Deposit Endowment exploration – Undercover search space Our Cover / Basement Search Young Cover Space Palaeozoic Basement Old Archean-Proterozoic Basement Source: Minex Consulting - https://www.minexconsulting.com/)
Slide 24: Active early entry arrangements
Active early entry arrangements North America • Jarbidge (O) • Rattlesnake Hills (O & FI) Mexico • Azucar Minerals (EI) PNG • Wamum project Indonesia (100%) • Antam Alliance • Tatau / Big Tabar Island (O & FI) Cote d’Ivoire Ecuador • Barrick JV (50% JV) • SolGold (EI) • Lundin Gold (EI) • Lundin Gol
Slide 25: Unique suite of capabilities in the gold industry
Unique suite Lihir, Telfer Telfer Gosowong Telfer Cadia of capabilities in the gold industry Open pit Selective Reef Underground Narrow Vein Bulk Sublevel Caving Underground Block Caving Large scale comminution Pressure oxidation Processing Copper-gold flotation Cyanide & carbon in leach
Slide 26: Half year highlights
Safety Half year highlights Site Results Financials Approach to growth Summary
Slide 27: What makes Newcrest different
What makes Newcrest Long Low cost different reserve life production Organic growth Do what options we say (at Cadia, Lihir and Wafi Golpu) Strong exploration & technical Financially robust capabilities
Slide 28: Find out more
Find out more: www.newcrest.com.au Engage with us +613 9522 5717
Slide 29: FY19 Half Year Results
NEWCREST FY19 Half Year Results Sandeep Biswas / Gerard Bond Managing Director and Chief Executive Officer / Finance Director and Chief Financial Officer