Slide 1: Capital Raising Presentation
For personal use only CAPITAL RAISING PRESENTATION 14 December 2016
Slide 2: Important Information
IMPORTANT INFORMATION For personal use only This document has been prepared by Coal shares and has been prepared Indications of, and guidance on, future will not in any way rely upon this Stanmore Coal Limited (“Stanmore without taking into account the earnings and financial position and document. C
Slide 3: Overview of Stanmore Coal
OVERVIEW OF STANMORE COAL For personal use only Queensland based coal Advanced metallurgical Highly experienced Board Low overhead cost base development company, and thermal coal and management team Actively pursuing further operations at Isaac Plains development projects in with proven track record
Slide 4: Strong Board and Management Team
STRONG BOARD AND MANAGEMENT TEAM For personal use only KEY MANAGEMENT Dan Clifford Mike McKee Andrew Roach Nigel Clifford Managing Director Chief Operating Officer Chief Financial Officer Senior Geologist Over 20 years’ experience in Mine manager with over 30 10 years of accounting and 10 years of e
Slide 5: The Business at a Glance
THE BUSINESS AT A GLANCE For personal use only Independent coal company with focus on coking coal Isaac Plains operational with ramp-up achieved 1-2Mtpa sales opportunity (FY17 1.25Mt) December 2016 quarter SSCC settled at USD 130 per tonne Mining, port and rail contracts in place Mid-range of inter
Slide 6: Overview Stanmore Portfolio
OVERVIEW STANMORE PORTFOLIO BOWEN BASIN – For personal use only Coking Coal ISAAC PLAINS – 100% MACKENZIE – 95% Operations Exploration ISAAC PLAINS EAST – 100% Development SURAT BASIN – Thermal Coal THE RANGE – 100% BELVIEW – 100% Development (pending Exploration infrastructure) CLIFFORD – 60% LILYV
Slide 7: Isaac Plains Complex
ISAAC PLAINS COMPLEX SIGNIFICANT SYNERGIES & MINE LIFE OPTIONS For personal use only Opportunities to utilise Isaac Plains infrastructure including underutilised CHPP and rail loop CURRENT ISAAC PLAINS OPEN CUT Current 3 year mining services contract producing coal ISAAC PLAINS EAST – OPEN CUT EXTEN
Slide 8: Isaac Plains Assets
ISAAC PLAINS ASSETS STANMORE OWNED For personal use only DRAGLINE Originally refurbished and recommissioned 2011 Contractor is responsible for planning and carrying out minor maintenance of the dragline. All maintenance activities are based on a plan developed jointly between Golding and Stanmore Th
Slide 9: Isaac Plains East
ISAAC PLAINS EAST LOW STRIP RATIO, ADJACENT RESOURCE For personal use only Coking coal adjacent tenures – improved coking properties and coking fraction compared to existing Isaac Plains operation Low strip ratio coal starting <6:1, average over first 4 years sub 10:1 (lower than Isaac Plains) Envir
Slide 10: Isaac Plains Underground
ISAAC PLAINS UNDERGROUND PROJECT OVERVIEW For personal use only Concept mining studies indicated operation via bord & pillar operation most viable Further exploration activities are planned in 2017 to de-risk the project 10
Slide 11: Recent Coking Coal Strength
RECENT COKING COAL STRENGTH RETURN TO MORE STABLE INVESTMENT LEVELS IN MEDIUM TERM For personal use only Coking and thermal spot markets $300 continue to remain tight – hard coking $250 price just under USD300/t, semi-soft FOB Port US$/t (nominal) coking coal USD137/t $200 Consensus view that prices
Slide 12: Strategic Objectives FY17 and Forward
STRATEGIC OBJECTIVES FY17 AND FORWARD For personal use only Time horizon Internal External Short • Establish reliability and • Assess potential assets in repeatability of production proximity to IP Complex from Isaac Plains Medium • Develop Isaac Plains East • Pursuing realistically and complete ass
Slide 13: Offer Details
OFFER DETAILS For personal use only • Placement of 27.3m new shares to raise $15.02m offered to new and Placement existing institutional investors • New shares represent approximately 12.3% of Stanmore’s issued capital • Offer price of $0.55 per new share represents: Offer Price • 12.0% discount to
Slide 14: Sources & Uses
SOURCES & USES PLACEMENT FUNDS For personal use only The proposed use of funds (after costs of the Proposed Source of Proposed Use of offer) is noted as follows: Funds Funds All figures in All figures in • Additional short to medium term material AUD million AUD million movement associated with pre-
Slide 15: Mine Plan
MINE PLAN STAGE 1 OF STRATEGIC OBJECTIVES - A REVISED MINE PLAN For personal use only • As the operation has ramped up to planned production level through 2016, progress has been impacted by wet weather, mining system reliability challenges and a production sequence change • Stage 1 of Stanmore’s re
Slide 16: Impact of Revised Mine Plan
MINE PLAN IMPACT OF REVISED MINE PLAN For personal use only 20 Prime strip ratio comparison • Accelerated pre-strip activities will Waste bcm to ROM tonnes increase the short term strip ratio but 15 doesn’t fundamentally change the strip 10 ratio of the coal deposit 5 • The life of mine strip ratio
Slide 17: Risk Factors
RISK FACTORS (Page 1 of 2) For personal use only 1. Introduction The activities of the Company, as in any business, are subject to risks which may impacts on its future performance. The Company has appropriate actions, systems and safeguards for known risks, although some are outside of its control.
Slide 18: Risk Factors
RISK FACTORS (Page 2 of 2) For personal use only 2. General Risks Investing in a company of Stanmore’s size and operations within the coal industry involves risks that apply to any investment of this nature which may adversely affect the future operating and financial performance of the Company. Man
Slide 19: Supplementary Information
For personal use only SUPPLEMENTARY INFORMATION
Slide 20: Isaac Plains Coking Coal Mine Transaction Recap
ISAAC PLAINS COKING COAL MINE TRANSACTION RECAP For personal use only ACQUISITION OF ESTABLISHED TRANSACTION MET COAL MINE OVER $350M REPLACMENT VALUE OF AQUIRED ASSETS COMPLETED Existing open-cut operation Dragline - Bucyrus BE1370 commenced production in 2006 November Located near Moranbah in 500t
Slide 21: Creating a Low Cost Operation
CREATING A LOW COST OPERATION MIDDLE OF INTERNATIONAL COKING COAL COST CURVE For personal use only ISAAC PLAINS MINE – OPTIMISED Global seaborne coking coal cost curve – 2016 Right sized production for dragline and mine 200 Competitive mining costs locked in via Total Cash three year contract Cost L
Slide 22: Geology
GEOLOGY For personal use only The Leichhardt seam (Rangal Coal Measures) averages 3.5m thick across the deposit. The seam splits into an upper and lower section in the far northern area Within the open-cut, depth of cover commences at 60m, dipping to the east (~5 degrees), before stepping back up ov
Slide 23: Site Operations Contracting Structure
SITE OPERATIONS CONTRACTING STRUCTURE For personal use only Stanmore Coal PRINCIPAL CONTRACT OVERVIEW Owner Head Contractor paid on a rolled-up rate basis, which requires assumption of certain efficiency and operational risks Golding Waste rate ($/bcm) covering blasting Head Contractor and all overb
Slide 24: Open Cut Mining
OPEN CUT MINING AN OPTIMISED APPROACH For personal use only Open cut coal mining Northern pits, N1 North (N1N) and N1 South (N1S) which are the main operating pits The mining flow is typically south to north until the economic coal from N1N and N1S is extracted, before mining out the identified grab
Slide 25: Rail & Port
RAIL & PORT STRATEGIC INFRASTRUCTURE POSITION For personal use only Darlymple Bay Coal Terminal As part of the transaction Stanmore has secured 1.1Mtpa of rail (Pacific National) and 1.2Mtpa of port capacity (Dalrymple Bay Coal Terminal) Good availability of further expansion capacity as required in
Slide 26: Sales & Marketing
SALES & MARKETING For personal use only Produced 75% semi-soft coking coal and 25% Indicative Parameter1 Isaac Plains thermal, with a total product yield of 74% Coking Thermal (project to date) Product split (%) 80% 20% Inherent Moisture (%) 2.5 3.1 FY17 year to date - improvement in coking coal Ash
Slide 27: Our Contribution
OUR CONTRIBUTION QUEENSLAND COMPANY THAT TAKES ITS RESPONSIBILITIES SERIOUSLY For personal use only JOBS 150 jobs in the Isaac region created by the mine restart ROYALTIES Over $7m per year of payments to the State with potential to increase (increased to $12m per year with coal price increase) THE