Mineral Resources Limited · ASX:MIN
Mineral Resources — FY2018 Earnings Presentation
26 slides from Mineral Resources's earnings presentation, Aug 20, 2018
Slide 1: FY18 Results Investor Presentation
FY18 Results Investor Presentation August 2018 1
Slide 2: Contents
Contents Agenda 1 FY18 Key Headlines 2 FY18 Financial & Safety Performance 3 FY18 Operating & Commodity Performance 4 Where we are going in FY19 5 Project Pipeline 46 Guidance Notes 2
Slide 3: FY18 Key Headlines
FY18 Key Headlines • EBITDA: A$507M – increase of 9% • NPAT: A$272M – increase of 35% • 40 cents final dividend – total of 65 cents for the year • Wodgina: Spodumene plant construction commenced • Mt Marion: Commenced upgrade to 450K All-in production at 6% • Secured Marillana Iron Ore JV 3
Slide 4: FY18 Financial Performance
FY18 Financial Performance Revenue 16% Diluted EPS 35% Capex 57% $1.7bn 145.3cps $357.0m EBITDA 1 Dividends Net Assets 15% 9% 20% $506.7M declared 65cps $1.30bn NPAT Operating Return on 3 35% 41% 2 18.3% $271.8m cash flow invested $538.7m capital Notes: 1. FY17 Normalised EBITDA excludes Pilbara Min
Slide 5: FY18 Safety Performance
FY18 Safety Performance TRIFR 2.49 1 Top 5 ASX 100 companies 5 Total Recordable Injury Frequency Rate (TRIFR) LTIFR 0.17 2 16.00 14.70 14.00 Top 10% ASX 100 companies 3 12.00 10.00 8.00 584 more people 7.20 6.01 108% increase in participation 4 6.00 5.50 4.00 • 6 Day program to nationally accredited
Slide 6: Our Business: Mining Services
Our Business: Mining Services Mining Services Supply Chain Infrastructure Innovation Delivers annuity style earnings through: • Strategic port allocations at: • Delivering range of innovative o Kwinana projects, focused on: • Crushing o Esperance and o Cost reductions • Processing o Utah Point o Add
Slide 7: Our Business: Commodities
Our Business: Commodities Commodity Projects Iron Ore Lithium • MRL acquires joint ownership of • Producer of iron ore: • One of the world’s largest owners of undeveloped ore bodies in o Yilgarn hardrock lithium units: partnership with an explorer o Iron Valley o 100% of Wodgina • MRL awarded Life-o
Slide 8: Our Business Model
Our Business Model + Provide BOO development and services + Ownership as security for funding ‘+ Lowest cost, expedited time frame OURCORE °< ‘o BUSINESS - Open Pit Mining ~ Contract Crushing (B00) - Mineral Processing, ~ Road & Rail Bulk Haulage ~ Port Operations / Allocations ~ Site Services ~ Ene
Slide 9: Mining Services Revenue from Profit Share Projects
Mining Services Revenue from Profit Share Projects 2006 Business Model: Crushing Only 2018 Business Model: Full Pit to Customer • $19.8M per annum • $219.8M per annum • Fixed term contract • Life of mine contract Shipping Shipping Port Costs 5% Port Costs 5% Mine to Port 2% Mine to Port 2% Haulage H
Slide 10: FY18 Mining Services Performance
FY18 Mining Services Performance Mining Crushing Processing • 79.5Mt total material • 134Mt installed • 2.4Mt processed moved crushing capacity - up during the year 6% Ore Hauled - Road Site Services Energy • 1,287 rooms • Perth: 2,700 solar panels • 13.4Mt • Mt Marion: 108T LNG • Including 520 adde
Slide 11: FY18 Commodity Performance
FY18 Commodity Performance Iron Ore Lithium (DSO) Lithium (Spod) • 9.3Mt exported • 3.5Mt DSO • 382Kt • $66.8/t avg. exported spodumene revenue • JORC 216Mt exported • C1 costs $43.6/wmt • EBITDA $2.9/wmt 11
Slide 12: FY18 Mining Services Achievements
FY18 Mining Services Achievements Mining Services Supply Chain Infrastructure Innovation • LOM mining services contract at Wodgina; • Secured Esperance port allocation & • Synthetic graphite pilot plant on track to operations commence Oct 2018 infrastructure assets commence commissioning in Nov/Dec
Slide 13: FY18 Commodity Achievements
FY18 Commodity Achievements Commodity Projects Iron Ore Lithium • Empire Oil & Gas – Perth Basin tenements • 9.3Mt exported from Iron Valley and • Mt Marion extended for three years Carina o 435Kt (wet) of combined 6% and 4% • Hexagon Resources – Executed Farm-in and • Acquired Koolyanobbing iron or
Slide 14: Where we are going in FY19
MINERAL RESOURCES. Where we are going in FY19
Slide 15: FY19 Mining Services: where we are going
FY19 Mining Services: where we are going Mining Services and Infrastructure Mining Services Growth • 2 x NextGen plants | 30Mtpa increase • Wodgina Lithium Project: LOM BOO producing 833ktpa 6%/ • Expansion of accommodation services by 200 - 300 rooms Pilbara Infrastructure Project • Light rail syst
Slide 16: FY19 Commodities: where we are going
FY19 Commodities: where we are going Commodity Projects Commodity Projects - Lithium • Wodgina: steady state 750ktpa of 6% Spodumene Concentrate by Q4 FY19 • Mt Marion: steady state annualised 450ktpa of 6% Spodumene Concentrate by Q3 FY19 Commodity Projects - Iron ore • Koolyanobbing iron ore to co
Slide 17: Project Pipeline
Project Pipeline 1. Pilbara Infrastructure Project 2. Mount Marion Lithium Project Upgrade 3. Wodgina Lithium Project 17
Slide 18: Pilbara Infrastructure Project Overview
Pilbara Infrastructure Project Overview Light Weight Rail System Innovative | Low capital and operating cost | 330km line connecting inland Pilbara mines to Port Hedland UTAH POINT BERTH 1/2 Rail System Design Structure and rollingstock design completed | Undergoing modelling and third party verific
Slide 19: Mount Marion Lithium Project Upgrade – Processing
Mount Marion Lithium Project Upgrade – Processing Process Infrastructure • Three part upgrade: 1. Dry stacking, water management, water supply and power 2. Installation of flotation equipment and upgrade Reverse Osmosis plant 3. Installation of ore-sorter to remove Basalt material Timeframe • Part 1
Slide 20: Wodgina Lithium Project - Development Overview
Wodgina Lithium Project - Development Overview Wodgina will be Australia’s first fully integrated downstream lithium development Direct Shipping Ore (“DSO”) – operational Generated early cash flow | Accelerated low cost pre-strip mining operation | DSO production reduced to maximise future mine valu
Slide 21: Wodgina Lithium Project – Development Overview
Wodgina Lithium Project – Development Overview Wodgina Lithium MRL Mining Services Ownership of infrastructure and utility assets Build Own Operate (BOO) • Mining operations designed to supply circa 5.65Mtpa of ore Gas Pipeline • 83km, 10 inch pipeline feed to the Spodumene Concentrate plant Drill &
Slide 22: Peer Comparison Of Hard Rock Lithium Deposits
Peer Comparison Of Hard Rock Lithium Deposits Notes: 1. MRL operates 100% of the Mt Marion project in which it owns a 43.1% interest. 2. Inclusive of tailings Resource Note: Chart represents tonnes of ore from disclosed Resource estimates as published by respective project owners. These estimates ma
Slide 23: Wodgina Lithium Project - Minority Sale Process
Wodgina Lithium Project - Minority Sale Process Sell Down 49% Seeking minority JV partners | Advisors: Macquarie Capital (Australia) Limited and Gilbert + Tobin Access To Life Of Mine Off-take Partners acquire offtake proportionate to interest MRL Will Provide Life Of Mine Services Conduct mining op
Slide 24: FY19 Guidance Notes
FY19 Guidance Notes • Full year EBITDA guidance for FY19 to be announced at Annual General Meeting • FY19 EBITDA likely to be weighted towards second half of financial year given Mount Marion all-in 6% Spodumene Concentrate upgrade project and Wodgina Spodumene Concentrate project are both currently
Slide 25: Disclaimer
Disclaimer: This presentation has been prepared by Mineral Resources Limited (“MRL” or “the Company”).It should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities.
Slide 26: www.mineralresources.com.au
OFFICE: 1 Sleat Road, Applecross, WA 6153 PO. Locked Bag 3, Canning Bridge, Applecross, WA 6153 P +61 8 9329 3600 F +61 8 9329 3601 www.mineralresources.com.au 26