Mgx Resources Limited · ASX:MGX
Mgx Resources — Mount Gibson Iron — Investor Presentation (August 2012)
27 slides from Mgx Resources's investor presentation, Aug 27, 2012
Slide 1: Strength and flexibility for volatile times
MOUNT GIBSON IRON LIMITED Strength and flexibility for volatile times For personal use only Investor Presentation 27 August 2012 1
Slide 2: Disclaimer
Disclaimer For personal use only 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
Company Overview For personal use only Established multi-operation exporter of quality Australian hematite ores to China Financial strength …….….. Strong balance sheet/earnings provide flexibility and security in challenging conditions Leadership renewal …... Strengthened Board and Management
Slide 4: Company overview
Company overview For personal use only Western Australia’s fifth largest iron ore exporter by volume • Issued capital 1085.7 million shares, 2 million options ($1.10/share, maturing Oct’12) • Index S&P/ASX 200 • Market cap1 A$1,030 million • Cash @ 30 June 2012 A$293 million • Bank borrowings2 nil •
Slide 5: Financial Results Discussion
Financial Results Discussion For personal use only Financial results for the Year ended 30 June 2012 5
Slide 6: 2012 Full year results overview
2012 Full year results overview For personal use only • Sales revenue $648.5 million (down 3.5% on FY2011) on similar tonnes sold, but 3% lower realised price • Net profit after tax $172.5 million • Diluted EPS of 15.9 cents • Operating cash flows $56.2 million • Cash balance of $293 million • Final
Slide 7: Summary 2012 financial results
Summary 2012 financial results 12 months 12 months % For personal use only ended ended change 30-Jun-11 30-Jun-12 pcp Tonnes mined and crushed wmt (mill) 5.38 6.94 29.0% Tonnes sold wmt (mill) 5.24 5.21 -0.5% Sales revenue $ mill 672.1 648.5 -3.5% Interest income $ mill 21.1 20.3 -4.8% Cost of goods
Slide 8: Operating Cashflow
Operating Cashflow For personal use only Operating cashflow variance FY2011 vs FY2012 250.0 222.4 -22.1 -34.1 200.0 -84.0 150.0 A$ millions 100.0 -26.0 56.2 50.0 - 30 June 2011 Revenue - Price & Tax Inventory investment Operating cost 30 June 2012 Volume 8
Slide 9: Cash balance changes
Cash balance changes For personal use only Cash balance movement Year ended 30 June 2012 500.0 19.8 -84.9 56.2 450.0 387.0 400.0 -18.3 -61.9 350.0 -5.1 292.7 300.0 A$ millions 250.0 200.0 150.0 100.0 50.0 - 2011 Cash Operating activities Interest received Property, plant and Lease liabilities Divide
Slide 10: Key financial indicators
Key financial indicators For personal use only 12 months 12 months % Ended Ended change 30-Jun-11 30-Jun-12 pcp Realised selling price A$ / wmt 128.4 124.5 -3.0% Cost of goods sold (excluding impairment) A$ / wmt -62.1 -71.7 15.5% Margin A$ / wmt 66.3 52.8 -20.4% EPS cps 22.1 15.9 -28.1% Operating c
Slide 11: Robust financial position - profitability
Robust financial position - profitability 800.0 Profit and Loss (A$m) For personal use only • Solid profit result- 2nd 700.0 Revenue NPBT NPAT 672.1 648.5 highest NPAT on record 600.0 536.3 • Strong margins 500.0 425.5 400.0 maintained in a year of 342.9 300.0 239.5 239.6 operational challenges 200.
Slide 12: Cash & cashflow
Cash & cashflow • FY2012 cashflow reflects: Operating Cash Flow ($m) For personal use only 250.0 – cash tax payments commenced 222.4 – build up of inventory 200.0 169.1 • export constraints in the Mid 150.0 West due to infrastructure 99.5 100.0 upgrades 56.2 • rescheduled shipments (June 50.0 to Jul
Slide 13: Strength meets opportunity
Strength meets opportunity For personal use only MGI has strength to weather Iron ore prices at +2 year lows Mining and exploration asset storms and agility to pounce and volatility ongoing values have retracted sharply S&P Chimaera Australian Mining Capacity to generate Index* vs S&P ASX-200 Inde
Slide 14: Business Overview
For personal use only Business Overview 14
Slide 15: Leadership renewal
Leadership renewal Board – 3 new independent directors with mining, construction and M&A experience For personal use only appointed since November 2011. • Geoffrey Hill – Chairman* • Russell Barwick* Majority of independent directors • Paul Dougas* Enhanced corporate governance mechanisms • Simo
Slide 16: Quality assets – optimising existing business
Quality assets – optimising existing business For personal use only Koolan Island • High quality DSO lump and fines (high grade, low contaminants) • Commenced mining premium Main Pit ore in November 2011 • Transition to owner mining complete • Planning underway to define pathway beyond 3Mtpa Mid Wes
Slide 17: Quality assets - Koolan Island
Quality assets - Koolan Island For personal use only • Mount Gibson’s flagship asset • Premium products • Simple logistics – no rail, standalone shiploading facilities • Current production rate ~3Mtpa • Detailed planning underway to define pathway beyond 3Mtpa • Transition to owner mining complete •
Slide 18: Quality assets – Mid West
Quality assets – Mid West For personal use only 18
Slide 19: Quality assets – Geraldton Port
Quality assets – Geraldton Port • Infrastructure access a For personal use only strategic asset - key barrier to entry for new producers • MGI nominal Mid West export capacity doubled to 6Mtpa • MGI port facility upgrades completed May 2012 • 240,000t MGI Berth 5 shed Rail Unloader commissioned Apri
Slide 20: Quality assets – Extension Hill
Quality assets – Extension Hill For personal use only • First ore sales December 2011 • Diversified customer base (Glencore, Rizhao Steel) • Simple, low cost operation, life of mine strip ratio ~1:1 • Strong cash generator • Significant stockpiles built up during port/rail works 4 • Nameplate capaci
Slide 21: Quality assets – Tallering Peak
Quality assets – Tallering Peak For personal use only • Mining scheduled for completion in mid 2013 • Targeting ~2.5Mt production in FY2013 • Strip ratio of 2.6:1 (average over remaining life) • Shipping from low-grade stockpiles to continue into FY2014 • Encouraging early drilling results from T1 a
Slide 22: Mid West potential
Mid West potential • Regional prospectivity – For personal use only substantial identified iron ore resources, exploration upside • +200 leaseholders within Mount Gibson operational sphere of influence • Resources stranded without access to port/rail • Oakajee port schedule uncertain • Geraldton onl
Slide 23: Strategy – positioning for growth
Strategy – positioning for growth Optimising existing business, getting set for M&A and exploration-driven growth For personal use only PRIORITIES • Bed down new executive team • Cost control and elimination of waste/inefficiencies • Complete optimisation of existing assets to maximise cash generati
Slide 24: Summary
Summary Disciplined business strategy For personal use only Mount Gibson has… First mover status & access to Strong and profitable operating business existing infrastructure Strengthening operational Established DSO products performance Growing FY2013 production profile Focused growth plan
Slide 25: Thank You
Thank You For personal use only For more information contact: John Phaceas Manager External Relations Phone: +618 9426 7500 Email: admin@mtgibsoniron.com.au Web: www.mtgibsoniron.com.au 25
Slide 26: Addendum: Resources/reserves
Addendum: Resources/reserves For personal use only An updated resources and reserves statement will be released in September 2012. 26
Slide 27: Attributions
Attributions For personal use only 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
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