Newcrest Mining — FY2017 Earnings Presentation
24 slides from Newcrest Mining's earnings presentation, Aug 14, 2017
Slide 1: FY17 Results
FY17 Results Sandeep Biswas, Managing Director & CEO Gerard Bond, Finance Director & CFO 14 August 2017
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: Overview
Overview 3–7 FY17 Results 8 – 15 Forging a Stronger Newcrest 16 – 17 Increasing Shareholder Returns 18 – 21 Pivoting to Growth 22 Summary 23 Q&A 2
Slide 4: FY17 key achievements
FY17 key achievements Improved • Zero fatalities Safety • TRIFR1 of 3.3, 10% lower than FY16 • Produced 2.38moz gold and 84kt copper, including record Lihir production Achieved Group • Four years in a row of meeting or exceeding Group production guidance Guidance • Within or below Group AISC costs,
Slide 5: FY17 summary by asset: Lihir, Cadia, Telfer
FY17 summary by asset Lihir Cadia Telfer Production koz 900 940 721 689 667 669 593 620 536 520 462 386 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 1,158 1,156 1,178 925 967 AISC $/oz 830 858 791 299 274 241 203 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 • Achieved 1
Slide 6: FY17 summary by asset: Gosowong, Bonikro
FY17 summary by asset Gosowong Bonikro Production koz 345 332 296 197 120 138 128 95 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 1,099 1,105 935 941 AISC $/oz 756 719 757 738 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 • Exceeded gold production guidance • $38 million in free cash flow before tax • $142 mil
Slide 7: Cadia recovering from seismic event
Cadia recovering from seismic event1 What happened Activities to date Forward plan • 14 April 2017 seismic event • Production from PC2 has • Ore production expected to impacted Cadia recommenced after recommence in PC1 successful ‘test and September 2017 quarter2 • All personnel safely response’ pha
Slide 8: Cadia – Low cost expansion to 30mtpa
Cadia – Low cost expansion to 30mtpa1,2 • Targeting new processing baseline of 30mtpa by end of June 2018 • Low capital expenditure approximately $10m • Applying learnings from seismic event to Mining Prefeasibility Study PC10 PC5 PC3 PC1 • Gating of Expansion PFS to Feasibility Study to PC2 PC4 ali
Slide 9: Forging a stronger Newcrest
Forging a stronger Newcrest Our mission Our vision Our Edge To deliver superior returns from To be the Miner of Choice. A high performance, no-nonsense finding, developing and operating We will lead the way in safe, culture focused on: gold/copper mines. responsible, efficient and profitable ‣ Safet
Slide 10: Safety update
Our Edge A high performance, no-nonsense culture focused on: ‣ Safety ‣ Operational discipline Safety update ‣ Cash ‣ Profitable growth. We deliver on our commitments. FY14-FY17 TRIFR (per million man hours)1 Critical Control Management Verifications 4 3 1,945 2 in FY17 1 176,254 in FY17 0 FY14 FY15
Slide 11: Lihir's increased throughput lowers AISC per oz
Our Edge A high performance, no-nonsense culture focused on: ‣ Safety ‣ Operational discipline Lihir’s increased throughput lowers AISC per oz ‣ Cash ‣ Profitable growth. We deliver on our commitments. 12mtpa 13mtpa 14mtpa By December 2015 By December 2016 By December 20171 Achieved with 12.4mtpa
Slide 12: Delivering on Edge focus on cash generation
Our Edge A high performance, no-nonsense culture focused on: ‣ Safety ‣ Operational discipline ‣ Cash Delivering on Edge focus on cash generation ‣ Profitable growth. We deliver on our commitments. Seven consecutive halves of positive free cash flow $800 $700 $m $600 $500 $400 $300 $200 $100 $0 FY14
Slide 13: Profitable growth from Cadia and Lihir drives improved AISC
Our Edge A high performance, no-nonsense Profitable growth from Cadia and Lihir drives culture focused on: ‣ Safety ‣ Operational discipline ‣ Cash improved AISC ‣ Profitable growth. We deliver on our commitments. Gold Price and Newcrest AISC ($/oz)1 • Reflects focus on operational discipline and ca
Slide 14: Deliver on commitments
Our Edge A high performance, no-nonsense culture focused on: ‣ Safety ‣ Operational discipline Deliver on commitments ‣ Cash ‣ Profitable growth. We deliver on our commitments. Improved safety record – FY17 fatality free Four years in a row of meeting or exceeding Group production guidance Ach
Slide 15: Improved balance sheet strength
Improved balance sheet strength Debt, Cash and Leverage1,2 (times) ($m) 4,500 3.0 4,000 2.5 3,500 3,000 2.0 2,500 1.5 2,000 1,500 1.0 1,000 500 0.5 - FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 - (500) (1,000) (0.5) US Private Placement Notes Corporate Bonds Other Bilateral Bank Debt Cash (as negative)
Slide 16: Good debt structure and clean balance sheet
… good debt structure and clean balance sheet Maturity profile as at 30 June 20171 ($m) 1,200 Corporate Bonds 900 600 300 - FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY42 • FY17 – Fully repaid US Private Placement debt and drawn bank facilities • No goodwill remaining on the balance sheet • Relatively
Slide 17: Which has enabled the ability to pay dividends
… which has enabled the ability to pay dividends Leverage Investment Gearing Grade Coverage Ratio 16.6%1 Credit $2.5bn1,2 1.1x1 Rating1 Profitability Market Capex conditions requirements Final dividend of US 7.5 cents per share3 1 Leverage ratio based on Net Debt as of 30 June 2017 and EBITDA for th
Slide 18: Focused on returns to shareholders
Focused on returns to shareholders Dividend Policy1 Newcrest’s dividend policy continues to balance financial performance and capital commitments with a prudent leverage and gearing level for the Company. Newcrest looks to pay ordinary dividends that are sustainable over time having regard to its fi
Slide 19: Pivoting more to profitable growth
Pivoting more to profitable growth Near term Medium term Longer term objectives objectives objectives (0-2yrs) (2-10yr) (10+yr) • Lihir 14mtpa mill throughput • Lihir beyond 14mtpa mill • Early stage entry pipeline rate target1 throughput rate target1 • Porphyry exploration targets • Cadia 30mtpa mi
Slide 20: Targeting orebodies which fit our skills
Targeting orebodies which fit our skills Cote d’Ivoire Australia Ecuador Seguela Project (100%) Mendooran project (O & FI) SolGold Investment (EI) OSEAD Project (FI) Second Junction Reefs project (JV) Kodal Minerals – Dabakala (FI) Encounter project generation alliance Argentina Cape
Slide 21: Deep exploration capability key for next discovery
Deep exploration capability key for next discovery 1 Better than average ground selection Advanced exploration models 2 Low level pathfinder geochemistry 3 Targeted use of technology Micro-scale gold mapping in pyrite 4 Smarter and rapid interpretation of data Data Cloud Drill early and often 5 6 Cr
Slide 22: Disciplined approach to growth
Disciplined approach to growth • Continued focus on exploration • Pursue attractive early stage entry opportunities • Actively explore partnerships to manage risk and access opportunities • Small, dedicated team that reviews and evaluates M&A opportunities Potential Value Adding Pathways Technical C
Slide 23: Forging a Stronger Newcrest
Forging a Stronger Newcrest 1 HAVE A LOT OF GOLD 2 LOW COST PRODUCER 3 DO WHAT WE SAY ~27 years1 $787 4 years of maintaining or exceeding reserve life FY17 AISC per ounce Group guidance 4 ORGANIC GROWTH 5 EXPLORATION & 6 FINANCIALLY ROBUST TECHNICAL CAPABILITY Lihir, Cadia Exploration capabili
Slide 24: Newcrest Mining Limited
® NEWCREST MINING LIMITED