Stanmore Resources Ltd · ASX:SMR
Stanmore Resources — Stanmore Coal — Mines and Money Hong Kong 2016
25 slides from Stanmore Resources's conference presentation, Apr 6, 2016
Slide 1: Delivering Value as Australia's newest coking coal producer
DELIVERING VALUE For personal use only as Australia’s newest coking coal producer Mines and Money Hong Hong April 2016
Slide 2: Important Information
IMPORTANT INFORMATION For personal use only This document has been prepared by Stanmore tort (including negligence) or otherwise. Stanmore Coal shares have not been, and will not defined in the 2012 Edition of the “Australasian Coal Limited (“Stanmore Coal”) for the purpose of be, registered under t
Slide 3: Stanmore Coal: Delivering value as Australia's newest coking coal producer
STANMORE COAL DELIVERING VALUE AS AUSTRALIA’S NEWEST COKING COAL PRODUCER For personal use only CREATING A LOW COST COKING COAL OPERATION WITH SIGNIFICANT MINE LIFE BY COMBINING TWO NEIGHBOURING ASSETS ✓Transformational ✓Adjacent ✓JORC ✓Fully funded acquisition investment Resources and for productio
Slide 4: The tightly held Bowen Basin
THE TIGHTLY HELD BOWEN BASIN THE MAJORS DOMINATE OWNERSHIP & PRODUCTION For personal use only 4
Slide 5: Bowen Basin met coal peer analysis – annual production rates
For personal use only Million tonnes per annum (production) - 10 12 14 2 4 6 8 Collinsville Ensham Newlands Byerwen Major Burton Baralaba Isaac Plains Limited Sonoma for direct coking coal opportunities Grosvenor investment in North Goonyella Cook Moorvale Unlisted junior & mid-tier Carborough Downs
Slide 6: A Transformational Investment
A TRANSFORMATIONAL INVESTMENT For personal use only 6
Slide 7: Isaac Plains Mine: Transaction overview & rationale
ISAAC PLAINS MINE TRANSACTION OVERVIEW & RATIONALE For personal use only ACQUISITION OF ESTABLISHED ACQUISITION MET COAL MINE LOCATION Located near Moranbah in PRICE Existing open-cut operation the heart of the Bowen Basin previously in care and maintenance 172 km from DBCT via $1 Near term
Slide 8: Isaac Plains Mine: Acquired assets – replacement value > $350m
ISAAC PLAINS MINE ACQUIRED ASSETS – REPLACEMENT VALUE > $350m For personal use only DRAGLINE TRAIN LOADOUT Bucyrus BE1370 Product stockpile, train High performance machine loadout, rail loop Conveyor feed to rail surge/loading bin COAL HANDLING AND PREP PLANT (CHPP) OFFICE FACILITIES AND WOR
Slide 9: A Value-Adding Adjacent Acquisition
A VALUE-ADDING For personal use only ADJACENT ACQUISITION 9
Slide 10: Isaac Plains East: Low strip ratio, adjacent resource
ISAAC PLAINS EAST LOW STRIP RATIO, ADJACENT RESOURCE For personal use only Acquisition from Peabody Energy in July 2015 Coking coal adjacent tenures Low strip ratio coal starting <6:1 (lower than Isaac Plains) Significant synergies with IP, with minimal capital requirements 3km haul back t
Slide 11: Untapping Value: Optimised Mine Plan & Extensions
For personal use only UNTAPPING VALUE: OPTIMISED MINE PLAN & EXTENSIONS 11
Slide 12: Isaac Plains Optimised: A low cost approach
ISAAC PLAINS OPTIMISED A LOW COST APPROACH For personal use only RIGHT SCALE OF OPERATION Asset re-optimised at 1.5Mtpa ROM (1.1Mtpa product) to maximise proportion of low cost dragline Open cut mining of lower strip ratio northern pits only Contractors’ rates are significantly lower than rece
Slide 13: Creating a low cost operation
CREATING A LOW COST OPERATION ISAAC PLAINS COSTS REDUCED BY 35%1 For personal use only ISAAC PLAINS MINE – OPTIMISED Global seaborne coking coal cost curve – 2016 Right sized production for dragline and 200 mine nTotal Competitive mining costs locked in via Cash three year contract Cost 150 Lo
Slide 14: Major upgrade to project scale
MAJOR UPGRADE TO PROJECT SCALE DETAILED EXPLORATION & STUDIES RECENTLY COMPLETED BY STANMORE For personal use only JORC UPDATE APRIL Doubled JORC Resources Tripled JORC Reserves 20161 to 76.9Mt to 15.7Mt PREVIOUS UPDATE APRIL 2016 % INCREASE IP IPE TOTAL IP IPE TOTAL JORC RESOURCES1 Measured 10.0 0.
Slide 15: Significant growth options
SIGNIFICANT GROWTH OPTIONS SYNERGIES & LIFE-OF-MINE EXTENSIONS For personal use only Growth opportunities to utilise IP infrastructure including underutilised CHPP and rail loop CURRENT ISAAC PLAINS OPEN CUT 3 years at 1.5mtpa ROM production rate ISAAC PLAINS EAST – OPEN CUT EXTENSION Extends op
Slide 16: High quality coking coal pre-sold to major Asian steel makers
HIGH QUALITY COKING COAL PRE-SOLD TO MAJOR ASIAN STEEL MAKERS For personal use only HIGHLIGHTS Parameter1 Isaac Plains Isaac Plains East JPY 2017 contracts signed / terms agreed with top tier (Indicative) Japanese and Korean steel mills on annual benchmark contracts for 900,000t of coking coal Cok
Slide 17: Transaction Summary
TRANSACTION For personal use only SUMMARY Two strategic transactions completed to present multiple pathways to enhance shareholder value Delivered without dilution to existing shareholders 17
Slide 18: Delivering on key milestones
DELIVERING ON KEY MILESTONES CURRENT MARKET CAP: A$50M For personal use only UPCOMING Acquire Acquire Optimise IP Sign Offtake Additional MILESTONES Isaac Isaac mine plan to for coking coal JORC ✓ 0.30 Plains Plains reduce with leading Resources East for $1 production Asian & First shipment Extensio
Slide 19: Contact Us
CONTACT US FOR FURTHER INFORMATION For personal use only Conference Booth M4 at Hong Kong Mines & Money Head Office Level 8, 100 Edward Street, Brisbane QLD 4000 GPO Box 2602, Brisbane QLD 4001 Phone +61 7 3238 1000 Email info@stanmorecoal.com.au ASX : SMR AUSTRALIA’S ONLY ASX LISTED JUNIOR COKING C
Slide 20: Appendices
For personal use only APPENDICES 20
Slide 21: Strong board and management team
STRONG BOARD AND MANAGEMENT TEAM For personal use only Over 150 years of coal exploration, development and operational experience KEY MANAGEMENT Nick Jorss Mike McKee Andrew Roach Nigel Clifford Managing Director Chief Operating Officer Chief Financial Officer Senior Geologist 20 years in engineerin
Slide 22: Overview of Stanmore assets
OVERVIEW OF STANMORE ASSETS For personal use only BOWEN BASIN – Coking Coal MACKENZIE – 85% Coking Coal ISAAC PLAINS – 100% Total Resources 143 Mt Total Resources 30.1 Mt Exploration Total Reserves 5.0 Mt Ramp-up to operations SURAT BASIN – Thermal Coal ISAAC PLAINS EAST – 100% THE RANGE
Slide 23: Fully funded for production
FULLY FUNDED FOR PRODUCTION CASH & ADDITIONAL FINANCING For personal use only HIGHLIGHTS ✓ ✓ ✓ ✓ A$57m in Vender US$42m Taurus Cash balance of Strategy in place to Compensation Mining Finance $17.6m as at 31 refinance the Payments Fund interest only March 2016 Taurus facilities A$50m to be repaid to
Slide 24: Global cost curve support
GLOBAL COST CURVE SUPPORT MACRO FACTORS SUPPORT A POSITIVE OUTLOOK FOR METALLURGICAL COAL For personal use only MARKETS CONTINUE TO BE CHALLENGING GLOBAL HCC US$ MARGINS @US$78 / TONNE FOR PRODUCERS OF METALLURGICAL COAL 40 Current prices indicate significant tonnages are losing money 20 Continu
Slide 25: Global cost curve support: incentive price for met coal projects
GLOBAL COST CURVE SUPPORT MACRO FACTORS SUPPORT A POSITIVE OUTLOOK FOR METALLURGICAL COAL For personal use only THE NEXT WAVE OF INCENTIVE PRICE FOR METALLURGICAL COAL PROJECTS MET COAL PROJECTS (US$/TONNE, 15% IRR) REQUIRES A SIGNIFICANT 350 INCREASE IN PRICING nAustralia 25% < US$126/t 50% > US$14