Coronado Global Resources Inc. · ASX:CRN
Coronado Global Resources — Investor Presentation (May 2021)
69 slides from Coronado Global Resources's investor presentation, May 4, 2021
Slide 1: Equity Raising and Refinancing Presentation
For personal use only Coronado Global Resources Inc. Equity Raising and Refinancing Presentation 4 May 2021 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 2: Important Notices and Disclaimer
Important Notices and Disclaimer This investor presentation (Presentation) is dated 4 May 2021 and has been prepared by Coronado Global Resources Inc. ARBN 628 199 468 (Coronado or the Company). By Investment risk attending the meeting where this Presentation is made, or by reading the Presentation
Slide 3: Important Notices and Disclaimer (cont.)
Important Notices and Disclaimer (cont.) 2020 JORC Resource and Reserve Statements affiliates may also communicate independent investment recommendations, market colour or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may
Slide 4: Table of Contents
Table of Contents For personal use only 1. Operational and Financial Update 5 2. Equity Raising and Refinancing Overview 10 2.A. Equity Raising 15 2.B. New Debt Facilities 17 3. Key Investment Highlights 21 Appendices A. Risk Factors 32 B. International Offer Restrictions 45 C. Regulation S Restrict
Slide 5: Operational and Financial Update
For personal use only Section 1 Operational and Financial Update Roadshow presentation 5 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 6: Preliminary and Unaudited Q1 2021 Highlights - Operational Performance
Preliminary and Unaudited Q1 2021 Highlights - Operational Performance(1) For personal use only ROM production for the March quarter was 6.8 Run-of-Mine (ROM) production (Mt) Mt, up 0.9% on the December quarter Saleable production for the March quarter was 4.6 Mt, up 0.1 Mt or 2.5% on the Decemb
Slide 7: Preliminary and Unaudited Q1 2021 Highlights - Financial Performance
Preliminary and Unaudited Q1 2021 Highlights - Financial Performance(1) March quarter revenue was US$376 million, up 1% on the previous Revenue For personal use only quarter (US$m) 409 372 376 245 231 238 Group realised metallurgical coal price of US$94.3 per tonne for 164 141 138 the March quar
Slide 8: Coronado Successfully Managed through COVID-19 and the Market Downturn in 2020
Coronado Successfully Managed through COVID-19 and the Market Downturn in 2020 Legend: COVID-19 initiatives Operating initiatives Financial initiatives For personal use only COVID-19 Safety Restart US Operations 2020 Capex Review 2020 Equity Raising Protocols x xxx xxxx Preventative measures Buchana
Slide 9: Factors supporting Coronado's liquidity in the current market
Factors supporting Coronado’s liquidity in the current market Historical Metallurgical Coal Australian FOB prices vs. US FOB prices For personal use only (US$/t) US coking coal prices continue to trade at a 250 premium to Australian coking coal prices • Currently ~US$56/t above Australian FOB prices
Slide 10: Equity Raising and Refinancing Overview
For personal use only Section 2 Equity Raising and Refinancing Overview 10 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 11: Refinancing to put in place a more Appropriate and Flexible Capital Structure
Refinancing to put in place a more Appropriate and Flexible Capital Structure Coronado is undertaking a proposed refinancing comprising three coordinated For personal use only transactions: Initial amount of US$100m Asset Based Revolving Asset Based Loan ̶ Asset Based Loan (“ABL”); Credit Facility
Slide 12: Key Transaction Highlights
Key Transaction Highlights For personal use only SFA covenants removed and new 1 Increases financial flexibility facilities have no periodic financial maintenance covenants(1) Maturity Profile (years)(2) 4.6 2 Extends maturity profile 1.8 Current Pro-Forma Senior Secured Notes Offering provides acce
Slide 13: Sources & Uses and Capital Structure
Sources & Uses and Capital Structure Sources US$m(1) A$m(1) Uses US$m(1) A$m(1) For personal use only Proceeds from new equity offering(2) 100 132 Repay SFA balance(3) 328 431 Proceeds from new US$350m Senior Secured 1st lien notes 350 461 Cash and restricted cash to balance sheet(4) 108 141 Transac
Slide 14: Refinancing Timetable
Refinancing Timetable Coronado expects to enter into a Purchase Agreement for an offering of US$350m of 5 year Senior Secured 1st Lien Notes and expects to enter into an ABL with an initial amount of US$100m – refer to page 11 for further detail(1) For personal use only Event Date(2) Trading halt
Slide 15: Equity Raising Overview
For personal use only Section 2.A. Equity Raising Overview 15 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 16: Equity Raising Terms
Equity Raising Terms A$132 / US$100 Million(2) Underwritten(1) Entitlement Offer For personal use only • Underwritten(1) 1 for 4.73 pro-rata accelerated non-renounceable Entitlement Offer (“Offer” or “Entitlement Offer”) at A$0.45 per New Chess Depositary Offer Size and Interest (“CDI”) to raise A$1
Slide 17: New Debt Facilities
For personal use only Section 2.B. New Debt Facilities 17 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 18: Debt Facilities Overview
Debt Facilities Overview New debt facilities to put in place a more appropriate and flexible capital structure For personal use only Proposed refinancing involves two Current Pro-Forma(4) debt facilities, comprising Senior Secured Notes and an ABL • Multicurrency SFA, incorporating a bank guarante
Slide 19: Asset Based Loan Terms
Asset Based Loan Terms US$100 Million Global Asset Based Revolving Credit Facility Borrower(s): Coronado Coal Corporation, and Coronado Finance Pty Ltd For personal use only Facility: Initial $100 million Global Asset Based Revolving Credit Facility LC Sublimit: To be agreed, and including a c
Slide 20: Senior Secured Notes Terms
Senior Secured Notes Terms US$350 Million Senior Secured 1st Lien Notes For personal use only Issuer: Coronado Finance Pty Ltd Issue Type: Senior Secured 1st Lien Notes Distribution: 144A / Regulation S for life Secured on a first-priority basis on US and Australia assets that constitute Not
Slide 21: Key Investment Highlights
For personal use only Section 3 Key Investment Highlights NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 22: Key Investment Highlights
Key Investment Highlights Coronado following the refinancing transactions For personal use only Equity offer provides the opportunity to invest in a company which.. 1 Is the largest independent producer of steel making coal globally Has low operating costs and stay-in-business capital requirements.
Slide 23: Coronado is a Leading Diversified, Large Scale Producer of Metallurgical Coal
Coronado is a Leading Diversified, Large Scale Producer of Metallurgical Coal For personal use only Listed on the ASX (ASX:CRN) in 2018 One of the largest metallurgical coal producers globally US-incorporated company with SEC reporting obligations 2020 Saleable metallurgical coal production(1) (
Slide 24: Well Positioned on Met Coal Cost Curve
Well Positioned on Met Coal Cost Curve Ability to generate Adj. EBITDA(1) and potential FCF through the coal price cycle underpinned by competitive cost positions For personal use only Competitively positioned on the global Competitively positioned on Australian met coal Buchanan is one of the low
Slide 25: Track Record of Solid Operational Performance
Track Record of Solid Operational Performance(1) Run-of-Mine (ROM) production Export ratio (sales volume %) For personal use only (Mt) FY2018(1) FY2019 FY2020 30.8 27.2 25.2 24% 25% 30% 16.4 14.7 15.3 14.4 11.9 10.5 70% 76% 75% Australia United States Group (1) FY2018 FY2019 FY2020 Export Domestic S
Slide 26: History of Generating Positive Adj. EBITDA through-the-cycle
History of Generating Positive Adj. EBITDA(3) through-the-cycle with strong leverage to met coal prices For personal use only Revenue Mining Costs(2) (4) (US$m) (US$/t) 1,981 2,216 56.8 55.6 1,462 51.8 (1) (1) FY2018 FY2019 FY2020 FY2018 FY2019 FY2020 Realized met Operating Costs coal price $139/t $
Slide 27: Refinancing to Secure a More Appropriate and Flexible Capital Structure
Refinancing to Secure a More Appropriate and Flexible Capital Structure(1) For personal use only Flexible balance sheet SFA covenants removed and new facilities have no periodic financial maintenance covenants(2)(3) Pro-Forma Debt Maturity Profile (US$m) 350 2021 Drawn No near term debt maturiti
Slide 28: Operations diversified across geography, products and customers
Operations diversified across (A) geography, (B) metallurgical coal products offering and (C) customers For personal use only Geographically diverse asset Geography Metallurgical coal product offering base located near key rail and port infrastructure, providing Key export destinations Australia(1
Slide 29: Positive Metallurgical Coal Outlook
Positive Metallurgical Coal Outlook Forecast demand for seaborne metallurgical coal is underpinned by the growth of India’s blast furnace production over the next decade For personal use only Metallurgical Coal Supply (Mt) Metallurgical Coal Demand (Mt) India’s seaborne metallurgical coal demand is
Slide 30: Significant Potential EBITDA Generation as Met Coal Prices Recover
Significant Potential EBITDA Generation as Met Coal Prices Recover A US$10/t HCC benchmark price uplift could contribute ~US$100 million to annual Adj. EBITDA(1)(4) Prices >US$200/t For personal use only In 2020 metallurgical coal Historical Metallurgical Coal Benchmark Prices 29% (307 days) price
Slide 31: Strong Commitment to Safety, Environment and Governance
Strong Commitment to Safety, Environment and Governance Matters relating to safety, environment and governance are viewed seriously For personal use only In the U.S., the Logan Division’s Eagle #1, Powellton 2020 Australian operations (TRIFR)(1) 2020 US operations (TRIR)(2) Commitment to maintai
Slide 32: Appendix A Risk Factors
For personal use only Appendix A Risk Factors NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 33: Risk Factors
Risk Factors This section discusses some of the key risks associated with any investment in Coronado, which may affect the value of Coronado's securities. The risks set out below do not To the extent the COVID-19 pandemic adversely affects Coronado's business and results of operations, it may also h
Slide 34: Risk Factors (cont.)
Risk Factors (cont.) 1.4 Operational risk given their limited ability to access domestic storage options. Xcoal purchases coal from Coronado upon landing into the rail car, or free-on-rail (FOR), at its US operations, which means that: Coronado's mining operations, including exploration, development
Slide 35: Risk Factors (cont.)
Risk Factors (cont.) 1.7 Contract, counterparty and collection risk its reserve information on geologic data, coal ownership information and current and proposed mine plans and mining cost assumptions may be affected by changes in mine planning or scheduling over time. There are numerous uncertainti
Slide 36: Risk Factors (cont.)
Risk Factors (cont.) 1.13 Reliance on third party suppliers and contracts Under Coronado's take-or-pay agreement with WICET Pty Ltd (the WICET Take-or-Pay Agreement), Curragh’s export capacity is 1.5 Mtpa and Coronado is obligated to pay the terminal handling charge for this capacity, whether utilis
Slide 37: Risk Factors (cont.)
Risk Factors (cont.) 1.18 Reliance on key personnel (including Virginia and Pennsylvania), and its current and future impact on Coronado's operations are the subject of significant uncertainty. On April 21, 2020 the EPA and the USACE published the Navigable Waters Protection Rule (NWPR), replacing t
Slide 38: Risk Factors (cont.)
Risk Factors (cont.) 1.24 Financial assurances for obligations 1.27 Increased regulation of coal combustion and coal mining in many jurisdictions Australian laws and U.S. federal and state laws require Coronado to provide financial assurances related to requirements to reclaim lands used for mining,
Slide 39: Risk Factors (cont.)
Risk Factors (cont.) 1.29 Native tile assessment of damages, the imposition of penalties, suspension of production or distribution, costly changes to equipment or processes due to required corrective action, or a cessation or interruption of operations. In Australia, mineral exploration and mining t
Slide 40: Risk Factors (cont.)
Risk Factors (cont.) 1.36 Cybersecurity attacks, natural disasters, terrorist attacks and other similar crises or disruptions On August 14, 2018, Curragh entered into the Curragh Mine New Coal Supply Deed (Supply Deed) with Stanwell. The Supply Deed grants Curragh the right to mine the coal reserves
Slide 41: Risk Factors (cont.)
Risk Factors (cont.) 1.44 Indebtedness • sell assets (and deal with proceeds); On an as adjusted basis as of December 31, 2020, after giving effect to the financing transactions referred to in section 1.43 above, Coronado would have had an aggregate • create or incur certain liens; principal amount
Slide 42: Risk Factors (cont.)
Risk Factors (cont.) 1.46 Capital structure and future additional debt financing 1.49 Coronado Global Resources Inc. is a holding company Even after the completion of the financing transactions referred to in section 1.43 above, Coronado may need to raise additional debt or equity funds in the futur
Slide 43: Risk Factors (cont.)
Risk Factors (cont.) 1.53 Substantial stockholder risk claims” as defined in Section 115 of the DGCL. Coronado Group LLC and the EMG Group have significant influence over Coronado, including control over decisions that require the approval of stockholders, which could limit the The choice of forum p
Slide 44: Risk Factors (cont.)
Risk Factors (cont.) 2 Risks relating to the Offer outlined above; 2.1 Equity raising and underwriting risk • there being an outbreak of hostilities or major terrorist attack in one or more of Australia, New Zealand, the United States, the United Kingdom, Singapore, China or any member state of the
Slide 45: Risk Factors (cont.)
Risk Factors (cont.) 3 General investment risks 3.1 Investment in securities For personal use only There are general risks associated with investments in securities, such as Coronado's CDIs. The trading price of Coronado's CDIs may fluctuate with movements in economic conditions and capital markets
Slide 46: Appendix B International Offer Restrictions
For personal use only Appendix B International Offer Restrictions NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 47: International Offer Restrictions
International Offer Restrictions This document does not constitute an offer of New CDIs of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any any contents of this document, you should obtain independent professional advice. perso
Slide 48: International Offer Restrictions (cont.)
International Offer Restrictions (cont.) United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus For personal use only (within the meaning of section 85 of the Financi
Slide 49: Appendix C Regulation S Restrictions
For personal use only Appendix C Regulation S Restrictions NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 50: Regulation S Category Restrictions
Regulation S Category 3 Restrictions Unites States Securities Law Restrictions • require that any New CDIs or Shares bearing the legend set forth in Rule 903(b)(3)(iii)(B)(3) under the US Securities Act may not be transferred by Coronado’s Share Registry or other transfer agent during the Distributi
Slide 51: Regulation S Category Restrictions (cont.)
Regulation S Category 3 Restrictions (cont.) BENEFICIAL INTERESTS IN THE SECURITIES REPRESENTED HEREBY MAY BE HELD IN THE FORM OF CHESS DEPOSITARY INTERESTS (“CDIs”). BY ACQUIRING ANY If a holder of Shares wishes to transmute its Shares into New CDIs, it can contact the Share Registry and request th
Slide 52: Regulation S Category Restrictions (cont.)
Regulation S Category 3 Restrictions (cont.) • notwithstanding the foregoing bullet, it understands and acknowledges that during the Distribution Compliance Period, the New CDIs may only be reoffered and resold either certifications and other documentation relating to its ability to transfer Shares
Slide 53: Appendix D Reconciliation of Non-GAAP measures
For personal use only Appendix D Reconciliation of Non- GAAP measures NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 54: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures This report includes a discussion of results of operations and references to and analysis of certain non-GAAP measures (as described below) For personal use only which are financial measures not recognised in accordance with U.S. GAAP. Non-GAAP financial measures
Slide 55: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures For personal use only Realized Pricing reconciliation For the year ended December 31, 2020 Australia United States Consolidated (US$ Thousands, except for volume data) Total Revenues 976,369 485,893 1,462,262 Less: Other revenues 34,143 4,520 38,663 Total coal rev
Slide 56: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures For personal use only Realized Pricing reconciliation For the year ended December 31, 2018(1) Australia United States(2) Consolidated (US$ Thousands, except for volume data) Total Revenues 1,165,580 814,924 1,980,504 Less: Other revenues 29,521 5,383 34,904 Total
Slide 57: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures For personal use only Realized Pricing reconciliation For 3 months For 3 months For 3 months For 3 months ended ended ended ended (US$ Thousands, except for volume data) March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 Total Revenues 409,317 304,3
Slide 58: Reconciliation of Non-GAAP measures (cont'd)
Reconciliation of Non-GAAP measures (cont’d) For personal use only For the year For the year For the year For the year For the year For the year Adjusted EBITDA ended ended ended Mining Costs per tonne ended ended ended reconciliation December 31, December 31, December 31, reconciliation December 31
Slide 59: Reconciliation of Non-GAAP measures (cont'd)
Reconciliation of Non-GAAP measures (cont’d) For personal use only Adjusted EBITDA reconciliation For 3 months For 3 months For 3 months For 3 months ended ended ended ended March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 (US$ Thousands) Net (loss) Income (8,865) (114,330) (41,794)
Slide 60: Reconciliation of Non-GAAP measures (cont'd)
Reconciliation of Non-GAAP measures (cont’d) For personal use only Adjusted segment EBITDA reconciliation For the year ended December 31, 2020 Australia United States Other / Corporate(1) Total (US$ Thousands) Net (loss) Income (66,645) (77,853) (82,039) (226,537) Add: Depreciation, depletion and am
Slide 61: Reconciliation of Non-GAAP measures (cont'd)
Reconciliation of Non-GAAP measures (cont’d) For personal use only Adjusted segment EBITDA reconciliation For the year ended December 31, 2019 Australia United States Other / Corporate(1) Total (US$ Thousands) Net (loss) Income 246,668 120,921 (62,112) 305,477 Add: Depreciation, depletion and amorti
Slide 62: Reconciliation of Non-GAAP measures (cont'd)
Reconciliation of Non-GAAP measures (cont’d) For personal use only Adjusted segment EBITDA reconciliation For the year ended December 31, 2018(1) Australia United States(2) Other / Corporate(3) Total (US$ Thousands) Net (loss) Income 164,331 94,417 (144,159) 114,589 Add: Depreciation, depletion and
Slide 63: Reconciliation of Non-GAAP measures (cont'd)
Reconciliation of Non-GAAP measures (cont’d) For personal use only Mining Costs per tonne reconciliation For 3 months For 3 months For 3 months For 3 months ended ended ended ended March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 (US$ Thousands) Total costs and expenses 407,691 357,
Slide 64: Reconciliation of Non-GAAP measures (cont'd)
Reconciliation of Non-GAAP measures (cont’d) Mining Costs per tonne reconciliation For personal use only For the year ended December 31, 2020 Australia United States Other / Corporate Total (US$ Thousands, except for volume data) Total costs and expenses 1,082,640 496,462 31,111 1,610,213 Less: Sell
Slide 65: Reconciliation of Non-GAAP measures (cont'd)
Reconciliation of Non-GAAP measures (cont’d) Mining Costs per tonne reconciliation For personal use only For the year ended December 31, 2019 Australia United States(1) Other / Corporate Total (US$ Thousands, except for volume data) Total costs and expenses 1,132,790 590,131 36,024 1,758,945 Less: S
Slide 66: Reconciliation of Non-GAAP measures (cont'd)
Reconciliation of Non-GAAP measures (cont’d) Mining Costs per tonne reconciliation For personal use only For the year ended December 31, 2018(1) Australia United States(2) Other / Corporate Total (US$ Thousands, except for volume data) Total costs and expenses 924,813 657,693 64,919 1,647,424 Less:
Slide 67: Reconciliation of Non-GAAP measures (cont'd)
Reconciliation of Non-GAAP measures (cont’d)(1) Operating Costs and Mining Costs Reconciliation (US$/t) For personal use only For the three months ended For the three months ended For the three months ended (US$ Thousands) March 31, 2020 December 31, 2020 March 31, 2021 Total costs and expenses $407
Slide 68: Reconciliation of Non-GAAP measures (cont'd)
Reconciliation of Non-GAAP measures (cont’d)(1) Realized Pricing reconciliation For the three months ended March 31, 2021 For personal use only (US$ Thousands, except for volume data) Australia United States Consolidated Total Revenues 238,293 137,818 376,111 Less: Other revenues 8,843 66 8,909 Tota
Slide 69: Contacts
Contacts: Investors: Media: For personal use only Matt Sullivan Brett Clegg P: +61 412 157 276 P: +61 487 436 985 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Coronado Global Resources — Investor Presentation (May 2021) on 6ix