Newcrest Mining — FY2019 Earnings Presentation
37 slides from Newcrest Mining's earnings presentation, Aug 16, 2019
Slide 1: FY19 Full Year Results
NEWCREST FY19 Full Year Results Sandeep Biswas Managing Director and Chief Executive Officer Gerard Bond Finance Director and Chief Financial Officer
Slide 2: Disclaimer: Forward Looking Statements
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: Disclaimer: Competent Person's Statement
Disclaimer Competent Person’s Statement The information in this presentation that relates to Mineral Resources or Ore Reserves (other than Red Chris and Havieron) has been extracted from the release titled “Annual Mineral Resources and Ore Reserves Statement –31 December 2018” dated 14 February 2019
Slide 4: Newcrest Mining Limited
Newcrest | Mining Limited ® NEWCREST WINING LIMITED
Slide 5: Safety and Sustainability
Safety and FY19 key Sustainability achievements Production Financials results Our approach to Summary growth
Slide 6: Continued safety improvement
Group TRIFR1 progress Continued safety 3.7 3.3 improvement 3% 2.4 2.3 FY16 FY17 FY18 FY19 Zero Fatalities Most operations recorded TRIFR improvements Remaining vigilant Encouraging results reflecting the ongoing safety leadership with another year and culture change fatality-free Cadia TRIFR Lihir T
Slide 7: New sustainability commitments
Greenhouse gas (GHG) intensity target New A 30% reduction in GHG emissions per tonne of ore treated by 2030 against the 2018 sustainability baseline commitments Shadow carbon price Acquisitions and key capital investment decisions will include carbon price scenarios between $25 and $50 a tonne of CO
Slide 8: FY19 key achievements
Safety and FY19 key Sustainability achievements Production Financials results Our approach to Summary growth
Slide 9: FY19 key achievements
FY19 key Improved safety performance achievements • Another fatality-free year and further reduction in injury rates Met Group production & cost guidance • 2.5moz gold & 106kt copper at an AISC of $738/oz All operations cash flow positive • Free cash flow of $804m Returned benefits to shareholders •
Slide 10: Production results
Safety and FY19 key Sustainability achievements Production Financials results Our approach to Summary growth
Slide 11: FY19 production by operation: Cadia
Cadia FY19 Record annual gold and copper production production by operation Record low annual AISC per oz Exceeded production guidance 913 669 620 600 274 241 171 132 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19
Slide 12: FY19 production by operation: Lihir
Lihir FY19 Achieved its 15mtpa sustainable mill production by throughput target in the June 2019 quarter operation Fourth consecutive year of generating free cash flow greater than $300m 940 955 933 900 858 934 887 830 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19
Slide 13: FY19 production by operation: Telfer
Telfer FY19 Gold production up 6% year on year production by operation Increase primarily due to strong improvement in recovery, reflecting technical discipline 1,178 1,262 1,253 462 426 452 386 967 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19
Slide 14: FY19 production by operation: Gosowong
Gosowong FY19 Year on year results impacted by declining production by grade operation 296 251 197 190 1,099 935 882 757 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19
Slide 15: Maintaining operating discipline in a rising gold price
Maintaining AISC/oz for the most recently reported quarter1 ($/oz) operating 1,016 996 discipline in a 953 rising gold 910 price 869 720 2 Newcrest Barrick Gold Gold Fields Agnico Eagle Anglogold Newmont Mining Ashanti Mining 1 AISC/oz from company reports for 3 months ended 30 June 2019. Based on d
Slide 16: Financials
Safety and FY19 key Sustainability achievements Production Financials results Our approach to Summary growth
Slide 17: 22% increase in underlying profit
Movement in Underlying Profit ($m) 22% Increase Revenue Operating Costs Depreciation & in Underlying $180 million 196 $51 million Amortisation $50 million Profit ($m) (2) 104 25 25 20 Statutory profit = Underlying profit 289 (132) (131) 13 561 (53) 459 (81) (100) (71) Silver revenue Copper sales vol
Slide 18: Strong free cash flow even after investing in growth
Strong free after investing in growth ($m) cash flow even FY19 EBITDA 1,670 Exploration expenditure written-off 71 & Non-cash items Working capital movements (3) Interest & taxes paid (251) Cash flow from operating activities 1,487 Production stripping (130) Sustaining capital (248) expenditure Majo
Slide 19: History of strong operating, investing and free cash flow
1,600 1,600 History of $1,467m $1,487m $1,434m strong 1,400 1,400 operating, $1,280m $1,241m investing & 1,200 $683m 1,200 $728m free cash $426m Realised Gold Price ($/oz) 1,000 $427m $833m 1,000 flow Cash flow ($m) 800 800 600 600 400 $854m $814m $804m 400 $739m $601m 200 200 0 0 FY15 FY16 FY17 FY1
Slide 20: $4.2bn of free cash flow since 1 January 2014
$4.2bn of Cumulative free cash flow ($m) free cash flow $4.2 Billion since 1 January 2014 H1 Free Cash Flow H2 Free Cash Flow
Slide 21: In a strong financial position
Leverage Ratio (Net Debt / EBITDA) Gearing Ratio Target less than In a strong Target less than 2.0x (for trailing 25% 12 months) financial 16% position 1.2x 12% 12% 0.7x 0.6x 5% 0.2x 31 Dec 2017 30 Jun 2018 31 Dec 2018 30 Jun 2019 31 Dec 2017 30 Jun 2018 31 Dec 2018 30 Jun 2019 Coverage ($b) Investm
Slide 22: Increasing returns to shareholders
Increasing Dividends1 (US$/share) 0.25 Increasing returns to 0.20 19% shareholders US$ per share 0.15 0.10 0.05 0.00 FY16 FY17 FY18 FY19 • Third consecutive year of dividend increases • Targeting a total dividend payment of at least 10-30% of free cash flow • With the dividend being no less than US1
Slide 23: Our approach to growth
Safety and FY19 key Sustainability achievements Production Financials results Our approach to Summary growth
Slide 24: Preparing for the next phase of growth
Preparing for the next phase Chief Executive Officer of growth Sandeep Biswas • Balancing stability Chief Development Officer Chief Operating Officer Chief Financial Officer Chief Operating Officer of senior leadership (Australia, Indonesia & America) (PNG)# Michael Nossal* Gerard Bond Craig Jones w
Slide 25: Our approach to growth
Our approach to growth 1. Organic 2. Greenfield 3. Early entry 4. M&A growth exploration partnerships
Slide 26: Meaningful organic growth options
Cadia Expansion Expansion Feasibility study expected to be completed in December 2019 Quarter Molybdenum plant gated to execution with first production expected CY21 Meaningful organic Lihir growth Annualised sustainable milling rate of 15mtpa achieved in June 2019 options Targeting to sustain rates
Slide 27: History of delivering multi mine districts
Cadia – >50Moz Au * Gosowong - 6.6Moz Au* History of delivering multi mine districts Telfer – 20Moz Au* Wafi-Golpu – 13Moz Au* * Total Mineral Endowment is past production sourced from Represents Newcrest 50% share of the Wafi-Golpu Newcrest Annual reports and/or Mineral Resource from “Annual Minera
Slide 28: Newcrest: Partner of choice
Partners Newcrest’s Strengths Newcrest Partner of choice Exploration Mining Exploration Expertise Capabilities Technology & Innovation New Discoveries
Slide 29: Havieron: Presence of higher grade copper-gold mineralisation confirmed
Assay results from Newcrest extended Greatland Gold hole HAD006 include: • 52 m @ 7.0 g/t Au and 0.17% Havieron: Cu from 1122 m Presence of incl 17 m @ 21 g/t Au and 0.39% Cu from 1153 m higher grade copper-gold mineralisation confirmed Successful development of the Havieron deposit has the potentia
Slide 30: Red Chris benefits Newcrest shareholders
Red Chris benefits Newcrest shareholders • Supports strategic goals • Immediate asset and geographic diversification • Large mineral endowment • Significant upside opportunity
Slide 31: Red Chris: Two stage transformation
Stage 1 - Apply Newcrest’s Edge transformation approach • Process plant optimisation • Mine optimisation • Supply chain cost reduction • Extensional resource and exploration drilling program Red Chris: Two stage Stage 2 - Apply Newcrest’s industry leading technology transformation • Block caving • C
Slide 32: Red Chris: Forward work plan
FY20 FY20 FY20 FY20 FY21 FY21 FY21 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Drilling program Ore deposit knowledge Resource Drilling Red Chris: Forward work Exploration Drilling plan Open pit optimisation Open pit optimisation Transformation Determine open pit extent Stage 1 Process plant optimisation Determine optimal
Slide 33: Defining the orebody
Defining the orebody Red Chris exhibits Cadia like porphyry geology
Slide 34: Safety Summary
Safety and Safety Sustainability Production Financials results Our approach to Summary growth
Slide 35: What makes Newcrest different
What makes Newcrest Long Low cost different reserve life production Organic growth options Do what (at Cadia, Lihir, Wafi we say Golpu & Red Chris) Strong exploration & technical Financially robust capabilities
Slide 36: Find out more: Engage with us
Find out more: www.newcrest.com.au Engage with us +613 9522 5717 +1 (647) 255 3139
Slide 37: FY19 Full Year Results
NEWCREST FY19 Full Year Results Sandeep Biswas Managing Director and Chief Executive Officer Gerard Bond Finance Director and Chief Financial Officer