Mgx Resources Limited · ASX:MGX
Mgx Resources — Mount Gibson Iron — Investor Presentation (April 2008)
27 slides from Mgx Resources's investor presentation, Apr 22, 2008
Slide 1: Investor Presentation April 2008
Investor Presentation April 2008 For personal use only 1 19/04/2008
Slide 2: Disclaimer
For personal use only Disclaimer 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
For personal use only Company overview Corporate • Issued capital 803.3 million shares, 10.8 million options • Market cap1 A$2,192 million • Cash2 A$42 million • Total debt2 A$93 million • EV A$2,141 million • Index S&P/ASX 200 • Finance facilities A$200m (includes A$25m contingent debt) Financials
Slide 4: Mount Gibson key event timeline
Mount Gibson key event timeline 3 For personal use only 2.5 3 2 MGX Ordinary Shares Trading Price (A$) 1.5 2 1 1 0.5 0 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Tallering Peak production commences Production stabilised & growth explored Koolan Island production commences 8 Jan 2
Slide 5: Key investment themes
For personal use only Key investment themes 1 Quality assets 2 Solid growth profile 3 Earnings leverage to strong iron ore price outlook 4 Disciplined financial strategy & strong performance 5 Experienced - disciplined Board & executive team with proven track record …Mount Gibson has a solid investm
Slide 6: Quality assets
1 For personal use only Quality assets Koolan Island - production Tallering Peak - production Extension Hill - near-term production 6 19/04/2008
Slide 7: Quality assets: key statistics
1 Quality assets KEY STATISTICS For personal use only Extension Tallering Peak Koolan Island Combined Hill Reserves and Resources1 Proven & Probable Ore Reserves (Mt) 18.3 (61.7% Fe) 29.9 (65.0% Fe) 12.8 (60.3% Fe) 62.0 (62.9% Fe) Measured, Indicated & Inferred Mineral 21.0 (61.6% Fe) 62.8 (63.1% Fe
Slide 8: Quality assets: Tallering Peak
1 Quality assets Main Range Pits looking west at end of March 2008 For personal use only Tallering Peak • First hematite ore shipped Feb 2004 • Producing 3 Mtpa • 65% Lump & 35% Fines ratio • Quality high grade, low contaminant product: – 61.7% Fe, – 5.32 % SiO2 – 2.6 % Al2O3 – 0.025 % P • Access to
Slide 9: Quality assets: Koolan Island
1 Quality assets Crushing, port & ship-loading facilities For personal use only Koolan Island • First hematite ore shipped June 2007 • Production ramping up to 4 Mtpa (expected to reach capacity by 4Q 2009) • 30% Lump & 70% Fines ratio (initial production 50% Lump & 50% Fines) • Quality high grade,
Slide 10: Main West ore-body has ensured timely access to Koolan Island Main Pit
1 Quality assets Main West ore-body has ensured timely access to Koolan Island Main Pit For personal use only 10 19/04/2008
Slide 11: Quality assets: Extension Hill
1 Quality assets Extension Hill For personal use only • Mining reserve will be increased • Operationally robust and straightforward • Low capital cost: $100m • Up to 3 Mtpa production rate • Average LOM cash cost: $34/t • Low strip ratio – 0.7:1 • 50% Lump & 50% Fines ratio • Quality grade, low cont
Slide 12: Solid growth profile: production growth to 2010
2 Solid growth profile 9 Production growth to reach full production by 2010… For personal use only 11 10 Extension Hill 9 Koolan Island 8 Tallering Peak 7 Million WMT 6 5 4 3 2 1 0 2006 Actual 2007 Actual 2008 Forecast 2009 Forecast 2010 Forecast 2011 Forecast 9 Organic growth opportunities • T1 & N
Slide 13: Solid growth profile: Geraldton Port capacity
2 Solid growth profile Ship-loading capacity increased at Geraldton Port to meet For personal use only growth in Mount Gibson’s production from the Mid West… Rail unloading capacity at Geraldton Port requires upgrading to meet ship-loading capacity required for Extension Hill … 13 19/04/2008
Slide 14: Koolan Island upside on unexplored western side
2 Solid growth profile Koolan Island provides significant upside potential on unexplored western side of the island… For personal use only 14 19/04/2008
Slide 15: Koolan Main Pit grade and quality
2 Solid growth profile Koolan Main Pit - World class grade and quality – 66.5% Fe, 3.48% SiO2, 0.69% Al2O3, 0.019% P, 0.3 LOI For personal use only 15 19/04/2008
Slide 16: Mineralised area under Koolan Main Pit to be drilled
2 Solid growth profile Extensive potential mineralised area under Koolan Main Pit to be drilled in coming months… For personal use only 16 19/04/2008
Slide 17: Projects have among the lowest capital intensity of peers
2 Solid growth profile Mount Gibson’s projects have amongst the lowest capital intensity of any of its peers For personal use only 200 ‘Greenfields’ infrastructure requirement 180 Balmoral South Magnetite Southdown 160 140 Capital intensity (US$/t) Karara magnetite 120 100 Rapid growth project 4 80
Slide 18: Earnings leverage to strong iron ore price outlook
3 Earnings leverage to strong iron ore price outlook Robust iron ore price outlook For personal use only Dramatic growth in global iron ore Substantial increases forecast in iron consumption… ore prices… 250 12 2,000 …largely driven by Sales volume Lump price 10 China’s industrialisation Consumption
Slide 19: Disciplined financial strategy & strong performance
4 Disciplined financial strategy & strong performance Good operating margins For personal use only 2005-2007 sales revenue 2005-2007 net profit CAGR 2005 - 2007: 45% Sales revenue (A$m) 200 163 60.0 CAGR 2005 - 2007: 88% 1 47.8 160 NPAT (A$m) 45.0 120 77 73 30.0 80 23.5 13.5 40 15.0 0 0.0 2005A 2006
Slide 20: Experienced Board & executive team
5 Experienced - disciplined Board & executive team with proven track record For personal use only Mr Luke Tonkin Mr Alan Rule Mr Neil Hamilton Mr Craig Readhead Managing Director CFO Chairman Non-Executive Director B.E., MAusIMM, AICD B.Comm, B.Acc, CA LLB B.Juris, LLB, AICD • Appointed in Oct 05 •
Slide 21: Tallering Peak: access to infrastructure
For personal use only Tallering Peak Access to infrastructure – full production 21 19/04/2008
Slide 22: Koolan Island: installed infrastructure
Koolan Island Installed infrastructure – capacity 6Mtpa For personal use only 22 19/04/2008
Slide 23: Tallering Peak – March 2008 quarterly
6 For personal use only Tallering Peak – March 2008 quarterly • Continued strong operating performance – Annualised ore mined and crushed >3Mtpa – Record ore crushed – Second highest ore sales quarter with ore sales increase 13% on prior quarter – Operating costs in line with expectations – 1.4 Mt s
Slide 24: Tallering Peak ore production
6 For personal use only Tallering Peak – March 2008 quarterly Tallering Peak - Ore production (WMT) 2,600 2,500 Ore sold 2,400 2,300 2,200 Ore crushed 2,100 666 2,000 409 592 1,900 Ore mined 618 1,800 1,700 708 604 1,600 1,500 000 WMT's 719 1,400 591 1,300 773 828 1,200 782 1,100 663 680 1,000 900 4
Slide 25: Koolan – March 2008 quarterly
6 For personal use only Koolan – March 2008 quarterly • Operating performance in line with expectations – Monsoonal wet season from Jan to March impacted operations as forecast – Total BCM’s moved only 6% below previous quarter – Material handling and shipments restricted by monsoonal wet season – 0
Slide 26: Koolan quarterly ore production
6 Koolan – March 2008 quarterly Koolan - Quarterly ore production (WMT's) For personal use only 2,500 2,400 2,300 2,200 2,100 Ore sold 2,000 726 1,900 1,800 Ore crushed 1,700 654 1,600 1,500 Ore mined 569 000 WMT's 1,400 1,300 739 1,200 1,100 686 1,000 603 900 800 150 700 600 274 500 885 400 695 669
Slide 27: Extension Hill – March 2008 quarterly
6 For personal use only Extension Hill – March 2008 quarterly • Various regulatory approval submissions lodged • Detailed design and engineering continuing • Major contracts finalised • Commenced civil works at Geraldton Port • Submitted tenders increase capex from $85 mill to $100 mill • GPA rail u
Mount Gibson Iron — Investor Presentation (April 2008) on 6ix