Coronado Global Resources Inc. · ASX:CRN
Coronado Global Resources — Investor Presentation (August 2020)
54 slides from Coronado Global Resources's investor presentation, Aug 18, 2020
Slide 1: Coronado Global Resources Inc. Equity Raising Presentation
For personal use only Coronado Global Resources Inc. Equity Raising Presentation 18 August 2020 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 18 August 2020 and has been prepared by Coronado Global Resources Inc. ARBN 628 199 468 (Coronado or the Company). prevent any New CDIs from being sold on ASX during the Distribution Compliance Period to persons that
Slide 3: Important Notices and Disclaimer (cont.)
Important Notices and Disclaimer (cont.) 2019 JORC Resource and Reserve Statements You acknowledge and agree that determination of eligibility of investors for the purposes of the Offer is determined by reference to a number of matters, including legal requirements and the discretion of Coronado and
Slide 4: Table of Contents
Table of Contents For personal use only 1. Half Year Results Recap 6 2. Response to the Current Environment 11 3. Equity Raising Overview 16 4. Well Positioned for Recovery in Met Coal Prices 19 Appendices A. Risk Factors 24 B. International Offer Restrictions 36 C. Regulation S Restrictions 39 D. R
Slide 5: Half Year Results Recap
For personal use only Section 1 Half Year Results Recap 5 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 6: HY20 Highlights
HY20 Highlights(a) Financial performance For personal use only • Reported HY20 Net Loss after Tax of $123.2 million, down $337.5 million (157.5%) compared to HY19 • Adjusted EBITDAb of $34.9m, down 91.4% compared to HY19 of $405.4 million • Group mining cost of $57.3 per tonne, 11.5% increase than H
Slide 7: HY20 Highlights (Cont.)
HY20 Highlights (Cont.) For personal use only Distributions • No distributions have been declared for HY20 Corporate • In May 2020 the Company concluded an agreement with lenders of the Syndicated Facility Agreement (SFA) to waive the compliance with financial covenants until February 2021 (refer pa
Slide 8: HY20 financial metrics
HY20 financial metrics Financial metrics were significantly impacted by the COVID-19 economic downturn For personal use only HY19 HY20 Variance Production 10.4Mt 8.0Mt 2.4Mt Production adversely impacted by temporary suspension In January 2020 at the Australian operations and Sales Volumes 10.4Mt 8.
Slide 9: Segment performance
Segment performance HY20 EBITDAa performance For personal use only Australian Operations US Operations Australia Buchanan Logan Operations US Greenbrier 500 EBITDA (US$m): 500 Curragh 271.7 250 250 151.6 41.7 6.3 0 0 HY19 HY20 HY19 HY20 EBITDA Margin 1.32% 17.4% (%): • EBITDA for the HY20 was $6.3 m
Slide 10: Response to the Current Environment
For personal use only Section 2 Response to the Current Environment Roadshow presentation 10 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 11: Managing the Downturn: Implemented and New Initiatives
Legend: Implemented Initiatives Managing the Downturn New Initiatives Potential Future Initiatives COVID-19 Safety Protocols Restart US Operations 2020 Capex Review For personal use only Preventative measures Buchanan and Logan resumed 2020 capex reduced by 40% from implemented across all mines in o
Slide 12: Impact of Equity Raising
Impact of Equity Raising Provide additional liquidity, improve credit metrics and increase free float For personal use only Indicative US$ million Current Impact of Offer(1) Sources(1) A$m US$m(4) Pro forma Facility limit to Liquidity Cash, Excluding Restricted Cash 36(2) 36 reduce in three steps Pr
Slide 13: Bank Waiver Update
Bank Waiver Update Strong support from SFA lending syndicate, as evidenced by the two waivers obtained since May 2020 For personal use only Successfully concluded an agreement with the SFA lending syndicate in May 2020 to SFA Facility Limit (US$ million)(1) waive compliance with financial covenant
Slide 14: Operational & Financial Levers Available in a Sustained Downside Price Environment
Operational & Financial Levers Available in a Sustained Downside Price Environment In the event of a sustained low price environment, Coronado has flexibility to reduce its operating and For personal use only capital expenditure costs as well as alternative initiatives to support liquidity • Reduce
Slide 15: Equity Raising Overview
For personal use only Section 3 Equity Raising Overview Roadshow presentation 15 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 16: Equity Raising Terms
Equity Raising Terms A$250 / US$180 Million Fully Underwritten(1) Placement + Entitlement Offer For personal use only • Fully underwritten(1) placement to institutional investors (including institutional securityholders) to raise A$145 million / US$104 million (“Placement”)(2); and Offer Size and •
Slide 17: Equity Raising Timetable
Equity Raising Timetable Event Date(1) For personal use only Announcement of Equity Raising Tuesday, 18 August 2020 Placement and Institutional Entitlement Offer opens Tuesday, 18 August 2020 Placement and Institutional Entitlement Offer closes Tuesday, 18 August 2020 Announcement of results of Plac
Slide 18: Well Positioned for Recovery in Met Coal Prices
For personal use only Section 4 Well Positioned for Recovery in Met Coal Prices Roadshow presentation 18 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 19: Coronado is the World's Leading Metallurgical Coal Producer
Coronado is the World’s Leading Metallurgical Coal Producer For personal use only One of the Largest Metallurgical Coal Producers Globally Leading ASX-listed metallurgical coal producer with a diversified portfolio of world-class assets globally 70 40 2019 Saleable Metallurgical Coal Production(1)
Slide 20: Strong Historical Performance
Strong Historical Performance Saleable Coal Production (Mt)(1) Adj. EBITDA (US$ million)(1)(3) For personal use only HCC Bench- 207 178 mark Price (US$/t) 20.2 20.2 599 634 FY18 FY19 FY18 FY19 Capital Expenditures (US$ million)(2) Group Mining Cost (US$/t of Saleable Coal Production)(1) 183 56.4 51.
Slide 21: Positive Metallurgical Coal Outlook
Positive Metallurgical Coal Outlook A V-shape recovery is V-shaped Recovery for Indian Steel Production by 2021 Seaborne Metallurgical Coal Demand For personal use only expected for the steel industry in India by 2021 Mt 450 Long term metallurgical 12 90% 400 coal demand expected to 350 grow 1.1
Slide 22: Significant EBITDA Generation when Coal Prices Recover
Significant EBITDA Generation when Coal Prices Recover A $10/t HCC benchmark price uplift can result in an increase in EBITDA by ~$100 million(1) For personal use only Current metallurgical coal Historical Metallurgical Coal Benchmark Prices price level has seen a major Platts Premium LV HCC Price
Slide 23: 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 24: 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 1.2 Volatility of coal prices constitute an exhaustive list of all risks involved with an investment in Coronado.
Slide 25: Risk Factors (cont.)
Risk Factors (cont.) 1.4 Operational risk means that: Coronado's mining operations, including exploration, development, preparation, product handling and accessing transport infrastructure, may be affected by various operational o Coronado does not bear the credit risk of international customers ass
Slide 26: Risk Factors (cont.)
Risk Factors (cont.) 1.7 Contract, counterparty and collection risk selling the coal are determined on a mine by mine basis, and as a result, the price at which Coronado's coal is economically recoverable varies based on the mine. Coronado bases its reserve information on geologic data, coal ownersh
Slide 27: Risk Factors (cont.)
Risk Factors (cont.) 1.12 Take or pay arrangements within the coal industry because of unfamiliarity with new assets and the businesses associated with them and new geographic areas; the diversion of management’s attention from other operations; and timing, and whether the acquisition or business ex
Slide 28: Risk Factors (cont.)
Risk Factors (cont.) 1.17 Title and leasehold risk approvals that Coronado must obtain and maintain include mine development approvals, environmental permits and, in Australia, tenure and approvals relating to native title and indigenous cultural heritage. In addition, Coronado's operations depend o
Slide 29: Risk Factors (cont.)
Risk Factors (cont.) 1.23 Impact on the environment or exposure to hazardous substances the Queensland State Government. Coronado is subject to extensive environmental laws and regulations, and its operations may substantially impact the environment or cause exposure to hazardous materials to its In
Slide 30: Risk Factors (cont.)
Risk Factors (cont.) 1.28 Decreases in demand for coal fired electricity and changes in thermal coal consumption patterns adverse effect on Coronado's reputation, financial condition and results of operations. In addition to metallurgical coal, the Australian Operations and U.S. Operations produce s
Slide 31: Risk Factors (cont.)
Risk Factors (cont.) 1.35 Cybersecurity attacks, natural disasters, terrorist attacks and other similar crises or disruptions below the cost to Curragh of mining and processing the coal, Curragh pays certain rebates to Stanwell on metallurgical coal exported from certain parts of Curragh, which repr
Slide 32: Risk Factors (cont.)
Risk Factors (cont.) 1.43 Financial covenants under debt agreements and debt obligations U.S. Operations, which, in turn, could lead to a decline in its production and could adversely affect Coronado's business, financial condition and results of operations. Coronado is subject to various financial
Slide 33: Risk Factors (cont.)
Risk Factors (cont.) 1.50 Impact of being a public company in the United States and Australia employee director solely in his or her capacity as Coronado's director), that non-employee director will have no duty to communicate or offer that opportunity to Coronado, and will be permitted to communica
Slide 34: Risk Factors (cont.)
Risk Factors (cont.) 2 Risks relating to the Offer 3.2 Dividends 2.1 Equity raising and underwriting risk The payment of dividends in respect of Coronado's CDIs is impacted by several factors, including Coronado's profitability, retained earnings, capital requirements and free cash flow. Any future
Slide 35: 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 36: International Offer Restrictions
International Offer Restrictions This document does not constitute an offer of Chess Depositary Interests ("CDIs") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may This document has not been, and will not be, registered with or approved by any securi
Slide 37: International Offer Restrictions (cont.)
International Offer Restrictions (cont.) Switzerland The CDIs may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange or on any other stock exchange or regulated trading facility in Switzerland. For personal use only Neither this document nor any other offering or
Slide 38: 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 39: 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 40: 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 41: Regulation S Category Restrictions (cont.)
Regulation S Category 3 Restrictions (cont.) Off-Market Transfers in the Secondary Market • it will be the sole registered and beneficial owner of the Shares that it intends to acquire; New CDIs • if it is outside the United States, it is not a US Person and is not acting for the account or benefit
Slide 42: 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 43: 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) which are financial measures not recognised in accordance with U.S. GAAP. Non-GAAP financial measures are used by the Compan
Slide 44: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures Consolidated Balance Sheet December 31, Consolidated Balance Sheet December 31, June 30, 2020 June 30, 2020 (US$ Thousands) 2019 (US$ Thousands) 2019 For personal use only Assets Liabilities Current assets: Current liabilities: Cash and restricted cash 36,324 26,5
Slide 45: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures For personal use only Consolidated Income Statement June 30, 2020 June 30, 2019 (US$ Thousands) Coal revenues 605,699 919,329 Coal revenues from related parties 89,118 293,158 Other revenues 18,849 21,848 Total revenues 713,666 1,234,335 Cost of coal revenues 481,
Slide 46: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures Consolidated Statement of Cash Flows June 30 June 30, (US$ Thousands) 2020 2019 For personal use only Cash Flows From Operating Activities: Consolidated Statement of Cash Flows June 30 June 30, Net income (123,196) 214,326 (US$ Thousands) 2020 2019 Adjustments to
Slide 47: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures For personal use only Adjusted EBITDA reconciliation June 30, 2020 June 30, 2019 Mining Costs per tonne reconciliation June 30, 2020 June 30, 2019 (US$ Thousands) (US$ Thousands) Net Income (123,196) 214,326 Total costs and expenses 765,303 914,744 Add: Depreciati
Slide 48: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures Realised Pricing reconciliation For personal use only Australian June 30, 2020 Operations U.S. Operations Consolidated (US$ Thousands, except for volume data) Total Revenues 473,555 240,111 713,666 Less: Other revenues 15,074 3,775 18,849 Total coal revenues 458,4
Slide 49: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures For personal use only Mining Costs per tonne reconciliation Other / June 30, 2020 Australia United States Corporate Total (US$ Thousands, except for volume data) Total costs and expenses 506,686 244,891 13,726 765,303 Less: Selling, general and administrative expe
Slide 50: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures For personal use only Mining Costs per tonne reconciliation Other / June 30, 2019 Australia United States Corporate Total (US$ Thousands, except for volume data) Total costs and expenses 564,658 331,930 18,156 914,744 Less: Selling, general and administrative expe
Slide 51: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures For the year ended For the year ended For the year ended For the year ended Adjusted EBITDA reconciliation December 31, December 31, Mining Costs per tonne reconciliation December 31, December 31, For personal use only 2019 2018 2019 2018 (US$ Thousands) Pro forma
Slide 52: Appendix E: Board of Directors
For personal use only Appendix E Board of Directors NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 53: Directors of Coronado Global Resources Inc.
Directors of Coronado Global Resources Inc. For personal use only Mr William (Bill) Koeck Mr Garold (Gerry) Spindler Mr Philip Christensen Mr Greg Pritchard Independent Non-Executive Director and Managing Director and Chief Executive Independent Non-Executive Director Independent Non-Executive Direc
Slide 54: Contacts
Contacts: Investors: Investors: Media: For personal use only Matt Sullivan Aidan Meka Brett Clegg P: +61 412 157 276 P: +61 428 082 954 P: +61 487 436 985 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
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