Energy Resources Of Australia Ltd. Class A · ASX:ERA
Energy Resources Of Australia Ltd. Class A — H1 2012 Earnings Presentation
19 slides from Energy Resources Of Australia Ltd. Class A's earnings presentation, Jul 26, 2012
Slide 1: 2012 Half Year Results
Presentation to the Financial Community For personal use only 2012 Half Year Results Rob Atkinson – Chief Executive Steeve Thibeault – Chief Financial Officer 1
Slide 2: Acknowledge Traditional Owners
Acknowledge Traditional Owners For personal use only • The mining operations of Energy Resources of Australia Ltd (ERA) are located on Aboriginal land and are surrounded by, but separate from, Kakadu National Park • ERA respectfully acknowledges the Mirarr, Traditional Owners of the land on which th
Slide 3: Forward-looking statement
Forward-looking statement • This presentation has been prepared by Energy Resources of Australia Ltd (“ERA”) and consists of the slides for a presentation concerning ERA. By For personal use only reviewing/attending this presentation you agree to be bound by the following conditions. Forward-looking
Slide 4: Agenda
Agenda • Safety For personal use only • People • Operational performance • Financial overview • Mining • Ranger 3 Deeps • Brine Concentrator • Exploration • Relationship with Traditional Owners • Market update • Summary 4
Slide 5: Safety performance
Safety performance • ERA has maintained a strong focus on safety and achieved an All Injury Frequency Rate of 0.65 For personal use only year to date • Three recordable injuries have occurred in the first half of 2012 • These three recordable injuries consisted of two Lost Time Injuries (a sprained
Slide 6: Our people
Our people • ERA is a major employer in the For personal use only West Arnhem region, and one of 120 the leading employers of 103 Indigenous employment 98 Indigenous people in the Northern 99 100 Territory 83 81 80 • As at 26 July 2012, ERA has approximately 600 full time Number 54 60 employee posit
Slide 7: Operational performance
Operational performance For personal use only H1 2012 H1 2011 Change Total material mined (million tonnes) 5.2 4.2 + 24% Ore mined (million tonnes) 0.6 0.2 + 190% Ore milled (million tonnes) 1.3 0.3 + 393% Average mill head grade (%) 0.11 0.21 - 48% Mill recovery (%) 86.4 87.9 - 2% Production drumme
Slide 8: Financial overview
Financial overview For personal use only H1 2012 H1 2011 Change Net profit/(loss) after tax - $ million (59.9) (121.7) + 51% Revenue from sales of uranium oxide - $ million 148.0 235.6 - 37% Net cash flow - $ million (69.8) (2.6) - 2,585% Underlying earnings - $ million (51.5) (22.3) - 131% Capital
Slide 9: Average realised sales price (US$/lb)
Average realised sales price (US$/Ib) For personal use only 70 FY 2011 $59.32 60 FY 2009 $60.82 FY 2010 $58.50 $57.57 $50.84 50 $48.16 $52.84 $48.02 $50.19 $44.79 40 US$/lb 30 20 10 0 2009 H1 2009 H2 2010 H1 2010 H2 2011 H1 2011 H2 2012 H1 9
Slide 10: 2012 half year earnings
2012 half year earnings For personal use only 88 3 8 (10) -10 100 (22) (6) (2) (51) (52) -50 (6) (60) A$ Million (8) (122) -90 (54) -130 2011 Inventory 2011 Sales FX on Sales Changes Purchased Raw Employee Depreciation Tax H1 2012 Inventory 2012 2011 H1 Earning w/down Underlying Price Sales Volume i
Slide 11: Key financial elements
Key financial elements • Non-cash costs For personal use only – In 2012, ERA’s non-cash costs have increased due to – • Property, plant and equipment net value of $741 million as at 31 December 2011 (including rehabilitation asset) • Allocation to Profit and Loss Statement based on reserves of 13,48
Slide 12: Pit as at July 2012
Pit 3 as at 23 July 2012 For personal use only Average grade of in-situ ore reserves is 0.19% (6,530t U3O8) applying a cut-off grade of 0.08% (Source: Ranger Ore Reserves and Mineral Resources Statement as at 31 December 2011) 12
Slide 13: Stockpile mining
Stockpile mining For personal use only • H1 2012 production from stocks and pit • 1,244 tonnes of U3O8 produced in H1 2012 (average mill head grade of 0.11% U308) Waste • Average grade of all stockpiled ore reserves is 0.12% U3 O 8 Ore • Post completion of pit all U3O8 production will come from stoc
Slide 14: Ranger Deeps exploration decline on schedule
Ranger 3 Deeps exploration decline on schedule For personal use only Ranger 3 Deeps Date Indicative milestones to production Regulatory approval for exploration September 2011 decline granted Commenced box cut excavation 1 May 2012 Decline tunnel construction November commences 20121 Exploration dri
Slide 15: Brine Concentrator on schedule and budget
Brine Concentrator on schedule and budget • ERA Board approved project on 1 February 2012 with For personal use only estimated expenditure of $220 million • The Brine Concentrator is being provided by HPD LLC, a subsidiary of Veolia Water Solutions and Technologies • Strong relationship continues be
Slide 16: Exploration update
Exploration update For personal use only • Exploration drilling since April 2012 Ranger 19 – 14 holes drilled totalling 7,300 metres – Drilling concentrated at Anomaly 4, Anomaly 8 and south east Ranger 3 Deeps R19PD52 – Drilling commenced in areas north of the Magela Creek in late June Ranger 18 E
Slide 17: Relationship with Traditional Owners
Relationship with Traditional Owners • ERA recognises that the support of Traditional Owners is critically important to future projects For personal use only and successful rehabilitation • Gundjeihmi Aboriginal Corporation (GAC) and ERA are collaborating on matters of mutual interest: – GAC was rec
Slide 18: Long term market outlook encouraging
Long term market outlook encouraging • Near term market will be challenging For personal use only – Japan’s slow recovery is expected to keep market quiet in the near term: • Two reactors operating at present time, however limited restarts may occur in near future • It appears unlikely that Japan wi
Slide 19: Summary
Summary • Continued strong safety performance For personal use only • Net loss after tax of $59.9 million for first half of 2012 • No interim dividend • Pit 3 has been fully dewatered earlier than expected and mining of Pit 3 on target to be completed by the end of 2012 • Continued strong plant perf
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