Coronado Global Resources Inc. · ASX:CRN
Coronado Global Resources — Investor Day (September 2019)
52 slides from Coronado Global Resources's investor day presentation, Sep 16, 2019
Slide 1: Coronado Global Resources Inc. Investor Day
For personal use only Coronado Global Resources Inc. Investor Day (All units in USD, unless otherwise noted) 16 September 2019
Slide 2: Disclaimer
Disclaimer The material contained in this presentation is intended to be general background information on Coronado Global Resources (Coronado) and its activities. The information is supplied in summary form and is therefore not necessarily complete. It is not intended that it be relied upon as advi
Slide 3: Agenda
For personal use only Gerry Spindler Agenda Company Overview Managing Director & CEO Jim Campbell Operational Highlights President & Chief Operating Officer Tim Peirce Market Update Vice President Sales and Marketing Johan Ballot New Curragh Mine Plan Vice President Australia Operations Ayten Sarida
Slide 4: Company Overview
For personal use only Company Overview Gerry Spindler Managing Director & Chief Executive Officer HY19 Results Presentation 4
Slide 5: Company overview
Company overview Safety For personal use only • Safety metrics continued to outperform national industry averages with Australian rolling 12-month TRIFR of 5.46 and US rolling 12-month TRIR of 1.65 Achievements to date • The Curragh acquisition in March 2018 positioned Coronado as the largest dedica
Slide 6: Company overview – (cont'd)
Company overview – (cont’d) Curragh Mine Plan targets 15Mt of saleable production by 2023 For personal use only • New Curragh mine plan provides additional 6Mt of saleable production above prospectus forecast period • Plan includes incremental growth from Stanwell Reserved Area and accelerated growt
Slide 7: World class portfolio of met coal assets
World class portfolio of met coal assets For personal use only Production 20.2Mt AUGUST 2011 Coronado DECEMBER APRIL 2013 MARCH 2016 2014 MARCH 2018 founded by Acquired Acquired Acquired Logan Acquired Curragh Garold Spindler Greenbrier from Buchanan from from Cliffs Natural from Wesfarmers and Jame
Slide 8: Reserves & Resources (Mt)
Reserves & Resources (Mt) Long life assets with significant Reserves & Resources supports strong growth outlook For personal use only Reserves and Resources (Mt) as 31 December 2018a 3,000 1,200 2,524 2,500 957 1,000 2,000 800 1,500 513 600 493 1,084 1,000 311 400 251 220 177 201 180 500 155 200 60
Slide 9: Key strategic drivers
Key strategic drivers Growth through the incremental tonne, product optimisation, new project development and acquisitions For personal use only • Operational scale to deliver sustainable incremental production growth • Leverage existing capital employed to improve operation efficiency and Asset Opt
Slide 10: Competitive Reserves (Mt) position
Competitive Reserves (Mt) position Among the largest Marketable Reserves base of all metallurgical coal producers globally Marketable Reserves (a),(b),(c) For personal use only 3,000 2,445 2,500 2,000 1,500 1,000 711 647 500 400 248 222 183 108 105 0 BMA Contura Anglo Peabody Warrior Glencore Arch Y
Slide 11: Segment performance
Segment performance $405.4 million Group EBITDA underpinned by strong performance at Curragh and Buchanan For personal use only Curragh Buchanan Buchanan Logan Logan Greenbrier Greenbrier 300 300 300.0 EBITDA (US$m): 300 271.7 Curragh 164.8 150 150 150 150.0 116.4 99.7 35.3 15.5 1 0 0 0 0.0 HY18 HY1
Slide 12: Competitive cost structure
Competitive cost structure Low operating cost base supports profitability throughout the commodity cycle Australian Operations Cost (FOB $/t)a For personal use only 200 Low operating cost asset base targets profitability throughout the 150 commodity cycle Anglo Curragh BMA 100 US$78.7 US$81.8 US$84.
Slide 13: Operational Highlights
For personal use only OPERATIONAL HIGHLIGHTS Jim Campbell President & Chief Operating Officer HY19 Results Presentation 13
Slide 14: Safety performance
Safety performance Continued vigilance to ensure we maintain our strong safety performance For personal use only Australian Operations (TRIFR)a US Operations (TRIR)b 12.0 3.50 3.00 10.0 2.50 8.0 2.00 6.0 1.50 4.0 1.00 2.0 0.50 0.0 0.00 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 J
Slide 15: Safety interactions and awards
Safety interactions and awards For personal use only • Safety Metrics continued to outperform national industry averages with Australian rolling 12-month TRIFR of 5.46 and US rolling 12-month TRIR of 1.65 • Buchanan operations recorded 1 million man hours without a lost time incident. • Buchanan rec
Slide 16: Curragh operations
Curragh operations Improved operating base provides a solid platform for growth For personal use only 12 Month Operational Focus • Implementing the new Thiess Contract • Increased dragline efficiency by ~16% through incremental improvements • Reduce coal mining loss & dilution to increase ROM • Impr
Slide 17: US operations
US operations New sources of production at Logan improve metallurgical coal product mix For personal use only 12 Month Operational Focus • Buchanan delivered production of 2.4Mt to June 2019 despite challenging mining conditions • Logan mine reconfiguration resulted in two new production sources of
Slide 18: Marketing: US operations
Marketing: US operations Full suite of metallurgical coals that meets blend requirements of steel producers domestic and internationally For personal use only US Operations Marketing Contract Type Volume Nature Duration Price reset Price Reference Comment Seaborne Fixed Spot/Term Single shipment / B
Slide 19: Blending capabilities improve quality and increase margin
Blending capabilities improve quality and increase margin Curragh US Operations For personal use only • Flexibility to blend product with • Improving quality by existing feed and infrastructure blending the Logan county to meet market demand and products maximise margin • Capacity to co-blend at sit
Slide 20: PSF Development
PSF Development Strategically located development opportunity providing access to high quality metallurgical coal For personal use only Reserves/Resources Reserves – 147.2 Mt, Resources – 493.1 Mt General Location Map Reserve Life – 65 years Production Capacity +2.25 Mt per year Coal Quality High-Vo
Slide 21: MDL development project
MDL 162 development project • MDL 162 is a 100%-owned development project situated For personal use only between and adjacent to Curragh East Mining Area and Curragh North Mining Area Overview • The project is expected to produce coal products suitable for export markets • The arrangement with Stanw
Slide 22: Other development opportunities
Other development opportunities For personal use only • Russell County is a greenfield project located near Buchanan • Coronado acquired the asset through its acquisition of Buchanan in March 2016 • Land is 11% owned and 89% leased Russell • Capable of potentially producing over 1.5Mt per year of hi
Slide 23: Market Update
For personal use only MARKET UPDATE Tim Peirce Vice President Sales and Marketing HY19 Results Presentation 23
Slide 24: Metallurgical coal market fundamentals
Metallurgical coal market fundamentals The seaborne metallurgical coal market continues to be impacted by external forces Seaborne Price (US$/t)a Key Market Points For personal use only 350 Demand for seaborne metallurgical Resulting in cuts to steel production coal has been impacted by a globally 3
Slide 25: Marketing: Australian operations
Marketing: Australian operations Over 30 years of supplying high quality metallurgical coal to tier one steel mills globally For personal use only Australian Operations Marketing Australian Infrastructure Contract Type Volume Nature Duration Price reset Price Reference Seaborne Fixed Term Variable u
Slide 26: Market outlook – supply and demand
Market outlook – supply and demand(a) 300 HCC supply and seaborne demand (Mt) For personal use only 250 Mt 200 150 100 50 0 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 Operating Project need Demand Source: Wood Mackenzie, *Operating mines include a disruption allowance of 5.6% on our base
Slide 27: New Curragh Mine Plan
For personal use only NEW CURRAGH MINE PLAN Johan Ballot Vice President Operations Australia HY19 Results Presentation 27
Slide 28: Curragh operational review
Curragh operational review Coronado has unlocked significant value at Curragh since acquisition For personal use only • Asset significantly de-risked and enhanced since acquisition Attractive and • Improved valuation supported by recent comparative met coal asset well timed transactions acquisition
Slide 29: World class operations at Curragh
World class operations at Curragh Ultra-scale equipment underpinned open-cut strip mining at Curragh For personal use only One Bucyrus 749HR Electric Curragh Mine has four electric Rope Shovel, accompanied by a Two CHPPs provide extensive draglines, one being amongst 35 km of strike length across fl
Slide 30: New Curragh mine plan targeting 15Mt of production by 2023
New Curragh mine plan targeting 15Mt of production by 2023 • Integrate the SRA into the new mine plan which underpins continuation of production utilising current installed infrastructure. For personal use only • The SRA provides access to Pisces coal in the “T” Pit which has significantly better me
Slide 31: Infrastructure overview
Infrastructure overview Supply chain infrastructure requirements developed to support increase in production For personal use only Mining Processing Transport Port Optimised mine plan to Reliability initiatives: Total Coronado in is advanced stages Agreed a Substitute Shipper integrate the SRA into
Slide 32: Saleable production uplift
Saleable production uplift Deliver an additional 6.0Mt over the forecast period For personal use only Estimated Production Profile (Mt)a The expansion is set to deliver 16 an additional 6.0Mt from FY20 15.0 to FY23 14.8 14.3 14 2.1 13.5 1.9 1.4 12.9 0.6 12.1 Growth in production is a result 12 of de
Slide 33: Incremental tonne drives lower cost profile
Incremental tonne drives lower cost profile New mine plan has potential to deliver ~10% reduction in FOB costs over the forecast period and increasing margins For personal use only Estimated FOB Cost Profile (US$/t)a 100 Sustainable production supply $82 - $92 $78 - $89 profiting from a unique cost
Slide 34: Investment in accelerated growth plan
Investment in accelerated growth plan Capex fully funded from operating cash flows For personal use only Estimated Capex Profile (US$m) Annual Capex profile (US$m) $117m - $147m $131m - $163m $47m - $60m $57m - $72m 70 66 64 62 60 58 53 21% 50 46 40 4 Year Capex profile 55% 30 24% 20 10 0 Sustaining
Slide 35: Capital Management
For personal use only CAPITAL MANAGEMENT Ayten Saridas Group Chief Financial Officer Merger Analysis 35
Slide 36: HY19 financial highlights
HY19 financial highlights Improved operating performance drives better product mix and robust financial performance For personal use only HY18 HY19 Variance Production 10.2Mt 10.4Mt 0.2Mt Sales Volumes increase driven by operational improvements Sales Volumes 9.9Mt 10.4Mt 0.5Mt and enhanced rail ava
Slide 37: Cash flows and Balance Sheet
Cash flows and Balance Sheet Strong cash flows drive robust balance sheet and capacity to support strategic initiatives For personal use only 300 Liquidity Operating Cash Flow (US$m) Use of Debt Proceeds Dividend Funding Repayment of Analysis 350 (US$m) (US$m) Liabilities (US$m) (US$m) 10.6 300 125
Slide 38: Capital management
Capital management Strong operating performance and balance sheet underpins shareholder returns Dividend & Capital Return Profile Total Investment Returna For personal use only 40% Operating cash flow • Fully franked interim dividend of $0.112 per CDI ($108.3 million) • Low capital investment requir
Slide 39: Outlook
For personal use only OUTLOOK Gerry Spindler Managing Director & Chief Executive Officer
Slide 40: Low cost, competitive expansion options
Low cost, competitive expansion options Expansion options are highly compelling on installed capacity basis For personal use only Capital Cost per Installed Capacity (US$/t)a 250 221 200 153 150 130 Pangburn-Shaner-Fallowfield ~110 - 150 100 Curragh ~5050 - 55 45 50 0 Warrior Riversdale Arch PSF Cur
Slide 41: Valuation comparison
Valuation comparisona Despite superior shareholder returns Coronado’s valuation has lagged sector peers For personal use only Dividend EV/EBITDA EV/EBITDA Yield (%) FY19 (x) FY20 (x) Gearing (x) Coronado 42.3% Coronado 2.4 Coronado 2.9 Coronado 0.0 Whitehaven 15.2% Whitehaven 4.5 Whitehaven 5.8 Whit
Slide 42: Focused on delivering key promises
Focused on delivering key promises Since listing, Coronado has exceeded all operational and corporate targets Stock Price (A$ per CDI) For personal use only Coronado Initial 4.00 Q2 FY19 Public Offering FY18 Quarterly Report Results Announcement 3.75 Index Inclusion Index Inclusion MSCI Australian F
Slide 43: Financial flexibility to navigate commodity cycles
Financial flexibility to navigate commodity cycles Flexibility to manage capital through all stages of the commodity cycle enables Coronado to take advantage of opportunities For personal use only Shareholder return opportunities Funding development Capital preservation to expenditure to facilitate
Slide 44: Thank You
For personal use only THANK YOU
Slide 45: Supplementary Information
For personal use only Supplementary Information HY19 Results Presentation 45
Slide 46: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures This report which includes a discussion of results of operations includes references to and analysis of certain non-GAAP measures as described below which are For personal use only financial measures not recognised in accordance with U.S. GAAP. Non-GAAP financial
Slide 47: Income Statement Reconciliation of underlying net income
Income Statement Reconciliation of underlying net income For six Months For six Months For six Months For six Months For six Months (US$ Thousands) Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, (in US$’000) For personal use only 2019 2018 2018 2019 2018 Pro forma Pro for
Slide 48: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation For personal use only For six Months Ended December 31, 2018 For six Months Ended (in US$’000) June 30, 2019 Proforma June 30, 2018 Pro forma Net Income 214,326 168,926 111,178 Add: Depreciation, depletion and amortization 85,279 184,351 86,636 Add: Interest expense (n
Slide 49: Operating and Mining costs per tonne reconciliations
Operating and Mining costs per tonne reconciliations for the six months ended June 30, 2019 For personal use only Australian U.S. Other/ Total in US$’000, except for volume data Operations Operations Corporat e Total costs and expenses 564,658 331,930 18,156 914,744 Less: Selling, general and admini
Slide 50: Proforma Operating and Mining costs per tonne reconciliations
Proforma Operating and Mining costs per tonne reconciliations For personal use only For six Months Ended For twelve months ended June 30, 2018 December 31, 2018 In US$’000, except for volume data Pro forma Pro forma Total costs and expenses 942,885 1,888,051 Less: Selling, general and administrative
Slide 51: Mining costs per tonne reconciliation by geographic region
Mining costs per tonne reconciliation for the three months ended June 30, 2019 by geographic region Australian U.S. Other / Total operations Operations Corporate In US$’000, except for volume data For personal use only Total costs and expenses 283,948 172,844 9,050 465,842 Less: Selling, general and
Slide 52: Contacts
Contacts For personal use only Corporate: Ayten Saridas Group Chief Financial Officer t +61 437 565 833 Aidan Meka m +61 428 082 954 ameka@coronadoglobal.com.au EEwart@coronadoglobal.com.au Investor Presentation 52
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