St. Barbara Ltd. · ASX:SBM
St. Barbara — Merger or Acquisition (May 2019)
66 slides from St. Barbara's merger presentation, May 15, 2019
Slide 1: Presentation on acquisition of Atlantic Gold Corporation and equity raising
ASX Release / 15 May 2019 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Presentation on acquisition of Atlantic Gold Corporation and equity raising Bob Vassie, Managing Director & Chief Executive Officer, will brief analysts and investors at 10:00 am AEST (GMT + 10:00) today on the acquisitio
Slide 2: Acquisition of Atlantic Gold Corporation and Equity Raising
BOB VASSIE, MANAGING DIRECTOR & CEO / 15 May 2019 ASX: SBM Acquisition of Atlantic Gold Corporation and Equity Raising NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 3: Important Notices and Disclaimer
Important Notices and Disclaimer This investor presentation (Presentation) has been prepared by St Barbara Limited (ACN 009 165 066) (St Barbara or the Company). This Presentation has been prepared in relation to an underwritten pro-rata accelerated non-renounceable entitlement offer of new St Barba
Slide 4: Important Notices and Disclaimer
Important Notices and Disclaimer Financial data: This Presentation contains pro forma financial information. The pro forma financial information and past information provided in this Presentation is for illustrative purposes only and is not represented as being indicative of St Barbara's views on it
Slide 5: Important Notices and Disclaimer
Important Notices and Disclaimer Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current m
Slide 6: Important Notices and Disclaimer
Important Notices and Disclaimer Notes: Financial year is 1 July to 30 June, e.g. FY19 = 1 July 2018 to 30 June 2019. Calendar year is 1 January to 31 December, e.g. CY18 = 1 January 2018 to 31 December 2018. Q1 Sep FY19 = quarter to 30 Sep 2018 Q3 Mar FY19 = quarter to 31 Mar 2019 Q2 Dec FY19 = qua
Slide 7: Contents
Contents Transaction Summary 6 Overview of Atlantic Gold 13 Strategic Rationale 21 Financial Overview 28 Entitlement Offer Details 33 Confirmation of Guidance 36 Appendices 38 Key Risks 49 International Offer Restrictions 58 5/ Acquisition of Atlantic Gold Corporation and Equity Raising NOT FOR DIST
Slide 8: Transaction Summary
Section 1 Transaction Summary NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 9: Acquisition of Atlantic Gold – Key Points
Acquisition of Atlantic Gold – Key Points Acquisition of Atlantic Gold Corporation ("Atlantic") achieves each of St Barbara's five strategy criteria Diversifies production with a low cost, long life mine; plus a quality growth pipeline Atlantic's team has an excellent track record of project d
Slide 10: Transformational Acquisition, Consistent with our Strategy
Transformational Acquisition, Consistent with our Strategy – "Stronger for Longer" • Substantial, low cost production from an established mining jurisdiction Diversify production base • CY19 forecast production of 92 – 98 koz at an AISC of C$695 – 755/oz (A$740 – 803/oz)1, with pathway to 200+ koz
Slide 11: Acquisition of Atlantic – Transaction Summary
Acquisition of Atlantic – Transaction Summary • St Barbara will acquire 100% of outstanding shares of Atlantic via a Canadian Plan of Arrangement1 • All cash consideration of C$2.90 per share and C$35 M (A$37 M) to acquire all outstanding options • In aggregate values equity at C$722 M (A$768 M)2 wi
Slide 12: Acquisition of Atlantic Adds a Low Cost Producer
Acquisition of Atlantic Adds a Low Cost Producer with Expansion Pipeline and Exploration Potential Key statistics Acquiring a great team of talented people who deliver CY18 production 91 koz Moose River is a high quality producing asset in an CY19 production guidance 92 – 98 koz established mini
Slide 13: Transaction Delivers a “Stronger for Longer” Profile
Transaction Delivers a "Stronger for Longer" Profile Reserves (Moz) CY18 Production (koz) 5.8 • Acquisition of Atlantic will materially increase St 48% 484 23% Barbara's reserves (by 48% to 5.8 Moz) and 393 resources (by 26% to 11.5 Moz)1 3.9 • Production impact is meaningful with CY18 pro forma pro
Slide 14: Transaction Timetable
Transaction Timetable Event Date Announcement Wednesday, 15 May 2019 Trading halt Wednesday, 15 May 2019 Institutional Entitlement Offer closes Thursday, 16 May 2019 Trading halt lifted Friday, 17 May 2019 Shares recommence trading on an "ex-entitlement" basis Friday, 17 May 2019 Retail Entitlement
Slide 15: Overview of Atlantic Gold
Section 2 Overview of Atlantic Gold NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 16: Moose River Consolidated Overview
Moose River Consolidated Overview Key asset information Location in Nova Scotia • 60 km northeast of provincial capital of Halifax Location (population 400,000+) LEGEND Atlantic Gold Tenement Gold mine - • Touquoy (in production) Central processing facility • Gold deposit Deposits Beaver Dam, Fiftee
Slide 17: Moose River Consolidated Timeline and Expansion Plan
Moose River Consolidated Timeline and Expansion Plan CY19 CY20 CY21 CY22 CY23 Touquoy (63.5%)1 (Commercial production declared in March 2018) Producing Beaver Dam (100%) Environmental application Productionand currently construction planned from 2022 Production currently planned from 2022 (37km from
Slide 18: Production Profile (Phases 1 and 2)
Production Profile (Phases 1 and 2) Processing plant commissioned in October 2017 Central processing facility Completed development of Touquoy pit. Commercial production declared in March 2018 Phase 1: Production of 91 koz in CY18 Touquoy and Beaver Dam • CY19 production guidance of 92 – 98 ko
Slide 19: Reserve and Resource Development (Phase 3)
Reserve and Resource Development (Phase 3) • Scope to expand production beyond existing 12 year reserve life1 • Expansion potential across all pits, with focus in CY19 on continued infill drilling of inferred resource at Touquoy and establishing a mineral resource at 149 Deposit • Expanded reserves
Slide 20: Near Mine Exploration (Phase 4)
Near Mine Exploration (Phase 4) • Program to systematically undertake up to 100,000 m of drilling along the 45+ km Existing operations un-tested host structure around MRC in Non operating gold deposits prospective geological setting • Cochrane Hill has demonstrated robust 1 mineralisation to the eas
Slide 21: Key Operating and Financial Metrics
Key Operating and Financial Metrics Financial Operating • Atlantic declared commercial production in CY18 C$ M A$ M CY18 C$ M A$ M March 2018 at Touquoy pit Revenue 128 134 Production (koz) 91 • Profile for CY18 shows strong cash flow EBITDA 78 81 Total cash cost 50 52 generation, given the low cost
Slide 22: Strong Cost Positioning Amongst ASX and TSX-Listed Peers
Strong Cost Positioning Amongst ASX and TSX-Listed Peers 1,200 CY18 AISC (US$/oz) 1,000 800 600 400 200 - SSR Mining Eldorado Gold Endeavour Northern Star New Gold OceanaGold Pretium Atlantic Saracen B2Gold Evolution Detour Gold IAMGOLD Kinross St Barbara post-transaction St Barbara pre-transaction
Slide 23: Strategic Rationale
Section 3 Strategic Rationale NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 24: Diversifies Production Base
Diversifies Production Base St Barbara St Barbara Key operating statistics by asset pre-transaction post-transaction Gwalia Simberi Moose River 91 136 CY18 production (koz) 257 136 91 2018 production 257 257 (koz) 136 C$731/oz CY18 AISC A$849/oz A$1,118/oz (A$761/oz) FY19E production (koz)1 235 – 24
Slide 25: Delivers an Accretive Addition to Portfolio
Delivers an Accretive Addition to Portfolio Reserves and resources1 Sizeable production Low cost, high margin 2.4 Moz 254 koz CY18 realised 165% gold price 0.7 892 C$1,588/oz 1.9 Moz (A$1,652/oz) 0.5 0.8 0.6 91 koz 92 – 98 koz 0.4 0.3 761 0.5 0.5 Cochrane Hill Cochrane Hill CY18 CY19 CY24 CY18 AISC
Slide 26: Moose River is a Strong Strategic Fit within St Barbara's Growth Pipeline
Moose River is a Strong Strategic Fit within St Barbara's Growth Pipeline Exploration Feasibility Construction Production Back Creek Pinjin Australia Greater Catalyst Gwalia Metals Peel Mining 14% 18%. Aust. Tower Gwalia Gwalia Gwalia Prodigy Potash Hill GMX Extension Mine Gold Duketon Mining 10% 12
Slide 27: Atlantic Adds Material Medium Term Development Projects
Atlantic Adds Material Medium Term Development Projects Simberi Operations Tabar & Tatau Investment Exploration Port Moresby Nova Scotia, Canada New joint venture Papua New Guinea Fifteen Mile Stream Cochranes Hill Prodigy: Tanami Aust. Potash: Lake Wells Beaver Dam Duketon Touquoy Gwalia Peel: Coba
Slide 28: Talented People with Strong Operating Capability to Ensure Continued Success
Talented People with Strong Operating Capability to Ensure Continued Success • St Barbara is seeking to retain key Atlantic executives to assist with transition and intending to retain the successful Atlantic operating team to ensure continuity of Extensive international mining experience including
Slide 29: Stronger Positioning Amongst ASX-Listed Peers
Stronger Positioning Amongst ASX-Listed Peers CY18 production (koz) CY18 AISC1 (A$/oz) 1,450 776 1,380 1,322 709 1,180 1,106 1,026 533 956 943 909 869 483 393 359 336 271 156 101 OceanaGold OceanaGold Dacian Dacian Evolution Saracen Saracen Evolution transaction transaction Silver Lake Silver Lake t
Slide 30: Financial Overview
Section 4 Financial Overview NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 31: Atlantic Provides a Strong Financial Contribution to St Barbara
Atlantic Provides a Strong Financial Contribution to St Barbara Atlantic financial performance (A$ M)1 134 • Atlantic commenced production in early 2018 and delivered production of 91 koz as planned 83 81 50 53 • Atlantic generated A$81 M EBITDA and A$53 M EBIT in CY18 33 • High EBITDA margin of c.6
Slide 32: Pro Forma 31 December 2018 Balance Sheet
Pro Forma 31 December 2018 Balance Sheet A$ M, as at 31 December 2018 St Barbara Atlantic C$ M Atlantic A$ M Pro forma adjustments St Barbara post-transaction Cash and deposits1 356.7 50.3 52.3 (290.8)2 118.2 Financial assets 43.0 1.4 1.5 - 44.5 Inventory3 73.6 25.3 26.3 - 99.9 PP&E 106.1 98.8 102.7
Slide 33: Transaction Funding
Transaction Funding Sources (A$ M) Uses (A$ M) Existing cash 291 Acquisition equity 731 Equity raise 490 Atlantic options 371 Transaction costs 13 Total sources 781 Total uses 781 • Based on offer price of C$2.90 and 236.9 M outstanding shares and options worth C$35 M (A$37 M) Transaction value • At
Slide 34: Pro Forma Net Cash Position as at 31 March 2019
Pro Forma Net Cash Position as at 31 March 2019 St Barbara pre- St Barbara post- A$ M Atlantic Adjustments transaction transaction • St Barbara post-transaction would have a Atlantic debt - 1241 - 124 strong balance sheet with a cash balance of A$130 M and a net cash position of Total debt - 124 - 1
Slide 35: Entitlement Offer Details
Section 5 Entitlement Offer Details NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 36: Entitlement Offer Details
Entitlement Offer Details Offer structure • Underwritten accelerated non-renounceable entitlement offer Offer size • c.A$490 million Rights ratio • 1 for 3.1 New Shares to be issued • c.169.7 million ordinary St Barbara shares (32.3% of current issued capital) • A$2.89 per New Share representing Off
Slide 37: Equity Raising Timetable
Equity Raising Timetable Key Dates Time/Date (AEST) Trading Halt, announcement of Transaction, Entitlement Offer, Institutional Entitlement Offer opens Wednesday, 15 May 2019 Institutional Entitlement Offer closes Thursday, 16 May 2019 Announcement of results of Institutional Entitlement Offer Frida
Slide 38: Confirmation of Guidance
Section 6 Confirmation of Guidance NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 39: St Barbara is on Track to Deliver Full Year Guidance
St Barbara is on Track to Deliver Full Year Guidance Production Summary Year Q1 Sep Q2 Dec Q3 Mar Q3 YTD Guidance Consolidated FY18 FY19 FY19 FY19 FY19 FY191 St Barbara's financial year is Year to 30 June Qtr to Qtr to Qtr to 9 months to • St Barbara reaffirmed Simberi Year to 30 June 2019 1 July to
Slide 40: Appendices
Section 7 Appendices NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 41: Nova Scotia Overview
Nova Scotia Overview • Population – ~1 million • Capital city – Halifax • 2nd smallest Canadian province • Main industries – fishing, forestry, energy and tourism • Port of Halifax – All weather, deep water port Cochrane • Halifax Stanfield International Hill Airport – 25 km north of Halifax Fifteen
Slide 42: Moose River Operating Data
Moose River Operating Data Q1 March Q2 June Q3 September Q4 December Q1 March 2018 2018 2018 2018 2018 2019 2019 Guidance Tonnes milled (kt) 188 567 581 541 2,108 528 Gold head grade (g/t Au) 1.53 1.28 1.54 1.37 1.41 1.21 Recovery (%) 94.9 95.2 95.5 94.7 94.9 95.1 Gold produced (oz) 18,183 22,269 27
Slide 43: Atlantic Ore Reserves Summary
Atlantic Ore Reserves Summary per 25 March 2019 Release Tonnes (mt) Grade (g/t Au) Gold oz's ('000's) Touquoy Proven Reserves 3.36 1.10 119 Probable Reserves 7.14 1.28 295 Stockpile reserves 2.14 0.57 44 Total Proven and Probable Reserves 12.91 1.10 458 Beaver Dam Proven Reserves 3.81 1.54 188 Proba
Slide 44: Atlantic Mineral Resources Summary
Atlantic Mineral Resources Summary per 13 March 2019 Release Touquoy Beaver Dam Tonnage Grade Contained Gold Tonnage Grade Contained Gold Confidence Category (Mt) (g/t Au) (Au oz x 1,000) (Mt) (g/t Au) (Au oz x 1,000) Measured 3.4 1.14 124 5.1 1.28 209 Indicated 7.9 1.27 321 4.6 1.23 182 Total Measu
Slide 45: Hedging Summary
Hedging Summary St Barbara Volume Delivery (as at 30 April 2019) ounces Price $/oz (all monthly instalments) Announced FY19 18,000 A$1,750 February and June 2019 7 & 19 Feb 2018 and 7 Mar 2018 (82,000 of initial 100,000 ounces delivered year to date since 1 July 2018) 7 & 19 Feb 2018 FY20 50,000 A$1
Slide 46: St Barbara Ore Reserves Summary
St Barbara Ore Reserves Summary as at 30 June 2018 Proved Probable Total Tonnes Gold Ounces Tonnes Gold Ounces Tonnes Gold Ounces Project ('000) (g/t Au) ('000) ('000) (g/t Au) ('000) ('000) (g/t Au) ('000) Gwalia, (WA) 1,845 9.0 531 6,061 7.0 1,368 7,907 7.5 1,899 Tower Hill, (WA) – – – 2,572 3.7 3
Slide 47: St Barbara Mineral Resources Summary
St Barbara Mineral Resources Summary as at 30 June 2018 Measured Indicated Inferred Total Tonnes Gold Ounces Tonnes Gold Ounces Tonnes Gold Ounces Tonnes Gold Ounces Project ('000) (g/t Au) ('000) ('000) (g/t Au) ('000) ('000) (g/t Au) ('000) ('000) (g/t Au) ('000) Gwalia, (WA) 4,581 7.1 1,048 14,69
Slide 48: St Barbara Board of Directors
St Barbara Board of Directors Tim Netscher Bob Vassie Chairman – Non Executive Managing Director and CEO Appointed Director February 2014 Appointed July 2014 Appointed Chairman July 2015 Mr Vassie is a mining engineer with over 30 years' international mining industry Mr Netscher is an experienced in
Slide 49: St Barbara Executive Leadership Team
St Barbara Executive Leadership Team Bob Vassie Garth Campbell-Cowan Rowan Cole Val Madsen Managing Director and CEO Chief Financial Officer Company Secretary General Manager Human Resources and Health, Safety, Appointed 2014 Joined 2006 Joined 2010 Environment and Community Mr Vassie is a mining en
Slide 50: Competent Persons Statement
Competent Persons Statement Exploration Results The information in this presentation that relates to Exploration Results for Simberi and Pinjin is based on information compiled by Dr Roger Mustard, who is a Member of The Australasian Institute of Mining and Metallurgy. Dr Mustard is a full-time empl
Slide 51: Key Risks
Section 8 Key Risks NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 52: Key Risks
Key Risks The St Barbara Group (the Group) consists of St Barbara Limited and the entities it controls, which would extend to include Atlantic Gold Corporation (Atlantic) upon completion of the acquisition of Atlantic. There are a number of risks and factors, specific to the Group, specific to the a
Slide 53: Key Risks
Key Risks 4. Reliance on transportation facilities and infrastructure The Group depends on the availability and affordability of reliable transportation facilities and infrastructure (e.g. roads, bridges, airports, power sources and water supply) to deliver consumables to site, and final product to
Slide 54: Key Risks
Key Risks 8. Exploration and development risk Although the Group's activities are primarily directed towards mining operations and the development of mineral deposits, its activities also include the exploration for mineral deposits and the possibility of third party arrangements including joint ven
Slide 55: Key Risks
Key Risks 11. Foreign exchange The Group has an Australian dollar presentation currency for reporting purposes. However, gold is sold throughout the world based principally on the US dollar price, and most of the Group's revenues are realised in, or linked to, US dollars. The Group is also exposed t
Slide 56: Key Risks
Key Risks 17. Risk of impairment If the gold price suffers a significant decline, or the operations are not expected to meet future production levels, there may be the potential for future impairment write downs at any of the operations. The recoverability of the carrying value of the Group's assets
Slide 57: Key Risks
Key Risks The Underwriter's rights to terminate the Underwriting Agreement if certain events occur include, if: • the Plan of Arrangement is terminated or amended in any material respect without the Underwriter's consent; • ASX announced that St Barbara will be removed from the official list of ASX
Slide 58: Key Risks
Key Risks 9. Acquisition accounting St Barbara is required to undertake an assessment of fair value of the tangible and non-tangible assets acquired as well as the actual and contingent liabilities of Atlantic at the effective date of the Acquisition. Accounting standards provide 12 months from comp
Slide 59: Key Risks
Key Risks Financial information and forecasts The forward looking statements, opinion and estimates provided in this presentation, rely on various contingencies and assumptions. Various factors and risks, both known and unknown, many of which are outside the control of the Group, may impact upon the
Slide 60: International Offer Restrictions
Section 9 International Offer Restrictions NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 61: International Offer Restrictions
International Offer Restrictions This document does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except to th
Slide 62: International Offer Restrictions
International Offer Restrictions Section 138 of the Securities Act (Ontario) provides that no action shall be commenced to enforce these rights more than (a) in the case of any action for rescission, 180 days after the date of the transaction that gave rise to the cause of action or (b) in the case
Slide 63: International Offer Restrictions
International Offer Restrictions Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the New Shares cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and
Slide 64: International Offer Restrictions
International Offer Restrictions • in compliance with Article 129 of the Italian Banking Act and the implementing guidelines of the Bank of Italy, as amended, pursuant to which the Bank of Italy may request information on the offering or issue of securities in Italy; and • in compliance with all rel
Slide 65: International Offer Restrictions
International Offer Restrictions • is large within the meaning of clause 39 of Schedule 1 of the FMC Act; • is a government agency within the meaning of clause 40 of Schedule 1 of the FMC Act; or • is an eligible investor within the meaning of clause 41 of Schedule 1 of the FMC Act. Norway This docu
Slide 66: International Offer Restrictions
International Offer Restrictions Switzerland The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange or any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the New