Northern Star Resources Ltd · ASX:NST
Northern Star Resources — Bank of America Merrill Lynch Metals & Mining Conference May 2017
23 slides from Northern Star Resources's conference presentation, May 2017
Slide 1: An Australian gold miner – for global investors
An Australian gold miner – for global investors Bank of America Merrill Lynch Metals & Mining Conference May 2017
Slide 2: Disclaimer
Disclaimer Competent Persons Statements The information in this announcement that relates to mineral resource estimations, exploration results, data quality and geological interpretations for the Company’s Paulsens and Jundee Project areas is based on information compiled by Brook Ekers, a Competent
Slide 3: Introduction – Globally Relevant Gold Miner with Tier 1 Assets
Introduction – Globally Relevant Gold Miner with Tier 1 Assets NST is an ASX 100, top 25 global gold producer with all our mines in the Tier 1 Paulsens Operations jurisdiction of WA; ~500koz per annum at an +3Moz Gold Camp Central Tanami Project +5Moz Gold Camp AISC of ~A$1,000/oz (US$735/oz) Majori
Slide 4: Overview - 5 years of outperformance
Overview - 5 years of outperformance Stock code (ASX listed) : NST Share price: A$4.60 Market Capitalisation (600 million shares on issue) : A$2.75B (US$2B) Cash, Bullion & Investments as at 31 Mar 2017 A$393M (US$289M) Debt Nil Hedging as at 31 Mar 2017 409,000oz at A$1,743/oz (US$1,281/oz) 3 Month
Slide 5: A business first, mining is how we deliver value
A business first, mining is how we deliver value NST is uniquely positioned to continue to deliver above average returns to its Shareholders 40% 30% 5 Year Average Return on Equity 30% 20% 10% 0% -10% -20% 5yr Peer Average -2.5% 5yr Peer Average -3.3% -30% -40% Efficiently allocating Shareholders’ c
Slide 6: Northern Star continues to buck the global trend
Northern Star continues to buck the global trend Since 2012 Reserve life of the top five global producers has declined by 37%; whilst NST’s Reserves have grown by 67% in just two years by investing into successive multi year exploration programs With NST’s current investment into exploration, Reserv
Slide 7: Growth around our Tier 1 Assets is the core focus
Growth around our Tier 1 Assets is the core focus Globally there are only 30 mines producing over 200kozpa in Tier 1 mining jurisdictions; production is declining in these regions due to a lack of discoveries and significant Reserve depletion Overlaying an EBITDA margin of over 50% on these mines si
Slide 8: Growth around our Tier 1 assets is the core focus
Growth around our Tier 1 assets is the core focus By the end of FY2017, NST will have invested A$250M (US$184M) in exploration and expansionary CAPEX since the acquisition of its Tier 1 portfolio 3 years ago In FY2016, NST invested A$61M (US$45M) into exploration This investment saw a 33% increase i
Slide 9: Organic Production Growth with a low level of capital intensity
Organic Production Growth with a low level of capital intensity Production set to grow materially in 2018 and deliver significant increases in Company free cashflow Development plans and studies are well underway to grow production across the Tier 1 operating centres NST has a competitive advantage
Slide 10: Australian Gold Producers trading on low multiples
Australian Gold Producers trading on low multiples NST is trading on a 12 month trailing EV/EBITDA* multiple of 5.6x compared to the Bloomberg Global Mid-Tier Gold peer average of 8.3x Applying these multiples to the comparable average sees NST trading at a significantly higher valuation, especially
Slide 11: Kalgoorlie Operations: Rapid, low-cost growth
Kalgoorlie Operations: Rapid, low-cost growth FY2016: Resources 3.6Moz, up 17% and Reserves up 0.9Moz up 48%, after mining 216koz FY2017: Guidance 200,000-210,000oz at an AISC of A$950-A$1,000/oz (US$698-US$735/oz) 6.45Moz of gold production over the past 23 years, average of 280kozpa with a peak ye
Slide 12: Jundee: A big mine…..and getting bigger
Jundee: A big mine…..and getting bigger FY2016: Resources 1.25Moz and Reserves up 21% to 720,000oz, even after mining 228koz FY2017: Guidance 220,000-230,000oz at an AISC of A$1,000-A$1,050/oz (US$735-US$771/oz) 6.75Moz of continuous gold production over the past 21 years, average of 320kozpa with a
Slide 13: Paulsens: The Founding Asset
Paulsens: The Founding Asset FY2016: Resources 0.3Moz and Reserves 0.1Moz, after mining 91koz FY2017: Guidance 65,000-75,000oz at AISC of A$1,200-A$1,250/oz (US$882-US$918/oz) 0.85Moz of continuous gold production over the past 11 years, average of 75kozpa with a peak year of 100koz Record cash flow
Slide 14: Central Tanami Project “CTP”: Emerging Growth Region
Central Tanami Project “CTP”: Emerging Growth Region The Tanami region is an exciting new area that is rapidly GROUNDRUSH (NST Earning to 60%) developing a reputation for major gold discoveries Open Pit Production (Newmont) of 610koz NST operations are contiguous to the world class 150km Tanami Gold
Slide 15: Why Invest in Northern Star
Why Invest in Northern Star Highly profitable: Record half year net profit after tax of A$104.6M (US$77M), up 61%; EBITDA margin of 53%; track record of dividends, paid A10¢ps in 2016 (up 100% from 2015) Strong balance sheet: no debt; A$393M (US$289M) in cash & equivalents (31 March 2017) Emphasis o
Slide 16: Northern Star Resources
Northern Star Resources An Australian Mid Cap gold miner – for global investors Contact Details: Luke Gleeson – Investor Relations +61 8 6188 2100 Email – info@nsrltd.com Website – www.nsrltd.com
Slide 17: Appendix
Appendix Appendix Northern Star Resources An Australian gold miner – for global investors
Slide 18: A strong track record of growing earnings and margins
A strong track record of growing earnings and margins NST has been able to grow earnings, profit margins and payouts to Shareholders consistently EBITDA EBITDA Margin 250 60% 53% EBITDA is up 21% $216.4 $218.8 EBITDA margins are up 24% 47% 50% 42% 200 $165.6 $180.6 38% 40% 35% 36% $148.3 A$ (m) 150
Slide 19: Global Gold Trends: Gold discoveries & exploration
Global Gold Trends: Gold discoveries & exploration Substantial reduction in major discoveries world wide; in 2015 greenfield discoveries cost US$189 per ounce, NST costs were US$14 per ounce for the same period Exploration is becoming more focussed around the mine site due to a lack of greenfield di
Slide 20: Kalgoorlie Operations: Rapid, low-cost production growth
Kalgoorlie Operations: Rapid, low-cost production growth Kanowna Belle is a +5Moz orebody, averaging 4koz per vertical metre with limited exploration below E block NST will be drilling over 61,000m at Kanowna Belle with 4 rigs focused on Velvet, E Block and Lowes Extension NST has also aggressively
Slide 21: Kalgoorlie Operations: Rapid, low-cost production growth
Kalgoorlie Operations: Rapid, low-cost production growth NST is targeting over 33,000m of exploration drilling on the EKJV ground with up to 4 underground drill rigs This drilling will provide the next Resource and Reserve update across the mining complex The new 2.1km drill drive to date is 630m fr
Slide 22: Kalgoorlie Operations: Rapid, low-cost production growth
Kalgoorlie Operations: Rapid, low-cost production growth Past production on the 100% NST ground has yielded 1.25Moz at 6gpt between 1990-2004 NST is drilling over 38,000m across these historic deposits to increase the resources at: Barkers, Strzelecki and Pope John; each of these ore surfaces has hi
Slide 23: Applying the BCG TSR drivers to the NST business model
Applying the BCG TSR drivers to the NST business model NST has ticked all the boxes to deliver consistent returns above the peer group and is positioning itself to continue this over the coming years and is looking to achieve a change in valuation multiple by extending mine lives TSR is the product
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