Northern Star Resources Ltd · ASX:NST
Northern Star Resources — Merger or Acquisition (August 2018)
53 slides from Northern Star Resources's merger presentation, Aug 30, 2018
Slide 1: Acquisition of 4.1Moz Pogo Underground Gold Mine and Equity Capital Raising
For personal use only Northern Star Resources Acquisition of 4.1Moz Pogo Underground Gold Mine and Equity Capital Raising Not for release to US wire services or distribution in the United States.
Slide 2: Disclaimer
Disclaimer IMPORTANT: You must read the following before continuing. For personal use only Not for release to US wire services or distribution in the United States This presentation has been prepared by Northern Star Resources Limited (ACN 092 832 892) ("Company" or "Northern Star" or "NST"). This p
Slide 3: Disclaimer (cont.)
Disclaimer (cont.) Limitation on information relating to the Pogo mine and SMM Pogo and SC Pogo All information in this presentation in relation to SMM Pogo and SC Pogo, and the Pogo mine – including in relation to historical production, mineral resources and mineral reserves, historic costs and oth
Slide 4: Disclaimer (cont.)
Disclaimer (cont.) Financial data All currency amounts are in Australian Dollars ("$" or "A$") unless otherwise stated. The pro-forma financial information included in this presentation is for illustrative purposes and does not purport to be in compliance with Article 11 of Regulation S-X of For per
Slide 5: Disclaimer (cont.)
Disclaimer (cont.) Not an offer This presentation is for information purposes only and is not an offer or invitation to subscribe for, acquire or buy any securities in NST, including the New Shares, or any other financial products in any jurisdiction which, or to any person to whom, it would For per
Slide 6: Foreign Estimate Footnote & Cautionary Statements & LR 5.23
Foreign Estimate Footnote & Cautionary Statements & LR 5.23 Foreign Estimate Footnote For personal use only This information is extracted from the ASX announcement titled “Northern Star Acquires Pogo Gold Mine in Alaska dated 30 August 2018" and is available to view at https://www.nsrltd.com/investo
Slide 7: 1. Transaction
7 For personal use only 1. Transaction
Slide 8: Transaction Summary
Transaction Summary Acquisition of the high grade 4.1Moz Pogo underground gold mine in Alaska for US$260 million For personal use only Pogo Site Layout Northern Star has agreed to acquire the high grade 4.1Moz Pogo Underground Gold Mine (“Pogo”), located in Alaska, USA, from Sumitomo Metal Mining an
Slide 9: Transaction Benefits for Northern Star
Transaction Benefits for Northern Star Acquisition immediately transforms Northern Star into a ~900kozpa global gold producer with three Tier-1 For personal use only assets all in Tier-1 jurisdictions Pogo Processing Plant ✓ Pogo represents another high grade, low cost, Tier-1 asset in another Tier-
Slide 10: Consistent with Northern Star acquisition and operating model
Consistent with Northern Star acquisition and operating model Pogo provides another opportunity for NST to apply its proven acquisition and operating model to deliver For personal use only value creation for Shareholders Initiative Description ▪ Maximise operational cashflow to recover acquisition p
Slide 11: Pogo Acquisition – Consistent with publicly stated 3 Year Vision
Pogo Acquisition – Consistent with publicly stated 3 Year Vision 3 Year Vision A global mid-cap and ASX100 sustainable gold producer focused on superior shareholder value creation For personal use only Establish concentrated centres to maximise Develop functional disciplines and corporate Find new c
Slide 12: Consistent with strategy: Tier-1 assets, Tier-1 locations
Consistent with strategy: Tier-1 assets, Tier-1 locations Globally there are only 17 mines producing over 300kozpa in Tier-1 mining jurisdictions (Australia, US and Canada); For personal use only production is declining in these regions due to a lack of discoveries and significant reserve depletion
Slide 13: Pogo Gold Mine overview
Pogo Gold Mine overview Pogo is a high-grade underground gold mine which in CY2017 produced 271koz at an AISC of US$882/oz For personal use only Fully permitted and operating underground Operational Profile Location and Site Map gold mine with a 12 year production record Location 145km South-east of
Slide 14: Pogo operating and financial performance – past years
Pogo operating and financial performance – past 5 years An established history of consistent high grade gold production at a competitive AISC For personal use only Throughput (kt) and Grade (Au g/t)* Gold Production (koz) and AISC (US$/oz) Recoveries (% Au) 1,000 16 400 882 1000 13.5 13.6 870 849 90
Slide 15: Benchmarking Pogo against its peers
Benchmarking Pogo against its peers Pogo is one of the highest grade gold mines of scale in North America For personal use only North American Producing Gold Mines with Production >200koz p.a.1 18 16 14 12.3 11.9 Gold Grade (g/t Au) 12 10 8 6 4 2 0 Reserve Grade Resource Grade 1. Source: Wood Macken
Slide 16: Why Alaska is a Tier-1 Jurisdiction
Why Alaska is a Tier-1 Jurisdiction Rated as a top-ten jurisdiction based on the 2017 Fraser Mining Index of 2017 Fraser Institute Mining Index of Investment Attractiveness (Top 20 Jurisdictions)(1) “Investment Attractiveness”; For personal use only 0 20 40 60 80 100 Rated ahead of every Australian
Slide 17: Pogo is in the World-Class Tintina Mineral Belt
Pogo is in the World-Class Tintina Mineral Belt Pogo provides Northern Star exposure to a prolific gold mineral belt with a long history of gold production For personal use only The Tintina Mineral Belt, a metal province stretching across much of interior Alaska, through the southwestern Yukon The r
Slide 18: Pogo resources and reserves – December 2017
Pogo resources and reserves – 31 December 2017 Mineral reserves and mineral resources have been historically calculated in-line with Canadian NI 43-101 reporting guidelines(1)(2) For personal use only MINERAL RESERVES MINERAL RESOURCES at 31 December 20173 (Exclusive of reserves) at 31 December 2017
Slide 19: Resource and reserve growth potential
Resource and reserve growth potential A significant amount of mineralisation is present outside of the current Pogo resources, there is also considerable mineralisation For personal use only inside the current resources that hasn’t made it into reserves Over the coming 24 months NST will look to inv
Slide 20: Jundee Parallels - Case Study
Jundee Parallels- Case Study NST has identified similarities between Pogo & Jundee, which sets up the value creation template for Pogo For personal use only A Jundee Analogue? Demonstrated Ability to Extend Life at Underground Gold Mines Northern Star has a proven track record of Jundee Historical R
Slide 21: 2. Investment Highlights and Transaction Rationale
For personal use only 2. Investment Highlights and Transaction Rationale 21
Slide 22: Diversifying Into Another Tier-1 Mining Jurisdiction
Diversifying Into Another Tier-1 Mining Jurisdiction Pogo provides Northern Star with a third production centre in another Tier-1 mining jurisdiction, increasing For personal use only FY2019 group guidance to 850,000-900,000oz at an AISC of A$1,050-1,150/oz (US$787-862/oz)(1) Australia US 1. Kalgoor
Slide 23: Proforma Transaction Impact on Northern Star
Proforma Transaction Impact on Northern Star Accretive to Northern Star’s group production, reserves, resources and gold grades For personal use only Reserves (Moz)(1) Reserve Grade (Au g/t)(1) Resources (Moz)(1) Resource Grade (Au g/t)(1) +19% +7% +20% +26% 4.8Moz 4.0Moz 3.8 g/t 4.1 g/t 20.0Moz 3.4
Slide 24: Elevated Position Within the Global Mid-Tier Gold Sector
Elevated Position Within the Global Mid-Tier Gold Sector Approaching 1Mozpa gold production with a globally competitive cost position operating in Tier-1 jurisdictions For personal use only Australian Peers(1) Global Mid-Tier Peers(2) FY2019 Guidance Production (koz) FY2019 Guidance AISC (A$/oz) 1,0
Slide 25: Extending Mine Life and Delivery of Guidance – Proven Formula
Extending Mine Life and Delivery of Guidance – Proven Formula Paulsens Gold Mine Jundee Gold Mine Kalgoorlie Operations For personal use only IRR: 148% (historic) IRR: 156% (historic) IRR: 264% (historic) Average AISC: A$1,146/oz Average AISC: A$950/oz Average AISC: A$964/oz 7.4x 5.9x 15.9x Paulsens
Slide 26: Establishing a New Platform for Growth
Establishing a New Platform for Growth Northern Star will acquire a high quality For personal use only management team as part of the Pogo Northern Star’s Growth Platforms The Pogo Management Team acquisition to be integrated with Northern Star management General Manager The Pogo team has extensive
Slide 27: 3. Equity Capital Raising
For personal use only 3. Equity Capital Raising 27
Slide 28: Transaction Funding
Transaction Funding Transaction to be funded with a combination of existing cash on balance sheet and an underwritten For personal use only Placement. New Shares issued to represent just 4% of Northern Star’s existing share capital Equity Capital Raising Details Fully underwritten Placement to profe
Slide 29: Sources and Uses of Funds
Sources and Uses of Funds Northern Star is funding the acquisition of Pogo with a combination of cash Transaction Funding Sources A$M For personal use only on balance sheet and proceeds from the Placement Northern Star cash on balance sheet 180 While Northern Star is applying a significant portion o
Slide 30: Placement Timetable
Placement Timetable For personal use only Event Date (AEST) Trading halt and announcement of Placement Pre-market open, 30 August 2018 Placement bookbuild opens 30 August 2018 30 August 2018 (Australia) Placement bookbuild closes 31 August 2018 (Overseas) Announcement of completion of Placement and
Slide 31: 4. Statements in respect of JORC resources and reserves statements and foreign estimates
For personal use only 4. Statements in respect of JORC resources and reserves statements and foreign estimates 31
Slide 32: Statements in respect of JORC resources and reserves statements and foreign estimates
Statements in respect of JORC resources and reserves statements and foreign estimates The information in this presentation that relates to Northern Star’s Mineral Resources and Ore Reserves is extracted from Northern Star's ASX release dated For personal use only 2 August 2018 "Reserve & Resource Up
Slide 33: 5. Key Risks
33 For personal use only 5. Key Risks
Slide 34: Key Risks
Key Risks There are various risks associated with investing in Northern Star, as with any securities market investment. This section summarises the following key risks: For personal use only The existing business and operational risks for Northern Star. These are risks to which Northern Star will co
Slide 35: Existing business and operational risks for Northern Star
Existing business and operational risks for Northern Star Risk Description For personal use only Ore Reserves and Mineral Northern Star's JORC Code-compliant ore reserves ("Ore Reserves") and mineral resources ("Mineral Resources") for its existing projects, and the Resources mineral reserves and mi
Slide 36: Existing business and operational risks for Northern Star (cont.)
Existing business and operational risks for Northern Star (cont.) Risk Description For personal use only Replacement of Ore Reserves Northern Star must continually replace reserves depleted by production to maintain production levels over the long term. Reserves can be replaced by expanding known or
Slide 37: Existing business and operational risks for Northern Star (cont.)
Existing business and operational risks for Northern Star (cont.) Risk Description For personal use only Fluctuations in the gold price Northern Star's revenues are exposed to fluctuations in the gold price. Volatility in the gold price creates revenue uncertainty and requires careful management of
Slide 38: Existing business and operational risks for Northern Star (cont.)
Existing business and operational risks for Northern Star (cont.) Risk Description For personal use only Insurance risk Northern Star maintains insurance coverage as determined appropriate by its Board and management. Post-closing, insurance coverage that is similar to Northern Star's current covera
Slide 39: Existing business and operational risks for Northern Star (cont.)
Existing business and operational risks for Northern Star (cont.) Risk Description For personal use only Water sources Climate-related changes to precipitation patterns in Australia could exacerbate water stress in some areas and therefore potentially have a negative impact on Northern Star’s abilit
Slide 40: Risks specific to the acquisition
Risks specific to the acquisition Risk Description For personal use only Due Diligence risks Northern Star undertook a due diligence investigation process in respect of the Transaction and was given the opportunity to review certain information provided by or on behalf of SMM Pogo and SC Pogo relati
Slide 41: Risks specific to the acquisition (cont.)
Risks specific to the acquisition (cont.) Risk Description For personal use only Foreign jurisdictional risk All of Northern Star's existing projects are located in Australia. As noted above, the Pogo mine is located in Alaska in the United States. As a result, although Alaska is considered to be a
Slide 42: Placement and share investment risks
Placement and share investment risks Risk Description For personal use only Underwriting risk Northern Star has entered into an underwriting agreement ("Underwriting Agreement") under which the Lead Manager has agreed to fully underwrite the Placement, subject to the terms and conditions of the Unde
Slide 43: Placement and share investment risks (cont.)
Placement and share investment risks (cont.) Risk Description For personal use only Dilution risk Existing shareholders who do not participate in the Placement (which will include all retail shareholders and those institutional shareholders who are potential placees and elect not to participate in t
Slide 44: 6. International Offer Restrictions
For personal use only 6. International Offer Restrictions 44
Slide 45: International Offer Restrictions
International Offer Restrictions International Offer Restrictions For personal use only 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
Slide 46: International Offer Restrictions (cont.)
International Offer Restrictions (cont.) Certain Canadian income tax considerations. Prospective purchasers of the New Shares should consult their own tax adviser with respect to any taxes payable in connection with the acquisition, holding or disposition of the New Shares as any discussion of For p
Slide 47: International Offer Restrictions (cont.)
International Offer Restrictions (cont.) New Zealand For personal use only This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the "FMC Act"). The New Shares are not being offered or sold in New Zealand (
Slide 48: International Offer Restrictions (cont.)
International Offer Restrictions (cont.) United Kingdom For personal use only Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financi
Slide 49: Appendix A: Summary Transaction Terms Sheet
For personal use only Appendix A: Summary Transaction Terms Sheet 49
Slide 50: Summary Transaction terms
Summary Transaction terms For personal use only Transaction Acquisition of the Pogo JV, an Unincorporated Joint Venture owning 100% of the Pogo Gold Mine Sellers Sumitomo Metal Mining America Inc. and SC Minerals America Inc (subsidiaries of Sumitomo Metal Mining Co., Ltd and Sumitomo Corporation re
Slide 51: Appendix B: Pogo Infrastructure & Logistics
For personal use only Appendix B: Pogo Infrastructure & Logistics 51
Slide 52: Pogo infrastructure & logistics
Pogo infrastructure & logistics A fully equipped site operated by an experienced management team For personal use only Key Infrastructure Electricity, Water & Fuel Simplified Pogo Tailings Process Route Facilities include a surface mill, dry stack tailings Power supply is via a 80km, 13.8kV Flotatio
Slide 53: Northern Star Resources
For personal use only 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
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