Evolution Mining Limited · ASX:EVN
Evolution Mining — Bank of America Merrill Lynch Global Metals, Mining & Steel Conference 2019
34 slides from Evolution Mining's conference presentation, May 14, 2019
Slide 1: BAML Global Metals, Mining & Steel Conference
B A N K O F A M E R I C A M E R R I L L LY N C H GLOBAL METALS, MINING For personal use only & STEEL CONFERENCE 1 4 – 1 6 M AY 2 0 1 9 JAKE KLEIN – EXECUTIVE CHAIRMAN
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT For personal use only These materials prepared by Evolution Mining Limited (or “the Company”) include forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as “may”, “will”, “expect
Slide 3: Snapshot
SNAPSHOT Operating cash flow (A$ per ounce) For personal use only ASX code EVN 1,015 837 1,013 782 Market capitalisation(1) US$4.0B / A$5.6B 580 699 Average daily turnover(2) US$25M / A$35M FY14 FY15 FY16 FY17 FY18 FY19 H1 Net debt(3) US$54M / A$74M Payout of 50% of Cumulative dividends paid (A$M) D
Slide 4: Clear and Consistent Strategy
CLEAR AND CONSISTENT STRATEGY For personal use only Focused portfolio of 6 – 8 assets Upgrade portfolio asset quality Reduce costs and grow free cash flow per share Extend reserve life Ernest Mt Carlton Henry Deliver consistent returns to shareholders Mt Rawdon Cracow Mungari A globally relevant mid
Slide 5: EBITDA Margins
EBITDA MARGINS For personal use only ◼ H1 FY19 Group EBITDA margin of 48% ◼ Improved portfolio quality in recent years ◼ Longer life assets generating highest margins Site FY19 H1 EBITDA margin 65% 58% 52% 46% 31% 34% Cowal Ernest Henry Mt Carlton Mt Rawdon Mungari Cracow 8+ years(1) 5-7 years(1) <5
Slide 6: Return on Investment
RETURN ON INVESTMENT For personal use only ◼ Generating an appropriate return on investment a primary focus of the business ◼ Longest life assets generating highest returns Bubble size ◼ Assets generating returns of up to 23% per annum represents midpoint of FY19 ◼ Mt Carlton and Cracow have already
Slide 7: Financial Position
FINANCIAL POSITION For personal use only ◼ Balance sheet liquidity of A$606M Dividends paid and debt repayments (A$M) ◼ Cash balance: A$256M ◼ Undrawn revolver: A$350M available ◼ Net bank debt position of A$74M ◼ Since FY15: 325 30 322 ◼ Debt repayments: A$879M 40 65 ◼ Dividend payments: A$357M 127
Slide 8: Cowal
COWAL E46 OP Reserves 140koz For personal use only ▪ Sustainable, reliable, low cost E42 OP Reserves 3.3Moz OP Resources 4.5Moz production Past production 3.3Moz GRE46 Total endowment 7.8Moz OP Reserves 25koz ▪ Delivering a pathway to produce UG Resources 1.4Moz >300kozpa ▪ Exploration success deliv
Slide 9: Delivering Pathway to 300kozpa
DELIVERING PATHWAY TO 300KOZPA For personal use only Underground Exploration Decline Resource definition Integrated and extensional Waste drilling of high grade underground ore Landform body Plant Expansion Life of Mine tails solution 300KOZPA+ Permit increased from 7.5Mtpa to 9.8Mpa Stage H Cutback
Slide 10: Cowal Underground
COWAL UNDERGROUND For personal use only Scale 0 200m Section of Cowal GRE46 underground area. Orange shows the outline Long projection of the GRE46 structure looking west showing the location of the December 2017 mineable shape optimiser (MSO) outlines and of drilling completed during the March 2019
Slide 11: Ernest Henry
ERNEST HENRY For personal use only ▪ History of reliable operational delivery ▪ Exceptionally high margins 1,200mRL ▪ Evolution’s interest generating free cash flow in excess of A$200M per year ▪ Planned drilling in December 2019 quarter to extend Drilling target mine life below 1,200mRL Current Min
Slide 12: Mt Carlton
MT CARLTON N Open pit For personal use only Stage 3 - ▪ Generating exceptional returns current ▪ Net mine cash flow averaged in excess of A$100M per year in FY16 – FY18 N ▪ Underground mine development to bring forward access to high-grade Link Zone Open pit ▪ Current mine life to FY25 with extensio
Slide 13: Mungari
MUNGARI For personal use only ▪ Ore Reserves and Mineral Resources provide 10 year base load production platform ▪ Targeting growth through: ▪ High-grade discoveries ▪ Improving plant efficiencies ▪ Regional opportunities ▪ Recently acquired 19.9% interest in Tribune Resources FY19 GUIDANCE1 Gold pr
Slide 14: Cracow and Mt Rawdon
CRACOW AND MT RAWDON For personal use only FY19 GUIDANCE CRACOW MT RAWDON Gold production 80 – 85koz 95 – 105koz US$905 – US$940/oz US$725 – US$760/oz AISC A$1,250 – A$1,300/oz A$1,000 – A$1,050/oz QUEENSLAND EXPLORATION Drummond Exploration Project (Evolution earning 80%) ▪ Early-stage epithermal (
Slide 15: Discovery Strategy
DISCOVERY FY19 Discovery STRATEGY Guidance A$40-55M For personal use only Approach: Upgrade the pipeline Drummond Project Mt Carlton People Tactics A$1–2M A$1–2M • New, invigorated world class team • Build land positions in key camps Tennant • Fostering a discovery culture • 3D architecture and foot
Slide 16: Generating Superior Financial Returns
GENERATING SUPERIOR FINANCIAL RETURNS For personal use only Global leader in low cost production Strong track record in creating value Reputation for reliability and transparency Discovery team delivering transformational organic growth Shareholders rewarded through dividends and capital growth 16
Slide 17: Appendix
For personal use only APPENDIX
Slide 18: FY19 Guidance: Production and Costs
FY19 GUIDANCE: PRODUCTION AND COSTS For personal use only Gold production All-in sustaining cost1 All-in sustaining cost* FY19 Guidance (oz) (A$/oz) (US$/oz) Cowal 240,000 – 250,000 975 – 1,075 705 – 780 Mungari2 125,000 – 135,000 1,050 – 1,100 760 – 800 Mt Carlton 95,000 – 105,000 670 – 720 485 – 5
Slide 19: FY19 Guidance: Capital
FY19 GUIDANCE: CAPITAL For personal use only Major project capital items ◼ Cowal: Sustaining Major FY19 Guidance Capital Capital ◼ Stage H cut-back (A$70 – A$75M) (A$M) (A$M) ◼ Float Tails Leach (A$6 – A$9M) ◼ Other process plant projects (A$29 – A$36M) Cowal 55 – 60 105 – 120 ◼ Mt Carlton Mungari 1
Slide 20: FY19 Guidance: Discovery and Non-Cash
FY19 GUIDANCE: DISCOVERY AND NON -CASH For personal use only Depreciation & Fair Value Resource Discovery FY19 Guidance Amortisation* Unwind Definition** (A$M) (A$/oz) (A$M) (A$M) Cowal 430 – 480 10 – 15 3–7 15 – 20 Mungari 500 – 550 10 – 15 2–4 15 – 20 Mt Carlton 580 – 630 0–1 1–2 Mt Rawdon 550 – 6
Slide 21: Three Year Outlook: FY19 – FY21
3 YEAR OUTLOOK: FY19 – FY21 For personal use only Production Guidance koz AISC Guidance A$/oz 11 22 910 770 775 765 900 895 833 780 907 720 725 710 797 850 845 860 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Production Low Production High Divested Assets AISC Low AISC High Sustaining Capital G
Slide 22: Production Target
PRODUCTION TARGET For personal use only Cautionary statement concerning the proportion of Exploration Targets1 Of Evolution’s Production Outlook, 2% is comprised of Exploration Targets. The potential quantity and grade of this exploration target is conceptual in nature and there has been insufficien
Slide 23: FY19 YTD: Production and Costs
FY19 YTD: PRODUCTION AND COSTS For personal use only FY19 YTD Units Cowal Mungari Mt Carlton Mt Rawdon Cracow Ernest Henry Group Total ore mined kt 5,131 1,479 488 1,998 431 5,002 14,530 Total tonnes processed kt 5,869 1,200 589 2,481 435 5,116 15,691 Grade processed g/t 1.19 2.48 5.35 0.99 4.91 0.5
Slide 24: Evolution 2018 Gold Mineral Resources
EVOLUTION 2018 GOLD MINERAL RESOURCES For personal use only Group Gold Mineral Resource Statement – December 2018 Gold Measured Indicated Inferred Total Resource Gold Gold Gold Gold Gold Gold Gold Gold CP3 Tonnes Tonnes Tonnes Tonnes Project Type Cut-Off Grade Metal Grade Metal Grade Metal Grade Met
Slide 25: Evolution 2018 Gold Ore Reserves
EVOLUTION 2018 GOLD ORE RESERVES For personal use only Group Gold Ore Reserve Statement – December 2018 Gold Proved Probable Total Reserve Cut- Tonnes Gold Gold Metal Tonnes Gold Gold Metal Tonnes Gold Gold Metal CP3 Project Type Off (Mt) Grade (g/t) (koz) (Mt) Grade (g/t) (koz) (Mt) Grade (g/t) (ko
Slide 26: Evolution 2018 Copper Reserves & Resources
EVOLUTION 2018 COPPER RESERVES & RESOURCES For personal use only Group Copper Mineral Resources Statement Copper Measured Indicated Inferred Total Resource Copper Copper Copper Copper Copper Copper Copper Copper Cut- Tonnes Tonnes Tonnes Tonnes CP3 Project Type Grade Metal Grade Metal Grade Metal Gr
Slide 27: Cowal Dec 2018 Mineral Resources and Ore Reserves
COWAL DEC 2018 MINERAL RESOURCES AND ORE RESERVES EVOLUTION 2017 GOLD ORE RESERVES For personal use only Cowal Gold Mineral Resource Statement - December 2018 Measured Indicated Inferred Total Resource Mineral Resource Tonnes Grade Cont. Metal Au Grade Cont. Metal Au Tonnes Grade Cont. Metal Grade C
Slide 28: Sustainability
Total Recordable Injury Frequency (TRIF)* SUSTAINABILITY 24.4 For personal use only 19.9 ◼ Inaugural Sustainability Report published in December 2018 half-year 12.0 ◼ Driving safety culture where our people do the 9.6 9.7 8.0 7.3 right thing because they want to, not because they 5.5 have to ◼ HSE S
Slide 29: Environmental Stewardship
ENVIRONMENTAL STEWARDSHIP For personal use only ▪ Four environmental enhancement projects underway ▪ Environmental protocols implemented to manage environmental impacts and risk ▪ Life of mine environmental management plans developed for all sites ▪ Environmental assurance audit program and environm
Slide 30: Socio-Economic Contributions
SOCIO-ECONOMIC CONTRIBUTIONS ▪ Social licence to operate score 4.1 out of 5.0 For personal use only ▪ ‘High approval’ – a high level of social licence compared to other global miners1 ▪ Nine Shared Value projects underway – creating tangible, sustainable legacies in our communities beyond the life o
Slide 31: Our People
OUR PEOPLE For personal use only Attract, engage, develop and retain talent ▪ Developing our leaders via bespoke leadership programs ▪ Guiding Our Leaders Program (GOLD) completed by 119 of our senior leaders ▪ SILVER Program completed by 201 of our front line managers ▪ Supporting Graduate Programs
Slide 32: Cost Structure
COST STRUCTURE For personal use only ▪ Top seven expense groups account for ~78% of total costs ▪ Proactively managing input costs ▪ Cost reduction of 10% on A$100M of contracts in FY18 Other, 22% ▪ Continue to competitively test market for cost reductions Employee ▪ Major focus on productivity and
Slide 33: M&A Strategy
M&A STRATEGY Improve portfolio quality For personal use only ▪ The rules are simple: ▪ Improve the quality of the portfolio ▪ Logical ▪ Value accretive ▪ Opportunistic ▪ But delivery is not simple. It requires the ability to: ▪ Recognise the opportunity ▪ Execute the transaction ▪ Integrate acquired
Slide 34: For personal use only
For personal use only Evolution MIINTINE