Newcrest Mining — H1 FY2020 Earnings Presentation
37 slides from Newcrest Mining's earnings presentation, Feb 13, 2020
Slide 1: FY20 Half Year Results
FY20 Half Year Results Sandeep Biswas Managing Director and Chief Executive Officer Gerard Bond Finance Director and Chief Financial Officer
Slide 2: Disclaimer
Disclaimer Forward Looking Statements This presentation includes forward looking statements. Forward looking statements can generally be identified by the use of words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “continue”, “outlook” and “guidance”, or other similar
Slide 3: Newcrest Mining Limited
Newcrest Mining Limited Placeholder image
Slide 4: Safety & Sustainability
Safety & HY20 Results Sustainability The unique Financials multi-decade gold-copper miner Summary
Slide 5: Continued Focus on Safety
Continued Total Recordable Injury Frequency Rate (per million hours worked) Focus on Safety1 3.7 3.3 2.4 2.3 2.3 FY16 FY17 FY18 FY19 H1 FY20 Safety Transformation TRIFR improvements at most operations Red Chris integration is progressing well but Cadia Telfer injury rates are much higher than Newcre
Slide 6: Implementing NewSafe at Red Chris
Implementing NewSafe at Red Chris 90% of site and contractor leaders at Red Chris have completed the Leadership component of NewSafe
Slide 7: Sustainability targets
Greenhouse gas (GHG) intensity target Sustainability A 30% reduction in GHG emissions per tonne of ore treated by 2030 against targets the 2018 baseline Shadow carbon price Acquisitions and key capital investment decisions to include carbon price scenarios between $25 and $50 a tonne of CO2-e in sen
Slide 8: HY20 Results Summary
Safety & HY20 Results Sustainability The unique Financials multi-decade gold-copper miner Summary
Slide 9: Half Year Highlights
Half Year Highlights Investing in the Gold production 1.1moz future Acquired 70% AISC $880/oz Red Chris Underlying Profit Significant $280m mineralisation at Interim dividend Havieron US 7.5 cents per share, fully franked
Slide 10: Cadia mill expanding to between 33 & 35mtpa
Cadia mill Cadia expanding to between 33 & Gold Production (koz) 35mtpa 382 374 453 460 411 350 318 301 299 287 246 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY15 FY16 FY17 FY18 FY19 FY20 AISC ($/oz) 210 197 246 295 258 217 135 205 131 134 167 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY15 FY16 FY17 FY18 FY19 FY20
Slide 11: Lower grades from open pit mining sequence at Lihir
Lower grades Lihir from open pit mining Gold Production (koz) sequence 431 469 434 506 413 542 433 500 374 381 315 Biannual shut strategy to improve full plant utilisation H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 opportunities FY15 FY16 FY17 FY18 FY19 FY20 AISC ($/oz) 1,239 1,154 1,085 1,086 890 913 925 857
Slide 12: Challenging Telfer site but focused on improving performance and costs
Challenging Telfer site but focused on Gold Production (koz) improving 275 performance 245 243 219 222 164 216 209 215 237 182 and costs H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY15 FY16 FY17 FY18 FY19 FY20 AISC ($/oz) 1,391 1,347 1,380 1,227 1,298 1,169 955 979 1,026 760 824 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2
Slide 13: Declining head grade impacted Gosowong production
Declining Gosowong head grade impacted Gold Production (koz) production 197 173 134 141 123 128 124 102 88 57 76 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY15 FY16 FY17 FY18 FY19 FY20 AISC ($/oz) 1,494 1,261 1,076 1,121 867 949 794 825 651 737 687 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY15 FY16 FY17 FY18 FY19 FY
Slide 14: Newcrest agrees to divest Gosowong for $90m
Newcrest to sell 100% of its Gosowong divestment - $90m interest in Gosowong • Newcrest Economic ownership from 31 $5m cash deposit paid on execution of the sale and purchase agreement agrees to December 2019 transfers to the new • $55m cash payable on transaction owner post satisfaction of conditio
Slide 15: Red Chris integration progressing to plan
Red Chris Red Chris integration progressing to plan Gold Production (koz) 11 8 3 FY20 Q1 FY20 Q2 H1 FY20 AISC ($/oz) 4,317 2,606 2,205 FY20 Q1 FY20 Q2 H1 FY20
Slide 16: Red Chris First stage transformation on track
Stage 1 - Apply Newcrest’s Edge transformation approach • Process plant optimisation Red Chris • Mine optimisation • Supply chain cost reduction First stage • Extensional resource and exploration drilling program Stage 2 - Apply Newcrest’s industry leading technology transformation • Block caving •
Slide 17: Achievements in the first 150 days at Red Chris
Safety & Sustainability NewSafe rollout in full swing Achievements Emergency and first aid capability significantly upgraded in the first 150 days at Red People Chris Camp upgrade commenced Mobile equipment workshop upgrade design commenced Operating Performance Tailings Impoundment Area lifts compl
Slide 18: Financials
Safety & HY20 Results Sustainability The unique Financials multi-decade gold-copper miner Summary
Slide 19: Newcrest's financial results
Newcrest’s financial Delivering earnings results Shareholder returns •Underlying Profit $280m up 18% for first half • US 7.5 cents per share, fully franked •Statutory Profit $236m in line with prior period • Payout ratio of 55% of adjusted free cashflow Financial Metrics Low Cost Position • Well wit
Slide 20: Underlying Profit up 18% to $280m
Underlying Movement in Underlying Profit ($m) Profit up 18% to $280m * Corporate and other includes Corporate administration expenses, Exploration expenses, Other income and Share of losses of associates
Slide 21: $3.4bn of free cash flow generated since 1 January 2014
$3.4bn of free Cumulative free cash flow ($m) cash flow generated since $3.4 Billion 1 January 2014 H2 Free Cash Flow H1 Free Cash Flow
Slide 22: Comfortably within all four financial policy targets
Leverage Ratio (Net Debt / EBITDA) Gearing Ratio Comfortably Target less than 2.0x (for Target less than 25% within all four trailing 12 months) 15.1% financial policy 12.2% 11.5% targets 0.7x 0.6x 0.8x 4.9% 0.2x 30 Jun 2018 31 Dec 2018 30 Jun 2019 31 Dec 2019 30 Jun 2018 31 Dec 2018 30 Jun 2019 31
Slide 23: The unique multi-decade gold-copper miner
Safety & HY20 Results Sustainability The unique Financials multi-decade gold-copper miner Summary
Slide 24: The unique multi-decade gold-copper miner
The unique multi-decade gold-copper miner Producing Exploration mines drilling Development projects
Slide 25: Cadia and Lihir reserves greater than mines of major gold peers
Cadia and Reserve base of operating assets1 (moz) Lihir reserves greater than 25 mines of major gold 20 peers… 15 10 5 1 Based on producing assets held by Barrick, Newmont and Newcrest with an attributable reserve >4moz. Source: Company reports as at 5 February 2020. - Reserves reflect proven and pr
Slide 26: Industry leading reserve lives
…resulting in Reserve life (years) industry 30 leading reserve lives 25 20 15 10 1 Based on producing assets held by Barrick, Newmont and Newcrest with an attributable reserve >4moz. Source: Company reports as at 5 February 2020. Reserves reflect proven and probable gold ore 5 reserves (contained me
Slide 27: Cadia to increase processing capacity
Cadia to Execution of Stage 1 and Stage 2 of the Cadia Expansion FS could see1: increase processing capacity Increased throughput Increased LOM rate to 33-35mtpa recovery to 80% +17% +8% 1 Stage 1 of the Cadia Expansion Feasibility Study has been prepared with the objective that its findings are sub
Slide 28: Increasing days without maintenance interruption at Lihir
Increasing Indicative previous days without maintenance shut schedule interruption1 Transition year Unlock full processing capacity more often Improve uptime, Targeting an additional Indicative Biannual stability and ~65 days of operation without interruption shut schedule1 recovery from planned maj
Slide 29: The unique multi-decade gold-copper miner
The unique multi-decade gold-copper miner Producing Exploration mines drilling Development projects
Slide 30: Increased mineralisation at Havieron
Increased mineralisation at Havieron $25m increase to the FY20 exploration expenditure guidance range due to increased drilling at Havieron
Slide 31: Positive drill results at Red Chris
Positive drill RC591R 64m @ 1.6g/t Au & 1.1% Cu from results at 847m, incl. 62m @ 1.7g/t Au & 1.1% Cu from 847m & incl. 56m @ Red Chris 1.8g/t Au & 1.2% Cu from 851m. RC603 124m @ New higher grade area 0.58g/t Au & 0.42% Cu from Open Pit identified in Gully Zone 466m, incl. 94m @ 0.71g/t Au & 0.51%
Slide 32: The unique multi-decade gold-copper miner
The unique multi-decade gold-copper miner Producing Exploration mines drilling Development projects
Slide 33: Injunction on Wafi-Golpu project lifted
Injunction on Wafi-Golpu Multi-decade mine life project lifted1 Highest grade undeveloped gold-copper project world-wide Low cost production Attractive return on investment expected First production expected ~five years from permit 1 Subject to all necessary permits, regulatory requirements and Boar
Slide 34: Summary
Safety & HY20 Results Sustainability The unique Financials multi-decade gold-copper miner Summary
Slide 35: What makes Newcrest different
What makes Newcrest Long Low cost different reserve life production Organic growth Do what options we say (at Cadia, Lihir, Wafi Golpu & Red Chris) Strong exploration & technical Financially robust capabilities
Slide 36: Find out more
Find out more: www.newcrest.com.au Engage with us +613 9522 5717 +1 (647) 255 3139
Slide 37: FY20 Half Year Results
FY20 Half Year Results Sandeep Biswas Managing Director and Chief Executive Officer Gerard Bond Finance Director and Chief Financial Officer