Bathurst Resources Ltd · ASX:BRL
Bathurst Resources — Investor Presentation (January 2019)
24 slides from Bathurst Resources's investor presentation, Jan 31, 2019
Slide 1: December quarter update
BATHURST RESOURCES December quarter update January 2019
Slide 2: New Zealand's Largest Coal Producer
NEW ZEALAND’S LARGEST COAL PRODUCER We are now the leading presence in coal production in New Zealand, with forecasted coal production of 2.4Mt in FY19 under our management, in both export and domestic markets. Sales by product use (% of revenue $) Maramarua 0.2Mt 0.2Mt Rotowaro 0.8Mt Stockton 1.1Mt
Slide 3: Capital Overview
CAPITAL OVERVIEW Capital structure Substantial shareholders Institutional by geographic Share price (31 Dec 18) $0.125 locations Singapore 7.3% Market cap (A$m) 198.0 Australia 6.6% Debt: USD Bonds (US$m) 7.9 North 3.3% America Cash (NZ$m) 30.6 Hong Kong 2.9% Europe 2.1% Issued ordinary shares 1,584
Slide 4: How Our Business Has Changed
HOW OUR BUSINESS HAS CHANGED • Financial figures noted above are consolidated Bathurst and 65% BT Mining. Employees are total employees under management. •Commercial *EBITDA in is calculated Confidenceas earnings before interest, tax, depreciation, amortisation, financing costs, and fair value (non-
Slide 5: FY19 YTD Progress Update
FY19 YTD PROGRESS UPDATE FY19 has so far met or exceeded key operational and financial targets $54.1 million unaudited No lost time injuries EBITDA Upgrade in FY EBITDA to Export sales of 621kt at $105.0 million an APR of NZD$214/t Consolidated cash balance Domestic operations $30.6 million exceedin
Slide 6: FY19 Forecast Metrics
FY19 FORECAST METRICS Forecast FY EBITDA guidance was increased to $105m from $75m after a strong H1. Measure Export North Island South Island BRL Equity (Stockton) Domestic Domestic share Production 1.1Mt 900kt 400kt 1.7Mt Cash cost2 $100 Margin/t $971 $42 $27 $105m EBITDA $108m $38m $10m (mid-poin
Slide 7: FY19 Capital Allocation
FY19 CAPITAL ALLOCATION Initiative Strategic action Current activity Financial impact Current Generate strong EBITDA Operational excellence $55m YTD operations Guidance of $105m FY19 Cost reduction investments Targeted fleet replacement $5.1m YTD Sustaining capital Extend life of current fleet $4.5m
Slide 8: LMCH1 Case Update
LMCH1 CASE UPDATE On 20 August 2018 the High Court found in favour of LMCH regarding a disputed USD $40m performance payment under the Buller project Sale and Purchase Agreement (SPA) of 2010. An update on the case: • We have lodged an appeal to the Court of Appeal against the finding on a number of
Slide 9: Export - Stockton (65% BRL)
EXPORT - STOCKTON (65% BRL1) Stockton is an open cut mine located on the West Coast of New Zealand producing a low-ash metallurgical coal for export Stockton Production (FY19) 1.1Mt Unit Cost (FOB) (FY19) NZ$100/t FTE (incl. contractors) 278 Crown Rehab. NZ$41.5m Indemnity (FY19) Resource 68.2Mt6 Re
Slide 10: Export Market – Coking Coal and Iron
EXPORT MARKET – COKING COAL AND IRON Iron making requires: 480 – 600kg coke (0.68 – 0.86 tonne coking coal)/tonne of hot metal Approximately 1.5 tonne 62% Fe Iron ore/tonne of hot metal Commercial in Confidence 10
Slide 11: Export Market – Global Coking Coal Market
EXPORT MARKET – GLOBAL COKING COAL MARKET Production • Total coking coal production ~1.1Bt/annum. • China 53% of total output. • Seaborne trade ~300Mt/annum; Australia accounting for 185Mt/annum. Outlook • Global coking coal imports continue growth to 2040. • Steady growth since 2000 mainly from Chi
Slide 12: Export Market – Market Summary
EXPORT MARKET – MARKET SUMMARY Current market • Chinese buyers returned to the seaborne market as a number of import restrictions eased in the new year. • Ongoing safety concerns at Chinese coal mines will limit domestic production. Outlook • India’s steel production continues to grow. • Trade tensi
Slide 13: Our Export Coal
OUR EXPORT COAL • Our coal is characterised by: ▪ Very low ash content ▪ Very low phosphorus ▪ Almost all vitrinite ▪ Blend improver • Coal is marketed on a ‘Value In Use’ basis to maximise value to customers and sales price. • Diversified geographic markets, end products, pricing structures and log
Slide 14: North Island Domestic (65% BRL)
NORTH ISLAND DOMESTIC (65% BRL1) Open cut mines located in the Waikato region of New Zealand producing a high-quality, low-ash coal for the local steel market Rotowaro Production (FY19) 690kt EBITDA margin (FY19) NZ$42/t2 FTE 128 Crown Indemnity NZ$16.0m (FY19) Resource 8.9Mt3 Reserve 2.3Mt3 Maramar
Slide 15: South Island Domestic (100% BRL)
SOUTH ISLAND DOMESTIC (100% BRL) Open cut mines located in the Canterbury and Southland regions of New Zealand producing a high-quality, low-ash coal for the domestic market Takitimu Production (FY19) 240kt EBITDA margin (FY19) NZ$27/t1 FTE 46 Resource 4.6Mt2 Reserve 1.3Mt2 Canterbury Production (FY
Slide 16: Domestic Market
DOMESTIC MARKET Domestic operations enable us to have stable pricing, regular cashflow and long-term contracts: • North Island ▫ New production has commenced at Waipuna West with stripping initiated. ▫ Fixed pricing through two major diversified customers. ▫ Long term contracts. ▫ Enables expansion
Slide 17: Forward Looking Approach
FORWARD LOOKING APPROACH Legend Brownfields Greenfields Capex/ Production Waipuna West Implementation Domestic New Brighton Domestic - Resource to Reserve classification Canada Crown Mountain Buller Project NZ Export Deep Creek and Marshalls Export - Resource to Reserve classification 2018 2019 2020
Slide 18: Long Term Company Growth
LONG TERM COMPANY GROWTH BRL production tonnes (100% basis) by market Commercial in Confidence 18
Slide 19: Buller Project (100% BRL)
BULLER PROJECT (100% BRL) The combination of the BT Mining assets with Bathurst’s existing Buller Plateau assets will unlock material synergies for the Company Item With Without Synergies Synergies CHPP nil $100m Access to Rail $6m $50m Rail loadout nil $25m Water $3m $3m treatment Workshops etc $1m
Slide 20: Buller Project Timetable
BULLER PROJECT TIMETABLE A short development cycle at low capital cost1 to bring on stream • Increase Resource definition – large diameter washability holes Evaluation • Complete Feasibility Study • Transport route Consenting • Mining areas • Initial Boxcut in Sullivan CML (350ktpa building to 650kt
Slide 21: Stockton Organic Growth (65% BRL)
STOCKTON ORGANIC GROWTH (65% BRL1) A natural southern extension of Stockton • Development of open cut pits within the Upper Waimangaroa permit, incorporating comparable coal within the BRL Buller exploration permit. • High value resource which enables blending to maintain coking coal export markets
Slide 22: Ruawaro Development Plan (65% BRL)
RUAWARO DEVELOPMENT PLAN (65% BRL1) Ruawaro is an extension project for the Rotowaro mine • Development of an open cut within the Ruawaro permit 40698 adjacent to current Rotowaro operations. • Utilise existing infrastructure to access the established customer base. • Exploration has continued over
Slide 23: Crown Mountain (BRL buy-in to 50%)
CROWN MOUNTAIN (BRL buy-in to 50%) Crown Mountain is a Canadian joint venture in which Bathurst can buy-in over three stages to achieve 50:50 ownership: total potential investment CAD $121.5m • The project is located in a mature mining region in British JV structure assuming all Colombia with well e
Slide 24: Competent Persons Statement
COMPETENT PERSONS STATEMENT Bathurst Resources Competent Person Statement The information on this report that relates to mineral resources for Deep Creek and the mineral reserves for Escarpment Export, Stockton and Whareatea West is based on information compiled by Sue Bonham-Carter who is a full ti
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