Northern Star Resources Ltd · ASX:NST

Northern Star Resources — H1 FY2020 Earnings Presentation

21 slides from Northern Star Resources's earnings presentation, Feb 11, 2020

  1. Slide 1: An Australian gold miner - for global investors

    An Australian gold miner - for global investors 1H FY2020 Financial Results - February 2020

  2. Slide 2: Resources & Reserves

    Resources & Reserves Ore reserves and mineral resources reporting of Northern Star This presentation contains estimates of Northern Star's ore reserves and mineral resources, as well as statements about KCGM's mineral resources and mineral reserves. The information in this presentation that relates

  3. Slide 3: Notes to Financial Overview Table / Forward Looking Statements

    Notes to Financial Overview Table Forward Looking Statements Footnotes to Financial Overview Table (slide 15) (1) Unless otherwise stated below, the financial information for the period ended 31 December 2018 as presented in the Financial Overview Table are inclusive of the December 18 quarter resul

  4. Slide 4: 1H FY2020 – Key Financial Highlights

    1H FY2020 – Key Financial Highlights Cash flow from Net profit of Underlying free operating activities A$126.8M up 54% cash flow up 179% up 76% to A$297.5M on pcp from pcp to $116.3M on pcp Strong Balance EBITDA of Interim dividend up Sheet; Cash, Bullion A$322.2M up 45% 25% from pcp to & Investment

  5. Slide 5: KCGM acquisition adds another Tier 1 asset

    KCGM acquisition adds another Tier 1 asset Extends portfolio mine life, adding meaningful production beyond 2030 1. Kalgoorlie Operations (100%) Mine type: U/G KCGM to be incorporated into Australia US Processing: CIL / CIP plant with broader Kalgoorlie (Alaska) throughput of 3.2Mtpa operations FY20

  6. Slide 6: KCGM adding value to the Northern Star portfolio

    KCGM adding value to the Northern Star portfolio Creation of a 1Moz+ gold producer FY20G Production1 (koz) • KCGM H2FY20 Guidance (50%): 1,250 • 120koz – 140koz 1,110 FY20PF (assuming • A$1,450/oz – A$1,550/oz AISC 1,000 12 months KCGM) FY20 750 • Revised FY20 Northern Star consolidated guidance of:

  7. Slide 7: On track to meet Group guidance

    On track to meet Group guidance  Group production guidance (pre KCGM Transaction) is forecasted at 800,000-900,000oz at an AISC A$1,200-A$1,300/oz  Australian Operations are performing strongly and are comfortably within the annual guidance range of 600k-660koz at A$1,200 – A$1,300/oz AISC. In the

  8. Slide 8: Value Creation – delivering returns to Shareholders

    Value Creation – delivering returns to Shareholders  Northern Star’s strategy of balancing organic growth with well executed M&A has generated over A$9.1B of value for Shareholders since the first acquisition in 2010  This strategy has been achieved through operational excellence, investing heavil

  9. Slide 9: Northern Star continues to generate favourable ROE and ROIC

    Northern Star continues to generate favourable ROE and ROIC 50% Average Annualised Return on Equity  For the past five years Northern Star has delivered an average annualised Return on 40% NST 5yr Average 29% 6% acquisition Equity (ROE) of 29% versus the GDX sector 30% effect on 1H20 average of 20%

  10. Slide 10: 1H FY2020 Highlights

    1H FY2020 Highlights  Statutory NPAT of A$127M up 54% on pcp  Group EBITDA of A$322M grew 45% against pcp of A$222M  Group EBITDA margin excluding acquisition and integration costs was 40% Net Profit After Tax 350 EBITDA 140 $322 $127 $115 300 120 $105 $258 250 $241 100 $216 $219 $222 $86 $84 $20

  11. Slide 11: Strong EBITDA and operating cash flow maintained

    Strong EBITDA and operating cash flow maintained  Jundee and Kalgoorlie Operations continue to produce strong EBITDA margins of 64% and 41% respectively  Pogo returns expected to lift in 2H FY2020 as the production inflection point was reached in the December quarter and forecasted to be a meaning

  12. Slide 12: Financial Highlights for 1H FY2020

    Financial Highlights for 1H FY2020 Dividend Per Share  Underlying EPS of A21.5cps up 49% in 1H 8.0 7.5 FY2020; underlying NPAT(3) up 53% 3.0 6.0 6.0 Dividend up: interim dividend up 25% to 6.0  5.0 A7.5cps fully franked in line with 6% of 4.5 A$cps 4.0 revenue when excluding KCGM equity raised 2.5

  13. Slide 13: Adding another world class asset into the Australian Operations in 1H20

    Adding another world class asset into the Australian Operations in 1H20 whilst increasing free cash flow generation and growing earnings  Whilst acquiring the world class KCGM Operations in 1H20 for US$775M, underlying free cashflow was up 176% on the pcp; Northern Star also continues to invest hea

  14. Slide 14: Another leg of growth added to the portfolio in 1H20

    Another leg of growth added to the portfolio in 1H20  Northern Star generated A$116M in underlying free cash flow and invested A$96M in 1H20 on exploration and expansionary capital to provide the next level of value creation in the portfolio  Northern Star also paid out A$48.7M to Shareholders in

  15. Slide 15: 1H FY2020 - Financial Overview Table

    1H FY2020 - Financial Overview Table  EBITDA grew 45% and underlying free cash flow by 179% in 1H20 Half Year End Half Year End $’000 % A$’000 31 Dec 2019 31 Dec 2018(1) Change Change Revenue 826,979 633,515 193,464 31% EBITDA(2) 322,261 222,018 100,246 45% Net profit 126,787 82,090 44,697 54% Unde

  16. Slide 16: Growing cash generation, balance sheet flexibility

    Growing cash generation, balance sheet flexibility  One of the key differentiators of the Northern Star business is its balance sheet; this strength has allowed for counter cyclical acquisitions and sector leading returns to Shareholders  Post KCGM acquisition moderate gearing levels as at 31 Dece

  17. Slide 17: Gold production and sales up

    Gold production and sales up  Gold sold of 399koz in 1H20  Group AISC of A$1,454/oz in 1H20  Jundee: Gold sold of 163koz up 15% on pcp at AISC of A$1,008/oz (US$690*/oz)  Kalgoorlie Operations: Gold sold of 161koz down 2% at AISC of A$1,510/oz (US$1,034*/oz)  Pogo: Gold sold of 74koz up 29%** a

  18. Slide 18: Northern Star Resources Limited

    Northern Star Resources Limited ASX Code: NST An Australian mid cap gold miner – for global investors Investor Enquiries: Luke Gleeson, Investor Relations Level 1, 388 Hay Street, Subiaco 6008 Western Australia T: +61 8 6188 2100 E: info@nsrltd.com W: www.nsrltd.com 18

  19. Slide 19: Pogo – Inflection point reached; December month demonstrating Pogo potential

    Pogo – Inflection point reached; December month demonstrating Pogo potential  As per previous announcements, Pogo’s FY20 Gold Produced to End of December 18 month transition plan is on track with 25,000 December quarter a significant inflection point 120% increase in production 21,570  Pogo produc

  20. Slide 20: Jundee – Going from strength to strength

    Jundee – Going from strength to strength  FY20: Guidance 260,000- 280,000oz at an AISC of A$1,115-A$1,195/oz (US$780- US$836)  1H FY2020 production of: Gold sold 163koz up 15% on pcp at AISC of A$1,008/oz (US$690*/oz)  In addition to guidance, a further 60koz of Ramone ore will be stockpiled in F

  21. Slide 21: Consolidates Northern Star's footprint in Kalgoorlie

    Consolidates Northern Star’s footprint in Kalgoorlie Northern Star has accumulated a premier land holding in the world class Kalgoorlie Camp NST Managed Kalgoorlie Operations Tenure KCGM Tenure  Northern Star has accumulated (50% to be acquired) Newmont Tenure unprecedented exposure to the (100% to

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