Northern Star Resources Ltd · ASX:NST
Northern Star Resources — FY2019 Earnings Presentation
27 slides from Northern Star Resources's earnings presentation, Aug 27, 2019
Slide 1: FY2019 Full Year Results
For personal use only An Australian gold miner - for global investors FY2019 Full Year Results
Slide 2: Resources & Reserves and Forward Looking Statements
Resources & Reserves and Forward Looking Statements For personal use only Mineral Resources and Ore Reserves The Mineral Resources and Ore Reserves information reported in accordance with the 2012 edition of the Joint Ore Reserves Committee’s Australasian Code for Reporting of Mineral Resources and
Slide 3: FY19 Key Highlights
FY19 Key Highlights For personal use only Financial Underlying Net FY19 dividends Record Performance Total Shareholder Profit of A$179M; declared A13.5¢ underlying FCF Return of 62% Group EBITDA up per share; Final of A$104M in 8% to A$480M dividend up 50% June Qtr of FY19 Acquisition of the Record
Slide 4: NST Safety Performance leading the sector
NST Safety Performance leading the sector Lost Time Injury Frequency Rate FY19 NST again delivered significant For personal use only ▪ Underground Metalliferous improvement in reducing LTIFR rate by 45% to 3 0.5 (sector LTIFR of 1.6) and TRIFR maintained at 3.3 (sector TRIFR of 9.1) 2 1 ▪ Safety Man
Slide 5: Sustainability in FY19
Sustainability in FY19 We strive to deliver responsible environmental and social For personal use only business practices that lead to both the creation of strong economic returns for our Shareholders, and shared value for our Stakeholders. Safety Social Environmental We strive for safety excellence
Slide 6: Value Creation – delivering returns to Shareholders
Value Creation – delivering returns to Shareholders ▪ NST’s strategy of balancing organic growth with well executed M&A has generated over A$7.2B For personal use only of value for Shareholders since the first acquisition in 2010 and <7% of this value uplift has been from equity raised ▪ This strate
Slide 7: Best in Class Returns & Capital Management
Best in Class Returns & Capital Management ▪ Consistent superior returns delivered to Shareholders; For personal use only 5yr Avg Return on Equity vs GDX 5 year TSR of 816%1 40% ▪ Sector leading 5 year average Return on Equity of 30% 30% 30% and Return on Invested Capital of 27% 20% 10% ▪ Demonstrat
Slide 8: Financial Highlights
Financial Highlights ▪ EBITDA up 8% on pcp; final dividend up 50% to A7.5¢ps and full year payout of A13.5¢ps For personal use only Financials FY19 FY18 Change Statutory Profit after tax A$M 154.7 194.1 (20%) Underlying Profit after tax1 A$M 179.2 211.5 (15%) EBITDA A$M 479.7 443.3 8% Operating mine
Slide 9: FY19 Underlying net profit
FY19 Underlying net profit ▪ NST’s strategic investments in FY19 has set the business up for further growth across its Tier-1 assets For personal use only ▪ FY19 Statutory profit was marginally impacted by A$6M associated with the Pogo acquisition and A$18M of non-cash items (A$8M fair value adjustm
Slide 10: FY19 - A year of investment for future growth
FY19 - A year of investment for future growth ▪ NST’s investments in FY19 has laid the platform for further sector leading returns For personal use only A$160M invested to drive organic growth A$350M Pogo Acquisition to drive 104 further growth 380 95 A$70M paid out to 66 Shareholders in fully frank
Slide 11: EBITDA and Margins
EBITDA and Margins ▪ EBITDA was up 8% on pcp to A$479.7M in FY19 For personal use only ▪ Australian operations continue to generate strong EBITDA operating margins of 46% ▪ Pogo’s contribution set to increase significantly in FY20 EBITDA Site EBITDA Margin 600 500 $480 53% $443 $424 $397 46% Pogo Op
Slide 12: Mine site cash flow
Mine site cash flow ▪ For personal use only NST grew net mine cashflows and invested heavily into its operating assets in FY19 investing A$66M into exploration and A$95M into growth capital ▪ Strong mine cash flow in FY19 ▪ Operating cash flow A$588M1 Mine cash flow (A$M) ▪ Net mine cash flow A$359M
Slide 13: Dividends
Dividends After the final FY19 dividend is paid, NST will have returned A$335M or 71% of total equity For personal use only ▪ issued back to Shareholders in the form of fully-franked dividends ▪ Final FY19 dividend up Cumulative dividends and cents per share declared 50% to A7.5 cents per 16 400 sha
Slide 14: NST well positioned to leverage current gold price strength
NST well positioned to leverage current gold price strength Current hedge book offers For personal use only ▪ Hedge Position significant upside to record gold price versus the peer group 45 NST has fewer hedged ounces at a higher price 1,800 compared to its ASX Peer ▪ Use hedging to protect key 40 G
Slide 15: Cost focused business with competitive advantages
Cost focused business with competitive advantages ▪ NST proactively manage input costs and For personal use only FY19 Group Operating Costs1 continues to competitively test market for cost reductions ▪ Last 5 years have realised A$118M of cost Taxes, Royalties & reductions on contracted services/mat
Slide 16: Continually extending mine life beyond production
Continually extending mine life beyond production ▪ Mine lives continue to grow at both Australian Ops; Pogo integration is underway Conservative Reserve pricing assumptions now ~A$775/oz below spot gold price of A$2,300/oz For personal use only ▪ Kalgoorlie Operations Jundee Pogo First Acquired: 20
Slide 17: Delivering Reserve and Resource Growth per share
Delivering Reserve and Resource Growth per share ▪ Through value accretive organic and inorganic growth NST has been able to successfully grow For personal use only Resource and Reserve life on a per share basis for its Shareholders ▪ NST announced a 31% increase in Resources to 20.8Moz at 4.1gpt (g
Slide 18: Allocation of capital
Allocation of capital ▪ Opportunities motivate capital allocation. With the NST Business model delivering on all fronts; this approach has delivered sector leading returns to Shareholders For personal use only Organic Growth Dividends Inorganic Growth Balance Sheet ▪ A$7.3B of value delivered since
Slide 19: FY20 Production and Cost Guidance
FY20 Production and Cost Guidance For personal use only ▪ Group production 800,000-900,000oz at AISC A$1,200-A$1,300/oz ▪ Growth capital non-sustaining of A$116 million – Pogo, Jundee and Moonbeam Growth ▪ Exploration record spend of A$76 million – Pogo, Jundee and South Kalgoorlie ▪ Second half of
Slide 20: A$76M Global Investment in Future Growth
A$76M Global Investment in Future Growth ▪ A$76M exploration and drilling commitment for FY2020 is a record commitment For personal use only ▪ Pogo will continue to be a major focus with outstanding in-mine and near mine opportunities ▪ Strong commitment to Jundee growth with major investment in-min
Slide 21: Capital investment for production growth
Capital investment for production growth FY20 growth capital of A$116M is primarily allocated to Growth Capital (A$M) For personal use only 116 the following key projects: 95 ▪ A$44M developing and bringing online new mining areas at Pogo. This also includes A$7M on processing infrastructure to de-b
Slide 22: Northern Star Resources Limited
For personal use only 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 Inventum 3D
Slide 23: Company Overview
Company Overview For personal use only Stock code (ASX) : NST Share price as at 26 August 2019: A$12.39 Market capitalisation (26 Aug 2019) (639.6 million shares on issue): A$7.9B (US$5.5B) Cash, bullion & investments as at 30 June 2019 A$361M (US$253M) Corporate Bank debt Nil Enterprise value A$7.5
Slide 24: NST Operations – Tier-1 Assets, Tier-1 Locations
NST Operations – Tier-1 Assets, Tier-1 Locations ▪ NST manages a simplified business with a For personal use only strong organic growth outlook; with 3 Tier-1 assets in Tier-1 locations ▪ FY20 group guidance of 800koz-900koz at an AISC of A$1,200-A$1,300/oz ▪ FY19 Record year for company and Austral
Slide 25: Kalgoorlie – Concentrated centre, great infrastructure
Kalgoorlie – Concentrated centre, great infrastructure For personal use only ▪ FY19 record production at top end of guidance with 340,007oz sold at AISC of A$1,330oz (US$931/oz) ▪ FY20 continues organic production growth profile with guidance of 340,000oz- 380,000oz at an AISC of A$1,260-A$1,370 (US
Slide 26: Jundee – Going from strength to strength
Jundee – Going from strength to strength For personal use only ▪ A significant FY19: Record 299koz sold at an AISC of A$981/oz ▪ Resources up 7% to 4.55Moz and Reserves up 3% to 1.6Moz ▪ Mining & processing of Ramone open pit material commenced the June quarter ▪ FY20: Guidance 260,000- 280,000oz at
Slide 27: Pogo – The next Jundee
Pogo – The next Jundee ▪ Pogo is a world-class 10Moz gold endowment that has produced approximately 3.8Moz at an average grade of For personal use only 13.6gpt over the past 12 years at an average of ~300,000ozpa ▪ Pogo has a JORC Resource of 5.95Moz at 9.6gpt and a maiden JORC Reserve of 1.5Moz at
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