Newcrest Mining — H1 FY2021 Earnings Presentation
35 slides from Newcrest Mining's earnings presentation, Feb 11, 2021
Slide 1: FY21 Half Year Results
NEWCREST FY21 Half Year Results Sandeep Biswas Managing Director and Chief Executive Officer Gerard Bond Finance Director and Chief Financial Officer
Slide 2: Disclaimer: Forward Looking Statements
Disclaimer Forward Looking Statements This document includes forward looking statements and forward looking information within the meaning of securities laws of applicable jurisdictions. Forward looking statements can generally be identified by the use of words such as “may”, “will”, “expect”, “inte
Slide 3: Disclaimer: Competent Person's Statement
Disclaimer Competent Person’s Statement The information in this document that relates to Mineral Resources or Ore Reserves has been extracted from the release titled “Annual Mineral Resources and Ore Reserves Statement – 31 December 2020” dated 11 February 2021 (the original MR&OR release), and have
Slide 4: Newcrest Mining Limited
Newcrest Mining Limited
Slide 5: 1H FY21 Key achievements
1H FY21 Safety & Key achievements sustainability Lihir optimisation Financial results & shareholder returns Our growth story Summary
Slide 6: A strong first half
A safe & sustainable business A strong first • Zero fatalities & a 4% reduction in TRIFR from prior period half • COVID-19 impacts successfully managed in the period • Cadia renewable energy PPA (~20% reduction in emissions intensity from 20241) • Year on year improvement in DJSI score & ranking Str
Slide 7: Well positioned for the future
Unlocking value at Lihir Well • Impact of argillic ores is lower than initial expectations positioned for • Optimisation study enables deferral of Seepage Barrier capex by ~18 months the future • Improved grade with potential for additional ~1.4Moz1 contained gold in mill feed • Phase 14A cutback op
Slide 8: Forging an even stronger Newcrest
Our Aspirations 2021-2025 Forging an even stronger Newcrest Company Purpose defined Measures
Slide 9: Safety & sustainability
1H FY21 Safety & Key achievements sustainability Lihir optimisation Financial results & shareholder returns Our growth story Summary
Slide 10: Industry-leading low injury rates
Total Recordable Injury Frequency Rate (per million hours worked) Industry-leading 3.3 low injury rates1 2.6 2.4 2.3 2.2 FY17 FY18 FY19 FY20 H1 FY21 Safety Transformation More than 5 years TRIFR improvements at most operations2 fatality free Zero life changing Cadia Telfer injuries 5.5 28% 3.6 1
Slide 11: A more sustainable business
Greenhouse Gas Emissions Targeting a 30% reduction in emissions intensity by 20301 A more Site plans developed with multi-year actions defined sustainable Renewable energy PPA for Cadia expected to help deliver a ~20% reduction in Newcrest’s GHG emissions intensity from 20242 business Water Ma
Slide 12: Progress reflected in improved ESG scores
S&P Global Corporate Sustainability Assessment for the Dow Jones Sustainability Indexes (DJSI) Progress 2020: First quartile in DJSI Australia Metals & Mining Index (82nd percentile, reflected in Performance Score of 63) improved Promoted into the Dow Jones Sustainability Asia Pacific Index for
Slide 13: Lihir optimisation
1H FY21 Safety & Key achievements sustainability Lihir optimisation Financial results & shareholder returns Our growth story Summary
Slide 14: Significant progress at Lihir
Significant progress at Lihir1 • Impact of argillic ores is lower than initial expectations • Mine Optimisation Study identifies potential to unlock additional ~1.4Moz2 of contained gold in FY22-34 & enables deferral of Seepage Barrier capex by ~18 months • Phase 14A opportunity = potential for addi
Slide 15: Argillic ore management
Current Improvements – Materials Handling Argillic ore management • Improved blending & operational control • Installation of new transfer chutes to drive significant materials handling improvements • Chute impact zone & conveyor profile modifications largely complete • Trommel spray upgrades planne
Slide 16: Lihir Mine Optimisation Study outcomes
Current Lihir Mine Plan Sequence Lihir Mine Optimisation Study outcomes1 • Bringing higher grade into mine sequence earlier • Potential for additional ~1.4Moz2 of contained gold in mill feed across FY22-34 • Deferral of Seepage Barrier capex by ~18 months • Opportunity identifies potential to access
Slide 17: Potential for significant value uplift at Lihir
Potential for Lienitz Pit Phase 14A Cutback Opportunity significant value uplift at Lihir1 • Phase 14A cutback opportunity identified, potential for additional ~400- 600koz2 of contained gold in FY23-25 • Utilises civil engineering wall support techniques to enable the safe retrieval of otherwise in
Slide 18: New landholder agreements signed at Lihir
New landholder agreements signed at Lihir • Builds on strong relationships with mining lease landholders • Transparent & clear accountability for development of Lihir Island • Socio-economic development outcomes enhanced • Benefits distributed directly to intended beneficiaries 18
Slide 19: Financial results & shareholder returns
1H FY21 Safety & Key achievements sustainability Lihir optimisation Financial results & shareholder returns Our growth story Summary
Slide 20: Strong gold prices reflected in margin, profit, free cashflow
Strong gold Strong financial Strong balance sheet prices reflected in performance - Low leverage & gearing margin, profit, - Underlying & statutory profit $553m - Good debt structure free cashflow & - Record 1H free cash flow $439m - Well within financial policy metrics shareholder - AISC margin of
Slide 21: Strong record of free cash flow generation
Strong record of free cash flow generation • ~$35 million received in 1H from Fruta del Norte finance facilities $3.5 Billion 1. Cash investment in M&A activity in FY20 comprises the payment for the acquisition of Red Chris (70% ownership) of $769 million, the acquisition of Fruta del Norte finance
Slide 22: Strong balance sheet & debt structure is ideal for growth
Reduction in net debt ($m) Strong balance 3,707 sheet & debt structure is 2,889 ideal for growth 2,107 Acquired Red Chris & FdN 1,499 phase financing facilities for total of $1.2bn in FY20 1,040 624 395 330 Jun-2014 Jun-2015 Jun-2016 Jun-2017 Jun-2018 Jun-2019 Jun-2020 Dec-2020 Debt maturity profile
Slide 23: Strong financial position
Leverage ratio (Net Debt / EBITDA) Gearing ratio Strong 2.7 Target less than 2.0 times (for trailing 12 months) 33.8% Target less than 25% financial 2.1 29.3% position 1.6 22.8% 16.6% 1.1 12.2% 0.7 6.8% 0.3 4.9% 0.2 3.3% Continue to be 0.1 comfortably within our Jun-2014 Jun-2015 Jun-2016 Jun-2017 J
Slide 24: Capital allocation framework
Capital Newcrest’s Capital Allocation Framework allocation Cash flow from operations framework Newcrest’s financial objectives are to: • meet all financial obligations Sustaining capital / Growth Exploration Maintain strong Minimum annual production stripping investment balance sheet dividend of 15
Slide 25: Updated Dividend Policy
Updated Dividend Policy “Newcrest looks to pay ordinary dividends that are sustainable over time having regard to its cash flow generation, its reinvestment options in the business and external growth opportunities, its financial policy metrics and its balance sheet strength. Newcrest targets a tota
Slide 26: Track record of increasing returns to shareholders
Track record of Increasing dividends1 (US$/share) increasing returns to 25.0 shareholders 22.0 FY21 interim dividend 15 18.5 15.0 • Doubling of interim 14.5 17.5 dividend 11.0 7.5 • Shareholders to benefit 7.5 15.0 from gold price strength 7.5 7.5 7.5 7.5 7.5 US cents per share - FY16 FY17 FY18 FY19
Slide 27: Our growth story
1H FY21 Safety & Key achievements sustainability Lihir optimisation Financial results & shareholder returns Our growth story Summary
Slide 28: Advancing Havieron
Havieron Initial Inferred Mineral Resource Extents & Potential Growth Options Advancing North West Crescent Crescent NW Havieron • Initial Inferred Mineral Resource estimate of 3.4Moz of gold & 160kt of copper1 • Mineralisation Northern Breccia remains open, potential for resource growth over time •
Slide 29: Advancing Havieron
Advancing Havieron Australia • Board funding approval received for the box cut, exploration decline & associated infrastructure • Regulatory approval granted to commence these activities • Early works construction underway 29
Slide 30: Red Chris
Red Chris • Higher grade discovered across the porphyry corridor • Permitting for the box cut received & construction commenced • Board funding approved for exploration decline & associated infrastructure The information in this slide that relates to exploration results at Red Chris has been extract
Slide 31: Cadia Moly plant on track
Current Progress Photo (January 2021) Cadia Moly plant on track1 • On track for commissioning in June quarter 2021 • Additional revenue stream for Cadia • First production expected September Quarter 2021 • Estimated ~$50/oz reduction in Cadia’s AISC • Capital cost of ~$95 million 1. Subject to marke
Slide 32: Delivering on our profitable growth
Delivering on Oct 2020 Dec 2020 Feb 2021 Mar 2021 Q1 FY22 Q1 FY22 Q1 FY23 our profitable Front end Initial Pit Initial Seepage Block Cave 35mtpa growth recovery FS inferred resource optimisation study Newcrest resource barrier FS PFS process capacity targets1 Feb 2021 Q1 FY22 Q1 FY22 Late 2021 In FY
Slide 33: Summary
1H FY21 Safety & Key achievements sustainability Lihir optimisation Financial results & shareholder returns Our growth story Summary
Slide 34: A strong first half & well positioned for the future
Our aspirations for 2021 - 2025 A strong first half & well A safe & sustainable business positioned for the future Strong gold prices = improved profitability & record free cash flow Unlocking value at Lihir Increasing returns to shareholders Progressing our growth options Newcrest’s value propositi
Slide 35: Find out more: www.newcrest.com
Find out more: www.newcrest.com Engage with us +61 3 9522 5717 +1 (866) 396 0242