Mgx Resources Limited · ASX:MGX
Mgx Resources — Mount Gibson Iron — FY2013 Earnings Presentation
24 slides from Mgx Resources's earnings presentation, Aug 23, 2013
Slide 1: Financial Results FY2013
For personal use only Financial Results FY2013 22 August 2013 MOUNT GIBSON IRON LIMITED
Slide 2: Disclaimer
Disclaimer For personal use only This Document is Confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person, or published, in whole or in part, for any purpose without prior written approval from Mount Gibson Iron Limited. This Document is not a
Slide 3: Significantly stronger operating performance
FY2013 Significantly stronger operating performance For personal use only • Record ore sales of 8.8 Mwmt, up 68% yoy • Record Mid West sales of 5.3 Mwmt, up 124% • Koolan Island sales of 3.5 Mwmt, up 22% • Koolan Island ramp-up to 4 Mtpa commenced • Tallering Peak mine life extended to mid 2014 • 9.
Slide 4: Another strong financial performance delivered
FY2013 Another strong financial performance delivered For personal use only • Record sales revenue of $852.9m, up 32% yoy • Net profit after tax of $157.3m • Underlying net profit after tax of $92.9m, excluding MRRT tax credit* • Net operating cash flow of $179.7m, up 220% • EBITDA of $330.7m • Cash
Slide 5: Strong sales driven by stockpile drawdown
FY2013 Strong sales driven by stockpile drawdown For personal use only 12 months ended: 30-Jun-13 30-Jun-12 Tonnes mined Mwmt 5.8 7.3 Tonnes sold Mwmt 8.8 5.2 Sales revenue $ mill 852.9 648.5 Interest income $ mill 11.9 20.4 Cost of goods sold $ mill (698.3) (413.5) Gross profit $ mill 166.5 255.4 A
Slide 6: Cash operating costs driven lower by stockpile drawdown
FY2013 Cash operating costs driven lower by stockpile drawdown For personal use only 12 months ended 30 June: 2013 2012 Sales Volume (Mwmt) 8.8 5.2 Sales Revenue (A$m) 852.9 648.5 Realised Price (A$/wmt sold) 97.24 124.42 Cost breakdown A$m A$/wmt sold A$m A$/wmt sold Total Cost of Goods Sold 698.3
Slide 7: Significantly increased operating cashflow
FY2013 Significantly increased operating cashflow For personal use only 7
Slide 8: Cash levels continue to build
FY2013 Cash levels continue to build For personal use only 8
Slide 9: Savings targets achieved, more targeted in 2014
FY2013 Savings targets achieved, more targeted in 2014 For personal use only • Total FY2013 cash expenditure reduced by $140m in line with October 2012 guidance • Permanent savings of at least $50m in line with guidance, including: • Significant net workforce reduction (~130 positions) • Significant
Slide 10: Iron ore outlook remains healthy for A$ producers
Iron ore outlook remains healthy for A$ producers For personal use only In the short term… • ore inventories at Chinese ports remain extremely low compared with H2 2012 • Chinese steel mill production remains at historic highs • Chinese economic growth is forecast to remain healthy at ~7% pa on a la
Slide 11: Five Year Performance Summary
Five Year Performance Summary For personal use only 30 June 30 June 30 June 30 June 30 June 12 months ended: 2009 2010 2011 2012* 2013 Mineral Resources Mt 104.7 108.6 103.3 95.2 To be released Mineral Reserves Mt 56.7 56.4 52.0 44.3 To be released Operating Mines # 2 2 3 3 3 Sales M wmt 5.4 6.5 5.2
Slide 12: Supplementary information
Supplementary information For personal use only 12
Slide 13: Multiple sites provide operational flexibility
Multiple sites provide operational flexibility For personal use only Koolan Island Mine • Premium DSO lump and fines • Ramping up to 4 Mtpa by end 2014 • Long life asset with dedicated shiploader Mid West Region Tallering Peak, Extension Hill & Geraldton Port facilities Tallering Peak Mine Extension
Slide 14: Strong sales profile and credible growth strategy
Strong sales profile and credible growth strategy For personal use only Ore sales history and indicative outlook 10 Actual Forecast Priority Two growth 8 Priority One growth 6 Ore Sales (Mwmt) 4 2 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Year to 30 June
Slide 15: Koolan Island – optimising a quality long life asset
Koolan Island – optimising a quality long life asset For personal use only Long life asset • 7 years at 4Mtpa Simple logistics • No road/rail, dedicated ship-loader High value products • DSO lump and fines, plus Rizhao Special Product Optimised ramp up to 4 Mtpa • Reducing unit mining costs and incr
Slide 16: Tallering Peak – a prime example of extracting extra value
Tallering Peak – a prime example of extracting extra value For personal use only • An extra year of high value production • Total ore sales of 2.5Mt targeted for FY2014 • T6 pit life extended to January 2014 • T1 development underway, first ore expected September 2013 • Mining operations to conclude
Slide 17: Extension Hill – the jewel of the Mid West
Extension Hill – the jewel of the Mid West For personal use only • Simple, low cost operation • Initial five year mine life at 3Mtpa • First sales achieved December 2011 • Total sales of 2.8 Mt in FY2013 • Established rail and port access • Rail constrained to 3Mtpa, potential to 4 secure additional
Slide 18: Field's Find – greenfields potential near Extension Hill
Field’s Find – greenfields potential near Extension Hill For personal use only Plateau prospect past drilling results Field’s Find • Low cost entry to 250 sqkm land package ~65km from Extension Hill • Confirmed hematite targets from past drilling • Permitting well advanced • Drilling approvals expec
Slide 19: Geraldton Port – established port access is priceless
Geraldton Port – established port access is priceless For personal use only • Infrastructure access - key barrier to entry for new producers • Provides MGX leverage to regional opportunities • MGX Mid West export capacity doubled to ~6Mtpa • Total MGX port storage capacity trebled to 360,000t • +40
Slide 20: A disciplined approach to longer term growth
A disciplined approach to longer term growth For personal use only What are we looking for? What is our competitive strength? • Iron Ore • Robust balance sheet, supportive major • Other bulk carbon steel materials shareholders • Low capital intensity • Experienced in project delivery • “Australia-fi
Slide 21: Summary
Summary For personal use only Mount Gibson Iron has: • Established and profitable iron ore operations • Strong cash reserves • Record of strong financial performance • Credible management • Demonstrated capability to deliver business improvement and manage market volatility • Cost focused • High pot
Slide 22: For more information
For personal use only For more information: Phone: +618 9426 7500 Email: admin@mtgibsoniron.com.au Web: www.mtgibsoniron.com.au 22
Slide 23: Appendix – Mineral Resources and Ore Reserves
Appendix – Mineral Resources and Ore Reserves (at 30 June 2012, except for T1 as stated) For personal use only Koolan Island Total Group Mineral Resources and Ore Reserves Mineral Resources, above 50% Fe as at 30 June 2012 Tonnes Fe SiO2 Al2O3 P Tonnes Fe SiO2 Al2O3 P millions % % % % millions % % %
Slide 24: Appendix - Attributions
Appendix - Attributions For personal use only Attributions The information in this report that relates to Exploration Results is based on information compiled by Gregory Hudson, who is a member of the Australian Institute of Geoscientists. Gregory Hudson is an employee of Mount Gibson Iron Limited g