Bathurst Resources Ltd · ASX:BRL
Bathurst Resources — Shareholder Meeting (November 2018)
30 slides from Bathurst Resources's shareholder meeting presentation, Nov 28, 2018
Slide 1: Bathurst Resources AGM presentation
BATHURST RESOURCES AGM presentation November 2018
Slide 2: Agenda
AGENDA • FY18 overview • FY19 progress update • How our business has changed • Operations • Strategy • LMCH update • FY19 forecast 2
Slide 3: FY18 Highlights
FY18 HIGHLIGHTS A record year incorporating 10 months of operations from BT Mining Strong safety record with Equity coal sales of 1.5Mt LTIFR at 1.2 (incl. sales of purchased coal) Record operating profit New offshore joint venture $72.9 million secured Highest EBITDA $93.7 Net assets increased $64.
Slide 4: FY18 Health, Safety and Environment
FY18 HEALTH, SAFETY AND ENVIRONMENT To ensure long term sustainability we aim for the highest standards in health, safety, environment and community SAFETY HEALTH ENVIRONMENT LTIFR = 1.2 Zero 1 TRIFR = 4.6 occupational health illness serious water discharge incident at Canterbury • One Lost Time Inj
Slide 5: FY18 Community Contributions
FY18 COMMUNITY CONTRIBUTIONS Our contribution to the communities that we operate in forms an integral part of our strategic direction. Maintaining positive stakeholder relationships is a core part of our operating framework. 91% $221.6m of our employees live spent with local suppliers locally to min
Slide 6: FY19 Progress Update
FY19 PROGRESS UPDATE FY19 has so far met or exceeded key operational and financial targets $28 million unaudited No lost time injuries EBITDA Upgrade in FY EBITDA to Export sales of 353kt at $92.0 million an APR of NZD$230/t Consolidated cash balance Domestic operations $47.5 million exceeding budge
Slide 7: 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 in Confidence 7
Slide 8: How Our Business Has Changed
HOW OUR BUSINESS HAS CHANGED Balance Sheet FY 2018 FY 2017 Movement Net Assets $70.4m $6.2m $64.2m Working Capital $38.5m $5.8m $32.7m Gearing Ratio 21% 254% (233%) Cash $25.2m $29.2m ($4.0m) • Cash balance maintained after significant asset purchases and debt repayments. • The investment in B
Slide 9: 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 2.3Mt in FY19 under our management, in both export and domestic markets. Sales by product use (% of revenue $) Maramarua 0.2Mt 0.2Mt Rotowaro 0.6Mt Stockton 1.1Mt
Slide 10: Export - Stockton
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$97/t FTE (incl. contractors) 278 Crown Rehab. NZ$41.5m Indemnity (FY19) Resource 68.2Mt6 Res
Slide 11: Export Market – Key Drivers
EXPORT MARKET – KEY DRIVERS • Overall met coal supply growth stalls and declines in Australia. • Seaborne market relies on high- cost US supply > $170/t FOB). • Strong steel demand and high profit margins. • Chinese coal / coke environmental clampdowns. • China closes 260Mtpa of inland Chinese steel
Slide 12: Export Market – Outlook for 2019
EXPORT MARKET – OUTLOOK FOR 2019 Potential upsides 2019 Potential downsides 2019 • Ongoing potential supply disruptions • Global growth cycle slows. (China and Australia). • High coking coal process stimulate a larger • US Export peaking – very price dependent than expected supply response. (swing s
Slide 13: Our Export Coal
OUR EXPORT COAL • Bathurst 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 consequently maximise price to Bathurst. • Diversified geographic markets, end pro
Slide 14: North Island Domestic
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) 621kt EBITDA margin (FY19) NZ$32/t2 FTE 128 Crown Indemnity NZ$16.0m (FY19) Resource 8.9Mt3 Reserve 2.3Mt3 Maramar
Slide 15: Waipuna West – Rotowaro Extension
WAIPUNA WEST – ROTOWARO EXTENSION (65% BRL1) Waipuna West is an extension project for the Rotowaro mine which will extend the life of operations for a further four years Project summary: • Rotowaro is now owner operated, with cash margins maintained. • The existing workforce have moved to direct per
Slide 16: South Island Domestic
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) 250kt EBITDA margin (FY19) NZ$26/t1 FTE 46 Resource 4.6Mt2 Reserve 1.3Mt2 Canterbury Production (FY
Slide 17: 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 18: Strategic Goals
STRATEGIC GOALS Operations - Increase productivity - Improve equipment utilisation - Sustain domestic margins - Maintain Export FOB below NZD $100/tonne To be the leading Customers/Markets domestic and People and export coal Community - Maintain NZ domestic market share producer in New - Manage low
Slide 19: 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 20: Long Term Company Growth
LONG TERM COMPANY GROWTH BRL Production Tonnes 100% by market BRL Production Tonnes 100% v Equity Share Commercial in Confidence 20
Slide 21: Buller Project
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 22: 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 23: Stockton Organic Growth
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 24: Ruawaro Development Plan
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 25: Crown Mountain
CROWN MOUNTAIN (BRL buy-in to 50%) Cumulative Bathurst investment to achieve 50:50 joint venture: C$121.5m Bathurst initial payment: C$4m Bathurst tranche 1: C$7.5m Bathurst tranche 2: C$110m Bathurst Bathurst Bathurst Jameson Jameson Jameson Resources Ltd Resources Ltd Resources Ltd Resources Ltd R
Slide 26: Crown Mountain
CROWN MOUNTAIN (BRL buy-in to 50%) 2018 Canadian summer exploration programme The exploration programme was designed to collect all necessary field data to: • Further define coal quality through evaluation via a pilot coke oven. • Improve the level of confidence in project geology and coal quality.
Slide 27: Crown Mountain
CROWN MOUNTAIN (BRL buy-in to 50%) Actions advancing Crown Mountain • Prepare the Application for EA Certificate: ▫ Actively underway. ▫ Several entities participating in drafting the Application. • Prove the selenium mitigation strategy: ▫ Phase I work completed in December 2017: favourable. ▫ Phas
Slide 28: LMCH 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 29: FY19 Forecast Metrics
FY19 FORECAST METRICS Forecast FY EBITDA guidance was increased to $92m from $75m after a strong Q1. Measure Export North Island South Island BRL Equity (Stockton) Domestic Domestic share Production 1.1Mt 800kt 400kt 1.6Mt Cash cost2 $97 Margin/t $901 $32 $26 $92m EBITDA $100m $26m $10m (mid-point)
Slide 30: 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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