Northern Star Resources Ltd · ASX:NST

Northern Star Resources — Investor Day (July 2021)

70 slides from Northern Star Resources's investor day presentation, Jul 22, 2021

  1. Slide 1: Northern Star 2021 Investor Day and Live Q&A Session

    ASX: NST ASX Announcement 22 July 2021 NORTHERN STAR 2021 INVESTOR DAY For personal use only AND LIVE Q&A SESSION Northern Star Resources Limited (ASX: NST) is pleased to release its 2021 Investor Day presentation. This virtual presentation can be viewed at: https://webcast.boardroom.media/northern-

  2. Slide 2: Business First: Five-Year Strategic Plan, 2021 Investor Day

    For personal use only Business First Five-Year Strategic Plan 2021 Investor Day

  3. Slide 3: Forward Looking Statements, Reserves and Resources

    Forward Looking Statements, Reserves and Resources Forward Looking Statements For personal use only Northern Star Resources Limited has prepared this announcement based on information available to it. No representation or warranty, express or implied, is made as to the fairness, accuracy, completene

  4. Slide 4: Annual Investor Day Agenda

    Annual Investor Day Agenda For personal use only Agenda Speaker Introduction Michael Chaney AO, Non-Executive Chair Strategic Overview Stuart Tonkin, Managing Director People & Culture Marianne Dravnieks, Executive Manager - People & Culture ESG Hilary Macdonald, General Counsel & Company Secretary

  5. Slide 5: Introduction

    For personal use only Introduction Michael Chaney AO Non-Executive Chair

  6. Slide 6: Indigenous Peoples Statement

    Indigenous Peoples Statement Northern Star would like to acknowledge and pay our respects to Traditional Owner For personal use only groups whose land we are privileged to work on, and whose input and guidance we seek and value within the operation of our business. We acknowledge their strong and sp

  7. Slide 7: Strategic Overview

    For personal use only Strategic Overview Stuart Tonkin Managing Director

  8. Slide 8: Business first: Strong focus on sustainable shareholder returns

    Business first Strong focus on sustainable shareholder returns For personal use only  Results - Deliver on our promises  Reliable delivery of production and cost guidance  Returns - Target superior financial performance  Capital discipline balancing re-investment and returns to Shareholders  Ac

  9. Slide 9: Core Values

    For personal use only Core Values 8

  10. Slide 10: Safety performance

    Safety performance The health and safety of our people is always our number one priority For personal use only  We continue to deliver industry-leading safety performance during a period of significant growth, change and alignment - TRIFR at 5.6 (more than 10% below the industry index)  We continu

  11. Slide 11: A simple business - Three large-scale production centres

    A simple business - Three large-scale production centres Kalgoorlie to 1.1Mozpa Yandal to 600kozpa Pogo to 300kozpa For personal use only Reserves: 314Mt @ 1.5g/t for 15.0Moz Reserves: 67Mt @ 2.1g/t for 4.5Moz Reserves: 5.9Mt @ 8.0g/t for 1.5Moz Resources: 666Mt @ 1.8g/t for 37.6Moz Resources: 141Mt

  12. Slide 12: Robust platform: A position of strength

    Robust platform A position of strength For personal use only  FY21 production and cost guidance achieved FY21 actual FY21 guidance June Q 2021 Gold sales (koz) 1,596 1,540-1,700  444 AISC (A$/oz) 1,483 1,390-1,520  1,459  Strong FY21 exit rate - June quarter 444koz sold @ AISC A$1,459/oz  Stron

  13. Slide 13: Five-year strategic plan-on-a-page

    Five-year strategic plan-on-a-page For personal use only RESPONSIBLE PROFITABLE LOWER LONG MINE PREMIUM EESG GROWTH COSTS LIFE VALUATION SUPERIOR SUSTAINABLE SUSTAINABLE SUSTAINABLE SUSTAINABLE SHAREHOLDER NST ~2Mozpa 1st HALF COSTS +20 YEARS RETURNS Independent 3-5 Tier-1 production Growth in Targe

  14. Slide 14: Business first: Responsible EESG

    Business first For personal use only  Michael Chaney AO - Independent Non-Executive Chair, RESPONSIBLE commenced 1 July 2021 EESG  Stuart Tonkin - Managing Director, effective today (NST tenure 5 years CEO / 3 years Chief Operating Officer)  Merger confidence - Combined experience of aligned, ind

  15. Slide 15: Group production outlook

    Business first Group production outlook For personal use only Profitable production growth: PROFITABLE Moz A$/oz  Kalgoorlie to 1.1Mozpa GROWTH 2.0 1,600  Yandal to 600kozpa  Pogo to 300kozpa 1.5 1,200 Where it counts most: SUSTAINABLE ~2Mozpa 1.0 800  KCGM increasing to 650koz in 3-5 Tier-1 pro

  16. Slide 16: Lower costs: improved 1st half costs

    Business first  Industry cost pressure; unique opportunities to “buck the For personal use only LOWER trend” to deliver improved 1st half costs: COSTS  Growth in ounces produced - KCGM, Yandal, Pogo  Merger synergies - Kalgoorlie, Yandal, Corporate  Structural change at KCGM / access higher grad

  17. Slide 17: Long term Resource and Reserve growth

    Business first Long term Resource and Reserve growth For personal use only Quality geological LONG MINE Moz oz per '000 shares systems yield ongoing discovery outcomes: LIFE 60 60  Improved quality and increased quantity of 50 50 ounces per share 40 40  Track record of SUSTAINABLE +20 YEARS Resour

  18. Slide 18: Premium valuation: P/NAV versus market capitalisation

    Business first  Compelling valuation opportunity, significant upside from For personal use only PREMIUM “bucking the trend” - Profitable production growth where it counts VALUATION Newmont 1.5 Agnico Eagle Evolution SUPERIOR SHAREHOLDER 1.3 RETURNS Kirkland Lake P / NAV (x) Barrick Enhance return o

  19. Slide 19: People & Culture

    For personal use only People & Culture Marianne Dravnieks Executive Manager - People & Culture

  20. Slide 20: Bring together

    Bring together  Successful merger of experienced, aligned, For personal use only industry-leading teams  Integration accelerated by “can-do” culture and supported by internal talent:  5,500 careers (3,000 employees / 2,500 contractors)  Kalgoorlie Production Centre now under single management: 

  21. Slide 21: Meeting the people challenge

    Meeting the people challenge For personal use only Retain people through increasing individual opportunity through Company growth: Tight labour  Build our own talent and develop our people in key roles market  Majority of workforce residential, providing stability to careers and communities Mainta

  22. Slide 22: NST - A unique opportunity

    NST - A unique opportunity For personal use only Workforce  Our Core Values drive culture and leadership FIFO 35%  Long mine life / long term commitment to our people  Different from peers / “one-stop-shop” for an opportunity- rich career: Residential 65%  Growth business  Open Pit / Undergroun

  23. Slide 23: ESG

    For personal use only ESG Hilary Macdonald General Counsel & Company Secretary

  24. Slide 24: Approach to EESG

    Approach to EESG Sustainability Vision For personal use only “Delivering responsible environmental and social business practice that lead to both the creation of strong economic returns for our Shareholders, and shared value for our Stakeholders.” Employees Environment STARR Core Values Energy use a

  25. Slide 25: Environment

    Environment  Detailed planning for Net Zero ambition for Scope 1-3 GHG Emissions by 2050 For personal use only Paris-aligned emissions reduction pathway is 2021 2030 Existing technology 2040 Innovation underway - Disclosure in Indicative Scope 1-3 2021 Sustainability Report pathway (t CO2-e) (March

  26. Slide 26: Environment: Net Zero ambition

    Environment Net Zero ambition for Scope 1-3 GHG emissions by 2050 For personal use only Northern Star Scope 1 & 2 Emissions  Focus on Scope 1 and 2 GHG Emission Reduction by by Source (t CO2-e) Renewable Energy projects Electricity - Purchase  Electrification of carbon fuel based engines - Once 2%

  27. Slide 27: Social

    Social Indigenous Relations Heritage related infringements or human rights For personal use only violations detected in our supply chain;  Building cultural awareness in the workforce with on-country Materially adverse Community incidents training  Growing Indigenous employment and training opport

  28. Slide 28: Governance

    Governance Independent Non-Executive Chair, Michael Chaney AO appointed from 1 July 2021 For personal use only 5 x Sub-Committees: Environmental, Social & Safety (ESS); Remuneration; Audit & Risk; Exploration & Growth and Nomination Nasdaq evaluated NST Board to be highly functional, responsive and

  29. Slide 29: Geology & Exploration

    For personal use only Geology & Exploration Michael Mulroney Chief Geological Officer

  30. Slide 30: Geological endowment - A major value driver

    Geological endowment - A major value driver Consolidation of world-class gold systems, exclusively in Tier-1 jurisdictions For personal use only Kalgoorlie Operations Yandal Operations Pogo Operations 160 127 years 30 years 14 years 10.0 production production production 140 9.0 8.0 120 7.0 Reserve g

  31. Slide 31: Investment in world-class gold systems pays dividends

    Investment in world-class gold systems pays dividends For personal use only 700 Acquired assets in highly endowed geological terrains in Tier-1 jurisdictions with a history of 600 significant exploration underspend Pogo Organic growth has 500 added over 11Mozs KCGM Reserves (net of A$\Resserve oz ac

  32. Slide 32: Sustained growth in endowment

    Sustained growth in endowment Reserve and Resource Growth For personal use only Moz Oz per '000 shares  Quality geological systems 60 60 yield significant discovery outcomes: 50 50  Improved quality of ounces 40 40  Increased ounces per 30 30 share  Track record of 20 20 Resource conversion - Lo

  33. Slide 33: A dominant player in a Tier-1 Location

    A dominant player in a Tier-1 Location For personal use only Reserves by production Resources by production FY22 Exploration Budget by centre (Moz)* centre (Moz)* production centre (A$M)** 1.5 6.9 21 KCGM 77% KCGM 70% 4.5 10.1 74 37 37.6 15.0 Kalgoorlie Yandal North America Kalgoorlie Yandal North A

  34. Slide 34: Extensive organic growth pipeline

    Extensive organic growth pipeline For personal use only Exploration Evaluation Feasibility Development Production Australia Tanami CTP JV Yandal WTP Jundee NM Atlantis Kalgoorlie Thunderbox CTP JV Groundrush Carbine OP/UG Bronzewing Golden Hind OP Yandal Jims Orelia YANDAL Regional Carbine Yandal KC

  35. Slide 35: Kalgoorlie Production Centre

    For personal use only Kalgoorlie Production Centre Simon Jessop Chief Operating Officer

  36. Slide 36: Kalgoorlie - Profitable growth to 1.1Mozpa

    Kalgoorlie - Profitable growth to 1.1Mozpa For personal use only  Simplify the business, divert capital to grow Kalgoorlie production outlook the high margin assets, where it counts koz A$/oz  Reduce costs with regional synergies 1,200 2,000  Enviable optionality: 1,000 1,600  Open pit and under

  37. Slide 37: Synergy - Kalgoorlie District Milling

    Synergy - Kalgoorlie District Milling Kalgoorlie production centre - Processing optionality For personal use only  20Mt of installed milling capacity Mill Throughput (Mtpa)  Replace lower margin Carosue Dam (CDO) ore with higher KCGM 13.0 margin KCGM stockpile ore Kanowna Belle 2.0  Increases in

  38. Slide 38: KCGM - Revival

    KCGM - Revival  The asset has historically delivered +700kozpa (under previous ownership, pre-East Wall slip) For personal use only KCGM annual gold production (koz) Pre-Wall Slip Wall Slip NST Revival 752 730 730 489 472 459 FY16A FY17A FY18A FY19A FY20A FY21A FY22F FY23F FY24F FY25F FY26F Process

  39. Slide 39: KCGM - Tier-1 Asset in a Tier-1 Location

    KCGM - Tier-1 Asset in a Tier-1 Location  Large, long life open pit and underground gold mine For personal use only  11.6Moz Reserves, 26.3Moz Resources, underpins long mine life KCGM Production Profile FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 Open Pit Oroya Brownhill Fimis

  40. Slide 40: KCGM - Open Pit Mining

    KCGM - Open Pit Mining Gets better every day For personal use only  All open pit mining - 17 years from 4 areas: Super Pit cutbacks Reserve Stockpiles  Average strip ratio 10:1 (7.8Moz Reserves)  Targeting conversion of 2.0Moz Inferred Resource within Reserve shell  Strip ratio falls to 7.2:1 in

  41. Slide 41: KCGM - Underground mining (Mount Charlotte)

    KCGM - Underground mining (Mount Charlotte) The gift that keeps on giving Mt Charlotte section For personal use only  Mount Charlotte - Historic production of >5.5Moz at an average grade of 3.6g/t  Resources 42Mt @1.8g/t for 2.5Moz v 1.9Moz 9 months earlier^  Reserves 14Mt @ 2.1g/t for 0.9Moz (36

  42. Slide 42: KCGM - Underground mining (Fimiston drill platforms)

    KCGM - Underground mining (Fimiston drill platforms) Fimiston underground - A brand new chapter For personal use only  KCGM offers world class scale: Fimiston North West drill platform • Endowment 45,000 ounces per vertical metre • Multiple lodes within large mineralised package; average ~900m widt

  43. Slide 43: KCGM - Stockpiles the (not-so) hidden levers

    KCGM - Stockpiles the (not-so) hidden levers Mining costs already sunk For personal use only  Large surface stockpiles - 125Mt ore (2.9Moz Reserves) Reserve Stockpiles 125Mt @ 0.73g/t for 2.9Moz  Stockpile grades compare well with many peer open pit mines globally - But with NO cash mining costs 

  44. Slide 44: KCGM - Processing optionality

    KCGM - Processing optionality 13Mtpa current capacity, expansion studies underway For personal use only  As mining increases, the Reserve stockpile value becomes increasingly stranded KCGM processing studies  Evaluating mill expansion options Current Option 1 Option 2  NOT in current 5-year plan

  45. Slide 45: Kalgoorlie - Synergies to lower costs

    Kalgoorlie - Synergies to lower costs Kanowna Belle (+80kozpa producer) Carosue Dam (+250kozpa producer) For personal use only  0.6Moz Reserve, 2.5Moz Resource  1.8Moz Reserve, 4.3Moz Resource  Hanging wall prospectivity, open pit and bulk  Mill expanded - Low cost regional milling solution unde

  46. Slide 46: Yandal Production Centre

    For personal use only Yandal Production Centre Luke Creagh Chief Operating Officer

  47. Slide 47: Yandal Production Centre

    Yandal Production Centre Yandal Production Centre: Production target 600kozpa For personal use only  NST consolidated >270km of continuous strike of Western Reserves: 67Mt @ 2.1g/t for 4.5Moz Australia’s prolific Yandal greenstone belt Resources: 141Mt @ 2.2g/t for 10.1Moz Processing capacity: 5.5M

  48. Slide 48: Yandal - Investment drives value

    Yandal 600 - Investment drives value Yandal growth capital of A$270M in FY22 For personal use only  Options analysed included Jundee expansion, Bronzewing mill re-commission, TBO expansion  Highest value to increase TBO mill to 6.0Mtpa (A$180M) Thunderbox 6.0Mtpa schematic  Reduces TBO processing

  49. Slide 49: Yandal - Delivering value, growth, strategy

    Yandal 600 - Delivering value, growth, strategy 40% increase in production to ~600kozpa For personal use only  Increase Thunderbox mill to 6.0Mtpa; Jundee Yandal production outlook at 3.0Mtpa koz A$/oz 600 1,500  Total Yandal milling capacity 9.0Mtpa  Growth underpinned by 4.5Moz Reserves 500 1,2

  50. Slide 50: Pogo Production Centre

    For personal use only Pogo Production Centre Luke Creagh Chief Operating Officer

  51. Slide 51: Pogo Production Centre

    Pogo Production Centre Pogo Production Centre: Production target 300kozpa For personal use only  Pogo Operation is located ~150km south-east of Fairbanks, Alaska Reserves: 5.9Mt @ 8.0g/t for 1.5Moz Resources: 23Mt @ 9.4g/t for 6.9Moz Processing capacity: 1.3Mtpa (expanded)  The vaccine rollout in

  52. Slide 52: Pogo - FY21 delivered; Continuing to improve

    Pogo - FY21 delivered; Continuing to improve  FY21 production & cost guidance For personal use only delivered with 204koz sold (~210koz Pogo Ounce Production (FY20 to FY22 Guidance) produced) at AISC of US$1,387/oz 250 ~17% YoY ounce 1,200  This results was a 17% increase in production growth from

  53. Slide 53: Pogo value increasing on the way to 300kozpa

    Pogo value increasing on the way to 300kozpa  FY22 represents a ~17% increase in For personal use only production and 5% decrease in AISC Pogo production outlook costs koz A$/oz 300 1,800  Growth Capex of ~US$55M  Processing upgrade to 1.3Mtpa delivered 250 1,500 in September Quarter (current ~1.

  54. Slide 54: Finance & Commercial

    For personal use only Finance & Commercial Morgan Ball Chief Financial Officer

  55. Slide 55: Balance sheet - Robust and flexible

    Balance sheet - Robust and flexible Liquidity Position Capital allocation - Disciplined For personal use only  Re-investment (organic / inorganic) 30%  Dividends As at 30 June 2021  Retained earnings A$1.14B 70% Measure Target Range Leverage Ratio (Net Debt / EBITDA) Leverage ratio less than 1.5x

  56. Slide 56: Growth Capital and Hedging

    Growth Capital and Hedging Rolling 3-year hedge profile For personal use only  FY22 budgeted growth capital A$570M including 40 Fimiston South cutback & TBO expansion % of Production 30  Hedging decisions will support return on growth 20 capital and debt obligations Average 14% 10  Hedge book of

  57. Slide 57: Merger synergies

    Merger synergies For personal use only Tracking towards upper end of pre- Synergy estimate post implementation merger implementation estimate of (July 2021) A$1.5-2.0B* 50 350  Bigger than expected wins from Procurement operational efficiencies / milling optimisation will apply over life of Ore Mil

  58. Slide 58: Synergy - Corporate & Tax

    Synergy - Corporate & Tax 50 350 Corporate For personal use only Consolidated into one Corporate Office 200  900  Consolidation of operational and financial systems ongoing 500  Rationalisation of resources  Reduction in G&A of A$5-10/oz (pre-tax NPV ~A$60M) Tax  Merger will result in a reset o

  59. Slide 59: Synergy - Procurement

    Synergy - Procurement 50 350 Delivery For personal use only 200  Revised agreements for over 30 different 900 suppliers 500  Operating cost savings from revised agreements currently total ~A$30Mpa (final target pre-tax NPV of ~A$350M) Total Spend Addressed to Date A$540M  Driven by increased scal

  60. Slide 60: Markets

    For personal use only Markets Troy Irvin Chief Investor Relations Officer

  61. Slide 61: Global gold leaders

    Global gold leaders New peer group For personal use only Global Gold Leaders - Market capitalisation (US$B) 60 50 40 30 20 10 0 Newmont Barrick Newcrest Agnico Eagle Kirkland Lake Northern Star GoldFields AngloGold Kinross Evolution Endeavour B2Gold 60 Market capitalisation at 9 July 2021

  62. Slide 62: The recipe for outperformance

    The recipe for outperformance NST: Gold industry challenges: For personal use only  Long life, profitable growth   Declining Reserves and production  Consistent delivery v guidance Opportunity  Variable delivery (operational, financial)  Progressive ESG   Progressive ESG  Exclusively in Tie

  63. Slide 63: Advantage NST: Unrivalled exposure to Tier-1 locations

    Advantage NST Unrivalled exposure to Tier-1 locations For personal use only We are the only “Global Gold Leader” mining exclusively in Tier-1 jurisdictions Pogo Yandal 6.9Moz Resource 10.1Moz Resource 1.5Moz Reserve USA 4.5Moz Reserve (Alaska) Kalgoorlie 37.6Moz Resource 15.0Moz Reserve Perth Austra

  64. Slide 64: Advantage NST: Unrivalled exposure to Reserve and production growth

    Advantage NST Unrivalled exposure to Reserve and production growth For personal use only Global Gold Leaders - Reserve Growth (5-year CAGR) 43% 40% Northern Star 43% v Global gold leader average 8% 22% 11% 5% 5% 2% -2% -3% -6% -7% Northern Star Kirkland Lake Endeavour Evolution Newmont Agnico Eagle

  65. Slide 65: Opportunities: Valuation, Bucking the trend

    Opportunities Valuation For personal use only Bucking the trend Newmont 1.5 Agnico Eagle Evolution 1.3 P / NAV (x) Kirkland Lake Barrick 1.1 GoldFields Northern Star Endeavour AngloGold 0.9 Newcrest B2Gold Kinross 0.7 0 10 20 30 40 50 60 Market capitalisation (US$B) 64 Source: Factset 9 July 2021

  66. Slide 66: Broad investor appeal

    Broad investor appeal For personal use only Generalist Funds  Stability, scale, liquidity, long mine life, low jurisdictional risk Precious Metal Funds  Exposure to immediate cash flow and organic growth / exploration upside Value  Attractive across a range of valuation metrics (absolute and rela

  67. Slide 67: Investor Summary

    For personal use only Investor Summary Stuart Tonkin Managing Director

  68. Slide 68: Business development: Active portfolio management

    Business development Active portfolio management For personal use only  Business development focus = Enhance the portfolio  Sustainable production ~2Mozpa from 3-5 production centres  Disciplined - Focused on quality, reward for effort and value per share: Filter Tier-1 jurisdiction  Geological

  69. Slide 69: Why invest in NST?

    Why invest in NST? For personal use only  Business first - Leveraging operating / technical skills and disciplined capital management to deliver superior shareholder returns  Tier-1 jurisdictions - Exclusively  Capital discipline - Balance between shareholder returns and re- investment, active po

  70. Slide 70: FY22 guidance

    FY22 guidance 1.55-1.65Moz at AISC of A$1,475-1,575/oz; A$570M growth capital For personal use only Gold production AISC Growth capital Exploration (koz) (A$/oz) (A$M) (A$M) Kalgoorlie 900-950 1,500-1,600 230 Yandal 430-450 1,375-1,475 270 1,700-1,800 70 Pogo 220-250 (US$1,275-1,350/oz) (~US$55M) Gr

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