Northern Star Resources Ltd · ASX:NST
Northern Star Resources — Merger or Acquisition (October 2020)
42 slides from Northern Star Resources's merger presentation, Oct 6, 2020
Slide 1: Northern Star and Saracen: A Compelling Combination
Northern Star and Saracen: For personal use only A Compelling Combination • Strategic merger-of-equals to create a Top-10 global gold miner operating exclusively in Tier-1 jurisdictions • Highly accretive transaction, unlocking synergies of A$1.5-2.0B 6 October 2020 Not for release to US wire servic
Slide 2: Cautionary note and disclaimer
Cautionary note and disclaimer For personal use only This presentation is a joint presentation by Northern Star Resources Limited (Northern Star) and Saracen Mineral Holdings Limited (Saracen). For the purposes of ASX Listing Rule 15.5: (a) Northern Star confirms that this presentation has been auth
Slide 3: Reserves, Resources & production targets
Reserves, Resources & production targets For personal use only ASX Listing Rule 5.19 Ore reserves and mineral resources reporting (by Northern Star and by Saracen) This presentation contains estimates of Northern Star's and Saracen's respective ore reserves and mineral resources, as well as estimate
Slide 4: Transaction summary
For personal use only 1Transaction summary
Slide 5: A platform for growth and superior returns
A platform for growth and superior returns For personal use only Targeting production of 2Mozpa from three Tier-1 production centres by FY271 A sector-leading global gold miner currently producing Positioned for market leading growth across two Tier-1 1.6Mozpa with a pathway to 2Mozpa jurisdictions
Slide 6: Transaction overview
Transaction overview For personal use only A compelling merger-of-equals with unique strategic merit and strong value-drivers • Merger of Northern Star and Saracen, to be effected via a Saracen scheme of arrangement (Scheme) under which Northern Star will acquire 100% of the fully paid ordinary shar
Slide 7: Transaction rationale
Transaction rationale For personal use only A highly accretive transaction, creating a Top-10 global gold producer with high-margin assets located exclusively in Tier-1 jurisdictions1 • Combined portfolio of high quality assets concentrated in three logical production centres exclusively in Tier-1 j
Slide 8: Transaction rationale: Logical combination of highly complementary assets
Transaction rationale For personal use only 1 Logical combination of highly complementary assets1 • Logical, accretive M&A - A unique and significant opportunity to combine complementary assets and management teams • Transaction creates a Top-10 global gold miner, with three large-scale Tier-1 produ
Slide 9: Complementary portfolio of assets
Complementary portfolio of assets For personal use only 1 High-quality, long-life assets located exclusively in Tier-1 locations1 Kalgoorlie Operations Yandal Operations North American Operations A KCGM (100%) D Jundee & Bronzewing F Pogo Reserves 9.7Moz (1.3g/t) Reserves 2.8Moz (2.7g/t) Reserves 1.
Slide 10: Three large-scale production centres
Three large-scale production centres1 For personal use only Kalgoorlie Operations Yandal Operations North American Operations 1 Reserves: 287Mt @ 1.4gpt for 13.3Moz Reserves: 66Mt @ 2.2gpt for 4.6Moz Reserves: 5.9Mt @ 8.0gpt for 1.5Moz Resources: 516Mt @ 1.8gpt for 30.5Moz Resources: 139Mt @ 2.3gpt
Slide 11: Three large-scale production centres
Three large-scale production centres For personal use only 1 Simplified business structure with three Tier-1 production centres1 Kalgoorlie Operations Yandal Operations North American Operations Carosue Dam KCGM 250kozpa 550kozpa target target Jundee and Thunderbox Bronzewing 200kozpa 400kozpa targe
Slide 12: Geological endowment - a major value driver
Geological endowment - a major value driver For personal use only 1 Consolidation of world-class gold systems, exclusively in Tier-1 locations1 Kalgoorlie Operations Yandal Operations North American Operations 10.0 110 9.0 100 Ore Reserve Grade (g/t) 90 8.0 80 7.0 70 6.0 Moz Au 60 127 years 5.0 prod
Slide 13: One vision for KCGM
One vision for KCGM For personal use only 1 Consolidating ownership of KCGM for the first time will streamline operations, drive efficiencies and accelerate growth options Benefits of 100% ownership KCGM growth opportunities KCGM synergy potential • Ensures a clear aligned vision for • Opportunity t
Slide 14: Sector-leading growth, with superior financial returns
Transaction rationale For personal use only 2 Sector-leading growth1, with superior financial returns2 • Clear trajectory towards 2Mozpa gold production, with production set to grow by +30% in the next 3 years3 • Growth capital intensity is one of the lowest in the global gold sector • Combined enti
Slide 15: Compelling production growth
Compelling production growth For personal use only 2 Initial production of >1.6Mozpa with a pathway to 2Mozpa, maintaining the growth trajectory of both companies which has generated sector-leading shareholder returns Lack of production growth across global gold sector1 Combined production profile2,
Slide 16: Compelling exploration pipeline
Compelling exploration pipeline1 For personal use only 2 Merged entity includes a significant pipeline of projects to drive further Resource and Reserve growth2 Exploration Evaluation Feasibility Development Production Kanowna Regional Carnage Tanami Armada Anthill Kal Ops: Revelation Carbine Pogo c
Slide 17: The right skill-set to drive value creation
Transaction rationale For personal use only 3 The right skill-set to drive value creation • Proven and highly experienced Board and senior management team to be drawn from both companies: • Team reflects the relevant and significant expertise of both companies • Existing senior leadership retained w
Slide 18: Compelling Board and senior management
Compelling Board and senior management For personal use only 3 Proven Board and senior management team to continue to drive value creation for shareholders Approach to Board and management MergeCo Board of Directors ⚫ Board and management team reflects the depth and significant expertise of both Sar
Slide 19: Significant synergies unique to this merger
Transaction rationale For personal use only 4 Significant synergies unique to this merger, A$1.5-2.0B1 of value to be unlocked (pre-tax NPV) • This is M&A that works - A unique and significant opportunity only available by combining Northern Star and Saracen to unlock geographic, operational and str
Slide 20: Processing capacity to unlock value
Processing capacity to unlock value For personal use only 4 Over 24Mtpa of processing capacity in the Western Australian Goldfields, providing increased operational flexibility for the combined portfolio Kalgoorlie processing options Yandal processing options • Unprecedented footprint in the Western
Slide 21: Alignment on sustainability and culture
Alignment on sustainability and culture For personal use only 4 Northern Star and Saracen are fully aligned in their approach to sustainability and culture. The companies were founded upon the same principles, which have been instrumental to their success Northern Star Core Values Saracen Core Value
Slide 22: Environment and social responsibility
Environment and social responsibility For personal use only 4 The merged entity is committed to ensuring all business activities interact with the natural environment in a consistently responsible manner Ability to leverage combined ESG experience to enhance shared value for all stakeholders Merged
Slide 23: Governance
Governance For personal use only 4 Corporate governance is essential to sustainable value creation We will remain committed to pursuing the highest standards in all aspects of corporate governance and transparency The Merged entity will meet every recommendation of the ASX Corporate Governance Counc
Slide 24: The scale and liquidity to attract both gold and generalist investors
Transaction rationale For personal use only 5 The scale and liquidity to attract both gold and generalist investors • Top-10 global gold miner with sector-leading production growth; pathway to 2Mozpa1 • Size and liquidity to attract generalist as well as gold-focused global investors and Australian
Slide 25: Australian gold landscape re-defined
Australian gold landscape re-defined 30 For personal use only 29 5 MergeCo creates a new, high-quality large-cap alternative in the Australian gold market The28only large cap with 100% production exposure in Tier-1 jurisdictions1 27 Percentage of FY21 production 57 % 100% from Tier-1 jurisdictions 2
Slide 26: Relative positioning
Relative positioning For personal use only 5 Merger creates a global Top-10 gold producer, with a unique portfolio of assets all located in Tier-1 jurisdictions Market capitalisation (A$B) Production Guidance (koz)1,2 Newmont 69.8 Newmont 6,950 Barrick 69.2 Barrick 5,734 Agnico Eagle 26.8 AngloGold
Slide 27: A compelling combination - Takeaways
A compelling combination - Takeaways For personal use only A unique opportunity exclusively available for both companies to unlock significant value, and build a major global gold producer with an exceptional high-margin growth profile Benefits to both sets of shareholders ✓ Top-10 global producer,
Slide 28: Indicative timetable
Indicative timetable For personal use only Scheme booklet anticipated to be dispatched to Saracen shareholders in December 2020 with completion targeted in early February 2021 Transaction timetable (indicative) Event Date First Court Hearing December 2020 Saracen to dispatch Scheme documents to its
Slide 29: Additional materials
A For personal use only Additional materials
Slide 30: Pro-Forma Snapshot
Pro-Forma Snapshot For personal use only Northern Star Saracen Pro-Forma Share price / Offer price A$ 13.82 5.22 - No. ordinary shares1 M 741 1,108 1,158 Market Capitalisation2 A$M 10,240 5,782 16,022 % shareholding in MergeCo % 64.0% 36.0% - Cash and equivalents (30 Jun 2020)3 A$M 770 369 1,139 Deb
Slide 31: People, inclusion & diversity
People, inclusion & diversity For personal use only People provide the foundation for any organisation’s success Northern Star’s and Saracen’s practices foster inclusivity and actively manage diversity as a means of enhancing company performance. The safety, health and well-being of our employees, c
Slide 32: Kalgoorlie Production Centre
Kalgoorlie Production Centre For personal use only Kalgoorlie Overview KCGM (NST/SAR) Mines Kalgoorlie Operations (NST) Carosue Dam (SAR) Mining method Underground & open pit Ability to process varying ore types (free-milling and Processing sulphide ores) Currently 18.6Mtpa with capital committed to
Slide 33: Yandal Production Centre
Yandal Production Centre For personal use only Yandal Overview Jundee (NST) Mines Thunderbox (SAR) Bronzewing (NST) Mining method Underground & open pit Processing Conventional CIL plant Currently 5.5Mtpa with capital committed to expand to Milling capacity 8.5Mtpa in FY22 Reserves 4.6Moz Resources
Slide 34: North American Production Centre
North American Production Centre For personal use only North America (Pogo) Overview Mines Pogo Mining method Underground Processing Conventional CIL plant Currently 1Mtpa with capital committed to expand to Milling capacity 1.3Mtpa Reserves 1.5Moz Resources 6.7Moz FY2021 Production 180-220koz FY202
Slide 35: Consolidated Ore Reserves
Consolidated Ore Reserves For personal use only Proved Probable Total Reserve Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces (000’s) (gpt) (000’s) (000’s) (gpt) (000’s) (000’s) (gpt) (000’s) Kalgoorlie Gold Project KCGM 127,611 0.7 3,073 111,832 1.8 6,617 239,443 1.3 9,690 Carosue Dam 3
Slide 36: Consolidated Ore Reserves (cont.)
Consolidated Ore Reserves (cont.) For personal use only Proved Probable Total Reserve Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces (000’s) (gpt) (000’s) (000’s) (gpt) (000’s) (000’s) (gpt) (000’s) Pogo Gold Project Pogo - - 4 5,867 8.0 1,507 5,867 8.0 1,511 Sub-Total Pogo - - 4 5,867
Slide 37: Consolidated Mineral Resources
Consolidated Mineral Resources For personal use only Measured Indicated Inferred Total Resources Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces (000’s) (gpt) (000’s) (000’s) (gpt) (000’s) (000’s) (gpt) (000’s) (000’s) (gpt) (000’s) Kalgoorlie Gold Project KCGM 127,32
Slide 38: Consolidated Mineral Resource (cont.)
Consolidated Mineral Resource (cont.) For personal use only Measured Indicated Inferred Total Resources Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces (000’s) (gpt) (000’s) (000’s) (gpt) (000’s) (000’s) (gpt) (000’s) (000’s) (gpt) (000’s) Pogo Gold Project Pogo - - 4
Slide 39: Competent Persons Statements
Competent Persons Statements For personal use only Northern Star The information in this announcement that relates to Mineral Resource estimations, exploration results, data quality and geological interpretations for the Company’s Project areas (excluding the Central Tanami Gold Project, the Bronzew
Slide 40: Competent Persons Statements
Competent Persons Statements For personal use only Northern Star cont. The information in this announcement that relates to the Mt Clement Project is extracted from the Artemis Resources Limited announcement entitled “Substantial Resource Increase at Mt Clement Gold & Silver Project” released on ASX
Slide 41: Forward looking statements and risks
Forward looking statements and risks For personal use only Past performance Past performance metrics and figures, as well as pro forma financial information, included in this presentation are given for illustrative purposes only and should not be relied upon as (and are not) an indication of Norther
Slide 42: Financial data and Ore Reserve replacement
Financial data and Ore Reserve replacement For personal use only Industry data Certain market and industry data used in connection with or referenced in this presentation, including in relation to other companies in the peer group of Northern Star and Saracen, may have been obtained from public fili
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