Slide 1: Bathurst Resources FY 2018 Results Investor Presentation
For personal use only BATHURST RESOURCES FY 2018 RESULTS Investor Presentation
Slide 2: Agenda
AGENDA For personal use only • Highlights • Sustainability • Export and Domestic Markets • Operations • Financial Performance • Strategy • Project Pipeline • FY19 Forecast 2
Slide 3: Highlights
For personal use only Highlights
Slide 4: Highlights
HIGHLIGHTS A record year incorporating 10 months of operations from BT Mining For personal use only Strong safety Equity coal sales of record with LTIFR 1.5 Mt (incl. 3rd party purchased at 1.2 coal) Record operating Gearing low at profit $72.9 million 21%1 (excl. Convertible Notes) Record EBITDA Ne
Slide 5: Sustainability
For personal use only Sustainability
Slide 6: Health, Safety and Environment
HEALTH, SAFETY AND ENVIRONMENT To ensure long term sustainability we must operate with the highest standards in For personal use only Health, Safety, Environment and Community SAFETY HEALTH ENVIRONMENT LTIFR = 1.2 Zero 1 TRIFR = 4.6 occupational health illness serious water discharge incident at Can
Slide 7: Community Contributions
COMMUNITY CONTRIBUTIONS Bathurst’s contribution to the communities that it operates in forms an integral part of Bathurst’s strategic direction. Maintaining positive stakeholder relationships is a core part of its operating For personal use only framework. 91% of our $221.6m employees live locally t
Slide 8: Export and Domestic Markets
For personal use only Export and Domestic Markets
Slide 9: Export Markets
EXPORT MARKETS Export Business Development For personal use only • New markets have been developed in Australia and India for Alpine (Semi hard coking coal) product. • Markets are developed ahead of production. • Steel manufacturers are increasingly more technical on their coal purchases to maximise
Slide 10: Positioning on HCC Cost Curve
POSITIONING ON HCC COST CURVE For personal use only BRL HCC Commercial in Confidence 10
Slide 11: Domestic Market
DOMESTIC MARKET For personal use only New Zealand Industry Diversified Coal Consumption Domestic market is stable • Domestic market performing well through a range of industries. • Stable fixed pricing and margins underpin the business. • Working closely with key long- term customers (NZS, Genesis,
Slide 12: Market Risk Management
MARKET RISK MANAGEMENT Committed Hedging (Coal) For personal use only Hedging lines established for BT 100% Mining to manage its market 80% 31% 45% 28% exposure to USD HCC and FX: 60% 9% 40% • Unsecured facility for 250kt HCC equivalent - which equates to approx. 30% 20% of annual production. 0% Aug
Slide 13: Operations
For personal use only Operations
Slide 14: New Zealand's Largest Coal Producer
NEW ZEALAND’S LARGEST COAL PRODUCER Bathurst is the leading presence in coal production in New Zealand, with 2.1 Mt under For personal use only Bathurst management split across both export and domestic markets Sales by region (mtpa) Sales by product use (% of revenue $) Figures noted above are Bathu
Slide 15: Stockton (65% BRL)
Stockton (65% BRL1) Stockton is an open cut mine located on the West Coast of New Zealand producing a For personal use only low-ash metallurgical coal for export Stockton Production (FY19) 1.1 mt Unit Cost (FOB) NZ$100/t FTE 230 Crown Rehab. NZ$38.6m Indemnity Resource 69.2 Mt6 Reserve 12.4 Mt6 ✓ In
Slide 16: North Island Domestic (65% BRL)
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 For personal use only Rotowaro Production (FY19) 588 kt EBITDA margin (FY19) NZ$40/t2 FTE 123 Crown Indemnity NZ$15.3m Resource 9.7 Mt3 Reser
Slide 17: South Island Domestic (100% BRL)
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 For personal use only Takitimu Production (FY19) 251 kt EBITDA margin (FY19) NZ$25/t1 FTE 46 Resource 5.3 Mt2 Reserve 1.8 Mt2
Slide 18: Financial Performance
For personal use only Financial Performance
Slide 19: Financial Highlights
FINANCIAL HIGHLIGHTS Income Statement FY 2018 FY2017 Movement For personal use only Underlying profit before tax $43.4m $1.1m $42.3m Excluding fair value movements, debt costs and transaction costs EBITDA $93.4m $10.0m $83.8m BT Mining contributed $85.3m Cash generated from operations $54.6m $9.
Slide 20: Cash Allocation
CASH ALLOCATION For personal use only Figures noted above are Bathurst and BT Mining at 65% for FY18 Commercial in Confidence 20
Slide 21: Growth in Underlying Profit
GROWTH IN UNDERLYING PROFIT Financial Performance - $m FY 2018 FY2017 For personal use only Revenue 237.1 41.6 Cost of Sales (134.0) (32.4) Gross Profit 103.1 9.2 Administrative and other expenses (14.2) (6.3) Other non-cash costs (13.7) (1.3) Operating profit before income tax 75.2 1.6 Finance cost
Slide 22: Strategy
For personal use only Strategy
Slide 23: Strategic Goals
STRATEGIC GOALS Operations For personal use only - Increase productivity - Improve equipment utilisation - Sustain domestic margins - Maintain Export FOB below NZD $100/tonne Customers/Markets To be the leading People and domestic and export coal Community - Maintain NZ domestic market share produce
Slide 24: Project Pipeline
For personal use only Project Pipeline
Slide 25: Forward Looking Approach
FORWARD LOOKING APPROACH For personal use only 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 classif
Slide 26: Long Term Company Growth
LONG TERM COMPANY GROWTH For personal use only BRL Production Tonnes 100% by market BRL Production Tonnes 100% v Equity Share Commercial in Confidence 26
Slide 27: Buller Project (100% BRL)
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 For personal use only Item With Without Synergies Synergies CHPP nil $100m Access to Rail $6m $50m Rail loadout nil $25m Water $3m $3m treat
Slide 28: Buller Project Timetable
BULLER PROJECT TIMETABLE A short development cycle at low capital cost1 to bring on stream For personal use only • Increase Resource definition – large diameter washability holes Evaluation • Complete Feasibility Study • Transport route Consenting • Mining Areas • Initial Boxcut in Sullivan CML (350
Slide 29: Marshalls Development Plan (65% BRL)
MARSHALLS DEVELOPMENT PLAN (65% BRL) A natural southern extension of the Cypress area of Stockton For personal use only Development of an open cut pit within the Upper Waimangaroa Permit. Resource can be integrated into the current Stockton market plan. Key component for a Deep Creek blend and shoul
Slide 30: Deep Creek Development Plan (BRL/BT)
DEEP CREEK DEVELOPMENT PLAN (BRL/BT) This area is a blend of BT Mining and Bathurst held resources with access back to For personal use only Stockton Infrastructure Development of an open cut pit within the Upper Waimangaroa Permit and incorporating comparable coal within the BRL Buller exploration
Slide 31: Waipuna West – Rotowaro Extension (BRL 65%)
WAIPUNA WEST – ROTOWARO EXTENSION (BRL 65%) Extending the life of the Rotowaro complex For personal use only Waipuna West is an extension project for the Rotowaro mine. Bathurst is evaluating options but looking to be Owner Operator utilising the existing heavy fleet. Project Metrics: Expected Minea
Slide 32: Crown Mountain (BRL buy-in to 50%)
CROWN MOUNTAIN (BRL buy-in to 50%) Project moving towards Bankable Feasibility Study and Permitting For personal use only Comprehensive due diligence has been undertaken by Bathurst Resources. An in-depth understanding of the status of the project has been achieved that includes the next steps requi
Slide 33: Crown Mountain Key Metrics
CROWN MOUNTAIN KEY METRICS The pre-feasibility study was updated in April 2017 and demonstrates robust For personal use only economics, forming the backdrop for Bathurst’s due diligence assessment of the Crown Mountain project. ✓ FOB cash cost of US$75/t life-of-mine (US$66/t first four years). ✓ Ha
Slide 34: FY19 Forecast
For personal use only FY19 Forecast
Slide 35: FY19 Key Forecast Metrics
FY19 KEY FORECAST METRICS For personal use only Measure Stockton North Island South Island BRL Domestic Domestic Equity Share Production 1.1Mt 800kt 400kt 1.6Mt Cash cost (av $100 tonne at port) Margin/t $621 $40 $25 EBITDA $62m-73m $32m $10m BRL share of $72m-$78m $41m-47m $21m $10m EBITDA $75m(av.
Slide 36: L&M Case Update
L&M CASE UPDATE On 20 August 2018, the High Court found in favour of LMCH1 and that BRL owed a USD For personal use only $40m performance payment under the Buller project Sale and Purchase Agreement (SPA) of 2010. An update on the case: ✓ Bathurst has lodged an Appeal against the finding on a number
Slide 37: Competent Persons Statement
COMPETENT PERSONS STATEMENT Bathurst Resources Competent Person Statement For personal use only 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-C