Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — Investor Presentation (September 2011)
42 slides from Whitehaven Coal's investor presentation, Sep 9, 2011
Slide 1: Delivering Growth – Investor Presentation September 2011
For personal use only Whitehaven Coal Limited Delivering Growth Investor Presentation – September 2011
Slide 2: Disclaimer
Disclaimer For personal use only Statements contained in this material, particularly those regarding the possible or assumed future performance, costs, dividends, returns, production levels or rates, prices, reserves, potential growth of Whitehaven Coal Limited, industry growth or other trend projec
Slide 3: Qualifications and Statement
Qualifications and Statement For personal use only Information in this report that relates to Coal Resources and Reserves is based on and accurately reflects reports prepared by the Competent Person named beside the respective information. All these persons are consultants for Whitehaven Coal Limite
Slide 4: Contents
Contents For personal use only ► Investment highlights and outlook ► Status of growth plans ► FY 2011 highlights ► Operating and financial results FY 2011 3 Full Year Results - August 2011
Slide 5: Whitehaven is the leading coal producer and developer in the Gunnedah Basin
Whitehaven is the leading coal producer and developer in the Gunnedah Basin For personal use only 1 Large resources and reserves of high quality coal 2 High productivity mines & high yield coals provide cost and margin benefits Increasing percentage of metallurgical coal production and close to 100%
Slide 6: Large resources and reserves of high quality coal
1 Large resources and reserves of high quality coal For personal use only ► Thermal and metallurgical Coal Resources of 1,772 Mt (100% basis) and Marketable Reserves of 426 Mt (100% basis) ► Revised JORC statement released on 23 August 2011 ► Potential for continued increase in Marketable Reserves f
Slide 7: High yield coals provide cost and margin benefits
2 High yield coals provide cost and margin benefits For personal use only ► Average saleable coal yield of +90%, compared to an average of around 73% for Hunter Valley coals ► Currently 25% metallurgical coal, expected to increase to between 40% and 50% in future ► Average cash cost of ~A$60/t FOB N
Slide 8: Increasing percentage of metallurgical coal production capacity
4 Increasing percentage of metallurgical coal production capacity - close to 100% export sales For personal use only ► Metallurgical coal is expected to grow to between 40% and 50 % of total saleable production capacity as Narrabri and Vickery are fully developed ► Expected long term average of 80%
Slide 9: Mix of off-take contracts and uncommitted tonnages
4 Mix of off-take contracts and uncommitted tonnages to manage market and production risks For personal use only ► Whitehaven has off-take commitments with Narrabri JV partners, but there remains significant uncommitted tonnage in the future ► The Vickery project offers a good mix of metallurgical c
Slide 10: Low-risk open cut production base with substantial growth
5 Low-risk open cut production base with substantial growth from Narrabri UG and Vickery OC For personal use only ► Four OC mines with ~5.5 Mtpa1 SALEABLE PRODUCTION CAPACITY VS PORT capacity. OC growth from CAPACITY (100% BASIS) 1. 18,000 Vickery ► Saleable production capacity 16,000 expected to be
Slide 11: Growth plans are well funded
6 Growth plans are well funded Capacity to fund new opportunities For personal use only ► Cash on hand at end June of ~$207.6 million, with minimal finance debt other than equipment leasing and funding for the Narrabri longwall ► Major committed capital is the completion of Narrabri Stage 2, which i
Slide 12: Major milestones to be passed in FY 2012
6 Major milestones to be passed in FY 2012 For personal use only ► Installation of Narrabri longwall and ramp up of production Narrabri has been systematically de-risked over the last three years. Capital works are complete, mining is underway, installation of the longwall and ramp up to design capa
Slide 13: Contents
Contents For personal use only ► Investment highlights and outlook ► Status of growth plans ► FY 2011 highlights ► Operating and financial results FY 2011 12 Full Year Results - August 2011
Slide 14: Ongoing growth in Resources & Marketable Reserves
Ongoing growth in Resources & Marketable Reserves Reserve life increased while production also increased For personal use only Whitehaven Coal - JORC Resources Whitehaven Coal - JORC Marketable Reserves 2,000 500 1,800 450 1,600 400 1,400 350 1,200 300 Million Tonnes Million Tonnes 1,000 250 800 200
Slide 15: Substantial growth from Narrabri underground mine
Substantial growth from Narrabri underground mine For personal use only ► Coal resources of 854 Mt in a single seam of 8-9 metres thick ► Current marketable reserves of 199.9 Mt based on extracting the bottom 4.2 metre section of the seam only ► Low ash, high energy, low sulphur PCI and thermal coal
Slide 16: Narrabri now developing for longwall
Narrabri now developing for longwall For personal use only ► First CM production 28 June 2010 ► Four continuous miners now developing for LW ► More than 280 Kt of saleable coal produced to date ► Longwall installation due in February 2012 ► Gas drainage successful in reducing CO2 levels below requir
Slide 17: Gas Drainage Strategy
Gas Drainage Strategy For personal use only SIS on Drainage SIS Drilled Planned SIS 16 Full Year Results - August 2011
Slide 18: Narrabri UG development conditions are very good
Narrabri UG development conditions are very good For personal use only 17 Full Year Results - August 2011
Slide 19: Longwall is 94% complete, surface build started
Longwall is 94% complete, surface build started For personal use only 18 Full Year Results - August 2011
Slide 20: CHPP now being commissioned
CHPP now being commissioned For personal use only 19 Full Year Results - August 2011
Slide 21: Shaft complete and fans being commissioned
Shaft complete and fans being commissioned For personal use only ► Stage 2 capital estimate of ~$300 million (100% basis) remains on track 20 Full Year Results - August 2011
Slide 22: Longwall panel #1 development rate is critical path
Longwall panel #1 development rate is critical path For personal use only 21 Full Year Results - August 2011
Slide 23: Extension of the Tarrawonga JV has significant strategic benefits
Extension of the Tarrawonga JV has significant strategic benefits for both parties For personal use only ► Utilises coal reserves within the Boggabri Coal area which would not otherwise be mined ► Extends the existing 70:30 Tarrawonga JV reserves to allow up to 3 Mtpa for 20 years with same coal qua
Slide 24: Vickery a major strategic growth acquisition
Vickery a major strategic growth acquisition For personal use only ► The Vickery project area comprises Vickery, Merton, Bluevale and Canyon Extended ► 439 Mt of open cut Coal Resource, with an interim Marketable Reserve of 113.5 Mt ► Coal seams at Vickery contain a range of semi-soft coking and hig
Slide 25: Large OC reserve at Vickery with extensions to come
Large OC reserve at Vickery with extensions to come For personal use only ► 439 Mt opencut Coal Resource in the Vickery area ► Main Pit (green outline) now MERTON has 164 Mt of ROM coal at 10:1 stripping ratio, of which 129 POTENTIAL Mt is currently JORC EXTENSION Recoverable Reserve AREA ► Further
Slide 26: Rail track capacity to meet Whitehaven's growth
Rail track capacity to meet Whitehaven’s growth For personal use only ► Whitehaven has now entered into a long term track access agreement with ARTC which provides capacity to meet Whitehaven's planned growth ► Further track upgrades have been identified by ARTC to increase rail capacity to ~60 Mtpa
Slide 27: New trains being acquired as needed for growth
New trains being acquired as needed for growth For personal use only ► Whitehaven has a long term haulage agreement with PN which includes the provision of new trains to meet Whitehaven’s growth plans. ► Two new trains have been commissioned, with the third due in October 2011 26 Full Year Results -
Slide 28: Newcastle port capacity is growing rapidly
Newcastle port capacity is growing rapidly For personal use only 100 100 PWCS NCIG 315+ 40 40 T4 70 32 32 32 30 30 30 30 145 113 113 113 113 Newcastle Port Capacity by PWCS expansion by 2012 NCIG expansion during 2013 PWCS Terminal 4 Future Expected Newcastle end of CY2010 Port Capacity 27 Full Year
Slide 29: Port capacity to meet Whitehaven growth
Port capacity to meet Whitehaven growth For personal use only WHC - PORT CAPACITY BUILDUP 16,000 14,000 12,000 T4 Thousand tonnes 10,000 Idemitsu TJV 8,000 NCIG Stage 2F 6,000 NCIG Stage 2AA 4,000 NCIG Stage 1 2,000 PWCS 0 28 Full Year Results - August 2011
Slide 30: NCIG Stage now fully operational, first Cape size ship due in September
NCIG Stage 1 now fully operational, first Cape size ship due in September For personal use only 29 Full Year Results - August 2011
Slide 31: Contents
Contents For personal use only ► Investment highlights and outlook ► Status of growth plans ► FY 2011 highlights ► Operating and financial results FY 2011 30 Full Year Results - August 2011
Slide 32: Highlights - FY 2011
Highlights - FY 2011 For personal use only ► Net profit after tax (NPAT) of $9.9 million1 ► Underlying NPAT (excluding significant items) of $73.3 million, up 33% ► Final fully franked dividend of 4.1 cents per share2 ► Average cash cost of sales slightly lower at $60.49 per tonne FOB ► EBITDA of $1
Slide 33: Operating highlights - FY 2011
Operating highlights - FY 2011 For personal use only ► Coal sales grew strongly, but with more purchased coal to meet legacy contracts ► up 45% to 6.647 million tonnes (Mt) (100% basis) ► up 48% to 6.126 Mt (equity share) ► Saleable coal production increased substantially, mainly in the second half
Slide 34: Business development highlights - FY 2011
Business development highlights - FY 2011 For personal use only ► Coal Resources (JORC) increased by 8.5% to 1,771.5 Mt ► Marketable Coal Reserves (JORC) increased by 34% to 426.1 Mt ► Vickery Project progressed with opencut Coal Resources (JORC) now at 439.2 Mt and interim opencut Marketable Reserv
Slide 35: Contents
Contents For personal use only ► Investment highlights and outlook ► Status of growth plans ► FY 2011 highlights ► Operating and financial results FY 2011 34 Full Year Results - August 2011
Slide 36: Growth of coal production and sales continues
Growth of coal production and sales continues Saleable coal production has trebled in 5 years For personal use only Saleable Production - Equity Basis Total Coal Sales - Equity Basis 4,500 7,000 4,000 6,000 3,500 5,000 3,000 000 tonnes 000 tonnes 2,500 4,000 2,000 3,000 1,500 2,000 1,000 1,000 500 0
Slide 37: Higher prices + lower costs = better EBITDA margins
Higher prices + lower costs = better EBITDA margins For personal use only A$/t FOB FY 2010 FY 2011 Coal Sales - 000t (equity basis, excl. purchased coal) 3,310 4,243 Average revenue - (excl. purchased coal & net of NSW royalties) 99.14 103.00 Average cash cost of sales 61.78 60.49 EBITDA 37.36 42.51
Slide 38: Full year profitability – FY 2011
Full year profitability – FY 2011 For personal use only Reported Financial Performance - A$ millions FY 2010 FY 2011 Revenue 406.8 622.2 NPAT before Significant Items 55.1 73.3 NPAT 114.9 9.9 Earnings per share (cents per share - diluted) 24.0 2.0 Final dividend (cents per share - fully franked) 2.8
Slide 39: Cash flow – FY 2011
Cash flow – FY 2011 For personal use only A$ millions FY 2010 FY 2011 Cash generated from operations 69.3 120.3 Interest and tax payments (108.8) (40.9) Net cash provided by/(used) in operating activities (39.5) 79.4 Proceeds from sale of assets 100.8 191.8 Capital investment (245.7) (225.3) Other i
Slide 40: June financial position
30 June financial position For personal use only A$ millions June 30 – 2010 June 30 – 2011 Cash 141.0 207.6 Current receivables 289.2 92.4 Other current assets 72.0 162.3 Current assets 502.2 462.3 Non-current receivables 37.2 2.7 Other non-current assets 811.9 997.4 Total assets 1,351.3 1,462.4 Cur
Slide 41: Full year capex – FY 2011
Full year capex – FY 2011 For personal use only Capital Investment - $ million FY 2010 FY 2011 Tarrawonga 1 2.4 2.3 Werris Creek 45.3 8.3 Rocglen 2.0 2.4 Sunnyside 2.2 1.9 Gunnedah CHPP 12.9 16.4 Total Open-cuts 1 64.8 31.3 Narrabri 1, 2 126.6 104.4 New coal train 35.5 3.7 Exploration 1.5 4.1 Vicker
Slide 42: Fixed price coal contracts and fixed FX status
Fixed price coal contracts and fixed FX status For personal use only ► “Legacy” thermal coal contracts of 1.77 Mt remain over next year, average price US$68.98/t. Otherwise, US$ coal prices are currently only fixed for the short term ► Whitehaven has a total FX fixed position of US$319.9m at an aver
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