Stanmore Resources Ltd · ASX:SMR
Stanmore Resources — Stanmore Coal — Merger or Acquisition (July 2015)
33 slides from Stanmore Resources's merger presentation, Jul 30, 2015
Slide 1: Acquisition of Isaac Plains: A Fully Equipped Coking Coal Mine
For personal use only ACQUISITION OF ISAAC PLAINS A FULLY EQUIPPED COKING COAL MINE July 2015
Slide 2: Important Information
IMPORTANT INFORMATION For personal use only This document has been prepared by Stanmore Coal Limited (“Stanmore Coal”) Although due care and attention has been used in the preparation of forward Competent Persons Statement: for the purpose of providing a company and technical overview to interested
Slide 3: Overview of Stanmore Coal
OVERVIEW OF STANMORE COAL For personal use only Queensland based coal Advanced metallurgical and Highly experienced Board Well funded with a strong development company, thermal coal development and management team with shareholder base transitioning to production projects in the Bowen and pr
Slide 4: Strong Board and Management Team
STRONG BOARD AND MANAGEMENT TEAM For personal use only Over 150 years of coal exploration, development and operational experience KEY MANAGEMENT Nick Jorss Mike McKee Andrew Roach Nigel Clifford Managing Director Chief Operating Officer Chief Financial Officer Senior Geologist 20 years in engineerin
Slide 5: Overview of Stanmore Assets
OVERVIEW OF STANMORE ASSETS For personal use only ISAAC PLAINS – 100% BELVIEW – 100% Total Resources 30.1 Mt Total Resources 330 Mt Total Reserves 5.0 Mt Pre Feasibility underway Ramp-up to operations WOTONGA – 100% MACKENZIE – 85% Undertaking development Total Resources 143 Mt activit
Slide 6: Acquisition of Isaac Plains & Wotonga
ACQUISITION OF ISAAC PLAINS For personal use only & WOTONGA 6
Slide 7: Location
ISAAC PLAINS LOCATION For personal use only Located approximately 7 km east of the township of Moranbah in the heart of the northern Bowen Basin Surrounded by large scale operating coking coal mines Adjacent to Goonyella Branch Railway which connects the mine to Dalrymple Bay Coal Terminal (DB
Slide 8: Transaction Overview
ISAAC PLAINS TRANSACTION OVERVIEW For personal use only MAJOR ACQUIRED ASSETS CONTRACTUAL COMMITMENTS ACQUISITION Include: A number of contractual commitments also form PRICE Bucyrus 1370W dragline part of the transaction terms. These include: CHPP Rail haulage and port contracts $1 Dedicate
Slide 9: Conditions Precedent
For personal use only ISAAC PLAINS CONDITIONS PRECEDENT The main conditions precedent which, once satisfied, will allow completion of the transaction, include: Foreign Investment Review Board (FIRB) approval; Novation or assignment of the specified material contracts; and Customary Ministerial
Slide 10: Financing
ISAAC PLAINS FINANCING For personal use only Taurus Mining Finance Fund (Taurus) will Approximately US$30 million will be used for Cost of drawn funds is 10% per annum provide a US$42 million interest only facility financial guarantees, with the balance (undrawn funds 2% per annum) for a term of up
Slide 11: Transaction Rationale
ISAAC PLAINS TRANSACTION RATIONALE For personal use only ✓ ACQUISITION OF ESTABLISHED MINING ASSET, PROVIDING ✓ MINING AND TRANSPORTATION INFRASTRUCTURE IN PLACE ✓ RIGHT SCALE OF OPERATION AND RISK PROFILE NEAR-TERM CASH FLOWS Acquisition includes dragline, coal Reduced mining scale of 1.1millio
Slide 12: Stanmore's Operating Approach
STANMORE’S OPERATING APPROACH For personal use only ✓ REDUCED ANNUAL PRODUCTION RATE ✓ UTILISE EXPERIENCED CONTRACTOR ✓ LOW OVERHEADS Reduction in take or pay contracts from Contractors rates are significantly lower Small owner’s team to manage 2.8 Mtpa to 1.1 Mtpa – facilitates lower than rec
Slide 13: Asset Overview
ISAAC PLAINS ASSET OVERVIEW For personal use only THE MINE COAL HANDLING AND PREPARATION TRANSPORT AND SALES Commenced production in 2006 as a PLANT (CHPP) Product coal is railed 172 km to DBCT truck shovel operation Coal trucked to the CHPP and washed to via the Gooneyella Branch Railway Dr
Slide 14: Mine Layout and Wotonga
ISAAC PLAINS MINE LAYOUT AND WOTONGA For personal use only Well laid out site with mine infrastructure located along western side of lease Short spur connection to Goonyella Branch Railway Ease of access for potential Wotonga extension via haul road Close to camp accommodation facilities 14
Slide 15: Acquired Assets
ISAAC PLAINS ACQUIRED ASSETS For personal use only DRAGLINE TRAIN LOADOUT Bucyrus BE1370 CHPP, product stockpile and train High performance machine – loadout in close proximity in last year of operation moved Conveyor feed to rail surge/ >15 million bank cubic metres (bcm) loading bin Majo
Slide 16: Well Understood Geology
ISAAC PLAINS WELL UNDERSTOOD GEOLOGY For personal use only The Leichhardt seam (Rangal Coal Measures) averages 3.5 m thick across the deposit. The seam splits into an upper and lower section in the far northern area Depth of cover commences at 60 m, dipping to the east (6-7 degrees) with maximum
Slide 17: Coal Resources and Reserves
ISAAC PLAINS COAL RESOURCES AND RESERVES For personal use only Xenith Consulting Pty Significant Resource Current Reserves Plan to increase the Targeted supplementary Ltd updated the coverage within Mining support over 3 years of resource confidence with exploration is planned in Resource and Reserv
Slide 18: Marketing
ISAAC PLAINS MARKETING For personal use only Historically sold primarily to North Asian steel makers - attractive coal Parameter1 SHCC SSCC Thermal qualities may broaden customer base Plan to continue to produce three coal products: Inherent Moisture (%) 2.3 2.3 3.1 SEMI-HARD COKING COAL Ash (%)
Slide 19: Wotonga Project
WOTONGA PROJECT LOW STRIP RATIO COKING COAL For personal use only Completion of acquisition from Peabody expected in September 2015 Progress Mining Lease in parallel with exploration and mining study Ability to utilise 100% owned dragline once Isaac Plains open cut mining is completed Low co
Slide 20: Strategic Port and Rail Position
ISAAC PLAINS STRATEGIC PORT AND RAIL POSITION For personal use only As part of the transaction Stanmore will DARLYMPLE BAY COAL TERMINAL secure around 1.1Mtpa of rail and port capacity Further expansion capacity is likely to be available in current market environment Total transport infrastruc
Slide 21: Indicative Timetable to Production
ISAAC PLAINS INDICATIVE TIMETABLE TO PRODUCTION For personal use only Transaction First coal completion railings 2H 2015 1H 2016 2H 2016 Contractor First coal Steady state mobilised processed production 21
Slide 22: Stanmore's Project Pipeline
STANMORE’S PROJECT PIPELINE DRIVING LONG TERM SHAREHOLDER VALUE For personal use only Development Production Exploration Isaac Plains Clifford Wotonga (ramp up) Mackenzie The Range Lilyvale Belview Potential to utilise near-term cash flows for self funded development or prudent acquisition opportuni
Slide 23: Belview Project
BELVIEW PROJECT For personal use only SIGNIFICANT COKING COAL PROJECT IN THE BOWEN BASIN 100% OWNED Substantial coking coal deposit in heart of the Bowen Basin – 330 Mt JORC Resource (50 Mt Indicated, 280 Mt Inferred) Coal quality results to date confirm attractive coking properties across multi
Slide 24: Belview Project: Coal Quality Test Results
BELVIEW PROJECT For personal use only COAL QUALITY TEST RESULTS ARE VERY POSITIVE Indicative Product Primary Secondary Coal testing from bore cores indicate that Belview will Specification of Pollux Seam HCC PCI produce a Hard Coking Coal (“HCC”) primary product and a Parameter1 Product Product se
Slide 25: Lilyvale Project
LILYVALE PROJECT For personal use only COKING COAL PROJECT The Lilyvale Project is targeting the German Creek seam which is mined as a prime coking coal at nearby operating mines (Kestrel UG longwall Rio Tinto and Crinum UG longwall BMA) Historical drilling results and knowledge of surrounding a
Slide 26: The Range Project
THE RANGE PROJECT For personal use only OPEN CUT, HIGH ENERGY, EXPORT GRADE THERMAL COAL MINE 100% OWNED Feasibility Study complete on 5 Mtpa open cut export thermal coal mine over 25 years High energy, low emission thermal coal sought after in Asia EIS completed and approved by the State In
Slide 27: The Range Project: High Energy Export Thermal Coal
THE RANGE PROJECT For personal use only HIGH ENERGY EXPORT THERMAL COAL Surat Walloon Surat Basin coals are typically clean burning with good burnout Quality Coals Comment characteristics and low nitrogen, ash and sulphur Sulphur Low levels of trace elements and Suitable for all key markets in
Slide 28: Clifford Project
CLIFFORD PROJECT For personal use only LARGE EXPLORATION AREA WITH OPEN CUT POTENTIAL Substantial exploration opportunities within the Clifford Project Potential to host a substantial thermal coal deposit suitable for open cut mining Substantial synergies with the Range JOGMEC funding allows
Slide 29: Clifford Location and Geology
CLIFFORD LOCATION AND GEOLOGY For personal use only EPC 1274 & 1276 - Grange – in situ strip ratio commences at 6:1 Extensive tenure area in excess of 1,100km2 - Liberty – in situ strip ratio commences at 7:1 Historically held by MIM/ Xstrata and others Strong coal quality results with a high
Slide 30: Reserves and Resources
RESERVES AND RESOURCES For personal use only JORC JORC JORC JORC Marketable Recoverable Measured Indicated JORC Inferred Total JORC Asset Coal Reserve1,2 Coal Reserve1,2 Resource1 Resource1 Resource1 Resource1 Isaac Plains Coking/Thermal 3.7 5.0 10.0 9.1 11.0 30.1 The Range Thermal 94.2 117.5 18.0 1
Slide 31: Outlook: Coal Market
For personal use only OUTLOOK COAL MARKET 31
Slide 32: Where Are We in the Resources Cycle?
WHERE ARE WE IN THE RESOURCES CYCLE? For personal use only Bottom of the cycle opportunity – long term outlook is strong CYCLICAL LOWS RENEWED FOCUS ON COST AND PRODUCTIVITY Coking and thermal coal prices are at their lowest levels since the The majors continue to aggressively pursue cost reduct
Slide 33: Macro Factors Support a Positive Outlook for Metallurgical Coal
RESERVES MACRO FACTORS SUPPORT A POSITIVE OUTLOOK FOR METALLURGICAL COAL For personal use only THE NEXT WAVE OF HIGH QUALITY MET COAL PROJECTS HCC US$ MARGINS @US$89/T, 0.78:1 REQUIRES A SIGNIFICANT INCREASE IN PRICING Incentive price curve shows almost no new projects would be 40 developed in cur