38 slides from Bathurst Resources's shareholder meeting presentation, Dec 1, 2021
Slide 1: Bathurst Resources Limited 2021 AGM Presentation
BATHURST RESOURCES LIMITED 2021 AGM PRESENTATION ASX: BRL
Slide 2: Disclosure
DISCLOSURE General information This document is authorised for release by the board of directors of Bathurst Resources Limited (“Bathurst”) on the 1 December 2021. Bathurst’s address is Level 12, 1 Willeston Street, Wellington 6011, New Zealand. General disclaimer This presentation contains forward-
Slide 3: Our Board Members
OUR BOARD MEMBERS Current Up for election Peter Westerhuis, non- Francois Tumahai, non- executive chairman executive director CEO and executive Russell Middleton, CFO director and executive director 3
Slide 4: Safety Is Important To Us
SAFETY IS IMPORTANT TO US Our key safety stats were on an upwards trend. We have taken steps to identify the cause and reduce reportable incidents. 12 MONTH ROLLING AVERAGE 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 - LTIFR TRIFR DRIVERS OF UPWARDS TREND FINDINGS & RESPONSE • Restricted access to immediate
Slide 5: ESG Highlights
ESG HIGHLIGHTS CORPORATE VALUES REDUCING EMISSIONS SUSTAINABLE OPERATING Values set by directors during the • After successful trials, a new fuel will • Focus on coking coal as there is year: be used across all BT Mining sites currently no viable alternative to coal • Be real. leading to approximate
Slide 6: Strategic Pillars
STRATEGIC PILLARS STABLE FINANCIAL STAKEHOLDER PLATFORM PATRONAGE Funding pipeline Government Strong net equity Investors Community and Iwi DIVERSIFY STRATEGIC ALIGN NZ RESERVES COMMODITIES TO MARKET Strategic partnerships No stranded assets Investment strategy Resource development HIGH PERFORMANCE
Slide 7: People Strategy
VALUES AND BEHAVIOURS Communication PEOPLE STRATEGY Lead from the top SKILLS AND KNOWLEDGE Gap analysis Upskilling of workforce DEVELOPMENT Leadership Career opportunities REWARD AND RECOGNITION Retain Motivate 7
Slide 8: Values and Behaviours
VALUES AND BEHAVIOURS BE SAFE BE REAL Put health & safety first Right your wrongs Learn how, know how Be open to other ways Take no shortcuts Be aware of your impact on others Speak up Take ownership for your Always assess the risks development Help each other get it right Drive it and deliver it Em
Slide 9: FY21 Highlights
FY21 HIGHLIGHTS Equity restored Share consolidation 0.68 171m shares Major litigation win debt to equity ratio on LMCH claim -81% -90% Energy used Net profit Capital investment 0.43 $66.7m $28.7m Gigajoules per tonne extracted coal -12% +241% -35% Financial numbers noted are consolidated. 9
Slide 10: Consistent Positive Cash Flows
CONSISTENT POSITIVE CASH FLOWS NZ $m FY18 FY19 FY20 FY21 FY22E • Cash flows in FY18 EBITDA 93.7 106.6 76.8 59.5 95.3 were impacted by intensive cash out Tax (11.6) (16.6) (9.3) (18.2) (10.7) flows relating to the Fixed assets CAPEX (net of disposals) (30.6) (29.9) (14.4) (6.2) (9.6) acquisition of t
Slide 11: Profit Achieved Even During Low Export Pricing
PROFIT ACHIEVED EVEN DURING LOW EXPORT PRICING The export pricing benchmark hit its lowest point in five years in FY21, but our domestic business continued to provide stable cash flows. Revenue1 by product use ($m) Consolidated EBITDA2 NZD $m NZD $m NZD APR $ 400 120 250 100 200 300 80 150 200 60 10
Slide 12: Record Net Profit & Balance Sheet Recovery
RECORD NET PROFIT & BALANCE SHEET RECOVERY Item (NZ $m except for share FY21 FY20 EARNINGS data) • Revenue and EBITDA both decreased from a retraction in the export segment, driven by lower export pricing. Revenue 212.6 232.7 • The COVID-19 pandemic as well as China’s import ban on EBITDA 59.5 76.8
Slide 13: LMCH Litigation Update
LMCH LITIGATION UPDATE Following the success in resolving the first claim in our favour, we believe we will have similar success in defending the second claim. • December 2016: LMCH initiated litigation for payment of the first First performance RESOLVED Maramarua USD $40m performance payment (“PP”)
Slide 14: Business Snapshot
BUSINESS SNAPSHOT EXPLORATION JOINT VENTURE PROJECT Maramarua EXPORT SALES ≈ 1Mt p.a. Canterbury Takitimu •PRODUCTION ≈ 2Mt p.a. •DOMESTIC SALES ≈ 1Mt p.a. Production and sales tonnes under management 14
Slide 15: NZ Business Snapshot
NZ BUSINESS SNAPSHOT Maramarua Stockton Canterbury 15
Slide 16: Stockton Mine (Export)
STOCKTON MINE (EXPORT) Metric (100% basis) FY19 FY20 FY21 FY22E Sales kt 1,178 1,077 1,042 1,083 HCC benchmark USD/ 205 151 116 268 price t Benchmark % 75% 72% 78% 75% realisation1 NZD:USD FX rate 0.67 0.64 0.70 0.73 EBITDA $m 104 66 29 96 EBITDA margin $/t 88.0 60.9 27.0 89.1 Market: Steelmaking LO
Slide 17: North Island Domestic
“North Island domestic sales decrease in FY22 due to planned changes in volumes as NORTH ISLAND per customer contracts. EBITDA margin increases in FY22E compared to FY21 when DOMESTIC the difference in freight revenue is excluded, reflecting an underlying decrease in operating cost per tonne.” Metri
Slide 18: South Island Domestic
SOUTH ISLAND DOMESTIC Metric (100% basis) FY19 FY20 FY21 FY22E Sales (kt) kt 396 345 343 261 EBITDA $m 19 15 17 14 EBITDA margin $/t 47.5 44.5 53.1 52.6 Market: Processing heat LOM: ≈ 3 years Infrastructure: Close to rail loadout facilities. Employees: 47 Growth projects: New Brighton project. “Sout
Slide 19: Canterbury Rehab
CANTERBURY REHAB Rehab completed: 41ha Rehab left to complete: 16ha 19
Slide 20: EBITDA Guidance FY22 $95.3M
EBITDA GUIDANCE FY22 $95.3M An increase of $35.8m (60%) from FY21. An increase in the USD Closure of Canterbury pricing benchmark that mine in June 2021. our export sales are #039;m priced against. 120 100 (4.2) (3.5) 80 43.5 60 Contracted reduction in sales 95.3 40 volumes, partially offset by 59.5 un
Slide 21: How Our Product Is Used
HOW OUR PRODUCT IS USED Construction in which most buildings or structures are made from steel. Electricity generation when there isn't enough green energy supply to meet demand. Semi-conductors are an essential component in many electronic devices such as solar panels and smartphones. Transport Car
Slide 22: Demand Has Remained Strong
DEMAND HAS REMAINED STRONG Sales are consistent and primarily coal used for steelmaking Coal sales1 (Mt) FY21 sales by product use 2.5 2.0 19% 1.2 1.0 1.1 1.1 1.5 1.1 10% 1.0 1.1 1.3 1.1 71% 0.5 1.0 0.9 0.0 FY18 FY19 FY20 FY21 FY22E Steelmaking Electricity Process heat Domestic Export Our business
Slide 23: Export Strategy & Markets
EXPORT STRATEGY & MARKETS EXPORT SALES BY COUNTRY % FY22E Value in use focus • Coal marketed on a value in use basis. • Our customers design their coke blends around our product. China 11% South Korea Long-standing relationships 17% and India • Our value in use focus means we have long-standing Japa
Slide 24: Export Pricing Benchmark Recovers
EXPORT PRICING BENCHMARK RECOVERS USD/tonne 420 Monthly USD export pricing1 400 380 360 340 320 300 280 260 240 220 200 180 160 140 120 100 80 Actual Guidance • The USD hard coking coal (“HCC”) premium low vol • We have recently seen a sharp rise in the benchmark, benchmark which our export pricing
Slide 25: The Fundamental Demand for Steel
THE FUNDAMENTAL DEMAND FOR STEEL Demand for steel has nearly doubled over the last 21 years. It is projected to increase by a third by 2050. WHY HAS DEMAND FOR STEEL INCREASED? • Steel is integral to modern economies. • It is the world’s second largest commodity value chain and is essential in engin
Slide 26: Domestic Strategy & Markets
DOMESTIC STRATEGY & MARKETS Life of mine plans are matched against committed sales SHARED volumes; new areas are only explored when there is a India in place. strategic partnership GOALS Our domestic coal sales are used for both steel making and processing heat. STABILITY DIVERSITY Our sales are und
Slide 27: A Sustainable Focus
A SUSTAINABLE FOCUS THE NEW ZEALAND ENVIRONMENT: • Zero carbon bill legislated in 2019; net zero carbon economy by 2050. • Emissions Trading Scheme which is the market mechanism for offsetting A global spotlight on climate change is Co2 emissions. bringing increased focus on mineral OUR POSITION ext
Slide 28: Share Price Is Recovering
SHARE PRICE IS RECOVERING MARKET CAP1 & EXPORT PRICING2 AUD $m USD $/tonne COVID-19 pandemic 200 450 and Court of Appeal judgment against 180 400 Bathurst on LMCH 160 350 claim. 140 300 120 Supreme Court rules in 250 100 favour of Bathurst on 200 LMCH claim. Export 80 coal price recovers. 150 60 40
Slide 29: Capital Overview Cont'd
CAPITAL OVERVIEW CONT’D 68c 171 82% $19.9 $12.31 SHARE MILLION TOP 20 MILLION MILLION PRICE SHARES HOLDINGS CASH DEBT AU at 22 Shares on issue Top 20 Consolidated BT $10m AUD November 2021. 171m. shareholders hold Mining and convertible bond, These exclude a 82% of equity on Bathurst, and funds rece
Slide 30: Proven Record
PROVEN RECORD Over time, we have built a world class portfolio of assets against our strategic setting JV operating JV coking coal Existing mine assets exploration business acquisition acquisition THEN NOW POSITIONED FOR GROWTH PRODUCTION 400kt ≈ 2Mt ≈ 4Mt1 UNDER MANAGEMENT PRODUCT USES 100% thermal
Slide 31: Future Investments
FUTURE INVESTMENTS Noting the increasing global appetite for other minerals, we are considering leveraging the strong coal mining core of our business and our sector expertise as producers to contemplate and potentially take advantage of other resource opportunities. The following are the key criter
Slide 32: Growth Projects Overview
GROWTH PROJECTS OVERVIEW We have a robust pipeline to extend our current operations. Growth projects Production start date1 Status SOUTH ISLAND DOMESTIC New Brighton FY23 Waipuna West extension FY23 NORTH ISLAND DOMESTIC Maramarua M1 pit FY23 Rotowaro North FY27 Stockton organic projects2 FY22: HL H
Slide 33: Canadian Coking Coal JV Project
CANADIAN COKING COAL JV PROJECT Crown Mountain – a premium low volatile hard coking coal exploration project, due to enter production late 2025, and produce 2Mt per year. Located in British Columbia in a mature mining region, close to well established transport infrastructure. Further investment is
Slide 34: Crown Mountain Timeline
CROWN MOUNTAIN TIMELINE CY 2021 CY 2022 CY 2023 CY 2024 CY 2025 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Environmental Submission 1 assessment Review & approval workflows Mine permits 2 Pre-construction Update LOM plan Financing/ Financing 3 final investment decision Engineering/
Slide 35: FY22 Focus
FY22 FOCUS 1 4 Progression of organic Roll out of people strategy growth projects in domestic segment 2 5 Progression of organic Embedding field growth projects in export leadership programme segment 3 6 Further refinement of Resolution of L&M criteria for new resource litigation opportunities 35
Slide 36: Questions?
QUESTIONS? Thank you for attending the AGM. Please ensure you submit any questions before you log-off.
Slide 37: Appendices
APPENDICES BATHURST &
Slide 38: Marketable Coal Reserves
MARKETABLE COAL RESERVES Proved (Mt) Probable (Mt) Total (Mt) Product coal area Bathurst ownership 2021 2021 2021 Stockton (B, D, J & L) 65% 0.3 4.6 4.9 Upper Waimangaroa (Met) (B, D & K) 65% 0.6 1.5 2.1 Takitimu (C, E & F) 100% 0.0 0.8 0.8 Canterbury Coal (C, E & G) 100% 0.4 0.6 1.0 Rotowaro (D & F