Mgx Resources Limited · ASX:MGX
Mgx Resources — Mount Gibson Iron — H1 FY2013 Earnings Presentation
21 slides from Mgx Resources's earnings presentation, Feb 19, 2013
Slide 1: Interim Financial Results Presentation
MOUNT GIBSON IRON LIMITED Interim Financial Results Presentation For personal use only 19 February 2013 1
Slide 2: Disclaimer
Disclaimer For personal use only This Document is Confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person, or published, in whole or in part, for any purpose without prior written approval from Mount Gibson Iron Limited. This Document is not a
Slide 3: Company snapshot
Company snapshot For personal use only A leading mid-tier iron ore exporter targeting sales of 8 – 8.5Mt in FY2013 • Issued capital 1090.6 million shares • Index S&P/ASX 200 • Market cap1 A$976 million • Cash @ 31 Dec 2012 A$279 million • Bank borrowings2 nil • Finance facilities A$65m environmental
Slide 4: Operations: Moving in the right direction
Operations: Moving in the right direction Operational performance has improved significantly in FY2013 to date For personal use only • H1 2013 shipments up 86% to 4.43 Mt on prior half • Dec Q shipments increased to 2.67 Mt – up 52% on prior quarter Sales trending upwards (Mt) • Dec Q Koolan Island
Slide 5: H1 2013 results overview
H1 2013 results overview For personal use only • Sales revenue $416.2 million (up 10.4% from pcp) on record 4.43 wmt sold • Average realised price 29% lower, including low grade/mineralised waste • Net profit after tax of $37.1 million under new waste accounting requirements • EPS of 3.4 cents • Ope
Slide 6: Summary H1 2013 results
Summary H1 2013 results For personal use only % change Six months ended: 31-Dec-11 31-Dec-12 pcp Tonnes mined Mwmt 3.55 3.57 0.6% Tonnes sold Mwmt 2.84 4.43 86% Sales revenue $ mill 376.9 416.2 10.4% Interest income $ mill 11.2 5.9 -47.3% Cost of goods sold $ mill -182.4 -349.3 91.5% Gross profit $
Slide 7: Key financial indicators
Key financial indicators For personal use only % change Six months ended: 31-Dec-11 31-Dec-12 pcp Realised selling price A$ / wmt 132.8 94.0 -29.2% Cost of goods sold A$ / wmt 64.3 78.9 22.7% Margin A$ / wmt 68.5 15.1 -78.0% Earnings per share cps 12.0 3.4 -71.7% Dividend per share cps 2.0 2.0 - 7
Slide 8: COGS vs underlying cash operating expenditure
COGS vs underlying cash operating expenditure For personal use only Six months ended 31 December: 2011 2012 Sales Volume (Mwmt) 2.84 4.43 Sales Revenue (A$m) 376.9 416.2 Cost breakdown A$m A$/wmt A$m A$/wmt Total Cost of Goods Sold 182.4 64.27 349.3 78.90 Less: depreciation and amortisation (49.5) (
Slide 9: Operating cash flow movements
Operating cash flow movements For personal use only Comparison of Operating Cash flows 9
Slide 10: Cash balance
Cash balance For personal use only Movement in Closing Cash 10
Slide 11: A leading WA mid-tier iron ore exporter
A leading WA mid-tier iron ore exporter For personal use only Koolan Island • High quality DSO lump and fines (high grade, low contaminants) • Commenced mining premium Main Pit ore in November 2011 • Operation restructured to reduce cash expenditure • Production optimisation strategy being finalised
Slide 12: Koolan Island – optimising for the future
Koolan Island – optimising for the future For personal use only • Premium products – 63.5%Fe • Simple logistics – no rail, standalone ship-loader • Long life asset • +9 years @ 3Mtpa • +7 years @ 4 Mtpa • Mineralised waste sales commenced • Production optimisation plan being finalised – completion b
Slide 13: Mid West Operations
Mid West Operations For personal use only Field’s Find 13
Slide 14: Geraldton Port – increased export capacity
Geraldton Port – increased export capacity For personal use only • Infrastructure access a strategic asset - key barrier to entry for new producers • MGI Mid West export capacity doubled to ~6Mtpa • Total MGI port storage capacity trebled to 360,000t MGI MGI Berth 4 • 50 year leases over port land S
Slide 15: Extension Hill – exploration upside
Extension Hill – exploration upside For personal use only • Simple, low cost operation, life of mine strip ratio ~1:1 • Nameplate capacity of 3Mtpa • Diversified customer base • Uncommitted volumes under discussion with prospective new customers • First spot cargo sold November 2012 Growth Potential
Slide 16: Tallering Peak – finetuning in its final year
Tallering Peak – finetuning in its final year For personal use only • Mining scheduled for completion in November 2013 • On track to yield ~2.5 Mt standard product in FY2013 • Commenced sales of low-grade product • Sales from low-grade stockpiles (~1 Mt) to continue into FY2014 • Potential for short
Slide 17: Pursuing growth – hitched to Chinese steel
Pursuing growth – hitched to Chinese steel The long term outlook remains strong – Chinese steel consumption has a long way to run For personal use only Urbanisation remains a key driver of Chinese steel consumption, with regeneration of existing urban centres also becoming important to underlying de
Slide 18: Pursuing growth – the pathway
Pursuing growth – the pathway Optimising existing business, now pursuing M&A and exploration-driven growth For personal use only PRIORITIES • Target further cost control and elimination of waste/inefficiencies • Further broaden customer base • Complete optimisation of Koolan mine plan • Complete T1
Slide 19: Looking beyond Mid West “bolt-ons”
Looking beyond Mid West “bolt-ons” For personal use only Disciplined approach: • Targeting bulk carbon steel materials we know and have positive fundamentals HCC price history and outlook (real A$/t) – DSO iron ore – Coking coal • Low capital intensity – Minimal processing – Conventional products •
Slide 20: Thank You
Thank You For personal use only For more information: Phone: +618 9426 7500 Email: admin@mtgibsoniron.com.au Web: www.mtgibsoniron.com.au 20
Slide 21: Additional information
Additional information Total Group Mineral Resources and Reserves For personal use only Koolan Island at 30 June 2012 Mineral Resources, above 50% Fe Tonnes Fe SiO2 Al2O3 P Tonnes Fe SiO2 Al2O3 P millions % % % % millions % % % % Mineral Resources 95.2 61.6 8.29 1.19 0.03 Measured 10.8 59.6 13.0 1.0