BATHURST RESOURCES LIMITED Annual General Meeting November 2019 - PowerPoint PPT Presentation

BATHURST RESOURCES LIMITED Annual General Meeting November 2019

DISCLOSURE General disclaimer This presentation contains forward-looking statements. Forward- hey also include all figures noted as FY20 which are forecasted financial year June 2020 results. The forward-looking statements are based on management's and conditions, circumstances and results. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. -looking statements. The Company, its directors, employees and/or shareholders shall have no liability whatsoever to any person for any loss arising from this presentation or any information supplied in connection with it. The Company is under no obligation to update this presentation or the information contained in it after it has been released. Nothing in this presentation constitutes financial, legal, tax or other advice. Resources and reserves ASX announcement Limited - rence to resources and reserves are quoted as per this announcement. Resource and marketable coal reserve tables have been included as appendices to this document. Bathurst confirms that it is not aware of any new information or data that may materially effect the information included in this market announcement, and in the case of estimates of coal resources or reserves, that all material assumptions and technical parameters underpinning 9 announcement . the estimates continue to apply and have not materially changed since the 30 October 201 Meanings Consolidated in this document where used refers to consolidated 1 00 percent Bathurst Resources Limited and 65 percent equity share of BT Mining Limited. Commercial in Confidence 2

FY19 HIGHLIGHTS Investment in two key Record EBITDA - $106.6m growth projects 14% Receipt of innovation New capital initiatives in award share buy-backs Maiden dividend Record NPAT - $45.0 million approved $39.5 million Financial figures noted above are based on 30 June 201 9 audited financial statements, and are consolidated. Commercial in Confidence 3

STRATEGY To be the leading NZ domestic and export coal producer VISION with a globally diversified coking coal portfolio SUSTAINABLE BUSINESS TARGETS STABLE MARKETS • Environmental focus. • 5Mtpa by 2023. • Protect domestic • People and safety key • Sustainable costs with relationships. MISSIONS priority. • Grow export relationships . aligned life of mine plans. • Proactive risk management & compliance. OPERATIONAL EXHAUST GROW STAKEHOLDER HIGH EXCELLENCE CURRENT NZ INTERNATIONAL PATRONAGE PERFORMANCE ECONOMIC COKING COAL CULTURE • Compliance. • Investor • Zero harm RESOURCES • Unit cost / • Technical • Resource support. health and PILLARS • Community drive evaluation consenting. safety a core productivity. • Pipeline of standard. engagement. focus. • Strategic • Attract, resources. customer motivate, and partnerships. retain talent. Commercial in Confidence 4

WHAT MAKES US DIFFERENT WE BENEFIT FROM A DIVERSIFIED PORTFOLIO 60 percent of our revenue is forecast for FY20 to come from export Revenue by market (FY20 1 ) sales (coking coal); the remainder domestic sales (thermal coal and coal for steelmaking). 74 percent of revenue for FY20 is forecast to come from sales of coal for steelmaking; 6 percent to electricity generators, and 20 percent to domestic food and other local industry. Our domestic business : Provides us with reliable and repeatable cashflows that are not impacted by export coal pricing. Contracts are long term, and prices are fixed. We have excellent, long standing relationships with our key customers. Revenue by product use (FY20 1 ) mining areas where we have committed strategic commercial partnerships in place. Our export business : Enables us to benefit from uplifts in export coal pricing. A focus on low cost production, utilisation of FX and coal pricing hedging, and receipt of stable domestic cash flows enable us to weather periods when export coal pricing is constrained. We also have excellent long standing relationships with our key export customers, many in place for decades. 1 Forecasted numbers based on the current internal budget Commercial in Confidence 5

FY20 EBITDA GUIDANCE $78.4M Export Consolidated EBITDA • The decrease in forecast FY20 $m 1 20.0 EBITDA from FY1 9 is coming from 1 06.6 our export segment. 93.7 1 00.0 This is primarily due to a lower 78.4 80.0 export coal price. 67.4 FX hedging continues to be in place 60.0 68.3 45.2 to manage impacts from significant 40.0 movements in export pricing, the benefits of which are being realised. 20.0 39. 9.2 33.2 25.4 Domestic 0.0 FY1 8 Actual FY1 9 Actual FY20 forecast* • This segment continues to provide Domestic (incl. corporate overheads) Export stable cash flows. * Forecast export sales pricing for Q2 to Q4 is based on 80 percent of an average HCC A decrease in production at the benchmark of USD $1 60.00 at $0.65 NZ:USD across all sales types including thermal coal sales. Canterbury mine, and movement into a higher strip ratio K1 block at the Maramarua mine, are the key drivers in the drop in forecast FY20 EBITDA. Commercial in Confidence 6

EXPORT MARKET UPDATE > The outlook for > The hard coking coal Current conditions Outlook Chinese imports index has recently remains subject to dropped to swing substantial uncertainty, between USD $1 30 and the key drivers being $1 50s, following a the extent of an reduction in steel pricing and market economic slowdown, confidence due to and respondent government stimulatory measures and import economic growth. policies. > Looking to expectations for Q3, > The current Chinese increased exports from domestic/seaborne Australia and Russia will equivalent pricing is keep the seaborne $1 60 USD (East China), market flush with hence pricing is supply. expected to return to these levels in the medium term. of this market means weather, logistics, and other disruptions in Queensland could potentially drive intermittent price spikes as we come into the cyclone season. Commercial in Confidence 7

LMCH 1 CASE UPDATE DETAILS UPDATE On 20 August 201 8 Our appeal was heard in the High Court found the Court of Appeal on 21 in favour of LMCH to 23 August 201 9. regarding a disputed Management were happy USD $40m with the proceedings. performance payment under the Buller project Sale We expect to receive a and Purchase judgment from the Court of Agreement (SPA) of Appeal in early 2020. 201 0. We continue to have full An appeal was confidence in our legal lodged to the Court team (a major law firm and of Appeal against the a leading QC). Their finding of a number advice continues to be that of grounds. we have a strong case. We will need to be Notwithstanding this, successful in only should we be unsuccessful, one of these to management have reverse the High considered options to fund Court judgment. payment and are of the view that the Company would be able to do so. Commercial in Confidence 8 1 L and M Coal Holdings

Quick facts Our operations Operations 5 operating mines 3 via a Domestic 65% owned joint venture Corporate offices Maramarua Markets Export and domestic Mine in care & maintenance Distribution centre Production under 2.2Mt Export management FY20 Rotowaro Revenue by market FY20 60% export, 40% domestic EBITDA FY20 NZD $78.4m People > 550 Production volumes by site (FY20 1 ) Stockton Wellington Buller South Island domestic (BRL) 307 kt Canterbury North Island Takitimu Export (BT domestic (BT Mining) Christchurch Mining) 805 kt Timaru 1,167 kt Financial figures noted in this document are consolidated Bathurst and 65% BT Mining, unless otherwise noted Commercial in Confidence 9 1 Forecasted numbers based on the current internal budget

CAPITAL MANAGEMENT Substantial shareholdings Net assets $116m Issued shares at 30 June. 1.7bn . 23.5% Republic Investment Borrowings 1 USD Potential shares Management (Singapore) $7.9m. 156m from 1 2. 1 % convertible notes Cash $50.3m incl. and performance Zealand) restricted deposits rights. at 30 Sep. Shares on 6.4% Crocodile Capital (Europe) Structure issue 6.3% Chng Seng Chye (Singapore) Analyst Initiatives Indicative pricing On market share (AUD ) Euroz 20.0¢ (Aug buy-back 2 NZD 1 9). $4.2m . Bell potter 17.0¢ Maiden dividend (Aug 1 9). approved for FY1 9, CCZ 20.0¢ (Sep 1 9). AU 0.3¢ per share. 1 USD bonds mature 1 February 2020. 2 The on-market share buy-back has been extended to 28 August 2020; cost noted is spend to date. Commercial in Confidence 10