New Hope Corporation Limited · ASX:NHC
New Hope — Macquarie Coal Day 2008
49 slides from New Hope's conference presentation, May 14, 2008
Slide 1: ASX cover letter
ABN 38 010 653 844 Contact Phone: +61 7 3810 0500 Fax: +61 7 3810 0555 Email: [email protected] For personal use only 14th May 2008 Australian Securities Exchange Attention: Company Announcements Attached is a copy of a presentation to be given to brokers this afternoon and at the Macquari
Slide 2: Corporate Overview
For personal use only Corporate Overview 14 May 2008 Presented by: Rob Neale, Chief Executive Officer Disclaimer IMPORTANT: The information in this document has been provided to you for information only by New Hope Corporation Limited (“NHC”) and is subject to change without notice. Nothing containe
Slide 3: Agenda; Highlights of First Six Months
Agenda For personal use only Highlights of First Six Months Financial Overview and Operations Summary New Acland Mine Overview West Moreton Overview Queensland Bulk Handling Overview New Saraji Project Overview Exploration Projects Overview Other Activities Overview Coal to Liquids Project Overview
Slide 4: Key Financials; Production Volumes
Key Financials For personal use only Six months ended 31 January 2008 2007 Change Total revenue $148.8m $123.1m +20.9% Profit from operations $36.6m $33.5 +9.4% Net profit after non $36.6m $40.1m -8.6% recurring items Earnings cents per share 4.5 5.0 -8.9% 2.25 cents 2.1 cents Interim Dividend +7.1%
Slide 5: Sales Volumes; Group NHC Total Sales
Sales Volumes For personal use only Six months ended 31 January (million tonnes) 2008 2007 Change Export 1.67 1.21 +38% Domestic 0.63 0.71 -11% TOTAL 2.30 1.92 +20% 14 May 2008 7 Group NHC Total Sales Y/E 31 July 2008 Australia 28% Japan 41% Korea 4% Taiwan/China Americas 22% 5% 14 May 2008 8 4
Slide 6: Export Sales; Key Profit Drivers
Group NHC Export Sales Y/E 31 July 2008 For personal use only Korea 6% Taiwan/China 31% Japan 56% Americas 7% 14 May 2008 9 Key Profit Drivers New Hope’s profit for the six months to 31 January 2008 benefited from: – Higher production and sales volumes; – Higher export sales prices in US Dollar term
Slide 7: New Acland Mine Overview
For personal use only New Acland Mine Overview New Acland Coal Coal Resources High quality thermal coal resource Large resource base: – 789 million tonnes of in situ resources (¹JORC) – 234 million tonnes of Marketable Reserves (¹JORC) Extensive mining leases: – Current leases cover 43 million tonne
Slide 8: New Acland Coal Locality Map; Rapid Project Development
New Acland Coal Locality Map Kingaroy For personal use only Chinchilla Kogan Creek Kogan Creek Tarong Wilkie Creek Dalby Acland QBH Export Fisherman Islands Open Cut Coal Mine Coal Terminal Coal Terminal Oakey BRISBANE Coal Deposit Oakleigh Power Station Toowoomba Ipswich Ipswich Town Railway Jeebro
Slide 9: Open-Cut Mining Processes; Capacity and Growth
New Acland Coal Open-Cut Mining Processes For personal use only Owner/operator Specialists at thin seam mining: – 6 seam groups ( A – F) – 29 seams currently being mined – Seam thickness ranges from 5cm to 1.5m. Excavator, loader and truck mining operation 14 May 2008 15 New Acland Coal Capacity and
Slide 10: Human Resources; Queensland Open Cut Mines Productivity
New Acland Coal Human Resources For personal use only 250 full time employees Safety performance and focus Flexible employment agreements: – 76% of workforce on AWA’s – remainder on Certified Agreement 6 and 7 day rosters with 12 hour shifts (incl public holidays) Contract Maintenance for CHPP and M
Slide 11: Mining Equipment; Coal Handling & Preparation
New Acland Coal Mining Equipment For personal use only Current: Growth: Overburden Removal Fleet: Overburden Removal: – 2 x Hitachi EX3600 Excavators – 1 x Hitachi EX5500 Excavator - on – 6 x Cat 789 Haul Trucks order – additional Haul Trucks - progressing Coal and Interburden Fleets: – 3 x Cat 992
Slide 12: Administration Complex; Future Development
New Acland Coal Administration and Office Complex For personal use only 14 May 2008 21 New Acland Coal Future Development Mining Lease application underway: – Covers entire resource – Seeking environmental approval for 10 Mtpa – Progressively securing land Development plans are classified by Qld Gov
Slide 13: West Moreton Overview
For personal use only 14 May 2008 23 West Moreton Overview 12
Slide 14: West Moreton Overview and History
West Moreton Overview For personal use only Long history of coal mining activity – continuous mining activity since the 1870’s – underground & open cut; small to modest scale Progressive encroachment by urban development Depletion of available coal resources New Hope Focus: ››››››› adding value by s
Slide 15: Economic Mining Areas; Typical Geological Sequence
Economic Mining Areas Bremer River For personal use only 2nd Pit Air Base 3rd Pit 1st Pit CHPP 500m 14 May 2008 Rail Loop Amberley27 West Moreton Coal Measures Typical Geological Sequence Overburden Coal seams Partings 14 May 2008 28 14
Slide 16: Jeebropilly and New Oakleigh Proximity to Infrastructure
Jeebropilly Proximity to Transport Network & Infrastructure For personal use only to Warrego Hwy Proximity to transport routes ¾ major highways Walloon ¾ electrified rail Proximity to infrastructure Rail to Ipswich ¾ water & Brisbane ¾ power ¾ gas Rosewood to Cunningham Hwy ¾ urban development Prima
Slide 17: Southern Freight Rail Corridor; Master Planning
Southern Freight Rail Corridor Study Queensland Government For personal use only 14 May 2008 31 West Moreton Master Planning Transition from mining to valued land use Active Mining Traditional Mine Rehabilitation Conceptual Future 14 May 2008 32 16
Slide 18: Jeebropilly Potential Future Land Use
Jeebropilly Concept – Potential Future Land Use For personal use only Concept: – Light industrial park Benchmark: – Metroplex light industrial park – Adjacent to Gateway Motorway Bridge – Adjacent to Brisbane River Low lying Water Body Subject to engineering assessments & 14 May 2008 regulatory appr
Slide 19: New Oakleigh Potential Future Land Use
New Oakleigh Concept – Potential Future Land Use For personal use only Concept: – Urban and recreational Benchmark: – Forest Lake Water Body – Medium and high density housing – Supporting recreational space – Supporting commercial development Subject to engineering assessments & 14 May 2008 regulato
Slide 20: Queensland Bulk Handling Overview; QBH Port Facility
For personal use only Queensland Bulk Handling Overview QBH Port Facility Overview Facilities 100% owned by New Hope Corporation – Operates under Port of Brisbane access regime – Land leased from Port of Brisbane +5 Mtpa capacity servicing two current export coal producers Expansion potential Essent
Slide 21: Proximity to SE Qld Coal Resources; Ship Loading
Proximity to SE Qld Coal Resources Locality Map Kingaroy For personal use only Chinchilla Kogan Creek Kogan Creek Tarong Wilkie Creek Dalby Acland QBH Export Fisherman Islands Open Cut Coal Mine Coal Terminal Coal Terminal Oakey BRISBANE Coal Deposit Power Station Toowoomba Oakleigh Ipswich Ipswich
Slide 22: QBH Port Facility Aerial Views
QBH Port QBHFacility Facility Aerial View prior to Expansion Activity 1 For personal use only 14 May 2008 41 QBH Port Facility Aerial View prior to Expansion Activity 2 Expansion Area Sunstate Cement 14 May 2008 42 21
Slide 23: QBH Stockpile and Ship Loading Activity
QBH Port Facility Stockpile Handling Activity For personal use only 14 May 2008 Back 43 QBH Port Facility Ship Loading Activity 14 May 2008 44 22
Slide 24: QBH Current Operations; Expansion Proposal
QBH Port Facility Current Operations For personal use only Two existing Coal producers and potential for others New Hope acquired the remaining 50% of QBH on 1 Aug 2007 Record 5.263 million tonnes shipped in calendar 2007 Coal Throughput (6 months ended 31 January 2008) – 2007: 2.1 million tonnes –
Slide 25: New Saraji Project Overview
QBH Port Facility New Stockpile Pads For personal use only 14 May 2008 47 New Saraji Project Overview 24
Slide 26: New Saraji Project Highlights
New Saraji Project Highlights 1 For personal use only A large, high quality metallurgical coal resource – Current total JORC resource1 of 690 million tonnes Future drilling is expected to significantly increase the defined resource – Target +1.5 billion tonnes Central to existing regional infrastruc
Slide 27: New Saraji Locality Plan; Background History
New Saraji Project Locality Plan For personal use only New Saraji Locality Plan Queensland Bowen Basin Proximity to infrastructure Proximity to export port 14 May 2008 51 New Saraji Project Background - History Coal Exploration Activities: – BHP between 1999 and 2002 – located the Dysart and Harrow
Slide 28: New Saraji Resources; Current Resource Definition
New Saraji Project Resources For personal use only Moranbah Coal Measures – target seams – P Seam • 77 Mt indicated + inferred resource – Harrow Creek Upper • 4 – 7 metres in thickness • most significant – 281Mt indicated + inferred resource – Main Dysart Seam • 4.5 – 7.5 metres in thickness • 271 M
Slide 29: JORC Resource Zone; Indicative Coal Quality
New Saraji Project JORC Resource Zone For personal use only New Saraji Resource Zone 14 May 2008 55 New Saraji Project Indicative Coal Quality Quality Parameter Value Range Ash 8.0 – 8.5% Volatile Matter 17 – 18% CSN 8–9 Fluidity 20 – 50 ddpm RoMax 1.60 – 1.65 Vitrinite ~60% Carbonisation Tests Seam
Slide 30: Expected Production Profile; Mining Method
New Saraji Project Expected Production Profile For personal use only Project construction expected to commence 2010 Longwall operations commencing 2012 Target ROM output 7Mtpa by 2015 Target ROM output 14Mtpa by 2017 Ultimate saleable coal up to 10Mtpa from 2016 Annual Production (ROM output) Annual
Slide 31: Water and Rail Infrastructure; Port Infrastructure
New Saraji Project Water and Rail Infrastructure For personal use only Rail – Northern Missing Link 14 May 2008 59 New Saraji Project Port Infrastructure Current Rail and Port Infrastructure: – Current limitations solved by 2010-11 – Options: • Abbot Point • Dalrymple Bay • Gladstone – Wiggins Islan
Slide 32: Coal Seam Gas Opportunity; Conclusion
New Saraji Project Coal Seam Gas Opportunity For personal use only Significant amounts of in-seam gas: – Coal bed methane – Seam drainage to enable safe mining – Committed to the capture and use Utilisation opportunities: – in conjunction with the Holders of Petroleum Exploration Authorities – Arrow
Slide 33: Exploration Projects Overview
For personal use only Exploration Projects Overview New Hope Exploration Overview ¹ In-house exploration capability: – 2 rotary coring drilling rigs with 450m depth capability – 1 rotary coring drilling rig on order with 1300m depth diamond coring capability • Delivery mid 2008 – geological team of
Slide 34: Exploration Overview; SE Queensland Regional Map
New Hope Exploration Overview 2 For personal use only In-house management & project support expertise: – land acquisition and ongoing management – specialist environmental support personnel – experienced with cultural heritage and native title – sound relationships with Fed & State Govt regulatory a
Slide 35: NHC Exploration Tenements Darling Downs
NHC Exploration Tenements Darling Downs Projects 1 For personal use only 14 May 2008 67 Exploration Tenements Darling Downs Projects 2 10 Exploration Permits for Coal 1545 sub-blocks 4500 sq km Ground prospective for Walloon Coal Measures Target similar deposits to New Acland: – Shallow open cut res
Slide 36: Central Queensland Region Locality Map; Tenements
Central Queensland Region Locality Map For personal use only 2 3 1 New Saraji 2 Lenton 1 3 Bee Creek 14 May 2008 69 Exploration Tenements Central Queensland Projects New Saraji: – EPC 837 – MLA 70383 Lenton: – EPC 766 22 sub blocks – EPC 865 2 sub blocks – MLA 70337 Bee Creek: – EPC 777 141 sub bloc
Slide 37: Lenton and Bee Creek Projects; Resource Definition
Exploration Tenements Lenton and Bee Creek Projects For personal use only Potential Broughton Resource (Eastern Corporation & Mitsui) 14 May 2008 71 Lenton Project Resource Definition Drilling and coal quality analysis continuing – Total drill holes 200 – Open holes 1,901m and core holes 95m – Coal
Slide 38: Lenton Exploration Activity; Seismic Profile
Lenton Project Exploration Activity For personal use only ` 14 May 2008 73 Lenton Project Underground Potential Seismic Profile ` 14 May 2008 74 37
Slide 39: Lenton Development Program; Cross Section
Lenton Project Development Program For personal use only Mining Lease 70337 recommended for grant Project suitable for rapid development after grant of ML Rangal Coal Measures – same coal seams as mined at the Burton Coal Mine Hard coking and thermal coal products possible Close to existing mining i
Slide 40: Bee Creek Project Status and Targets
Bee Creek Project Status For personal use only Working to define drilling target sites: – Using remote sensing techniques – Structurally complex – Hyperspectral mapping indicates possible Moranbah and Rangal coal measures within New Hope’s tenement – Drill targets will be tested when drill rigs are
Slide 41: Hyperspectral Image Processing; New Hope JORC Resources
Bee Creek Project Hyperspectral Image Processing For personal use only Rangal Coal Measures Moranbah Coal Measures Rangal Coal Measures 14 May 2008 79 New Hope JORC Resources As at 18 March 2008 Project Status Proven Probable Marketable Measured Indicated Inferred Total Reserves Reserves Reserves Re
Slide 42: Other Activities; Arrow Energy Tenure Map
For personal use only Other Activities Overview Arrow Energy Tenure Map Shareholding at 31/01/08 17.8% Cost of shares $112M Market value at $3 per share $362M Moranbah Unrealised profit before tax $250M Styx Basin Boyne River Surat Basin Clarence Moreton 14 May 2008 82 41
Slide 43: New Hope - Arrow Energy Common Ground
New Hope - Arrow Energy For personal use only Common ground holdings in the Surat basin Synergies with New Saraji: – Co-existing coal bed methane gas and EPC tenements – Share exploration results – Potential for cooperative development – Shared support during operational phases 14 May 2008 83 Coal t
Slide 44: Coal to Liquids Plant Concept; Status
Coal to Liquids Project Plant Concept For personal use only Gas Heating Source Power Generation Coal Wash Plant Clean Coal Coal Gassifier LIQUIDS PLANT Diesel , Gasoline & Jet Fuel Raw Coal Coal Mine Inert Waste Sulphur By-Product Carbon Enrichment By-Product 14 May 2008 85 Coal to Liquids Project S
Slide 45: Coal to Liquids Next Steps
Coal to Liquids Project Status 2 For personal use only Next Steps: – Confirm gasification performance 3Q, 2008 – Assess catalysts performance 3 – 4Q, 2008 – Initiate fully integrated tests 4Q, 2008 / 1Q, 2009 – Initiate Government approvals process 2Q, 2008 14 May 2008 87 Strategic Summary 44
Slide 46: Strategic Summary
New Hope Corporation Strategic Summary 1 For personal use only 1 – 2 Year Horizon: – Strong Base Business • New Acland and incremental expansions • Extending West Moreton operations – Supporting Projects • QBH Expansion • Wetalla Pipeline Project 14 May 2008 89 New Hope Corporation Strategic Summary
Slide 47: Strategic Summary; Indicative Summary of NHC Business Strategy
New Hope Corporation Strategic Summary 3 For personal use only 5 – 10 Year Horizon: – Additional Growth Projects • New Saraji Development -> Stage Two, 5 - 10 Mtpa • Bee Creek or Replacement Project • New Energy Projects – West Moreton Land Development • Oakleigh – possible residential and recreatio
Slide 48: Outlook
For personal use only Outlook Outlook New Hope’s likely production for 2007/08 year is approximately 4.4 million tonnes. Thermal coal prices remain firm. Second six months result likely to be higher due to: – Higher export sales prices; – Possibly offset by higher exchange rate. 14 May 2008 94 47
Slide 49: Summary
Summary For personal use only New Hope Corporation: – is a Low Cost Producer; – is Profitable; – has Reserves; – has the Projects; – has a Strong Balance Sheet; – has a Strong Future. 14 May 2008 95 “The Independent Energy Alternative” People are Important Margin Management makes us Competitive Cont