Northern Star Resources Ltd · ASX:NST
Northern Star Resources — Macquarie Securities Conference 2017
23 slides from Northern Star Resources's conference presentation, May 3, 2017
Slide 1: An Australian gold miner – for global investors
For personal use only An Australian gold miner – for global investors Macquarie Securities Conference May 2017
Slide 2: Disclaimer
Disclaimer Competent Persons Statements The information in this announcement that relates to mineral resource estimations, exploration results, data quality and geological interpretations for the Company’s Paulsens and Jundee Project areas is based on information compiled by Brook Ekers, a For perso
Slide 3: Introduction – Globally Relevant Gold Miner with Tier 1 Assets
Introduction – Globally Relevant Gold Miner with Tier 1 Assets We are an ASX 100, top 25 global gold producer with all our mines in the Tier 1 jurisdiction of WA; For personal use only ~500koz per annum at AISC of ~A$1,000/oz Paulsens Operations Central Tanami Project +3Moz Gold Camp +5Moz Gold Camp
Slide 4: A strong track record of growing earnings and margins
A strong track record of growing earnings and margins NST has been able to grow earnings, profit margins and payouts to Shareholders consistently only EBITDA EBITDA Margin 250 60% 53% EBITDA is up 21% $216.4 $218.8 EBITDA margins are up 24% 47% 50% 42% 200 $180.6 use $165.6 36% 38% $148.3 40% 35% (m
Slide 5: Consistently generating sector leading Returns
Consistently generating sector leading Returns Over the last five years NST has averaged a Return on Equity of 30% and a Return on Invested Capital of 27% For personal use only which compares favourably to the ASX 100 Materials index average of 9.9% and 6.5% respectively 5 Year Average Return on Equ
Slide 6: Delivering consistent value creation in uncertain times
Delivering consistent value creation in uncertain times According to the Boston Consulting Group 2016 study “Delivering value in times of uncertainty”, NST ranked 6th For personal use only on the list for the 5 year Total Shareholder Return of ASX 200 companies, generating an average yearly TSR of 6
Slide 7: Global Gold Trends: Gold discoveries & exploration
Global Gold Trends: Gold discoveries & exploration Substantial reduction in major discoveries world wide; in 2015 greenfield discoveries cost US$189 per ounce, For personal use only NST costs were US$14 per ounce for the same period Exploration is becoming more focussed around the mine site due to a
Slide 8: Northern Star continues to buck the global trend
Northern Star continues to buck the global trend Since 2012 Reserve life of the top five global producers has declined by 37%; whilst NST’s Reserves have grown For personal use only by 67% in just two years by investing into successive multi year exploration programs With NST’s current investment in
Slide 9: Growth around our Tier 1 Assets is the core focus
Growth around our Tier 1 Assets is the core focus Globally there are only 30 mines producing over 200kozpa in Tier 1 mining jurisdictions; production is declining in these regions due to a lack of discoveries and significant Reserve depletion For personal use only Overlaying an EBITDA margin of over
Slide 10: Growth around our Tier 1 assets is the core focus
Growth around our Tier 1 assets is the core focus By the end of FY2017, NST will have invested A$250M For personal use only in exploration and expansionary capex since the acquisition of its Tier 1 portfolio of assets 3 years ago In FY2016, NST invested A$61M into exploration This investment saw a 3
Slide 11: Organic Production Growth with a low level of capital intensity
Organic Production Growth with a low level of capital intensity Production set to grow materially in 2018 and deliver significant increases in Company free cashflow For personal use only NST has a competitive advantage from having one of the lowest levels of capital intensity in the industry Develop
Slide 12: Australian Gold Producers trading on low multiples
Australian Gold Producers trading on low multiples NST is trading on a 12 month trailing EV/EBITDA* multiple of 5.4x compared to the ASX 100 Material's index average of 8.4x For personal use only Applying these multiples to the comparable average sees NST trading at a significantly higher valuation,
Slide 13: Kalgoorlie Operations: Rapid, low-cost growth
Kalgoorlie Operations: Rapid, low-cost growth FY2016: Resources 3.6Moz, up 17% and Reserves up 0.9Moz up 48%, after mining 216koz For personal use only FY2017: Guidance 200,000-210,000oz at an AISC of A$950-A$1,000/oz 6.45Moz of gold production over the past 23 years, average of 280kozpa with a peak
Slide 14: Jundee: A big mine…..and getting bigger
Jundee: A big mine…..and getting bigger FY2016: Resources 1.25Moz and Reserves up 21% to 720,000oz, even after mining 228koz For personal use only FY2017: Guidance 220,000-230,000oz at an AISC of A$1,000-A$1,050/oz 6.75Moz of continuous gold production over the past 21 years, average of 320kozpa wit
Slide 15: Paulsens: The Founding Asset
Paulsens: The Founding Asset FY2016: Resources 0.3Moz and Reserves 0.1Moz, after mining 91koz For personal use only FY2017: Guidance 65,000-75,000oz at AISC of A$1,200-A$1,250/oz 0.85Moz of continuous gold production over the past 11 years, averaged of 75kozpa with a peak year of 100koz Record cash
Slide 16: Central Tanami Project “CTP”: Emerging Growth Region
Central Tanami Project “CTP”: Emerging Growth Region The Tanami region is an exciting new area that is rapidly GROUNDRUSH (NST Earning to 60%) developing a reputation for major gold discoveries For personal use only Open Pit Production (Newmont) of 610koz NST operations are contiguous to the world c
Slide 17: Why Invest in Northern Star
Why Invest in Northern Star Highly profitable: Record half year net profit after tax of A$104.6M, up 61%; EBITDA margin For personal use only of 53%; track record of dividends, paid A10¢ps in 2016 (up 100% from 2015) Strong balance sheet: no debt; A$393M in cash & equivalents (31 March 2017) Emphasi
Slide 18: Northern Star Resources
For personal use only Northern Star Resources An Australian Mid Cap gold miner – for global investors Contact Details: Luke Gleeson – Investor Relations +61 8 6188 2100 Email – [email protected] Website – www.nsrltd.com
Slide 19: Appendix
Appendix For personal use only Appendix Northern Star Resources An Australian gold miner – for global investors
Slide 20: Kalgoorlie Operations: Rapid, low-cost production growth
Kalgoorlie Operations: Rapid, low-cost production growth Kanowna Belle is a +5Moz orebody, averaging 4koz per vertical metre with limited exploration below E block For personal use only NST will be drilling over 61,000m at Kanowna Belle with 4 rigs focused on Velvet, E Block and Lowes Extension NST
Slide 21: Kalgoorlie Operations: Rapid, low-cost production growth
Kalgoorlie Operations: Rapid, low-cost production growth NST is targeting over 33,000m of exploration drilling on the EKJV ground with up to 4 UG drill rigs For personal use only This drilling will provide the next Resource and Reserve update across the mining complex The new 2.1km drill drive to da
Slide 22: Kalgoorlie Operations: Rapid, low-cost production growth
Kalgoorlie Operations: Rapid, low-cost production growth Past production on the 100% NST ground has yielded 1.25Moz at 6gpt between 1990-2004 For personal use only NST is drilling over 38,000m across these historic deposits to increase the resources at: Barkers, Strzelecki and Pope John; each of the
Slide 23: Applying the BCG TSR drivers to the NST business model
Applying the BCG TSR drivers to the NST business model NST has ticked all the boxes to deliver consistent returns above the peer group and is positioning itself to continue For personal use only this over the coming years and is looking to achieve a change in valuation multiple by extending mine liv
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