An Australian gold miner – for global investors 1H FY2018 Financial Results - February 2018
Disclaimer Competent Persons Statements The information in this announcement that relates to exploration results, data quality, geological interpretations and Mineral Resource estimations for the Company’s Project areas is based on information compiled by Darren Cooke, a Competent Person who is a Member of the Australian Institute of Geoscientists and a full-time employee of Northern Star Resources Limited. Mr Cooke has sufficient experience that is relevant to the styles of mineralisation and type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" for the Company’s Project areas. Mr Cooke consents to the inclusion in this announcement of the matters based on this information in the form and context in which it appears. The information in this announcement that relates to Ore Reserve estimations for the Company’s Project areas is based on information compiled by Jeff Brown, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy and a full-time employee of Northern Star Resources Limited. Mr Brown has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Brown consents to the inclusion in this announcement of the matters based on this information in the form and context in which it appears. The information in this announcement that relates to the Central Tanami Gold Project is extracted from the Tanami Gold NL ASX announcement entitled “Quarterly Report for the Period Ending 31 March 2014 ” released on 1 May 2014 and is available to view on www.tanami.com.au. The information in this announcement that relates to mineral resource estimations, data quality, geological interpretations and potential for eventual economic extraction for the Groundrush deposit at the is Central Tanami Gold Project based on information compiled by Darren Cooke a Competent Person who is a Member of the Australian Institute of Geoscientists and a full-time employee of Northern Star Resources Limited. Mr Cooke has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" for the Group reporting. Mr Cooke consents to the inclusion in this announcement of the matters based on this information in the form and context in which it appears. The Company confirms that it is not aware of any further new information or data that materially affects the information included in the original market announcement entitled “Quarterly Report for the Period Ending 31 March 2014 ” released on 1 May 2014 and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. To the extent disclosed above, the Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. Forward Looking Statements Northern Star Resources Limited has prepared this announcement based on information available to it. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this announcement. To the maximum extent permitted by law, none of Northern Star Resources Limited, its directors, employees or agents, advisers, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this announcement or its contents or otherwise arising in connection with it. This announcement is not an offer, invitation, solicitation or other recommendation with respect to the subscription for, purchase or sale of any security, and neither this announcement nor anything in it shall form the basis of any contract or commitment whatsoever. This announcement may contain forward looking statements that are subject to risk factors associated with gold exploration, mining and production businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to price fluctuations, actual demand, currency fluctuations, drilling and production results, Reserve estimations, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory changes, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. [a] Unless stated otherwise, includes continuing and discontinuing operations for the period ended 31 December 2016. (1) EBITDA is earnings before interest depreciation, amortisation and impairment and is calculated as follows: Profit before Income tax plus depreciation, amortisation, impairment and finance costs less interest income. (2) Free Cash Flow is calculated as operating cash flow minus investing cash flow. (3) Underlying Free Cash Flow is calculated as follows: 31 Dec 2017 - free cash flow ($0.7 million) plus investments ($26.0 million), plus M&A ($4.0 million), plus FY17 tax ($35.2 million), plus working capital adjustment ($7.7 million), less bullion awaiting settlement ($12.5 million). 31 Dec 2016 - free cash flow ($12.8 million) plus bullion awaiting settlement ($10.6 million), plus stamp duty paid on prior acquisitions ($1.7 million), plus investments ($0.8 million), plus FY16 tax ($33.6 million), less working capital adjustment ($3.4 million). EBITDA, Underlying Free Cash Flow and All-in Sustaining Costs (AISC) are unaudited non IFRS measures All currency conversions in this document were converted at a spot conversion rate of USD/AUD of 78c 2
1H FY2018 – Key Financial Highlights Key Financial Outcomes Cash Flow from Underlying Free Cash Interim dividend up operating activities up Flow of A$61M up 9% 50% from pcp to A4.5¢ 14% to A$126.8M on from pcp Fully Franked pcp Results strength illustrated by 25% Return on Equity A$433M Cash & EBITDA of A$201.7M; and 24% Return on Equivalents up 43% on EBITDA Margin of Invested Capital pcp and no debt 46% 3 3
NST continues to lead the global gold sector in ROE and ROIC NST generated a sector leading annualised underlying return of invested capital of 24% in 1H2018 and has averaged 28% since FY2015 For the past three years NST has delivered an average return on equity of 35% Capital is forced to compete internally for project funding to ensure NST continues to generate sector leading returns Whilst NST can generate these type of returns from organic growth it will continue to motivate capital Annualised Return on Equity Return on Invested Capital 50% 43% 40% 38% 40% 45% 42% 38% 33% 40% 35% 35% 37% 36% 31% 3 Year Avg ROIC of 28% 35% 30% 30% 28% 3 Year Avg ROE of 35% 30% 27% 24% 25% 25% 25% 25% 25% 20% 20% 17% 20% 15% 15% 15% 10% 10% 10% 5% 5% 5% 0% 0% 0% 1H15 2H15 1H16 2H16 1H17 2H17 1H18 1H15 2H15 1H16 2H16 1H17 2H17 1H18 4
1H FY2018 Highlights - Underlying FCF and Operating Cash Flow Up Cash flow from operating activities grew by 14% to A$126.7M and underlying FCF grew by 9% to A$61M $’000 Half Year End Half Year End % 31 Dec 2017 31 Dec 2016 [a] Change Change Revenue 435,349 415,485 19,864 5% EBITDA 201,738 218,803 (17,065) (8%) Net profit 79,090 104,624 (25,534) (24%) Net profit from continuing operations 79,090 84,720 (5,630) (7%) Cash flow from operating activities 126,787 111,349 15,438 14% Cash flow used in investing activities (126,067) (98,586) (27,481) 28% Sustaining capital (41,139) (54,107) 12,968 (24%) Non sustaining capital (33,982) (30,325) (3,657) 12% Exploration (21,804) (30,968) 9,164 (30%) Acquisition of available-for-sale financial assets (26,007) (750) (25,257) 3,368% Acquisition of Western Tanami Project (4,000) - (4,000) (100%) Other investing 865 17,564 (16,699) (95%) Underlying free cash flow 61,098 56,051 5,047 9% Average gold price per ounce (A$) 1,678 1,683 (5) 0% Gold mined (ounces) 293,990 271,536 22,454 8% Gold sold (ounces) 267,278 246,229 21,049 9% All-in sustaining costs (AISC) per ounce sold (A$) 1,043 1,111 (68) (6%) Cash and cash equivalents 368,054 282,101 85,953 30% Earnings per share (cents) 13.1 17.4 (4.3) (25%) 5
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