BATHURST RESOURCES LIMITED New Zealand’s leading coal group Investor presentations – September 2019
DISCLOSURE General disclaimer This presentation contains forward-looking statements. Forward- looking statements often include words such as “anticipate”, “expect”, “intend”, “plan”, “believe”, “guidance” or similar words in connection with discussions of future operating or fina ncial performance, they 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 directors’ current expectations and assumptions regarding Bathurst’s businesses and performance, the economy and other future conditions, circumstances and results. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. Bathurst’s actual results may vary materially from those expressed or implied in its forward -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 All references to reserve and resource estimates should be read in conjunction with Bathurst’s ASX announcement – “ Bathurst Resources Limited - Update on Resources and Reserves” reported on the 31 October 2018, and all disclosures made in this document with reference to resources and reserves are quoted as per this announcement. 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 the estimates continue to apply and have not materially changed since the 31 October 2018 announcement. Commercial in Confidence 2
NZ’S LEADING COAL PRODUCER AND EXPORTER Quick facts Operations 5 operating mines – 3 via a 65% Domestic owned joint venture Corporate offices Maramarua Markets Export and domestic Mine in care & maintenance Distribution centre Production under management FY20 2.2Mt Export Revenue by market FY20 60% export, 40% domestic Rotowaro EBITDA FY20 NZD $78.4m People > 550 Production volumes by site (FY20) Revenue by product use (FY20) Stockton Wellington Buller Canterbury Takitimu Christchurch Timaru Financial figures noted in this document are consolidated Bathurst and 65% BT Mining, unless otherwise noted Commercial in Confidence 3 Any figures noted as FY20 are forecasted numbers based on the current internal budget
CAPITAL MANAGEMENT Capital structure Substantial shareholders 31 August 2019 Currency Value Share price AUD 10.5 ¢ Market cap AUD $179m Borrowings 1 (excl. leases) USD $7.9m Cash incl. restricted deposits NZD $43.5m Capital initiatives Initiative Price per share Cost On-market share buy-back 2 AU 12.8¢ NZD $4.2m Dividend 3 AU 0.3¢ AUD $5.1m Shares on issue Analyst indicative pricing (AUD) Analyst Date of coverage Valued at Issued shares 1,706,964,431 Euroz August 2019 20.0¢ Potential shares Instrument Maturity Coupon Bell Potter August 2019 17.0¢ 149,333,333 Convertible notes 1 Feb 2021 8% CCZ September 2019 20.0¢ 7,145,909 Performance rights Dec 2019 / Jan 2022 n/a Total issued and potential shares 1,863,443,673 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 4 3 Dividend to be paid on 23 October 2019, cost estimated based on current issued shares.
KEY RESULTS Investments 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 announced $39.5 million Financial figures noted above are based on 30 June 2019 audited financial statements Commercial in Confidence 5
HIGH STANDARDS IN HSEC Zero major environment incidents; 18 minor incidents • Life of mine integration plans commenced at all sites. BRL TRIFR 1 = 8.0 BRL TRIFR 1 = 8.0 40.0 • Four lost time injuries. 30.0 • >3,200 hours of risk management training. • >85,000 risk tools used. 20.0 10.0 Zero occupational health illnesses • Revised employee fitness for work periodic health assessments 0.0 (80 percent complete). • +4,200 fitness for work drug and alcohol tests completed. Zero regional scale community issues • 54 community related reports to the mine sites, noise complaints being the greatest cause. • Stakeholder and community consultation training commenced. 1 Total recordable injury frequency rate Commercial in Confidence 6
KEY FINANCIALS: STRONG PERFORMANCE A general uplift in results reflect a full 12 months of BT Mining (pcp 10 months). A stable domestic business with long-term contracts, and an export segment that operates at low cost to take full advantage of export coal price uplifts, show that Bathurst is a repeatable and reliable business. Income statement FY19 FY18 highlights $m $m Revenue 286.9 237.1 NPAT pcp included one-off non-cash fair value movements on derivatives related to the corporate convertible notes. EBITDA 106.6 93.7 NPAT 45.0 5.5 Operating cashflows 90.7 54.6 Balance sheet highlights Cash 38.5 29.3 Net cash increased despite significant investments during the period. Borrowings 1 14.5 12.7 Gearing % 13% 18% Borrowings primarily consist of the USD bonds issued to fund the investment in BT Mining. Lease liabilities 7.8 5.4 Gearing % incl lease liabilities 19% 26% Gearing has decreased, as net assets grow from profits Equity 116.3 70.4 earned and asset investments, without the need to draw down further debt. 1 Excluding convertible notes and lease liabilities Commercial in Confidence 7
FY20 EBITDA GUIDANCE $78.4M • The export segment is the Measure Export North Island South Bathurst Prior period key driver in the decrease (Stockton) domestic Island equity share actuals in forecast FY20 EBITDA domestic FY20 FY19 from FY19. EBITDA 1 $69.9m $39.2m $7.5m $78.4m $106.6m • The budget for FY20 export market pricing is based on Sales 1,246kt 800kt 312kt 1,642kt 1,750kt 77 percent of an average hard coking coal benchmark of USD $177.50 per tonne at $0.6875 NZ:USD across all sales types, including thermal coal sales. • FX hedging continues to be in place to manage impacts from significant movements in export pricing. • The waterfall to the right highlights the key areas causing the decrease in forecasted EBITDA for Stockton. 1 The domestic segments include corporate overheads. Commercial in Confidence 8
CAPITAL GUIDANCE FY20 key projects over $500k North Island South Island Corporate • Financing cashflows will be domestic domestic consistent to FY19, with the Componentry spend on yellow $5.7m $1.4m - exception of the repayment goods of the USD bonds (face Crown Mountain $3.9m value USD $7.9m) in February 2020. Denniston plateau - - $1.5m • Investing cash outflows in FY20 key projects over $500k Export FY19 were elevated from (Stockton) increased capital spend on Componentry spend on yellow goods and infrastructure $5.5m growth projects. Tailings dam $1.9m • FY19 key investments were Resource development drilling $1.5m in Crown Mountain, Fines recovery feasibility $1.3m Rotowaro extension, yellow goods replacement at Water management pits $0.9m Stockton, advanced capitalised stripping, and share buy-backs. Spend noted above for BT Mining segments is on a 100% basis. Commercial in Confidence 9
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