St Barbara Limited

Thank you for standing by and welcome to the St. Barbara briefing on FY20 Q4 June quarterly report. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Craig Jensen. Please go ahead.

Thank you, Amanda, and good morning to everybody. And obviously, thank you very much for joining us this morning for St Barbara's 2020 Quarter Report Briefing. On the call with me this morning, I have Garth Campbell-Cohen as Chief Financial Officer, Rowan Cole, Company Secretary, Val Madsen, General Manager, Human Resources and HSEC, and David Cottrell, Manager, Investor Relations. At a higher level, I'll be going through the presentation pack and I'll open up for discussions at the end. but also discuss the quarter that we've had and the strong end of the financial year. And I'd have to say up front that the quarter that we've had has been very strong in many ways, and I'll go into detail behind that strong performance in the coming presentation. First and foremost, I'm very pleased with our safe performance, and in particular the COVID-19 management that we've endured during this quarter, no different than others in our industry and across the country and globally. However, the risks of COVID-19 remain and will maintain our discipline as we evolve our management plan accordingly. I will have a call out to Val Madsen and her team at this point in time and congratulate her and the team. All the operations led by our general manager of the organisation in particular to be able to manage through these challenging and difficult times for us. And as you'll see in the coming slides and the conversation we'll have, Not only is our safety performance certainly improved over this quarter and a very strong year, but we've been able to manage and navigate our way through the current COVID-19 issues that we have globally in the countries of where we operate. So moving on, operationally, it was an excellent quarter. For example, the Manti Gold had a record quarter. Guali produced 50,000 ounces for the first time in a year. And Simberi had the best quarter for the year. finishing up very strongly. The cash balance increased in the company by $85 million. The company is in a very healthy position with $405 million in cash. And as a result, we're planning to repay the $200 million we drew down back in March to bolster the balance sheet at the end of that time. In terms of where I'd like to go to slide four and discuss some of the those management plans and issues that we've had around COVID-19. As I've talked about previously, our absolute priority during this pandemic is the health and wellbeing of our people, partners, suppliers, and the communities of where we operate. Fortunately, we've had no COVID-19 positive cases in any of our sites. However, we are very conscious of the risks in maintaining our controls by adopting and evolving in the changing circumstances of the past and what we have in front of us going forward. In PNG, for example, we've seen flights resume and allowed us to rotate our expat management team. However, with cases on the rise in PNG, we are keeping a watchful eye on the situation. Our exploration program has recommenced under strict procedures and guidelines, given the remoteness of where we operate. We've also been conducting a number of mental health webinars for our employees, which we are offering on an ongoing basis and we will certainly continue to do that and monitor the health and wellbeing of our people and our partners and providing support in the communities of where we operate. Lastly, in this area, we've maintained a strong commitment to our communities with a number of COVID-19 related programs and donations during this quarter, supporting the areas and the people that live in the areas of where we work. With that now, I'd like to turn to slide five. And on slide five are the highlights of the quarter, which some have already mentioned. We've had our strongest production quarter for two years in light of guidance. The operations generated $126 million in operating cash flow. The cash position increased $85 million after growth capex of $11 million, income tax of payments of $6 million, and expiration of $5 million was spent. Over to slide six, and again, I'll just touch on our safety performance at a very high level, but safety is certainly going in the right direction, which I'm pleased about. However, there's still a lot of work to be done to achieve an injury-free workplace. Pleasingly, FY20, there was a 44% decrease in recordable injuries, and I'll take the moment to congratulate all of our employees, partners in all our operations and beyond for this achievement, and congratulations to them. Turning on to areas of focus for us and moving into slide seven. During the quarter, as I've mentioned in the past, we've had a review with external technical assistance that was undertaken of each of our operations. A range of productivity improvements and cost reduction opportunities have been identified and there are still more being identified as we speak. We're also looking at our operating model to enhance our technical expertise to see what we're going to set ourselves up for success and how we're going to set ourselves up for success in the future. At Atlantic Gold, we're progressing with various environmental impact statements for each of the developments, which I'll talk a bit more in detail in slides to come. The COVID restrictions are slowing some stakeholder engagement down, in particular community engagement. Work continues to be optimal in sequencing the Atlantic Gold projects and we'll still continue to work that in the short term. short period over the remaining part of this calendar year. At Gwalior, we're completing the final bench shaft as we speak. Currently, it's sitting at 93% complete at 480 metres, with a further 37 metres to go before that project is finally completed. It certainly has been a challenging program and project over a long period of time, and it will be good to get this one behind us so we can move on and optimise that operation. Once complete, we will seek to optimize development, maximize oil extraction and production, and ultimately reduce operating costs into the future for that operation. A dedicated project team has been established to drive business improvement opportunities already identified in the operational review that I mentioned just a moment ago. So Gwalior is becoming a very strong operation. Again, coming back out of the Gwalior extension project, and certainly we are getting ready to optimise that particular asset. At Sinberry, we're progressing the Sinberry Sulfide Project through the feasibility study. This involves future optimising work already completed in the past pre-fee study. I look forward to seeing the improvements in the study come to fruition at the end of this year. The consolidated June 4 quarter results on slide 8 shows the consolidated quarterly production and all its sustaining costs. This shows our best quarter since acquiring Atlantic Gold. And with that, I'd like to move into some of the operations in a little bit more detail. Moving on to slide nine and starting off with Atlantic Gold. So again, as I previously mentioned, Atlantic Gold had a record quarter. The team completed, in this quarter as well, the team has completed a realign of the ball mill. And the reason I highlight this as a significant factor is it's the first time the internal team Due to COVID restrictions and having people move around the country and within country to come and do our linings as contractors and relines as contractors, we've performed that task ourselves. I'm pleased to announce that the team not only completed better than budget, but certainly in a shorter time than allocated in our plans. Congratulations to the Atlantic team. As announced earlier this week, we are seeking to acquire 100% shares in MRRI. for $60 million. As you would know, MRRI hold 40% interest in the Tukoi mine and 25% interest in certain exploration tenements around the Tukoi operation. Post this transaction, St Barbara will own 100% of the Tukoi mine and 100% of the surrounding exploration tenements. Completion for this transaction is expected to be done and signed by early September. FY21 guidance for Atlantic productions between 100 and 115,000 ounces. All in sustaining costs between $9.55 and $1,100 per ounce. Sustaining capex ranges between $15 and $20 million, with growth capex about the same, which is $15 to $20 million. On the Atlantic growth projects, the COVID-19 restrictions certainly have slowed down in terms of stakeholder management, engagement, and particularly in the area of public consultations. I'm pleased to say that the federal agencies have now reopened and engagement with the First Nation groups has recommenced. And I myself have had many engagements with the federal and the state government over the last quarter. The Beaver Dam data collection is progressing well together with the feasibility studies on plant design and haul roads. I'm pleased with the progress on that particular project. and we expect to submit a revised environmental impact statement in the December quarter of this year. At 15 Mile Stream, currently we're revising the environmental impact statement with scientific studies, and the first national consultation on this project is progressing very well. We expect to submit a revised EIS in the current quarter. Cochrane Hill EIS is planned for later this coming year. On the proposal to designate the archipelago Lake Wilderness area would have engaged with the Nova Scotia government and the outcome has been delayed due to COVID-19 restrictions. We are in consultation and we have had meetings with the key stakeholders around Cochrane Hill and that's progressed very well at the same time. So moving on to Gwalior quarter four performance. Gwalior's quarterly result has been very solid to say the least. Production priority this quarter has absolutely showed the ability of what the Gwalior team can deliver in lifting production levels in that operation. Certainly looking forward to the extension projects being finished. On completion of the Gwalior extension project allows full optimisation of the mine. However, in support of continued sustainable operations in the meantime, FY21 development will remain under production and I'm sure we'll get some questions on that. FY21 guidance, production between 175,000 ounces and 190,000 ounces. All in sustaining cost guidance is 1435 to 1560 per ounce. Sustaining capex is 70 to 80 million Australian and growth capex at 30 to 32 million Australian. Sustaining capex includes a higher mine capital development to increase a number of mining fronts and that will be the focus of this next coming production year. Forward planning for FY22 and 23 indicates a production uplift to 190,000 to 200,000 ounces. I'm happy to take questions on this at some other stage. So moving on now to slide 11. The final raised bore has advanced during the quarter. However, we did prioritise all movement underground. We had significant issues with the raised bore with bad alterated ground and squeezing ground that caused a lot of delays. Thankfully that is now coming to an end with the last 37 metres currently underway. On to slide 12 in terms of St Berry. St Berry at a higher level had another improved quarter. Congratulations to the team there. Both Botlow and Sarawak Central Pit had higher grades than anticipated which certainly assisted in that production uptick. On the downside, mill performance was lower due to reduced availability, in particular the SAG mill and the road con. During this quarter, we replaced a 250-metre section of the road con with the remainder of the original belt of 1,200 metres to be replaced in this current financial year. As announced in May, the Board approved the Simberry Sulfide project to proceed to a feasibility study, and this has been well-progressed as we speak. We expect the feasibility study and environmental social impact assessment to be completed in December of this year. The final investment decision is being targeted for the March quarter 2021. FY21 guidance for St Berry is the production between 95 and 105,000 ounces. All in sustaining costs between $16.65 and $18.40 per ounce. sustaining capex between $12 to $15 million and growth capex between $4 to $5 million that is directly related to the feasibility study. If I may now, just turning to slide 13 and our balance sheet. Our balance sheet is shown clearly on slide 13. Cash increased by $85 million during the quarter to $405 million and this is after $11 million of growth $6 million in tax payments and $5 million in exploration expenditure in the quarter. The debt is $316 million, as I mentioned earlier, and we plan to repay the $200 million drawdown from the syndicated debt facility that we drew down earlier this year. So just quickly moving through the exploration update on slide 14. So again, during the quarter, exploration resumed. under strict new procedures in particular to COVID-19 management and due to us working in extremely remote areas. Activity was focused on the Leonora region and Moose River corridor. The surrounding Gwalior is of particular focus, the surrounding area in Gwalior is of particular focus and we've commenced drilling in the shallow portions of the Gwalior system during this quarter. Additionally, the broader Leonora region, we are testing targets located within a 30 kilometre trucking distance from the operation itself. Slide 15 shows a high level, some of the growth pipeline that we have in place. So we're focused on building the existing growth options as well as keeping an eye out for external growth opportunities. The future growth potential looks very exciting for us and I look forward to be able to talk positively about that in the future. In conclusion, on slide 16, we've had a very good quarter to the end of the year. It's our best production performance in two years. Our safety performance has improved and heading in the right direction, although we obviously still have some work to do to be injury-free. Cash at the end of the quarter has increased by $85 million, leaving the company a very strong cash position at $405 million. Debt is $316 million. and we intend to repay the $200 million at the end of the month, which we drew down in March to bolster the balance sheet in case of COVID operation, that COVID affected our operations in any way. The feasibility study on St. Barry's sulphide is continuing. The operational reviews, as I've mentioned before, that obviously helped us in a production journey in quarter four, Aqualia is underway and continuing underway, and now Atlantic, and then on to St. Barry, and that's progressing very well, I'm pleased to say. Lastly, we announced on Monday that we have reached an agreement to acquire MRRI and hold the remaining 40% of 2COI. I think in terms of the presentation pack, that's certainly a very quick overview and high-level update to everybody. And with that, I'd now like to throw open for any questions that people in the audience may have.

Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Alex Barkley from Morgan Stanley. Please go ahead.