St Barbara Limited

Thank you for standing by and welcome to the St. Barbara SPM briefing on half-year report conference call. All participants are in 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 Jetson, CEO. Please go ahead, sir.

Thank you very much and good morning everyone and thank you for joining us for St Barbara's First Half FY21 Interim Financial Report. Participating on the call with me today are Garth Campbell Cowan, our Chief Financial Officer, and Mr David Cottrell, our Manager, Investor Relations. Attending the call with me today is Vale Madsen, EGM People, and Evan Spencer, our Chief Operating Officer. As always, I'd like to begin by recognising the traditional owners and the First Nations people in the lands of which we operate in Australia, Canada, Papua New Guinea and pay my respects to the Elders past, present and emerging. I would also like to provide a short overview of the first half results before handing over to Garth to take you through the financials in more details. Moving on to slide five outlines St Barbara's five core commitments. They are key to our business success going forward. Of note, St Barbara was recently included in the 2021 Bloomberg Gender Equality Index. We are very proud of this achievement, especially as it's our first year submitting data, and it is testament towards our commitment to gender equality. St Barbara is one of 10 Australian companies within a total of 300 companies globally covering 11 sectors to achieve this, something we're proud of. In terms of slide six, safety always, zero harm is always our target. During H1FY21, we launched our CARE program to embed our safety behaviours across all of our operations globally. CARE stands for Control, Action, Respect and Engage. Acting with CARE is how we always put safety first. We've also developed an infectious disease critical risk control standard in this half. We have not had a great start to H1 safety performance, but our care program will go a long way towards making a difference as we strive for building brilliance in the safety space. Next on slide seven are some of the key achievements for the first half of FY21. As you all know, despite a slow start to the year at Gwalior, we've had consistent profit performance with a net profit after tax of $37 million. We've had a strong cash generation across all our operations with 94 million contribution after CapEx. We've continued our focus on shareholder returns with an interim fully franked dividend of $0.04 per share declared today. We've launched our Building Brilliance Program at the start of quarter two. Already a few weeks in and we're starting to see some really nice improvements. Our organic growth options, we've reviewed the Leonora province and developing that into a strategic action plan. We will maximise value from our tenement and there will be more discussions around that later this quarter. The feasibility studies and various software project is on track and is scheduled to be reviewed by the board late this quarter. Atlantic Gold projects are progressing quite well and we plan to resubmit EIS for Beaver Dam this quarter. During this half, also, Evan Spencer joined us as a Chief Operating Officer. And Laird Brownlee, who was our GM Atlantic Gold operations, now moves to a newly created strategic role as GM permitting government and community relations of Atlantic Gold projects. At the same time during the half, we've made changes to our technical services team to build and enhance our technical capability, addressing our past performance exposures and linking building brilliance into our internal growth strategy. Now moving on to slide eight. The operational performance for the company is shown here on slide eight. The first half performance, as we know, was impacted in the September quarter by the fall of ground issues at Glarlia. St Berry's grade reconciliation and low recovery also was problematic during the December quarter. Second half production forecast is strong and been driven by Glarlia. In terms of slide nine, this slide was presented at the December investor breeding. It shows the uplifts we're looking to achieve over the next three years across all of our operations. As I outlined in the December quarter briefing, we are executing to plan and beginning to see some improvement. The recent tolling process agreement at Leonora shows we're on track to deliver the first uplift on our strategy over time. We remain on schedule for delivery of the sulphide feasibility project at Sinbury. With that, I will now hand over to Garth and discuss the financials in more detail. Thanks, Garth.

Thanks, Craig, and good morning, everyone. Just turning to slide 10, where we set out the financial highlights for the half. Group EBITDA margin was up on the same period last year at 42% with Atlantic Gold making a very strong contribution to that percentage. Cash from group operating activities was well up on the same period last year at 94 million. And this was in part due to the lower tax payments in the current half. While statutory net profit after tax was marginally down at 37 million, our underlying net profit after tax at 40 million was up on the same period last year. And we closed the half with 119 million of cash in the bank and debt of 101 million. As noted on the slide, the only hedging the group has remaining is the 78,000 ounces of gold call options at a strike of Canadian $2,050 per ounce, and those mature monthly between April 2021 and December 2022. And the board approved a fully franked interim dividend of $0.04 per share. If we now turn to slide 11, where we summarized the key financial outcomes for the first half. So the first half results did show solid financial performance, as Craig made reference to, albeit that production was down at Gwalior and Sunbury. Our underlying EBITDA was $151 million, which was 17% higher than the same period last year, with a very strong contribution from Atlantic Gold. The EBITDA margin at 42% for the group can be broken down as Atlantic Gold reporting a strong margin of 69%. Wiley's margin was at 45% and Sambiri also achieved EBITDA margin of 45%. The difference between the statutory and underlying net profit after tax is significant items and those related to costs associated with the Building Brilliance Programme. and movements related to the mark-to-market value of those gold call options, which get recognised through the income statement. And if you look at Note 3 to the half-year accounts, we give a breakdown and explanation of those significant items. Now just turning to Slide 12, where we have a waterfall showing the movement in the underlying net profit after tax for the half. A strong contribution from Atlantic Gold and Sunberry was mainly due to the stronger gold price in the half, and that was partially offset by the weaker performance from Gualia. Appreciation and amortization in the current half was $16 million higher than the same period last year. Now, the key changes being the higher charge at Atlantic Gold related to assets acquired in 2019 and from the MRI acquisition. and the higher asset base at Gwalior after the completion of the extension project there. And again, if you turn to note one of the accounts, we give a breakdown of the DNA across those three operations. There was a positive variance from lower financing costs and foreign exchange movements, and those foreign exchange movements relate to mainly the appreciation of the AUD against the... Canadian dollar and that impact on our Canadian dollar debt. If we now turn to slide 13, where we give a breakdown of the movement in the cash over the period, you can see there the acquisition of the MRI. It settled in September, costing $60 million. The operations generated a combined cash contribution in the half of $117 million, and that was after sustaining CapEx of $52 million. We spent $16 million on growth, CapEx in the half, together with $20 million on exploration. Our corporate and royalty payments of $38 million include corporate costs, all of our royalty payments, and the cost of the Building Brilliance Program incurred in the half. Tax payments of $17 million relate to our pay-as-you-go payments during the half of $8 million and payment of the tax provision made at the end of the last financial year amounting to $9 million. The big movement in the half is obviously the financing payments, which included the $200 million that we repaid on the syndicate facility, which we drew down at the start of COVID. And we also... had the first drawdown under the loan that we provided to the Linden Alliance in support of the Toll Treatment Agreement at Gwalior, which we talked about in the December quarterly report. The last slide for me is slide 15, where we set out our shareholder returns. You can see from the slide that we've now had eight consecutive dividend payments. since recommencing our dividends in fiscal 2017. Those payments amount to $226 million over that period. The interim dividend of $0.04 per share crates to $173 per ounce produced, gives us a dividend yield for the half of 1.7%, or if you annualise that, it's 3.5%. The company continues its dividend reinvestment plan, which allows shareholders to participate in receiving shares for their dividend at a discount of 1% to the five-day VWAP price. And with that, I'll hand back to Craig to make a few closing remarks.