St Barbara Limited

Good morning, everyone, and thank you for joining us in St Barbara's March 2021 quarterly briefing. On the call with me today is the executive team from St Barbara, along with Lucas Welsh, our Chief Transformation Officer, and David Cottrell, Manager, Investor Relations. At this point, I'd like to draw your attention to page two and encourage a reading by standard disclaimer. As always at this point on slide three, I would like to begin by recognising our traditional owners and people of the lands in which St Barbara operate in Australia, Canada, Papua New Guinea and pay my respects to elders of past, present and emerging. Now turning to slide five. Slide five outlines our five core commitments related to St Barbara operating safely and sustainably. Of note, St Barbara became the signatory of the United Nations Women's Empowerment Principles. We also realised and released our modern statement. With the ongoing global challenge of COVID-19, it was pleasing to learn that 93% of our employees believe that COVID-19 is being managed well by the company. On slide six, we have had five recordable injuries for this quarter, most of low severity. Importantly, we recorded zero injuries in March, which was a high production month for us in quarter. This demonstrates our goal of zero harm is possible. Priority areas of focus during the March quarter were whole of business focus on care, which stands for control, action, respect and engage. Safely transitioning to a new underground mining contractor at Gwalior has also been a key focus of ours. Although in comparison to our peers, we are certainly doing well, we still have a journey to travel and reach zero harm or zero life-changing injuries. In terms of COVID-19 on slide seven, the COVID-19 situation in PNG deteriorated in the quarter with a significant increase in community transmissions across the country. By the end of March, a number of Simberry employees and community members tested positive for COVID-19. The employees were isolated in an on-site quarantine camp and containment measures in place to protect other employees. While specialist medical care and support has ensured the recovery of the majority of cases, two of our employees sadly passed away in the medical complications while were positive for COVID-19. So BARBRA is extending due care and support for their families. Whilst the Simberry operations have been unaffected by COVID until recent escalation, it remains a dynamic situation with increasing pressure on resources and people. St. Barbara continues to work closely with the government and non-government agencies together with local community to manage the situation at centre. On slide eight, quarter three March key achievements in particular, I'm pleased to report the performance of the March was strong, delivering 50% of the total production for the quarter. This was a result of our company-wide transformation and implementation of Building Billings Initiative over the recent months. The cash contribution from the operations for the quarter was 41 million Australian dollars. Of note, we have a couple of growth options to unlock inherent value in our business. This is uplift two of our strategy, which is to grow the production from the Leonora province and deliver brownfield projects at Sinbury and Atlantic. First, we have reviewed a number of our aspects of the Leonora Province Plan relating to geological models, resource models and pit optimisations. We are planning to release the details of this work plus the Leonora mill options during the June quarter. Secondly, we yesterday released the Sinbury sulphide results which demonstrate we have a very robust and financially viable project. The board has approved 13 million US in pre-investment work. This includes metallurgical test work, engineering work on the wharf and infrastructure design. Deposits are placed upon long lead items in complete purchases. We have submitted the SEIS to SEPA for the project and expect a modification approval to the process to take somewhere between nine and 12 months. Third, we have submitted the environmental impact statement for 15-mile stream. And in February, we expect to submit... Sorry, in February. And we expect to submit the EIS for Beta Dam in May. All of these are significant milestones for the Atlantic and Australian PNG operations. Most importantly, we continue to operate safely despite the COVID-19 headwinds, particularly in Canada and PNG. Now moving to slide nine. We first published slide nine in the December investor briefing. It shows two near-term uplifts I'm looking to achieve over the next two to three years across our operations which are progressing as planned. As I outlined during the December quarter briefing and the half year briefings, executing to plan with building British initiatives, underpinning the performance in March in particular. Delivery of the sulphide feasibility study and in the coming weeks we will provide an update on the Leonora Province plan. On slide 10, slide 10 shows the contribution from each site and annualised cash contribution amounts we outlined in the December investor briefing. Our company-wide transformation is well underway and launched in December 2012 by those results. At the end of March we achieved 50% of the FY21 targets driven primarily by Atlantic and Gwilyer operations. I'm pleased with our progress and I look forward to continue to unlock value in our business through our program. Slide 11 is a deeper dive into some of the initiatives driving performance at Atlantic and Gwalior in particular. The mill throughput and availability of recovery rates at Atlantic continue to edge upwards with 8% increase in mill availability. At Leonora, the team has balanced development and production with a 14% uplift in development metres and a 24% increase in total material removed compared to FY20. These are key performance indicators and value unlocked as outlined in the December investor briefing at each of our operations. Moving on to slide 12, highlights of quarter three. Consolidated production for the quarter was 82,000 ounces on the sustaining cost of 1640 Australian per ounce. March was an excellent month, clearly demonstrating performance potential across all operations, which I'll talk about in more detail in the operational sections. As I mentioned earlier, operational cash flow in the quarter was AU$41 million. It's however worth noting that we sold less ounces than we produced, which will come through on the balance sheet in the next quarter. Cash at the end of March was AU$100 million and with debt of AU$102 million. The key items impacting cash flow were $23 million of dividend payments, $9 million of income tax payments, $7 million of growth capex, and $6 million of exploration expenditure. Slide 13 shows the consolidated quality of production and all the sustained costs. The March quarter result was driven by lower production in January and February and significantly stronger performance in March, particularly from Glalio. Performance in March is expected to continue into and through quarter four. On slide 14, my NTQ3 results. Production was $20,600 in sustaining costs of $11.28 per ounce. The operations were impacted by weather events and winter operating conditions, with production lower than the previous quarter. The lower grade results is attributable to the use of stockpiles of supplementary mill feed as winter affected the mining rates. Despite this, meal performance in March was a new record. Its throughput was up 5% on FY20, with availability at 98%, and the average recovery for the month was 94.5%. As we move into the final quarter of the financial year, we've adjusted FY21 guidance to production between 100 and 110,000 ounces, all in sustaining costs between 958 and 1,050 Australian pounds. At Leonora, Gwalior's production was 42,716 ounces and all in sustaining costs of $15.55 per ounce. While the numbers for Gwalior look almost identical to the December quarter, in reality, January and February were development-focused months, with 50% of the production for the quarter achieved in March. Mill throughput increased at Gwalior to nameplate capacity of 1.2 million for the second half of the month. The development rate substantially improved with both February and March achieving advance of over 400 metres. These themselves are records. McMahon commences as an underground mining contractor in early May. This change of underground operator is expected to reduce the mining costs from around 8% to 10% and support our productivity improvements. FY21 guidance is adjusted to the lower end of the previous range, 175 and 190,000 ounces. This could include 5,000 to 7,000 ounces of production from ore purchased from Second Fortune, which would replace lower-grade Leonora province ore, if required. All in sustaining costs between $15.90 and $16.30, all in sustaining per ounce. On to the slide 16, the St Berry results. Simberi recorded a week a quarter with production of 18,981 ounces, an almost sustained cost of $2.426 Australian per ounce. The reporting period was impacted by lower oxide grades in particular and with a transitional law resulting in lower recoveries. Production in March improved with higher oxide grades in the summit pit in particular. This result in production in March is equating also to about 50% of the total quarter production. The remainder of the original Rotcom belt as replaced during the quarter resulted in higher mill throughput, which will continue into quarter four. FY21 guides to adjust to the lower end of the previous range of 95 to 105,000 ounces and all in sustaining costs between 17 and 20 and 18.10 per ounce. Onto slide 17. At Gwalior, new areas of our mining lease and current footprint have been identified for inclusion in overall mineral resources. As part of the de-bottom making, Gwalior production rate in a number of areas of current Gwalior deeps mining front have been identified and incorporated into the mine plan, including intermediates and the shallows. Slide 17 presents a long section of the upper part of the mine showing the Gwalior Shallows target. During the quarter, the additional phase of underground diamond drilling consisting of 11 holes was completed. Four hangwall loads have been identified and the team is commencing a resource estimation work in weeks. The team has also conducted a review of the upper part of the mine. This has identified a number of attractive targets for infill drilling, including old South Gwalior, Old West Lode and targets in the south end of the mine above the 585 metres below the surface. We will drill these areas out over the next six to 12 months. Onto the Leonora Province in slide 18. Slide 18 shows the deposits in the areas close to Gwalior and further to the north. Work has progressed in the Leonora Province plan that's involved reviewing of the geological models, existing resource models and building new resource models, completing a pit optimisation and considering mill expansions. We are planning a more detailed update on the province plan for Galalia and Leonora in the June quarter. Slide 19, in terms of Leonora province plan, the timeline incorporates the information from the two previous slides, which includes the expected increase of mineral resources and plans to launch a pre-feasibility study covering Tower Hill, Harbour Lights and considering a mill expansion. The indicative timeline for assessment, development and production reach of the major areas within the Leonora Province Plan ensures we will deliver building brilliant strategy as outlined and announced in our December announcements. Yesterday we released the results of the Sinbury's sulfide feasibility study, which highlighted a robust project with strong financial returns. The Board has approved a pre-investment work of $13 million and final investment decision targeted for March 2022 or sooner. The next steps include completing the supporting trials on waste rock management and tailings footprint with submission to SEPA and FY22. We're working to update the mineral reserves for the end of the financial year reporting. Over the next three to six months, we'll complete a reserve definition drilling program. Importantly, we will continue to build on stakeholder engagement to ensure appropriate consultation supported by legislative assurances for the program. In terms of oxide drilling targets, exploration at Tsimberi is targeting additional oxide mineralization in the corridor. Six oxide targets were drill tested with the aim of defining additional inferred and indicated resources. Results highlight that Piggy Bow North and Cell Tower contain oxide mineralisation. In addition, resource definition drilling is planned to be completed and converted to unclassified and inferred mineralisation in the very near future. We expect to release these drilling results in the June quarter. as we delivered a promise. In conclusion, we've had a solid quarter and a very strong month of March across all of our operations. We expect to continue in quarter four, and as billion-billionish becomes the way we deliver. We've progressed with unlocking value in our business, expected to provide a detailed update on our province plan in the June quarter. The balance sheet remains strong, positioned with $100 million in cash and $102 million Australian in debt. Building business initiatives are starting to deliver with FY21 annualised cash contribution target already 50% achieved since launching in December. We have continued to implement COVID-19 protocols across our business and keep our people safe and maintain stable operations. With cost reduction starting to be realised and progress made with regards to Brownfield project pipeline in particular, Quarter four has been set up to finish the financial year. And with that now, I'd like to hand back and hand over for any questions that people may have. Thank you very much.

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 Australia. Please go ahead.

Hi Craig and team. At Gwalior, you stated you're trying to get to 12 mining fronts by the end of next quarter. When are we likely to see the benefit of that tonnage increasing towards the 1.1 million ton per annum you wanted FY23? And also for Q4 this year more specifically, are you expecting a better mix of tons and or grade to reach guidance? So how do you see that quarter developing?