INVESTORDAYANDCADIAVALLEYSITEVISIT1008

1、chris terry12deutsche bankmarkets researchratingholdaustralasiaaustraliacompanynewcrest mining ltddate4 october 2012company updatem&m - goldprice at 4 oct 2012price target - 12mth28.2425.40reutersbloombergexchange ticker52 week range (aud)37.21 - 20.94ncm.axncm auasxncmall ordinaries4,473investo

2、r day and cadia valley site visitbrett mckayresearch analystcomprehensive company update including strategy day and site visitsas part of a comprehensive update on the company being undertakenthroughout this week, newcrest hosted an investor day on tuesday, followedby a site visit to cadia valley op

3、erations (cvo) yesterday and are conducting atrip to lihir tomorrow. the investor day detailed each aspect of the company,including finance, human resources and technology, as well as updates oneach asset. particular focus was given to cadia east, lihir and wafi-golpu. thecurrent growth strategy, pr

4、oduction, cost and capex targets remainunchanged. recent production issues experienced at ridgeway (conveyor) andlihir (oxygen) have now been resolved. maintain hold.key take-outs from investor daythe investor day focused on the current status of expansion projects at cadiavalley and lihir. for the

5、first time a ramp-up profile has been provided forcadia east (ce) which considers sources of mill feed over the coming 5 years.ce completes ramp-up to 26mtpa as ridgeway winds down in 2016. at lihir,75% of mopu is commissioned, with commercial production on track for dec12. additional initiatives ar

6、e underway to lift gold production to 1.2-1.3mozfrom fy15 with further studies considering output up to 1.4moz in fy16. alonger term target of 2mozpa was mentioned.cadia east ramp-up underway, cave propagating well so farncm have done as much as they can to ensure the successful start-up of thece pa

7、nel cave. with extensive pre-conditioning being undertaken, oreextraction from panel cave 1 is now being carefully managed to ensuresuccessful cave start-up and propagation. the cave has moved through theinitial 20m of blasted material and into less pre-conditioned ore, indicating thecave has starte

8、d to propagate well. with 9-12 months of blasted material toextract, followed by 3-4 years of pre-conditioned ore, the longer termperformance of the cave isnt likely to be known for some time.minor changes to cvo production and capex profile lifts eps by 5%we have made minor grade and capex adjustme

9、nts at cvo & lihir, resulting ineps lifting by 5%. our price target has increased marginally to $25.40/sh (from$25.30/sh). downside risk: operational issues and commodity prices. upsiderisk from fast ramp up at cadia east/lihir and higher commodity prices.forecasts and ratios(+61) 2 8258-mat hoc

10、kingresearch associate(+61) 2 8258-research analyst(+61) 2 8258-year end jun 30eps (aud)old eps (aud)% change2012a1.421.420.0%2013e1.581.505.1%2014e2.762.635.2%2015e2.732.585.8%source: deutsche bank estimates, company datapre-exceptionals/extraordinariesmultiples and yields calculations use average

11、historical prices for past years and spot prices for current and future years, except p/b which usesthe year end close_deutsche bank ag/sydneyall prices are those current at the end of the previous trading session unless otherwise indicated. prices are sourcedfrom local exchanges via reuters, bloomb

12、erg and other vendors. data is sourced from deutsche bank and subjectcompanies. deutsche bank does and seeks to do business with companies covered in its research reports. thus,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.in

13、vestors should consider this report as only a single factor in making their investment decision. disclosures andanalyst certifications are located in appendix 1. mica(p) 072/04/2012.4 october 2012m&m - goldnewcrest mining ltdmodel updated:04 october 2012fiscal year end 30-jun2010201120122013e201

14、4e2015erunning the numbersfinancial summaryaustralasiaaustraliam&m - goldnewcrest mining ltddb eps (aud)reported eps (aud)dps (aud)bvps (aud)valuation metricsprice/sales (x)1.581.150.2510.245.81.401.200.5018.007.11.421.460.1419.555.71.581.580.4220.834.52.762.760.7523.123.22.732.730.9425.293.2reu

15、ters: ncm.axholdprice (4 oct 12)target price52 week rangemarket cap (m)bloomberg: ncm auaud 28.24aud 25.40aud 20.94 - 37.21audm 21,636p/e (db) (x)p/e (reported) (x)p/bv (x)fcf yield (%)dividend yield (%)ev/salesev/ebitdaev/ebit21.128.93.43.20.85.811.314.427.532.12.1nm1.37.214.419.023.222.61.2nm0.46.

16、012.617.017.917.91.4nm1.55.09.912.310.210.21.27.62.73.66.17.310.410.41.17.93.33.56.07.2usdm 22,090income statement (audm)company profilenewcrest mining ltd is an australia-based gold companyheadquartered in melbourne. it is engaged in theexploration, development, mining and sale of gold andgold/copp

17、er concentrates in australia, indonesia, fiji, theunited states, peru, png, west africa and chile. thecompanys current activities include development projectssuch as (cadia east open pit and underground, ridgewaydeeps and kencana k2) and operating mines (telfer, cadiahill, ridgeway, cadia valley eas

18、t, lihir island, gosowong,hidden valley, bonikro, mt rawdon and cracow).price performance4844403632282420oct 10jan 11apr 11jul 11oct 11jan 12apr 12jul 12newcrest mining ltdall ordinaries (rebased)margin trends6056524844403632salesebitdaebitpre-tax profitnet incomecash flow (audm)cash flow from opera

19、tionsnet capexfree cash flowequity raised/(bought back)dividends paidnet inc/(dec) in borrowingsother investing/financing cash flowsnet cash flowchange in working capitalbalance sheet (audm)cash and cash equivalentsproperty, plant & equipmentgoodwillother assetstotal assetsdebtother liabilitiest

20、otal liabilitiestotal shareholders equitynet debtkey company metricssales growth (%)2,8021,4281,1278115571,303-786518-16-112-3-9288-56431,76403,9266,3344278981,3245,010-21710.74,1022,0451,5441,3009081,729-1,890-1610-231427-367-434-3621853,310013,78717,2828002,6073,40713,87561546.44,4162,1131,5711,57

21、71,1171,726-2,556-8300-4051,543-89611832424,364015,90320,5092,4083,0075,41515,0942,1667.74,8322,4711,9741,8121,2071,508-1,684-1760-220445-44-1550875,551016,36422,0022,8533,0075,86016,1422,7669.46,6713,9173,3013,1332,1172,907-1,2541,6540-362-135-4495301,0406,189016,47023,6992,7183,0075,72517,9741,678

22、38.16,6683,8773,2223,0842,0892,912-1,2111,7020-434-53-441,01102,0506,744016,57625,3712,6663,0075,67319,6986150.010111213e14e15edb eps growth (%)53.3-11.31.211.275.4-1.3ebitda margingrowth & profitability504030ebit margin2015payout ratio (%)ebitda margin (%)ebit margin (%)roe (%)net debt/equity (

23、%)21.751.040.216.8-4.341.649.937.69.14.49.747.835.67.514.426.451.140.97.917.127.258.749.512.69.334.658.248.311.33.120100-1010111213e14e15e1050net interest cover (x)dupont analysisebit margin (%)x asset turnover (x)53.740.20.5117.037.60.3-785.435.60.2-489.440.90.2-436.249.50.3-95.148.30.3x financial

24、cost ratio (x)1.01.01.00.90.91.0solvency20151050-5-101011sales growth (lhs)1213e14eroe (rhs)2000-200-400-600-800-100015ex tax and other effects (x)= roa (post tax) (%)x financial leverage (x)= roe (%)annual growth (%)x nta/share (avg) (x)= reported epsannual growth (%)source: company data, deutsche

25、bank estimates0.59.51.312.277.39.41.15117.70.66.41.27.8-36.115.41.204.40.75.91.37.7-1.519.01.4621.50.75.71.47.92.220.01.587.90.79.31.412.659.922.02.7675.40.78.51.311.3-10.424.22.73-1.3net debt/equity (lhs)brett mckay+61 2 8258-2607page 2net interest cover (rhs)deutsche bank ag/sydney-8000.606258350-

26、epsdps4 october 2012m&m - goldnewcrest mining ltdhj_13newcrest operational summary datainput assum ptionsaudusdgold (us$/oz)silver (us$/oz)copper (us$/lb)fy10a0.881,09316.883.04fy11a0.991,37328.953.94fy12a1.031,67233.183.70fy13f1.031,88737.863.63fy14f1.002,10042.923.49fy15f0.961,87837.133.32fy16

27、f0.911,63431.383.15fy17f0.891,51328.503.06npv (hj13)telfercadia valleygosowonghidden valleya$m n1,0705,5911,865446a$/sh1.407.302.430.58(%)7%35%12%3%lihir island8,76311.4454%gold product ion (equity), kozbonikro4120.543%telfercadia valleygosowonghidden valleylihir islandbonikro68949844360621515463100

28、79150540473439896049253042938694704895326343981229971025166833981221,1401275167053981221,1921705177253981221,243170wafi golpuexplorationevolution (evn.asx)corporate/othernet debttot al1241,500450(1,308)(2,766)16,1470.161.960.59(1.71)(3.61)21. 081%9%3%-8%-17%100%cracow and mt. rawdon7216148w acc8.7%s

29、ha res766mt ot al1,7612,702 2,286 2,233 2,786 2,985 3,102 3,176% change53%-15%-2%25%7%4%2%gold & audus ds ilv er p roduction (equity), koztelfer3733672002002002002002,2002,0001.101.00cadia valley1322664203053163163163161,800gosowong6983872714174174174174171,6000.90hidden valleyt ot al2861,116716

30、 858 683 1,125 1,071 1,008 1,4691,743 1,916 1,604 2,058 2,004 1,941 2,4011,4001,2000.80% change56%10%-16%28%-3%-3%24%1,0000.70copp er p roduction (equity), ktfy10a fy11a fy12a fy13f fy14f fy15f fy16ftelfercadia valleyt ot al% change355287324476-13%3145761%25608511%237710018%23801044%24801051%257499-

31、5%gold (u s$/oz)copper & s ilver50.00au du sd (rhs)4.5045.00cas h cos t s , a$/oz40.004.00telfercadia valleygosowong4991203016742993227834224059023004641,0321894541,0641424541,0299445399411745335.0030.0025.0020.003.503.00hidden valleylihir islandbonikrow . av erage417-3191,0104191,2444501,259560

32、9036041,2636107446271,13558971559295557759156189547655349972038054345115.0010.005.00-fy10a fy11a fy12a fy13f fy14f fy15f fy16f2.502.00cap ex , a$msilver (us$/oz)copper (u s$/lb)telfer8084948080808040revenue split by com m odit ycadia valleygosowonghidden valleylihir islandbonikroother (incl. ocallag

33、hans, namosi & golpu)t ot al338190118603-1,3291,078203361841351,9081,1691005086165542,3937004080637271201,6843604020398762801,25426040202072364461,2892354020191374221,0252104020174184209228000700060005000400030006773,2186833,527 3,6366754,135789 8055,840 5,8328125,4527714,8257284,1667353,756 3,8

34、102000eps s ens it iv it y (for 10% move)fy13fy14mozev a$/oz ev us$/oz1000goldcopperaudusd18%3%-20%18%2%-19%reservesresources80.0147.5302.76164.213131700total goldtotal coppertotal silverp roduct ion v/s cash costscash, debt & gearing (%)fr ee cashflow v/s capex4,0003,0002,0001,000-fy10a fy11a f

35、y12a fy13f fy14f fy15f fy16f800600400200-35003000250020001500100050020.0%15.0%10.0%5.0%0.0%-5.0%-10.0%3,0002,0001,000-(1,000)(2,000)teflercadia valleygosowong2010a 2011a 2012a 2013e 2014e 2015e 2016e2010a 2011a 2012a 2013e 2014e 2015e 2016ehidden valleycash costs (a$/oz)lihir islandbonikorocashdebtn

36、et debt/nd + ecapexfcfearnings & dividend300250200150100500price to earnings30.025.020.015.010.05.0ev /ebitda16.014.012.010.08.06.04.02.02010a 2011a 2012a 2013e 2014e 2015e 2016esource: company data, db estimates, datastreamdeutsche bank ag/sydney2010a 2011a 2012a 2013e 2014e 2015e 2016e0.02010a

37、 2011a 2012a 2013e 2014e 2015e 2016epage 3t4 october 2012m&m - goldnewcrest mining ltdncm investor daysummary of key pointsvision: to become the miner of choicefy13 remains a transition year with delivery of cadia east and mopu on timeand within 10% of budgetlihir mopu 97% construction complete,

38、 75% commissionedridgeway conveyor issue and lihir oxygen plant have been repaired and bothare now operationalncm group cash costs remain below industry average and still aiming tobecome a first quartile producergearing to peak in fy13 at 15%, careful allocation of capital until this reducesto 10%;

39、focus free cashflow after capex to reducing debt in the near term.no gearing covenants, 15% peak is a board directivedividends will grow when gearing and profit allowlarge-scale m&a not being actively considered at the moment; will look to domore farm-in joint ventures with a focus in indonesia,

40、 philippines and pngexperienced the peak of the current cost cycle in august this year; lower pricesfor fuel, tyres, steel; quicker arrival of equipment; more competitive contractpricing and availabilityfy12 costs: 41% labour, 18% consumables, 16% energy and 11% maintenancencm believe wafi-golpu is

41、as good as it gets for next generation of cu-auprojects; strong commitment to continue work on wafi-golpu; would pick upadditional ownership if given the opportunitycontinue to believe the wafi-golpu pfs outcomes can be refined and improved19,000 current employees, including contractorsstrong focus

42、on working culture to attract and retain experienced personnelemployee turnover trending down, currently at 11%, compared to industrynorm at 30% for staff and 40-45% for contractorsstarting to pick up workers in png coming off the pnglng development; alsoimplementing education initiatives and partne

43、rships to ensure future workforceis educatedsoon to complete new workplace agreements at cadia with little to no unioninvolvementstrong focus on technology, particularly developing new ways of introducingoperating systems to automate equipment for efficiency gains and improvedsafetyncms caving exper

44、t, german flores, is ex-codelco and been with ncm for 6yearsbelieve bulk cave mining is the way of the future; orebodies becoming deeper,lower-grade and in harder rockexpect 100% increase in cave mines over next 5 yearspage 4deutsche bank ag/sydney4 october 2012m&m - goldnewcrest mining ltdonly

45、5 major companies undertaking cave mining, with ncm the only goldcompanyncm over 10 years experience in cave mining, with the sub-level cave (slc) atridgeway starting in 2001, telfer slc in 2005 and ridgeway deeps block cavein 2009lihir:guidance remains unchanged at 700-900koz for fy13a structured p

46、lan detailing the building blocks required to achieve theirtargets has been presented (figure 1)five year plan to lift production to 1.2-1.3mozpastudies underway to achieve 1.4mozpa within 5 years15 year strategy to examine use of a coffer dam to assist with accessinghigh-grade kapit zone, potential

47、 step-up in production; targets up to2mozpa were mentionedreliability improvement program (“renew”) in placeat bonikro, focus remains on exploration with a decision to retain the projectremaining 12 months away; targeting third quartile cash costsat namosi, the recent focus on rehabilitation of lega

48、cy exploration sites, withthe government recently indicating their satisfaction with the completed work;landowners have now been directed by the government to re-engage withncmfigure 1: proposed plant expansions to achieve 1.3-1.4moz in fy16source: newcrest mining 2 october 2012deutsche bank ag/sydn

49、eypage 54 october 2012m&m - goldnewcrest mining ltdcadia valley operations (cvo)key points from cvo site visit:indications are the cave is behaving as expected and starting to propagatethrough the extensively pre-conditioned (blasted) material and into less-conditioned ore; this is an encouragin

50、g signthey are being careful how they manage the initial stages of the cavepropagation at ce and are closely monitoring progress; there is an extensivemonitoring system in place to measure cave performance they know howimportant it is to get the start-up correct to ensure the future cave design is n

51、otcompromisedthere is 9-12 months of extensively pre-conditioned ore (blasted) which willpresent little/no problem to extract; they then move into less-conditionedmaterial for a further 3-4 years before moving into the least conditioned ore(hydro-fracked only) which will start to indicate actual cav

52、ing rates and orefragmentationwithin 12 months theyll know how the cave is propagating, but its not foranother 3-4 years until they know the true performance of the cave which canthen be extrapolated out over the life-of-mine; this will relate to caving ratesand fragmentationthey have some methods a

53、vailable to control the caving dynamics, includingmanaging drawpoints to broaden the hydraulic radius of the cave and promotefurther propagationthe zone 20m above the undercut level is extensively blasted and pre-fragmented; the next 150m has been subject of uphole blasting with 15mspaced holes and

54、the material up to 400m above the undercut is hydro-fracked.preconditioning cost $100m100% of the orebody will be hydro-fracked which assists with cavepropagation, not fragmentationmonitoring system measures seismicity (related to rock breaking above thecave) and the air gap between the caved ore an

55、d the roof of the cave; this airgap is currently 9m with a maximum allowable limit of 25m.a level has been developed 400m above the undercut level which is being usedto drill down into the top cave to allow installation of monitoring equipment,including camerasore contained in the mature cave should

56、 undergo some column comminutionand assist with fragmentation, although very little benefit from this has beenfactored into the modelling; overbreak was an issue in the first few years atridgeway deeps, with extensive secondary rock breaking requirednumber drawbells per panel: panel 1 = 116 and pane

57、l 2 = 165; currently 29drawbells have been fired in panel 1for the first time, they have provided a ramp-up profile for the entire cadiavalley operation including cadia east (figure 2)expected to hit the 26mtpa rate in 2014 from combination of cadia east,ridgeway and stockpiles; continued developmen

58、t of ce through to 2016 whenridgeway is depleted and ce provides 100% of the mill feed.conveyor system fully built and operationalpage 6deutsche bank ag/sydney4 october 2012m&m - goldnewcrest mining ltdtwo small underground crushers operational, with crushing and conveyingcapacity currently arou

59、nd 1000tph; however currently being operated at350tphinstallation of large underground crusher completed by march 2013 which willlift capacity system capacity to 3500-4000tphncm continue to believe a$200/oz is an achievable cash cost for cvomining costs at ce currently around $10.50/t, aiming to red

60、uce to $5-6/t in year5; stockpile handling $2/t; processing $8/twith 15mt of stockpiled ore to be treated in fy13, a faster ramp-up of cewould directly offset the lower-grade stockpile feedcurrent stockpiles consist of 15mt at 0.4g/t au and another 35mt at 0.4g/t aucadia east average grade 1.0-1.2g/t for first 10 yearsexpanded plant fully commissioned and operati