德银-澳大利亚-金属与采矿业-现金何在？谁付了印花税？-2019.2.7-31页_1mb

Australasia Gold Mining Sector Summary - 2H 2018 and 2019 Outlook

Core Content

This document provides an analysis of the performance of Australian and New Zealand gold mining companies during the second half of 2018 and outlines expectations for the first half of 2019. It discusses cash flow trends, capital management strategies, exploration and M&A activities, and the impact of production and pricing on financial results. The focus is on major gold producers and their financial and operational outlooks.

Main Points

1. Cash Flow and Financial Performance

• December Half Cash Flow: Consolidated net cash position fell by A$223m, with a further A$28m reduction when excluding Pogo.
• Comparison to 2018: This is a significant decline from the A$1bn net cash gain in the first half of 2018.
• Reasons for Decline: Lower commodity prices, higher costs, cash tax payments, and an 8% increase in working capital.
• Capex: Remained largely flat, with gold project spend rolling off and new investments in base metal and lithium projects.

2. Capital Management and Dividend Policies

• Companies with Strong Franking Balances: NST, SBM, SFR, OZL, and MIN have healthy franking balances and potential for increased dividends.
• Dividend Impact: Dividends increased by 40% in the second half, with larger final dividends in 2H.
• Capital Deployment: Companies are deploying capital into new and brownfield projects, particularly in gold.
• Potential Dividend Adjustments: MIN may consider a special dividend from recent project sales, while others may balance dividend payouts with capital needs.

3. Exploration and M&A Trends

• Exploration Spend: Increased by 30% in the second half of 2018.
• Focus on Organic Projects: Companies are allocating capital to exploration to support future growth, especially in the context of gold price fluctuations and base metal constraints.
• M&A Considerations: The value of acquisition vs. exploration is being assessed, with gold companies looking to acquire undervalued assets or companies.

4. 2H Skew to EBITDA and Production

• EBITDA Skew: Most companies are expected to show a 2H skew due to higher production and pricing.
• Outliers: NST and NCM show a higher 2H skew due to rising production profiles, IGO and WSA due to nickel price increases, and DCN due to commercial production at Mt Morgan.

5. Key Companies and Their Performance

Newcrest Mining (NCM)

• Production: 655koz in Dec Q, +19% QoQ, driven by Lihir and Cadia.
• Cash Costs: C2 cash costs of US$503/oz beat expectations.
• AISC: US$676/oz, improved 13% QoQ.
• Guidance: Group production expected to remain over 650koz per quarter until 2021.
• Valuation: Preferred gold exposure in ASX100 due to long-life assets.

Evolution Mining (EVN)

• Production: 182koz, down 9% QoQ, missing expectations.
• AISC: A$923/oz, up 4% QoQ, missing by 11%.
• Cash Flow: Restricted by higher cash tax, CAPEX, and working capital movement.
• Guidance: Updated to A$1,125-1,225/oz for AISC, with a revised PT of A$3.95.
• Outlook: Expected to be in a net cash position by June Q, not at year-end.

Northern Star Resources (NST)

• Production: 193koz, down 7% QoQ and 15% below expectations.
• AISC: A$1,365/oz, up 11% QoQ.
• Cash Flow: Increased by A$13m, but below expectations.
• Dividend Policy: Updated, with a new PT of A$7.50/sh.
• Outlook: Expected to maintain production guidance but increase AISC.

OceanaGold (OGC)

• Production: Slightly below expectations, with CY19 guidance also below estimates.
• C2 Cash Costs: Higher than expected, but AISC came in under.
• CY19 EPS: Fell by 38% due to lower production and higher costs.
• LOM Assumption: Updated for Waihi, with benefits expected in 2H 2020.

Key Financial Figures

Summary of Changes

Key Takeaways

• Cash Flow Trends: The December half saw a decline in cash flow due to lower prices and higher costs, but companies are well-positioned with healthy balance sheets.
• Capital Management: Companies are likely to manage capital more actively, with a focus on dividends and franking credits.
• Exploration and M&A: Continued investment in exploration and potential acquisitions are expected.
• Production and Pricing: Most companies are expected to show a 2H skew, with some exceptions due to specific operational or market factors.
• Company Performance: Newcrest remains the preferred gold exposure, while Evolution Mining and Northern Star face challenges in meeting expectations.

Outlook

• If pricing holds, cash flow is expected to improve in 2019.
• Companies with strong franking balances are likely to increase dividends.
• Exploration and capital deployment will continue to be key areas of focus.