The Undiscovered Coking Coal Producer - Gujarat … Undiscovered Coking Coal Producer INSERT NEW...
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Gujarat NRE Coke LimitedArun Kumar JagatramkaVice Chairman & Managing Director
February, 2009
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The Undiscovered Coking Coal Producer
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Disclaimer
This presentation has been prepared by and issued by Gujarat NRE Coke Limited (“Gujarat” or the “Company”) to assist it in informing interested parties about the Company. It should not be considered an invitation or offer to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this presentation.
Forward Looking Statements
This presentation contains forward looking statements. While Gujarat has no reason to believe that any statements are either false, misleading or incorrect, it cannot guarantee that through either passage of time or actions beyond the control of Gujarat, they will not become so.
You should not act or refrain from acting in reliance on this presentation material. This overview of Gujarat does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company’s prospects. You should conduct your own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation before making any investment decisions.
There are a number of risks, both specific to Gujarat and of a general nature which may affect the future operating and financial performance of Gujarat and the value of an investment in Gujarat including and not limited to economic conditions, stock market fluctuations, iron ore demand and price movements, timing of access to infrastructure, timing of environmental approvals, regulatory risks, operational risks, reliance on key personnel, reserve and resource estimations, native title and title risks, foreign currency fluctuations, and mining development.
Has the India story run out of steam?
• There is a global meltdown – all Market indices are in a free fall
• When the US sneezes, the world catches cold
• Billion dollar “bailouts” have gone unsung
• Still, there seems no light at the end of the tunnel
Indian context: It’s a mere Traffic jam
Imagine the cross roads
Where everybody is stuck on “your move”
The cars, the fuel, the drivers are all there – the fundamentals are in place
Only, no one wants to be the first mover
Due to severe lack of confidence on one hand
As well as the Desire to profit from the downturn
What next?
• The moment the bottleneck eases,
• Cars will zoom past in the un-congested road ahead
• With the fundamentals in place, all that is lacking today is
Investor confidence
• Once that returns,
• The indices will be on steroids
• Especially good, old resource plays
Period
5 – 8 months
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A Snapshot
Gujarat NRE Coke Limited
Largest independent producer of Metallurgical Coke in India
Listed on the Bombay and National Stock Exchanges, with a market capitalisation of over INR 15 bn (No. of shareholders 180,000)
Profit earning and dividend paying company with strong financials and credit rating
Met Coke capacity 1 million tons, being increased to 1.25 Million Mtpa by March 09, and will further ramp upto 2.25 with setting up of 1 million TPA green field plant in Southern India
The only Indian company to have acquired captive coking coal mines outside India
Strong focus on the Environment with ISO 14001:2004 & OHSAS 18001:1999 certification
Setting up Captive Jetty at Bellikeri, Karnataka and Railway Siding at Dharwad which would improve logistics and reduce cost
Acquired six new dry bulk carriers on long term time charters with an option to buy.
Received several awards as Super performer, Highest wealth creator, Best Performing Mid sized company, environment & safety by various media houses
Last 2 Annuals ~ Current 9 Months
GUJARAT NRE COKE LIMITED
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Year 31.03.2007 Year 31.03.2008 9 Months 31.12.2008
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Quarter Ended Quarter Ended Quarter Ended Quarter Ended
30.09.2005 30.09.2006 30.09.2007 30.09.2008
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Performance for 9 Months Period Ended
GUJARAT NRE COKE LIMITED
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9 Months Ended31.12.2006
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Our Bonus History
• Fin. Year Ratio Record Date Allotment Date
• 1995-96 11:10 26-Nov-1996 23-Dec-1996
• 2001-02 1:2 30-May-2003 16-Jun-2003
• 2002-03 1:2 21-Apr-2004 30-Apr-2004
• 2003-04 1:1 10-Feb-2005 12-Feb-2005
• 2004-06 1:1 30th Sept-2006 18-Oct-2006
• 2007-08 2:5 20th –Oct-2008 31-Oct-2008
Long term NRE Share Price compared with Nifty(Adjusted for Bonus Issues)
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2.8.04 3.10.06 2.4.07 16.10.08 4.11.080
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2004 was the earlier peak in coke cycle which bottomed out in Dec’05
NRE has still outperformed the NIFTY by 54% in last 4 years (2.8.04 to 4.11.08)& 60% in last 2 years (3.10.06 to 4.11.08)
GUJARAT NRE COKE LIMITEDGrowth @ speed of thought
Shareholding Pattern Jagatramka Family 46%
Mutual Funds & FIIs 22%Indian Public (180,000) 32%
----------100%
Returns to ShareholdersInvestment of Rs. 1 million 1994 equals Rs 0.8 billion in 2008/2009
• Listed on BSE & NSE• Ticker Code: GUJNRECOKE BSE: 512579• Face Value : Rs. 10 per share
Growth @ speed of thoughtGUJARAT NRE COKE LIMITED
GUJARAT NRE COKE LTDOperations…
HARD COKING COAL (NSW, AUSTRALIA)
RESOURCES 560 MMT
LOW ASH METALLURGICAL COKE
1.25 MMTPA
COAL WASHERYAT KHAMBALIA
& BHACHAU (0.75 MTPA each)
Gujarat NRE Minerals (ASX: GNM)
NRE NO. 1 COLLIERY300 MILLION MT
NRE Wongawilli Colliery260 MILLION MT
STEEL UNITTMT BARS : 0.311 MMTPA
*DHARWAD UNIT0. 25 MILLION MTPA
BHACHAU UNIT0.324 MILLION MTPA
KHAMBALIA UNIT0.358 MILLION MTPA
BNCL (60%)DHARWAD UNIT
0. 324 MILLION MTPA
*Proposed Facilities
Waste Heat Recovery Power Plants
Khambhalia* 15 MWBachau* 15 MWDharwad* 30 MW
Total 60 MW
Wind Power 87.5 MW
In Australia In India
15%
85%
GUJARAT NRE COKE LIMITEDListed on NSE & BSE in India
Pluton Resources LtdGujarat NRE Limited
Pike River Coal Ltd Rey Resources LtdWonga Coal Pty Ltd
Gujarat NRE FCGL Pty Ltd
Gujarat NRE Minerals Ltd
Listed on ASX:GNM
100%
NRE Wongawilli260 MT
NRE No. 1 300 MT
International Operations
Gujarat NRE Resources NL
Coal mine in New Zealand.
Coal off-take For 400,000MT pa
Exploration tenements
In Australia, Chile & Peru
Exploration tenementsIn Australia
13%
100% 10%
100%
100%
GUJARAT NRE MINERALS LIMITED
Listed on ASXTicker Code: GNMIssue Price $0.50 per share (In July’07)Shares on Issue 803 millionCurrent Market Price $0.35Fully diluted Market Cap AUS $0.3 Billion +
GUJARAT NRE MINERALS LIMITED
Shareholding Pattern:
Holding Co.(GNCL) 85%Institutions 08%Corporate Bodies 05%Individuals 02%
Our Journey Down under
Acquired NRE No1 mine Dec 2004
Re-opened NRE No1 mine Sept 2005
ASX listing raising a total of $22m July 2007
Four panels in operation in Bulli Seam
Acquires ASX listed Gujarat NRE Resources – Avondale/Huntley Dec 2007
Completes acquisition of Eloura colliery from BHP Dec 2007
Wonga mains project commenced to access Wongawilli seam Sept 2007
Commenced Development at Wongawilli Colliery Feb 2008
Gujarat NRE Minerals Ltd
• Fully Focussed, Hard Coking Coal Producer
• Located in the Southern Coalfields of New south Wales, approximately 20kms for Port Kembla
• Currently employing more than 400 people in Illawarra directly
• Established Infrastructure including rail
• Bord and pillar production 900,000 tonnes per annum
• Longwall mining commencing in 2009, ramping up production to 5.9Mt by 2011 and 7Mt by 2013
• Over 570Mt of Reserves and Resources
– 33Mt Measured Reserves, 153Mt Indicated and 389Mt Inferred
• Work underway to convert indicated and inferred to measured
• Exporting to India under long term off-take contract
• 85% held by Gujarat NRE Coke
Gujarat NRE Minerals LtdBoard and Management
Mr. Steve Bow
Head of Operations
28 Years Underground Coal experience
BE (hons), MEngSc
Dr. Chris Harvey
Head of Tech. Services
35 years coal industry experience
PhD Mining Engineering
Mr. Steve Coffee
Group Engineering Manager
28 years Underground Coal experience
Mechanical Engineers Certificate of Competency.
Mr Phil Wakeford
Operations Manager
32 years Underground Coal experience
Mine Managers Ceriticate of Competency
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Mr Arun Jagatramka Chairman
25 years professional & management experience, gold medallistB.Com (Hons), FCA, AIMM
Mrs. Mona JagatramkaNon-Executive Director
10 years of experience in management & administration affairsB. Sc. (Hom.)
Dr Andrew Edwin Firek Non Executive Director
25 years experience in mining &Mineral processingMSc, Ph D, FAusIMM, FAIE
Mr. Maurice AnghieNon Executive Director and Chair of the Audit Committee Experienced financially qualifiedProfessional with commercial skills &Legal/regulatory/governance expertiseBBus, FCA, FCPA, MAICD
GNML Resource Statement
Reserve Reports Summary – Extracted from JORC compliant reports carried out by
NRE#1 – Barry Clark, Technical Services Consultant, Bureau Veritas International Trade Australia (Sept 2008)
Wongawilli – Barry Clark, Technical Services Consultant, Bureau Veritas International Trade Australia (March 2008)
Measured Indicated Infered TotalMt Mt Mt Mt
NRE No 1 Colliery Bulli 12.4 31.7 15.1 59.2
Balgownie 0.0 37.5 42.7 80.2
Wongawilli 0.0 59.3 117.9 177.2
Total 12.4 128.5 175.7 316.6
Wongawilli Colliery Bulli 0.0 8.0 25.0 33.0
Wongawilli 21.0 16.0 114.0 151.0
Tongarra 0.0 0.0 74.0 74.0
Total 21.0 24.0 213.0 258.0
Total Resource 33.4 152.5 388.7 574.6
Production
Mine Seam 2008/9 2009/10 2010/11 2011/12 2012/13 2013/14Mt Mt Mt Mt Mt Mt
NRE No1 Bulli 0.7 0.5 0.7 0.4 0.4 0.3
Wongawilli 0.0 0.4 0.6 3.4 3.1 2.9
Balgownie 0.0 0.0 0.3 0.3 0.3 0.3
Total 0.7 0.9 1.5 4.0 3.8 3.5
Wongawilli Wongawilli 0.2 1.5 1.7 1.6 2.3 3.3
Bulli 0.0 0.1 0.3 0.3 0.3 0.3
Tongara 0.0 0.0 0.0 0.0 0.0 0.0
Total 0.2 1.6 2.0 1.9 2.6 3.6Total Production 0.9 2.5 3.5 5.9 6.4 7.1
Gujarat NRE Minerals LtdRaw Coal Production Profile
012345678
Mar'09 Mar'11 Mar'13
No. 1WongawilliTotal
NRE #1 Mine – Bulli Seam Extraction
• Infrastructure already in-place to mine Bulli Seam
• Mining currently underway in 4 areas
NRE #1 BulliDomains
Av. Yield%
Ash% CSN IM%
Bulli Seam Quality Summary
Bulli 84.28 10.11 2.4 0.8V‐mains 76.45 11.53 2.5 0.8
P,O & H Panels 76.8 9.68 2.75 0.8
310‐311 83.4 10.3 2.2 0.8
NRE #1 Mine – Wongawilli Seam Extraction
• Development underway from R.V Pit-top and from Shaft #4 Man and materials.
• Development in both Western and Eastern areas will be independent of each other, however LW extraction to commence in the eastern block first whilst establishing conveyors and infrastructure to link 2 Areas together
• Known geology due to previous development and extraction above (Bulli and Balgownie seams)
NRE #1 Wongawilli Domains
Av. Yield%
Ash% CSN IM%
Wongawilli Seam Quality Summary
Wonga East 50.48 13.23 6.01 0.7Wonga West 52.81 11.72 8.5 0.81
NRE #1 Mine – Balgownie Seam Extraction
• Access to seam via Shaft #4 man and materials which is being developed as part of the access to Wongawilli seam.
• Mine out using pillar extraction whilst developing longwall blocks in seam below.
• Known geology from Bulli Seam above
NRE #1 BalgownieDomains
Av. Yield%
Ash% CSN IM%
Balgownie Seam Quality Summary
Balgownie 59.17 9.14 4.2 0.8
NRE Wongawilli Mine – Wongawilli Seam Extraction
NRE Wongawilli Domains
Av. Yield%
Ash% CSN IM%
Wongawilli Seam Quality SummaryEloura Area 71 10.4 >7 1%Nebo Area 76 10.5 7.5 1%
• Using Existing Infrastructure to extract remnant coal reserves whilst establishing new roadways to access southern coal reserves
NRE Wongawilli Mine – Conceptual Design for Wongawilli Seam Extraction
NRE Wongawilli Domain
Av. Yield%
Ash% CSN IM%
Wongawilli Seam Quality SummaryAREA 1 75 11.5 5.5 1%
Bulli Seam Quality SummaryAREA 1 95 9.8 3.5 1%
AREA 1
Proposal has recoverable resource of greater than 16MT of Wongawilli Seam Coal – 2.5MT from Area 1
Capital plans – NRE No.1 Mine
GNML Financial Year
Capital Investment ($AUD) Key Milestones for Period
2008/2009 $ 56.3 M Wonga Mains Project, Procurement of Mining Equipment
2009/2010 $ 55.0 M Wonga Mains Project, Surface Coal Handling
2010/2011 $ 186.2 M Procure LW, Washery Project
2011/2012 $ 20.9 M LW commencement Apr 2011, V Mains Lifting Panels Commence
2012/2013 $ 10.4 M Wonga West Development to commence
2013/2014 $ 7.5 M
TOTAL $ 336.5 M
Capital plans – Wongawilli Mine
GNML Financial Year
Capital Investment ($AUD) Key Milestones for Period
2008/2009 $ 11.5 M Procurement of Mining Equipment.
2009/2010 $ 45.0 M Nebo belt upgrades, Wonga South Project, Procurement of 2 Continuous Miners, Commence Longwall July 09.
2010/2011 $ 24.0 M Wonga South Project
2011/2012 $ 82.3 M Wonga South Project, Avon Shaft Project, Surface Coal Handling and Processing Projects
2012/2013 $ 50.0 M Wonga South Project, Wonga South LW Commence
2013/2014 $ 5.0 M
TOTAL $ 217.8 M
Next 12 Months Activity
Wongawilli
–Commence Longwall Extraction
–Commence Drivage to Wonga South
–Provide Access Roadway to Nebo
–Complete Stage 1 exploration program of Wonga South
NRE #1
–Start V-Mains
–Start Wonga West Drivage
–Refurbish #1 Shaft
–Continue Wonga Mains Project