Metals X Ltd Dividend declared and policy in place Buy
Transcription
Metals X Ltd Dividend declared and policy in place Buy
13 October 2014 Analyst Fred Truong 613 9235 1629 Stuart Howe 613 9235 1782 Metals X Ltd (MLX) Authorisation Chris Savage 612 8224 2835 Dividend declared and policy in place Inaugural dividend declared; shares consolidated 1 for 4 Recommendation MLX has declared an inaugural fully franked dividend of 0.6785 cents per share (vs BP est nil) subsequent to the release of its FY14 financial results. The dividend will be paid on 10 December 2014. The dividend represents a payout ratio of 30% of FY14 NPAT. Buy (unchanged) Price $0.205 MLX has also recommended to shareholders a 1 for 4 share consolidation. A resolution will be put forward at the company’s AGM on Wednesday 26 November 2014. Should the consolidation occur, MLX will have 414m shares on issue. Target (12 months) $0.30 (unchanged) Dividend policy adopted: 30% payout ratio Expected Return Capital growth 46.3% Dividend yield 4.8% Total expected return 51.1% Company Data & Ratios Enterprise value $248m Market cap $339m Issued capital 1,656m Free float 76% Avg. daily val. (52wk) $434,270 12 month price range $0.14 - $0.28 GICS sector Materials Price Performance Price (A$) Absolute (%) Rel market (%) (1m) 0.24 -4.26 2.07 MLX has adopted a dividend policy where it will seek to pay out 30% of NPAT as dividends in future years, consistent with our estimates. We estimate dividend yields of 4.8% and 5.8% in FY15 and FY16, respectively. We see this as achievable given MLX’s modest CAPEX requirements from FY15+. We estimate MLX’s current cash balance to be around $100m, following funds raised from its gold prepayment arrangement with Citibank ($40.5m). Currency and commodity price changes We have recently trimmed our gold price estimates, now expecting US$1,208/oz (previously US$1,265/oz) in FY15, US$1,175/oz (US$1,275/oz) in FY16, and US$1,245/oz (US$1,290/oz) in FY17. We have also reduced our A$/US$ estimates, now expecting 0.875 in FY15 and 0.85 from FY16 onwards. The net effect of these changes is earnings downgrades of 5% and 1% in FY16 and FY17, respectively. Investment view: Buy TP$0.30/sh (3m) 0.25 -10.00 -8.03 (12m) 0.14 60.71 60.54 Absolute Price Our 12-month forward NPV is $0.33/sh with around 75% of our valuation attributable to MLX’s gold assets. MLX is trading on FY15 and FY16 PE multiples of 6.2x and 5.2x. We see potential for MLX to re-rate as it grows gold production from around 138kopza in FY14 to more than 350kozpa from FY17. We’ve made no material changes to our earnings estimates and price target. Earnings Forecast Year ending 30 Jun $0.30 Sales (A$m) 2014a 2015e 2016e 239 291 401 2017e 506 $0.25 EBITDA (A$m) 70 93 110 146 $0.20 NPAT (reported) (A$m) 37 53 65 66 $0.15 NPAT (adjusted) (A$m) 39 53 65 66 2 3 4 4 na 43% 21% 2% EPS (adjusted) (cps) $0.10 EPS growth (%) $0.05 PER (x) $0.00 Oct Feb Jun Oct Feb Jun 12 13 13 13 14 14 MLX S&P 300 Rebased 9.1 6.3 5.2 5.1 FCF Yield (%) -1% 28% 10% 33% EV/EBITDA (x) 3.5 2.7 2.3 1.7 Dividend (cps) 1 1 1 1 Yield (%) 3.3% 4.7% 5.8% 5.9% Franking (%) 100% 100% 100% 100% 13% 16% 16% 15% ROE (%) SOURCE: IRESS SOURCE: BELL POTTER SECURITIES ESTIMATES BELL POTTER SECURITIES LIMITED ACN 25 006 390 7721 AFSL 243480 DISCLAIMER AND DISCLOSURES THIS REPORT MUST BE READ WITH THE DISCLAIMER AND DISCLOSURES ON PAGE 8 THAT FORM PART OF IT. Page 1 Metals X Ltd (MLX) 13 October 2014 Earnings and valuation changes Changes to earnings estimates As a result of our commodity price changes below, we have downgraded earnings by 5% and 1% in FY16 and FY17, respectively. Table 1 - Earnings and valuation changes Previous Revenue (A$m) NPAT (adjusted) (A$m) Adjusted EPS (Ac/sh) PER (x) DPS (Ac/sh) Yield (%) ND / (ND + E) (%) Valuation ($/sh) New Change Jun-15 Jun-16 Jun-17 Jun-15 Jun-16 Jun-17 Jun-15 Jun-16 290 404 507 291 401 506 0% -1% Jun-17 0% 53 69 67 53 65 66 0% -5% -1% -1% 3 4 4 3 4 4 0% -5% 6.4 5.0 5.1 6.3 5.2 5.1 (0.0) 0.3 0.0 1 1 1 1 1 1 0% -5% -1% 4% 5% 5% 5% 6% 6% 1% 0% 1% nc nc nc nc nc nc n/a n/a n/a 0.28 0.34 0.34 0.28 0.33 0.34 -3% -3% 0% SOURCE: COMPANY DATA AND BELL POTTER SECURITIES ESTIMATES Commodity price changes We have recently trimmed our gold price estimates, now expecting US$1,208/oz (previously US$1,265/oz) in FY15, US$1,175/oz (US$1,275/oz) in FY16, and US$1,245/oz (US$1,290/oz) in FY17. We have also reduced our A$/US$ estimates, now expecting 0.875 in FY15 and 0.85 from FY16 onwards. Table 2 - Commodity price changes Fiscal year FY15e FY16e FY17e LTe (real) New 1,208 1,175 1,245 1,150 Old 1,265 1,275 1,290 1,150 -4% -8% -3% 0% New 0.88 0.85 0.85 0.85 Old 0.91 0.90 0.88 0.85 Change -4% -6% -3% 0% Gold US$/oz Change AUD/USD SOURCE: BELL POTTER SECURITIES ESTIMATES Page 2 Metals X Ltd (MLX) 13 October 2014 Valuation and sensitivity analysis Valuation of $0.33/sh Our MLX valuation of $0.33/sh is based on: • Discounted cash flow models of MLX’s two main producing assets (Renison tin mine and HGO) and two development gold assets (SGO and CMGP) using a nominal WACC of 10%; • A notional value on Rentails, Rover 1 and Wingellina; • An allowance for corporate costs; and • Bell Potter Securities base and precious metals estimates. Table 3 - Sums of parts valuation Current Sum of parts valuation + 12 months + 24 months $m $/sh $m $/sh $m $/sh 84 0.05 76 0.05 67 0.04 Higginsville Gold Operation 127 0.08 107 0.06 86 0.05 South Kalgoorlie Operation 48 0.03 47 0.03 38 0.02 151 0.09 182 0.11 226 0.14 Rentails 10 0.01 10 0.01 10 0.01 Rover 1 10 0.01 10 0.01 10 0.01 Wingellina 20 0.01 20 0.01 20 0.01 Corporate (48) (0.03) (46) (0.03) (44) (0.03) Enterprise value 403 0.24 406 0.25 413 0.25 57 0.03 133 0.08 145 0.09 460 0.28 538 0.33 557 0.34 Renison Tin mine Central Murchison Gold Project (risked at 70%) Net (debt)/cash Equity value SOURCE: COMPANY DATA AND BELL POTTER SECURITIES ESTIMATES Revenue and free cash flow growth from gold production Gold will make a substantial (+80%) contribution to revenue and EBITDA from FY16. Given the minimal CAPEX required going forward, we expect MLX to generate substantial free cash flow over FY15 – 18. Our gold production assumptions are lower than company guidance (refer Figure 2) due to differences in ramp-up assumptions and milled capacity. We have also excluded the early stage Rover 1 project from our modelling. 700 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 600 500 A$m Figure 2 - Gold production (MLX guidance) vs BP est 400 300 200 100 0 FY13 FY14 FY15e FY16e FY17e FY18e FY19e FY20e FY21e 600 500 400 koz gold Figure 1 - MLX total revenue split by operation 300 200 100 0 Renison Tin mine CMGP Gold % of total (RHS) SOURCE: BELL POTTER SECURITIES ESTIMATES South Kalgoorlie gold project Higginsville Gold Project FY15e Rover 1 FY16 CGMP FY17e SKO FY18e HGO FY19e BP est SOURCE: BELL POTTER SECURITIES ESTIMATES AND COMPANY REPORTS Page 3 Metals X Ltd (MLX) 13 October 2014 Figure 3 - Revenue split by commodity in FY2013 Figure 4 - Revenue split by commodity in FY2016e Copper, 6% Tin, 20% Copper, 1% Gold, 79% Tin, 94% SOURCE: COMPANY DATA AND BELL POTTER SECURITIES ESTIMATES SOURCE: BELL POTTER SECURITIES ESTIMATES Sensitivity analysis: most leveraged to gold and currency Our MLX valuation is most sensitive to movements in the gold price and AUD:USD exchange rate as shown in Figures 5 and Table 6. Figure 5 - Changes (%) to our pricing deck, including long term Table 4 - Sensitivity to Au and Sn A$/sh (change from base case) 0.9 0.8 Changes (%) to our pricing deck, including Long Term Units -10% -5% 0% 5% 10% NPV A$/sh 0.23 0.28 0.33 0.39 0.44 NPV A$m 377 465 553 641 730 FY15e EPS Ac/sh 2 2 3 4 5 0.2 FY16e EPS Ac/sh 2 3 4 5 6 0.1 FY17e EPS Ac/sh 2 3 4 5 6 0.0 FY15e P/E times 12.7 8.3 6.2 5.0 4.1 FY16e P/E times 12.9 7.4 5.2 4.0 3.3 FY17e P/E times 10.8 7.0 5.2 4.1 3.4 0.6 0.5 0.4 0.3 -30% -20% -10% 0% 10% Changes to base case (%) Au prices Sn Prices Cu prices 20% 30% A$/$US SOURCE: COMPANY DATA AND BELL POTTER SECURITIES ESTIMATES SOURCE: BELL POTTER SECURITIES ESTIMATES Table 5 - Valuation under spot & long term pricing A$m (A$/sh) Renison HGO & SGO CMGP Total equity valuation Base case 76 (0.05) 154 (0.09) 182 (0.11) 538 (0.33) Spot 65 (0.04) 177 (0.11) 213 (0.13) 597 (0.36) Long term 86 (0.05) 160 (0.10) 191 (0.12) 577 (0.35) Note: 1. Spot scenario - assumes metals prices as at 10 October 2014 1. Long term scenario - assumes real prices of Au US$1,150/oz; Sn US$9.30/lb; Cu US$2.70/lb. SOURCE: BELL POTTER SECURITIES ESTIMATES Table 6 - Changes (%) to our pricing deck, A$/sh (change %) %change in the Gold Price % Change in the Tin Price NPV (A$/sh) 0.7 -20% -20.0% -10.0% 0.0% 10.0% 20.0% 0.12 (-63%) 0.21 (-38%) 0.29 (-13%) 0.37 (12%) 0.46 (37%) -10% 0.14 (-57%) 0.23 (-32%) 0.31 (-7%) 0.40 (19%) 0.48 (44%) 0% 0.17 (-50%) 0.25 (-25%) 0.33 (0%) 0.42 (25%) 0.50 (50%) 10% 0.19 (-44%) 0.27 (-19%) 0.36 (7%) 0.44 (32%) 0.52 (57%) 20% 0.21 (-37%) 0.29 (-12%) 0.38 (13%) 0.46 (38%) 0.55 (63%) SOURCE: BELL POTTER SECURITIES ESTIMATES Page 4 Metals X Ltd (MLX) 13 October 2014 MLX asset summary Table 7 - MLX asset summary Project MLX equity (%) Project stage Location Mining method Higginsville Gold Operation (Au) South Kalgoorlie Operation (Au) Central Murchison Gold Project (Au) Meekatharra Gold Operation (Au) Renison (Sn) Wingellina project (Ni) 100% 100% 100% 100% 50% 100% Producing Toll treatment of 3rd party ores and treatment of low grade stockpiles Feasibility Feasibility Producing Feasibility Higginsville, 45 km north of Norseman South-west of Kalgoorlie, Western Australia Murchison gold province, approximately 600 km northeast of Perth. Meekatharra, WA 100km northeast of CGMP West coast, Tasmania Central Musgrave (~1,400km NE of Perth) Underground (Trident mines) and various open pits Planning to resume underground (HBJ) and various open pits Lower grade open pit and higher grade underground mine Lower grade open pit and higher grade underground mines Underground Open cut Resource / Reserve Resource (Mt) - 100% 15.9Mt @ 3.03g/t Au 63Mt @ 1.75g/t Au 61.2Mt @ 2.54g/t Au 63.8Mt @ 1.8g/t Au 33.8Mt @ 0.9%Sn 217Mt @ 0.95% Ni Reserve (Mt) - 100% 7.0Mt @ 3.69g/t Au 11.1Mt @ 2.1g/t Au 15.5Mt @ 2.36g/t Au 11.1Mt @ 2.1g/t Au 23.9Mt at 0.6%Sn (including Rentails 19.8Mt @ 0.45% Sn) 168Mt @ 0.98% Ni Milling rate 850ktpa growing to 1.25Mtpa 1.2Mtpa (900ktpa MLX ore, 300ktpa toll treating) 1.5 – 2.0Mtpa 700ktpa 4.3Mtpa Milled grade (BP est) 4.9g/t Au declining to 3.10g/t Au 0.8g/t Au increasing to 3.1gt Au 4.5g/t Au (average life of mine) 1.5% Sn 0.87 – 1.33% Ni 67% Ni 92.1%; Cu 89.1% Project parameters Recovery (%) Gold production (Au koz) 96% 92% 120kozpa 19koz increasing to 80ozpa Au 92% Ramping up to 220kozpa Tin production (Sn kt, equity) 3.5kt Nickel production (Ni kt, equity) 38.2ktpa BP modelled mine life 5 years 5 years 10 years 8 years n/a Remaining mine life based on current reserves 5 years 5 years 10 years 8 years 39 years SOURCE: COMPANY DATA AND BELL POTTER SECURITIES ESTIMATES Figure 6 - Location of MLX key assets SOURCE: MLX PRESENTATION Page 5 Metals X Ltd (MLX) 13 October 2014 Metals X Limited (MLX) Company description MLX is a diversified precious and base metals producer with two key producing assets being the Renison tin mine (MLX 50%) and the Higginsville Gold Operation (MLX 100%). The Renison tin mine is the only significant tin operation in Australia, producing around 7 – 7.5ktpa. Higginsville is producing at around 120kozpa gold. MLX is also developing the South Kalgoorlie Operation (SKO) and the Central Murchison Gold Project (CMGP). Combined gold production is expected to grow from around 138koz in FY14 to more than 350koz by FY17. MLX will be increasingly leveraged to gold (and decreasingly leveraged to tin) as CMGP and SGO ramp-up. We estimate that gold assets will contribute to around 80% of MLX earnings in FY14 – 18. Investment thesis and valuation: Buy, TP$0.30/sh Our 12-month forward NPV is $0.33/sh with around 75% of our valuation attributable to MLX’s gold assets. MLX is trading on FY15 and FY16 PE multiples of 6.2x and 5.2x. We see potential for MLX to re-rate as it grows gold production from around 138kopza in FY14 to more than 350kozpa from FY17. We’ve made no material changes to our earnings estimates and price target. Shareholders Major shareholders include: APAC Resources Ltd, 24.01%; Jinchuan Group Limited, 10.63%; and Blackrock Investment Management, 6.31%. Risks of investment - Commodity price and exchange rate fluctuations. The future earnings and valuations of exploration, development and operating resources companies are subject to fluctuations in underlying commodity prices FX exchange rates. - Operating and capital cost fluctuations. Markets for exploration, development and mining inputs can fluctuate widely and cause significant differences between planned and actual operating and capital costs. Key operating costs are linked to energy and labour costs. - Resource growth and mine life extensions. Future earnings forecasts and valuations may rely upon resource and reserve growth to extend mine lives. - Regulatory changes risks. Changes to the regulation of infrastructure and taxation (among other things) can impact the earnings and valuation of mining companies. - Operating and development risks. Mining companies’ assets are subject to risks associated with their operation and development. Risks for each company can be heightened depending on method of operation (e.g. underground versus open pit mining). Development assets can be subject to approvals timelines or weather events, causing delays to commissioning and commercial production. - Funding and capital management risks. Funding and capital management risks can include access to debt and equity finance, maintaining covenants on debt finance, managing dividend payments, and managing debt repayments. Page 6 Metals X Ltd Recommendation Price Target (12 months) as at 13 October 2014 Metals X Ltd (MLX) Buy $0.205 13 October 2014 $0.30 Table 8 - Financial summary PROFIT AND LOSS Year ending 30 Jun Revenue FINANCIAL RATIOS Unit $m 2013a 76 2014a 239 2015e 291 2016e 401 2017e 506 Year ending 30 Jun Unit 2013a 2014a 2015e 2016e 2017e $m 14 39 53 65 66 c/sh 1 2 3 4 4 % n/a na 43% 21% 2% PER x -39.1x DPS c/sh VALUATION Expense $m (61) (169) (198) (290) (361) EBITDA $m 15 70 93 110 146 Adjusted EPS Depreciation $m (11) (34) (41) (48) (55) EPS growth EBIT $m 4 36 52 62 91 Net interest expense $m (0) 3 2 3 3 PBT Tax expense $m $m 4 11 39 - 53 - 65 - 95 (28) Impairments/write-offs/other $m (6) (2) - - - NPAT (reported) $m 9 37 53 65 66 Abnormal items $m 6 2 - - - NPAT (adjusted) $m 14 39 53 65 66 PROFIT AND LOSS (INTERIM) Half year ending Revenue Unit $m Dec-13a 73 Jun-14a Dec-14a 166 141 Jun-15e Dec-15e 149 198 Expense $m (58) (110) (92) (106) (145) EBITDA Depreciation $m $m 15 (5) 55 (29) 49 (20) 44 (22) 53 (24) EBIT $m 10 26 30 22 30 NPAT (adjusted) 9.1x 6.3x 5.2x 5.1x - 0.7 1.0 1.2 1.2 Franking % 0% 100% 100% 100% 100% Yield % 0.0% 3.3% 4.7% 5.8% 5.9% FCF/share c/sh 1 (0) 6 2 7 FCF yield % 7% -1% 28% 10% 33% EV/EBITDA x 16.8x 3.5x 2.7x 2.3x 1.7x PROFITABILITY RATIOS EBITDA margin % 20% 29% 32% 28% 29% EBIT margin % 5% 15% 18% 16% 18% Return on assets % 3% 9% 10% 11% 10% Return on equity % 3% 13% 16% 16% 15% Net debt / (cash) $m (61) (57) (133) (149) (242) ND / E % nc nc nc nc nc ND / (ND + E) % nc nc nc nc nc LIQUIDITY & LEVERAGE Net interest expense $m 2 1 1 1 1 PBT Tax expense $m $m 11 - 28 - 30 - 23 - 31 - Unit 2014a 2015e 2016e 2017e LT real Impairments/write-offs/other $m (2) 0 - - - Gold US$/oz 1,295 1,208 1,175 1,245 1,150 NPAT (reported) Abnormal items $m 28 (0) 30 - 23 - 31 - Tin US$/lb 10.2 10.0 10.0 10.0 9.3 $m 9 2 Copper USc/lb 318 319 320 309 2.70 NPAT (adjusted) $m 11 28 30 23 31 CURRENCY US$/A$ 0.92 0.88 0.85 0.85 0.85 2014a 2015e 2016e 2017e 2018e ASSUMPTIONS - Prices Year ending 30 Jun AUD/USD CASH FLOW Year ending 30 Jun Unit 2013a 2014a 2015e 2016e 2017e OPERATING CASHFLOW ASSUMPTIONS - Production (equity %) Year ending 30 Jun Unit Receipts $m 65 238 270 370 482 Payments $m (59) (165) (167) (266) (333) Sn production (in conc) kt 3.1 3.5 3.5 3.5 3.5 Tax $m - - - - (12) Cu production (in conc) kt 0.2 0.2 0.2 0.2 0.2 A$/lb 8.6 7.7 7.7 7.7 7.7 koz 123 120 119 118 118 A$/oz 774 858 840 845 845 Renison Tin mine (MLX 50% share) Net interest $m 2 2 2 3 3 Sn cash costs (payable) Other $m 1 (2) 40 - - Operating cash flow $m 10 73 145 106 141 Higginsville Gold Operation Gold production C1 gold cash costs INVESTING CASHFLOW Capex and exploration $m (19) (49) (49) (74) (29) Other $m 30 (29) - - - Investing cash flow $m 11 (78) (49) (74) (29) FINANCING CASHFLOW South Kalgoorlie Operation Gold production C1 cash costs (after tolling credits) Net equity proceeds $m (0) 0 - - - Gold production Debt proceeds/(repayments) $m (1) (1) - - - C1 gold cash costs Dividends $m (1) 0 (20) (16) (18) Other $m - - - - - Financing cash flow Change in cash $m (2) 18 0 (4) (20) 76 (16) 16 (18) 94 $m BALANCE SHEET Year ending 30 Jun koz 15 22 70 79 80 A$/oz 606 652 880 823 817 Central Murchison Gold Project Unit 2013a 2014a 2015e 2016e 2017e koz - 13 53 114 187 A$/oz - 1,051 1,034 1,050 996 VALUATION Issued capital Unit Ordinary shares m Ordinary partly paid (restricted) m 7 Total m 1,662 ASSETS Current Cash & short term investments $m 61 57 133 149 242 Accounts receivable $m 12 19 30 40 55 Renison Tin mine Inventory $m 15 33 33 33 33 Higginsville Gold Operation Mine development and PPE $m 113 219 226 252 227 Exploration & evaluation $m 82 95 95 95 95 Sum of parts valuation South Kalgoorlie Operation Central Murchison Gold Project (risked at 70%) + 12 months 1,656 + 24 months $m $/sh $m $/sh $m 84 0.05 76 0.05 67 $/sh 0.04 127 0.08 107 0.06 86 0.05 48 0.03 47 0.03 38 0.02 151 0.09 182 0.11 226 0.14 Other $m 10 8 8 8 8 Rentails 10 0.01 10 0.01 10 0.01 Total assets $m 293 431 525 578 660 Rover 1 10 0.01 10 0.01 10 0.01 20 0.01 20 0.01 20 0.01 $m 11 33 64 88 116 Corporate (48) (0.03) (46) (0.03) (44) (0.03) Enterprise value 403 0.24 406 0.25 413 0.25 57 0.03 133 0.08 145 0.09 460 0.28 538 0.33 557 0.34 Wingellina LIABILITIES Accounts payable Borrowings $m 0 0 0 0 0 Other $m 8 86 116 96 103 Net (debt)/cash Total liabilities $m 19 120 180 184 219 Equity value SHAREHOLDER'S EQUITY Share capital $m 331 331 331 331 331 TOP 10 SHAREHOLDERS Reserves $m 20 20 20 20 20 Issued capital Retained earnings $m (77) (39) (6) 42 90 APAC Resources Ltd % 24.0% Non-controlling interest $m - - - - - Jinchuan Group Limited % 10.6% Total equity $m 274 312 345 394 441 Blackrock Investment Management % 6.3% m 1,484 1,652 1,652 1,652 1,652 Weighted average shares Unit SOURCE: BELL POTTER SECURITIES ESTIMATES Page 7 Metals X Ltd (MLX) Recommendation structure 13 October 2014 Research Team Staff Member Title/Sector Phone @bellpotter.com.au TS Lim Head of Research 612 8224 2810 tslim Sam Haddad Industrials 612 8224 2819 shaddad John O’Shea Industrials 613 9235 1633 joshea Hold: Expect total return between -5% Chris Savage Industrials 612 8224 2835 csavage and 15% on a 12 month view Jonathan Snape Industrials 613 9235 1601 jsnape Sam Byrnes Industrials 612 8224 2886 sbyrnes Sell: Expect <-5% total return on a Bryson Calwell Industrials Associate 613 9235 1853 bcalwell 12 month view John Hester Healthcare 612 8224 2871 jhester Tanushree Jain Healthcare/Biotech 612 8224 2849 tnjain TS Lim Banks/Regionals 612 8224 2810 tslim Lafitani Sotiriou Diversified 613 9235 1668 lsotiriou Buy: Expect >15% total return on a 12 month view. For stocks regarded as ‘Speculative’ a return of >30% is expected. Speculative Investments are either start-up enterprises with nil or only prospective operations or recently commenced operations with only forecast cash flows, or companies that have commenced Industrials Financials Resources operations or have been in operation for Peter Arden Resources 613 9235 1833 parden some time but have only forecast cash Stuart Howe Resources 613 9235 1782 showe flows and/or a stressed balance sheet. Fred Truong Resources 613 9235 1629 ftruong Research Assistant 612 8224 2825 Quantitative Such investments may carry an Tim Piper P tpiper exceptionally high level of capital risk and volatility of returns. Bell Potter Securities Limited ACN 25 006 390 7721 Level 38, Aurora Place 88 Phillip Street, Sydney 2000 Telephone +61 2 9255 7200 www.bellpotter.com.au The following may affect your legal rights. 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Disclosure of interest: Bell Potter Securities Limited, its employees, consultants and its associates within the meaning of Chapter 7 of the Corporations Law may receive commissions, underwriting and management fees from transactions involving securities referred to in this document (which its representatives may directly share) and may from time to time hold interests in the securities referred to in this document. ANALYST CERTIFICATION Each research analyst primarily responsible for the content of this research report, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about those securities or issuers and were repared in an independent manner and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research report. Page 8