Post on 29-Dec-2019
TSX:NMI, OTCQX:NMKTFDiggers & Dealers ConferenceRobert Dufour, CFO
Exceptional Team, Solid Production,Significant Valuation Upside
2TSX:NMI
Forward-looking StatementsCertain information set forth in this presentation contains “forward-looking statements”, and “forward-looking information under applicable securitieslaws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements, which include theCompany’s expectations about its business and operations, and are based on the Company’s current internal expectations, estimates, projections,assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as “will”, “expects”,“anticipates”, “believes”, “projects”, “plans”, and similar expressions. These statements are not guarantees of future performance or outcomes andundue reliance should not be placed on them. Forward-looking statements are based on the opinions and estimates of management as of the date suchstatements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level ofactivity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statementsor forward-looking information. Although management of the Company has attempted to identify important factors that could cause actual results todiffer materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results notto be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and futureevents could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-lookingstatements and forward-looking information. The Company does not undertake to update any forward-looking statements or forward-lookinginformation that are included in this presentation or incorporated by reference herein, except in accordance with applicable securities laws.
All amounts are presented in United States dollars ("$") unless otherwise stated. References in this document to “C$” are to Canadian dollars andreferences to "A$" are to Australian dollars.
Certain non-IFRS measures are included in this presentation, including operating cash cost per ounce, all-in sustaining costs (“AISC”) per ounce, andoperating cash cost per tonne milled in Australian dollars. In the gold mining industry, these are common performance measures but may not becomparable to similar measures presented by other issuers. Newmarket Gold believes that these measures, in addition to that information prepared inaccordance with IFRS, provides investors with useful information to evaluate the Company’s performance and ability to generate cash flow from itsoperations. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures ofperformance prepared in accordance with IFRS. For further information, refer to the “Non-IFRS Measures” section of the latest quarterly MD&A.
Qualified PersonMark Edwards, MAusIMM (CP), MAIG, General Manager, Exploration, Newmarket Gold, is a "qualified person" as such term is defined in NationalInstrument 43-101 and has reviewed and approved the technical information and data included in this presentation
3TSX:NMI
Management & Board of Directors
Raymond Threlkeld Chairman
Douglas Forster President, CEO & Director
Blayne Johnson Executive VP, Director
Lukas Lundin Director
Randall Oliphant Director
Darren Hall COO
Doug Hurst VP Corp Development
Robert Dufour CFO
Ryan King VP Investor Relations
Edward Farrauto Director
Michael Vint Director
Advisors
Ian Telfer Capital Markets
Michael Vitton Capital Markets
Proven Track Record of SuccessPublic Companies
Sold Companies
Principals have founded, managed and sold mining companies with a combined market
value in excess of $35 billion
4TSX:NMI
Vision: To become the next quality mid-tiergold producer with annual production of 400-500k ozs
Leverage best expertise in the industry
Continue to align with shareholder interests
Develop our people
Deliver safe & responsible production
Drive operational improvement & efficiency
Deliver on guidance, focus on FCF
Grow resource base & convert to reserves
Prove up near mine & in mine exploration targets
Advance & develop high-quality existing projects
Evaluate accretive acquisition opportunities to add low cost reserves to the business
Uphold strong financial discipline
PEOPLE OPERATIONS DISCOVERY GROWTH
Newmarket Gold Vision and Strategy
5TSX:NMI
Producing in a Top Mining JurisdictionCOSMO/UNION REEF
Location Northern TerritoryOwnership 100%Metals GoldMining UndergroundCapacity 2.0Mtpa Yrs in Production 2.5 Prod. Guidance ~60k ouncesDiscovery Western Lodes Discovery
MAUD CREEK GOLD PROJECT
Location Northern TerritoryOwnership 100%Metals GoldMining Open Pit + UndergroundStage PEAM&I Resources 724,000 ozs @ 3.46 g/t1
FOSTERVILLE GOLD MINE
Location Bendigo, VictoriaOwnership 100% (2% Royalty)Metals GoldMining UndergroundCapacity 850Ktpa Yrs in Production +10 Prod. Guidance 130k – 140k ouncesDiscovery Eagle Fault Zone
STAWELL GOLD MINE
Location Stawell, VictoriaOwnership 100% (1% Royalty)Metals GoldMining UndergroundCapacity 1.0Mtpa Yrs in Production +30Prod. Guidance ~35k ounces
2016 REVISED CONSOLIDATED GUIDANCE
Production: 225,000 - 235,000 ouncesOperating Cash Cost2: US$650 - US$725 per ounceAll-in sustaining costs2: US$900 - US$975 per ounce
AUSTRALIA
BIG HILL GOLD PROJECT
Location VictoriaOwnership 100%Metals GoldMining Open PitStage PermittingM&I Res. 166,000 ozs @ 1.52 g/t1
Producing Mine
Development Project
Mine site Discovery
AURORA B GOLD PROJECT
Location VictoriaOwnership 100%Metals GoldMining UndergroundStage DrillingInf. Res. 30,400 ozs @ 3.5 g/t1
6TSX:NMI
July 2015 - Year One - July 2016
Newmarket Gold – Success to Date
Merger of Newmarket Gold Inc. and Crocodile Gold Corp.
Ownership structure change from 80% private equity/hedge fund to diversified
ownership
Increased liquidity from 50k shares per day average to 1.4 million shares per day
average
Increased analyst coverage from 0 to 11 with consensus target prices increasing
Consecutive quarter over quarter record operational results
Significant investment in growth resulting in three new mine site discoveries
Increased mineral resources and reserves and extended LOM
Redeemed all convertible debt and now essentially debt free, all gold production
unhedged
7TSX:NMI
Newmarket (NMI) Share Performance vs. Peers
Share Price Performance
Notes:Peers: Alamos, Kirkland, Lake Shore (to unaffected), Primero, Richmont, Regis, Saracen Daily Trading Volume reflects Canada-wide composite across all exchangesSource: FactSet, Bloomberg
76%
257%
128%
15%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
26.0
28.0
30.0
32.0
34.0
36.0
38.0
40.0
42.0
44.0
46.0
48.0
50.0
(60%)
(40%)
(20%)
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
220%
240%
260%
280%
300%
15-Jul-15 15-Aug-15 15-Sep-15 15-Oct-15 15-Nov-15 15-Dec-15 15-Jan-16 15-Feb-16 15-Mar-16 15-Apr-16 15-May-16 15-Jun-16 15-Jul-16
Dail
y T
rad
ing
Vo
lum
e -
Can
ad
a C
om
po
sit
e (
M)
Rela
tive P
erf
orm
an
ce (
%)
NMI Volume GDX Index Newmarket Peer Producers Spot Gold
8TSX:NMI
Strong Financial Position
Balance Sheet (at June 30, 2016) US$ Equivalent:
Cash Balance (million) US$ 69.9 AUD$93.7
Working Capital (million) US$ 56.3 AUD$75.4
Debt (million) – Capital lease obligation $US$ 1.6 AUD$3.75
Capital Structure & Ownership (June 30 2016)
TSX: NMI OTCQX: NMKTF
Market Capitalization ($CAD million) (June 30 2016) ~$700
Issued and Outstanding (million) 177.7
Fully Diluted (million) 191.3
Luxor Capital Group LP 19.3%
Eric Sprott ~ 15%
Management/Board (basic) 7.4%
90 day average volume 1.4 mil shares
$36.5
$52.1
$69.9
Q4 2015 Q1 2016 Q2 2016
YTD US$ CASH BALANCE INCREASE
91%
Including $3.8 million in growth investment
Including $3.6 million in growth investment
9TSX:NMI
2016 Consolidated Guidance - Revised
Production:
225,000 - 235,000 ounces
Cash Cost:
US$650 - US$725 per ounce
AISC:
US$900 - US$975 per ounce
Growth Expenditure: US$10 – US$15 million
H1 Production: 119,248 ounces
H1 Cash Cost: US$ 686/ oz sold
H1 AISC: US$ 923/ oz sold
10TSX:NMI
2016 Highlights
119,248 oz revised full year 2016 guidance (225koz-235koz)
CONSOLIDATED GOLD PRODUCTION
RECORD FOSTERVILLE Q2(June 30, 2016)
Cash - US$69.9 million
~AUD$93 million
OF PRODUCTION FROM FOSTERVILLE GOLD MINE
COSMO GOLD MINE
YTD PRODUCTION 31,782 ozsYTD RECOVERY 92.4%
Q2 Production 15, 442Q2 Grade 3.01g/t goldQ2 Record Recovery 94.2%
FOSTERVILLE GOLD MINE YTD PRODUCTION 70,383 ozs
Q2 Record Production 37,245Q2 Record Mill Grade 7.50 g/t goldQ2 Record Recovery 90.8%Q2 Operating Cost $440 per ounce soldQ2 AISC $741 per ounce sold
59%
11TSX:NMI
32,793
31,519
33,138
Q3/15 Q4/15 Q1/16 Q2/16
Q2 2016 Highlights Record Q2, 2016 production, grade and recoveries Record grade - 27% YOY increase in mill grade – 7.5 g/t Au Record gold recovery – 90.8% Grade Profile continues to increase at depth at Lower Phoenix Lower Pheonix Gold System highlights intercept
3.3m @ 22.1 g/t Au & 3m @ 16.6 g/t Au. New gold gravity circuit – recovered 17% of gold produced
during Q2
H1 2015 H1 2016
Gold Production (ozs) 58,783 70,383
Gold grade (g/t) 5.84 7.42
Recovery (%) 89.1 88.9
Cash Costs (US$/oz) $537 $456
AISC (US$/oz) $895 $732
Fosterville Gold Mine – Flagship Asset
Go
ld P
rod
uct
ion
oz
37,245
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Fosterville Gold Mine (Eagle Zone - Visible Gold)
13TSX:NMI
Largest Gold Producer in State of Victoria
2015 MINERAL RESOURCE & RESERVES
Proven and Probable underground Mineral Reserves increased 34% to 244,000 ounces of gold. (Dec 31. 2015)
Mineral Reserve grade increased 25% grading 6.95 g/t gold (Dec 31. 2015)
Fosterville’s current mining front comprising the Phoenix and Lower Phoenix gold systems, and associated structures, host Measured
and Indicated Mineral Resources containing 673,000 ounces grading 8.33 g/t open up and down plunge
FEB 2016 – FOSTERVILLE POURED 1 MILLIONTH OZ OF GOLD
• 11 years of continuous operations since first gold pour in 2005 & + 8 million man hours
• World class BIOX treatment system • Continued exploration success – 8 drill rigs in operation currently• Increasing grade profile at depth• New potential mining fronts including Harrier Gold System
14TSX:NMI
Fosterville Mine Life Expansion
Lower Phoenix
Phoenix
NORTHSOUTH
Mineral Resources, Reserves and MINING as at December 31, 2015
Harrier Decline
Harrier
6,00
0mN
BLOCK A
BLOCK C
BLOCK D
Harrier Drill Drive
1km step-out drillingH2/2016 drill results
5,4
50
mN
BLOCK B
Current UG Reserve 244,000 ounces at 6.95g/t Au with Measured and Indicated resources of 673,000 ounces at 8.33 g/t Au and Inferred Resources of 101,000 ounces at 9.49 g/t Au as of Dec 2015
With additional drilling success blocks A,B, C and D are targeted to add +5 years of additional reserves on top of current reserves and resources (Block B drilling underway testing 1000 metres down plunge from current resources/reserves)
Grade increasing with depth at Harrier, converting resources to reserves and growing resources, 8 drill rigs in operation
Mill Capacity +850k tpa, currently utilizing ~700k tpa. Opportunity to add two additional mining fronts in Block A and Block D
= Visual gold elevation depth, increasing with depth
Current Mining Front
80
50
mN
15TSX:NMI
Fosterville Mine Drilling Success
Harrier Drill Drive
12.5 g/t Au over 2.4m
12.75 g/t Au over 4.5m
Lower Phoenix
Drill Targets
NORTHSOUTH
Mineral Resources, Reserves and MINING as at December 31, 2015
Harrier Decline
Harrier
Consistently intersecting high grade gold in multiple zones; Harrier, Lower Phoenix, Lower Phoenix South and Lower Phoenix North.
Grade increasing with depth on all zones
8 Drill rigs in operation
4.4 g/t Au over 6.1m
6.5 g/t Au over 4.2m
9.3 g/t Au over 3.3m
6,00
0mN
9.2 g/t Au over 11.8m
7.3 g/t Auover 13.9m
80
50
mN
6.2 g/t Au over 1.9m
22.1 g/t Au over 3.3mFirst recorded visualGold from Harrier
10.3 g/t Au over 3.3m
16.6 g/t Au over 3.05m
11.99 g/t Au over 3.4m
14.25 g/t Au over 3.6m11.1 g/t Au over 4.9m
12.8 g/t Au over 8.5m
112 g/t Ay over 11.9m
645 g/t Au over 3.4m
501 g/t Au over 4.5m
386 g/t Au (VG) over 3.4m
16.4 g/t Au (VG) over 16.5m
73.2 g/t Au (VG) over 7.8m
16TSX:NMI
Fosterville Gold Mine – Peer Cost Comparison
Q1/16Production
Q1/16Cash CostsPer Ounce
(US$/oz)
Q1/16 AISC
Per Ounce(US$/oz)
Fosterville/Newmarket Gold1(Australia) 33,138 $473 $723
Andy Wells/Doray Minerals2(Australia) 20,126 $484 $938
Carosue Dam/Saracen Minerals2(Australia) 33,749 $777 $864
Island/Richmont Mines3(Canada) 26,589 $491 $623
Pajingo/Evolution Mining2(Australia) 18,026 $593 $943
Macassa/Kirkland Lake4(Canada) 27,604 $535 $1,006
1. See non-IFRS details on slide 2, excludes corporate G&A 2. March 2016 Quarterly Reports. Assuming 0.730 USD:AUD 3. Production and costs based on April and May 2016 press release 4. Production and costs based on March 2016 press release SY15_Q3
(open pit/underground)
(open pit/underground)
Underground Mine Comparisons
17TSX:NMI
12,672 12,898
16,340 15,442
Q3/15 Q4/15 Q1/16 Q2/16
Q2 - 2016 Production of 15,442 oz based on record recovery of 94.2%
Optimization ongoing (grade, recovery, costs)
Strong mineral potential at depth (Sliver and Easter Deep zones)
New discovery - Western Lode gold zone (potential to open a new mining front)
H1 2015 H1 2016
Gold Production (ozs) 37,685 31,782
Gold grade (g/t) 3.33 3.05
Recovery (%) 91.9% 92.4%
Cash Costs (US$/oz) $814 $957
AISC (US$/oz)$1,037 $1,021
Northern Territory - Cosmo Gold MineCosmo Gold Mine
Gold
Pro
duction o
z
1. Revised Consolidated Company AISC guidance is US$970 – US$1,020/oz and operating cash cost guidance is US$700 – US$750/oz for the year 2015
18TSX:NMI
Northern Territory - Maud Creek Gold Project Cosmo Gold Mine currently processes ~800,000 tpa through the Union Reefs Mill
Union Reefs mill has 1.2Mt of excess capacity to treat additional ore and is located 67km from Cosmo and 144km from Maud Creek
1. The PEA is preliminary in nature and is based on a number of assumptions that may be changed in the future as additional information becomes available. The PEA includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. The Maud Creek Gold Project PEA Technical Report is available on Sedar and www.newmarketgoldinc.com and was compiled by Peter Fairfield, Principal Consultant (Project Evaluation), BEng (Mining), FAusIMM CP (Mining) of SRK Consulting (Australasia) Pty Ltd. By virtue of his education, membership to a recognised professional association and relevant work experience, Peter Fairfield is an independent "Qualified Person" as such term is defined in NI 43-101. Mineral resources that are not mineral reserves do not have demonstrated economic viability. For full details please see press release dated May 18, 2016
Base Case Highlights Utilizing the Union Reef Mill (US$1,200) (AUD$1,550) FX 0.77
Pre-Tax NPV5% AUD$201 million
Internal Rate of Return 116%
After-Tax NPV5% AUD$137 million
Internal Rate of Return 80%
Pay Back 1.25 years
Pre-Production Capital Cost AUD$42 million
Mine Life 9.5 years
Diluted Gold Grade 4.2 g/t gold
Gold Recovery (Oxide/Transitional) 85%
Gold Recovery (sulphide) 95%
LOM Recovered Gold 496,000 ounces
Average Annual Production 52,000 ounces
LOM Cash Operating Cost AUD$1,101/oz US$632
19TSX:NMI
8,352 8,762 8,579 8,504
Q3/15 Q4/15 Q1/16 Q2/16
Continued remnant mining on the Western Flank
H2 2016 focus on refining understanding of the Aurora B discovery on the East Flank
Working with regulators to establish a path forward for Bill Hill Project
H1 2015 H1 2016
Gold Production (kozs) 19,207 17,083
Gold grade (g/t) 1.66 1.46
Recovery (%) 81.7% 79.8%
Operating Cash Costs (US$/oz) $884 $1,143
AISC (US$/oz) $988 $1,264
Stawell Gold Mine
Gold
Pro
duction o
z
20TSX:NMI
Stawell Exploration (Expansion Opportunity)
Past Production of 2.3
Million ounces Gold
* Announced drill results July 22, 2015, September 21, 2015
Aurora A – Significant historic drill intercept includes: 13.7 g/t gold over 5.45 m
Aurora B – Significant new discovery: 7.06 g/t gold over 17.80 m, 8.03 g/t gold over 8.8 m, drilling on-going
East Flank (Aurora B) DISCOVERY* drill hole 7.06 g/t Gold over 17.80 metres
Brummigans
21TSX:NMI
Stawell Mine Aurora B Discovery Section
Maiden Inferred Mineral Resource of 30,400 ounces grading 3.5g/t gold. The grade of the Aurora B Inferred Mineral Resource is 42% greater than the underground Mineral Reserve grade
East Flank TargetAurora A
Traditionally mined West Flank total production to date 2.3 million ounces
Magdala
13.7 g/t gold over 5.45 m
Drilling underway
Aurora B located approximately 500m above Aurora A
22TSX:NMI
Financial Results (000’s US$ except per share amounts) Q2 2016 Q2 2015 YTD 2016 YTD 2015
Gold ounces produced 61,191 55,998 119,248 115,674
Gold ounces sold 62,223 55,154 120,019 116,447
Revenue 78,039 66,044 144,094 138,941
Cost of operations, including royalty expense (41,962) (37,649) (82,511) (79,622)
Depletion and depreciation (7,991) (8,877) (15,944) (20,039)
Mine operating income 28,086 19,518 45,639 39,280
Net income (loss) 16,760 12,072 23,223 27,775
Net income (loss) per share($/share) basic 0.10 0.10 0.14 0.24
Operating Cash Flow 30,999 27,073 49,300 54,559
Capital Expenditures 13,643 17,158 23,078 30,618
Gold Price and Cost per Ounce (US$) Q2 2016 Q2 2015 YTD 2016 Q1 2015
Average realized gold price 1,253 1,196 1,199 1,190
Operating cash costs per ounce sold2 673 681 686 682
All-in sustaining cash costs per ounce sold2,3 937 1,037 923 985
Financial Results Q2 2016 All figures are in United States (“U.S.”) dollars, unless stated otherwise
1. Higher weighted average number of shares outstanding during Q2/16 of 176.3M (basic)
2. See Non-IFRS Disclosures
3. All-In Sustaining Cash Costs per Ounce ("AISC") Includes Corporate General and Administrative Expenses.
23TSX:NMI
Newmarket Gold - Building On Success
•Additional opportunity for operational improvements on quality with a focus on building shareholder value
•Continue cost improvements and efficiencies to further increase real free cash flow
•Strategic capital allocation with a goal to continue mine life expansion at all mines
•Fosterville (drilling at Harrier, up and down plunge expansions of the high grade Phoenix/Lower Phoenix and review of brown field targets)
•Excess mill capacity opportunity at Fosterville, 18% unused +150k tonnes
•Cosmo (drilling at Sliver, Cosmo deeps and a number of additional priority targets) Maud Creek development stage project and potential toll milling opportunities
•Stawell (drilling at Aurora B), advancing the Big Hill development stage project
•Focus on reaching and exceeding peer valuation metrics
•Clear minded focus on M+A to build additional shareholder value
July 2016
24TSX:NMI
$2,242
$3,187 $3,841 $4,053
$4,354 $4,748 $4,831 $4,974
$5,538 $5,600 $5,891
Average: $4,702
4.4x 5.1x
7.4x 7.6x 8.3x 8.5x
9.6x 9.8x 10.6x 11.1x
13.9x
Average: 9.1x
Newmarket Gold - Peer Comparison
Source: FactSet, Bloomberg, company disclosure, available equity research.
Averages exclude Newmarket.
3.7x
5.3x 6.7x 6.8x
7.7x 8.5x 8.6x 8.8x 8.8x 9.2x
13.6x
Average: 8.2x
EV / 2016E Prod. (US$/oz)
Price / Consensus 2016E CFPS (ratio) EV / Consensus 2016E EBITDA (ratio)
1.24x 1.38x
1.61x 1.61x 1.74x 1.77x 1.77x 1.78x 1.84x 1.88x
2.05x
Average: 1.75x
Price / NAVPS (ratio)
25TSX:NMI
Newmarket Gold - Investment Highlights Increasing Cash Position – Q2 2016 Cash US$ 69.9 (~AUD$93) million, 91% increase from Q4 2015 Cash $US 36.5 million
Revised Corporate Guidance – Increased full year production to 225k-235k Au oz and decreased AISC to $900-$975/ oz
Record Consolidated Q2 Production of 61,191 ounces gold – Driven by record production at flagship Fosterville Gold Mine of 37,245 ounces on record grade of 7.50g/t gold and record recovery of 90.8%
Continued Growth Drilling Success at Fosterville - Potential to organically increase production, sustain increased grade profile, & utilize excess mill capacity on new mining fronts
Growth Focused Project Pipeline – Maud Creek Gold Project, Big Hill Gold Project and Aurora B Discovery provide for potential production expansion
Experienced Capital Markets and Operational Team - Proven track record of execution and significant shareholder value creation
Highly leveraged to the gold price in both US and AUD dollar terms – No hedging in place
NEWMARKET OPPORTUNITY
$2,242
$4,702
EV/oz Production EV/oz Production
5.1x
9.1x
Price/2016E CFPS (ratio) Price/2016E CFPS (ratio)
Peer Group1Peer Group1
Newmarket Valuation Newmarket Valuation1. Peer group details slide 8. Source: FactSet, Bloomberg, company disclosure, available equity research. Averages exclude Newmarket, details as at, June 08, 2016.
Robert Dufour Chief Financial Officer, Director
T: +1-604-559-8040
www.newmarketgoldinc.com
Contact Us
Ryan KingVice President, Investor Relations
T: +1-778-372-5611
TSX:NMI