Project Capri

Question 1

How does the size of the underwrite now compare to what was last approved.

Answer 1

510M vs 251M

Question 2

What are the facilities

Answer 2

800M partially amortising 5 year term facility and a $100M capex facility

Question 3

Why is an eCRS 11 supported

Answer 3

Rating of Perform system

Question 4

What is the Glencore ROE

Answer 4

21.8%

Question 5

Which banks have received credit approval?

Answer 5

ANZ, SMBC and DBS

Question 6

Where does Coal & Allied rank ?

Answer 6

2nd

Question 7

How much of MT does C&A own?

Answer 7

80%

Question 8

How much does C&A own of Warkworth?

Answer 8

55.6%

Question 9

How much of PWCS does C&A own

Answer 9

38.4%

Question 10

Who owns the remaining interests in HVO and Warkworth?

Answer 10

Mitsubishi

Question 11

Who owns the remaining interest in Mt Thorley

Answer 11

POSCO

Question 12

Who owns the remaining interest in Mt Thorley

Answer 12

POSCO

Question 13

What is the proposed eCRS?

Answer 13

11G

Question 14

what FX rate has been assumed

Answer 14

0.75

Note: if coal prices fall it would be expected that so to would the FX rate?

Question 15

What is the average annual production from thermal and SSCC?

Answer 15

13Mt Thermal Coal

4Mt SSCC

Question 16

What is the forecast price for Thermal Coal

Answer 16

FY17 56
FY18 58
FY19 58
FY20 62

Question 17

What is the forecast price for SSCC?

Answer 17

FY17 68
FY18 69
FY19 71
FY20 72

Question 18

What % of production is Thermal Coal?

Answer 18

~75%

Question 19

What are the components of debt reduction over the facility term?

Answer 19

$199M (Cash Share)
$200M (scheduled amort)
Dont forget the contingent liquidity of $200M

Question 20

Describe the debt profile over time?

Answer 20

Starts at 800 and falls by 400M from amort (200m) and cash share (200M) but increases by 100M due to capex resulting in 500M at maturity.

Question 21

What about the threat of renewables?

Answer 21

• Traditional markets of Japan, Korea and Taiwan dont have the land mass for large scale renewables
• Limitation of penetration due to network constraints
• Best wind/solar sites are developed first

Question 22

Which banks are included in the MLA group?

Answer 22

NAB, ANZ, DBS, HSBC, Mizuho, SMBC and Standard Chartered

Question 23

Why is hunter coal so special?

Answer 23

High Energy, Low Ash, Low Sulphur

Question 24

What about the threat of renewables?

Answer 24

• Traditional markets of Japan, Korea and Taiwan dont have the land mass for large scale renewables
• Limitation of penetration due to network constraints
• Best wind/solar sites are developed first

Question 25

What is the revenue contribution for Japan, Korea, Taiwan, Thailand?

Answer 25

Japan (48%) ; Korea (15%); Taiwan (15%); Thailand (13%)

Note: ~90% from JKTT and a further 7.5% from Malysia

Question 26

What are the repetitional risks of engaging in this financing?

Answer 26

Mitigated by :

* Brownfield nature of mines (HVO comenced in 1949 and MTW in 1981

Question 27

What are the reserve lives of HVO and MTW?

Answer 27

30 years (HVO) and 20yrs for MTW

Question 28

Any conservative parts of financial model?

Answer 28

Operating Costs and Wash Yields are below Rio Tinto forecasts and supported by Independent tech dd?

Question 29

Mitigants to market price risk?

Answer 29

• Low Breakeven prices (what portion of the cost curve would be loss making?)
• NAB forecasts are below both Woodmac and Consensus ($65-$70)