Insights into Resource Industry Outlook, presented at the UBS Emerging Companies Conference in Sydney, April 2018.

1. © Copyright Palaris 2018
AUSTRALIAN EMERGING
COMPANIES CONFERENCE
MINING SERVICES &
CONTRACTORS
John Pala
10 April 2018
UBS Conference - Sydney

2. © Copyright Palaris 20182
AGENDA
Snapshot Insights
Services and
Contracting Sector
Trying to Make Sense
of the Market
Macro Trends
Outlook

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SNAPSHOT INSIGHTS
The Australian Government attributes $90B annually to Mining Equipment,
Technology and Services (METS) sector
1
The sector is recognised internationally as delivering cost competitive
‘best practice solutions’
2
The sector is currently enjoying a resurgence following 3-4 years impacted
by the latest commodity cycle downturn
4
The outlook is bright but soft investment in greenfield projects is tempering growth5
Many of our services companies have made a successful entry into
the international marketplace
3
Macro economic factors will have the single biggest influence on the future
— the next boom is coming!
6
Niche players will continue to do well in all points of the cycle7

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RESOURCES INDUSTRY PIPELINE ACTIVITY
Recent
improvements
still a long way to go
to catch
the peaks of 2010

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POSITIVE TRENDS
Strong re-bound
in key commodities prices
All time historical
metals consumption
Global drilling activity
strong performance
Significant capital will soon start to flow

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GLOBAL DRILLING ACTIVITY
Global drilling
activity is back
to 2012 levels

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KEY COMMODITY TRENDS
Nickel
Zinc
Gold

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KEY COMMODITY PRICE TRENDS
Coal
Iron Ore
Copper

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IRON ORE GROWTH
Iron ore growth
continues to
develop strongly

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WORLD METAL CONSUMPTION
World metal
consumption is
at historical highs
and still growing

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US CONSTRUCTION SPEND
Total annual construction spend in the World’s largest economy

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AUSTRALIAN MINING STAGES
Increasing
consumption will
ultimately require
higher levels of
asset replacement

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CAPITAL WORKS
Most capital works currently
associated
with brownfields expansion
Long lead time for mine development
means greenfields development
are still a little way off
…..but it is coming

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CURRENT BRIGHT SPOTS
Providers of services/consumables
to existing mining operations now
will be doing well
Those who have embraced
technology solutions
will be doing even better

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WHAT IS COMING
Drilling, feasibility studies, approvals
and then finally, construction of greenfields1
The next boom is coming 2-4 years away
and will be a big one2
More M&A activity3
Capital raisings4
Small, focused, nimble-footed exploration
companies being taken over by larger players5

16. © Copyright Palaris 201816
THE CHALLENGES
Frazer Institute Annual Survey of Mining Companies 2017
Lack of human capital - dearth of new
talent in the pipeline
Working capital requirements as
companies seek to ramp up
Not re-learning the sins of the past
(cost control etc.)
Regulatory environment—annual
Frazer Institute survey of investment
attractiveness

17. © Copyright Palaris 201817
OPPORTUNITIES
International markets - client diversity,
capitalise on well regarded capability
Strategic relationships/collaboration
Preparing for the next boom
Technology solutions aimed
at reducing cost and operating risks

18. © Copyright Palaris 201818
THE PALARIS STORY
Established in 2000
Located in Australia, UK
and South Africa
Robust financial services
capability underpinned by
very strong technical team
Services delivered in 27 countries
Collaboration in processing,
environmental, civil construction
and other specialty areas
4 Key Pillars of Services
Financial
ITE, due diligence, financial modelling
Business Improvement
Mine optimisation and performance,
integrated gas and ventilation management,
operations, resource evaluation
Engineering, Risk, OH&S
Compliance, management systems
development and review, integrated risk
management
Specialist project management
Shafts, man winders, gas plants,
water treatment system

19. © Copyright Palaris 2018
+ 61 2 4927 5511 PO Box 1225,
Newcastle NSW 2300
http://www.palaris.com
JOHN PALA
Managing Director