GR ENGINEERING SERVICES LIMITED — AGM Information 2013

Nov 11, 2013

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2013 Annual General Meeting 12 November 2013

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Disclaimer
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This document has been prepared by GR Engineering Services Limited ACN 121 542 738 ( GR Engineering ) to provide an overview and update of GR Engineering’s activities and FY13 financial performance.

Any statements, opinions, projections or other material contained in this document do not constitute any commitments, representations or warranties by GR Engineering and associated entities or its directors, agents and employees. Except as required by law, and only to the extent so required, directors, agents and employees of GR Engineering shall in no way be liable to any person or body for any loss, claim, demand, damages, costs or expenses of whatsoever nature arising in any way out of, or in connection with, the information contained in the document.

This document includes certain statements, opinions, projections and other material, which reflect various assumptions. The assumptions may or may not prove to be correct. Recipients of the document must make their own independent investigations, consideration and evaluation of the opportunity to participate in any investment. By accepting this document the recipient agrees that if it proceeds further with its investigations, consideration or evaluation of the opportunity to participate in any investment it shall make and rely solely upon its own investigations and inquiries and will not in any way rely upon the document.

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Index
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1	FY13 Results Summary
2	Health, Safety & Environment
3	Operational Performance
4	Completed Projects
5	FY14 Outlook

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FY13 Results Summary
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Revenue	Revenue $114.7 million
	EBITDA $11.0 million
Earnings	PBT $11.5 million NPAT $7.5 million
	EPS 5.0 cents
Cash Flow	Cash flow from operations $5.5 million Supported interim and final dividends totalling 5cps fully franked for FY13
Balance Sheet	Cash $34.5 million1 Debt $0.9 million Net cash $33.6 million1

1. Including cash held to secure contingent liabilities under the Company’s bonding facilities

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FY13 Results Summary
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• Action taken to respond to changed market conditions

 Professional and support staff numbers reduced to suit anticipated workload

 Staff salary reductions of 5%

 Company wide reductions in overheads implemented

 Robust project execution maintained

Operational

• Primary revenue contributions made from greenfields and brownfields gold projects in WA and West Africa (Andy Well, Telfer, Syama)

• Medium term revenue secured through award of Hemerdon Tungsten & Tin Project EPC contract (£75 million over approximately 2 years)

 Positive contribution from Whyalla brownfields upgrade in 2H13, continuing into 1H14

 Study activity subdued, in line with market conditions

• Board & senior management restructure implemented, effective FY14

Corporate

 Joe Ricciardo appointed Executive Chairman

 Geoff Jones appointed Managing Director

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Health, Safety & Environment
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• Continued strong safety performance

 Record 1099 LTI free days as at 30 June 2013, continuing into 1H14

 Safety is a key element of GR Engineering’s operating ethos - our people are our greatest asset

 Committed to the protection of the natural environment, and actively playing a constructive role in communities

LTIFR – Lost Time Injury Frequency Rate TRIFR – Total Recordable Injury Frequency Rate

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LTIFR
3
2.5
2
1.5
1
0.5
0
2008 2009 2010 2011 2012 2013
TRIFR
30
25
20
15
10
5
0
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
TRIFR (per million hrs)
LTIFR (per million hrs)
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Operational Performance
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• Positive outcomes achieved on all completed projects – on time / on budget delivery

• Activity levels impacted by ongoing deferrals, scope reductions and project cancellations

• Gold price decline in 2013 has compounded challenges for opportunities in the gold sector

• Focus on brownfields upgrade and optimisation work – industry participants seeking to extract maximum value from existing operations

• Successfully delivered Andy Well gold project on budget and ahead of schedule

• Completed study & EPCM engagements in West Africa – Bonikro, Sissingue & Obotan

• Whyalla & Syama upgrades progressing well

• Commencement of design and procurement works on £75 million Hemerdon Tungsten & Tin Project

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Project Photos
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Andy Well Gold Processing Plant – Western Australia

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Project Photos
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Magnetite Iron Ore Plant Expansion – Whyalla, South Australia
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Project Photos
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Syama Gold Processing Plant Upgrade - Mali

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Project Photos
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Hemerdon Tungsten & Tin Project – 3D Design Model

Hemerdon – Historic Plant Site

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Operational Performance
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Studies & Consulting

FY13 Revenue Mix

• 16% contribution to revenue

• Study work predominantly undertaken on Australian and international gold projects

• Continued conversion of studies into design & construction engagements:

• Andy Well Gold Project

• Telfer upgrades

• Syama upgrade

• Hemerdon Tungsten & Tin Project

• Access to funding by junior explorers has adversely impacted study and consulting work volumes and revenue

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1%
13%
Precious Metals
13%
Base Metals
Iron Ore
Other
72%
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16%
Design &
Construction
Studies &
Consulting
83%
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Completed Projects – FY13
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 The following selected projects were successfully completed by GR Engineering in FY13

Client / Project	Location	Commodity	Contract Type / Value	Scope
Doray Minerals Andy Well Gold Project	Western Australia	Gold	EPC $31 million	Following completion of the Andy Well Gold Project DFS, GR Engineering was engaged by Doray to undertake the engineering, procurement and construction of the Andy Well processing plant and associated infrastructure.
Newcrest Telfer Brownfields Projects	Western Australia	Gold	EPC $41 million	GR Engineering was engaged by Newcrest to undertake a range of brownfields upgrades at Telfer in FY13, including the design and construction of a dump leach processing plant refurbishment and upgrade, flotation and regrind circuit and concentrate storage facility.
Phu Bia Mining Phu Kham Increased Recovery Project	Laos	Copper / Gold	E&P $3.4 million	GR Engineering was engaged by Phu Bia Mining Ltd (a subsidiary of PanAust Limited) to undertake the engineering and procurement associated with the Phu Kham Increased Recovery Project.
SilverCrest Mines Santa Elena Silver Leach & CCD Plant	Mexico	Silver	E&P $3.5 million	GR Engineering was engaged by SilverCrest to undertake the engineering design of a 3,000tpd CCD processing plant for the Santa Elena Silver project in Mexico.
PMI Gold Corporation Obotan Gold Project	Ghana	Gold	FEED ~$2 million	Following the delivery of the Obotan DFS for PMI in 2012, GR Engineering was instructed to commence FEED works for the project’s 3Mtpa processing plant and associated infrastructure. GR Engineering has also assisted PMI with procurement works on long lead equipment items.

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FY14 Outlook
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• Positive contributions expected to be made in 1H14 from existing projects

• Order book primarily comprised of:

• Hemerdon Tungsten & Tin Project (EPC)

• Whyalla Brownfields Upgrade (EPC)

• Syama Brownfields Upgrade (EPCM)

• Upside potential from commencement of $54 million Keysbrook Minerals Sands EPC Project

• Expectation that core markets will remain challenging, with headwinds prevailing into FY15

• A return to growth in core markets will require:

• sustained increases in commodity prices;

• reduced operating costs for miners, particularly in gold; and

• improved capital market conditions for junior explorers and developers

• Strategy is to remain focused on:

• adding to FY14 revenue base by targeting opportunities in Australia, Asia, South America & West Africa;

• continuing to reduce costs whilst maintaining execution capability;

• generating strong performance on existing projects; and

• balance sheet and cash flow preservation

• GR Engineering will continue to assess M&A opportunities that add to shareholder value

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Contact
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Geoff Jones

Managing Director

Australian Office Details

179 Great Eastern Highway Belmont WA 6104

Level 3, 99 Melbourne Street South Brisbane QLD 4101

• +61 8 6272 6000

• geoff.jones@gres.com.au

• PO Box 258  +61 7 3838 8000 Belmont WA 6984

• +61 8 6272 6000

Joe Totaro

CFO & Company Secretary

• +61 8 6272 6000

• joe.totaro@gres.com.au

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