MASTERMYNE GROUP LIMITED — AGM Information 2011

Nov 28, 2011

FY2011 Annual General Meeting CEO Presentation

November 2011

Disclaimer

The following disclaimer applies to this presentation and any information provided regarding the information contained in this presentation (the Information). You are advised to read this disclaimer carefully before reading or making any other use of this presentation or any information contained in this presentation.

Except as required by law, no representation or warranty, express or implied, is made as the fairness, accuracy, completeness, reliability or correctness of the Information, opinions and conclusions, or as to the reasonableness of any assumption contained in this document. By receiving this document and to the extent permitted by law, you release Mastermyne Group Limited (“Mastermyne”), and its officers, employees, agents and associates from any liability (including in respect of direct, indirect or consequential loss or damage or loss or damage arising by negligence) arising as a result of the reliance by you or any other person on anything contained in or omitted from this document.

Statements contained in this material, particularly those regarding the possible or assumed future performance, costs, dividends, returns, production levels or rates, prices, reserves, potential growth of Mastermyne, industry growth or other trend projections and any estimated company earnings are or may be forward looking statements. Such statements relate to future events and expectations and as such involve known and unknown risks and uncertainties, many of which are outside the control of, and are unknown to, Mastermyne and its officers, employees, agents or associates. In particular, factors such as variable climatic conditions and regulatory decisions and processes may cause or may affect the future operating and financial performance of Mastermyne. Actual results, performance or achievement may vary materially from any forward looking statements and the assumptions on which those statements are based. The Information also assumes the success of Mastermyne’s business strategies. The success of the strategies is subject to uncertainties and contingencies beyond Mastermyne’s control, and no assurance can be given that the anticipated benefits from the strategies will be realised in the periods for which forecasts have been prepared or otherwise. Given these uncertainties, you are cautioned to not place undue reliance on any such forward looking statements. Mastermyne undertakes no obligation to revise the forward looking statements included in this presentation to reflect any future events or circumstances.

In addition, Mastermyne’s results are reported under Australian International Financial Reporting Standards, or AIFRS. This presentation includes references to EBITA and NPAT. These references to EBITA and NPAT should not be viewed in isolation or considered as an indication of, or as an alternative to, measures AIFRS or as an indicator of operating performance or as an alternative to cash flow as a measure of liquidity.

The distribution of this Information in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions. This Information does not constitute investment, legal, accounting, regulatory, taxation or other advice and the Information does not take into account any investment objectives or legal, accounting, regulatory, taxation or financial situation or particular needs. You are solely responsible for forming your own opinions and conclusions on such matters and the market and for making your own independent assessment of the Information. You are solely responsible for seeking independent professional advice in relation to the Information and any action taken on the basis of the Information. No responsibility or liability is accepted by Mastermyne or any of its officers, employees, agents or associates, nor any other person, for any of the Information or for any action taken by you or any of your officers, employees, agents or associates on the basis of the Information.

3

FY11 Review

==> picture [352 x 250] intentionally omitted <==

Safety

• Majority of projects achieved excellent safety

outcomes however this was impacted by some sites which did not achieve our safety targets.

• During the year we invested significantly in safety

resources in recognition that our safety performance needed to improve to meet our expectations and those of our customers.

Financial Performance

• Combined Group Revenue was up 26% on prospectus forecast to $164.83 million.

• Adjusted Net Profit was up 10% on prospectus forecast to $9.79 million.

• EBITA Margin for the full year at 9.8%.

• Share price has outperformed the ASX200 in the last 12 months

Balance Sheet and Cash Flow

• Net Assets up $9.7 million to $42.8 million.

• Operating cash flows improved in H2 from outflows of $0.5 million at Dec 2010 to inflows of $9.4 million at 30

• June 2011

• Invested $19.18 million in new assets, majority of which was debt funded mobile equipment

4

FY11 Overview

Operational

• 3 new underground contracts mobilised and operating in the FY.

• Workforce numbers up 46% to 823 for the full year.

• Myne Start training centre trained over 100 people who are now working in the business. We also commenced training for 2 major mining companies during the year.

• Equipment utilisation were at record levels due to high demand hence the additional investment in capital equipment.

• Project at Newstan was the first major contract in the Hunter Valley for underground division.

• Introduced Directional Drilling and Ventilation Services and these are now an embedded part of the Mastermyne service offering.

• Engineering business expanded into larger workshops in Qld and NSW and continued to diversify its product offering and now has a growing market share in NSW.

• Services division was restructured and was awarded a major contract which started in October this year.

Order Book and Pipeline

• Underground contract services were in very high demand in 2011 and this is continuing into the current FY.

• Secured a Contracted Order Book of $178 million for 2012 which will be complemented by approx $25 of recurring

• work in the Engineering Division and Directional Drilling services.

• Commenced working with several tier 1 and 2 coal companies on some large scale underground projects, the first of which will start construction in the next 12 months.

5

Operational Focus FY12

• Recruiting for additional manning on existing projects (KME, Kestrel & Newstan)

• Training and up skilling our management team in

preparation for further growth in 2013.

• Bringing new capex on line, commissioning and

• working in Mastermyne projects.

• On boarding international personnel and continuing recruitment of overseas experienced miners

• Continue growth in the Engineering (Qld & NSW) workshops through expanded product and services offerings.

• Executing the recently awarded Services contract and returning this division back to profitability in 2012.

• Continued focus on reducing debtor days and

improving working capital in the business.

6

Safety Focus FY12

• Invested significantly in the safety

management team to meet the expectations and

demands of this growing business.

• Restructured the safety department to provide

a high level of support to the site operations.

• Focus for 2012 is summarised in 4 key areas.

• Right people in the right roles.

• Operations teams owning and leading

  • safety with the support of the HSEQ Team

• Adopting the Dupont safety model

• Moving to the more stringent OSHA

  • reporting standard.

==> picture [324 x 297] intentionally omitted <==

----- Start of picture text -----

7
----- End of picture text -----

People Focus FY12

• Workforce at June 2011 was 823 and has since grown by another

20% in the last 5 months to be at 1000 people including contractors.

• Current manning requirements will see this number increase to approx 1200 for the full year.

• Strategy in place is working so we will continue with this

  • Domestic Recruitment & Transportable Skills

  • Training Centre

  • International Recruitment

  • Focus on Retention

• The training centre has successfully introduced people into the

• Mastermyne workforce. Currently considering a second larger facility due to the interest and success.

• International recruitment has focused on Poland, South Africa, New Zealand and UK where there is a large pool of experienced

underground miners.

• Ranstad partnership continues and is delivering good numbers of experienced international & domestic miners.

• Continuing investment in workforce training and development with PM courses, Supervisor courses and Management training.

• Labour market is tight but we successfully continuing to meet

demands of our projects through this balanced HR strategy.

Workforce Numbers

==> picture [280 x 445] intentionally omitted <==

----- Start of picture text -----

900 823
800
700
600 518
490
500
386
400
300
200
100
0
FY08 FY09 FY10 FY11
121
Qld
107
Hunter
Illawarra
595
2011 Underground Labour Allocation 8
----- End of picture text -----

Order Book & Pipeline FY12

Sales Pipeline

• Order book provides high visibility in earnings and

provides a strong platform from which to continue to grow organically

• Business development will focus on several new large projects coming on line in the next 10 to 18 months across the Bowen Basin.

• Sales pipeline beyond 2013 continuing to materialise

and early engagement with project owners is underway

• Tendering opportunities on brownfield & existing mines is growing and will be the cornerstone to sustained growth and a strong order book.

• Focus is to continue to grow through a mix of both

production linked contracts in existing mines and new greenfield projects.

9

Mastermyne Group Long & Short Term Strategy

Short Term (12 months)

• Short term strategy will be concentrated around organic growth within the existing projects

• Which means

• Increasing our work scope on these projects

• Increasing our margins through maximised KPI earnings

• Continuing to build relationships with key customers

• Delivering projects without injury to people

• Hiring our equipment into these projects

• Ramping up our training facilities with a second larger training centre and expanding the training provided in these

centres

• On boarding of our international personnel and ongoing international recruitment to compliment the other HR strategies

• Recruiting a Chief Operating Officer (COO) to support the ongoing growth of Mastermyne

• Also strengthening middle management through targeted recruitment

• Targeted tendering on the major project opportunities that will commence in FY13 and focus on strategic tenders that support the strategy of expanded range of services, geographical growth, tenure and strengthening customer relationships

• The operational strategy for FY12 is summarised as consolidate and strengthen our management team and systems while taking advantage of organic growth in existing projects

10

Mastermyne Group Long & Short Term Strategy

Longer Term

• Position the business to take on the larger projects that are coming on line over the next 3 / 4 years in Qld & NSW

• Adding strategic equipment to the fleet to execute these larger projects

• Renew the production linked contracts which underpin the order book and provide us visibility and stability

• Continue to expand the Hunter Valley operations

• Target growth in the Services Division on the back of the new projects

• Add to the products offered in the engineering business through developing new products, consumables and business relationships.

• Continue to invest in training the management team and workforce

==> picture [690 x 110] intentionally omitted <==

----- Start of picture text -----

11
----- End of picture text -----

Summing Up

• Safety remains a core value and we are seeing improvement in the results with the increased focus. We wont stop here and will continue to work towards zero harm in our business

• We had strong revenue and profit performance in FY2011 and we have had a very strong start to the current financial year.

• Our success in recruiting and retaining our workforce is business critical and will continue to underpin the growth of the business. We are confident we have the right strategy and its working.

• We are strengthening our management team through up skilling and recruitment where necessary. This management team has been instrumental in the success of the business to date and we are very confident they, in addition with new staff, will be the driving force behind the ongoing continued success of this business.

• We are experiencing good growth from existing projects and our relationships with key customers is positioning the business for some exciting opportunities in the near future.

• Our focus on growth in the Hunter Valley region and in the Engineering workshop will also continue to enhance our service offerings and will see us build on our footprint in this Hunter area.

• The Services Division is on track through the new contract and has opportunities for further growth in 2013.

• The outlook for the Mastermyne Group remains very positive supported by a strong order book, good visibility on earnings, a burgeoning pipeline and excellent relationships with our customers.

• I am confident our company will continue its strong performance and remain a sound investment for our current and future shareholders.

Thank You

12