MLG OZ LIMITED — Investor Presentation 2021

Oct 4, 2021

Investor Update Morgans Conference

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5 OCTOBER 2021

MLG Business Model

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Integrated services model targeted at client processing facilities

Contract tenor typically 2-3 years with general standard terms and conditions and specific scope of work

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MINE
SITE
Construction
MINE Site
MINE
Materials
SITE Services
SITE
CLIENT
PROCESSING
Civil
FACILITY
Construction Haulage
MINE MINE
Road Crushing and
SITE SITE
Maintenance Screening
MINE
SITE
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BENEFIT OF INTEGRATED MODEL

• Single service provider

• Single contractual management touch point

• Reduced duplication (single workshop, shared equipment)

• Processing facilities typically long life

• Haulage can be adjusted to changing mine plans

• Builds long term client relationship

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Vertically integrated service offering

MLG delivers integrated production support services to embed MLG into customer operations

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Construction
Site Services Crushing and
Materials and Bulk Haulage
and Civil Works Screening
Quarries
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Export
Logistics
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• Strategic acquisition and positioning of quarry operations, throughout Western Australia near key regional centres

• Supply of bulk materials products for mining and civil projects

• Sand

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• Crusher feed

• Road maintenance

• Rehabilitation work

• Vehicle maintenance

• Machine and labour hire

• Tails Dam construction

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• Contract crushing - mobile plant

• Build Owned and Operated- fixed plant

• Concrete aggregate production

• Road base production

• General screening

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• Bulk material transfer

• General site haulage

• Bulk ore haulage services (on road and off road)

• Logistics

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• Bulk material import/export

• Container handling

• Esperance Port facility

• Aggregate

• Cement

• Lime

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Financial Information

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Financial Performance ahead of prospectus

Higher revenues mitigating some challenging cost pressures

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REVENUE EBITDA EBIT DIVIDEND $254.0m $42.7m $24.2m 1.71c/Share (Prospectus $241.6m) (Prospectus $41.0m) (Prospectus $24.3m) (Jan to June 2021) Higher demand for haulage and proceeds from cessation of Christmas Excludes costs associated with IPO. Excludes costs associated with IPO. 100% fully franked. Creek crushing services.

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$6.7m
Export
3% Logistics
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3%
Revenue
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• Pro forma revenue offsets fuel tax credits against fuel cost

• Pro Forma excludes cost associated with IPO

• Impairment charge taken against construction costs of Christmas creek fixed plants (circa $1m)

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Financial performance

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Higher revenues in FY21 mitigating some challenging cost pressures

Prospectus Data - Pro forma[1] revenue

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250
254
241
200
205
200
150
133
100
50
0
FY18 FY19 FY20 FY21F FY21A
Prospectus Data - Pro forma [1] EBITDA
40.0 42.7
41.0
30.0 34.0
24.5
20.0
15.6
10.0
0.0
FY18 FY19 FY20 FY21F FY21A
$Am
$Am
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FY21 Actual - Pro forma[1]

		Statutory Actuals FY20 FY21 172,529 191,818 28,858 55,478 3,749 6,720 3,311 3,470 147 329 208,594 257,815 (167,975) (200,112) 40,619 57,703 (14,866) (17,465) 25,753 40,238 (13,745) (18,519) 12,008 21,719	Statutory Actuals FY20 FY21 172,529 191,818 28,858 55,478 3,749 6,720 3,311 3,470 147 329 208,594 257,815 (167,975) (200,112) 40,619 57,703 (14,866) (17,465) 25,753 40,238 (13,745) (18,519) 12,008 21,719	Statutory Actuals FY20 FY21 172,529 191,818 28,858 55,478 3,749 6,720 3,311 3,470 147 329 208,594 257,815 (167,975) (200,112) 40,619 57,703 (14,866) (17,465) 25,753 40,238 (13,745) (18,519) 12,008 21,719	Pro Forma	Pro Forma
		Actuals			Prospectus Forecast	Pro Forma Actual
	$000’s Notes	FY20	FY21		FY21	FY21
	Revenue
	Mine Site Services and Bulk Haulage	172,529	191,818		189,864	191,818
	Crushingand Screening	28,858	55,478		47,842	55,478
	Export Logistics	3,749	6,720		3,891	6,720
	Fuel Tax Credits 2	3,311	3,470		-	-
	Other Income 2	147	329		-	-
	Total revenue	208,594	257,815		241,597	254,016
	Costs of sales	(167,975)	(200,112)		(184,622)	(196,313)
	Grossprofit	40,619	57,703		56,976	57,703
	General and administration	(14,866)	(17,465)		(15,938)	(14,984)
	EBITDA	25,753	40,238		41,038	42,719
	Depreciation 3	(13,745)	(18,519)		(16,752)	(18,519)
	EBIT	12,008	21,719		24,286	24,200
	Margins EBITDA EBIT				17.0% 10.0%	16.8% 9.5%

Notes: 2. Pro Forma offsets fuel tax credit revenue and other income against Costs of sales

3. Includes impairment of the Fixed Plants at the Fortescue’s Christmas Creek site in Actual and Pro Forma Actual FY21

Pro forma adjustments:

1.Adjusted for effect of new accounting standards (AASB9, AASB15 and AASB16), public company costs, and interest costs to reflect impact of proceeds from the offer. Revenue has been adjusted to offset fuel tax credits against cost of fuel rather than shown as revenue.

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Cashflow and Capital expenditure

Continued strong cash flow conversion and higher capex ahead of new contract start-ups in FY22

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• Historical positive operating cash flow allowing the business to cover the majority of the capital investment which has occurred across the same time period

• Higher FY21 capex includes investment in equipment for new projects at Jundee, and Paddington commencing in FY22

• Cash conversion rate lower due to a large outstanding debtor at 30 June 2021 (Debt has now been received)

Pro forma[1] cash flow summary

	Pro Forma1 Historical	Pro Forma1 Historical	Pro Forma1 Historical	Pro Forma1 Historical	Pro forma1 Forecast		Pro forma Actual
$'000	Notes	FY18	FY19	FY20	FY21		FY21
EBITDA		15,599	33,970	24,482	41,038		42,719
Movement in net working capital		8,208	(8,890)	4,536	(851)		(2,686)
Other operating cash flows	2	-	38	17	-		-
Tax paid		(3,858)	(2,714)	(2,132)	(2,626)		(3,139)
Operating Cash Flows		19,949	22,404	26,904	37,561		36,894
Net Replacement Capex		(563)	(5,604)	(11,337)	(9,267)		(10,735)
Growth Capex		(24,065)	(19,822)	(36,746)	(22,206)		(30,415)
Net Cash Flows before financing	3	(4,679)	(3,022)	(21,179)	6,088		(4,256)
Cash flow metrics FY18 FY19 FY20 FY21F FY21A
Operating cash flow conversion 127.9% 65.9% 109.9% 91.5% 86.4%

Pro forma adjustments:

• 1.Adjusted for effect of new accounting standards (AASB9, AASB15 and AASB16), public company costs, and interest costs to reflect impact of proceeds from the offer. Revenue has been adjusted to offset fuel tax credits against cost of fuel rather than shown as revenue. 2 Movement in net working capital represents the movement between the opening and closing working capital positions in each period presented

• The Pro Forma Historical Cash Flows and Pro Forma Forecast Cash Flows have been presented at the net cash flows before financing level as the capital and debt structure of MLG will be different post Offer and as the repayment of debt mentioned above is expected to be spread across debt facilities and various hire purchase arrangements

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Private & Confidential

Balance Sheet

Lower net debt as compared to 30 June 2020 providing capacity for growth following receipts of IPO proceeds

		Consolidated	Consolidated
	$000’s	30 June 2021	30 June 2020
	Cash and cash equivalents Trade and other receivables	9,689 42,226	1,005 33,392
	Inventories	14,214	9,866
	Total current assets	66,130	44,264
	Property,plant and equipment	152,098	128,012
	Other non-current assets	4,660	6,466
	Total non-current assets	156,757	134,478
	Total assets	222,887	178,742
	Trade and otherpayables	47,074	35,049
	Financial liabilities	28,229	49,007
	Lease liabilities	1,525	1,450
	Provisions	1,009	763
	Total current liabilities	77,836	86,270
	Financial liabilities	18,226	28,402
	Lease liabilities	3,287	4,515
	Other non-current liabilities	9,313	5,076
	Total non-current liabilities	30,826	37,993
	Total liabilities	108,662	124,262
	Net assets	114,225	54,480

• Strong cash position at 30 June 2021 of $9.7m

• • Net Assets increase to $114.2m, underpinned by $152.1m of property, plant and equipment

• Utilisation of proceeds from IPO to reduce financial liabilities by $30.9m

• Net debt at $36.8m as at 30 June following higher capital expenditure (0.86x EBITDA)

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Private & Confidential

Robust industry dynamics driving growth from existing clients with continuing demand for greater ore movements

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High levels of activity in Industry continue

Level of enquiry and new project commencement remains very high despite supply challenges

• Challenging labour market conditions

• Rising wage rates

• High demand across the industry for trained and experienced operators

• High demand for equipment within the industry

  • Delays in supply from OEM’s

  • Limited competitor scale in MLG space

LABOUR AND EQUIPMENT

• Preference to suppliers with fleet capacity (existing or on order)

• Covid restrictions continue to cause delays

• Inability to source labour from eastern states

• Sea lane shipping costs suffering severe escalation of cost

• Equipment orders delayed – utilising subcontractors

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• New client awards

• Norton Gold Fields – Paddington Operation (started September 2021)

• Litam MOU – Bald Hill lithium project (commence Q2 of FY2022)

• Mincor Resources NL – Kambalda Nickel (early next year)

• Roy Hill crushing and screening program commencing October 2021

• Existing client growth

• Northern Star (Existing Client) – Jundee expansion (started October 2021)

• Western Areas, Cosmic Boy contract (3 years)

• Clients engaging in cost mitigation strategies

• Site specific allowances

• Rate increases underpinned by contractual rise and fall mechanisms

• Open to considering shared risk modelling

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Market position and client portfolio provides strong outlook

Material projects commencing in H1 and large tenders on horizon for H2

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MLG FLEET AND STRATEGIC POSITION

FINANCIAL OUTLOOK FOR FY22

• Pre ordered fleet arriving

• Machine rebuild capability expanding

• Scale of fleet and market position.

CLIENT PORTFOLIO

• Existing client base with significant expansion plans

• Market aware of lower H1 expectations

  • Loss of Christmas Creek contribution

  • Materially higher start-up costs for new projects

  • Review of Lime business (importation) viability due to material increase in importation cost (sea freight)

• Willing to consider risk sharing and site specific incentive programs

• Portfolio optimisation opportunities to maximise margin.

• Stronger second half expected

• new projects fully mobilise

CRUSHING CAPACITY

• Availability of fixed plants for redeployment

• Targeting longer term contractual opportunities

• New projects commencing in second half (Mincor, Lithco)

• Rate rise negotiations commenced in Q2 flow through into second half

• Not required to service current needs

TENDER PIPELINE

• High volume of tenders in progress

• Roy Hill relationship evolving with longer term expansion opportunity

• Growth into new metals markets

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Strong pipeline of potential growth opportunities

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MLG has identified and is actively pursuing a range of potential growth initiatives

Further contract wins

• Utilise differentiated business capability to provide multiple support services into one delivery framework

• Consolidate MLG’s position as a critical component of the client’s operations and the production supply chain

1

Bolt-on acquisition opportunities

• Complementary potential acquisition opportunities have been identified by MLG, which would broaden MLG’s service offering and geographical reach

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Expanded service offering

• MLGs growth to date has been driven by the ability to offer a range of capabilities within the production process through one delivery model

• Seek to further enhance and expand this service offering to provide MLG with a potential competitive advantage in future tender processes 2

Commodity market diversification

• Current MLG clients consist of low-cost gold, nickel, and iron ore operations

• Seek further exposure to new commodities to provide further portfolio diversification and exposure to long-life assets

• More diverse commodity exposure will provide opportunities to increase project pipeline 5

Pursuit of strategic assets

• Continued pursuit of strategic assets (such as quarries) near long-life assets with the aim of creating a competitive advantage

• Quarries established to date have provided a competitive advantage in unlocking further contract expansion within the existing client base

• 3

• Australia-wide operations

• • Significant potential opportunity to expand the scope of MLG’s offering to mining and non-mining clients and operations across Australia

• • MLG will actively pursue selective and complementary opportunities 6

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Private & Confidential

E: investors@mlgoz.com.au

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