Mining High Grade Gold in Burkina Faso

Transcription

1 Mining High Grade Gold in Burkina Faso 2018 Second Quarter Financial Results August 14,

2 Cautionary Statement This presentation contains forward-looking information. Forward looking information contained in this presentation includes, but is not limited to, statements with respect to: (i) the estimation of measured, inferred and indicated mineral resources and proven and probable mineral reserves including, without limitation, statements with respect to the potential establishment of new mineral resources and/or reserves and the expansion potential of existing mineral resources/reserves and the expansion potential of mining operations including with respect to proposed development at Bagassi South and the anticipated timing thereof; (ii) proposed exploration and development activities (including proposed plant expansion), and the anticipated nature, success and timing thereof; (iii) production, earnings, recovery rates and cost guidance as well as future sources of funding, capital expenditures and exploration budgets, (iv) permitting; and (v) expansion and growth potential and the anticipated timing thereof including the anticipated production at Bagassi South and the timing thereof, and future economics and development activities related thereto; (vi) expectations the Company will be within its 2018 cost guidance; (vii) statements that are not of historical fact; and (viii) any potential share buyback by the Company. For further details regarding the Yaramoko project, please refer to the technical report entitled Technical Report for the Yaramoko Gold Mine, Burkina Faso dated December 20, 2017 (the Technical Report ) as well as the press releases of Roxgold Inc. ( Roxgold or the Company ) dated April 18, 2017 and the November 6, 2017, Bagassi South Feasibility Study news release. These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. In certain cases, forward-looking information may be identified by such terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Forward-looking information contained in this presentation is based on certain factors and assumptions regarding, among other things, the estimation of mineral resources and mineral reserves (and potential establishment and increases in respect thereof), the potential expansion of mining operations, the realization of resource estimates and reserve estimates, gold metal prices, the timing and amount of future exploration and development expenditures, and materials to continue to explore and develop the Yaramoko project in the short and long-term, the progress of exploration and development activities, the receipt of necessary regulatory approvals and permits, and assumptions with respect to currency fluctuations, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks inherent in the exploration, risks relating to variations in mineral resources and mineral reserves, grade or recovery rates resulting from current exploration and development activities (including risks that new mineral resources and/or reserves may not be established, or the anticipated expansion potential of existing mineral resources/reserves or mining operations may not be realized), risks relating to changes in gold prices and the worldwide demand for and supply of gold, risks related to increased competition in the mining industry generally, risks related to current global financial conditions, uncertainties inherent in the estimation of mineral resources and mineral reserves, access and supply risks, reliance on key personnel, operational risks inherent in the conduct of mining activities including the risk of accidents, labour disputes, increases in capital and operating costs and the risk of delays or regulatory risks, including risks relating to the acquisition of the necessary licenses and permits, capitalization and liquidity risks, risks related to disputes concerning property titles and interest, and environmental risks. Please refer to the 2017 Management s Discussion and Analysis filed on SEDAR at on March 28, 2018 for political, environmental or other risks that could materially affect the development of mineral resources and mineral reserves and other forward looking matters. This list is not exhaustive of the factors that may affect any of the Company's forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking information. The Company does not undertake to update any forward-looking information that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws. Unless stated otherwise herein, the following Qualified Persons, as defined in National Instrument , have prepared or supervised the preparation of the scientific or technical information presented in this presentation: Benny Zhang, P. Eng (SRK Consulting Canada Inc.), Sebastien Bernier (SRK Consulting Canada Inc.), Iain Cox, Interim Chief Operating Officer (Roxgold), Craig Richards (Roxgold). All amounts are in U.S. dollars unless otherwise stated. 2

3 2018 Second Quarter Results Conference Call Participants John Dorward President & CEO Iain Cox Interim COO Craig Richards Principal Mining Engineer Eric Pick VP, Corporate Development 3

4 2018 Second Quarter Highlights All amounts in U.S. dollars unless otherwise indicated Currently more than 5 million hours Lost Time Injury free 86,831 t Ore Mined 35,828 oz Gold Production $424 Cash Operating Cost 1 /oz Produced $25.7M Cash Flow from Mining Operations 1 75,417 t Record Quarterly Ore Processed 14.4 g/t Average Head Grade $718 All-In Sustaining Cost 1 /oz Sold $0.07 Cash Flow from Mining Operations per Share 1 1. This is a non-ifrs financial performance measure with no standard definition under IFRS. See the non-ifrs financial performance measure section of the Company s Q MD&A available on the Company s website at or 4

5 2018 Second Quarter Operational Results 76,280 ounces of gold produced in H putting Roxgold in a strong position to achieve the upper end of its increased guidance range of 120, ,000 ounces for the full 2018 year ROM Stocks of 45,877 tonnes at 12.1 g/t Au at the end of the quarter representing ~2 months of plant feed Q2 18 Q2 17 YOY Change Gold Produced (ounces) 35,828 27,970 28% Ore Mined (tonnes) 86,831 66,044 31% Ore Development (m) 1,200 1, /Q3 17/Q4 18/Q1 18/Q2 Ore Mined (tonnes) Gold Produced (ounces) 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, /Q3 17/Q4 18/Q1 18/Q2 Ore Processed (tonnes) Ore Processed (tonnes) 75,417 65,159 16% Head Grade (g/t Au) % Gold Recovery (%) NM Mill Operating Time (%) (1.5%) 120, ,000 80,000 60,000 40,000 20, /Q3 17/Q4 18/Q1 18/Q2 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, /Q3 17/Q4 18/Q1 18/Q2 5

6 Ore Processed and Gold Recovery Record quarterly processing throughput of 75,417 ounces representing 12% above nameplate capacity 78,000 76,000 74,000 72,000 70,000 68,000 66,000 64,000 62,000 60,000 Q Q Q Q Q Ore Processed (tonnes) Gold Recovery (%) 6

7 2018 Second Quarter Financial Highlights All amounts in U.S. dollars unless otherwise indicated Q Q YOY Change Gold produced (ounces) 35,828 27,970 28% Gold sold (ounces) 35,320 28,788 23% Revenue $46M $36M 27% Average realized gold price $1,296/oz $1,254/oz 3% Cash operating cost 1 $424/oz $498/oz (15%) Total cash cost 1 (per ounce sold) $483/oz $549/oz (12%) Sustaining capital cost 1 (per ounce sold) $190/oz $280/oz (32%) Site all-in sustaining cost 1,2 (per ounce sold) $672/oz $829/oz (19%) Corporate, sustaining and in-country costs 1 $46/oz $44/oz 5% All-in sustaining cost 1 (per ounce sold) $718/oz $873/oz (18%) Cash flow from mining operations 1 $25.7M $18.6M 38% Cash flow from mining operations per share 1 $0.07/C$0.09 $0.05/C$ % Adjusted earnings per share 1 $0.02/C$0.03 $0.01/C$ % 1. This is a non-ifrs financial performance measure with no standard definition under IFRS. See the non-ifrs financial performance measure section of the Company s Q MD&A available on or 2. Site All-in sustaining costs excludes corporate G&A and in-country corporate costs. Cash Operating Cost 1 $424/oz produced All-In Sustaining Cost 1 $718/oz sold EBITDA Margin 1 51% Return on Equity (Last twelve Months) 26% Cash Flow From Mining Operations 1 $25.7M or $0.07/C$0.09 per share 7

8 Strong Mine Operating Margins 1 All amounts in U.S. dollars $1,400 $1,200 $1,000 $800 $813 $878 $782 $764 $705 $600 $400 $200 $- Q Q Q Q Q Cash operating cost Total cash cost Mining operating margin AVG realized gold price 1. This is a non-ifrs financial performance measure with no standard definition under IFRS. See the non-ifrs financial performance measure section of the Company s Q MD&A available on the Company s website at or 8

9 2018 Year to Date Cash Position In millions of U.S. dollars Investing in underground development and Bagassi South while continuing to build cash $4.5 million of VAT reimbursed in April 2018 and $5.0 million of VAT reimbursed in July 9

10 Strong Balance Sheet As of June 30, 2018 in U.S. dollars Self-funding Bagassi South Expansion Project cost of ~$30 million Reduced long-term debt by 43% in 18 months Implemented share buy back of up to 10 million common shares Cash on hand Long-Term Debt 1 ~$66M ~$43M 1. Represents the Face Value of Long-term debt representing the remaining balance owing on the Amended Facility. 10

11 Bagassi South Expansion 11

12 Bagassi South Second High-Grade, Low Cost Underground Mine Project construction continues tracking to plan Boxcut excavation completed in early July Construction of surface infrastructure elements largely completed Overhead powerline to Bagassi South completed in August ~40% increase in Yaramoko gold production Estimated average gold production of 40,000 oz per year Cash Operating Cost 1 $361 per oz (LOM) All-in Sustaining Cost 1 $630 per oz (LOM) Funded by internal cash flow Pre-production capital - $29.6 million Utilizes synergies with the existing Yaramoko operation personnel and equipment First ore expected Q This is a non-ifrs financial performance measure with no standard definition under IFRS. See the non-ifrs financial performance measure section of the Company s 2018 Q2 MD&A available on the Company s website at or 12

13 Process Plant Expansion Continuing to Progress Well Expanded crushing circuit Expanded gold room Expanded leaching circuit Low voltage switch room and transformer Additional water tank Plant expansion sees throughput increased from 750 tonnes per day ( tpd ) to 1,100 tpd Engineering and procurement activities are complete Secondary crusher has been shipped; expected to be delivered to site in October as planned Overall project completion expected to be on schedule in latter part of Q4 13

14 Growth 14

15 Focus on Regional Exploration Siou 10 Km Large regional land package of approximately 230 km 2, located on the Houndé Belt Yaramoko Niankongo Boni Shear North Boni Shear Central Majority of known anomalies and deposits are located along the Boni Shear regional break and the second order Yaramoko Shear Yaro 300 Zone Haho 109 Zone 55 Zone 55 Zone 2018 drilling program shifting to a more regional focus with drilling along the Boni Shear, Haho, Kaho and Houko targets - 64,000 metres of drilling was planned for 2018, with approximately 20,500 metres drilled to date. Legend Basaltic Flows Tonalite Granite Granodiorite Tarkwaian Basin Volcaniclastic Houko Hounde Project 12 Km Bagassi South Kaho Several low grade structures have been identified in the Boni Shear and Haho programs, for follow up in Q4 Two large auger grids on the Houko concession and Tarkwaian basin completed in Q1 - Additional auger program commenced over Kaho granite, with completion in early Q4 15

16 55 Zone Drilling Diamond drilling resumed at 55 Zone Surface and underground drill rigs 7,600m completed Significant intercepts include: DD-446: g/t Au from 242.6m DD-455: 9.3 g.t Au from 355.6m DD-456A: 47.4 g/t Au from 335.3m 16

17 Bagassi South Drilling YRM-18-DD-BGS-370A ~7,500m completed during Q2 Drilled down plunge extension of western pod, and near surface infill of eastern shoot. Significant intercepts for Q include: BGS-370A: 8.0 g/t Au from 209.4m BGS-371: 20.9 g/t Au from 196.1m BGS-373: 19.2 g/t Au from 210.4m BGS-392: 52.5 g/t Au from 97.6 BGS-393: 66.6 g/t Au from 81.3m BGS-405: 18.4 g/t Au from 102.5m BGS-406: 15.5 g/t Au from 88.6m 17

18 2018 Guidance Gold production of 120, ,000 oz Cash Operating Cost 1 (per ounce produced) $450-$475 AISC 1 (per ounce sold) $740-$790 Bagassi South Pre-Production Capital Expenditure $30 million Exploration Budget $9 million 1. This is a non-ifrs financial performance measure with no standard definition under IFRS. See the non-ifrs financial performance measure section of the Company s Q MD&A available on the Company s website at or 18

19 Q&A Kelley Stamm Manager, Investor Relations & Communications 360 Bay Street, Suite 500 Toronto, ON M5H 2V