Xtract Resources Plc (AIM:XTR) First Quarter Update Presentation London 4 May 2016

Transcription

1 Xtract Resources Plc (AIM:XTR) First Quarter Update Presentation London 4 May 2016

2 Through our core strengths we are Xtracting shareholder value Opportunity spotters Value enhancing acquisitions Optimising project metrics Improving operational delivery We are Xtract Resources PLC (XTR:AIM) Corporate Overview

3 Vision our journey, our destination We want to build a mining house that is profitable and able to self fund its development and pay a dividend to our shareholders What does this mean? Build up our cash position and minimise dilution Leverage and recycle our current asset portfolio Target further growth opportunities that can deliver imiment returns 3

4 Our current reality where we are Project level Producing Chepica Gold mine that is starting to deliver Flexibility issues in terms of volume resolved Geological model in place and resource estimate underway Mining of tailings dam could increase output signifiicantly Completing the Manica BFS that is a game changer for the company Timing to completion is critical Project funding Manica alluvial JV partnership with MTI Production to start June

5 Understanding what makes us different Have a producing mine that can generate cash flow Have acquired a world class gold deposit that will transform the company (and that comes with a virtually completed BFS) We have formed successful partnerships that will allow us to grow our ability to generate cash flow with minimal capital risk We have built a management team that has a proven track record and have shown that they do not give up untill the job is done We have shown that we have the ability to raise cash when required 5

6 Strategy how will we get there? Ensure that Chepica delivers on its production plan current cash flow Start Manica alluvial mining operations within a relatively short period of time to grow the margin therefore creating more sustainibility in terms of capital agility Complete the Manica BFS and secure project finance once in production our objective of paying a dividend will be in reach and we will be fully self funded Stakeholder communication: Manica Gold Project significant improvement in project metrics & revised timeline Chepica surface drilling results estimate of geological potential at Colin Chepica Tailings project economic metrics Company cash flow & funding Manica Resource upgrade Chepica Resource upgrade 6

7 Manica Gold project All aspects of acquisition fulfilled BFS completion on track to be completed in Q

8 Alluvial Gold project - Manica Total re-design of project completed First alluvial plant will be on site on 1 June 2016 Alluvial reef production will build up to in excess of 850,000 ton per month This will be the largest alluvial gold mining operation in Africa First production to start in June 2016 MTI to invest cus$20 million in Capex 8

9 Mining flexibility resolved Building towards consistent delivery We are Xtract Resources PLC (XTR:AIM) Chepica Operational review

10 Chepica what are our threats? Having enough reef ends (flexibility) / keeping the mill full Understanding geological continuity at Colin Section / proper development lay-outs that avoid bad ground conditions when stoping commences Meeting our option payment obligations (security of tenure) Zones of weak ground conditions that either stops or slows down our development and impacts the timing of stoping operations Storage capacity of current Tailings dam 10

11 Chepica what are our tactics? To continue to develop the reef on 5, 6 and 7 level at the Colin section (developing the A Reef block) Blast a second decline at Colin to access the B-reef block Establish Chepica decline on reef within the next month Complete Resource estimate for Chepica Continue to build surface stockpile from off mine sources Raise tailings dam wall by approximately 5m (all permissions in place) Complete a feasibility study on mining the Chepica tailings dam create additional depositional storage and cash flow 11

12 Aerial view of Chepica Gold Mine Taken with Phantom 3 Professional Drone 12

13 Q4 Actuals - unaudited Production 2015 QTR QTR 1 Planned Actual Planned Actual On reef meters On reef tons Off reef meters Off reef tons On reef gold grade (g/t) - 2,25 2,98 2,15 On reef Copper grade (%) - 0,80% 0,99% 0,83% Decline/Incline meters Decline/Incline tons Mined tons Stope gold grade (g/t) 2,76 1,8 2,52 2,45 In terms of Revenue Q1 only accounts for 1 month of sale production but 3 months of cost as a result of plant being stopped for almost 2 months Stope Copper grade (%) 1,00% 0,80% 0,90% 0,75% Total tons milled Mill Gold grade (g/t) 2,85 1,65 2,82 2,25 Mill Copper grade (%) 1,01% 0,75% 0,96% 0,80% Financial Revenue Costs Profit Capital

14 Chepica tailings dam project Surface stockpiles Processing plant 0,6 to 1,5g/t Tailings dam extension 14

15 Lost Time Injuries (LTI) Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 15

16 Lost Time Injury Frequency Rate (LTIFR) Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 16

17 Mill tons Tons Plant stopped Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 17

18 Stockpile tons (cumulative) Tons Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 18

19 Total development metres m Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 19

20 Concentrate grade Au (g/t) Au (g/t) Plant stopped Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 20

21 Gold produced Oz Plant stopped 50 - Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 21

22 Revenue US$ Plant stopped Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 22

23 Costs US$ Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 23

24 Profit/Loss US$ Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar

25 Capex US$ Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 25

26 Cost breakdown 2015 Q4 Total cost : US$167k 2016 Q1 Total cost : US$249k 1% 3% 13% 12% 4% 11% 17% 19% 4% 47% 4% 39% 13% 13% Mining cost Processing cost Tramming & transport Electricity Salaries Consumables Other 26

27 Numerous significant drill intersections Colin 1: At 76.1m: 3.86g/t Colin 2: At 114.8m: 1.17g/t Colin 2: At 129m: 12.81g/t Colin 3: At 55.2m: 1.0g/t Colin 3: At 116.2m: 2.5g/t Colin 4: At 116.8m: 4.55g/t Colin 4: At 126m: 2.54g/t Colin 5: At 122m: 4.55g/t Colin 6: At 91m: 1.36g/t *Widths reported refer to borehole intersection widths and reflect mineralized zones identified in core 27

28 Colin mineralized intersection 28

29 Drilling at Colin mine Surface 3,86g/t Access development 3,5g/t over 3m width Colin adit entrance Position of new decline to access B-reef block Reef projection A-Reef block 300m New boreholes drilled from surface on side of mountain 29

30 Through our core strengths we are Xtracting shareholder value Opportunity spotters Value enhancing acquisitions Optimising project metrics Improving operational delivery We are Xtract Resources PLC (XTR:AIM)

31 In Summary Revenue of US$230,663 for only 1 month of production (project this over three months we would have exceeded our plan) Record tons of 18,212t mined Stoping operations commenced Total development increased by 36% to 506m which continues to build mining flexibility Surface stockpile continues to grow by 7,343t in excess of 18,000t Chepica adit 30m from opening up 2 more reef drives Surface boreholes confirm major mineralized intersections to depth at Colin Robust geological model in place for first time Major opportunity in mining tailings dam management estimates additional production of 15kt per month 31

32 Potential newsflow for next quarter Reporting on underground drilling results New resource statement for the Chepica mine New resource statement for Manica Gold project Update on production schedule for Alluvial Gold operations Economics of tailings gold project Update on re-negotiation of option payments for the mine Update on status of lifting tailings dam wall 32

33 Media and Investor Enquiries: Justine James Gable Communications 34 Lime Street London EC3M 7AT T: +44 (0) Company Secretary: Phil Dexter St James s Corporate Services Limited Suite 31, 2 nd Floor, 107 Cheapside London EC2V 6DN T: +44 (0) phil.dexter@corpserv.co.uk Contact Details

34 Disclaimer This presentation ( Presentation ) is being issued by Xtract Resources PLC. (the Company or Xtract ) for information purposes only. The content of this Presentation has not been approved by an authorised person for the purposes of Section 21(2)(b) of the Financial Services and Markets Act Reliance on this Presentation for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property orother assets invested. This Presentation is not an admission document or an advertisement and is being provided for information purposes only and does not constitute or form part of, and should not be construed as, an offer or invitation to sell or any solicitation of any offer to purchase or subscribe for any ordinary shares of the Company in the United States or any other jurisdiction. Neither this Presentation, nor any part of it nor anything contained or referred to in it, nor the fact of its distribution, should form the basis of or be relied on in connection with or act as an inducement in relation to a decision to purchase or subscribe for or enter into any contract or make any other commitment whatsoever in relation to any securities of the Company. No representation or warranty, express or implied, is given by or on behalf of the Company, its directors and advisors or any other person as to the accuracy or completeness of the information or opinions contained in this Presentation and no liability whatsoever is accepted by the Company, ts directors or advisors or any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. The Presentation has been prepared by the management of the Company for information purposes only. The Company has not been and will not be registered under the United States Investment Company Act of 1940, as amended (the "Investment Company Act"). In addition, the Ordinary Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"). Consequently, the Ordinary Shares may not be offered, sold or otherwise transferred within the United States or to, or for the account or benefit of, US persons, except pursuant to an exemption from the registration requirements of the Securities Act and under circumstances which will not require the Company to register under the Investment Company Act. No public offering of the ordinary shares of the Company is being made in the United States. Certain statements, beliefs and opinions in this Presentation are forward-looking. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this Presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events orotherwise. Youshould not place undue reliance on forward-looking statements, which speak only asofthe date ofthis Presentation. In receiving any information relating to the Company (whether in written or oral form), including the information in this Presentation, you will be deemed to have represented and agreed for the benefit of the Company (i) that you will only use such information for the purposes of discussions with the Company, (ii) to hold such information in strict confidence and not to disclose it (or any discussions with the Company) to any person, except as may be required by law, regulation or court order, (iii) not to reproduce or distribute, in whole or in part, (directly or indirectly) any of the information in this Presentation; (iv) that you will comply with all laws applicable to possessing such information, including without limitation insider trading laws, market abuse regulations and applicable regulations and recommendations of the UK Financial Services Authority or any other relevant regulator, and (v) that you are permitted, in accordance with all applicable laws, to receive such information. Issued by Xtract Resources PLC. 4 th floor 2 Cromwell Place, South Kensington, London SW7 2JE 34