LSE:ACA. Acacia Mining plc. Unearthing Africa s Potential

Transcription

1 LSE:ACA Acacia Mining plc Unearthing Africa s Potential

2 Important Notice This presentation includes forward-looking statements that express or imply expectations of future events or results as opposed to historical facts. These statements include, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, projects, and statements regarding future performance. Forward-looking statements are generally identified by the words plans, expects, anticipates, believes, intends, estimates and other similar expressions. All forward-looking statements involve a number of risks, uncertainties and other factors, many of which are beyond the control of Acacia, which could cause actual results and developments to differ materially from those expressed in, or implied by, the forward-looking statements contained herein. Factors that could cause or contribute to differences between the actual results, performance and achievements of Acacia include, but are not limited to, changes or developments in political, economic or business conditions or national or local legislation or regulation in countries in which Acacia conducts - or may in the future conduct - business, industry trends, competition, fluctuations in the spot and forward price of gold or certain other commodity prices (such as copper and diesel), currency fluctuations (including the US dollar, South African rand, Kenyan shilling and Tanzanian shilling exchange rates), Acacia s ability to successfully integrate acquisitions, Acacia s ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, and to process its mineral reserves successfully and in a timely manner, Acacia s ability to complete land acquisitions required to support its mining activities, operational or technical difficulties which may occur in the context of mining activities, delays and technical challenges associated with the completion of projects, risk of trespass, theft and vandalism, changes in Acacia s business strategy and ongoing implementation of operational reviews, as well as risks and hazards associated with the business of mineral exploration, development, mining and production and risks and factors affecting the gold mining industry in general. Although Acacia s management believes that the expectations reflected in such forward-looking statements are reasonable, Acacia cannot give assurances that such statements will prove to be correct. Accordingly, investors should not place reliance on forward-looking statements contained in this presentation. Any forward-looking statements in this presentation only reflect information available at the time of preparation. Subject to the requirements of the Disclosure and Transparency Rules and the Listing Rules or applicable law, Acacia explicitly disclaims any obligation or undertaking publicly to update or revise any forwardlooking statements in this presentation, whether as a result of new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast or estimate and no statement made should be interpreted to mean that Acacia s profits or earnings per share for any future period will necessarily match or exceed its historical published profits or earnings per share. Mineral reserves and mineral resources estimates contained in this presentation have been calculated as at 31 December 2014 in accordance with National Instrument as required by Canadian securities regulatory authorities. Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definitions were followed for mineral reserves and resources. The reserves and resources figures stated are estimates. No assurances whatsoever can be given that the indicated quantities of metal will be produced and totals stated may not add up due to rounding. You are reminded that you have received this presentation on the basis that you are a person to whom this presentation may be lawfully made and delivered. You may not and are not authorised to: (i) reproduce or publish this presentation; or (ii) distribute, disclose or pass on this presentation to any other person, in whole or in part, by any medium or in any form, in breach of any applicable securities laws. BY ACCEPTING THIS PRESENTATION, YOU ACKNOWLEDGE AND AGREE TO THE CONTENTS OF THIS DISCLAIMER AND YOU AGREE TO BE BOUND BY THE FOREGOING LIMITATIONS. Company Presentation 2

3 Introduction

4 What we stand for 1 A leading asset portfolio in Africa Our Three Pillars 2 Focused on free cash flow Our People 3 Disciplined capital allocation Our Relationships Our Business 4 Becoming the partner of choice 5 Growing our footprint unearthing Africa s potential Company Presentation 4

5 Overview A leading asset portfolio amongst our peers Our Locations Business Overview World class high grade narrow Bulyanhulu vein deposit Life of mine in excess of 30 years High-grade open pit and North Mara underground mine Tintinba Project - Mali Hounde Belt JVs Burkina Faso Bulyanhulu Tanzania Buzwagi Tanzania West Kenya JV Kenya North Mara Tanzania Buzwagi 9 year life of mine Low-grade bulk deposit with a single large open pit 5 year life of mine, harvest mode Contrarian view on exploration Exploration Building pan African portfolio of Producing mines Exploration properties prospective acreage Company Presentation 5

6 US$/ounce Driving cost reductions Delivered a 35% reduction in AISC since 2012 AISC and Cash Cost Evolution (US$/oz) 1,800 1,600 1,400 1,200 1, FY 12 FY 13 FY 14 FY 15E 15-19E Avg Cash cost / ounce AISC / ounce Company Presentation 6

7 EUS/$ million Outlook Full year guidance maintained with disciplined spend reducing capex Production (koz) E E Avg AISC per ounce sold (US$/oz) 1,500 1,300 1, ,561 1,346 1,105 1,050-1, E E Avg Cash cost per ounce sold (US$/oz) Capital Expenditure (US$ Million) Expansion Cap Dev't E E Avg Sustaining E E Avg 5 1 Sustaining capital guidance for 2015 includes US$15 million of land purchases which is not included in historic numbers as treated as a pre-payment for accounting purposes Company Presentation 7

8 Operations Overview

9 Bulyanhulu Year end 2014 underground reserves of 9.2Moz at 9.7g/t Produced 235koz at AISC of US$1,266/oz in 2014 (H1 15 $1,356/oz) Progressing implementation of efficient mechanised mining Significant investment in development to increase flexibility in mine plan Mine now being set up in order to deliver on its geological endowment Company Presentation 9

10 Bulyanhulu Reef 1 & 2 Reef 1 Reef 2 Company Presentation 10

11 North Mara Year end 2014 reserves of 2.0Moz at 2.6g/t Produced 274koz at AISC of US$947/oz in 2014 (H1 15 $893/oz) Combined open pit (Nyabirama) & underground (Gokona) operation Local community relations significantly improved Company Presentation 11

12 Further underground potential at Gokona Delineated a further 850koz in inferred resource beneath 990 mrl, to be tested by staged drilling from underground platforms Company Presentation 12

13 Assessing the potential at Nyabirama Drilling programme underway at Nyabirama to upgrade ounces in the open pit and test underground potential Phase 1 - priority 2 Potential ounce additions Potential UG follow up drilling Phase 1 - priority 1 High potential ounce additions Company Presentation 13

14 Buzwagi Year end 2014 Reserves of 900Koz at 1.35g/t Produced 210koz at AISC of US$1,055/oz in 2014 (H1 $1,089/oz) Mine in harvest mode to ensure cash generation LOM includes two years of mining, followed by processing of stockpiles Company Presentation 14

15 Exploration

16 Exploration Exploration is a key driver of value and now is the time to invest Drove 2.3Moz of resource additions at Bulyanhulu in 2014 Expanded our footprint across Africa Looking to further expand exploration portfolio Annual spend to be maintained at ~US$20 million Company Presentation 16

17 Building a portfolio of projects Continuing to expand our footprint across Africa Tintinba Project Mali 150sq km along highly prospective Senegal-Mali Shear Zone Expect to start soil sampling and IP in October Initial drilling of targets planned for Q West Kenya JV Kenya 2,200 sqkm - Liranda corridor showing best results to date Several narrow high grade vein systems identified Current drilling to scope potential size of system Houndé Belt JVs Burkina Faso 3 exploration joint ventures covering 2,400sqkm of the Houndé Belt Positive initial drilling on South Houndé JV New gold trends identified from initial soil sampling on new projects Bulyanhulu Tanzania U/G Reef 2 drilling programme - target of 5Moz 12,500m of drilling in H2 Near mine programme for repeat reefs Tested Safari zone in H1, results awaited Company Presentation 17

18 Kenya West Kenya JV Promising drill results on Liranda Corridor follow-up drill programmes underway Liranda Corridor showing best results to date from drilling results along 12km trend To date narrow high grade vein systems identified current drilling to determine if potential for sufficient scale on several of the better shoots 2015 Budget US$8 million Company Presentation 18

19 Burkina Faso Houndé Belt Multiple structural domains with extensive surface gold anomalies 3 projects now acquired under joint venture for 2,400sqkm in southern Houndé Belt Drilling on South Hounde JV encouraging extensions to exiting trends and new prospects identified Extensive soil sampling programmes undertaken on all 3 joint venture projects to identify further drill targets 2015 Budget US$5.5 million Company Presentation 19

20 Mali Tintinba Project Entry into the Senegal-Mali Shear Zone 150 sq km acquired under option agreement on the highly prospective Senegal-Mali Shear Zone (host to >50Moz) Recent discoveries Fekola 3g/t and Gounkoto 5g/t Option agreement signed with local vendor to earn initially 85.5% and ultimately 90% of three properties Limited upfront payment and NSR capped at US$2m on production Preliminary reconnaissance work started in late June Expect to start soil sampling, IP and aeromagnetics programmes after wet season in October 2015 Initial drilling of targets by Q Company Presentation 20

21 Investment Case

22 Delivery to date Continuing track record of delivery against plan Key Deliverables Achieved When First production from CIL Expansion (Tailings reclaim) Q3 14 Board approval of Gokona Underground Q3 14 Expanded exploration footprint into Burkina Faso Q3 14 Group free cash generation Q3 14 Improved plant recoveries at Buzwagi Q3 14 Achievement of US$185 million of cost savings Q4 14 Acceleration of development at Bulyanhulu Q4 14 Gokona Underground Permits granted Q2 15 Gokona Underground First Stoping Ore Q2 15 Tailings Reclaim operating at nameplate Q2 15 Expanded exploration footprint into Mali Q2 15 First stoping ore from Upper East Zone at Bulyanhulu Q Continued improvement in grade at Bulyanhulu Q Target development rates achieved at Bulyanhulu Q Gokona Underground fully ramped up Q Bulyanhulu producing at annualised rate of 350koz Q Company Presentation 22

23 Our investment case Delivery of plan will drive cash flow at and below current gold prices Structural changes already made to our operations Established track record of delivering on plan to enhance the long-term attractiveness of our business Bulyanhulu staged ramp up on track for Q Set to generate strong cashflows at and below the current gold price Redoubling our focus on driving costs out of the business Current plan designed to drive returns to our shareholders without having to make short term changes to our business Company Presentation 23

24 Appendix Operating Metrics Reserves & Resources Our Locations

25 Q Operating Metrics Bulyanhulu* North Mara Buzwagi Group** Q2 15 Q2 14 Q2 15 Q2 14 Q2 15 Q2 14 Q2 15 Q2 14 Key operational information: Ounces produced oz 71,423 50,241 66,532 70,177 47,687 57, , ,206 Ounces sold oz 67,490 52,044 66,470 70,040 50,093 49, , ,563 Cash cost per ounce sold US$/oz AISC per ounce sold US$/oz 1,278 1, ,065 1,078 1,149 1,105 Copper production Klbs 1,489 1, ,503 2,318 3,993 3,454 Copper sold Klbs 1,377 1, ,624 1,721 4,001 2,874 Mining information: Tonnes mined Kt - - 3,364 4,335 6,682 5,803 10,322 10,355 Ore tonnes mined / hoisted Kt / ,333 1,333 2,398 2,115 Processing information: Ore milled Kt ,125 1,010 2,484 1,925 Head grade g/t % 89.8% Mill recovery % 90.3% 91.5% 86.8% 86.9% 93.8% 91.9% Cash cost per tonne milled US$/t * Bulyanhulu mining and processing information represent ROM only Tailings reprocessing statistics are as follows: Q215 Ore Milled 1.2g/t, recoveries of 67.8% for 11,291 ounces recovered. Q ounces produced in circuit ** Group figures for ore milled, head grade and mill recovery include reclaimed tailings in processing information Company Presentation 25

26 HY 2015 Operating Metrics Bulyanhulu* North Mara Buzwagi Group** H1 15 H1 14 H1 15 H1 14 H1 15 H1 14 H1 15 H1 14 Key operational information: Ounces produced oz 133, , , ,816 92, , , ,581 Ounces sold oz 121, , , ,340 91,488 92, , ,947 Cash cost per ounce sold US$/oz AISC per ounce sold US$/oz 1,356 1, ,089 1,169 1,133 1,118 Copper production Klbs 3,069 2, ,423 3,999 7,492 6,430 Copper sold Klbs 2,538 2, ,290 3,044 6,828 5,391 Mining information: Tonnes mined Mt Ore tonnes mined / hoisted Mt / Processing information: Ore milled Kt ,412 1,365 2,087 1,980 4,559 3,770 Head grade g/t % 89.5% Mill recovery % 88.7% 91.6% 87.3% 87.3% 93.9% 90.3% Cash cost per tonne milled US$/t * Bulyanhulu mining and processing information represent ROM only Tailings reprocessing statistics are as follows: H1 15 Ore Milled 1.2g/t, recoveries of 64.5% for 14,775 ounces recovered. H ounces produced in circuit ** Group figures include reclaimed tailings in processing information Company Presentation 26

27 Appendix Operating Metrics Reserves & Resources Our Locations

28 Reserves and Resources Tonnes (000's) 2014 YE 2013 YE Grade Au (g/t) Ounce (000's) Tonnes (000's) Grade Au (g/t) Ounce (000's) Bulyanhulu Proven and probable (U/G) 29, ,225 29, ,072 Proven and probable (Tailings) 9, , Mineral Resource (U/G) 12, ,385 10, ,502 Inferred (U/G) 13, ,367 6, ,745 Buzwagi Proven and probable 20, , ,120 Mineral Resource 48, ,017 49, ,038 Inferred 4, , North Mara Proven and probable 23, ,047 21, ,212 Mineral Resource 17, ,659 25, ,694 Inferred 10, , Exploration Proven and probable Mineral Resource 105, , , ,812 Inferred 4, , Total* Proven and probable 83, ,475 83, ,719 Mineral Resource 183, , , ,046 Inferred 32, ,793 18, ,276 Reserves and Resources estimates calculated in accordance with NI Reserves calculated at US$1,300/oz and Resources at US$1,500/oz Company Presentation 28

29 Appendix Operating Metrics Reserves & Resources Our Locations

30 Bulyanhulu: Aerial View Shaft Waste Rock Storage Camp Airstrip Process Plant Tailings Storage Company Presentation 30

31 North Mara: Aerial View Gokona O/P & U/G Airstrip Nyabigena (closed O/P) Raw water dam Process Plant TSF Nyabirama O/P Company Presentation 31

32 Buzwagi: Aerial View Water Storage ROM pad Tailings Dam Water Harvest Pit Camp Waste rock storage Company Presentation 32