Mining High Grade Gold in Burkina Faso

Transcription

1 Mining High Grade Gold in Burkina Faso 2017 Third Quarter Financial Results November 16,

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, and the anticipated success and timing thereof; (iii) production and cost guidance, (iv) permitting; and (v) statements that are not of historical fact. For further details regarding the Yaramoko project, please refer to the technical report entitled Technical Report for the Yaramoko Gold Project, Burkina Faso dated June 4, 2014 (the Feasibility Study ) as well as the press releases of Roxgold Inc. (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 press release 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 third quarter Management s Discussion and Analysis filed on SEDAR at on November 14, 2017 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: Jean François Couture, PGeo (SRK Consulting Canada Inc.), Benny Zhang, P. Eng (SRK Consulting Canada Inc.), Sebastien Bernier (SRK Consulting Canada Inc.), Paul Criddle, Chief Operating Officer (Roxgold), and Yan Bourassa (Roxgold). All amounts are in U.S. dollars unless otherwise stated. 2

3 2017 Third Quarter Conference Call Participants John Dorward President & CEO Natacha Garoute CFO Paul Criddle COO Yan Bourassa VP, Geology 3

4 Safety Statistics Rolling twelve month period Currently more than 3,400,000 hours Lost Time Injury free 4

5 2017 Third Quarter Highlights Achieved 3,400,000 hours worked LTI free; Sold 27,912 ounces of gold for gold sales totalling $35,907,000 1 Produced 28,410 ounces of gold at an average cash operating cost of $445 per ounce produced 2 for the quarter contributing to a nine-month production total of 91,970 ounces of gold at an average cash operating cost of $445 per ounce produced; Incurred an all-in sustaining cost 2 of $833 per ounce sold and $794 per ounce sold, for the three and nine-month periods ended September 30, 2017, respectively; Generated cash flow from mining operations 2 totalling $18,028,000 ($61,573,000 for the nine-month period) and cash flow per share 2 of $0.05 (C$0.06/share) ($0.17 and C$0.22/share for the nine-month period); Became net cash positive with a cash balance of $56,288,000 and long-term debt face value balance of $50,100,000 3 ; Mined 76,480 tonnes of ore for the quarter, a 16% increase over Q2; Commenced construction work at site to facilitate the Bagassi South expansion project; Commenced a drilling program targeting newly identified geophysical targets along the Bagassi Corridor located less than two kilometers south of the 55 Zone and the Yaramoko plant; and Updated and increased the Bagassi South Mineral Resource Estimate ( MRE ) to Indicated MRE of 352,000 tonnes at 16.6 grams of gold per tonne ( g/t Au ) for 188,000 ounces of gold at a cut-off grade of 5.0 g/t Au and Inferred MRE of 130,000 tonnes at 16.6 g/t Au for approximately 69,000 ounces of gold at a cut-off grade of 5.0 g/t Au a significant improvement over the previous inferred resource estimate of 563,000 tonnes at 12.1 g/t Au for 220,000 ounces of gold at a cut-off grade of 5.0 g/t Au 4 ; Announced positive Feasibility Study for the Bagassi South project with after tax IRR of 53.2% with 1.8 year payback on initial capital, representing an increase of Reserves of 26% for the Yaramoko Gold Project. 1. Gold ounces sold and Gold Sales include revenues of $36,279,000 and Q3 deferred revenues of $1,091,000 related to 850 ounces sold, but not shipped, as of September 30, 2017, due to the timing of the shipment in Burkina Faso, offset by Q2 deferred revenues of $1,463, 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 3. Long-term debt face value represents the remaining balance owing on the Amended Facility. 4. See press release dated July 19, 2017 for more information which is available on the Company s corporate website ( and contains details regarding data verification undertaken, the results and interpretation of the exploration, details regarding location, types, depths and other details of the drill holes and QA/QC information. 5

6 2017 Year to Date Operational Highlights Ore Development (m) Waste Development (m) Q1 Q2 Q3 YTD 1,2 Gold Poured (ounces) 35,594 27,970 28,410 91,970 Gold Sold (ounces) 3 34,979 28,788 27,912 91,679 Waste Development (metres) ,687 Ore Mined (tonnes) 69,237 66,044 76, ,761 1,200 1, /Q1 17/Q2 17/Q3 1,200 1, /Q1 17/Q2 17/Q3 Milled (tonnes) 63,955 65,159 66, ,784 Ore Mined Tonnes Milled Head Grade (g/t Au) Gold Recovery (%) Mill Operating Time (%) Represents the period of nine-months ended September 30, Totals may not add up due to rounding 3. Gold ounces sold and Gold Sales include revenues of $36,279,000 and Q3 deferred revenues of $1,091,000 related to 850 ounces sold, but not shipped, as of September 30, 2017, due to the timing of the shipment in Burkina Faso, offset by Q2 deferred revenues of $1,463, ,000 70,000 60,000 50,000 40,000 30,000 20,000 10, ,000 60,000 50,000 40,000 30,000 20,000 10, /Q1 17/Q2 17/Q3 17/Q1 17/Q2 17/Q3 6

7 AISC Actuals Compared to Feasibility Study ( FS ) Actual vs FS LOM Metres AISC FS vs Actuals $ $800 $700 $600 $590/oz $751 $794 $ $ $ $ $ Feasibility Study Actual $ LOM 0 Mining Processing Site G&A Royalties UG Dev Corporate CSR FS - Meters of development Actual - Meters of UG dev FS - AISC Actual - AISC 7

8 Tracking to Increased 2017 Production Guidance; Cost Estimates Unchanged (oz Au) Guidance maintained for full year for Cash Operating Cost 1 and AISC 1 115, , , ,000 Significant investment in underground development Cash Operating Cost Guidance Range All-in Sustaining Cost Guidance Range 91, , ,564 63,564 As of Q As of Q $445 $490 $740 $790 FY 2017 Guidance Revised FY 2017 Guidance $445 actual at Q3 2 $794 actual at 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 2017 MD&A available on 2. As of the nine-month period ended September 30,

9 55 Zone Developed Reserves 1 $44 $740 $790 $445 $490 $740 $790 Block Remain % Devt Developed 2017 Nov-Dec Total 1 35, % 35,400 7,900 24,200 3,300 35, , % 55,300 8,600 40,400 6,300 55, , % 103,100 24,800 40,900 37, , ,000 52% 34,200 4,900 14,800 14,600 34, , ,000 21, ,200 65,100 37, , See press release dated April 18, 2017 for more information which is available on the Company s corporate website ( and contains details regarding data verification undertaken, the results and interpretation of the exploration, details regarding location, types, depths and other details of the drill holes and QA/QC information. 9

10 2017 Third Quarter Financial Highlights Average realized gold price Cash operating cost 2 Total cash cost 2 Sustaining capital cost 2 Site all-in sustaining cost 2 Q Corporate, sustaining and in-country costs 2 All-in sustaining cost 2 $1,286/oz $445/oz or $190/t $522/oz $258/oz $779/oz $52/oz $833/oz Revenue 3 $36M Cash flow from Mining Operations 2 $18M Cash flow from Mining Operations Per Share 2 Adjusted Earnings Per Share 2 $0.05 / C$0.06 $0.03 / C$0.03 Cash on Hand $56M 1. Represents the period of nine-months ended September 30, 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 2017 MD&A available on 3. Gold ounces sold and Gold Sales include revenues of $36,279,000 and Q3 deferred revenues of $1,091,000 related to 850 ounces sold, but not shipped, as of September 30, 2017, due to the timing of the shipment in Burkina Faso, offset by Q2 deferred revenues of $1,463, Year to Date 1 $1,400 $1,200 $1,000 $800 $600 $400 $200 $- Cash operating cost 1 $445/oz produced All-In Sustaining Cost 1 $794/oz sold Cash balance (unaudited) at September 30, 2017 ~US$56M 91,970 oz Cash Flow From of gold poured as of Mining Operations September 30, 2017 Per Share 1 $0.17/ C$0.22 Roxgold - Financial performance per ounce Q YTD 2017 Est Cash operating cost Total cash cost AISC AVG realized gold price 10

11 Financial Information Q YTD Month Financial Position Gold Poured (ounces) 28,410 91,970 Gold Sold (ounces) 1 27,912 91,679 Average realized gold price (per oz) $1,286 $1,255 LTD reduced by ~33% since Dec 31, 2016 Revenue 1 $36M $115M Adjusted earnings 2 $9M $23M Adjusted earnings per share 2 $0.03 C$0.03 $0.06 C$0.08 Cash flow from Mining Operations 2 $18M $62M Cash flow from Mining Operations $0.05 Per Share 2 C$0.06 $0.17 C$0.22 Cash on Hand $56M Long-Term Debt Face Value (LTD) 3 $50M 1. Gold ounces sold and Gold Sales include revenues of $36,279,000 and Q3 deferred revenues of $1,091,000 related to 850 ounces sold, but not shipped, as of September 30, 2017, due to the timing of the shipment in Burkina Faso, offset by Q2 deferred revenues of $1,463, 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 3. Long-term debt face value represents the remaining balance owing on the Amended Facility. $80 $70 $60 $50 $40 $30 $20 $10 $- $(10) Q Q Q Q Cash on hand NWC LTD Face value Cash and NWC 11

12 2017 Third Quarter Cash Position In millions of U.S. dollars Cash position increased ~20% during the quarter 1 1. Represents cash net of long-term debt repayments of $3.8 million 12

13 2017 Year to Date Cash Position In millions of U.S. dollars 13

14 Expansion 14

15 Bagassi South Positive Feasibility Study Base Case Highlights (100% basis, gold price of $1300/oz) Robust project economics $50M after-tax NPV 5% after-tax IRR 53.2% with a 1.8 year payback on initial capital Yaramoko Water Storage Dam ~40% increase in Yaramoko gold production Proven and Probable Mineral reserves of ~170,000 oz at g/t Au Plant Camp Tailing Storage Facility Estimated average gold production of 40,000 oz per year Plant expansion sees throughput increased from 750 tonnes per day ( tpd ) to 1,100 tpd First ore expected in late Q Funded by internal cash flow 55 Zone 1.8 Km from Plant to Bagassi South Utilizes synergies with the existing Yaramoko operation personnel and equipment Expansion capitalizes on existing infrastructure increasing revenue without commensurate increase in overheads Bagassi South 15

16 Bagassi South QV1 & QV Deposits Q Q Infill Drilling Program Complete Hydrology & Geotechnical Studies Commence Permitting in Burkina Faso Commence Camp Expansion Resource Update Mine Planning/Optimization Operating Cash Costs 1 LOM ($/oz) Cash Operating Cost $361 Total Cash Cost $426 All-in Sustaining Cost $ & 2018 Q Feasibility Study Approved ESIA received Development Decision Commencement of Site Works Plant Detailed Design Mine access works, plant expansion construction Camp expansion completion Pre-production Capital Underground Mine $7.9M Plant Expansion $7.1M Infrastructure $6.0M Indirects $5.7M Q Mine development commences Contingency $2.8M Q First Ore Total $29.6M 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 MD&A available on

17 Growth 17

18 Zone Deep Drilling Program 55 Zone Resource* Size Grade 5,200RL Measured & Indicated 738k ounces 17.1 g/t 5,000RL Inferred 347k ounces 16.1 g/t 4,800RL 4,600RL 4,400RL 4,200RL YRM-17-DD g/t over 5.1 m YRM-12-DD g/t over 4.1 m YRM-12-DD g/t over 4.4 m YRM-17-DD-443BW2 Results Pending YRM-16-DD g/t over 23.8 m YRM-17-DD-443BW g/t over 12.5 m and 12.9 g/t over 3.9 m Drill Hole 2017 Drill Hole < 1.0 g/t 1.0 to 3.0 g/t 3.0 to 5.0 g/t 5.0 to 10.0 g/t > 10.0 g/t *As of December 31st, Zone Deep Drilling program: Program completed in early Q4 Program targeted growth at depth following-up on 2016 drilling program High-grade shoot extended to 1.1 km below surface, down plunge from hole YRM-16-DD YE Resource Disclosure will include new drilling results See press release dated February 2, 2017 for more information which is available on the Company s corporate website ( and on SEDAR at and contains details regarding data verification undertaken, the results and interpretation of the exploration, details regarding location, types, depths and other details of the drill holes and QA/QC information. 18

19 Bagassi South QV Potential Additional Upside Inferred Resource of 36,000 oz at 22.0 g/t Au West 5,200RL 5,100RL 5,000RL 4,900RL YRM-17-DD-BGS g/t over 0.7 m East Mafic Dyke YRM-17-DD-BGS g/t over 0.8 m YRM-17-DD-BGS g/t over 1.3 m Block Model (Au Grade) < 1.0 g/t 1.0 to 3.0 g/t 3.0 to 5.0 g/t 5.0 to 10.0 g/t > 10.0 g/t Drill Hole Planned Drill Hole Bagassi South drilling program: 10,000 meters along the QV structure Commenced in Q3 Continuing into Q4 Aims at converting inferred to indicated resources* QV mineralized shoot located along a K-rich Granite contact The shoot is open to the east of the Mafic Dyke along the lithological contact * See press release dated July 19, 2017 for more information which is available on the Company s corporate website ( and on SEDAR at and contains details regarding data verification undertaken, the results and interpretation of the exploration, details regarding location, types, depths and other details of the drill holes and QA/QC information. 19

20 Upcoming Catalysts Q & 2018 Commencement of regional drilling programs along the Boni Shear zone, Haho and other regional targets Initial results of QV infill drilling program Commencement of Houko soil and auger program to followup on Q3 IP survey Commencement of early works infrastructure and procurement to facilitate the Bagassi South expansion Q Receipt of Bagassi South Mining Permit anticipated Commencement of Bagassi South mine development 20

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