AIM s Only Australian Gold Miner Klondyke Acquisition

Transcription

1 AIM s Only Australian Gold Miner Klondyke Acquisition

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3 OV ERV IEW Cashflow generative tribute gold miner secures 100% ownership in prospective Pilbara Greenstone Tenements Currently producing at open pit areas ahead of delivering higher margin ore from Lindsay s and Prince of Wales underground operations Market Epic AIM KRS Targeting 20,000-30,000 ozs per annum from mid 2017 Acquired 100% of the Klondyke Gold Project and an additional Option Agreement resulting in the consolidation of a 627ha area of the prospective Warawoona Greenstone Belt with a 7.5km strike length Share Price 0.63 (9/9/16) Market Cap GBP8.5m 52 WK High/Low 0.38 / 1.78 Shares in Issue (13/4/16) 1,344,969,623 Current Klondyke historic resource of 374koz Au represents 30% of the now contiguous 7.5km strike length Keras has now diversified away from being a tribute gold miner to owning its own gold resources in the Pilbara Director and Management Share Holding Warrants on Issue (0.5p) Director and Management Warrant Holding 24% 76,602,567 72% 3

4 DIRECTORS AND MANAGEMENT Executive management team has extensive gold experience and is based in Perth, reducing execution risk Brian Moritz Chairman Dave Reeves Managing Director Chartered Accountant and former Senior Partner of Grant Thornton, London Involved in listing many mining companies, primarily in Africa Chairman on several miners Formerly chairman of African Platinum PLC (Afplats) and Metal Bulletin PLC First class honours degree in mining engineering from the University of New South Wales Over 25 years experience and has operated in Australia, Africa and Europe in gold, precious metals, mineral sands, bulks and copper Currently non-executive Chairman of ASX and AIM listed European Metals Holdings Russell Lamming Non-executive Director Peter Hepburn- Brown Non-executive Director Qualified geologist with an honours degree in geology from the University of the Witwatersrand and a Bachelor of Commerce in Economics from the University of Natal Broad range of experience including precious metals analyst for a leading international broker, CEO of Chromex Mining Plc and nonexecutive Director of resource focussed companies. A qualified mining engineer with over 35 years of international mining experience, having managed gold mines in Australia and internationally Currently non-executive Director of ASX listed gold focussed companies, Alloy Resources and Focus Minerals James Carter Chief Financial Officer A CPA with 20 years experience in the mining industry Previously CFO and Company Secretary of Straits Asia Resources and was integral to its development as a 10 Mtpa coal producer in Indonesia 4

5 STRATEGY Targeting low capital gold mines which deliver production and cashflow through the entire price cycle V I S I O N Cash Flow Klondyke Deploy cash flow Continue optimisation of open pit tribute operations Deliver on underground tribute opportunities to help fund the drilling and development of the Klondyke Gold Project Undertake work programme to capitalise on exciting 100% owned exploration upside ahead of delivering an owner operated mine and mill, envisaged in the mid-term Reduce reliance on current capital markets by deploying cashflow to build its Australian gold portfolio via acquisition and/or return cash to shareholders 5

6 CONSOLIDATING A PROSPECTIVE REGION The transactions provide control over the Warawoona Greenstone Belt, a prospective gold region with 7.5km of strike and proven resource potential Located in the prospective Warrawoona Goldfield of the East Pilbara District of the Pilbara Goldfield of Western Australia 2012 JORC compliant Inferred Resource of 5.6Mt at 2.08g/t for 374,000 oz Au only identified across 2km strike of 7.5km strike Targeting large increase in resource along untested strike length and regional deposits Initial optimisations show good open pit potential Potential for underground mining on high grade lodes Located within 70km of Bamboo Creek and 90km of Millennium Minerals 6

7 KLONDY KE GOLD PROJECT Acquired Klondyke via the 100% acquisition of Arcadia for: A$1.42m cash A$1.3m shares 2.5% royalty capped at A$3.5m to commence post production of 20,000 ounces Arcadia 490 Ha Haoma 650 Ha Purchased 5 year option for A$250,000 to mine the Haoma tenements Option to purchase licences for an additional A$1.25m in cash and shares 7

8 LARGE RESOURCE UPSIDE The current resource is confined to 2km of strike resource drilling has not been conducted elsewhere in the project area Intercepts on Haoma tenement adjacent to resource areas include: 3.83 g/t from 62m 3.44 g/t from 53m 6.08 g/t from 88m 9.39 g/t from 90m Haoma Drill Area Current Resource Area Enlarged 8

9 PROV EN PRODUCTION POTENTIAL Numerous historic gold mines with very high gold grades exist on the property Average Mine Grades Klondyke Block 574 g/t 7.5km Klondyke Queen Klondyke Queen Klondyke No1 187 g/t 126 g/t Cuban 106 g/t Klondyke King Kopcke s Reward 90 g/t Gift 45 g/t Britannia 43 g/t Golden Gauntlet 42 g/t Warrawoona Queen 37 g/t Metallurgical testwork shows free milling ore with good recoveries (circa. 93%) 9

10 PRODUCTION UPSIDE V IA SURROUNDING LICENCES Additional historic mines along strike and all within 15km of Klondyke: Fieldings Gully Coronation Copenhagen Can potentially provide additional mill feedstock Klondyke Coronation Copenhagen Fieldings Gully 0 5km 10 10

11 FIELDINGS GULLY MINE An old operating mine located 15km from Klondyke Previous drilling has returned the following significant interceptions 3.09g/t from 53m 5.29 g/t from 12m 17.58g/t from 20m Historical resource of: Tonnes Grade (g/t) Ounces Measured 82, ,561 Indicated 179, ,129 Inferred 54, ,576 Total *The estimation provided is historical in nature and not reported in accordance with the JORC 2012 Code. A competent person has not done sufficient work to classify the historical estimates as mineral resources or ore reserves in accordance with the JORC 2012 Code. It is uncertain that following evaluation and/or further exploration work that the historical estimates will be able to be reported as mineral resources or ore reserves 11

12 COPENHAGEN AND CORONATION MINES Both targets are situated on old mines within 13km of Klondyke - significant drilling has been undertaken with results including: COPENHAGEN* g/t from 64m 6.25g/t from 14m 9.73 g/t from 16m g/t from 26m 6.82 g/t from 18m 8.51 g/t from 51m 6.88 g/t from 12m 7.23 g/t from 30m CORONATION 5.21 g/t from 9m 7.64 g/t from 64m g/t from 16m 7.98 g/t from surface 5.71 g/t from 12m 31.5 g/t from 30M Copenhagen Coronation *Note at Copengaen, a small open pit was developed in the 1980s and some of these intercepts may have been mined 12

13 PHASE PHASE PLANNED ACTIVITIES AT KLONDY KE Initial optimisations show potential for large open pit along the main strike of Klondyke 1 Resource Drilling & Update 2 Satellite Drilling & Met Testwork Initial mapping and then 12,000m drill program Follow up significant drill intercepts at to increase in size and upgrade current resource Copenhagen, Fieldings Gully and Coronation. Undertake metallurgical testwork Pre-Feasibility 4 PHASE Extensional Drilling & Scoping study 3 PHASE Pre-feasibility study Further extensional drilling planned to define westerly strike potential.and completion of Scoping Study 13

14 2 MAIN GOLD TRIBUTES Norton Gold Fields Grants Patch Deposits Tribute agreement with Paddington Gold, a subsidiary of Norton Gold Fields to produce from small scale deposits 50km north of Kalgoorlie Product to be treated at Norton s large Paddington Mill, 25 km from the deposits Targeting Prince of Wales Underground Mine, historic estimate* of 8.0 g/t and exploration target** of 8 to 10 g/t KalNorth Lindsay s Deposits A tribute to mine all known resources located at the Lindsay s deposit located 50km NE of Kalgoorlie JORC Resources of 1.7g/t for 215,100 oz Product to be treated at one of several nearby mills under toll treatment Main target the Parrot Feathers Underground KMA Wycheproof Deposit *The estimation provided is historical in nature and not reported in accordance with the JORC 2012 Code. A competent person has not done sufficient work to classify the historical estimates as mineral resources or ore reserves in accordance with the JORC 2012 Code. It is uncertain that following evaluation and/or further exploration Located 20km from the Norton tribute work that the historical estimates will be able to be reported as mineral resources or ore reserves in accordance with the JORC 2012 Code. Mining to be completed in October **The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource 14

15 LINDSAY S PROJECT Mineral resource of 3.97Mt at 1.7g/t for 217,000oz Au, including the high grade Parrots Feather resource of 562,000t at 3.3g/t for 60,000oz Au Small open pit (LE2) to be completed in Q pre grade control estimate of 2.2g/t ASIC of A$1,300/oz All permits in place to commence open pit mining Internal assessment of underground complete, shows positive returns, finalising documentation with KalNorth Targeting 10,000 oz to 20,000 oz per annum from Lindsey s underground Tribute based on a combination of fees and profit share: Management fee of 10% of operating cash flow payable to Keras Plus Keras shares 49% of net profit at a gold price below A$1,600/oz and 70% above A$1,600/oz 15

16 PRINCE OF WA LES MINE Forms part of the greater Grants Patch mineral lease, with a historic resource of 8.0g/t and an exploration target of 500Kt at 10g/t for 160Koz Product will be treated at Norton s 3.5 Mtpa Paddington Mill, 25 km from the deposit Targeting production of 15-20,000oz Au from the underground Opportunities to target shallower mineralisation between Coronation and Prince of Wales Shafts Further drilling planned to allow final decision on accessing the deeper mineralization Initial scoping studies show an ASIC of approximately $1,000/oz including tribute 16 7

17 EV/oz Grade g/t COMPA RISONS EV/oz and Grade Comparison Empire Resources 40,078ozs Dacian Gold 3,305,788ozs Gascoyne Resources 2,094,212ozs Capricorn Metals 901,929ozs Intermin Resources 267,871ozs Keras 100% 374,534ozs Keras incl tributes (apportioned) 483,039ozs 0 EV/oz Grade 17

18 INVESTMENT SUMMARY Commencing cash flow through low capex tributes; self funded growth through 100% owned projects Cash Flow GOLD TRIBUTES Accelerated start-up gold production commenced Q Main production to be sourced from two undergrounds Low capital requirements Growth Opportunity KLONDYKE GOLD Consolidated Warrawoona Greenstone belt for first time in history Existing resource of 375,000 ozs Large resource and valuation upside Planning for stand-alone operation funded through tributes Common Goals DIRECTORS ALIGNED WITH SHAREHOLDERS THROUGH SUBSTANTIAL INVESTMENT Supported Company with equity investment and loans Proven track record in developing projects and completing value accretive sales 18

19 CONTACT Keras Resources Plc Managing Director: Dave Reeves NOMAD: Northland Capital Partners Limited David Hignell Tel: +44 (0) Beaufort Securities Elliot Hance/Jonathon Belliss Tel: +44 (0) Financial PR: St Brides Partners Ltd Elisabeth Cowell/ Frank Buhagiar Tel: +44 (0)

20 Gross Gold Revenue AISC Govt royalty Keras Mgmt Fee Kalnorth (51%) Keras (49%) TRIBUTE MINING Tribute Mining Tribute Mining involves the mining of resources owned by other parties and processing the ore in third party mills Tributes can be in the form of paying a royalty (Norton) or as a profit share (KalNorth) Advantages of tribute mining: No exploration costs Existing mining leases on all the tributes Keras have entered into Toll treating requires no development capital, only working capital Example of tribute agreement (Lindsay s, KalNorth) $2,000 $1,500 $1,000 State or Government royalties, direct operating expenditure and working capital expenditure will be deducted from Gross Revenue Management fee of 10% of operating cash flow payable to KRS Keras takes 49% of net profit at a gold price below A$1,600/oz and 70% above A$1,600/oz $500 $0 $1,600 -$850 -$32 -$72 -$330 $317 20

21 NAY EGA: POTENTIAL VA LUE Nayega represents an attractive project to manganese end-users Low capex open-pit manganese mine Simple processing route saleable 38% Mn product Scalable 250,000tpa Mn operation Robust economics at varying manganese price Maiden JORC reserve 14.0% Mn Good infrastructure with direct access to Lome Port Metal prices rebounded strongly in 2016 Looking to realise value from asset 21