ww.caledoniamining.com Nedgroup Securities, October 2009

Transcription

1 ww.caledoniamining.com Nedgroup Securities, October 2009

2 Disclaimer This presentation does not constitute, or form part of, any offer to sell or issue or any solicitation of any offer to purchase or subscribe for, any shares in Caledonia, nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, or act as an inducement to enter into any contract oragreement thereto. Certain forward looking statements may be contained in the presentation which include, without limitation, expectations regarding metal prices, estimates of production, operating expenditure, capital expenditure and projections regarding the completion of capital projects as well as the financial position of the company. Although Caledonia Mining Corporation ( Caledonia ) believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be accurate. Accordingly, results could differ from those projected as a result of, among other factors, changes in economic and market conditions, changes inthe regulatory environment and other business and operational risks. Accordingly, neither Caledonia, nor any of its directors, officers, employees, advisers, associated persons or subsidiary undertakings shall be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying upon this presentation or any future communications in connection with this presentation and any such liabilities are expressly disclaimed 2

3 Contents 1. Caledonia Overview 2. Zimbabwe - Overview 3. Blanket Gold Mine (Zimbabwe) i. Background ii. Re-starting Production iii. Current Status iv. Development and Exploration v. Management and Employees vi. Challenges and Opportunities 4. Other Caledonia Assets 3

4 Caledonia - Overview Mining, exploration and development company Listed on TSX:CAL, and AIM:CMCL Current focus is Gold: Blanket Gold Mine in Zimbabwe Other assets include PGM-Ni exploration South Africa Cobalt exploration in Zambia Management based in Johannesburg Nama Cobalt Project (Zambia) Blanket Mine (Gold, Zimbabwe) Rooiport Project (PGEÕs & Nickel, South Africa) 4

5 Caledonia - Overview Capital Structure m shares in issue (546.6 fully diluted) 100% free float Mainly Canadian and US retail shareholders Caledonia Mining 2 year share price (C$, Toronto) 5

6 Zimbabwe Overview Political stalemate in GNU but commercial activity is left to run with little interference Liberalisation of gold exports and exchange control environment Recent statements by leading politicians regarding relaxation of previous indigenisation proposals are welcome. Zimbabwean government can no longer print money: hyper-inflation is now under control Finance Ministry follows conservative policies Availability of debt on sensible terms remains very limited 6

7

8 Location & Infrastructure 16km west of Gwanda, 140km south of Bulawayo, 190kms from the South African border post at Beit Bridge. Easily accessible by tarred road Beit Bridge Blanket Mine supplied with electricity from ZESA via a dedicated 12mVA 33kV power-line and the Blanket Mine Village by 11kV power-line.

9 Geology Situated on the 70km x15km Gwanda Greenstone Belt Summary of Reserves and Resources at 31 December 2008 Category Tonnes Grade (g/t) Gold Contained (oz) Proven Reserves 1,295, ,400 Probable Reserves 2,498, ,400 Indicated Resource 531, ,800 Inferred Resource 2,467, N/A Existing reserve base able to support 10 years at 40koz per annum Historic exploration has been limited due to lack of funds. Exploration and development work will re-commence on the mine lease areas and on satellite properties 9

10 Historic Performance Acquired in 2006 from Kinross Caledonia improved recoveries and profitability Investment to increase capacity from 24,000oz to 40,000oz almost 80% complete Acquisition cash positive for Caledonia Production suspended in October 2008 due to none payment by RBZ for gold delivered Blanket continued to pay employees, thereby retaining skills which allowed rapid resumption of production in April 2009 Historic operating/financial performance severely affected by adverse operating conditions and Z$ devaluation 10

11 Re-Starting Production 30 January 2009: New Zimbabwe Monetary Policy: gold producers allowed to export gold and retain 100% of proceeds 3 April 2009: Blanket secures required permits to export gold 5 April 2009: Blanket secures interim working capital facility, orders supplies and consumables 7 April 2009: underground mining re-starts 8 April 2009: metallurgical plant re-starts 20 April 2009: first gold smelted and delivered April 2009: 766oz exported to Rand Refinery in South Africa July 2009: monthly production of 1,822oz Blanket s immediate production objective is throughput of 600tpd - an annualised production rate of approx 24,000oz 11

12 Re-Starting Production Early Challenges Unreliable electricity supply Early shortages of key supplies before stock levels were re-built Working capital shortages Impact of historic under-spend on maintenance Recruiting and re-training labour 12

13 Current Status Blanket Results for 6 months to 30 June July Months to 30 June 2009 New Monetary Policy operates effectively but could be speeded up Operating costs expected to fall from level achieved in Q2 6 Months to 30 June 2008 Ore Milled Tonnes 13,760 24,177 57,164 Grade G/t Recovery % 91% 89% 87% Gold Produced Oz 1,822 2,746 5,384 Gold sold Oz 1,322 2,164 7,441 Net revenues Can $ N/A 2,364 5,384 EBITDA Can $ N/A 171 2,978 Cash cost/oz $/oz N/A 504 N/A Adequate working capital facility from Stanbic and internal cash flows 13

14 Short Term Development to 40,000 oz pa No. 4 Shaft Project increase production from 400tpd to 600tpd (24koz gold pa) and then to 1,000tpd (40koz gold pa) Project ongoing since 2004, but not completed due to shortages of foreign exchange $5.5m invested to date; $2.4m required to complete Minor underground works will increase daily throughput from 400tpd to 600tpd and significantly reduce underground handling costs No.4 Shaft capacity increased to 1,000tpd Upgrades to milling will further increase capacity to 1,500tpd No requirement to upgrade CIL plant as this has 3,800tpd capacity Project can be completed within 9 months subject to internal cash flows 14

15 Medium Term Development to 100,000oz pa Maintain production at 40koz gold pa and gradually increase to approx 100koz pa Ore from surrounding brownfield exploration properties Lima Project: development and exploration within existing mine footprint 1,500m already completed and equipped; 1,550m still to do Cross cuts used for drilling to confirm adequate resources down to at least 1,060m BMSL Implementation of the Lima Project subject to feasibility studies, board approval, funding etc but could see Blanket achieving 100,000oz per annum within 4-5 years Organic development within existing mine footprint is cheaper and lower risk than greenfield exploration and/or acquisitions 15

16 Shaft4/Lima Shaft Shaft 4 Expansion increase capacity to 40,000oz pa 2. Extension of Level 22 haulage: 3. Extend Lima Shaft to at least 1,060 BMSL to increase capacity to 100,000oz per annum 16

17 Near-mine Exploration 17

18 Management & Employees Blanket retained many employees whilst activities were suspended (Oct 2008 to April 2009) which enabled production to resume quickly 660 employees at end July, increasing to 800 to operate at 40koz pa Continuity in mine management team 18

19 Challenges and Opportunities Challenges Power supply: Blanket considering use of stand-by generators Access to expansion capital Shortage of skilled labour: ongoing recruitment and training Zimbabwe political & economic environment Opportunities Political stability Skilled and educated workforce On-mine development and exploration opportunities Over 18 highly prospective satellite exploration projects all within easy trucking distance Potential acquisition opportunities for an in-country, cash-generative gold producer with access to international equity. 19

20 Other Caledonia Assets Nama Cobalt Project, Zambia Cobalt is used in re-chargeable batteries in consumer electronic equipment (cell phones, computers etc). Rapid growth in use of cobalt batteries for hybrid-electric vehicles Caledonia holds mining licences covering 806sq.km in Northwest province of Zambia Project targets Cu-Co oxide ores, amenable to hydrometallurgical treatment for production of high value, low volume cobalt hydroxide 5-year off-take agreements signed with Chinese customers for 11,400 tonnes per annum of cobalt contained as 25-30% cobalt hydroxide 2008 exploration and metallurgical work focussed on iron-rich ores which were subsequently found to be pryrometallurgically treatable and would require a better developed rail infrastructure Exploration work continues in 2009 on other identified anomalies Zambia tax concessions have been secured and the general taxation regime in Zambia has been relaxed. 20

21 Other Caledonia Assets South African Nickel-PGM properties 21

22 Caledonia Outlook Blanket Gold Mine, Zimbabwe Robust gold price Positive developments in Zimbabwe Secured additional working capital Ramp-up to 24,000 oz pa well in hand; further expansion to 40,000 oz pa depends on internal cash generation Attractive exploration opportunities could allow further expansion All further investments on the basis of rigorous financial evaluation Nama Cobalt Project, Zambia Ongoing geo-chemical evaluation of identified anomalies to find higher grade oxide ores that are amenable to hydrometallurgical treatment South African Nickel-PGM s Re-assessing Caledonia s strategic objectives 22

23 Contact Caledonia Mining Website: Stefan Hayden, President and CEO Tel: Mark Learmonth, Vice President Tel:

24 ww.caledoniamining.com Nedgroup Securities, October 2009