Africa s gold fields. Gold mining in Sub Saharan Africa over the last 15 years a review of the drivers to creating value

Transcription

1 Gold mining in Sub Saharan Africa over the last 15 years a review of the drivers to creating value PDAC 21 Africa s gold fields African Gold Production excluding South Africa Moz !( 1 South Moz African 5 Gold Production

2 Dealing with Africa s risk... AFRICA RANKING Overall A Dependent on a qualitative assessment combining: geological opportunity political stability economic and fiscal regime infrastructure Overall B Overall C Overall D African politics A B C D Multiparty democracy installed and working - accepted by general population and world bodies No serious underlying ethnic conflicts Low crime risk Freedom of press Working and efficient civil service Recent multiparty democracy to benevolent non-representative government General population acceptance of government Low level of political unrest Dissatisfaction with non-representative government Some political unrest and/or sporadic rebellion Totalitarian government General unrest, severe repression, civil war No centralised controlling government 2

3 Fiscal and Economic regimes NPV s using a 5% discount rate and US$ 9 / oz gold price IRR s using a US$ 9 / oz gold price The importance of infrastructure A B C D Good access and telecommunications links and GPRS mobile Terrain easily passable Access to grid power and or hydro power Perennial water Reasonably easy access Fairly good telecommunications Access to remote areas made difficult by desert or tropical rain forest Pipeline and dam required for water Potential for grid power and hydro sites No maintained infrastructure Telecommunications uncertain and slow Access only really practical by air Communications only possible by radio/satellite links No power 3

4 15 years of gold mining and exploration Operating mines and projects No. of mines and projects >1Moz Tasiast Kalsaka Morila Sadiola Loulo Samira Hill Siguiri BonikroAhafo Obuasi!( TarkwaBogoso\Pretea Mines Projects Navachab North Mara Geita Bulyanhulu Golden Pride Projects Mines Growth in production Oz 6, 5, Juniors Seniors 1,299 4, 3, 2, 1, 489 1,22 2,336 2,198 3, The market s valuation % R'GOLD NEM ABX AU GFI IAG RBI SEMFF BAA HRIVF CAFGF GSS CRUJF GOLD Randgold Gold Price Jul 2 Jul 3 Jul 4 Jul 5 Jul 6 Jul 7 Jul 8 Jul

5 Share issues can dilute value Value Raised (US$ million) Randgold $ Banro Golden Star Red Back Semafo Etruscan IAMGOLD $ $ $ $ $ $ High River Gold $ CAG $ Crew Gold m $ million shares Initial shares in issue Subsequent shares issued Building reserves and resources is key to sustainability Oz per share Banro Randgold IAMGOLD Crew Gold Red Back Golden Star Etruscan Semafo High River Reserves Gold 5

6 The cost of growing reserves through M&A or discovery Average total acquisition cost vs gold price $1, $8 $6 $4 6 US$ 4 2 without Kibali with Kibali Randgold cost per ounce 2-28: Reserves $2 $ Company Mine Development Project Avg. Spot Gold Price 1 5 Operating (5) (1) profits (15) US$m (2) (25) Cash cost per ounce US$ Operating income vs cash costs Randgold Randgold IAMGOLD Corp Red Back Mining(1) IAMGOLD Corp. Red Back Mining(1) 58 Semafo Semafo High River Gold Mines 618 Etruscan 638 Central African Gold(2) Etruscan High River Golden Star Gold Mines Golden Star 798 Crew Gold Central African Gold(2) 837 Crew Gold 6

7 24. Not a lot of value created despite higher gold prices % R'GOLD NEM ABX AU GFI IAG RBI SEMFF BAA HRIVF CAFGF GSS CRUJF GOLD Randgold Gold Price Jul 2 Jul 3 Jul 4 Jul 5 Jul 6 Jul 7 Jul 8 Jul Looking ahead!( Number of projects Number of projects and mines >1 Moz 7

8 Driving a mining asset up the value curve in Africa is a tough business Value Hype and promotion Disappointment Development Production Discovery Creating value calls for a real partnership between the mining industry, its investors and host countries Investors Mining Industry Governments VALUE Communities and Local Businesses 8

9 Disclaimer CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934, and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, the estimation of mineral reserves and resources, the realisation of mineral reserve estimates, t the timingi and amount of estimated t future production, costs of production, reserve determination ti and reserve conversion rates. Generally, these forward-looking statements can be identified by the use of forwardlooking terminology such as will, plans, expects or does not expect, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or does not anticipate, or believes, or variations of such words and phrases or state that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Assumptions upon which such forward-looking statements are based are in turn based on factors and events that are not within the control of Randgold and there is no assurance they will prove to be correct. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Randgold (including Kibali) to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the integration of Randgold and Moto, risks related to mining operations, including political risks and instability and risks related to international operations, actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, as well as those factors discussed in the section entitled Risk Factors in Randgold s annual report on Form 2-F for the year ended 31 December 28 which was filed with the US Securities and Exchange Commission (the SEC ) on 15 May 29, in the section entitled Risk Factors in Randgold s prospectus published on 12 October 29 in relation to the consideration shares issued to former Moto shareholders and the risk factors contained in the Moto management information circular dated 1 September 29 which was filed and is available under Moto s profile on the SEDAR website at Although Randgold has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Randgold does not undertake to update any forward-looking statements herein, except in accordance with applicable securities laws. CAUTIONARY NOTE TO US INVESTORS: the SEC permits companies, in their filings with the SEC, to disclose only proven and probable ore reserves. We use certain terms in this release, such as resources, that the SEC does not recognise and strictly prohibits us from including in our filings with the SEC. Investors are cautioned not to assume that all or any parts of our resourceswill ever be converted into reserves which qualify as proven and probable reserves for the purposes of the SEC s Industry Guide number 7. 9