Investor Presentation 2014

Transcription

1 Draft By Avise Analytics P Ltd. Explore Discover Develop Investor Presentation

2 Executive Summary A world class gold deposit Undeveloped Gold Deposits of East Africa Nyanzaga Significant Gold Deposits Amongst a world known gold belt Situated around Lake Victoria Surrounded by major producers Extensive geological studies Buckreef Rwama Ikungu Tulu Kapi Saza-Makongolosi Advanced Stage Projects Comparable area to Barricks Bulyanhulu Multiple projects advancing towards commercial production Manica Pickstone Mikei Golden Ridge Independent Project Controlled by Major Singida Nyakafuru Exploration Initiatives Multiple licenses for diversified exploration Prime areas for gold mineralisation Ongoing exploration studies 2 Miyabi Open Pit Resource Moz (M+I), 0.5g/t cut off 2

3 Our Projects - Advanced Buckreef Tanzanian Royalty have a number of advanced stage projects that have undergone extensive geological studies 3 rd largest gold producing area 2.42 Moz Resource Medium grade orogenic deposits Fully licensed for production Plant nearing completion Itetemia Advanced Stage Projects Collaboration with Stamico has allowed significant exploration efforts Borders Bulyanhulu mine Previous exploration by Barrick Vast potential on Golden Horseshoe Reef (GHR) Preliminary Economic Assessment in progress Environmental license in progress Kigosi Small scale artisinal workings 8 years of exploration Environmental Impact Study conducted Fully licensed for mining ( final process de gazetting in progress) 3

4 Advanced Stage Projects - Buckreef Buckreef Re-development Project Located in the LVG the third largest gold producing region of Africa Hosted by steeply dipping NE/SW trending brittle-ductile sheer zone Structural similarities to that of the Canadian Shield and Yilgarn Craton (Australia) Fully licensed for production and plant nearing completion Buckreef location Buckreef Project includes two potential mining area Projects Buckreef Mining Area (BRMA) which includes Buckreef Prospect Eastern Porphyry Tembo Prospect Bingwa Prospect Buziba-Busolwa Mining Area (BZMA) Specific projects 4

5 Advanced Stage Projects - Buckreef Exploration and Drilling Iamgold Corp verified recent drilling data. In total, exploration included: 30,000 soil samples taken 202,000m of RC drilling 124,000m of AC drilling 28,000m of diamond core drilling Phase Explorer Date Type Number of Drillholes Length (m) 1 to 4 Spintex Pre to 6 EAM EAM IAMGOLD 2007 Previous exploration phase Reverse Circulation ,429 Diamond Drilling 18 15,860 Reverse Circulation ,274 Diamond Drilling 16 1,879 Reverse Circulation ,235 Diamond Drilling 11 1,401 Reverse Circulation ,487 Diamond Drilling 17 1,993 Drilling programme detailed Extensive drilling undertaken over the past decade

6 Advanced Stage Projects - Buckreef Detailed Drilling programme: Exploration Summary for Buckreef Prospect 1992 to 2009 Year Geochemistry Sampling Programme Drilling Geophysics Soil Rock Termite RAB AC RC DD Samples Samples Samples Holes Holes Metres Holes Metres Holes Metres Holes Metres , , , , , ,532 Ground magnetics and trenching , , , ,300 47, , , , , , , , ,253 31, , , , , , , , , , , ,976 IP completed by Search Geophysics , , , , , , , , ,166 4 blocks Ground IP survey completed , , blocks Ground Gravity survey completed Total 29,546 2, ,322 98,497 4, ,336 2, , ,464 6

7 Advanced Stage Projects - Buckreef Exploration and Drilling Drilling programmes conducted on BRMA The TRX exploration programmes post 2009, have included drilling and geochemical sampling so that the total drilling undertaken for the four prospects is summarized as follows: Buckreef Prospect: 684 drillholes for 97,287m Tembo Prospect: 74 drillholes for 5,713m Bingwa Prospect: 136 drillholes for 12,537m and Eastern porphyry: 80 drillholes for 10,814m 7

8 Advanced Stage Projects - Buckreef Resource Grade The 2014 BRMA Measured Mineral Resources are 9.91Mt at a grade of 1.81g/t Au for 0.58Moz contained metal, which represents an increase of 169% over the 2012 estimate of 0.34Moz. The 2014 BRMA Indicated Mineral Resources are 14.87Mt at a grade of 1.40g/t for 0.67Moz contained metal, which represents an increase of 300% over the 2012 estimate of 0.22Moz. Measured + Indicated resource of Total Buckreef project Moz Au Current NI Total Buckreef Project Mineral Resource Estimate for the BRMA and BZMA at 0.5g/t Au Cut-off Grade Jan 2014: 8 Tonnes (mt) Au Grade (g/t) Inferred Contained Au (Moz) Measured + Indicated Au Grade (g/t) Contained Au (Moz) BRMA Buckreef Prospect BRMA Eastern Porphyry BRMA Tembo Prospect BRMA Bingwa Prospect TOTAL BRMA BZMA Buziba & Busolwa Prospects TOTAL Buckreef Project (BRMA+BZMA) Buckreef Prospect Buziba & Busolwa Prospects Bingwa Prospect Tembo Prospect Eastern Porphyry Buckreef Prospect Au Grade (g/t) Eastern Porphyry Contained Au (Moz) Tembo Prospect Bingwa Prospect Buziba & Busolwa Prospects

9 Advanced Stage Projects - Buckreef 9

10 Advanced Stage Projects - Buckreef Estimated over 1,400m of and depth of 575m below surface using the MIK technique. Cutoff grade of 0.5 results in a Measured/Indicated contained Au (moz) of

11 Advanced Stage Projects - Itetemia Itetemia Project Ownership TRX (via Tancan) 90% STAMICO 10% Location: Situated 90Km SW of Mwanza adjacent to Barrick's Bulyanhulu Mine property (World s largest underground gold producers) Geological similarities to the Bulyanhulu deposit located only 5 km to the west. NI Mineral Resource for the Itetemia Project 1.0g/t cut-off at January 31,2012: Indicated: 266,000 oz Inferred: 156,000 oz Economic assessment report completed in 2010 confirms open pit mining potential Preliminary Economic Assessment in progress Environmental Assessment in progress Resource Grade NI Mineral Resource Statement for the Itetemia Project 1.0g/t cut-off at 31st January 2012 Itetemia Location The most advanced project within Itetemia The Golden Horseshoe Reef (GHR) Volume m 3 TONNES (t) Au Grade (g/t) Contained Au (Oz) Main Lode Indicated 816,000 2,390, ,000 Football Lode 141, , ,000 TOTAL INDICATED 957,000 2,799, ,000 Main Lode Inferred 355,000 1,053, ,000 Football Lode 128, , ,000 TOTAL INFERRED 483,000 1,433, ,000 Specific projects 11

12 Advanced Stage Projects - Itetemia Exploration and Drilling. At GHR, towards the end of ,543m had been drilled in 22 RC holes 10,209m in 41 diamond core holes RC DRILLING Period Holes Meters Holes Meters Interval (m) Notes TR-3 May - Oct, ,584 Oct, July, , RC-18 Oct, July, , , Aug - Nov, ,032 Aug, May, ,558 Jun - Aug, , N/A 8 N/A DC RC-43 RC-45 RC-61 & 62 RC-65 & 66 Extensive drilling undertaken at GHR 12

13 Advanced Stage Projects - Itetemia Preliminary Assessment of potential open pit mining of the GHR Saint Barbara LLP in Sept 2010, conducted a Preliminary Assessment of potential open pit mining of the GHR, in consideration of two options:- Base Case Full mine development Alternative 1 Use second-hand equipment reduce the plant capital Alternative 2 Sending the RoM from GHR to ASSUMPTIONS RELATING TO INPUTS USED IN THE DCF MODEL Assumed Gold Price Current Price : Discount rate USD 1,000/oz USD 1,303/oz (07/08/14) 12% p.a. Saint Barbara also included a 2% royalty payment for TRX. Summary of Conceptual DCF Results: Assumptions: Second-hand equipment costs between 25%-33% of the new item Cost of an operating plant is 2.4 times the landed purchase price of the installed equipment Assumptions: Barrick would accept an income of 20% of the gold revenue from the delivered ore less their process variable costs CASE Pre-tax NPV (USD in M) IRR (%) Base (9.4) 0.20 Option 1 (2.9) 7.70 Option e From the results, it can be concluded:- the open pit project is technically feasible; and that the only case worth considering, at the time, was Option 2 (supply of ore to Barrick). It must be noted that Saint Barbara only considered a gold price of USD1,000/oz. However, that at higher gold prices, the economics of all three scenarios become significantly more favorable, and demonstrate that at USD1,400/oz, there is no specific reliance on Option 2. 13

14 Advanced Stage Projects - Kigosi Kigosi Project Ownership TRX 80% STAMICO 15% Location: Situated within the greater Lake Victoria Gold Belt (LVGB), which consists of a number of east-trending linear, Archaean greenstone belts Awarded the Environmental Impact Assessment Certificate in February, 2013 Granted a Mineral Rights and Mining License through its wholly owned subsidiary, Tanzam in May, 2013 De gazetting of property for production in progress Buckreef location Kigosi Project Kigosi Project has been divided into 5 Prospect areas Prospects 14 Luhwaika Igunda Msonga Msonga West Bungoni Specific Projects projects

15 Draft By Avise Analytics P Ltd. Advanced Stage Projects - Kigosi Resource Grade The Kigosi Project area has, locally, been subjected to extensive exploration, specifically over the past eight years by TRX. It focusing their effort mainly on the known Luhwaika Prospect, and to a lesser extent on the Igunda and Msonga Prospects. 15 PROSPECT / LOCATION Luhwaika Inferred Igunda Luhwaika Igunda REEF Kigosi Project Resource Statement at September 1, 2009 GOLD GOLD RESOURCE VOLUME IN SITU SG (t/m 3 AVE GRADE ) CONTENT CONTENT (g/t) CATEGORY m 3 TONNAGE (kg) (Troy Oz) Main Measured 1,475, ,692, , ,987 Indicated 373, , ,065 34,252 TOTAL/AVE MAIN REEF 1,849, ,627, , ,239 West Measured 1,438, ,579, ,152 69,189 Quartz Rubble Indicated 234, , ,694 TOTAL/AVE WEST REEF 1,673, ,163, ,485 79,883 Measured Indicated 1,486, ,889, , ,681 TOTAL/AVE QUARTZ REEF 1,486, ,889, , ,681 TOTAL / AVE LUHWAIKA 5,009, ,679, , ,803 A Measured Indicated 64, , ,228 TOTAL/AVE A REEF 64, , ,228 B Measured Indicated TOTAL/AVE B REEF TOTAL / AVE LUHWAIKA 64, , ,228 Main Inferred 780, ,950, ,756 56,455 West Inferred 99, , ,891 Quartz Inferred 2,348, ,300, ,153 69,206 TOTAL / AVE LUHWAIKA 3,227, ,490, , ,552 A Inferred 74, , ,492 B Inferred 91, , ,255 TOTAL / AVE LUHWAIKA 165, , ,454 46,747 TOTAL / AVE LUHWAIKA 3,393, ,930, , ,299

16 Joint Venture - Busolwa - Buziba Busolwa-Buziba JV Deal Highlights TRX and Allied Gold Corp. (AGC) of Dubai signed Letter of Intent for JV development of commercially producing mine at Buziba- Busolwa, Buckreef Ownership: 40% by Buckreef Gold Company Limited (BGCL), a 55/45 JV between TRX an STAMICO 60% by ARL Gold Tanzania Limited (ARL), a subsidiary of AGC Project Highlights Busolwa Project JV will accelerate development and financing of 2 significant mineable gold deposits. Production anticipated to begin in late 2015 TRX relieved of raising additional financing as capital funding to be arranged by AGC Integrated project to deliver significant synergies thus maximizing shareholders value in long-run About Allied Gold Corp (AGC) - A gold exploration and development company focused on Sub-Saharan Africa, AGC is part of the Allied Resources Group, a natural resources group with offices in Dubai and Sydney. AGC s business model involves building value by identifying and acquiring gold resources, developing these into reserves and then producing gold. The Company has been actively involved in Tanzania for years with established operating facilities and Experienced staff. Key relationships extend to Sovereign Wealth Funds and large financial institutions in the Middle East, Europe and United States. 16

17 BGCL AGC Draft By Avise Analytics P Ltd. Draft By Avise Analytics P Ltd. Joint Venture - Busolwa - Buziba Proposed Structure Neighboring mines support case for long asset life for Rwama Project Buziba License Transfer Busolwa Licenses Transfer Rwamagaza Tanzania Limited [BGCL (40%) and AGC (60%)] Proposed Executive Management and Board Proven leadership and successful track record of focused return of newly proposed management team Chairman Stamico Representative Director Mr Jim Sinclair Director Mr Steven van Tongeren Proposed Executive Operations Rwama becomes one of east africa's largest potential mine-able gold deposits JVC to be funded in proportion to equity holdings with initial budget of $500,000 for 3Q314. Executive Management Team responsible for all operations and financing. CEO Mr Justin Dibb CFO Mr Phillip Shamieh COO Mr Andrew Robinson Exploration Mr Greg Winch

18 Draft By Avise Analytics P Ltd. Joint Venture - Busolwa - Buziba Focus to develop & finance 2 significant mineable gold To benefit and accelerate development of Buckreef Main Q Q3 Q4 Q1 Q Q3 Q4 Q1 Q Q3 Q Q1 Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar FINANCE RESOURCE FEASIBILITY MINING MILESTONES JV Formatio n $15 m DFS Equity raise Project Financing 50% debt Indicative Schedule for Production DD & RC Resource Drilling Exploration Drilling Update Resources Definitive Feasibility Study Environmental & Social Impact Assessment Prefeasibilty Mining Licence Award for Engineering & Procurement and Commissioning Resource Update & Prefeasibilty Study Resource Upgrade DFS & Reserve Capex Funding On a standalone basis, few key positives: Buziba cannot be mined alone due to the size of the license. As it is part of the same orebody as Allied s Busolwa mine, forming a joint alliance to accelerate production, is in the best interest of all stakeholders. TRX is not required to raise any additional borrowings as AGC to provide major financing Indicative Budget to September 2014 To incorporate Buziba metallurgical results and finalize into current Ausenco Scoping Study To incorporate Buziba drill data into new geological model, MRE and mine design To undertake additional Buziba metallurgical work for Pre Feasibility Study To meet requirements for working capital and administration TOTAL ESTIMATED BUDGET (Till September 14) $15,000 $50,000 $150,000 $285,000 $500,000 Gold Production from Busolwa Buziba JV is expected to commence during

19 Joint Venture - Busolwa - Buziba Integrated projects to deliver significant synergies Shareholders wealth maximization in long-run TRX s Buckreef mine project: Achieving Operational Synergies from JV with AGC Standalone Assets Merged Project Buziba Busolwa Buizba - Busolwa JV Licensing PL6545/2010 TRE Corp (55%), Stamico (45%) Mineralization 25.5m tonnes grading 1.0g/t for 0.93m oz RL0007/2012, PL6858/2011, PL4634/2007, PL7036/2011 AGC (100%) 24.1m tonnes grading 1.0g/t for 0.84m oz; additional targets ~ 3m oz Joint Venture Company 100% 49.6m tonnes grading 1.0g/t for 1.69m oz; additional targets ~3m oz Logistics Impossible to mine. 5.3 km 2 area is Airstrip, offices, 25 person camp insufficient for waste dumps, established. Further infrastructure tailings dam, process plant & development supported by control of mining infrastructure associated surrounding licenses. Total area with open cast mining of the Buziba 93km 2 deposit. Ore too low grade to truck commercially. Space to mine: total license holding 93km 2 Integrated development maximizes value Economics Current structure constrains ability to finance Ausenco Pre-Feasibility Study was to be completed by March In anticipation of a JVC, Allied has been integrating Buziba data into a new MRE, Scoping Study and PFS. Scale: one management team, one camp, one plant. Capacity to incorporate into Ausenco Pre- Feasibility Study TENURE MAP: Buziba Standalone TENURE MAP: Busolwa Standalone TENURE MAP: Buziba/Busolwa JV All licenses surrounding Buziba held Allied Corp Ample space for Mine Ample space for Mine Significant exploration upside near Mine Significant exploration upside near Mine

20 Value Addition $m (bars) Value Change % (diamonds) Draft By Avise Analytics P Ltd. Joint Venture - Busolwa - Buziba Integrated projects to deliver significant synergies Shareholders wealth maximization in long-run TRX s Buckreef mine project: Achieving Financial Profitability from JV with AGC Operator Standalone Assets Merged Projects Buziba Busolwa Buizba - Busolwa JV Buckreef Gold Co Allied EV/Oz $18 million N/A New Joint Venture Company with Allied Executive Management NPV@10% Zero $87 million $196 million Sum of Parts $18 million + $87 million = $105 million VALUE TRANSFER TO BGCL VIA PROPOSED JV BGCL AGC 350% 280% 210% 140% 70% 0% JOINT VENTURE SYNERGIES $91 million BGCL AGC Equity Share 40% 60% BGCL Synergies AGC Synergies Joint Venture Contributions JV NPV Share $79 million $118 million Synergy Share 67% 33% Value Growth 322% 35% Asset Buziba PL6545/2010 Merged Project Busolwa Interest Buckreef Gold Co (100%) JV Company (100%) Allied Gold Corp (100%) Land Area 5.3 km km km2 Inventory 0.93m oz 1.77m oz 0.84m oz Exploration Target Negligible 3m oz 3m oz ~3x jump in NPV in case of merged project, with BCGL being the greatest beneficiary, BGCL receives 2/3rds of synergies and >300% value growth RESOURCE: JOINT VENTURE CONTRIBUTIONS 94.60% 19% 81% Land Area Resource + Target By asset value, BGC contribution to the Joint Venture ranges between 0 and 19%

21 Joint Venture - Busolwa - Buziba Growth opportunities A world class gold deposit Buckreef on track for transition to Development phase - BGCL & AGC collaboration would consolidate segmented license holdings thus accelerating the development of Buckreef Main project, The project will also benefit from proven expertise of new incoming management team and financial backup to be supplied by AGC. Busolwa-Buziba JV can replicate growth of neighboring mines - Successful drilling results at Busolwa supports the case for large growth potential. Sound track record of resource growth in the Lake Victoria Gold Belt, hint the JV potentials to replicate growth of neighboring mines. Opportunity at depth observed in nearby mines Buckreef, presently among one of the Undeveloped Gold Deposits of East Africa Nyanzaga Rwama Buckreef Ikungu Tulu Kapi Saza-Makongolosi Manica Pickstone Mikei Golden Ridge 2.0 Moz Independent Project Controlled by Major Singida Nyakafuru Miyabi Open Pit Resource Moz (M+I), 0.5g/t cut off 21

22 Exploration Stage Projects Lunguya Project The entire granite/greenstone contact zone within the Lunguya property remains the prime area of potential for significant gold mineralization. Location: Located in the Lake Victoria Goldfields area. within one of the principal Archaean greenstone belts of Tanzania. It lies about 30 km south of Barrick Gold s Bulyanhulu mine, Numerous veins on the Lunguya property have been exploited by artisanal miners to at least 30m in depth which is probably one of the most definitive indicators of gold potential on any property. Buckreef location Lunguya Project Luhala Project The Luhala project covers Archaean-age rocks equivalent to those that host the world class Bulyanhulu and Geita deposits in the Lake Victoria Goldfields of northern Tanzania. Exploration at Luhala has identified a number of prospects which show potential for open pittable oxide gold mineralization. Five gold mineralized prospects have been identified at Kisunge Hill (Central, Eastern and Southern zones) and Shilalo Hill (South and Southwest zones). However, further drillings are required to confirm the potentials. Location: Located 65km south of Mwanza within the Buhungukira greenstone belt which forms the eastern extension of the Geita greenstone belt in northern Tanzania. Specific Luhala Project projects 22

23 Executive Team Jim Sinclair CEO Joseph Kahama COO Mr. Sinclair provides Tanzanian Royalty Exploration with the strategy for its corporate growth and is primarily responsible for providing the leadership necessary for the Company to complete its evolution into a gold producer and royalty company. Mr Kahama became a director of Tanzanian Royalty Exploration Corporation in February 2008 and he formerly served as President and Senior Vice President of the Corporation. He has served as president and director of subsidiary, Tanzam, since Dr. Norman Betts Chairman Steven van Tongeren CFO Dr. Betts serves as a Chair of the board of directors of Starfield Resources Inc. and as a director and member of the audit committees of Tembec Inc., New Brunswick Power Corporation, Export Development Canada and Adex Mining Inc. Mr. Van Tongeren holds a Bachelor of Science degree from the State University of New York and is a Certified Public Accountant. He completed Executive Finance Management Training at INSEAD France, one of the world s leading and graduate business schools. 23

24 Key Investment Highlights A world TRX all class set gold for production deposit phase Excellent pipeline of advanced development projects situated within and around LVG, the third largest gold producing region of Africa, demonstrate potentials to exceed investors riskadjusted hurdle rates of return Proven expertise to explore and establish third party opportunities (JVs) to gain access to resources and drive economies Existing resource supports mine development with neighboring mines supporting case for long asset life Implementing cost reduction measures such as opting for small modular gravity-cil plants and heap leaching to lower capex and opex requirements Alliance with AGC allows TRX to accelerate and focus resources on development of Buckreef Main and other key projects in the pipeline Arranging finance is no more a constraint for the progress of Buckreef Main project progress as financial backup to be provided by AGC Busolwa-Buziba JV: A win-win situation for trio TRX AGC STAMIC O How shareholders will benefit - Buziba deposits become accessible, unlocking upside potentials - Receives highest share of synergistic benefits from JV - Earns exposure to scalable project with robust economics - Benefits from potential for accelerated development - Capital investment risks eases as a result of increased value of Allied s Mine Development Larger project - Buziba deposits become accessible, unlocking potentials - Gain access to larger capital investment, royalties - Responsibilities related to administration and monitoring reduces which may lead to cost savings 24

25 7/4/2011 9/4/ /4/2011 1/4/2012 3/4/2012 5/4/2012 7/4/2012 9/4/ /4/2012 1/4/2013 3/4/2013 5/4/2013 7/4/2013 9/4/ /4/2013 1/4/2014 3/4/2014 5/4/2014 7/4/2014 Price in CAD Millions Draft By Avise Analytics P Ltd. Share Structure As of August A world class gold deposit Ticker Exchange CORPORATE SUMMARY TNX TSE Industry Mining Price (08/20/14) 52-Week Range C$2.57 C$4.30 C$1.75 Shares Outstanding m Warrants Outstanding (08/31/13) 5,506,579 Market Cap $265.97m Net Cash (mrq) $3.97m Volume Close EV $262.00m Issued Capital C$115.61m Checklist SHAREHOLDERS Management Proven leadership, focused return Financials Less capital investment risks; Debt-free Catalysts Advancing development projects, Buziba Busolwa JV Stock Price Emerging Uptrend xxxx xxxx Directors Top 20 25

26 7/4/2011 8/4/2011 9/4/ /4/ /4/ /4/2011 1/4/2012 2/4/2012 3/4/2012 4/4/2012 5/4/2012 6/4/2012 7/4/2012 8/4/2012 9/4/ /4/ /4/ /4/2012 1/4/2013 2/4/2013 3/4/2013 4/4/2013 5/4/2013 6/4/2013 7/4/2013 8/4/2013 9/4/ /4/ /4/ /4/2013 1/4/2014 2/4/2014 3/4/2014 4/4/2014 5/4/2014 6/4/2014 7/4/2014 8/4/2014 Price in CAD Draft By Avise Analytics P Ltd. Relative Share Price Performance 140 Relative Strength Index (RSI) Represents the worth of $100 investment made at the beginning of July, IAG.TSE ABX.TSE TNX.TSE TNX.TSE - Tanzanian Royalty Exploration Corp. ABX.TSE - Barrick Gold Corp. IAG.TSE - IAMGOLD Corp. 26