Corporate Presentation. March 2019

Transcription

1 Corporate Presentation March

2 FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and assumptions and accordingly, actual results and future events could differ materially from those expressed or implied in such statements. You are hence cautioned not to place undue reliance on forwardlooking statements. Forward-looking statements include words or expressions such as , development, Q1 2020, target, guidance, intention, outlook, future, will, to be completed, LOM Plan and other similar words or expressions. Factors that could cause future results or events to differ materially from current expectations expressed or implied by the forward-looking statements include the ability to meet our target annual production of 400,000+ ounces at $700/oz AISC, the ability to start production at the Mana underground in Q1 2020, the ability to meet our target average production of 413,000 ounces at $714 AISC, the ability to generate over $1.2B of operating cash flow from 2019 to 2023 at $1,300 gold price, the ability to meet our 2019 guidance in terms of production, AISC, capital expenditure and non-recurring development expenditure, the ability of each of the Boungou Mine and the Mana Mine to meet its 5-year production and cost targets, the ability to complete the Nabanga deposit PEA by Q3 2019, the ability of the Mana Mine to meet its LOM Plan and operational and financial objectives, the ability of the Boungou Mine to meet its LOM Plan and operational and financial objectives, the ability to meet Siou underground timeline, the ability to meet our 2019 exploration programs, the accuracy of our assumptions, fluctuation in the price of currencies, gold or operating costs, mining industry risks, uncertainty as to calculation of mineral reserves and resources, delays, political and social stability in Africa (including our ability to maintain or renew licenses and permits) and other risks described in SEMAFO s documents filed with Canadian securities regulatory authorities. You can find further information with respect to these and other risks in SEMAFO s 2017 Annual MD&A, as updated with our 2018 First Quarter MD&A, 2018 Second Quarter MD&A, 2018 Third Quarter MD&A and other filings made with Canadian securities regulatory authorities and available at These documents are also available on our website at SEMAFO disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law. We also advise you that the terms Inferred Resources and Indicated Resources, although recognized and required by the Canadian Securities Administrators, are not recognized by the US Securities and Exchange Commission. There is no certainty that Inferred Resources or Indicated Resources will be economically mineable. All mineral resources are exclusive of mineral reserves. In this presentation, all amounts are in US dollars unless otherwise indicated. 2

3 TABLE OF CONTENTS Executive Summary 2019 Exploration Budget & Plan Appendices 3

4 1 SEMAFO OVERVIEW 400,000+ oz Producer at ~$700 AISC with Upside MANA 2008 first gold pour Strong 5-year outlook 1.7M oz reserves at 2.9 g/t Mana Mine BURKINA FASO Nabanga Boungou Mine Korhogo MANA + BOUNGOU Bantou DEVELOPMENT UPSIDE Bantou + Savary Nabanga PEA Q3/ Targets: 5-year average production 413,000 oz at 5-year average $714 AISC 3.2M oz reserves at 3.4 g/t Exploration upside BOUNGOU 2019 first full year Strong 5-year outlook 1.5M oz reserves at 4.1 g/t 4

5 CORPORATE SNAPSHOT 1 Conservative Capital Structure Enterprise Value Shareholders Shares - Basic 326M Shares - F.D. 327M Share Price (Feb 27/19) C$ 3.55 Market Cap (1.30 US$/C$) US$ 889M 34% Institutional 90% Cash (Dec 31/18) US$ 122M Debt (Dec 31/18) US$ 120M 48% 18% 10% Enterprise Value US$ 887M Retail & Research Analyst Coverage Other 5

6 1 5-YEAR PRODUCTION & COST TARGETS Over $1.2B of Operating Cash Flow at $1,300 Gold Price Operating Cash Flow (US$M) $243 $238 $240 $229 $260 5-Year Total >$1.2B Year Average $707 $757 $720 $730 $652 $ Production (000 s oz) BOUNGOU 200 MANA AISC (US$/oz) Average Guidance at Midpoint 0 6

7 1 RESERVES & RESOURCES SUMMARY High Quality Reserve Base (as at December 31, 2017) Updated reserves & resources for December 31, 2018 expected early March M oz Inferred Resources Others 122,000 oz 4% 6% Siou O/P g/t Au 181,000 oz 3.1M oz Measured & Indicated Resources Boungou g/t Au 1,479,000 oz 16% Siou U/G g/t Au 516,000 oz 46% TOTAL RESERVES g/t Au 3,200,000 oz 3.2M oz Proven & Probable Reserves % Wona g/t Au 902,000 oz * All mineral resources are exclusive of mineral reserves. 7

8 GUIDANCE Strong 2019 Driven by Full Year at Boungou Consolidated Boungou Mana Gold production ( 000 oz) All-in sustaining cost ($/oz) ,020 Capital Expenditure (included in AISC) (in millions of $) Sustaining Stripping Non-Recurring Development Expenditures (not included in AISC) (in millions of $) Siou Underground Development Air Strips & Mill Optimisations The general and administrative expense for 2019 has been forecast at $16 million. Exploration budget for 2019 is $19 million. 8

9 1 BOUNGOU OVERVIEW Our New Flagship Mine Constructed on-time, on-budget 2019 First full year 1.5M oz reserves at 4.1 g/t (at December 31, 2017) 5-year average production of 205,000 oz per year at $539 AISC 2019 Exploration Program goal is to extend mine life 9

10 1 BOUNGOU TARGETS 5-Year Production and Cost Year Average $616 $636 $537 $ $490 $449 Production (000 s oz) AISC (US$/oz) Average Guidance at Midpoint 0 10

11 1 MANA OVERVIEW Produced over 2M oz. and Still Going Strong First gold pour 2008 Plant upgraded and resources extended over time 1.7M oz reserves at 2.9 g/t (at December 31, 2017) Mana February 2018 PFS provides updated mine plan for Wona-Kona, Siou O/P and U/G 5-year average production target of 209,000 oz per year at $886 AISC Siou UG development started Q

12 1 SIOU UNDERGROUND OVERVIEW On-Time, On-Budget; 1,050m Completed at December 31, 2018 Portal (5.5m x 5.5m) and ramp (14 slope) located at the bottom of the Siou pit 2,000 tpd will require working 3-6 stopes per month depending on size and width of stopes Backfill for primary stopes are 4% cemented rockfill and secondary stopes are filled with only waste rock Two types of long hole mining will be used 80% Transversal long hole mining for stopes wider than 10m 20% Longitudinal long hole mining for stopes smaller than 10m 200 m PROGRESS AT END OF YEAR 2018 FIRST PRODUCTION STOPE (Q1 2020) 600 m 12

13 1 SIOU UNDERGROUND TIMELINE On-Time, On-Budget; 1,700m Completed at February 20, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 % Complete NI Technical report Negotiate / Sign contract with U/G Contractor Detailed engineering for development start-up ESIA & Mining Permit* Contractor Mobilization on-site Infrastructures Portal preparation U/G development Surface & U/G Definition & Grade Control drilling Long Hole stoping production start-up Design capacity reached at 2,000 tpd 100 % 100 % 100 % 85 % 100 % 55 % 100 % 20 % 0 % 0 % 0 % * Current permit allows for U/G development start-up 13

14 1 MANA TARGETS 5-Year Production and Cost $ Year Average $985 $892 $828 $ $665 Production (000 s oz) AISC (US$/oz) Average Guidance at Midpoint 0 14

15 BANTOU-SAVARY COMBINATION 1 A New District Scale Land Package on the Prolific Houndé Belt ~30 km District Scale Land Package, ~50 km x ~25 km for 1,250 km 2 Entire 1,250 km 2 truckable to potential central plant in NE of Bantou permit Both properties have existing resources ~50 km Karankasso (805,000 oz at 2.03 g/t) and Bantou (361,000 oz at 5.35 g/t) Bantou chert horizon Mafic volcanics Intermediate volcanics Excellent location on prolific Houndé Greenstone Belt Sediments (Tarkwa-type) Volcanoclastics and cherts Sediments ~20 km 15

16 1 BANTOU-SAVARY COMBINATION Savary Acquisition Overview & Update Non-binding letter of intent signed February 11, 2019 Exclusivity until March 11, 2019 Intention to enter binding agreement no later than March 11, 2019 Closing expected late May 2019 Post-closing will announce updated regional exploration program and combination of existing resources All-in cost of 1,250 km 2 district scale land package is $20-$24/oz based on existing resources only Minimal 2.2% dilution to SEMAFO shareholders 16

17 1 CORPORATE SOCIAL RESPONSIBILITY (CSR) Maintaining Strong Social Licence Training 12,000 HOURS Per year of training to Burkinabe employees Local Community Support Over 93% of workforce are Burkinabè National Workforce Development Program Training Burkinabè employees for management or trainer positions See Appendix for List of Local Community Projects 17

18 1 STRONG SAFETY RECORD AND CULTURE While Maintaining Cost Discipline BOUNGOU Construction million man-hours worked without lost-time injury MANA 701 days worked without lost-time injury as at December 20, 2018 Operating days worked without lost-time injury as at December 31,

19 SEMAFO IS A SIMPLE STORY 1 Clean and Straightforward with Upside WHAT WE DO HAVE x WHAT WE DON T HAVE x Strong 5-year outlook >$1.2B Operating Cash Flow at $1,300 Au Net cash now and in future Simple low cost debt that can be repaid any time without penalty Conservative capital structure Savary-Bantou and Nabanga upside x x x x x x No hedges No gold loans No gold streams No complicated financing schemes or arrangements No off-balance sheet financing No unreported dilution 19

20 TABLE OF CONTENTS Executive Summary 2019 Exploration Budget & Plan Appendices 20

21 2019 EXPLORATION OVERVIEW 2 $19 Million Consolidated 2019 Budget Add near-mine ounces $4M 2019 Budget BURKINA FASO Add near-mine ounces Regional Exploration $9M 2019 Budget Develop resources $3M 2019 Budget - Bantou $1M 2019 Budget - Korhogo Mana Mine Nabanga Boungou Mine Bantou will be Bantou increased on Savary closing Korhogo Increase resources along strike and at depth $2M 2019 Budget 21

22 2019 BOUNGOU EXPLORATION PLAN 2TAPOA 2018 All Targets within 30 km of Plant 2019 budget of $9M 1,200m DDH 41,000m RC Focus on adding resources by year-end 22

23 BOUNGOU EXPLORATION PROGRAM Dangou 2019 Exploration Plan 3 zones totalling 7,000m testing extensions and continuity Testing other anomalies and artisanal mining areas 5,000m 23

24 MANA EXPLORATION PLAN All Targets within 30 km of Plant 18,600m of RC drilling 2,000m trenches 58,000m of auger drilling 24

25 2019 MANA EXPLORATION PROGRAM 2TAPOA 2018 Pompoi 2019 Program Sector located 3 km east of Yaramoko Auger anomalies up to 1,264 ppb 2m at 2.30 g/t historic RAB 2m at 7.40 g/t historic RAB 25

26 2019 BANTOU EXPLORATION PROGRAM 2TAPOA 2018 Goal to Increase Maiden Resouce of 361,000 oz at 5.35 g/t 26

27 2019 BANTOU EXPLORATION PROGRAM 2TAPOA 2018 Bantou Proximal Zone 500m West of Bantou Zone 27

28 2019 BANTOU EXPLORATION PROGRAM 2TAPOA 2018 Bantou + Karankasso = New District Scale Land Package ~30 km Savary s Karankasso project is adjacent to Semafo s Bantou property Both properties have existing inferred resources, Karankasso 805,000 oz at 2.03 g/t and Bantou 361,000 oz at 5.35 g/t ~50 km Combined 1,250 km² produces a district scale land package Excellent location on prolific Hounde Bantou chert horizon Mafic volcanics Greenstone Belt Intermediate volcanics ~20 km Sediments (Tarkwa-type) Volcanoclastics and cherts Sediments Combined exploration program to be announced post-closing 28

29 2019 NABANGA EXPLORATION PROGRAM 2TAPOA % Increase in Resources to 840,000 oz at 7.7 g/t Inferred resources: 3.4 Mt at 7.7 g/t Au for 840,000 oz 3,240m DDH planned to test extensions PEA to be completed in Q

30 2019 NABANGA EXPLORATION PROGRAM 2TAPOA 2018 Testing Proximate Targets to Assess Property Potential 221 ppb ppb 5,000m RC to test for near-surface parallel structures 232 ppb 122 ppb 772 ppb Auger IP coincident anomalies 30

31 TABLE OF CONTENTS Executive Summary 2019 Exploration Budget & Plan Appendices 31

32 3 MANA RESERVES AND RESOURCES As at December 31, 2017 DECEMBER 31, 2017 DEPOSITS PROVEN RESERVES PROBABLE RESERVES TOTAL RESERVES Tonnage Grade (g/t Au) Ounces 4 Tonnage Grade (g/t Au) Ounces 4 Tonnage Grade (g/t Au) Ounces 4 MANA WONA-KONA 6,062, ,500 6,280, ,900 12,342, ,400 NYAFÉ 265, ,600 6, , ,300 FOFINA 33, ,900 3, , ,200 SIOU OP 1,400, , , ,000 1,579, ,200 SIOU UG 1,047, ,600 1,988, ,200 3,035, ,800 YAMA , , , ,600 ROMPAD 317, , , ,800 TOTAL 9,124, ,600 9,107, ,700 18,231, ,710,300 DECEMBER 31, 2017 DEPOSITS MEASURED INDICATED TOTAL RESOURCES Tonnage Grade (g/t Au) Ounces 4 Tonnage Grade (g/t Au) Ounces 4 Tonnage Grade (g/t Au) Ounces 4 MANA WONA-KONA 1,331, ,800 21,623, ,600 22,954, ,863,400 NYAFÉ 286, , , , , ,000 FOFINA 293, , , , , ,100 YAHO 5,738, ,500 11,636, ,800 17,374, ,300 FILON 67 26, ,300 9, ,000 35, ,300 FOBIRI 469, , , , , ,700 SIOU OP 67, ,400 56, , , ,600 SIOU UG 513, , , ,300 1,300, ,500 YAMA , ,900 99, ,900 TOTAL 8,723, ,600 34,800, ,280,200 43,523, ,696,800 32

33 3 MANA RESERVES AND RESOURCES (CONT D) As at December 31, 2017 DECEMBER 31, 2017 DEPOSITS INFERRED Tonnage Grade (g/t Au) Ounces 4 WONA-KONA 3,466, ,600 NYAFÉ 151, ,400 FOFINA 67, ,100 YAHO 223, ,600 MANA FILON 67 6, ,100 FOBIRI 578, ,800 MAOULA 2,628, ,100 SIOU 2,093, ,900 YAMA 58, ,500 TOTAL 9,270, ,100 1 The Corporation indirectly owns 90% of SEMAFO Burkina Faso S.A. which directly holds the interest in the Mana Mine reserves and resources. 2 Mineral reserves and resources were estimated using a gold price of $1,200 and $1,400 per ounce, respectively. 3 All mineral resources reported are exclusive of mineral reserves. 4 Rounding of numbers of tonnes and ounces may present slight differences in the figures. 33

34 3 CONSOLIDATED RESERVES AND RESOURCES As at December 31, 2017 PROPERTY Mana Tapoa (Boungou Mine) Yactibo (Nabanga Project) Total MINERAL RESERVES Proven Tonnes 9,124,000 1,584,000-10,708,000 Grade (g/t Au) Ounces 868, ,000-1,197,600 Probable Tonnes 9,107,000 9,611,000-18,718,000 Grade (g/t Au) Ounces 841,700 1,150,000-1,991,700 TOTAL MINERAL RESERVES Tonnes 18,231,000 11,195,000-29,426,000 Grade (g/t Au) Ounces 1,710,300 1,479,000-3,189,300 MINERAL RESOURCES (exclusive of reserves) Measured Tonnes 8,723,000 62,000-8,785,000 Grade (g/t Au) The Corporation indirectly owns a 100% interest in all of its permits. except for the permits held by SEMAFO Burkina Faso S.A. and SEMAFO Boungou S.A., respectively, in which the Government of Burkina Faso holds a 10% interest. 2 Mineral reserves and resources at Mana and at Tapoa (Boungou Mine) were estimated using a gold price of $1,200 and $1,400 per ounce. respectively. 3 Mineral resources at Yactibo Permit Group (Nabanga project) were reported above a 5.0 g/t Au cut-off grade. 4 Rounding of numbers of tonnes and ounces may present slight differences in the figures. 5 All mineral resources reported are exclusive of mineral reserves. 6 As of December 31, As of June 30, Ounces 416,600 4, ,600 Indicated Tonnes 34,800,000 4,768,000-39,568,000 Grade (g/t Au) Ounces 2,280, ,000-2,688,200 TOTAL M&I Tonnes 43,523,000 4,830,000-48,353,000 Grade (g/t Au) Ounces 2,696, ,000-3,108,800 Inferred Tonnes 9,270, ,000 1,840,000 11,965,000 Grade (g/t Au) Ounces 799,100 57, ,000 1,446,100 34

35 3 MANA FEBRUARY 2018 LOM PLAN TOTAL LOM SIOU UG Ore processed (t) Head grade (g/t) - 5,23 5,61 4,97 5,34 5,35 4,92-5,29 Recovery (%) 96% 96% 96% 96% 96% 96% 96% - 96% Gold recovered (oz) Cash operating cost per tonne ($/t) SIOU Waste (t) Ore processed (t) Head grade (g/t) 3,50 3, ,57 Recovery (%) 96% 96% % Gold recovered (oz) Cash operating cost per tonne ($/t) WONA Waste (t) Ore processed (t) Head grade (g/t) 2,31 2,53 2,31 2,40 2,20 2,20 2,35 1,97 2,27 Recovery (%) 81% 81% 81% 81% 81% 81% 81% 81% 81% Gold recovered (oz) Cash operating cost per tonne ($/t) Other (Nyafé + Yama + Rompad + Fofina) Gold recoevered (oz) MANA CONSOLIDATED Waste (t) Ore processed (t) Head grade (g/t) 2,62 3,04 3,25 3,16 3,13 3,12 2,78 1,97 2,92 Recovery (%) 87% 89% 88% 88% 89% 89% 75% 81% 86% Total Gold recovered (oz) Cash operating cost per tonne ($/t) Sustinaing capital ($) All-in sustaining cost ($/oz) Initial capital expenditure - Siou UG Cash operating cost per tonne is a non-ifrs financial performance measure with no standard definition under IFRS and is calculated using total operating costs related to tonnes processed (which includes capitalized stripping activities) over tonnes processed. 2 All-in sustaining cost is a non-ifrs financial performance measure with no standard definition under IFRS and represents the total mining operation expenses (which includes capitalized stripping activities), plus sustainable capital expenditures. 35

36 3 BOUNGOU FEBRUARY 2018 LOM PLAN 2018 (Pre Production) Waste (t) Ore processed (t) Head grade (g/t) 1,85 4,87 5,58 5,60 4,99 Recovery (%) 90.1% 93.3% 93.7% 93.7% 93.5% Total Gold recovered (oz) Cash operating cost per tonne ($/t) Sustaining capital ($) All-in sustaining cost ($/oz) TOTAL LOM Waste (t) Ore processed (t) Head grade (g/t) 4,61 4,46 3,00 2,10 2,00 4,11 Recovery (%) 93.5% 93.5% 91.0% 91.0% 89.6% 92.9% Total Gold recovered (oz) Cash operating cost per tonne ($/t) Sustaining capital ($) All-in sustaining cost ($/oz)

37 3 DEBT SUMMARY Simple, Low Cost Debt Main Economic Terms Principal Repayments Macquarie is the debt holder Repayment Date Amount US$M Annual interest at LIBOR % The debt can be repaid in whole or in part at any time, without penalty One payment of $15M is held on a reserve account and accounted for as restricted cash No restrictive covenants like cash sweeps, hedges, etc. Mar 31, 2019 $15M Jun 30, 2019 $15M Sep 30, 2019 $15M Dec 31, 2019 $15M Mar 31, 2020 $15M Jun 30, 2020 $15M Sep 30, 2020 $15M Dec 31, 2020 $15M $120M 37

38 3 SEMAFO FOUNDATION Working in Partnership with Local Communities Investment of C$10M in community projects in Burkina Faso See for details 38

39 3 MANAGEMENT TEAM Corporate Operations / Construction Benoit Desormeaux CEO & Director 20+ years at SEMAFO Martin Milette CFO 20+ years experience, including 14 at SEMAFO John Jentz VP Corporate Development & IR 20+ years experience, including 15 covering West Africa Geology Patrick Moryoussef VP Mining Operations 25+ years experience, including 15 at SEMAFO Sylvain Duchesne VP Construction & Engineering 30+ years experience, including 14 at SEMAFO Richard Roy VP Exploration 30 years experience, including 10 at SEMAFO 39

40 SEMAFO Inc. 100 Alexis-Nihon blvd. 7 th floor, St-Laurent (Quebec) Canada H4M 2P3