RESERVES of 700,000 ounces Gold (43-101) RESOURCES of 4.2 million ounces Gold (43-101) 25 th February 2013 Annual General Meeting

Transcription

1 RESERVES of 700,000 ounces Gold (43-101) RESOURCES of 4.2 million ounces Gold (43-101) 25 th February 2013 Annual General Meeting +44(0)

2 DISCLAIMER The information contained herein and in the relating presentation (together the information ) has been provided by Vatukoula Gold Mines Plc ( VGM or the Company ). No representation, express or implied, or warranty as to the accuracy or completeness of the information is made by any party and nothing contained herein is or shall be relied upon as a promise or representation as to the future. In all cases, recipients should conduct their own investigation and analysis of VGM. Except as otherwise indicated, the information is stated as of 25 February 2013 and should not, under any circumstances, create an implication that there has been no change in the affairs of the Company, market conditions or regulations since such date. The Company does not assume any obligation to update the information contained herein, including forwardlooking statements. Neither this document nor the presentation constitutes an offer to sell nor a solicitation of an offer to buy any securities. The information is confidential and must not at any time by recipients be copied, published, reproduced or distributed in whole or in part to any other person. The information is provided to recipients on the basis that they keep confidential the information and any other information otherwise made available, whether oral or in writing, in connection with the Company. The information contains forward-looking statements relating to VGM that are based on management s current expectations, estimates and projections about the VGM. Words such as expects, intends, plans, projects, believes, estimates and similar expressions are used to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Further, some of these forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements including rise in production capabilities and timetables; financials projections; production costs; and economic predictions. Forward-looking statements in the information are subject to known and unknown risks, uncertainties and other factors that may cause VGMs' actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: geopolitical uncertainty, political and economic instability, uncertain legal enforcement and risk of corruption where mining operations are located; changes in, and the effects of, the laws, regulations and government policies affecting VGMs' mining operations, uncertainties related to raising substantial additional financing to make all necessary investments and complete proposed mining projects; uncertainties related to the accuracy of VGMs estimates of mineral reserves and mineral resources and VGMs' estimates of future production and future total cash costs of production; uncertainties and costs related to exploration and development activities, feasibility studies that provide estimates of expected or anticipated economic returns from a mining project; uncertainties related to expected production rates, timing of production and the total cash costs of production; changes in general economic conditions, the financial markets and the demand and market prices of precious metals and diamonds. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. The information does not comprise an admission document, listing particulars or a prospectus relating to VGM or any subsidiary of the Company, does not constitute an offer or invitation to purchase or subscribe for any securities of the Company and should not be relied on in connection with a decision to purchase or subscribe for any such securities. The information does not constitute a recommendation regarding any decision to sell or purchase securities in the Company. No reliance may be placed for any purpose whatsoever on the information or the completeness or accuracy of the information. No representation or warranty, express or implied, is given by or on behalf of the Company, or its shareholders, directors, officers or employees or any other person as to the accuracy or completeness of the information and no liability is accepted for any such information (including in the case of negligence, but excluding any liability for fraud). The information is directed only at persons who fall within the exemptions contained in Articles 19 and 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (such as persons who are authorised or exempt persons within the meaning of the Financial Services and Markets Act 2000 and certain other persons having professional experience relating to investments, high net worth companies, unincorporated associations or partnerships, and the trustees of high value trusts) and persons to whom communication of the information may otherwise lawfully be made. Any investment, investment activity or controlled activity to which the information relates is available only to such persons and will be engaged in only with such persons. Persons of any other description, including those that do not have professional experience in matters relating to investments, should not rely or act upon the information. The information should not be distributed, published, reproduced or otherwise made available in whole or in part by recipients to any other person and, in particular, should not be distributed to persons with an address in the United States of America, Australia, the Republic of South Africa, the Republic of Ireland, Japan or Canada or in any other country outside the United Kingdom where such distribution may lead to a breach of any legal or regulatory requirement. No securities commission or similar authority in Canada has in any way passed on the merits of the securities in the Company and any representation to the contrary is an offence. No document in relation to the issue of securities in the Company has been, or will be, lodged with, or registered by, The Australian Securities and Investments Commission, and no registration statement has been, or will be, filed with the Japanese Ministry of Finance in relation to the issue of securities in the Company. Accordingly, subject to certain exceptions, securities in the Company may not, directly or indirectly, be offered or sold within Canada, Australia, Japan, South Africa or the Republic of Ireland or offered or sold to a resident of Canada, Australia, Japan, South Africa or the Republic of Ireland. The securities in the Company have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the US Securities Act ) or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered or sold within the United States or to, or for the account or benefit of, any US Person as that term is defined in Regulation S under the US Securities Act. The Company has not been registered and will not register under the United States Investment Company Act of 1940, as amended. 2

3 CONTENTS 1. Overview of VGM 2. Strategy 3. Operating performance 4. Capital Investment 5. Growth opportunities 6. Summary 3

4 VATUKOULA - OVERVIEW Owns and Operates the Vatukoula Gold Mine, Fiji Historic production of 7 million ounces of gold over 74 years Underground high grade narrow vein underground gold mine All required infrastructure 2 vertical hoisting shafts 1 decline Other access / ventilation shafts Processing plant rated at 600,000 tonnes per annum Labour live locally or in surrounding community Fiji Progressive Mining Policy Vatukoula Gold mining title held by foreign companies for over 70 years Government progressive mining policy encouraging resource development Namosi Cu/Au project Tavatu Au project Mt Kasi Au project 5 Year Tax Holiday (Dec 2014) 3% Royalty (Dec 2014) 20% Corporate Tax Rate 4

5 OPERATIONAL OVERVIEW Geology Shallow epithermal Au deposit Multiple mineralisation episodes along fractures and faults, caused by collapse of extinct volcano (3 My) Mineralisation occurs generally as shallow dipping, 40 cm lodes Processing Well established processing plant and known mineralogy Ultimate recovery 85% Plant capacity in excess of 550,000 tonnes per annum Mining Narrow vein mining, 1.1 metre stope width Jack leg mining Trackless haulage to shafts Majority of ore hauled via two shafts Ore capacity in excess of 550,000 tonnes per annum Mine metres deep (21 level) current mining between 14 level to 18 level Reserves & Resources Proven & Probable 700 koz (7.9g/t) Total Resources 4.2 million Oz (6.2g/t) 5

6 CONTENTS 1. Overview of VGM 2. Strategy 3. Operating performance 4. Capital Investment 5. Growth opportunities 6. Summary 6

7 VATUKOULA - STRATEGY Expand Targeting historic production rates on a sustainable basis 550,000 tonnes at 6.5 g/t head grade Targeting sub US$ 800 per ounce Optimise Improving productivity Alternative fuel source Increased plant recoveries Sustain Continued capital investment Underground infrastructure Resource drilling converting large inventory to Reserves Grow Large ore body Expansion Potential 19,700 hectares of further exploration licences adjacent to this world class deposit 7

8 CONTENTS 1. Overview of VGM 2. Strategy 3. Operating performance 4. Capital Investment 5. Growth opportunities 6. Summary 8

9 2012 Financial and Operational Highlights Gold shipped was 52,616 ounces for the year ended August 2012 Turnover of 54.9 million (2011: 47.9 million) Continued capital investment of 16.1 million (2011: 11 million) More than doubled compared to last year. access to high-grade ore bodies Measured Mineral Resource base increased by 7% to 7.7 million tonnes at 6.2 grams of gold per tonne (1.5 million ounces) Intersected three new high-grade mineralised structures at Vatukoula, subsequently named the Nielsen Deposit. Intersected high grade extensions and new mineralised structures in the Philip Shaft area. 9

10 OPERATIONAL REVIEW OPERATIONS FOCUSED ON OPENING UP NEW MINING AREAS Capital Development Either ahead or on target Targeting higher grade deposits in the coming year Lowering Cash Costs Current development programme will deliver increased grade to the mill 3 months ended Nov 2012 (Q1) 12 months ended Aug months ended Aug 2011 Underground Mining Total underground tonnes mined 117, , ,688 Operating development (metres) 3,360 15,644 16,834 Strike drive development (metres) 540 4,034 5,312 Capital development (metres) 1,625 4,975 2,307 Total development (metres) 5,525 24,653 24,453 Total (Sulphide + Oxide) Ore processed (tonnes) 112, , ,123 Average ore head grade (g/t) Total recovery (%) 71.9% 78.6% 81.3% Gold produced (ounces) 10,549 53,152 52,157 Gold shipped (ounces) 10,482 52,616 53,461 Cash Costs Cash cost per ounce shipped (US$) 1,590 1,627 1,349 Cash cost per tonne (US$/tonne) Average realised gold price (US$ / oz) 1,721 1,643 1,439 10

11 FINANCIAL REVIEW ONGOING CAPITAL INVESTMENT FY 2012 revenues of 54.9 million, up 15% on 2011 Cash generated from operations of 6.3 million, up on cash used of 2.3m in FY 2011 Continued capital investment to deliver sustainable profitable production in the long term FY million (47%) 3 months ended Nov 2012 (Q1) 12 months ended Aug months ended Aug 2011 Revenue ( 000) 11,335 54,925 47,964 EBITDA ( 000) 380 (1,547) 2,150 Cash generated from operating activities ( 000) 834 6,257 (2,312) Cash cost per ounce shipped (US$/ounce) 1,590 1,627 1,349 Average realised gold price (US$/ounce) 1,721 1,643 1,430 Capital Investment ( 000) 5,171 16,175 11,003 Cash and Cash equivalents ( 000) 3,998 2,641 12,849 11

12 DEVELOPMENT TARGETS OVERVIEW Total Reserve Report 2011 Zone Lode Tonnes Grade Contained Gold Code (Mt) (g/t) (Moz) 100 Matanagata Matanagata North east Matanagata East TTN Dolphin Prince Cayzer Prince (Prince) Crown Main N Flatmake N Hangingwall # Prince William Prince William Flatmake # Prince William Flatmake # Prince William Hanging wall split Prince William 1500 split Subtotal Ore Reserve

13 VATUKOULA WORLD CLASS Currently Developing New Areas on; Matnagata NE, Dolphin Prince, Cayzer Prince and Prince William flatmakes 13

14 CAYZER PRINCE

15 CONTENTS 1. Overview of VGM 2. Strategy 3. Operating performance 4. Capital Investment 5. Growth opportunities 6. Summary 15

16 Capital Investment Item Year 1 (US$,000) Year 2 (US$,000) Total (US$,000) Capital development (Inclusive of sustaining development) 19,000 17,500 36,500 R&R Drilling - 9,000 9,000 Shaft / mining upgrades 7,000 11,500 18,500 Tailings Dam 6,000-6,000 Additions / upgrade of mobile fleet 1,600 2,100 3,700 Other 10,400 3,900 14,300 Year 1 funded from cash flow circa US$ 35 debt Year 2 funded from cash flow Sustaining capex approx US$ 30 million (US$15 million Capital Development) Capital Investment delivers sustainable production levels Current forecasts 50,000 60,000 ounces 16

17 CONTENTS 1. Overview of VGM 2. Strategy 3. Operating performance 4. Capital Investment 5. Growth opportunities 6. Summary 17

18 VATUKOULA FUTURE POTENTIAL Comment from AMC Report December 2012 There is significant potential for discovery of additional mineralisation beyond 2012 resource and reserve boundaries. Previous investigations noted geological similarities between Vatukoula and deposits such as Lihir and Porgera and the high potential for the discovery of additional gold mineralisation. 18

19 EXPLORATION STRATEGY RESULTS TO DATE & TARGETS Expanding Resource Surface Oxide 5.14 g/t Au over m g/t Au over 5 m 3.45 g/t Au over 19 m Prince William g/t Au over 1.3 m Matanagata 9.61 g/t Au over 0.77 New Discoveries Nilsen Orebody g/t Au over 0.46 m 33.5 g/t Au over 2.86 m g/t Au over 1.07 m Philip Shaft Area 53.1 g/t Au over 1.29 m incl g/t over 0.23 m g/t Au over 0.42 m g/t Au over 0.53 m 19

20 EXPLORATION STRATEGY Resource Drilling Reserve and resource drilling in the Prince William, Cayzer Prince Area s 20

21 CONTENTS 1. Overview of VGM 2. Strategy 3. Operating performance 4. Capital Investment 5. Growth opportunities 6. Summary 21

22 CAPITAL STRUCTURE Major Shareholders Zhongrun International Mining Co. Ltd 29.0 m 24.67% Sprott Asset Management 14.0 m 12.67% Canadian Zinc Corporation 12.6 m 10.70% Zesiger Capital Group 8.2 m 6.97% Barclays Wealth 3.5 m 3.0% Issued Share Capital Issued and fully paid Current Price Market Capitalisation Warrants and Options (Directors) Fully Diluted million 23 pence 29.4 million US$ 44.7 million 8.41 million 4.10 million million Cash (approx) 4 million (November 2012) Debt Zero Gold Hedging Zero 22

23 Producing Gold Mine Large Exploration Potential Dave Paxton +44(0)