LSE:ACA. Acacia Mining plc. Continuing to transform our business to deliver free cash flow

Transcription

1 LSE:ACA Acacia Mining plc Continuing to transform our business to deliver free cash flow

2 Important Notice This presentation includes forward-looking statements that express or imply expectations of future events or results as opposed to historical facts. These statements include, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, projects, and statements regarding future performance. Forward-looking statements are generally identified by the words plans, expects, anticipates, believes, intends, estimates and other similar expressions. All forward-looking statements involve a number of risks, uncertainties and other factors, many of which are beyond the control of Acacia, which could cause actual results and developments to differ materially from those expressed in, or implied by, the forward-looking statements contained herein. Factors that could cause or contribute to differences between the actual results, performance and achievements of Acacia include, but are not limited to, changes or developments in political, economic or business conditions or national or local legislation or regulation in countries in which Acacia conducts - or may in the future conduct - business, industry trends, competition, fluctuations in the spot and forward price of gold or certain other commodity prices (such as copper and diesel), currency fluctuations (including the US dollar, South African rand, Kenyan shilling and Tanzanian shilling exchange rates), Acacia s ability to successfully integrate acquisitions, Acacia s ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, and to process its mineral reserves successfully and in a timely manner, Acacia s ability to complete land acquisitions required to support its mining activities, operational or technical difficulties which may occur in the context of mining activities, delays and technical challenges associated with the completion of projects, risk of trespass, theft and vandalism, changes in Acacia s business strategy and ongoing implementation of operational reviews, as well as risks and hazards associated with the business of mineral exploration, development, mining and production and risks and factors affecting the gold mining industry in general. Although Acacia s management believes that the expectations reflected in such forward-looking statements are reasonable, Acacia cannot give assurances that such statements will prove to be correct. Accordingly, investors should not place reliance on forward-looking statements contained in this presentation. Any forward-looking statements in this presentation only reflect information available at the time of preparation. Subject to the requirements of the Disclosure and Transparency Rules and the Listing Rules or applicable law, Acacia explicitly disclaims any obligation or undertaking publicly to update or revise any forwardlooking statements in this presentation, whether as a result of new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast or estimate and no statement made should be interpreted to mean that Acacia s profits or earnings per share for any future period will necessarily match or exceed its historical published profits or earnings per share. Mineral reserves and mineral resources estimates contained in this presentation have been calculated as at 31 December 2013 in accordance with National Instrument as required by Canadian securities regulatory authorities. Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definitions were followed for mineral reserves and resources. The reserves and resources figures stated are estimates. No assurances whatsoever can be given that the indicated quantities of metal will be produced and totals stated may not add up due to rounding. For more information regarding the nature of reserves and resources estimates and relevant CIM definitions, please see page 90 of African Barrick Gold plc s 2013 Annual Report and Accounts. You are reminded that you have received this presentation on the basis that you are a person to whom this presentation may be lawfully made and delivered. You may not and are not authorised to: (i) reproduce or publish this presentation; or (ii) distribute, disclose or pass on this presentation to any other person, in whole or in part, by any medium or in any form, in breach of any applicable securities laws. BY ACCEPTING THIS PRESENTATION, YOU ACKNOWLEDGE AND AGREE TO THE CONTENTS OF THIS DISCLAIMER AND YOU AGREE TO BE BOUND BY THE FOREGOING LIMITATIONS. Mining Indaba 2

3 What we stand for 1 A leading asset portfolio in Africa Our Three Pillars 2 Focused on free cash flow Our People 3 Disciplined capital allocation Our Relationships Our Business 4 Becoming the partner of choice 5 Growing our footprint unearthing Africa s potential Mining Indaba 3

4 Company overview A leading asset portfolio amongst our peers Our Locations Business Overview Bulyanhulu World class deposit Life of mine in excess of 20 years West Kenya JV Kenya High-grade open pit and North Mara underground mine Tintinba Project Mali Hounde Belt JVs Burkina Faso North Mara Tanzania Bulyanhulu Tanzania Buzwagi Tanzania Buzwagi 9 year life of mine Low-grade bulk deposit Short life mine, harvest mode Exploration Contrarian view on exploration Building pan African portfolio Producing mines Exploration properties Mining Indaba 4

5 US$/ounce Turning business around to drive free cash flow Delivered a 40% reduction in AISC since Q AISC and Cash Cost Evolution (US$/oz) 1,800 1,600 1,400 1,200 1, Q4 12 Q4 13 Q4 14 Q4 15 FY 16E Cash cost / ounce AISC / ounce Mining Indaba 5

6 Driving change within our business Limited benefit from foreign exchange and oil price Tone set from the top Board of Directors and Executive Leadership Team have volunteered to take a 10% reduction in salary Continuing to make our business more efficient in order to reduce costs US$25 million annual saving from the restructuring of the workforce announced in late 2015 US$10 million further reduction in capital expenditure (1) Capex expected to be 55% lower than it was in 2013 US$10 million reduction in corporate administration costs against 2015 Spend expected to be 50% lower than it was in 2012 US$10 million of annualised savings through renegotiation of contracts across supply chain Expect to further reduce cost base as we move through 2016 Mining Indaba 6

7 Improving our Bulyanhulu business Dramatic productivity improvements realised Breakdown of workforce 3,000 2, ,000 2, ,500 1,843 1, Nationals Internationals 72 1,197 Total Development metres (km) Average long-hole stoping width (m) 5.0 Average daily ROM tonnes milled (t) 3, ,500 2,000 2,268 2,329 2,510 2,636 2,625 2, , ,000 H H H H H H Mining Indaba 7

8 Continuing to enhance our relationships North Mara named as overall winner of the Presidential Awards for Corporate Social Responsibility and Empowerment in Tanzania Demonstrates the progress we have made at the mine over the past two years North Mara was also awarded the large scale mining CSRE Presidential Award Buzwagi was also awarded the CSRE Presidential Award for Infrastructure as a result of its investment in improving the road network close to the mine Awards are part of a programme jointly run by the Tanzanian Ministry of Energy and Minerals and the Extractive Inter-Stakeholders Forum Operations judged on their commitment to sustainable community wellbeing, human resource development and training and the integration of the sector with other areas of the economy Mining Indaba 8

9 Continuing to enhance our relationships Over US$12 million of investment into community projects around our mines moving focus towards making our local economies thrive Infrastructure Bridge to provide year round access to markets for farmers Livelihoods Tools to support co-operative setting up a motorbike maintenance business Livelihoods Bee-keeping project for 120 youths Mining Indaba 9

10 Continuing to keep our people safe Our innovative approach to embedding safety within hearts and minds taking effect WeCare Raffle Prize Draw at North Mara Total Reportable Injury Frequency Rate Image of WeCare prize giving / sign etc Winner of OSHA Mining Sector Award Bulyanhulu North Mara Buzwagi Acacia Mining Indaba 10

11 Continuing to localise our operations Identifying and promoting local talent Reduced number of expatriates on our mines by over 50% whilst delivering 3 years of increased production Promoted Tanzanians to senior managerial levels Buzwagi has only 10 expats out of a workforce of 1,000 Core Training programmes Rainbow Gold Training Program for our First Line Leaders Top 300 completed Tufanikiwe Pamoja Cultural Change Program Business Acumen Training Reinforcing Accountable Management System Proportion of National Employees 98% 97% 96% 95% 94% 94% 93% 93% 92% 91% 91% 90% 89% 97% 88% Mining Indaba 11

12 Whilst investing in our future Taking advantage of current market conditions to expand our footprint in the most prospective belts across Africa Tintinba Project Mali 150sqkm along highly prospective Senegal-Mali Shear Zone Initial drilling of targets planned for Q West Kenya JV Kenya 2,200 sqkm over Ndori Greenstone belt Liranda Corridor showing best results to date Houndé Belt JVs Burkina Faso 3 exploration joint ventures covering 2,400sqkm of the Houndé Belt Positive drilling on South Houndé JV project New gold trends identified from initial soil sampling on new projects North Mara Tanzania Drilling to test future U/G potential below Nyabirama Stage 4 open pit Bulyanhulu Tanzania U/G Reef 2 drilling programme - target of 5Moz Proterozoic-Archean volcano-sedimentary belts Greenfields projects Brownfields projects Mining Indaba 12

13 EUS/$ million 2016 Outlook Consolidating progress made to date to drive cash flow Production (koz) * Cash cost per ounce sold (US$/oz) * E AISC per ounce sold (US$/oz) 1,500 1,561 1,300 1,346 1,100 1,105 1, * E Capital Expenditure (US$ Million) Expansion Cap Dev't Sustaining * * E * 2016 Guidance reflects mid point of respective ranges Mining Indaba 13

14 Investment Case Focused on free cash flow generation and long term value creation Disciplined capital allocation 2016 will be 4 th consecutive year of reduced capital and increased production Continuing to invest in exploration across Africa Delivering further cost savings across the business Expect a 15% reduction in AISC in 2016 Operations set up to generate strong cash flow in the current gold price environment Q4 showed what is possible from the portfolio of assets Focus on cash flow ahead of ounces Mining Indaba 14