Acacia Mining plc
2015 Interim Results Presentation July 2015
LSE:ACA
Acacia Mining plc 2015 Interim Results Presentation July 2015 - - PowerPoint PPT Presentation
LSE:ACA Acacia Mining plc 2015 Interim Results Presentation July 2015 Important Notice This presentation includes forward - looking statements that express or imply Although Acacias management believes that the expectations reflected
LSE:ACA
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
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
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 forward- looking 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 2014 in accordance with National Instrument 43-101 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
metal will be produced and totals stated may not add up due to rounding. 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
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2 July 2015 Interim Results Presentation
July 2015 Interim Results Presentation 3
Producing mines Exploration properties Tintinba Project - Mali West Kenya JV Kenya Bulyanhulu Tanzania
High quality asset base
1
Becoming a low cost producer
2
Committed to exploration
5
Generating free cash flow
3
Disciplined capital allocation
4
Hounde Belt JVs Burkina Faso Buzwagi Tanzania North Mara Tanzania
Creating a leading company in Africa
4
Laying the foundations for the future
Q2 production of 186koz driven by 13% increase at Bulyanhulu to 71koz
than H1 2014
Reflects investment into Bulyanhulu and North Mara
Post payment of US$12m 2014 final dividend
Interim Results Presentation July 2015
626 642 719 750-800 760 500 550 600 650 700 750 800 2012 2013 2014 2015E 2015-19E Avg
Production (koz)
171 112 61 85 65 113 171 132 125 100 47 117 61 5 100 200 300 400 2012 2013 2014 2015E 2015-19E Avg
Capital Expenditure (US$ Million)1
Expansion Cap Dev't Sustaining 5
EUS/$ million 1,561 1,346 1,105 1,050- 1,100 910 500 700 900 1,100 1,300 1,500 2012 2013 2014 2015E 2015-19E Avg
AISC per ounce sold (US$/oz)
941 827 732 695-725 660 500 600 700 800 900 2012 2013 2014 2015E 2015-19E Avg
Cash cost per ounce sold (US$/oz)
1 Sustaining capital guidance for 2015 includes US$15 million of land purchases which is not included in historic numbers as treated as a pre-payment for accounting purposes
Full year guidance maintained – with disciplined spend reducing capex
Interim Results Presentation July 2015
1 Non-IFRS financial performance measures with no standard meaning under IFRS. Refer to ”Non IFRS measures”’ on page 22 of Interim results for definitions. 2 Cash cost per tonne milled excluding the reprocessing of tailings at Bulyanhulu amounted to US$67 for the six ended 30 June 2015. *Reported process recovery rates and head grade include tailings retreatment at Bulyanhulu. Excluding the impact of the tailings retreatment half year 2015 process recovery and head grade would be 89.4% and 3.1g/t respectively
July 2015 Interim Results Presentation 7
Operational Performance H1 2015 H1 2014 % change Tonnes mined (thousands of tonnes) 20,475 19,892 3% Ore tonnes mined (thousands of tonnes) 4,905 3,908 26% Ore tonnes processed (thousands of tonnes) 4,559 3,770 21% Process recovery rate (percent) 1* 88.0% 89.5% (2%) Head grade (grams per tonne)* 2.8 3.2 (13%) Gold production (ounces) 367,301 346,581 6% Gold sold (ounces)1 355,470 330,947 7% Cash cost per tonne milled1,2 (US$) 61 66 (8%) Per ounce data (US$) Average spot gold price1 1,206 1,291 (7%) Average realised gold price1 1,200 1,290 (7%) Total cash cost1 780 752 4% All-in sustaining cost1 1,133 1,118 1%
8 Interim Results Presentation July 2015
H1 2015 H1 2014 Operational information: Ounces produced Koz 133.1 105.4 Ounces sold Koz 122.0 101.2 Cash cost US$/oz 871 868 AISC US$/oz 1,356 1,249 ROM Processing information: Ore milled Kt 479 428 Head grade g/t 8.7 8.4 Mill recovery % 88.7% 91.6% Ounces produced Koz 118.4 105.1 Tailings Reclaim information: Ore milled Kt 580 7 Head grade g/t 1.2 1.2 Mill recovery % 64.5% na Ounces produced Koz 14.8 0.3
Quarter on quarter progress – on track to hit year end run rates
Q1 15
Led to 12% reduction in AISC
development and maintenance ongoing
elements:
Tailings reclaim Mining at reserve grade Increased ore tonnes
for both production and cost in Q4
9
50 100 150 200 250 300 350 400
2013 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
Annualised koz
Route to 350kozpa – Annualised production
2013 Base Tailings reclaim Grade & Tonnage Improvement
Route to 350koz consists of three elements with contributions from each starting as we move through 2015
July 2015 Interim Results Presentation
Continue to drive productivity and reduced dilution
50 100 150 200 250 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
Metres Average Monthly Development Metres per Double Boom Jumbo
July 2015 Interim Results Presentation 10
2.0 2.5 3.0 3.5 4.0 4.5 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
Average Long hole Stoping Width
11
Continuing to implement changes to the workforce to improve productivity
2,397 2,225 1,843 1,598 1,450 1,350 159 151 111 99 94 80
500 1,000 1,500 2,000 2,500 3,000 2012 2013 2014 2015 Current 2015 Dec 2016
Breakdown of Workforce Internationals Nationals
July 2015 Interim Results Presentation
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H1 2015 H1 2014 Operational information: Ounces produced Koz 142.1 138.8 Ounces sold Koz 142.0 137.3 Cash cost US$/oz 583 584 AISC US$/oz 893 936 Processing information: Ore milled Kt 1,412 1,365 Head grade g/t 3.6 3.6 Mill recovery % 87.3% 87.3%
Driving group free cash flow generation
by 5%, driven by increased throughput
in June 2015, ahead of schedule
Development ore still formed bulk of U/G ore
process during H1
Nyabirama open pit
Won President’s Award for Best CSR in
Tanzania (Extractives)
13 Interim Results Presentation July 2015
H1 2015 H1 2014 Operational information: Ounces produced Koz 92.0 102.3 Ounces sold Koz 91.5 92.4 Cash cost US$/oz 965 879 AISC US$/oz 1,089 1,169 Processing information: Ore milled Kt 2,087 1,980 Head grade g/t 1.5 1.8 Mill recovery % 93.9% 90.3%
Continue to optimise to drive cashflow
& recoveries) driving production
the lower production base
Lower capitalisation of mining costs as
planned, impacted cash costs
power in H1 15
Targeting improvement in H2
1 Non-IFRS financial performance measures with no standard meaning under IFRS. Refer to ”Non IFRS measures”’ on page 22 of interim results for definitions.
2 Excludes non-cash reclamation asset adjustments and includes finance lease purchases.
.
July 2015 Interim Results Presentation 15
Financial Performance H1 2015 H1 2014 % change Revenue US$m 446,781 445,509 0% EBITDA1 US$m 96,888 131,621 (26%) Net earnings / (loss) US$m 14,765 40,822 (64%) Basic earnings / (loss) per share (EPS) US cents 3.6 10.0 (64%) Dividend per share (cents) US$m 1.4 1.4 0% Cash and cash equivalents US$m 286,932 269,596 6% Cash generated from operating activities US$m 107,093 127,107 (16%) Operating cash flow per share1 US cents 26.1 30.1 (13%) Capital expenditure2 US$m 83,057 114,744 (28%) Long term debt (Borrowings) US$m 142,000 142,000 0%
1,10 0 to 1,175
July 2015 Interim Results Presentation 16
North Mara and Buzwagi have driven cash generation YTD
294 20 6 308 9 12 287 270 275 280 285 290 295 300 305 310 315 320
Cash at Dec 2014 Operating Mines Working capital investment and other Cash post sustaining spend Exploration Dividends paid Cash at Jun 2015
$ millions
1,10 0 to 1,175
July 2015 Interim Results Presentation 17
1,118 28 13 44 18 1,133
1,000 1,020 1,040 1,060 1,080 1,100 1,120 1,140 1,160 1,180 H1 2014 AISC Cash costs Sustaining Capital Capitalised Strip Central costs &
H1 2015 AISC US$/oz
All-in Sustaining Cost Bridge (US$/oz)
1,10 0 to 1,175
July 2015 Interim Results Presentation 18
132 32 32 7 21 8 7 3 6 97
70 80 90 100 110 120 130 140 150 160 170
H1 2014 EBITDA Volume Price Direct operating costs Capitalised costs Central costs & share based payments FX losses Unrealised hedge gains Exploration and
H1 2015 EBITDA
EBITDA bridge (US$m)
July 2015 Interim Results Presentation 19
Operational Optimisation
19
Earnings impacted by currency, oil hedges and share based incentives
Representative Adjusted Earnings US$m EPS (c) Current net earnings 14.8 3.6 FX adjustment – net 10.6 2.6 Unrealised hedge gains (5.6) (1.4) RSU charges 5.0 1.2 Adjusted EPS 24.8 6.0
re-valuation of outstanding indirect tax receivables, held in TSH
incentives
Post period end, charges have largely reversed
Offset by realised losses on hedges of US$4.7m taken through cash costs
July 2015 Interim Results Presentation 21
Tintinba Project Mali
prospective Senegal-Mali Shear Zone
and IP in October
planned for Q2 2016 West Kenya JV Kenya
corridor showing best results to date
vein systems identified
potential size of system Bulyanhulu Tanzania
programme - target of 5Moz
12,500m of drilling in H2
repeat reefs
Tested Safari zone in H1,
results awaited Houndé Belt JVs Burkina Faso
covering 2,400sqkm of the Houndé Belt
South Houndé JV
from initial soil sampling on new projects
Continuing to expand our footprint across Africa
23
Continuing track record of delivery against plan
Interim Results Presentation July 2015
Key Deliverables Achieved When First production from CIL Expansion (Tailings reclaim)
Q3 14 Board approval of Gokona Underground
Q3 14 Expanded exploration footprint into Burkina Faso
Q3 14 Group free cash generation
Q3 14 Improved plant recoveries at Buzwagi
Q3 14 Achievement of US$185 million of cost savings
Q4 14 Acceleration of development at Bulyanhulu
Q4 14 Gokona Underground Permits granted
Q2 15 Gokona Underground First Stoping Ore
Q2 15 Tailings Reclaim operating at nameplate
Q2 15 Expanded exploration footprint into Mali
Q2 15 First stoping ore from Upper East Zone at Bulyanhulu Q3 15
Q3 15
Q3 15
Q4 15
Q4 15
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Delivery of plan will drive cash flow at and below current gold prices
attractiveness of our business
make short term changes to our business
Interim Results Presentation July 2015
Bulyanhulu* North Mara Buzwagi Group** Q2 15 Q2 14 Q2 15 Q2 14 Q2 15 Q2 14 Q2 15 Q2 14 Key operational information: Ounces produced
71,423 50,241 66,532 70,177 47,687 57,787 185,641 178,206 Ounces sold
67,490 52,044 66,470 70,040 50,093 49,479 184,055 171,563 Cash cost per ounce sold US$/oz 830 919 605 561 933 837 777 749 AISC per ounce sold US$/oz 1,278 1,348 968 893 1,065 1,078 1,149 1,105 Copper production Klbs 1,489 1,135
2,318 3,993 3,454 Copper sold Klbs 1,377 1,153
1,721 4,001 2,874 Mining information: Tonnes mined Kt
4,335 6,682 5,803 10,322 10,355 Ore tonnes mined / hoisted Kt 222 217 733 / 55 566 1,333 1,333 2,398 2,115 Processing information: Ore milled Kt 229 205 721 710 1,125 1,010 2,484 1,925 Head grade g/t 9.0 8.3 3.3 3.5 1.4 1.9 88.1% 89.8% Mill recovery % 90.3% 91.5% 86.8% 86.9% 93.8% 91.9% 2.6 3.2 Cash cost per tonne milled US$/t 244 233 56 55 42 41 58 67
Interim Results Presentation 26 July 2015 * Bulyanhulu mining and processing information represent ROM only – Tailings reprocessing statistics are as follows: Q215 – Ore Milled 407Kt @ 1.2g/t, recoveries of 67.8% for 11,291 ounces recovered. Q2 14 – 273 ounces produced in circuit ** Group figures for ore milled, head grade and mill recovery include reclaimed tailings in processing information
Bulyanhulu* North Mara Buzwagi Group** H1 15 H1 14 H1 15 H1 14 H1 15 H1 14 H1 15 H1 14 Key operational information: Ounces produced
133,141 105,420 142,146 138,816 92,015 102,344 367,301 346,581 Ounces sold
121,976 101,165 142,005 137,340 91,488 92,442 355,470 330,947 Cash cost per ounce sold US$/oz 871 867 583 584 965 879 780 752 AISC per ounce sold US$/oz 1,356 1,249 893 936 1,089 1,169 1,133 1,118 Copper production Klbs 3,069 2,431
3,999 7,492 6,430 Copper sold Klbs 2,538 2,347
3,044 6,828 5,391 Mining information: Tonnes mined Mt
8.1 12.9 11.3 20.5 19.9 Ore tonnes mined / hoisted Mt 0.46 0.43 1.6 / 0.06 1.1 2.7 2.4 4.9 3.9 Processing information: Ore milled Kt 479 425 1,412 1,365 2,087 1,980 4,559 3,770 Head grade g/t 8.7 8.4 3.6 3.6 1.5 1.8 88.0% 89.5% Mill recovery % 88.7% 91.6% 87.3% 87.3% 93.9% 90.3% 2.8 3.2 Cash cost per tonne milled US$/t 222 206 59 59 42 41 61 66
Interim Results Presentation 27 July 2015 * Bulyanhulu mining and processing information represent ROM only – Tailings reprocessing statistics are as follows: H1 15 – Ore Milled 580Kt @ 1.2g/t, recoveries of 64.5% for 14,775 ounces recovered. H1 14 – 273 ounces produced in circuit ** Group figures include reclaimed tailings in processing information
29
sufficient scale on several of the better shoots
July 2015 Interim Results Presentation
Promising drill results on Liranda Corridor – follow-up drill programmes underway
Multiple structural domains with extensive surface gold anomalies
Company Presentation June 2015 30
joint venture for 2,400sqkm in southern Houndé Belt
encouraging – extensions to exiting trends and new prospects identified
programmes undertaken on all 3 joint venture projects to identify further drill targets
Mali – Tintinba Project
31
agreement on the highly prospective Senegal-Mali Shear Zone (host to >50Moz)
and Gounkoto 5Moz @ 5g/t
vendor to earn initially 85.5% and ultimately 90% of three properties
capped at US$2m on production
in late June
aeromagnetics programmes after wet season in October 2015
July 2015 Interim Results Presentation
Entry into the Senegal-Mali Shear Zone
July 2015 Interim Results Presentation 32
Reef 1 Reef 2
Interim Results Presentation July 2015
Delineated a further 850koz at 4.4g/t in inferred resource beneath 990 mrl, to be tested by staged drilling from underground platforms
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July 2015 Interim Results Presentation 34
Drilling programme being planned to test underground potential
Stage 3 pit outline Stage 4 pit outline Current pit outline Stage 1 programme to test U/G potential Stage 2 programme to test U/G potential
Reserves and Resources estimates calculated in accordance with NI43-101 – 2013 Reserves calculated at US$1,300/oz and Resources at US$1,500/oz July 2015 Interim Results Presentation 36
2014 YE 2013 YE Tonnes (000's) Grade Au (g/t) Ounce (000's) Tonnes (000's) Grade Au (g/t) Ounce (000's) Bulyanhulu Proven and probable (U/G) 29,681 9.667 9,225 29,610 9.530 9,072 Proven and probable (Tailings) 9,082 1.046 305 7,974 1.229 315 Mineral Resource (U/G) 12,399 8.491 3,385 10,225 10.653 3,502 Inferred (U/G) 13,725 9.897 4,367 6,632 12.877 2,745 Buzwagi Proven and probable 20,762 1.345 898 24,105 1.445 1,120 Mineral Resource 48,333 1.298 2,017 49,109 1.291 2,038 Inferred 4,623 1.237 184 7,173 1.183 273 North Mara Proven and probable 23,653 2.692 2,047 21,710 3.169 2,212 Mineral Resource 17,960 2.873 1,659 25,266 3.316 2,694 Inferred 10,073 3.236 1,048 735 2.730 65 Exploration Proven and probable
105,296 1.422 4,812 105,296 1.422 4,812 Inferred 4,456 1.352 194 4,456 1.352 194 Total* Proven and probable 83,178 4.665 14,475 83,399 4.743 12,719 Mineral Resource 183,988 2.007 11,873 189,895 2.137 13,046 Inferred 32,877 5.481 5,793 18,995 5.365 3,276