Acacia Mining plc
Company Presentation June 2016
LSE:ACA
Acacia Mining plc Company Presentation June 2016 Important Notice - - PowerPoint PPT Presentation
LSE:ACA Acacia Mining plc Company Presentation June 2016 Important Notice This presentation includes forward - looking statements that express or imply Although Acacias management believes that the expectations reflected in such
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 2015 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. For more information regarding the nature of reserves and resources estimates and relevant CIM definitions, please see page 90 of Acacia Mining plc’s 2015 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
AGREE TO THE CONTENTS OF THIS DISCLAIMER AND YOU AGREE TO BE BOUND BY THE FOREGOING LIMITATIONS.
June 2016 Company Presentation 2
A leading asset portfolio amongst our peers
Our Locations Business Overview Bulyanhulu
North Mara
underground mine
Buzwagi
Exploration
June 2016 Company Presentation
Producing mines Exploration properties Tintinba Project Mali West Kenya JV Kenya Bulyanhulu Tanzania Houndé Belt JVs Burkina Faso North Mara Tanzania Buzwagi Tanzania
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922 812 732 732 693 685 1,561 1,346 1,105 1,112 959 965
200 400 600 800 1,000 1,200 1,400 1,600 1,800
2012 2013 2014 2015 Q1 16 FY 16E* US$/ounce
AISC and Cash Cost Evolution (US$/oz)
Cash cost / ounce AISC / ounce
June 2016 Company Presentation
Delivered a 40% reduction in AISC since 2012
* Represent mid-point of 2016 guidance ranges
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FY 2016 AISC expected to be 15% lower than 2015
Significant free cash flow leverage
Deliver further increase in development metres Improving stope cycle times Achieve improved recoveries Progress drilling programmes across Reef 2 as
look to unlock geological potential
Continuing the transformation
June 2016 Company Presentation
1,453 1,278 1,373 999 983
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
AISC per ounce sold (US$/oz)
62 71 62 78 78
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Production (koz)
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June 2016 Company Presentation
10.4 12.3 15.9 16.5
2013 2014 2015 Q1 16 Annualised
Total Development metres (km)
Productivity improvements continuing and driving costs lower
47 52 70 105
2013 2014 2015 Q1 2016
Mined tonnes per employee 4.1 3.9 2.8 2.7
2013 2014 2015 Q1 2016
Average long-hole stoping width (m) 108 107 101 82 79
Q1 2015 Q2 15 Q3 15 Q4 15 Q1 2016
Cost per tonne mined
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Reef 1
Testing expansion of a world class resource to unlock potential parallel operation
June 2016 Company Presentation
Reef 2M
Phase 3 Drilling Phase 4 Drilling Phase 2 Drilling
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flow over the last 3 years
Q1 continued trend with AISC of US$737/oz
and lowest cost asset in 2016
Initiate Nyabirama deeper drilling programme Prepare U/G drill platforms ahead of 2017 deeper
drilling programme at Gokona
Deliver CAF plant at Gokona Underground Maintain improved community relations
Continuing to deliver strong performance
June 2016 Company Presentation
828 968 939 932 737
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
AISC per ounce sold (US$/oz)
76 67 68 77 75
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Production (koz)
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Company Presentation June 2016
Reserve replacement has eased pressure on drilling to upgrade approximately 850koz of resource beneath current reserves, infill and deeper drilling will commence in 2017
300m 600m
Pink blocks – reserves Green blocks – resources
250 m Reserves 640 m Resources Planned Western Portal Mining taking place via Eastern Portal
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Nyabirama - Assessing U/G potential in 2016
June 2016 Company Presentation
Mineralisation known to extend beyond final pit design, drilling programme in 2016 designed to test geological understanding
Planned 2016 holes (8 holes) Cut 4 Pit
Hangingwall Lode Footwall Lodes
300m 300m
Image looking South West From Eastern side-Mine Grid
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Operating in harvest mode
June 2016 Company Presentation
1,118 1,065 1,394 1,236 1246
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
AISC per ounce sold (US$/oz)
44 48 34 45 37
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Production (koz)
year as focus continued to be on waste stripping
Production due to step up quarter on quarter with
costs dropping accordingly
production and 15% reduction in AISC over 2015 levels
Zero cost collars for 136koz of 2016 production
between US$1,150/oz and US$1,290/oz
In Q1, added 43koz for 2017 production between
US$1,150/oz and US$1,421/oz
Maintain recoveries of 94% Improve excavator productivity to achieve
material movement plan
Assess future options for the mine
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Tintinba Project Mali
prospective Senegal-Mali Shear Zone currently being drill tested West Kenya JV Kenya
Greenstone belt
best results to date Houndé Belt JVs Burkina Faso
the Houndé Belt
drill tested
Houndé of 2.1Moz @ 1.5 g/t
Taking advantage of current market conditions to expand our footprint in the most prospective belts across Africa
North Mara Tanzania
potential below Nyabirama Stage 4 open pit Bulyanhulu Tanzania
programme
Proterozoic-Archean volcano-sedimentary belts Brownfields projects Greenfields projects
June 2016 Company Presentation
Nyanzaga Tanzania
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Broad initial exploration programmes focused on identifying potential new deposits within ~1,600sqkm land package
June 2016 Company Presentation 15
Composite long section of corridor showing multiple high grade intercepts at vertical depths of up to 500m
June 2016 Company Presentation
ASBSDD006 21m@5.27g/t Au from 50.81m KDLCDD0003 10m@17g/t Au from 18m LCD0055 3.2m@5.95g/t Au from 560m LCD0068 0.9m@10.3g/t Au from 748.3m LCD0075 2.5m@7.91g/t Au from 213.5m 2.8m@11.1g/t Au from 250.4m 12.8m@15.3g/t Au from 274.2m LCD0072 2.7m@4.86g/t Au from 242.3m 0.7m@4.55g/t Au from 270m 1.7m@7.49g/t Au from 367.8m LCD0077
500mRL 1000mRL 1500mRL
grams x meters Au
< 1 ≥ < 1 ≥ < 8 ≥ 28 In Progress LCD0078 LCD0076 ASBSDD001 16.81m@10.7g/t Au from 32.41m LCD0048 4m@7.71g/t Au from 223m 5m@17.3g/t Au from 305m LCD0057 3.4m@30.5g/t Au from 436.6m 6m@4.98g/t Au from 461m 4m@10.2g/t Au from 453m 6m@19.4g/t Au from 473m
500m 500m
ACACIA IA SHOO SHOOT BUSHIA USHIANGA NGALA SHOO SHOOT
LCD0053 3m@62.3g/t Au from 31.5m 3m@10.8g/t Au from 241m 12m@4.43g/t Au from 264m 8 28
500m
6.34m @ 5.02 g/t Au from 38.32m
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Currently managed by Sarama – Acacia funding US$3.5m per annum for next 3 years to earn 70% interest
June 2016 Company Presentation
Inferred Resource of ~500Koz @ ~1.8g/t Au from 2015 work and targeting >500Koz addition at better grades in 2016
Recoveries expected to be >90% using float, biox
and CIL & >85% using heap leach on oxide
grade gold controls may be cross cutting
Diamond drilling targeting oblique structures has
intersected several high grade zones.
extensions of MM and MC zone ongoing with positive results
Regional AC drilling on Phantom (NE of MM and
MC Zones) has intersected new zones in near surface
Auger sampling targeting areas of complicated
regolith in NE of project has started to resolve several gold zones
Inferred Tonnes Au Grade Ounces Cut-off (Mt) (g/t) (Koz) (g/t) Oxide 13.5 1.2 498 0.3 Transition 2.5 1.4 113 0.8 Fresh 25.0 1.9 1,487 0.8-2.2 Total 41.0 1.5 2,098
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June 2016 Company Presentation
Multiple structural domains with extensive surface gold anomalies & resource expansion at Tankoro
anomalism
Several gold anomalies >5-20km long Assay values up to 5,000ppb (5g/t) gold
magnetics/radiometrics being planned
regolith
Central Houndé and Pinarello
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June 2016 Company Presentation
entire land holding
interpreted major shears delineated on all properties
Target Area
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who will manage and fund Nyanzaga for 3 years through to DFS for a 25% interest for a spend of $15m
OreCorp may subsequently increase interest to 51% depending on
NPV
approximately 800m vertically below surface with mineralisation open at depth
Whole resource lies in one deposit Seven high grade zones up to 20m true width, 300m strike length
and over 450m down dip
Thickness and high grades for mine flexibility (potential OP or UG)
testwork to optimise the flow sheet
June 2016 Company Presentation
High-grade project in scoping study
Tonnes Au Grade Au Contained (Mt) (g/t) (Moz) Measured 2.93 3.77 0.356 Indicated 14.92 4.09 1.960 Sub-Total M & I 17.85 4.04 2.316 Inferred 3.40 4.20 0.463 Total 21.25 4.07 2.778
Summary of Resources (March 2016)
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626 642 719 731 765*
500 550 600 650 700 750 800 2012 2013 2014 2015 2016
Production (koz)
171 112 70 74 60* 113 171 132 110 110* 47 117 61 5 100 200 300 400 2012 2013 2014 2015 2016E
Capital Expenditure (US$ Million)
Expansion Cap Dev't Sustaining
EUS/$ million 1,561 1,346 1,105 1,112 965* 500 700 900 1,100 1,300 1,500 2012 2013 2014 2015 2016E
AISC per ounce sold (US$/oz)
941 827 732 772 685*
500 600 700 800 900 2012 2013 2014 2015 2016E
Cash cost per ounce sold (US$/oz)
Consolidating progress made to date to drive cash flow
* 2016 Guidance reflects mid point of respective ranges
June 2016 Company Presentation 22
2016 will be 4th consecutive year of reduced capital and increased production Continuing to invest in exploration across Africa Dividend maintained – commitment to capital returns Balance sheet strength maintained
Expect a 15% reduction in AISC in 2016
current levels
Strong start to 2016 Six months of free cash flow delivery Focus on cash flow ahead of ounces
Focused on free cash flow generation and long term value creation
June 2016 Company Presentation 23
1 These are non-IFRS measures. Refer to page 23 for definitions 2 EBITDA, adjusted EBITDA, net (loss)/earnings, (loss)/earnings per share, adjusted net earnings, adjusted earnings per share and cash generated from operating activities include continuing and discontinued operations in 2014 3 Excludes non-cash capital adjustments (reclamation asset adjustments) and includes finance lease purchases and land purchases recognised as long term prepayments.
Financial Performance Q1 2016 Q1 2015 % change Revenue US$m 220,909 214,894 3% EBITDA1 US$m 65,550 52,975 24% Adjusted EBITDA1,2 US$m 66,411 53,572 24% Net (loss)/ earnings2 US$m (52,410) 9,207 nm Basic (loss)/ earnings per share (EPS) (cents)2 US cents (12.8) 2.2 nm Adjusted net earnings1,2 US cents 18,109 10,619 71% Adjusted earnings per share (AEPS) (cents)1,2 US cents 4.4 2.6 69% Cash and cash equivalents US$m 237,429 285,569 (17)% Cash generated from operating activities US$m 52,232 47,129 11% Capital expenditure3 US$m 36,030 42,578 (15)% Total Borrowings US$m 113,600 142,000 (20)%
June 2016 Company Presentation 25
1 Non-IFRS financial performance measures with no standard meaning under IFRS. Refer to ”Non IFRS measures”’ on page 12 of Q1 results for definitions. Cash cost per tonne milled excluding the reprocessing of tailings at Bulyanhulu amounted to US$59 per tonne for the quarter ended 31 March 2016, US$69 per tonne for the quarter ended 31 March 2015
Operational Performance Q1 2016 Q1 2016 % change Tonnes mined (thousands of tonnes) 9,407 10,153 (7)% Ore tonnes mined (thousands of tonnes) 2,445 2,507 (2)% Ore tonnes processed (thousands of tonnes) 2,488 2,075 20% Process recovery rate (percent) 86.3% 88.0% (2)% Head grade (grams per tonne) 2.8 3.1 (10)% Gold production (ounces) 190,210 181,660 5% Gold sold (ounces)1 184,181 171,415 7% Cash cost per tonne milled1,2 (US$) 51 65 (22)% Per ounce data (US$) Average spot gold price1 1,183 1,218 (3)% Average realised gold price1 1,150 1,207 (5)% Total cash cost1 693 783 (11)% All-in sustaining cost1 959 1,117 (14)%
June 2016 Company Presentation 27
Bulyanhulu* North Mara Buzwagi Group** Q1 16 Q1 15 Q1 16 Q1 15 Q1 16 Q1 15 Q1 16 Q1 15 Key operational information: Ounces produced
78,426 61,718 74,721 75,614 37,063 44,328 190,210 181,660 Ounces sold
72,448 54,486 74,300 75,535 37,433 41,395 184,181 171,415 Cash cost per ounce sold US$/oz 661 921 484 563 1,171 1,004 693 783 AISC per ounce sold US$/oz 983 1,453 737 828 1,246 1,118 959 1,117 Copper production Klbs 1,817 1,580
1,920 3,803 3,499 Underground: Ore tonnes trammed/hoisted Kt 243 242 125 8
250 Open Pit / TSF Reclaim Tonnes mined Kt
3,675 5,926 6,211 9,040 9,886 Ore Tonnes mined Kt 378 173 775 874 1,303 1,375 2,456 2,422 Processing information: Ore milled Kt 252 250 731 691 1,128 962 2,488 2,075 Head grade g/t 9.8 8.3 3.5 3.9 1.1 1.5 2.8 3.1 Mill recovery % 87.9% 87.0% 90.2% 87.8% 94.3% 94.0% 86.3% 88.0%
for 8,650 ounces recovered. Q1 15 – Ore Milled 173Kt @ 1.1g/t, recoveries of 55.7% for 3,484 ounces recovered
June 2016 Company Presentation 28
Reserves and Resources estimates calculated in accordance with NI43-101 – 2013 Reserves calculated at US$1,100/oz , Mine Resources at US$1,400/oz and Exploration resources at US$1.500/oz
2015 YE 2014 YE Tonnes (000's) Grade Au (g/t) Ounce (000's) Tonnes (000's) Grade Au (g/t) Ounce (000's) Bulyanhulu Proven & probable (U/G) 20,820 8.851 5,925 29,681 9.667 9,225 Proven & probable (Tailings) 6,548 1.074 226 9,082 1.046 305 Mineral Resource (U/G) 22,158 7.033 5,010 12,399 8.491 3,385 Inferred (U/G) 19,900 9.227 5,903 13,725 9.897 4,367 Buzwagi Proven & probable (Surface/Stockpiles) 14,682 1.323 624 20,762 1.345 898 Mineral Resource 44,152 1.346 1,911 48,333 1.298 2,017 Inferred 3,656 1.340 158 4,623 1.237 184 North Mara Proven & probable (U/G) 3,455 6.125 680 1,989 8.071 516 Proven & probable (Surface/Stockpiles) 19,526 2.061 1,294 21,664 2.198 1,531 Mineral Resource (total) 12,674 2.657 1,083 17,960 2.873 1,659 Inferred (total) 4,949 4.606 733 10,073 3.236 1,048 Exploration Proven and probable Mineral Resource 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 & probable 65,030 4.185 8,750 83,178 4.665 12,475 Mineral Resource 184,280 2.163 12,817 183,988 2.007 11,873 Inferred 32,960 6.594 6,987 32,877 5.481 5,793
June 2016 Company Presentation 30
2015 reserve price of US$1,100/oz vs 2014 price of US$1,300/oz Taken more conservative view of future development rates and mining widths
June 2016
Company Presentation
DARK GREEN: REEF 1 UPPER CENTRAL Hosts [2 %] of reserve ounces BLUE: REEF 1 LOWER WEST REEF 1 Hosts [ 50%] of reserve ounces GREEN: REEF 1 LOWER CENTRAL Hosts [13 %] of reserve ounces PURPLE: REEF 2 Hosts [ 18% ] of reserve ounces YELLOW: REEF 1 UPPER EAST Hosts [ 6%] of reserve ounces RED: REEF 1 LOWER EAST Hosts [ 7%] of reserve ounces
LIGHT BLUE: REEF 1 UPPER WEST Hosts [ 4 %] of reserve ounces LIGHT BLUE: REEF 1 UPPER WEST Hosts [ 4 %] of reserve ounces DARK GREEN: REEF 1 UPPER CENTRAL Hosts [2 %] of reserve ounces BLUE: REEF 1 LOWER WEST REEF 1 Hosts [ 50%] of reserve ounces RED: REEF 1 LOWER EAST Hosts [ 7%] of reserve ounces YELLOW: REEF 1 UPPER EAST Hosts [ 6%] of reserve ounces PURPLE: REEF 2 Hosts [ 18% ] of reserve ounces GREEN: REEF 1 LOWER CENTRAL Hosts [13 %] of reserve ounces LIGHT BLUE: REEF 1 UPPER WEST 269koz @ 7.28 g/t BLUE: REEF 1 DEEP WEST REEF 1 2,827koz @ 9.99 g/t DARK GREEN: REEF 1 UPPER CENTRAL 131koz @ 10.07 g/t GREEN: REEF 1 DEEP CENTRAL 843koz @ 7.05 g/t PURPLE: REEF 2 952koz @ 9.84 g/t YELLOW: REEF 1 UPPER EAST 458koz @ 7.41 g/t RED: REEF 1 DEEP EAST 436koz @ 7.57 g/t
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