Acacia Mining plc 20 17 Prelim inary Results Presentation February - PowerPoint PPT Presentation

LSE:ACA Acacia Mining plc 20 17 Prelim inary Results Presentation February 2018

Im portant Notice This presentation includes “forward-looking statements” that express or imply such statements will prove to be correct. Accordingly, investors should not place expectations of future events or results as opposed to historical facts. These reliance on forward-looking statements contained in this presentation. Any statements include, financial projections and estimates and their underlying forward-looking statements in this presentation only reflect information assumptions, statements regarding plans, objectives and expectations with available at the time of preparation. Save as required under the Market Abuse respect to future production, operations, costs, projects, and statements Regulation or otherwise as may be required under applicable law, Acacia regarding future performance. Forward-looking statements are generally explicitly disclaims any obligation or undertaking publicly to update or revise any identified by the words “plans,” “expects,” “anticipates,” “believes,” “intends,” forward-looking statements in this presentation, whether as a result of new “estimates” and other similar expressions. information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast or estimate and no statement made should be All forward-looking statements involve a number of risks, uncertainties and interpreted to mean that Acacia’s profits or earnings per share for any future other factors, many of which are beyond the control of Acacia, which could cause period will necessarily match or exceed its historical published profits or actual results and developments to differ materially from those expressed in, or earnings per share. implied by, the forward-looking statements contained herein. Factors that could cause or contribute to differences between the actual results, performance and Any mineral reserves and mineral resources estimates contained in this achievements of Acacia include, but are not limited to, changes or developments presentation have been calculated as at 31 December 2017 in accordance with in political, economic or business conditions or national or local legislation or National Instrument 43-101 as required by Canadian securities regulatory regulation in countries in which Acacia conducts - or may in the future conduct - authorities. Canadian Institute of Mining, Metallurgy and Petroleum (CIM) business, industry trends, competition, fluctuations in the spot and forward price definitions were followed for mineral reserves and resources estimates. Any of gold or certain other commodity prices (such as copper and diesel), currency reserves and resources figures stated in this presentation are estimates only. All fluctuations (including the US dollar, South African rand, Kenyan shilling and estimates stated are subject to a variety of unknown factors, risks and Tanzanian shilling exchange rates), Acacia’s ability to successfully integrate considerations, such that no assurances whatsoever can be given that any acquisitions, Acacia’s ability to recover its reserves or develop new reserves, indicated quantities of metal will be produced. In addition, estimated figures and including its ability to convert its resources into reserves and its mineral totals stated may not add up due to rounding. potential into resources or reserves, and to process its mineral reserves This presentation is provided for general information purposes only. It does not successfully and in a timely manner, Acacia’s ability to complete land constitute an invitation or offer to underwrite, subscribe for or otherwise acquire acquisitions required to support its mining activities, operational or technical or dispose of any securities of Acacia in any jurisdiction. You are reminded that difficulties which may occur in the context of mining activities, delays and you have received this presentation on the basis that you are a person to whom technical challenges associated with the completion of projects, risk of trespass, this presentation may be lawfully made and delivered. You may not and are not theft and vandalism, changes in Acacia’s business strategy and on-going authorised to: (i) reproduce or publish this presentation; or (ii) distribute, implementation of operational reviews, as well as risks and hazards associated disclose or pass on this presentation to any other person, in whole or in part, by with the business of mineral exploration, development, mining and production any medium or in any form, in breach of any applicable securities laws. BY and risks and factors affecting the gold mining industry in general. ACCEPTING THIS PRESENTATION, YOU ACKNOWLEDGE AND AGREE TO Although Acacia’s management believes that the expectations reflected in such THE CONTENTS OF THIS DISCLAIMER AND YOU AGREE TO BE BOUND BY forward-looking statements are reasonable, Acacia cannot give assurances that THE FOREGOING LIMITATIONS. 20 17 Prelim inary Results Presentation 2 February 2018

Full Year Review Resilience in the face of challenges  Total Recordable Injury Frequency Rate (TRIFR) of 0 .45, 39 % lower than 20 16  20 17 production of 768 koz, 7% lower than 20 16 , with gold sales of 593koz  Sold 573koz of gold in doré, in line with doré production; and  Sold 20koz of gold in concentrate, 10% of total concentrate production, driven by impact of export ban  20 17 AISC of US$8 75/ oz , 9 % lower than 20 16 and below full year guidance  If sales matched production, AISC would have been US$798/ oz  Cash balance fell from US$318 m illion to US$8 1 m illion at 31 Decem ber 20 17  Concentrate inventory valued at US$286 million (1) at year end pricing currently stockpiled in Tanzania  Incurred post-tax im pairm ent of US$644 m illion which im pacted earnings (1) Gross value at year-end, net value of approxim ately US$240 m illion 20 17 Prelim inary Results Presentation 3 February 2018

Taken Decisive Action Effectively m anaging changes in the operating environm ent  20 17 was im pacted by events beyond our control  Took decisive action to stabilise our business during the year  Brought forward bypassing flotation circuit at Buzwagi to Q3 2017 to stop production of concentrate  Bulyanhulu moved to reduced operation state in Q4 2017  Sale of non-core royalty relating to Houndé project in Burkina Faso generated US$45 million  In Q3 bought options to provide a floor price of US$1,300/ oz for 210,000 ounces  New highly experienced m anagem ent continuing to drive positive actions  Appointment of Asa Mwaipopo as Managing Director, Tanzania  Consolidation of Bulyanhulu and Buzwagi Management team under Benedict Busunzu  Combined management team comprises five Tanzanians and one international employee  Extension of option arrangements to cover majority of H1 2018 doré production 20 17 Prelim inary Results Presentation 4 February 2018

Update on Tanzania

Overview of Governm ent Situation and the Concentrate Ban In March 2017, the Tanzanian In June, Barrick and the In September 2017, Acacia Ministry of Energy and Minerals Tanzanian Government entered announced intention to move to reduced operations at Bulyanhulu announced a ban on the export of into discussions to reach a metallic mineral concentrates resolution to the dispute and made processing changes at Buzwagi to solely produce doré going forward Q1 20 17 Q2 20 17 Q3 20 17 Q4 20 17 During Q2, two Presidential In July, Acacia received adjusted In October, Barrick and GoT Committees announced findings tax assessments totaling announced they had agreed a post investigations into mineral US$190bn for alleged unpaid taxes Framework for the resolution of content and historic exports of and penalties. In the same month the disputes − Detailed proposal not yet gold/ copper concentrates Bulyanhulu Gold Mine Limited − Acacia fully refuted the and Pangea Minerals Limited presented to Acacia − Barrick targeting a final implausible findings of both (Buzwagi) commenced committees international arbitration to protect proposal in H1 2018 our position − Any settlement will need Acacia approval Unsold concentrate containing 18 5,8 0 0 ounces of gold, 12.1 m illion pounds of copper and 158 ,90 0 ounces of silver currently stockpiled in Tanzania 20 17 Prelim inary Results Presentation 6 February 2018