Acacia Mining plc Unearthing Africas Potential 03.09.2015 Africa - - PowerPoint PPT Presentation

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Acacia Mining plc Unearthing Africas Potential 03.09.2015 Africa - - PowerPoint PPT Presentation

LSE:ACA Acacia Mining plc Unearthing Africas Potential 03.09.2015 Africa Down Under Important Notice This presentation includes forward - looking statements that express or imply Although Acacias management believes that the


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Acacia Mining plc

Unearthing Africa’s Potential 03.09.2015 Africa Down Under

LSE:ACA

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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

  • ther 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

  • f 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 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

  • 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. 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

  • r 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.

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What we stand for

A leading asset portfolio in Africa

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Focused on free cash flow

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Growing our footprint

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Disciplined capital allocation

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Becoming the partner of choice

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Our Three Pillars

… unearthing Africa’s potential

Our People Our Business Our Relationships

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Overview

A leading asset portfolio amongst our peers

Our Locations Business Overview Bulyanhulu

  • World class – high grade narrow

vein deposit

  • Life of mine in excess of 30 years

North Mara

  • High-grade open pit and

underground mine

  • 9 year life of mine

Buzwagi

  • Low-grade bulk deposit with a

single large open pit

  • 5 year life of mine, harvest mode

Exploration

  • Contrarian view on exploration
  • Building pan African portfolio of

prospective acreage

03.09.2015 Africa Down Under

Producing mines Exploration properties Tintinba Project - Mali West Kenya JV Kenya Bulyanhulu Tanzania Hounde Belt JVs Burkina Faso Buzwagi Tanzania North Mara Tanzania

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Driving cost reductions

200 400 600 800 1,000 1,200 1,400 1,600 1,800

FY 12 FY 13 FY 14 FY 15E 15-19E Avg US$/ounce

AISC and Cash Cost Evolution (US$/oz)

Cash cost / ounce AISC / ounce

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Delivered a 35% reduction in AISC since 2012

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Bulyanhulu

  • Year end 2014 underground reserves of 9.2Moz at 9.7g/t
  • Produced 235koz at AISC of US$1,266/oz in 2014 (H1 15 – 133koz @ $1,356/oz)
  • Progressing implementation of efficient mechanised mining
  • Significant investment in development to increase flexibility in mine plan
  • Mine now being set up in order to deliver on its geological endowment

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Bulyanhulu – Reef 1 & 2

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Reef 1 Reef 2

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North Mara

  • Year end 2014 reserves of 2.0Moz at 2.6g/t
  • Produced 274koz at AISC of US$947/oz in 2014 (H1 15 – 142koz @ $893/oz)
  • Combined open pit (Nyabirama) & underground (Gokona) operation
  • Local community relations significantly improved

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Further underground potential at Gokona

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Delineated a further 850koz in inferred resource beneath 990 mrl, to be tested by staged drilling from underground platforms

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Buzwagi

  • Year end 2014 Reserves of 900Koz at 1.35g/t
  • Produced 210koz at AISC of US$1,055/oz in 2014 (H1 15 - 92koz @ $1,089/oz)
  • Mine in harvest mode to ensure cash generation
  • LOM includes two years of mining, followed by processing of stockpiles

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Delivery to date

Continuing track record of delivery against plan

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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

  • Continued improvement in grade at Bulyanhulu

Q3 15

  • Target development rates achieved at Bulyanhulu

Q3 15

  • Gokona Underground fully ramped up

Q4 15

  • Bulyanhulu producing at annualised rate of 350koz

Q4 15

  • Africa Down Under

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Outlook

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

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

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Exploration

  • Exploration is a key driver of value and now is the time to invest
  • Drove 2.3Moz of resource additions at Bulyanhulu in 2014
  • Expanded our footprint across Africa
  • Looking to further expand exploration portfolio
  • Annual spend to be maintained at ~US$20 million

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Building a portfolio of projects

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Tintinba Project Mali

  • 150sq km along highly

prospective Senegal-Mali Shear Zone

  • Expect to start soil sampling

and IP in October

  • Initial drilling of targets

planned for Q2 2016 West Kenya JV Kenya

  • 2,200 sqkm - Liranda

corridor showing best results to date

  • Several narrow high grade

vein systems identified

  • Current drilling to scope

potential size of system Bulyanhulu Tanzania

  • U/G Reef 2 drilling

programme - target of 5Moz

 12,500m of drilling in H2

  • Near mine programme for

repeat reefs

 Tested Safari zone in H1,

results awaited Houndé Belt JVs Burkina Faso

  • 3 exploration joint ventures

covering 2,400sqkm of the Houndé Belt

  • Positive initial drilling on

South Houndé JV

  • New gold trends identified

from initial soil sampling on new projects

Continuing to expand our footprint across Africa

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Kenya – West Kenya JV

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  • Liranda Corridor showing best results to date from drilling results along 12km trend
  • To date narrow high grade vein systems identified – current drilling to determine if potential for

sufficient scale on several of the better shoots

  • 2015 Budget – US$8 million

Promising drill results on Liranda Corridor – follow-up drill programmes underway

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Burkina Faso – Houndé Belt

Multiple structural domains with extensive surface gold anomalies

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  • 3 projects now acquired under

joint venture for 2,400sqkm in southern Houndé Belt

  • Drilling on South Hounde JV

encouraging – extensions to exiting trends and new prospects identified

  • Extensive soil sampling

programmes undertaken on all 3 joint venture projects to identify further drill targets

  • 2015 Budget – US$5.5 million

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Mali – Tintinba Project

  • 150 sq km acquired under option

agreement on the highly prospective Senegal-Mali Shear Zone (host to >50Moz)

  • Recent discoveries Fekola 5Moz @ 3g/t

and Gounkoto 5Moz @ 5g/t

  • Option agreement signed with local

vendor to earn initially 85.5% and ultimately 90% of three properties

  • Limited upfront payment and NSR

capped at US$2m on production

  • Preliminary reconnaissance work started

in late June

  • Expect to start soil sampling, IP and

aeromagnetics programmes after wet season in October 2015

  • Initial drilling of targets by Q2 2016

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Entry into the Senegal-Mali Shear Zone

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Our Relationships

  • In 2014, Acacia made a total contribution of over $675 million to our host countries

representing ~2% of Tanzanian GDP

  • Acacia’s total tax contribution over last two years is estimated at over $250 million

Working closely with the Government and our communities

  • By working closely with the

Government we have seen significant progress on three key business issues:

 Indirect Tax Receivable  Law and Order at North Mara  Power

Community Relations Government Relations

03.09.2015 Africa Down Under

  • Since its inception in 2011, the Acacia

Maendeleo Fund has committed over US$25 million to over 100 community based projects in Tanzania and Kenya

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Our investment case

Delivery of plan will drive cash flow at and below current gold prices

  • Structural changes already made to our operations
  • Established track record of delivering on plan to enhance the long-term

attractiveness of our business

  • Bulyanhulu staged ramp up on track for Q4 2015
  • Set to generate strong cashflows at and below the current gold price
  • Redoubling our focus on driving costs out of the business
  • Current plan designed to drive returns to our shareholders without having to

make short term changes to our business

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