Acacia Mining plc
Continuing to transform our business to deliver free cash flow 08.02.2016
LSE:ACA
Acacia Mining plc Continuing to transform our business to deliver - - PowerPoint PPT Presentation
LSE:ACA Acacia Mining plc Continuing to transform our business to deliver free cash flow 08.02.2016 Important Notice This presentation includes forward - looking statements that express or imply Although Acacias management believes
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 2013 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 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
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2 08.02.2016 Mining Indaba
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A leading asset portfolio in Africa
1
Focused on free cash flow
2
Growing our footprint
5
Disciplined capital allocation
3
Becoming the partner of choice
4
Our Three Pillars
… unearthing Africa’s potential
Our People Our Business Our Relationships
A leading asset portfolio amongst our peers
Our Locations Business Overview Bulyanhulu
North Mara
underground mine
Buzwagi
Exploration
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Producing mines Exploration properties Tintinba Project Mali West Kenya JV Kenya Bulyanhulu Tanzania Hounde Belt JVs Burkina Faso North Mara Tanzania
4
Buzwagi Tanzania
200 400 600 800 1,000 1,200 1,400 1,600 1,800
Q4 12 Q4 13 Q4 14 Q4 15 FY 16E US$/ounce
AISC and Cash Cost Evolution (US$/oz)
Cash cost / ounce AISC / ounce
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Delivered a 40% reduction in AISC since Q4 2012
5
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Limited benefit from foreign exchange and oil price
Board of Directors and Executive Leadership Team have volunteered to take a 10% reduction in
salary
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
4.1 3.9 2.8
0.0 1.0 2.0 3.0 4.0 5.0 2013 2014 2015
Average long-hole stoping width (m)
2,225 1,843 1,197
151 111 72
1,000 1,500 2,000 2,500 3,000 2013 2014 2015
Breakdown of workforce
Nationals Internationals
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2,268 2,329 2,510 2,636 2,625 2,762 1,000 1,500 2,000 2,500 3,000
H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015
Average daily ROM tonnes milled (t)
10.4 12.3 15.9
10.00 15.00 20.00 2013 2014 2015
Total Development metres (km)
Dramatic productivity improvements realised
North Mara was also awarded the large scale mining CSRE Presidential Award
result of its investment in improving the road network close to the mine
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
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North Mara named as overall winner of the Presidential Awards for Corporate Social Responsibility and Empowerment in Tanzania
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Over US$12 million of investment into community projects around our mines – moving focus towards making our local economies thrive
Livelihoods –Bee-keeping project for 120 youths Infrastructure – Bridge to provide year round access to markets for farmers Livelihoods – Tools to support co-operative setting up a motorbike maintenance business
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Our innovative approach to embedding safety within hearts and minds taking effect
1.29 0.50 0.64 0.86 1.02 0.33 0.66 0.68 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40
Bulyanhulu North Mara Buzwagi Acacia
Total Reportable Injury Frequency Rate
2014 2015
Image of WeCare prize giving / sign etc
WeCare Raffle Prize Draw at North Mara Winner of OSHA Mining Sector Award 2015
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Identifying and promoting local talent
91% 93% 94% 97% 88% 89% 90% 91% 92% 93% 94% 95% 96% 97% 98%
2012 2013 2014 2015
Proportion of National Employees
mines by over 50% whilst delivering 3 years of increased production
managerial levels
Buzwagi has only 10 expats out of a workforce
Rainbow Gold Training Program for our First
Line Leaders
Top 300 completed Tufanikiwe Pamoja
Cultural Change Program
Business Acumen Training Reinforcing Accountable Management System
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Taking advantage of current market conditions to expand our footprint in the most prospective belts across Africa
Tintinba Project Mali
prospective Senegal-Mali Shear Zone
planned for Q2 2016 West Kenya JV Kenya
Greenstone belt
best results to date Houndé Belt JVs Burkina Faso
covering 2,400sqkm of the Houndé Belt
Houndé JV project
from initial soil sampling on new projects North Mara Tanzania
potential below Nyabirama Stage 4 open pit Bulyanhulu Tanzania
programme - target of 5Moz
Proterozoic-Archean volcano-sedimentary belts Brownfields projects Greenfields projects
626 642 719 731 765*
500 550 600 650 700 750 800 2012 2013 2014 2015 2016
Production (koz)
171 112 61 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
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* 2016 Guidance reflects mid point of respective ranges
2016 will be 4th consecutive year of reduced capital and increased production Continuing to invest in exploration across Africa
Expect a 15% reduction in AISC in 2016
Q4 showed what is possible from the portfolio of assets Focus on cash flow ahead of ounces
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Focused on free cash flow generation and long term value creation