Acacia Mining plc Continuing to transform our business to deliver - - PowerPoint PPT Presentation

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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


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Acacia Mining plc

Continuing to transform our business to deliver free cash flow 08.02.2016

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 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

  • 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. 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

  • 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.

2 08.02.2016 Mining Indaba

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What we stand for

08.02.2016 Mining Indaba 3

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

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Company overview

A leading asset portfolio amongst our peers

Our Locations Business Overview Bulyanhulu

  • World class deposit
  • Life of mine in excess of 20 years

North Mara

  • High-grade open pit and

underground mine

  • 9 year life of mine

Buzwagi

  • Low-grade bulk deposit
  • Short life mine, harvest mode

Exploration

  • Contrarian view on exploration
  • Building pan African portfolio

08.02.2016 Mining Indaba

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

4

Buzwagi Tanzania

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Turning business around to drive free cash flow

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

08.02.2016 Mining Indaba

Delivered a 40% reduction in AISC since Q4 2012

5

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Driving change within our business

08.02.2016 Mining Indaba 6

Limited benefit from foreign exchange and oil price

  • Tone set from the top

 Board of Directors and Executive Leadership Team have volunteered to take a 10% reduction in

salary

  • Continuing to make our business more efficient in order to reduce costs

 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

  • Expect to further reduce cost base as we move through 2016
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SLIDE 7

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

  • 500

1,000 1,500 2,000 2,500 3,000 2013 2014 2015

Breakdown of workforce

Nationals Internationals

08.02.2016 Mining Indaba 7

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

  • 5.00

10.00 15.00 20.00 2013 2014 2015

Total Development metres (km)

Improving our Bulyanhulu business

Dramatic productivity improvements realised

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Continuing to enhance our relationships

  • Demonstrates the progress we have made at the mine over the past two years

 North Mara was also awarded the large scale mining CSRE Presidential Award

  • Buzwagi was also awarded the CSRE Presidential Award for Infrastructure as a

result of its investment in improving the road network close to the mine

  • Awards are part of a programme jointly run by the Tanzanian Ministry of Energy

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

08.02.2016 Mining Indaba 8

North Mara named as overall winner of the Presidential Awards for Corporate Social Responsibility and Empowerment in Tanzania

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Continuing to enhance our relationships

08.02.2016 Mining Indaba 9

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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Continuing to keep our people safe

08.02.2016 Mining Indaba 10

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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Continuing to localise our operations

08.02.2016 Mining Indaba 11

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

  • Reduced number of expatriates on our

mines by over 50% whilst delivering 3 years of increased production

  • Promoted Tanzanians to senior

managerial levels

 Buzwagi has only 10 expats out of a workforce

  • f 1,000
  • Core Training programmes

 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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Whilst investing in our future

08.02.2016 Mining Indaba 12

Taking advantage of current market conditions to expand our footprint in the most prospective belts across Africa

Tintinba Project Mali

  • 150sqkm along highly

prospective Senegal-Mali Shear Zone

  • Initial drilling of targets

planned for Q2 2016 West Kenya JV Kenya

  • 2,200 sqkm over Ndori

Greenstone belt

  • Liranda Corridor showing

best results to date Houndé Belt JVs Burkina Faso

  • 3 exploration joint ventures

covering 2,400sqkm of the Houndé Belt

  • Positive drilling on South

Houndé JV project

  • New gold trends identified

from initial soil sampling on new projects North Mara Tanzania

  • Drilling to test future U/G

potential below Nyabirama Stage 4 open pit Bulyanhulu Tanzania

  • U/G Reef 2 drilling

programme - target of 5Moz

Proterozoic-Archean volcano-sedimentary belts Brownfields projects Greenfields projects

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2016 Outlook

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

08.02.2016 Mining Indaba 13

* 2016 Guidance reflects mid point of respective ranges

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Investment Case

  • Disciplined capital allocation

 2016 will be 4th consecutive year of reduced capital and increased production  Continuing to invest in exploration across Africa

  • Delivering further cost savings across the business

 Expect a 15% reduction in AISC in 2016

  • Operations set up to generate strong cash flow in the current gold price environment

 Q4 showed what is possible from the portfolio of assets  Focus on cash flow ahead of ounces

08.02.2016 Mining Indaba 14

Focused on free cash flow generation and long term value creation