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AN AFRICAN GOLD MINING AND EXPLORATION COMPANY
Corporation Presentation / February 2017
AN AFRICAN GOLD MINING AND EXPLORATION COMPANY Corporation - - PowerPoint PPT Presentation
AN AFRICAN GOLD MINING AND EXPLORATION COMPANY Corporation Presentation / February 2017 PAGE 1 DISCLAIMER Disclaimer This presentation has been created to provide general information, solely for the readers general knowledge, about
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Corporation Presentation / February 2017
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Disclaimer This presentation has been created to provide general information, solely for the reader’s general knowledge, about Metallon Corporation (“Metallon”), its subsidiaries, properties and activities, as well as the countries it operates in. Although Metallon believes that the information included in this presentation is accurate and current, such information is not intended to be a comprehensive review of all matters and developments concerning Metallon and Metallon does not warrant or make any representations or claims as to the authenticity, validity, accuracy, completeness or currency of the information provided in this presentation. Moreover, Metallon, its directors and officers assume no responsibility for the information or representations contained in this presentation and shall not be liable or responsible for any claim
No information in this presentation constitutes a solicitation, offer or recommendation to engage in any investment activity, to effect any transactions, or to conclude any legal act of any kind whatsoever. Forward-looking statements Certain statements included in this presentation constitute “forward-looking statements” which, based on numerous assumptions, involve known and unknown risks, uncertainties and other factors which are beyond Metallon’s control that may affect the results, performance or achievements of Metallon. In certain cases, forward-looking information can be identified by the use of words such as "aim", "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "continues", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "should", "might" or "will be taken", "occur" or "be achieved" and include the negative variation of such phrases. With respect to forward-looking information contained in this presentation, Metallon has made assumptions regarding, among other things, Metallon’s ability to generate sufficient cash flow from operations and access to existing credit facilities and capital markets to meet its future obligations, the regulatory framework in its countries of operation with respect to, among other things, permits, licenses, authorizations, royalties, taxes and environmental matters, and Metallon's ability to obtain qualified staff and equipment in a timely and cost-efficient manner to meet Metallon's demand. Although Metallon believes that its expectations reflected in forward-looking information are reasonable, such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Metallon or Metallon's projects in its countries of operations, or any of them, to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include, but are not limited to, risks related to failure to convert estimated mineral resources to reserves, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of gold, unexpected increases in capital or operating costs, possible variations in mineral resources, grade or recovery rates, failure of equipment or processes to operate as anticipated, accidents, labour disputes and other risks of the mining industry, labour risks, delays in obtaining governmental consents, permits, licences and registrations or financing or in the completion of development or construction activities, risks of title to properties, partner risks, legal and litigation risks, political risks arising from operating in Africa, risks relating to changes in governmental regulations and in operating internationally, risks relating to the infrastructures, uncertainties relating to the availability and costs and availability of financing needed in the future, indebtedness risks, changes in equity markets, inflation, changes in exchange rates, exchange control and export restriction risks, fluctuations in commodity prices and uninsured risks. Although Metallon has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Past performance of Metallon or its shares cannot be relied on as a guide to future performance. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information contained herein, unless stated otherwise, is made as of the date of this presentation and Metallon makes no responsibility to update them or to revise them to reflect new events or circumstances, except as required by law.
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ABOUT US KEY DATA ASSETS PERFORMANCE STRATEGY OUTLOOK
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ABOUT US
8.3Moz of gold and exploration targets of between 4-6Moz
and AISC of US$1,023/oz in 2016
US$38m and EBTIDA of US$18.6m in 2016
to become a 500,000oz pa producer
management team with ability to operate in Africa
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ABOUT US
Kenneth Mekani
Chief Executive Officer
Ken has been with Metallon for 30 years after joining the then Lonrho Mining as Graduate Trainee Metallurgist in June 1987. He spent several years in the group’s various operations and was involved in major metallurgical
Chief Executive Officer. Ken holds a BSc. Metallurgical Engineering (1987) from New Mexico Institute of Mining and Technology (USA) and a Masters in Business Administration (MBA) from the University Of Zimbabwe Graduate School Of Management (2006).
Tulani Sikwila
Finance Director
Tulani joined in 2005 and became Group Finance Director in March 2012. He has a decade of operational, accounting and finance expertise in the mining industry having started his career at Ernst & Young in 2001, where he spent four years as an Audit Supervisor. A chartered accountant by trade, he holds a B.Com in Accounting from Rhodes University, B. Compt (Honours) from UNISA, and a Diploma in Management Accounting (CIMA).
Dr Isadore Matunhire
Technical Director
Isadore joined in 2013 as Head of Technical Services and in April 2014 became Technical Director. He is responsible for leading the expansion programme, bankable feasibility studies and business integration. He has over 25 years operational mining experience and five years in the mining consultancy field. He worked for TWP Projects as Lead Mining Engineer/ Project Manager where he completed feasibility and due diligence studies for Lonmin Platinum, African Consolidate Resources, Metallon, Anglo Platinum, Zimasco Chrome, Wesizwe Platinum, and BCL Selebi-Phikwe. Isadore also worked as a Senior Mining Lecturer at the University
and MSc in Management from City University, London.
Mark Tsomondo
Director, Exploration and New Business
Mark joined in 2010 as Group Exploration Manager. Mark undertook an in-depth review of Mineral Resource estimation of Metallon’s assets. In September 2014 he was appointed Director - Geology and New
chrome and copper. Joining Union Carbide Zimbabwe in Kwe Kwe in 1981, he worked on the Great Dyke deposits and gold in greenstone belts rising through the ranks from Junior to Chief Geologist. Mark formed Midlands Geological Services in 1992, a consultancy that lasted for over a decade. He holds a BSc (Hons) from University of Rhodesia and an MSc and D.I.C. in Mineral Exploration from Royal School of Mines, London (1985).
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KEY DATA
GOLD PRODUCTION
C1 COSTS
OPERATING PROFIT
REVENUE
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ASSETS
METALLON’S ASSETS – 8.3Moz gold resource and mining infrastructure – considered to be best high-grade, low-cost gold mining operations in Zimbabwe
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ASSETS
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Mining recommenced in Nov 2015 Ramp up to capacity by Q3 2017
Repairs made across the mine Contract miners appointed and targeting installed capacity New processing plant and tailings storage facility constructed Commissioning expected Q1 2017 Flagship mining operation Over 50% of production
Zimbabwe's
gold producer
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ASSETS
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Location 35km South East of Bulawayo, Zimbabwe Geology Situated on Bulawayo greenstone belt and exploits several individual mineralised pods situated within a structure which dips at 70° to 80° Reserves & Resources (30 June 2016) M,I&I: 14.8Mt @ 2.12g/t = 1,009koz Au Processing Central facility, using combination of conventional milling, gravity recovery and carbon-in-leach process Current hoisting capacity 35ktpm Current milling capacity 33ktpm Average mined grade 5g/t Au Life of mine 9 years based on current capacity Production and costs (2016) Production: 50,191oz Au C1 costs: $520/oz Au AISC: $660/oz Au
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ASSETS
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Location 90km North East of Harare, Zimbabwe Geology Situated in Shamva greenstone belt and exploits numerous orebodies which occur within a 300- to 400-m wide Riedel-type shear system. Silver
Reserves & Resources (30 June 2016) M,I&I: 40.8Mt @ 1.96g/t = 2,574koz Au Processing Conventional crushing, milling, gravity recovery and combination of carbon-in-solution and -pulp processes Current hoisting capacity 45ktpm Current milling capacity 33ktpm Average mined grade 3g/t Au Life of mine 22 years based on current capacity Production and costs (2016) Production: 21,061oz Au C1 costs: $1,085/oz Au AISC: $1,244/oz Au
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ASSETS
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Location 50km North East of Harare, Zimbabwe Geology Orebodies generally comprise shear zones in- filled with gold-bearing sulphides and quartz. Mineralised zones are up to 1m in width, have average grades of 4 to 5g/t, and mostly dip between 10° and 60° to the north. Approximately 70% of gold is ‘free gold’ recovered by gravity concentration Reserves & Resources (30 June 2016) M,I&I: 14.1Mt @ 4.85g/t = 2,194koz Au Processing Conventional crushing, milling, gravity recovery and carbon-in-leach facility Current hoisting capacity 19ktpm Current milling capacity 10.5ktpm Average mined grade 4.2g/t Au Life of mine 10 years on current capacity Production and costs (2016) Production: 12,060oz C1 costs: $1,116/oz AISC: $1,272/oz
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ASSETS
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Impressive project economics KPI Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 TOTAL
Tonnes pa 720k 720k 720k 720k 720k 720k 4,320k Grade (g/t) 1.15 1.10 0.85 0.75 0.65 0.60 0.83 Recovery (%) 82.7 80.0 77.5 76.0 72.0 65.0 75.5 Oz pa 22,016 18,519 15,249 13,195 10,834 9,028 88,84 C1 ($/oz) 976 447 543 627 764 917 612 Profit (gold at $1,100) $15.9m $12.1m $8.5m $6.2m $3.6m $1.7 $48.1m Profit (gold at $1,200) $18.1m $13.9m $10m $7.6m $4.7m $2.6m $56.9m
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ASSETS
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ASSETS
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Location 20km North East of Mutare, Zimbabwe Geology Two main orebodies, the felsite and quartz, are where mining has taken place. Gold mineralisation is associated with sulphide mineralisation comprising pyrite, galena, chalcopyrite, minor arsenopyrite and sporadic native gold. Silver occurs with the gold and represents some 50% of gold content Reserves & Resources (30 June 2016) M,I&I: 34.1Mt @ 2.26g/t = 2,478koz Au Processing Conventional crushing, milling, flotation and carbon-in-leach facility Average mined grade 5.5g/t Au Life of mine 14 years on current capacity Ramp up to capacity Production:
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PERFORMANCE
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STRATEGY
PRODUCTION
C1 COSTS Larger plants Increase volumes
BUILD
Near-surface targets and inferred resource
EXPLORATION DRILLING
On-mine re-engineering to lower mining costs
FOCUS
Open pit/near surface resources
PRIORITISE
Brownfield sites in Tanzania
DIVERSIFICATION
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STRATEGY
MINE ACTIVITY DATE RESOURCE HOW MINE
– 2017 & 2018 – 2017 & 2018 – 2017 & 2018 – 2017 – 2018 – 2017 – 2020
SHAMVA MINE
– Ongoing – 2017 – 2018 – 2017 & 2018 – 2018 – 2021
MAZOWE MINE
– Commenced 2015 – 2017 - 2020 – 2017 - 2019 – 2017 - 2019 – 2020 – 2020
REDWING MINE
– Ongoing – 2017 & 2018 – 2017 – 2018 & 2019 – 2020
*dependent on external funding.
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STRATEGY
Proved and Probable Reserves as at 30th June 2016 Measured and Indicated Resources as at 30th June 2016 Inferred, Measured and Indicated Resource as at 30th June 2016
Proved Probable Total Measured Indicated Total Measured Indicated Total
Ton Grade Ounces Ton Grade Ounces Ton Grade Ounces Ton Grade Ounces Ton Grade Ounces Ton Grade Ounces Ton Grade Ounces Ton Grade Ounces Ton Grade Ounces
kt g/t
kt g/t
kt g/t
kt g/t
kt g/t
kt g/t
kt g/t
kt g/t
kt g/t
How – U/g
430 5.0 69 1,794 3.5 201 2,223 3.8 270 1,609 5.1 265 2,250 3.7 265 3,858 4.28 530 3,969 3.5 444 3,858 4.3 530 7,828 3.9 973
Surface
817 1.1 30 817 1.1 30 817 1.1 30 817 1.10 30 6,917 0.7 156 817 1.1 30 7,734 0.7 186
Total
430 5.0 69 2,611 2.7 231 3,040 3.1 300 1,609 5.1 265 3,067 3.0 295 4,675 3.73 560 10,886 1.7 600 4,675 3.7 560 15,562 2.3 1,159
Shamva – U/g
929 2.87 86 3,608 2.95 342 4,537 2.93 428 1,992 2.54 163 8,576 2.85 785 10,568 2.79 948 12,021 2.35 907 10,568 2.79 948 22,589 2.56 1,855
Surface
1.19 6 167 1.19 6 7,193 2.37 549 167 1.19 6 7,360 2.34 555
Surface 2
0.80 60 2,325 0.80 60 9,227 0.52 153 2,325 0.80 60 11,552 0.58 213
Total
929 2.87 86 3,608 2.95 342 4,537 2.93 428 1,992 2.54 163 11,068 2.39 851 13,060 2.42 1,014 28,441 1.76 1,609 13,060 2.42 1,014 41,501 1.97 2,623
Redwing – U/g
40 3.43 4 167 3.48 19 207 3.47 23 1,402 2.73 123 7,946 3.99 1,018 9,347 3.80 1,141 14,481 2.62 1,222 9,347 3.80 1,141 23,828 3.08 2,363
Surface Sands
0.33 105 9,924 0.33 105 9,924 0.33 105 9,924 0.33 105
Total
40 3.43 4 167 3.48 19 207 3.47 23 1,402 2.73 123 17,870 1.96 1,123 19,271 2.01 1,246 14,481 2.62 1,222 19,271 2.01 1,246 33,752 2.27 2,468
Mazowe – U/g
337 6.59 71 279 6.81 61 616 6.69 133 504 9.07 147 1,285 6.50 269 1,789 7.22 416 5,701 7.27 1,333 1,789 7.2 416 7,490 7.3 1,749
Surface
0.78 128 5,116 0.78 128 1,300 5.00 209 5,116 0.8 128 6,416 1.6 337
Total
337 6.59 71 279 6.81 61 616 6.69 133 5,620 1.52 275 1,285 6.50 269 6,905 2.45 544 7,001 6.85 1,542 6,905 2.4 544 13,906 4.7 2,086
TOTAL
1,736 4.1 231 6,664 3.0 653 8,401 3.3 883 10,623 2.42 825 33,289 2.37 2,538 43,912 2.38 3,364 60,809 2.54 4,972 43,912 2.38 3,364 104,720 2.48 8,335
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STRATEGY
mines (SRK 2013)
strike extensions
exploration upside potential
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STRATEGY
Focus on additional gold development sites and exploration projects
development projects in brownfield sites in prolific greenstone belts with target to commence gold production in 2019
underground mines
Lake Victoria gold fields
secured in Maniema province near Bukavu
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STRATEGY
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STRATEGY
and has well-established base of mining skills, expertise and local suppliers
driver of growth in near term and to attract most foreign direct investment into country
contributor to the sector
mining companies to incentivise investment in the sector including:
October 2014
against profit in the year incurred or capitalised over LoM
during exploration and development phases
mining companies during times of declining commodity prices
Companies operating in Zimbabwe
General Population 15.6m (World Bank, 2015) Capital Harare Major religions Christianity & Indigenous Economy GDP $14.4bn (World Bank, 2015) Annual GDP growth 1.1% (World Bank, 2015) GDP / capita $924 (World Bank, 2015) Inflation 1.1% (World Bank, 2015) Main currency US$ / Zim Bond Note Mining as % GDP 20% (CoM Zim)
Country snapshot
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STRATEGY
education, health, housing, other services
socio-economic development in communities where we operate
Construction of Mazowe School Block and Shamva Mortuary, Nov 2016
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OUTLOOK
with exciting prospects
employees, local communities and Government of Zimbabwe
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ABOUT US KEY DATA ASSETS PERFORMANCE STRATEGY OUTLOOK
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ABOUT US
Mzi Khumalo
Non-Executive Chairman
Mzilikazi Khumalo founded Metallon in 2001 and is the main shareholder of the Company. He purchased the assets in Zimbabwe from Lonmin in 2002. He has held the position of chairman at various companies including JCI Limited, Capital Alliance Holdings Limited and Point Waterfront Corporation, as well as having been Non- Executive Director at Mintek, Telkom, McCarthy Retail Limited, Ridge Mining and Anglo American Corporation. He holds a Bachelor of Commerce degree from UNISA.
Dr Tomas Salomão
Independent Non- Executive Director
Dr Tomaz Salomão joined the Board of Metallon in December 2014. He is the former Executive Secretary of the Southern African Development Community (SADC) and served from 2005 - 2013. Dr Salomão has made significant contributions to the development of Mozambique and the Region in senior positions for 22 years. During this period, he also served as Governor for Mozambique at the African Development Bank, IMF and World Bank. Dr Salomão is qualified as Certified Public Accountant, has Bachelor of Arts and Master of Arts Degrees in Economics. He is currently the Chairman of the Board of Directors of the Standard Bank, Mozambique (non executive), and a visiting Research Fellow at the Wits School of Governance at the University of Witwatersrand in Johannesburg.
Andile Reve
Non-Executive Director
Andile Reve joined Metallon in 2002 as Chief Executive and became a Non-Executive Director in August 2010. He was an analyst at Kwazulu Finance and Investment Corporation from 1987 to 1991 and a Commercial Manager at Eskom from 1991 to 1996. He joined the Rennies Group as an Executive Director in 1996 and in 1998 he moved to the Industrial Development Corporation as Executive Vice President – industrial finance. He holds an MBA from Rutgers University, State of New Jersey, USA, B .Com (Hons), UNISA and B.Com, Kwazulu-Natal.
Kwaku Akosah- Bempah
Non-Executive Director
Kwaku Akosah-Bempah joined the Board of Metallon in August 2010. He was previously the Chief Financial Officer of AngloGold Ashanti Limited’s West Africa Region, having previously served as General Manager: corporate finance at Ashanti Goldfields Company Limited. He has also held several senior roles as finance director at Freda-Rebecca mine in Zimbabwe. He holds a Bachelor of Commerce (Hons) Degree and a Diploma in Education from the University of Cape Coast, Ghana, and an MBA from the Columbia Business School, USA. He is also a chartered accountant and member of the Institute of Taxation, Ghana
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CONTACT US
Address:
78 Pall Mall London SW1y 5ES
Tel: +44(0) 203 178 7431 www.metcorp.co.uk Zimbabwe's
gold producer