Annual General Meeting Presentation November 2015
Disclaimer These materials include forward looking statements. Forward looking statements inherently involve subj ective j udgment & analysis & are subj ect to significant uncertainties, risks & contingencies, many of which are outside of the control of, & may be unknown to, the company. Actual results and developments may vary materially from that expressed in these materials. The types of uncertainties which are relevant to the company may include, but are not limited to, commodity prices, political uncertainty, changes to the regulatory framework which applies to the business of the company & general economic conditions. Given these uncertainties, readers are cautioned not to place undue reliance on such forward looking statements. Forward looking statements in these materials speak only at the date of issue. S ubj ect to any continuing obligations under applicable law or any relevant stock exchange listing rules, the company undertakes any obligation to publicly update or revise any of the forward looking statements, changes in events, conditions or circumstances on which any such statement is based. S ome statements in this presentation regarding estimates or future events are forward looking statements. They involve risk and uncertainties that could cause actual results to differ from estimated results. Forward looking statements include estimates of future production, cash and total costs per ounce of production, reserve and mineralised material estimates, capital costs, and other estimates or prediction of future activities. They include statements proceeded by words such as “ believe,” “ estimate,” “ expect,” “ intend,” “ will,” and similar expressions. Actual results could differ materially depending on such things as political events, labour relations, currency fluctuations and other general economic conditions, market prices for Kingsgate Consolidated Limited products, timing of permits and other government approvals and requirements, changes in operating conditions, lower than expected ore grades, unexpected ground and mining conditions, availability and cost of materials and equipment, and risks generally inherent in the ownership and operation of mining properties and investment in foreign countries. 2
Kingsgate Today ASX Listed: Market Cap ~A$150 M Net debt ~ A$83 M* Enterprise Value A$233 M* Portfolio: Chatree Gold Mine (Thailand) ave 130,000 Koz per annum Challenger Gold Mine (Australia) ave 80,000 Koz per annum till Feb 2016 Nueva Esperanza Proj ect (Chile) 1.9 Moz AuEq^ resource Bowdens Proj ect (Aust) 134 Moz silver resource * As at 30 September 2015. ^ Gold Equivalent Ounces: 60. 3
S napshot Total Shareholder Composition 2% 2% 1% Institutional 5% Unanalysed Corporate Information – as at 26 Nov 2015 15% Retail AS X List ed (AS X 300) KCN Corporate S hare Price A$0.63 50% Related Party Issued S hares 223,585M Broker Market Cap A$150M Custodian Cash Balance (available) A$35M* 25% Unallocated Drs < 1% Tot al Debt A$118M* (* as at 30 S ept ember 2015) 12 Month Share Price Performance to 24 Nov 2015 Top Shareholders – October 2015 Shares % 125% Universal-Invest ment -Gesellschaft 15,500,000 7.38 120% Van Eck Associat es Corporat ion 13,642,107 6.10 ASX All Ords -2% 115% Resource Capit al Funds 13,353.040 5.97 KCN – 11% 110% ASX300 M aterials -20% US AA Invest ment Mgmt Co 7,063,636 3.16 105% Ruffer LLP 6,484,919 2.90 100% 95% 90% 85% 80% 24 Nov 14 31 Dec 14 05 Feb 15 12 M ar 15 20 Apr 15 25 M ay 15 29 Jun 15 03 Aug 15 07 Sep 15 12 Oct 15 16 Nov 15 KCN.ASX XM K.ASX XAO.ASX 4
Board of Directors Ross Smyth-Kirk Sharon Skeggs Executive Chairman Non-Executive Director Invest ment Management Market ing and Change Management • 40+ years experience in invest ment management • 35+ years experience in market ing and change and mining management in Aust ralia t he UK and Asia. • Former direct or of numerous companies • Former direct or of S aat chi & S aat chi Aust ralia. • Change Management Consult ant working wit h maj or companies including Telst ra, West pac, Woolwort hs Peter Alexander and Visa. Non-Executive Director Explorat ion and Mining • 41+ years experience in explorat ion and mining Peter Warren • Managing Direct or of Dominion Mining for 10 years Non-Executive Director • Non-Executive Direct or of Doray Minerals Financial Management • • Direct or of Fort unis Resources Limit ed 40+ years experience in financial management • Formerly held senior posit ions at Alusuisse of Aust ralia, Equat orial Mining and Peabody Resources. Peter McAleer Non-Executive Director Legal and Commerce • Former CEO of Equatorial Mining Limit ed • Formerly senior independent director at Kenmare Resources PLC • Former Chairman of Lat in Gold, and Direct or at Minera El Tesoro (Chile) 5
S enior Management Greg Foulis Ronald James Chief Executive Officer GM – Exploration & Resource Development Mining and Financial Market s Gold Explorat ion • 30+ years experience in mining and financial market s • 31+ years experience in gold explorat ion & mining • Previously S VP Business Development for • Former Chief Mine Geologist at Gold Ridge and AngloGold Ashant i Group Explorat ion Manager at Ross Mining NL Tim Benfield Paul Mason Chief Operating Officer Company Secretary Open Pit and Underground Mining Financial Management • 22+ years experience in mining • 15+ years experience in financial management • • 10 years experience wit h Barrick Gold Former Financial Cont roller & Comp S ec at Cat alpa Resources • Formerly GM at Paj ingo Gold Mine Jamie Gibson Ross Coyle SM – Corporate Affairs Chief Financial Officer Public and Regulat ory Affairs Finance and Corporate • • 15+ years experience in regulat ory and public affairs 31+ years financial experience • Former Media Adviser and Chief Adviser in • 25 years at Dominion Group before t akeover Indust ry/ Resources Port folios 6
Macro backdrop Kingsgate is an international precious metals explorer, developer and producer The macro environment with respect to commodities and financing has been difficult for the past 3 to 5 years. Gold and silver prices are at multi year lows and related equity indices are also at lows eg The GDJX - Global Junior Gold Miners Index which includes Kingsgate and peers, is down ~85 % over the past 5 years. We believe the cycle will turn and we are positioning Kingsgate accordingly Our financial focus is to maximise cashflow and reduce debt Our strategic focus is to optimise our Chatree Mine and progress the Nueva Esperanza Proj ect GLD is Gold Price ETF, GDXJ is a Global Junior Gold Co. Index 7
Kingsgate FY15 – a performance re-cap 2013 2014 2015 Comments Kingsgate Scorecard Chatree (Koz) 133.7 134.5 125.1 Ops Challenger (Koz) 66.2 75.0 80.2 KCN Production (Koz) 199.9 209.5 205.2 Steady production Gold Price - Ave Deliv (US$/ oz) 1,588 1,291 1,208 Declining gold price Cash Costs (US$/ oz) 874 936 833 Cost reduction Cash Costs Margin (%) 45% 27% 31% Margins Revenue (A$M) 329.3 328.3 313.2 EBITDA (A$M) 96.6 64.3 70.0 EBITDA Margin (%) 29% 20% 22% M argin improvement (Y oY) Cashflow Operating Cashflow (A$M) 88.8 37.2 76.6 Cash (available) (A$M) 30.5 53.6 55.5 Bal Sheet Total Borrowings (A$M) 199.8 153.6 142.6 Debt Reduction Net Debt (A$M) 169.3 100.0 87.2 8
Kingsgate FY16 Renewal and re-focus New CEO – Greg Foulis Back to basics approach Success and capability is epithermal gold in the Pacific Rim Chatree and Nueva Esperanza are big epithermal systems The plan is to grow from these two beachheads Core capabilities are explore, develop and produce Strategy Focus on cashflow and balance sheet Operational improvement Create value at Nueva Esperanza through exploration and proj ect de-risking Opportunistic M&A 9
Australia – Challenger Gold Mine 1. Kingsgate made an informed decision to stop incurring costs on this capital intensive operation. The decision t o place t he mine ont o Care and Maint enance was an informed decision based on t echnical, economic and risk fact ors. Kingsgat e expect s t o make a cash surplus in FY16, net of all obligat ions, t o t he point of care and maint enance in t he March Quart er 2016. 2. We then made a decision on divestment. Kingsgat e ent ered a S ale Opt ion Agreement t o sell t o an ent it y who can deal wit h all st akeholders responsibly and pot ent ially ext ract value from t he asset under a different set of st rat egic and operat ing paramet ers. Kingsgat e, in t he event of sale, will receive A$1 million from any rest art cashflow, a royalt y over t he Challenger S S W Zone and all liabilit ies will be ext inguished. 10
Australia – Bowdens S ilver Proj ect Bowdens is a significant silver resource of 134 Moz , with economics and valuation leverage to silver prices. Kingsgate has phased work on the Environmental Impact S tatement (EIS ) and Feasibility S tudy to reduce costs and mitigate silver price volatility. EIS well advanced – work continues on long lead power and water options. Kingsgate expects material progress on elements of the EIS in 2016. 11
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