Bulyanhulu Investor Site Tour 04.02.16 Unearthing Africas Potential - - PowerPoint PPT Presentation

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Bulyanhulu Investor Site Tour 04.02.16 Unearthing Africas Potential - - PowerPoint PPT Presentation

LSE:ACA Bulyanhulu Investor Site Tour 04.02.16 Unearthing Africas Potential Important Notice This presentation includes forward - looking statements that express or imply Although Acacias management believes that the expectations


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Bulyanhulu

Investor Site Tour 04.02.16 Unearthing Africa’s Potential

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. 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 04.02.2016 Investor Site Tour

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Introduction

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Overview

A leading asset amongst our peers

Our Location

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

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Buzwagi Tanzania

Bulyanhulu

04.02.2016 Investor Site Tour

* Including produced ounces

  • World class – high grade narrow vein

deposit

  • Geological endowment of over 20 million
  • unces*
  • Located in a mining friendly and stable

country

  • However, history of under-delivery and

lack of free cash generation

  • Undertaking fundamental re-engineering
  • f the mine to ensure delivers to its

geologic potential

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SLIDE 5

Setting the scene

5 04.02.2016 Investor Site Tour

Past Present

 LOM focused on labour intensive

mining methods

 Converted to mechanised mining

methods

 Lack of investment in development  50% increase in development metres

due to bringing in contractor

 Poor maintenance practices, limited

planned maintenance

 Over 80% of maintenance is planned  Over capitalised (too much equipment

  • n site)

 Sustaining capital spend has more

than halved, whilst production has increased

 Optimistic planning led to culture of

failure

 Setting achievable targets, in tandem

with a dedicated cultural change programme

 Too many people, both local and expat  50% reduction in total workforce,

with expats down by 55%

In 2013 we started the process of fundamentally re-designing Bulyanhulu

We’ve made great progress, but still more to do to achieve our goals

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Safety

04.02.2016 Investor Site Tour 6

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Rate

Incident frequency rates 2006 - 2014

TRIFR LTIFR

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Geology

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Geology

04.02.2016 Investor Site Tour 8

A A ’

Schematic Cross Section

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Geological Units

04.02.2016 Investor Site Tour 9

X Y Gabbro Argillite Mineralized Qtz vn Pillow Basalts

Facing

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Mining

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Life of Mine: Options Review

  • Moved away from CCF (handheld

methods) towards modern mechanised mining

 Previous plan saw mine sourcing over 75% of

tonnes coming from hand held

  • Significantly improved safety profile
  • Investment in development to increase

flexibility in mine plan

  • Driving mining accuracy to reduce

dilution

  • Long Hole as main mining method
  • Setting mine up to deliver on its geological

endowment

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Fundamental redesign of LOM plan

Investor Site Tour 04.02.2016

78 6 13 37 33 53 9 31 25 21 25 42 26 20 40 60 80 100 2013 LOM 2014A 2015A 2016 (Plan) Percentage (%) Breakdown of Mining Method (tonnes) CCF Longhole Alimak Ore development

* 2013 planning allocated development to each of the mining method categories

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Significant progress to date

1,344 1,266 1,253 999

800 900 1,000 1,100 1,200 1,300 1,400 2013 2014 2015 Q4 15

AISC per ounce sold (US$/oz)

198 235 274 Q1 - 62 Q2 - 71 Q3 - 62 Q4 -78

  • 50

100 150 200 250 300 2013 2014 2015 2015

Production (koz)

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185 132 101

50 100 150 200 2013 2014 2015

Capital Expenditure ($m)

871 909 993

800 850 900 950 1,000 2013 2014 2015

Ore Tonnes hoisted (Kt)

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SLIDE 13

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

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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

  • 5.00

10.00 15.00 20.00 2013 2014 2015

Total Development metres (km)

KPIs have improved significantly

Dramatic productivity improvements already realised at the mine

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Upper East

  • Area located 2km east of shaft with existing small scale decline to the area
  • Includes material on both Reef 1 and the Reef 2 series
  • Commenced production from development ore in H2 2015

 Expected stoping ramp-up in 2016  When developing saw divergence between reserve model and results from the production

drilling in Reef 2 series

 Previous drill spacing of 100m centres, not tight enough to accurately predict variation in the

lode geometries

 Spacing is the same as has been used across the mine successfully for last 15 years

  • Deferred development in the Reef 2 Series whilst undertake definition drilling

programme

04.02.2016 Investor Site Tour 14

Deferred ramp up whilst undertake further definition drilling

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2 m 2 i 2 g

2M 2I 2G 2O 2N Reserve blocks UG Diamond Drill Holes Area Covered By Recent Drilling Reef 1

Oblique Section View Looking NE

Upper East Reef 2 - Reserve and Resource

500m

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  • Undertaken further detailed review of operating assumptions within reserves

 2015 reserve price of US$1,100/oz vs 2014 price of US$1,300/oz  Taken more conservative view of future development rates and mining widths

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DARK GREEN: REEF 1 UPPER CENTRAL Hosts [2 %] of reserve ounces BLUE: REEF 1 LOWER WEST REEF 1 Hosts [ 50%] of reserve ounces GREEN: REEF 1 LOWER CENTRAL Hosts [13 %] of reserve ounces PURPLE: REEF 2 Hosts [ 18% ] of reserve ounces YELLOW: REEF 1 UPPER EAST Hosts [ 6%] of reserve ounces RED: REEF 1 LOWER EAST Hosts [ 7%] of reserve ounces

Reserve Distribution

LIGHT BLUE: REEF 1 UPPER WEST Hosts [ 4 %] of reserve ounces LIGHT BLUE: REEF 1 UPPER WEST Hosts [ 4 %] of reserve ounces DARK GREEN: REEF 1 UPPER CENTRAL Hosts [2 %] of reserve ounces

BLUE: REEF 1 LOWER WEST REEF 1 Hosts [ 50%] of reserve ounces

RED: REEF 1 LOWER EAST Hosts [ 7%] of reserve ounces YELLOW: REEF 1 UPPER EAST Hosts [ 6%] of reserve ounces PURPLE: REEF 2 Hosts [ 18% ] of reserve ounces

GREEN: REEF 1 LOWER CENTRAL Hosts [13 %] of reserve ounces

LIGHT BLUE: REEF 1 UPPER WEST Hosts 4 % of reserve ounces BLUE: REEF 1 LOWER WEST REEF 1 Hosts 50% of reserve ounces DARK GREEN: REEF 1 UPPER CENTRAL Hosts 2 %of reserve ounces GREEN: REEF 1 LOWER CENTRAL Hosts 13 % of reserve ounces PURPLE: REEF 2 Hosts 18% of reserve ounces YELLOW: REEF 1 UPPER EAST Hosts 6% of reserve ounces RED: REEF 1 LOWER EAST Hosts 7% of reserve ounces

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Production Areas - 2016

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Upper East 5% Zones 0 & 7 15% Zones B & C 35% Zone 2 20% Zones 9 & A 25%

04.02.2016 Investor Site Tour

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Processing

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Processing Operations

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  • The following processes are utilised:

Crushing, Grinding, Gravity, Flotation, Carbon-In-Leach, Thickening, Cyanide destruction, Filtration and Paste Backfill

  • Nameplate process plant throughput is

155tph / 1.1Mt per annum

 Currently over 10% spare capacity

  • Bulyanhulu produces two saleable products:

dore and copper concentrate

 Dore bars are produced from Gravity and CIL

plants

 Copper Concentrate is produced from the flotation

plant and sold to copper smelters mainly in China and Japan

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Tailings Re-treatment

  • In Q4 2014 completed construction of new

2.4Mtpa Carbon in Leach (CIL) circuit to process TSF material

  • Project also designed to upgrade CIL

capacity for ROM material

 Previous infrastructure only allowed for

processing of 30% of flotation tailings

  • Plant produced 33koz in first full year of
  • peration

 Struggled to hit design recoveries

  • Re-commissioned old CIL in late Q4 15 to

better assess long term recoveries and costs

  • f

04.02.2016 Investor Site Tour 20

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Our People

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Our People

  • Management layers reduced from 14

to 4

  • Implementation of Accountable

Management System

  • Move to mechanisation significantly

reduces workforce numbers

  • Dispatch systems in process of being

implemented to drive productivity

  • Altered shift patterns to improve time

at site and at the face

  • Implemented a behavioural safety

programme (WeCare/Tunajali ) to embed a culture of safety in the workplace

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Continuing to implement changes to the workforce to improve productivity and drive

2,397 2,225 1,843 1,197 159 151 111 72

500 1,000 1,500 2,000 2,500 3,000 2012 2013 2014 2015

  • No. of Employees

Breakdown of Employees Internationals Nationals

Investor Site Tour 04.02.2016

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Cost Initiatives

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Ensuring the mine returns to positive cash flow

Investor Site Tour

Further Cost Saving Focus Areas

  • Looking to make savings across all operating costs categories:

 Reduction in over 600 employees compared to 2015  Majority of US$25 million group savings will be at Bulyanhulu  Improving consumable usage, aided by re-commissioning of old CIL  As planned maintenance is achieving targets, able to move to a condition based monitoring

approach going forward

 Energy costs will benefit from reduction in price of diesel hedges  2016 hedges struck at $72/bbl vs 2015 hedges at $97/bbl  Continuing to negotiate with suppliers and contractors to improve terms

  • Continuing to allocate capital efficiently

 2016 capex expected to be $5-10 million lower than 2015  Despite continuing investment into development

04.02.2016

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Our Relationships

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Social License to Operate

04.02.2016 Investor Site Tour 26

Key CSR focus area are:

  • Strategic social infrastructure

 Progression to residential model  Infrastructure to drive wealth creation in

community

  • Local business development

 Entrepreneurships skills for co-ops and SMEs,  access to financing  Agribusinesses including market linkages,

  • ASM
  • Social capital enhanced

 Sports programs with Sunderland  Support for the performing arts and cultural events

Stakeholder engagement, Social Impact Management and Grievance mechanisms to continue

Livelihoods –Bee-keeping project for 120 youths Infrastructure – Bridge to provide year round access to markets for farmers

Creating shared value

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Our Future

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Bulyanhulu – Reef 2 resource extensions

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Extending the potential of a world class resource

  • Focused on reserve conversion and resource expansion of

Reef 1 and the Reef 2 series

 Surface and Phase 1 underground drilling in 2013/14 added over

2.3Moz to resources

 Current focus of drilling on Reef 2 series west of shaft position

from underground

  • Phase 2 drilling commenced in H2 2015, with the

16,000m programme due to continue into H1 2016

 Completed 18 holes for 9,240m in 2015

  • Phase 3 programme expected to commence in late 2016
  • Initial results are encouraging and have intersected

mineralisation across a number of the reefs that make up the Reef 2 series at mineable widths and grades

Investor Site Tour 04.02.2016

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Summary

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Summary

  • Over past two years the mine has been fundamentally re-engineered into a modern

fully-mechanised mine

  • Dramatic improvements across a range of key indicators in that time
  • 2016 is a year of consolidation, expect to maintain 2015 production levels
  • Impact of cost saving initiatives coming through, driving more than a 15%

reduction in AISC

 Already seen in Q4 2015 performance

  • Confident that Bulyanhulu will produce 350,000 ounces per annum over the

medium term

  • Continue to assess the potential above this through an ongoing 3 year drilling

programme, primarily on the Reef 2 series.

04.02.2016 Investor Site Tour 30

Consolidating progress to date to drive cash flow

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Appendix

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Process Plant Flowsheet

Gravity Circuit Crushing & Grinding Circuit

Cu Conc SAG Mill Ball Mill Jaw Crusher

Prim cycl

Knelson CTR’s Acacia reactor

Bullion ORE from U/G

Dewatering and Paste Circuit

Larox

Flotation Circuit

U/G ops Paste Backfill Plant Ro’s

Regr Mill

Contact Cell

Flash Clnr 1 Flash flotation Clnr 1 Clnr 3 Clnr 2

Regr cycl

Clnr 4 Flash Clnr 2 Clnr Scav Acid Wash

To Paste Thickener

Pre-Leach Thickener

Quench Tank

Pregna nt Solutio n Tank Electro wining

TSF cell 4

New CIL Circuit Old CIL Circuit

Bullion A/W Elution Regeneration Kiln CIL Tanks CN Detox

TSF Reclamation

A/W Elution CIL Tanks

Quench Tank

Bullion Pregnant Solution Tank Pregnant Solution Tank

Rougher tails

Electro wining

TSF cell 1-2

Regeneration Kiln Pre-Leach Thickener

CST