Burkina Faso Analyst visit Taparko Gold Mine (SOMITA) 31.10.2013 - - PowerPoint PPT Presentation

Burkina Faso Analyst visit – Taparko Gold Mine (SOMITA)

31.10.2013

Disclaimer

2 Information contained in this presentation concerns Nord Gold N.V., a company organized and existing under the laws of Netherlands (the “Company”, and together with its subsidiaries, the “Group”), and is for general information purposes only. The opinions presented herein are based on general information gathered at the time of writing and are subject to change without notice. The Company relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. These materials may contain forward-looking statements regarding future events or the future financial performance of the Group. One can identify forward looking statements by terms such as “expect”, “believe”, “estimate”, “anticipate”, “intend”, “will”, “could”, “may”, or “might”, the negative of such terms or other similar expressions. These forward-looking statements include matters that are not historical facts and statements regarding the Group’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Group operates. By their nature, forward-looking statements involve risks and uncertainties, because they relate to events and depend on circumstances that may

• r may not occur in the future. The Company cautions you that forward-looking statements are not guarantees of future performance and

that the Groups’ actual results of operations, financial condition, liquidity, prospects, growth, strategies and the development of the industry in which the Group operates may differ materially from those described in or suggested by the forward-looking statements contained in these materials. In addition, even if the Group’s results of operations, financial condition, liquidity, prospects, growth, strategies and the development of the industry in which the Group operates are consistent with the forward-looking statements contained in these materials, those results or developments may not be indicative of results or developments in future periods. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in forward-looking statements

• f the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in

the states where the Group operates, changes in the world [gold] market, as well as many other risks specifically related to the Group and its operations. No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness, accuracy or fairness. The information in this presentation is subject to verification, completion and change. Accordingly, no representation or warranty, express

• r implied, is made or given by or on behalf of the Company or any of its shareholders, directors, officers or employees or any other

person as to the accuracy, completeness or fairness of the information or opinions contained in these materials. None of the Company nor any of its shareholders, directors, officers or any other person accepts any liability whatsoever for any loss howsoever arising from any use of the contents of this presentation or otherwise arising in connection therewith. The presentation and the information contained herein does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities of the Company have not been, and will not be, registered under the US Securities Act of 1933, as amended (the “Securities Act”). Accordingly, the securities of the Company may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Company does not intend to conduct a public offering of any securities in the United States

Taparko Gold Mine Key Messages

3

A.

• 2013 gold production expected to exceed 100koz.

D.

• Maximize plant throughput and gold recovery by optimizing the ore blend and the

implementation of recovery improvements initiatives.

E.

• Commenced pre-strip of 35 & GT pit cutbacks, while producing high-grade ore from the

low SR 35 & GT pits.

F.

• Commenced development of the high-grade Bouroum pit; first ore production in Q4 2013.

G.

• Over 3,000 of artisanal miners relocated without any incidents.

H.

• Successfully developing new pits and staging of cut-backs in line with the Life of Mine

plan to maximize NPV.

J.

• Implementing a site-wide efficiency programme.

L.

• Utilizing extensional and infill drilling to grow open pit Reserves.

B.

• 2-years without a Lost Time Injury (LTI). Best in Nordgold.

I.

• SR has peaked in 2013 and expected to decrease in 2014.

K.

• Established a training programme for the national staff.

C.

• Recovery is stably above 80%.

M.

• Regional exploration and development programme focused on high potential Goengo,

Yeou nearby areas and other early stage targets.

• Overview
• Safety and community
• Mine layout and infrastructure
• Mine geology
• Mineral resources and reserves
• Mining
• Processing
• Key financials indicators
• Exploration and growth
• Key messages

Contents

4

History

5

Year Tonnes Processed Feed Grade Au (g/t) Au recovery (%)

2008 368 973 3.04 91.1 2009 814 519 3.97 93.5 2010 1 273 759 3.46 90.3 2011 1 461 309 3.26 84.3 2012 1 677 442 3.09 82.1 Taparko annual production summary

A.

• The first gold poured at the Taparko-Bouroum Gold Mine on July 17, 2007.

B.

• The start-up of the Taparko-Bouroum Gold Mine marked the revival of a modern gold

mining industry in Burkina Faso.

C.

• It is the first commercially operated gold mine in the country since the government
• perated Poura mine closed in 1999.

Location

6

• M. Kelly

General Manager

• H. Bocoum

Regional director

• R. Godbout

HSE director JB Reinle Security director

• L. Mirindi

Human resources director

• F. Toe

Finance director

• B. Roy

Process director

• R. Berquin

Mining Director

• Y. Sevin

Logistic director

• J. Learn

Exploration director

• D. Couture

Maintenance director

• J. Imbeau

Geology director

Directors operating both for Bissa and Taparko Directors operating only for Bissa

Management Structure

• Nordgold is focusing on development of local employees
• 2 our directors are Burkina Faso citizens

DEPARTMENTS SERVICES HEADCOUNT

• DEP. HEADCOUNT

GENERAL MANAGEMENT Director 1 1 PLANT DEPARTMENT Or pre traitment 106 214 Maintenance 68 Metallurgy 13 Laboratory 27 MINE DEPARTMENT Blast/Drilling 49 204 Loading/Transportation 155 MAINTENANCE DEPARTMENT Mobile Equipment 140 175 Fixed Equipment 35 GEOLOGY/TECHNICAL SERVICES Geology 52 70 Ingeneering 18 EXPLORATION DEPARTMENT 30 30 SECURITY DEPARTMENT Security 36 42 Health 6 HSE DEPARTMENT Environment 8 21 Safety 5 Training 3 Business System 5 LOGISTIC DEPARTMENT 33 33 FINANCE DEPARTMENT Accounting/Control 8 12 IT 4 REGIONAL DEPARTMENT Ouaga Office 9 9 HUMAN RESOURCES DEPARTMENT Personnel 5 7 Community/Camp 2 TOTAL HEADCOUNT 818

Employees

• Overview
• Safety and community
• Mine layout and infrastructure
• Mine geology
• Mineral resources and reserves
• Mining
• Processing
• Key financials indicators
• Exploration and growth
• Key messages

Contents

9

HSE overview

1 0,0 0,5 0,0 1,0 0,8 0,6 0,4 0,2 1,0 1,5 2,0

Dec-12 Apr-13 Oct-12 Sep-12 Nov-12 Sep-13

0,72

Aug-13

0,75

Jul-13

1,53

Jun-13

1,52

May-13 Aug-12 Jul-12 Jun-12 Mar-13 Apr-12 Mar-12 Feb-12 Jan-12 May-12

0,73 0,58

Feb-13 Jan-13 Oct-13

Rolling LTIFR for 12m Lost time incidents HSE performance HSE strategy

1. Formal delivery of ICAM (Scheduled by Training Department January 2014) 2. Continued yearly training of all LV drivers onsite 3. Installation of Electronic Bulletin Boards 4. Continued development of Safety First Culture through: Take 5 / Near Miss Reporting JHAs and SOPs/ Behavior Audit assisted with SOMITA safety booklet for each level of Supervision 5. “Safety Employee of the Month” award system along existing Idea of the Month program (from Operational Excellence)

Emergency help

• Distributions of food to local populations following a poor agricultural

season in 2009

• Financial support to Yalgo and Bouroum impacted by the flood of July

2010

• Support to local communities impacted by the flood in September 2009
• Assistance in the reconstruction of the dam in Tougouri following the

September 2010 flood Education

• Construction of new school in Taparko and renovations to the old

school including furniture and supplies for 300 children

• Construction of 4 modern houses for nurses and teachers in Taparko in

2013

• Donation of tables and chairs to the primary school of Gorbalé in 2013

Health & agriculture

• Construction of new health clinic in Taparko and renovation of old

clinic including new supplies and equipment

• Potable water fountain for the school in Taparko
• Donation of 100 sheep to the Taparko women’s committee to help them

create a sustainable economic activity

11

Community development

Our Communities

12 DONATION OF AN AMBULANCE IN 2010 TO YALGO HOSPITAL CONSTRUCTION OF HEALTH INFRASTRUCTURE PROMOTION OF EDUCATION: TRAINING AND WOMEN EMPOWERMENT:

13

• Bouroum is the group of pits located in 50 km from
• Taparko. Inferred Resources at the beginning of

2013 were 281koz.

• Before starting developing Bouroum pits the

management faced a problem of illegal miners which have been acting on Bouroum’s territory. They were supposed to leave the future mine by the end of August because of the rain season, but the situation has gotten much worse. The total amount of illegal miners increased from 2 000 to 10 000 during the summer.

• The start of pits development was planned for

September 2013 and this problem could delay the planned launching of works relating to construction, fencing off the territory, etc.

• Joint efforts of local administration, legal and

security departments, Taparko’s communication department and Nordgold’s management have solved the problem with illegal miners in one month.

• During September the successful negotiations

with local authorities and communities were held. As the result the territory of Bouroum was purged from the illegal miners, the fence was installed and the illegal production was stopped. Before After

Bouroum negotiations

• Overview
• Safety and community
• Mine layout and infrastructure
• Mine geology
• Mineral resources and reserves
• Mining
• Processing
• Key financials indicators
• Exploration and growth
• Key messages

Contents

14

Taparko General Surface Plan

15 Base Vie Processing plant Tailing dam

• Overview
• Safety and community
• Mine layout and infrastructure
• Mine geology
• Mineral resources and reserves
• Mining
• Processing
• Key financials indicators
• Exploration and growth
• Key messages

Contents

16

17

Taparko General Geology

• Overview
• Safety and community
• Mine layout and infrastructure
• Mine geology
• Mineral resources and reserves
• Mining
• Processing
• Key financials indicators
• Exploration and growth
• Key messages

Contents

18

19

Mineral Resources and reserves

• Overview
• Safety and community
• Mine layout and infrastructure
• Mine geology
• Mineral resources and reserves
• Mining
• Processing
• Key financials indicators
• Exploration and growth
• Key messages

Contents

20

21

Comments:

• Mining tonnage: total tonnage forecast for 2013 is 14125kt to be mined from 3 pits 3/5, 2N2K and GT
• Shifts; 2 X 12 hrs shift are worked at Taparko with hot seat change and 45 minutes lunch break
• Mobile mining fleet maintenance is conducted during lunch break
• Strategy for 2014 is to develop Bouroum, GT and 3/5 on best NPV analysis basis

547 845 754 623 491 582 561 558 100 200 300 400 500 600 700 800 900 6 000 5 000 4 000 1 000 2 000 3 000 Jan Feb 5 648 2013 actual May Mar Apr Jun Jul Aug Sep 687

• Ths. BCM

2013 Mining Performance (1/2)

Total bcm mined in 2013 [ths. bcm]

22

2013 Mining Performance (2/2)

92 168 147 164 158 127 112 83 50 100 150 200 400 200 800 600 1 200 1 000 Jun 101 Jul Aug Jan Mar Feb Apr May 1 152 Sep 2013 actual

• Ths. Tones

Total ore tones mined in 2013 [ths. tones] Ore grade [g/t] 2.61 2.79 2.84 2.67 2.69 2.55 2.51 2.45 2.87 1 2 3 4 1.0 1.5 2.0 2.5 3.0 3.5 Sep Aug 2013 actual Jul Jun 2.16 May Apr Mar Feb Jan Grade

23

2013 & 2014 Taparko Mining Locations

24

Bouroum : 2013: 32 kt at 2.24 g/t for 3 koz 2014 : 377 kt at 3.38 g/t for 41 koz

Project Description

• Drill rods management
• Test rods from different suppliers
• Choose the most suitable for us with longest life

1

• Performance management of

excavator operators

• Finalization of testing of excavators at Berezitovy mine and installation of

Taparko in case of success

• Will allow to decrease loading cycle, improve load volume, manage

performance of operators 2

• Pit practice improvement
• Installation of radios in the mining equipment
• Implementation of simple dispatch system

3

• Optimization of downtime for

fueling and greasing

• Decrease down time for fueling and greasing of the mining fleet

4

• Tire life improvement
• Usage of the tires with suitable TKPH ratio

5

• Other projects without clear

economical effect

• Ramp management
• Base competency trainings for mining fleet operators
• Dedicated component shop and shop for drills repair

8

Efficiency program

• Elimination of overloading of DT
• Have hungry boards not higher than 250mm
• Have payload lights on new trucks mounted so they are visible by the shovel
• perator

6

• Chromium Carbide liners for DT

and KVX system for excavators

• Reduce the time and cost for lining truck trays
• Decrease cost on Ground Engaging Tools, Eliminate welded adaptors as

support for the teeth 7

25

• Overview
• Safety and community
• Mine layout and infrastructure
• Mine geology
• Mineral resources and reserves
• Mining
• Processing
• Key financials indicators
• Exploration and growth
• Key messages

Contents

26

27

A.

To improve the particles size of the ore to match the increase in production from 140 TPH to 210 TPH a regrind mill has been installed and started in August 2012. An improvement of 15 % on the grind size has been achieved.

B.

In 2013 we encountered high graphite and pyrite levels in the ore creating a reduction in recovery. Modifications were done to reduce the preg-robbing effect of the graphite. The slow gold dissolving process is mainly due to high pyrite content. Additives were added to the slurry to improve the reaction kinetic. _______________________________________________________________________________

C.

To increase the residence time, two new CIL tanks have been installed and started in August 2012. In 2013, the average residence time was close to 23 hours as per the feasibility steady.

D.

The tailing dam height increases in 2013 to support production for the next 2,5 years. The bottom and the berms of the tailing dam are covered by a 1.0 mm HDPE liners to eliminate risk of water table contamination.

E.

Additional improvement projects and equipment will see 2014 throughputs to close to 2.0 Mtpa by the end of the year.

Processing summary

Process Plant Flowsheet

28

29

2013 Processing Performance (1/2)

55,875 133,984 135,608 83,176 135,914 134,335 128,478 123,927 133,572 50,000 100,000 150,000 Apr Mar Feb Jan Jun Aug Sep May Jul

Tones milled in 2013

39.0 96.1 94.8 63.0 95.1 95.1 87.5 95.5 96.0 50 100 Sep Aug Jul Jun May Apr Mar Feb Jan

% mill operating hours 2013

142 187 192 183 192 196 197 193 187 50 100 150 200 Apr Mar Feb Jan Sep Aug Jul Jun May

Mill throughput 2013 [t/hr]

30 30

2013 Processing Performance (2/2)

3.32 2.50 2.30 3.04 2.86 2.55 2.64 2.75 2.92 1 2 3 4 Sep Aug Jul Jun May Apr Mar Feb Jan

Gold head grade 2013 [Au g/t]

86.30 81.99 76.68 83.16 84.24 74.34 73.71 77.64 79.66 50 100 May Apr Mar Feb Jan Sep Aug Jul Jun

Gold recovery 2013 [%]

158 275 240 210 328 254 250 265 311 100 200 300 400 Sep Jul Jun May Apr Mar Feb Jan Aug

Gold produced [kg Au]

Project Description

• Optimization of cyanide

consumption

• Oxygen addition, higher lime consumption will allow to decrease cyanide

consumption 1

• Optimization of caustic soda

consumption

• Optimization of elutions leading to lower caustic soda consumption

2

• Increase share of HFO in power

generation

• Increase share of HFO in power generation in 4th quarter to 80%

3

• Decrease downtime of the plant

due to electrical reasons

• Purchase of new genset what will allow to generate enough power for mills

start up in case of one of gensets repair 4

• Installation of homogenizer
• Installation of homogenizer for utilization of used oil for power generation

5

• Other minor projects
• Optimization of PPE
• Reduction of fuel for rented equipment
• Implementation of bacterial beds
• Optimization of travel costs
• LV costs optimization
• Installation of scrap magnet on the mills discharge

6

Efficiency program

31

• Overview
• Safety and community
• Mine layout and infrastructure
• Mine geology
• Mineral resources and reserves
• Mining
• Processing
• Key financials indicators
• Exploration and growth
• Key messages

Contents

32

33

Taparko Gold Mine: Financial KPIs

Operating results Q3 2013 Q3 2012 Change, YoY Q2 2013 Change, QoQ 9m 2013 9m 2012 Change, YoY LTIFR 0.00 0.00 0% 0.00 0% 0.00 0.00 0% Run of mine, kt 4,675 3,100 51% 4,357 7% 12,880 8,789 47% Waste mined, kt 4,327 2,669 62% 3,878 12% 11,462 7,595 51% Ore mined, kt 348 431

• 19%

480

• 28%

1,418 1,194 19% Stripping ratio, tn/tn 12.43 6.19 101% 8.09 54% 8.08 6.36 27% Ore milled, kt 325 406

• 20%

353

• 8%

1,065 1,171

• 9%

Grade, g/t 2.58 2.80

• 8%

2.80

• 8%

2.73 3.00

• 9%

Recovery, % 81.1% 82.8%

• 1.7%

81% 0.5% 79.6% 82.2%

• 2.6%

Gold production, Koz 22.1 29.4

• 25%

25.8

• 14%

77.3 91.2

• 15%

Gold sold, Koz 22.2 29.4

• 25%

25.8

• 14%

77.3 91.2

• 15%

Average realised gold price per ounce sold, US$/oz 1,323 1,688

• 22%

1,398

• 5%

1,463 1,653

• 12%

Revenue, US$m 29.3 49.6

• 41%

36.1

• 19%

113.1 150.7

• 25%

EBITDA, US$/m 12.3 EBITDA margin, % 34% TCC, US$/oz 832.5

• Overview
• Safety and community
• Mine layout and infrastructure
• Mine geology
• Mineral resources and reserves
• Mining
• Processing
• Key financials indicators
• Exploration and growth
• Key messages

Contents

34

35

A.

Brownfield exploration at Taparko pits GT, 3/5 and 2N/2K, at flanks and at depth. Brownfield exploration at very high grade Bissinga pit abandoned in 2010.

C.

Exploration of rich quartz veins satellites in Bouroum region to feed the mill with high grade

• re from deposits ~50 km away; the most advanced project in this category is Yeou.

B.

Prolong the life of Taparko mine with discovery of additional reserves for the existing mine and mill infrastructure. Exploration of 15km area around the mine using advanced techniques such as recent airborne geophysics, termite mound sampling and detailed mapping by senior geologists; so far most promising target is Goengo, which has potential to significantly increase the life of mine. No significant zones exist east or west of Taparko mill, work ongoing north and south along strike

D.

Integration of the mapping, drilling, termite mound geochemistry and airborne geophysics will be performed with a view to drill about 11 000m of DD in 2014

E.

2013 field work has resulted in decision to drop Dyakolra, Taranga and Nongo-Fayere permits.

Exploration summary

2013 exploration program Taparko ML

A.

Geophysics – newly acquired 100x100m airborne geophysics data (magnetics, radiometrics, VTEM electromagnetics) increases the technical level of the geophysics at the scale of the ML compared to the regional government surveys

C.

Mapping – increase the technical level of the mapping by using senior geologists

B.

Geochemistry – regional geochemistry will sample termite mounds** instead of traditional soils, at 200 x 200m spacing, compared to previous 400 x 400m; in-fill sampling of anomalies identified close to the ROMpad may be performed prior to complete coverage of the ML at 200 x 200m

D.

Continue resource/reserve drilling in close proximity to the existing open pits

E.

Special attention to the northern extension of 3/5 pit, using S plunge model

F.

Special attention to Goengo, 15 km from the ROMpad, where significant exploration potential may be opened up with detailed mapping and intepretation of existing drilling, integrated with the new detailed geophysics

VTEM DC_50 Conductivity Taparko mine Goengo Markoye fault

Taparko and Nongo-Fayere

Main results Taparko area 2013

A.

There is no significant mineralization west (Taparko granodiorite) or east of Taparko mine (amphibolite grade incipient migmatites)

C.

Best exploration target close to Taparko mine is Goengo (15 km) where gold mineralization is associated with shear zones in greenschist metasediments

B.

Drilling ongoing along strike, north and south of Taparko mine, best result north of the mine fence is 3.15 g/t Au / 1.95m but the zone is actually about 10m wide – step-out drilling will be done

D.

Secondary exploration target at Levry (20-25 km) not yet mapped

Taparko termite mound results (north)

3/5 pit GT pit

Goengo Levry

Taparko termite mound results (south)

41

35 Open Pit – Drill Targets

42

2N2K Open Pit – Drill Targets

43

GT Open Pit – Drill Targets

44

Bouroum Open Pit – Drill Targets

Yeou exploration project

45

Plan de sondages

46

Goengo exploration project

Goengo

• Overview
• Safety and community
• Mine layout and infrastructure
• Mine geology
• Mineral resources and reserves
• Mining
• Processing
• Key financials indicators
• Exploration and growth
• Key messages

Contents

47

Taparko Gold Mine Key Messages

48

A.

• 2013 gold production expected to exceed 100koz.

D.

• Maximize plant throughput and gold recovery by optimizing the ore blend and the

implementation of recovery improvements initiatives.

E.

• Commenced pre-strip of 35 & GT pit cutbacks, while producing high-grade ore from the

low SR 35 & GT pits.

F.

• Commenced development of the high-grade Bouroum pit; first ore production in Q4 2013.

G.

• Over 3,000 of artisanal miners relocated without any incidents.

H.

• Successfully developing new pits and staging of cut-backs in line with the Life of Mine

plan to maximize NPV.

J.

• Implementing a site-wide efficiency programme.

L.

• Utilizing extensional and infill drilling to grow open pit Reserves.

B.

• 2-years without a Lost Time Injury (LTI). Best in Nordgold.

I.

• SR has peaked in 2013 and expected to decrease in 2014.

K.

• Established a training programme for the national staff.

C.

• Recovery is stably above 80%.

M.

• Regional exploration and development programme focused on high potential Goengo,

Yeou nearby areas and other early stage targets.