Metallon Corporation An African Gold Mining and Exploration Company - - PowerPoint PPT Presentation

An African Gold Mining and Exploration Company – July 2014

Metallon Corporation

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Disclaimer

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

• f 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 or damage, direct or indirect, arising out of the interpretation, reliance upon or other use of the information provided herein. 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

• btain 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

• perations, 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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An African Gold Mining and Exploration Company

• 4 operating mines and 1 mine under-development in Zimbabwe, with exploration assets in

Zimbabwe, Tanzania & DRC

• Globally significant resource base of 8 million ounces of gold (JORC compliant) and targets of

between 4-6 million ounces in exploration

• Gold production of 82,000oz in 2013 and production guidance of 100,000oz in 2014
• Low cost producer in Africa – all-in-costs of US$900 expected in 2014
• Expansion plans underway to become a mid-tier producer in the next five years
• Additional pipeline of exploration and development projects backed by production growth and

stable cash flows

• Experienced management and technical team with proven ability to operate in Africa

Corporate overview

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Board & Executive management team

Board of Directors

Sir Nicholas Bonsor – Independent Non-Executive Chairman Mzi Khumalo - Chief Executive & Deputy Chairman – Company Founder Robert Robertson – Senior Independent Non-Executive Director Andile Reve – Non-Executive Director Kwaku Akosah-Bempah – Non-Executive Director

Executive Management Team

Tulani Sikwila – Finance Director Mark Tsomondo – Chief Operating Officer Dr Isadore Matunhire – Head of Technical Services Ken Mekani – How Mine General Manager Full biographies are in the appendix

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Operations

Operating mines Zimbabwe Exploration assets Zimbabwe Democratic Republic of Congo Tanzania

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Operations: Zimbabwe

Operating mines

• How Mine
• Shamva Mine
• Mazowe Mine
• Arcturus Mine

Mine under development

• Redwing Mine

Advanced exploration projects

• Motapa
• Midwinter

Metallon’s assets are considered to be the best gold mines in Zimbabwe – high grade, low cost operations

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Zimbabwe – a golden opportunity

First mover advantage – already one of the top 5 companies in Zimbabwe

Metallon has world class assets in Zimbabwe with exciting prospects

• Quality operations – efficient, professionally run mines
• High grade gold mines – How Mine & Mazowe Mine average mined grade of 5g/t
• Low cost production – All-in-costs expected at US$900 in 2014
• Shallow gold mines – all less than 1,000 metres deep
• Good infrastructure and skilled labour force
• Additional upside in prolific, well-mapped but underexplored greenstone gold belts
• Government understands that mining is essential to economic growth

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Indigenisation – working with local communities

• Indigenisation

− Metallon liaising with the Zimbabwe Government regarding Indigenisation Policy − No longer a “one size fits all” approach − Indigenisation to be completed in 2014 − Credits allocated through CSR projects and employee share schemes

• Supportive local communities

− Metallon is a good corporate citizen and is committed to maintaining its social licence to operate − Metallon has built local schools, medical clinics and other services for staff and local communities − Numerous local development and sustainability projects planned for 2014

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History of Metallon in Zimbabwe

• Assets acquired from Lonmin in 2002 with 5 operating mines
• In 2005 production peaked at 156,000oz – making Metallon Zimbabwe’s biggest gold producer
• In 2007 due to economic meltdown and hyper-inflation all mining activities in Zimbabwe ceased
• Mines were placed on care and maintenance, with some mines flooded due to unavailable electricity
• In 2009 mining activities recommenced
• Mining is ramping up:

– Production of 82,000oz in 2013 – Expected production of 100,000oz in 2014 – Returning to previous production of 156,000oz

• 100,000

200,000 300,000 400,000 500,000 600,000 700,000 800,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Total gold production (oz) in Zimbabwe (2002 -2013)

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Gold production

• All gold bullion produced is sold to Fidelity Printers, a subsidiary of the Zimbabwean Reserve Bank
• 85% of the spot gold price is paid on delivery and the balance is paid 7 days later, minus the 7%

royalty and 1% commission. Corporate tax rate in Zimbabwe is 25%

• Gold production was 82,000oz in 2013 and 100,000oz is expected in 2014

Gold pour at Mazowe Mine – April 2014

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Gold production and costs 2013 & 2014

Production for 12 months to Sept 2013 (oz) All-in-costs for 12 months to Sept 2013 (US $) Production for 15 months to Dec 2013 (oz) Estimated Production in Calendar Year 2014 (oz) Estimated all-in- costs in Calendar Year 2014 (US $)

How Mine 40,300 721 53,000 52,000 625 Shamva Mine 20,100 1,169 24,000 26,000 875 Mazowe Mine 10,400 1,515 13,000 12,000 1,100 Arcturus Mine 8,200 1,778 10,000 12,000 1,150 Redwing Mine 3,000*

• 3,000*

TBC

• GROUP

82,000 1,304 103,000 100,000 ~900 * Sands processed at Redwing Mine

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Three quarters of steady gold production

200 400 600 800 1000 1200 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 8,500 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14

Costs per oz (US$) Production (oz)

Gold Production and Cost per Ounce

Gold production (oz) C1 cost per oz (US$) All-in-cost per oz (US$)

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How Mine – Flagship Mining Operation

• Underground mine in production since 1942
• Central processing facility, using a combination of

conventional milling and carbon-in-leach process

• Current JORC-resource of 1.7Moz (SRK verified)
• 2013 production of 40,300oz
• Current capacity of approx. 53,200oz
• Forecast production of approx. 52,000oz in 2014
• Average costs of $650/oz in 2013, targeted

costs of $625/oz in 2014

• Average mined grade of 5g/t
• New orebody 350N discovered by routine

exploration drilling

Headgear at How Mine – April 2014 Underground at How Mine – April 2014

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Shamva Mine

• Underground mine with historic production since 1893

with 2.45Moz produced to date

• Ore is processed through conventional crushing, milling,

gravity recovery and a combination of carbon-in- solution and carbon in pulp processes

• Current JORC-resource of 2Moz (SRK verified)
• 2013 production of 20,100oz
• Current capacity of approx. 34,300oz
• Forecast production of approx. 26,000oz in 2014
• Average costs of $1,156/oz in 2013, targeted costs

(after restructuring) of $875/oz in 2014

• Average mined grade of 3g/t
• Additional open pit potential – previously scoped by

SRK

Shamva mine and plant – April 2014 Workers at Shamva Mine – April 2014

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Mazowe Mine

• Historic mining since 1890
• Two underground mining operations with conventional

crushing, milling , free gold recovery and carbon-in-leach facility

• Current JORC-resource of 1.3Moz (SRK verified)
• 2013 production of 10,400oz
• Current capacity of approx. 20,900oz
• Forecast production of approx. 12,000oz in 2014
• Targeted costs of $1,100 in 2014
• Average mined grade of 5g/t
• Conceptual target size of 15-25 high grade quartz

veins of approximately 2.5-3 million ounces

Headframe at Mazowe Mine – April 2014 Conveyor at Mazowe Mine – April 2014

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Arcturus Mine

• In production since 1907. Mine put on care and

maintenance and reopened in October 2013

• Production ramp up has commenced
• Underground mining operations, Ore is processed

through conventional crushing, milling, gravity recovery and a combination of carbon-in- solution and carbon in pulp processes

• Current JORC-resource of 1Moz (SRK verified)
• 2013 production of 8,200oz
• Forecast production of approx. 12,000oz in 2014
• Targeted costs of $1,150/oz in 2014
• Average mined grade of 4.2g/t

Working at Arcturus Mine – May 2012 Miners at Arcturus Mine – May 2012

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Redwing Mine – under development

• Historic mining since 1889. Mine flooded in recent years
• Currently being dewatered with exploration and

development in place to bring the mine back to capacity

• f 30,000oz/an
• Dewatering to be completed by Q4 2014
• Combined underground and sand retreatment
• peration
• Current JORC-resource of 1.3Moz (SRK verified)
• 2013 stop-gap production from sands retreatment of
• nly 3,000oz
• Exploration average grade of quartz orebodies of 5.5g/t
• Conceptual exploration targets in multiple quartz-

veins is 5-8 million ounces

Shaft headframe at Redwing – April 2014 Mine planning and development– April 2014

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Near mine exploration projects

• All 5 mines have open-ended depth extensions
• Historic drilling records were used to compute 3.5Mt @ 2.5-3.5g/t at Redwing, at shallow

depth (120m to 180m) in 2013

• Exploration results category contains about 4-6Moz from satellite orebodies to operating

mines (SRK 2012)

• Conceptual target sizes of:

− Mazowe Mine: 2.5-3Moz − Redwing Mine: 5-8Moz

• Rich quartz veins offer exploration

upside potential

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Additional gold exploration projects

• Zimbabwe – Motapa

− Brownfield project with sands and sulphide-gold resources (in-house estimate of 2.4Moz) − Successful ultrafine grinding metallurgical processing tested (the Albion process) − Contains the richer Motapa camp deposits (3-10g/t) of Club, B&S, Fossicker, Pluvius and Jupiter

• Zimbabwe – Midwinter

− Laterite-gold deposits in meta-sediments − Successfully re-modelled lateric gold mineralization in 2013 − Step-out drilling east of Aurora Pit planned

• Democratic Republic of Congo

− 4 exploration properties secured in the Maniema province near Bukavu

• Tanzania

− Currently securing mineral rights located near the Lake Victoria gold fields

Building an African footprint

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Strategy: Positioning for growth

• 1. Increase production through efficient use of capacity

− Ramp up from 82,000oz/an in 2013 to 100,000oz/an in 2014 − Reduction of all-in-costs to under $900/oz − Return to previous production levels of approx.156,000oz/an

• 2. Expansion projects

− Increase production by expansion of current operations − Feasibility studies underway to propose CAPEX

• 3. Near mine exploration

− High priority targets at Shamva Hill, Mazowe and Redwing Mines

• 4. Future exploration projects

− Drilling at Midwinter & Motapa, Zimbabwe − Exploration in DRC and Tanzania

• 5. Focused M&A activities
• 1. Increasing

efficiency

• 2. Expansion

projects

• 3. Near mine

exploration

• 4. Future exploration

projects

• 5. Focused M&A

activities

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Summary: Strong growth pipeline

Near term growth

Increasing production at current mining

• perations to reach

historic capacity Reduction of costs Commence feasibility studies on expansion

2013

Production at 82,000oz Experienced technical team appointed Review of all mining

• perations undertaken

Medium term growth

Expansion plans beyond capacity to increase production at current operations Commence near mine exploration

Long term growth

Commence greenfield exploration at Motapa and Midwinter Commence exploration in DRC and Tanzania Potential M&A activities

RESULT A low cost, mid-tier gold producer within 5 years

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Appendices

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Biographies: Board of Directors

Sir Nicholas Bonsor

Independent Non-Executive Chairman

Sir Nicholas Bonsor joined Metallon as Independent Non-Executive Chairman in March 2011 and is Chairman of the Nominations Committee. He serves on the Boards of several listed companies and is currently Chairman of Tomco Energy Plc. He started his career as a barrister, practising in a Common Law Chambers from 1967 to 1975 and as a specialist in regulatory and commercial law from 2003 to 2011. He served

• n the Council of Lloyd’s from 1987-91. He was a member of British

Parliament from 1979 to 1997 where he specialised in foreign affairs and defence, was chairman of the Defence Select committee from 1992 to 1995 and Minister of State at the Foreign Office from 1995 to 1997. He holds a MA in Jurisprudence from Oxford University.

Robert Robertson

Senior Independent Non-Executive Director

Robert Robertson joined the Board of Metallon in March 2011. He is a Senior Independent Non-Executive Director and Chairman of the Audit, SHE and Remuneration Committees. He is a Director of BlackRock Smaller Companies Trust plc and Lowland Investment Company plc, and Chairman of S and JD Robertson Group. He was previously chairman of West China Cement, a Director at Avocet Mining plc and Buro Happold Engineers, and Chief Executive of Tarmac Group and Anglo American's Industrial Minerals division. His early career was in finance, working in London, Paris, Johannesburg, New York and Rio de Janeiro. He holds a MA in History from Oxford University.

Mzilikazi Khumalo

Chief Executive & Deputy Chairman

Mzilikazi Khumalo founded Metallon in 2001 and is the main shareholder

• f 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.

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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Biographies: Executive Management

Mark Tsomondo

Chief Operating Officer

Mark Tsomondo joined Metallon in 2010 as Group Exploration Manager. In that capacity, he undertook an in-depth review of Mineral Resource estimation for the Group. His experience spans over 30 years and covers mining and mineral exploration for gold, platinum, 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 also worked as Mine Manager for an open pit operation for 4 years, including a recent stint as Non-Executive Director of ZMDC. 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).

Ken Mekani

General Manager – How Mine

Ken Mekani has been with Metallon for 27 years after joining the then Lonrho Mining as Graduate Trainee Metallurgist in June 1987. After completing the Graduate Trainee Programme, Ken was appointed Plant

• Metallurgist. He spent several years in the group’s various operations

where he worked his way up the ranks and was involved in major Metallurgical projects. In December 2012, he was appointed Acting COO for Metallon Gold Zimbabwe and in June 2013 was appointed General Manager for the group’s flagship operation, How Mine. From August 2010 to August 2013, Ken was non-Executive Director and Chairman of the Technical Committee of Sabi Gold Mine, a wholly owned subsidiary of the Zimbabwe Mining Development Corporation. 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).

Dr Isadore Matunhire

Head of Technical Services

Dr Isadore Matunhire joined Metallon in November 2013 as Head of Technical Services and is responsible for leading the expansion programmes, bankable feasibility studies and business integration. He has advised Metallon as an Independent Consultant since January 2013. He has over 20 years operational mining experience and 5 years in the mining consultancy field. He has worked for Zimbabwe Mining Development Corp and Bindura Nickel Corp in senior roles. 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. He has also lectured in the Mining Engineering Department at the University of Pretoria and worked as Corporate Affairs Director for Mwana Africa. He graduated with a PhD in Mineral Economics from University of Nottingham, England and MSc in Management from City University, London.

Tulani Sikwila

Finance Director

Tulani Sikwila joined Metallon in 2001 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, where he spent 5 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).

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History of the mining operations

Metgold Limited (now Metallon Corporation Limited) was established in April 2002 through the consolidation of various assets.

May 1909 Incorporation of Lonrho Plc 1960-1980’s Development of international business activities October 1998 Corporate restructuring results in disposal of non-mining assets March 1999 Lonrho de-merger results in re-listing of mining assets as Lonmin Plc March 1999 Closure and subsequent disposal of the Athens gold mine June 2000 Sale of the Tiger Reef gold mine and the Anzac gold mine October 2000 Restructuring of the Muriel mine and the Harare office October 2002 Acquisition of assets by Metgold Limited

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Company group structure

Metallon Corporation Limited (UK) Bulawayo Mining

Company

How Mine & Motapa Goldfields of Shamva

Company

Shamva Mine Goldfields

• f Mazowe

Company

Mazowe Mine, & Arcturus Mine and Midwinter King’s Daughter

Company

Redwing Mine Metallon Management Services

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Mineral Resource Statement (1 October 2012)

Mineral Resources Tonnage Grade Content (kt) (g/tAu) (kozAu) Measured How 2,268 5.6 412 Shamva 1,204 3 116 Arcturus 757 3.4 82 Redwing 1,362 3 132 Mazowe 338 10 109 Subtotal 5,930 4.5 851 Indicated How 3,749 4.3 516 Shamva 10,544 2.5 841 Arcturus 2,740 5.2 462 Redwing 10,567 3 1,019 Mazowe 5,166 1.5 249 Midwinter 220 2.3 16 Subtotal 32,986 2.9 3,103 Measured + Indicated How 6,017 4.8 928 Shamva 11,748 2.5 957 Arcturus 3,497 4.8 545 Redwing 11,929 3 1,151 Mazowe 5,504 2 358 Midwinter 220 2.3 16 Total 38,916 3.2 3,955 Mineral Resources Tonnage Grade Content (kt) (g/tAu) (kozAu) Inferred How 6,993 3.7 835 Shamva 20,489 1.7 1,090 Arcturus 3,281 5 531 Redwing 2,529 2.7 218 Mazowe 4,868 6.6 1,030 Motapa 5,913 1.6 310 Midwinter 1,232 1.7 68 Subtotal 45,306 2.8 4,083 Total Resources How 13,010 4.2 1,763 Shamva 32,237 2 2,047 Arcturus 6,778 4.9 1,076 Redwing 14,458 2.9 1,369 Mazowe 10,373 4.2 1,388 Motapa 5,913 1.6 310 Midwinter 1,452 1.8 84 Total 84,222 3 8,038

Metallon Corporation

Address: 78 Pall Mall, London, SW1Y 5ES Tel No: +44 (0) 203 178 7431 www.metcorp.co.uk