March 6 – 9, 2011 Metro Toronto Convention Centre
- P. D. A. C. Mining Conference – Toronto, Ontario, Canada
P. D. A. C. Mining Conference Toronto, Ontario, Canada March 6 9, - - PowerPoint PPT Presentation
P. D. A. C. Mining Conference Toronto, Ontario, Canada March 6 9, 2011 Metro Toronto Convention Centre Cautionary note DISCLAIMER This Presentation is for information purposes in connection with the Avocet Mining PLCs (the
DISCLAIMER
While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as "Information") and liability therefore is expressly
for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation.
assumptions made by the Company, which are beyond its control and which involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Forward-looking statements may in some cases be identified by terminology such as “may”, “will”, “could”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or
factors may cause our actual results to differ materially from any such statement. Such factors include among others general market conditions, demand for our products, development in reserves and resources, unpredictable changes in regulations affecting our markets, market acceptance of products and such other factors that may be relevant from time to time. Although we believe that the expectations and assumptions reflected in the statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievement. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Presentation to conform these statements to actual results or to changes in our expectations. You are advised, however, to consult any further public disclosures made by us, such as filings made with the Oslo Stock Exchange or press releases.
nothing contained herein shall form the basis of any contract or commitment whatsoever. Copies of this Presentation should not be distributed in or sent into any jurisdiction where such distribution may be unlawful.
Markets Act 2000 and therefore it is being delivered for information purposes only to a very limited number of persons and companies who are persons who have professional experience in matters relating to investments and who fall within the category of person set out in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or are high net worth companies within the meaning set out in Article 49 of the Order or are otherwise permitted to receive it. Any other person who receives this Presentation should not rely or act upon it. By accepting this Presentation, the recipient represents and warrants that they are a person who falls within the above description of persons entitled to receive the Presentation.
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OSE & AIM - AVM 218.0 p Market capitalisation US$698.7m Shares outstanding 197.5m Cash (31.01.11) US$51.7m Net debt (31.01.11) US$26.3m Enterprise value US$725.0m
13.1 %
12.4 %
9.7 %
7.7 %
* All figures as of 18.02.11, unless otherwise stated
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40 65 90 115 140 165 190 215 240 265
Feb-2010 May-2010 Aug-2010 Nov-2010 Feb-2011 AVOCET MINING GOLD FTSE GOLD MINES
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US$49.5m1
US$28.5m1
finance facility with Macquarie Bank
balance1: US$53m
average US$970/oz1
schedule of ~25,000
commenced Q3 2010
revolving credit facility with Standard Chartered Bank, fully drawn
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1 As of 31 December 2010
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irregularly calibrated at the moment 7
Koulékoun (Q2) and Balandougou (Q3)
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20,000 30,000 40,000 50,000 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Gold ounces produced
Actual gold production Initial target: 120,000 oz p.a. equivalent Revised target: 165,000 oz p.a. equivalent
200,000 300,000 400,000 500,000 600,000 700,000 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Ore tonnes processed
Actual tonnage processed Current nameplate capacity (2.25 Mt p.a.)
460 480 500 520 540 560 580 Q2 2010 Q3 2010 Q4 2010 Cash costs per ounce
Inata cash costs Inata cost guidance (lower limit) Inata cost guidance (upper limit)
* Includes US$2.7m adjustment to reflect a government decree on 31 December 2010 that government royalties for 2010 should be charged at 3% rather than 5%
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*
INATA (1.8 Moz) Tri-K (Koulékoun) (0.7 Moz) Bélahouro (0.6 Moz) Producing asset Exploration asset 100% Resources reported for each asset Mali Guinea Burkina Faso 9
* On a cash free, debt free basis, and subject to working capital adjustment - actual proceeds may therefore be greater or less than US$200 million
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Prospective Birimian geology Gold deposit / resource 12 Inata (Avocet) 137,732 oz Mana (Semafo) 179,700 oz Youga (Etruscan) 82,400 oz Kalsaka (Cluff) 74,000 oz Essakane (IAMGold) 135,900 oz Taparko (High River) 120,000 oz * Producing gold mine; number of ounces shown represent 2010 gold production
* Taparko production for 12 months to 30 September 2010
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Production statistics Q4 2010 Q3 2010 Ore mined (t) 638,000 481,000 Total movement (t) 5,007,000 3,100,000 Ore processed (t) 593,000 549,000 Average head grade (g/t) 2.68 2.43 Gold recovery rate (%) 94% 94% Gold production 46,208 40,461 132 114 209 211 170 201 511 526
Cash costs (US$/oz)
Total cash cost
government royalties for 2010 should be charged at 3% rather than 5%
>$1,300 Au price – 5%” *
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* Reserve increased by 25% to 1,081,500 ounces in Q3 2010
Sayouba highlights:
Inata North highlights:
Inata North Inata Central Inata South Plant site 15 Sayouba
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Gomde Barrage
WESTERN DOMAIN CENTRAL DOMAIN EASTERN DOMAIN
INATA Dynamite Miilam Gassel Garafo Fete Kole Pali Kourfadie Damba
Image: VTEM survey overlain with existing drill hole data. Warm colours (red/orange) indicate regions of more conductive geology
Oka Gakinde
5km
Gomde Barrage
Key: Priority drilling target
N
3km
INATA MINING LICENCE Pali Kourfadie Damba Minfo Filio 17
Image: VTEM survey overlain with existing drill hole data. Warm colours (red/orange) indicate regions of more conductive geology N
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Programmes
Q4 ‘10 Jan ’11 Feb ‘11 Mar ‘11 Apr ‘11 May ‘11 Jun ‘11 Jul ‘11 Aug ‘11 Sep ‘11 Oct ‘11 Nov ‘11 Dec ‘11 Q1 ‘12 RC/DD drilling and resource model reports Inata mining licence D D D/R D R D R Filio D R Damba D D/R Kourfadie D Souma Trend R RAB Drilling Filio D Damba D Kourfadie D Key: Indicates period of exploration activity R = resource model report D = drilling results
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Siguiri (7.8 Moz, Anglogold Ashanti) Kouroussa (1 Moz, Cassidy) Kineiro (1 Moz, SEMAFO) LEFA (5.2 Moz, Crew Gold) Prospective Birimian geology Gold deposit / resource Tri-K (0.7 Moz, Avocet)
* Based on views published by the Carter Centre (US-based NGO)
20 Project with gold resource in 2010 AVM permits
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666,500 ounces. Currently drilling
60 m @ 2.01 g/t Au 20 m @ 6.43 g/t Au Currently drilling
2 km long orpaillage Drilling planned in Q4
5km
N
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Programmes
Q4 ‘10 Jan ’11 Feb ‘11 Mar ‘11 Apr ‘11 May ‘11 Jun ‘11 Jul ‘11 Aug ‘11 Sep ‘11 Oct ‘11 Nov ‘11 Dec ‘11 Q1 ‘12 Drilling & Resources Koulékoun D R D R D D/R Kodiéran D D/R D R Balandougou D D R D/R Regional Targets Tri-K D D Kankan D D Kolenda D D Key: Indicates period of exploration activity R = resource model report D = drilling results
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Approx.
Birimian Greenstone Belt Inata Mine Avocet Mining-owned exploration project Source: Company data Mali Niger Côte d‟Ivoire Guinea Mauritania Senegal Ghana Burkina Faso Country Birimian Geology (km2) Gold Resources (Moz)
Ghana 45,000 110 Mali 124,000 33 Guinea 27,000 12 Burkina Faso 60,000 12 Cote d‟Ivoire 113,000 8 Senegal 6,000 3 25
N’Tjila
Koulékoun
Mali Burkina Faso Guinea
Souma Kodiéran Legend Bubble size reflects current resource estimate
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Inata Filio Damba Balandougou
N’Tjila
Koulékoun
Mali Burkina Faso Guinea
Souma Kodiéran Legend Bubble size reflects current target resource
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Inata Filio Damba Balandougou
irregularly calibrated at the moment 28
Koulékoun (Q2) and Balandougou (Q3)
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Exco Board of Directors
Ashanti Ltd in May 2010 having been a member of the board since 1998. Non- executive Director of Old Mutual PLC and several companies in the Rothschild
R P Edey Non-executive chairman
experience working in Africa and developing larger mining companies that will be invaluable in realising Avocet‟s potential. Brett is a HR and operations executive with previous experience at Katanga Mining Limited, Kinross and Co-Steel Inc.
Brett Richards CEO
financial and operational roles at Rio Tinto PLC and Anglo American PLC.
Mike Norris Finance Director
Finance, Norway for Svenska Handelsbanken
H Arnet Non-executive Director
an investment trust investing principally in South African gold mining companies.
R A Pilkington Non-executive Director
mine developments in Africa, Australia, South East Asia and Europe.
M J Donoghue Non-executive Director
17 years, acting as an advisor and auditor for several large and medium-sized businesses in both the public and private sector before retiring in 2001. He is also Chairman of the Audit Committee.
B J W Rourke Non-executive director
the acquisition of Wega Mining. He has had a successful career in developing mining companies, including 15 years working in South Africa for Gencor Ltd, and 10 years in West Africa for Golden Star Resources Ltd.
Richard Gray EVP Operations – West Africa
with over 20 years experience in gold and copper exploration, resource evaluation and reserve development in South East Asia, Central Asia and North America. He joined the Group as Chief Geologist in May 2002 following 12 years with Newmont Mining Corporation.
Peter Flindell EVP Exploration
joined Avocet in June 2009 following the acquisition of Wega Mining. Previously he was Acting CEO of Wega Mining, having joined from Vyke Communications Plc, where he served as
Birdstep Technologies, Inc.
Hans-Arne L’orange EVP Business Development & Investor Relations
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* Mineral Resources include Reserves. Note: the above figures are rounded up/down where appropriate. Dates for reserve and resource estimates are outlined in the following slides
AVOCET GROUP Gross Net attributable Tonnes Grade (g/t) Contained Ounces Tonnes Grade (g/t) Contained Ounces Mineral Reserves
15,760,000 1.92 972,000 13,924,200 1.92 862,550
10,195,000 2.17 712,800 9,516,400 2.17 670,900
25,955,000 2.02 1,684,800 23,440,600 2.02 1,533,450 Mineral Resources*
28,394,000 1.48 1,351,400 24,229,400 1.48 1,165,600
49,443,000 1.56 2,470,600 46,841,400 1.56 2,367,000
77,847,000 1.53 3,822,000 71,079,800 1.53 3,532,600
57,024,000 1.40 2,561,600 44,538,200 1.40 2,066,200
134,871,000 1.47 6,383,600 115,618,000 1.47 5,598,900 32
Reserves as at 31 August 2010 Resources as at 30 June 2010 (Reserves were calculated at a 0.7 g/t Au cut-off and a stock pile is developed for all low grade ore (0.5 – 0.7 g/t Au) that will be processed towards the end of the mine‟s life.) Note: the above figures are rounded up/down where appropriate. * Mineral Resources include Reserves.
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INATA & BELAHOURO Gross Net attributable Tonnes Grade (g/t) Contained Ounces Tonnes (Mt) Grade (g/t) Contained Ounces Mineral Reserves
10,540,000 2.09 707,500 9,486,000 2.09 636,750
5,760,000 2.01 374,000 5,184,000 2.01 336,600
16,300,000 2.06 1,081,500 14,670,000 2.06 973,350 Mineral Resources*
12,520,000 1.74 701,900 11,268,000 1.74 631,700
13,140,000 1.48 624,300 11,858,000 1.48 563,400
25,670,000 1.61 1,326,200 23,135,000 1.61 1,195,100
19,200,000 1.74 1,072,700 18,318,000 1.74 1,019,900
44,870,000 1.67 2,398,900 41,453,000 1.66 2,215,100
TRI-K (KOULEKOUN) Gross Net attributable (100%) Tonnes Grade (g/t) Contained Ounces Tonnes Grade (g/t) Contained Ounces Mineral Reserves
Mineral Resources*
12,690,000 12,690,000 720,000 1.55 1.55 1.48 632,000 632,000 34,500 12,690,000 12,690,000 720,000 1.55 1.55 1.48 632,000 632,000 34,500
13,410,000 1.55 666,500 13,410,000 1.55 666,500
Resources as at 31 December 2009 Note: the above figures are rounded up/down where appropriate. * Mineral Resources include Reserves.
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Reserves and resources as at 31 December „09. Note: the above figures are rounded up/down where appropriate. Above table includes stockpiles and Kurnia in the resources * Mineral Resources include Reserves.
PENJOM Gross Net attributable (100%) Tonnes Grade (g/t) Contained Ounces Tonnes Grade (g/t) Contained Ounces Mineral Reserves
1,311,000 1.69 71,100 1,311,000 1.69 71,100
3,922,000 2.51 316,500 3,922,000 2.51 316,500
5,233,000 2.30 387,600 5,233,000 2.30 387,600 Mineral Resources*
1,311,000 1.69 71,100 1,311,000 1.69 71,100
17,015,000 1.83 1,001,100 17,015,000 1.83 1,001,100
18,326,000 1.82 1,072,200 18,326,000 1.82 1,072,200
4,105,000 1.58 208,500 4,105,000 1.58 208,500
22,431,000 1.78 1,280,700 22,431,000 1.78 1,280,700
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* Mineral Resources include Reserves. Resources include North Lanut, Bakan and Doup projects, and as at 31 December 2009 Reserves figures are for North Lanut only (as at 31 December 2009). Attributable ounces are based on 80% ownership of North Lanut and Bakan, 60% ownership of Doup. Note: the above figures are rounded up/down where appropriate.
INDONESIA Gross Net attributable Tonnes Grade (g/t) Contained Ounces Tonnes Grade (g/t) Contained Ounces Mineral Reserves
3,410,000 1.52 166,400 2,728,000 1.52 133,120
428,000 1.24 17,100 342,400 1.24 13,680
3,838,000 1.49 183,500 3,070,400 1.49 146,800 Mineral Resources*
13,776,000 1.24 548,700 11,020,800 1.24 438,960
6,527,000 1.00 210,200 5,221,600 1.00 168,160
20,303,000 1.16 758,900 16,242,400 1.16 607,120
32,920,000 1.17 1,241,000 21,332,000 1.17 799,540
53,223,000 1.17 1,999,900 37,574,400 1.17 1,406,660
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38 Penjom North Lanut Ore mined (t) 137,000 341,000 Total movement (t) 3,910,000 675,000 Ore processed (t) 180,000 400,000 Average head grade (g/t) 2.36 1.88 Gold recovery rate (%) 87% 53% Gold production 11,934 12,715 667 383 255 186 142 153 1,064 722 Total cash cost Q4 2010 Production statistics Cash costs (US$/oz)
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2010 2009
be disclosed separately as Discontinued Operations on the basis that sale is probable
share price relative to FTSE Gold Mines Index
during that period
core asset disposals, Hounde, Merit Mining and Monument Mining
to the Macquarie Project Finance Facility
cash) - at Inata, revised LoM plan & higher prices indicate more tax payable in later years
US$ million Continuing Discon- tinued Group Group UK West Africa Total South East Asia Revenue
51.9 33.2 85.1 28.7 Cash costs
(23.6) (21.9) (45.5) (19.9) Other cost of sales 1.1 (1.6) (0.5) (3.5) (4.0) (2.4) Admin (1.9)
(0.3) Share based payments (5.2)
(0.8) EBITDA (5.9) 28.3 22.4 7.3 29.7 8.9 Depreciation
(13.0) (5.6) (18.6) (4.2) Exceptional items (4.4) 5.1 0.7 (0.2) 0.5 (10.5) Finance costs (0.5) (1.6) (2.1) (0.4) (2.5) (0.2) Profit before tax (10.7) 18.7 8.0 1.1 9.1 (6.0) Tax (1.6) (9.6) (11.2) (1.2) (12.4) (3.6) Profit after tax (12.3) 9.1 (3.2) (0.1) (3.3) (9.6) 40
2010 2009
reaching commercial production
impairments in South East Asia
to fund Inata construction from 1 April
US$ million Continuing Discon- tinued Group Group UK West Africa Total South East Asia Revenue 132.8 132.8 121.8 254.6 108.8 Cash costs
(62.6) (80.3) (142.9) (70.0) Other cost of sales 0.6 (4.5) (3.9) (7.9) (11.8) (7.1) Admin (7.0)
(4.1) Share based payments (8.6)
(1.6) Changes in inventory
4.0 (2.0) 2.0 4.0 EBITDA (15.0) 69.6 54.6 31.7 86.3 29.9 Depreciation (0.1) (32.5) (32.6) 15.4 (48.0) (13.3) Exceptional items (4.8) 5.1 0.3 (0.2) 0.2 (18.1) Finance costs (1.4) (3.4) (4.8) (0.1) (4.9) 0.3 Profit before tax (21.3) 38.8 17.5 16.1 33.5 (7.6) Tax (2.4) (9.6) (12.0) (3.3) (15.3) (3.3) Profit after tax (23.7) 29.2 5.5 12.8 18.2 (10.9) 41
US$ million 2010 2009 Continuing Discon- tinued Group Group UK West Africa Total SE Asia EBITDA (15.0) 69.6 54.6 31.7 86.3 29.9 Working capital 0.1 (27.8) (27.7) (0.7) (28.5) (10.0) Share based payments 8.3
1.5 Provision/other 0.4
0.9 1.3 3.0 Operating cash flow (6.3) 41.8 35.5 31.8 67.3 24.4 Interest (1.2) (4.0) (5.2) 0.1 (5.1) 0.1 Tax/other
(3.0) (0.7) Capex (0.1) (36.7) (36.8) (5.1) (41.9) (42.9) Exploration (0.3) (9.9) (10.2) (2.6) (12.7) (14.3) Wega acquisition
Disposals 9.9
(12.0)
34.2 Intercompany transfers (6.8) 27.8 21.0 (21.0)
17.7
(17.7)
13.0 7.0 20.0 (17.6) 2.5 (19.7) Opening cash 17.5 12.0 29.5 17.6 47.1 66.8 Closing cash 30.5 19.0 49.5
47.1
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underpinned by cash flow in South East Asia
Inata
fleet, deposit on third fleet, plant enhancements during commissioning, & infrastructure
Monument interests generated US$9.9m
US$ million 2010 2009 Continuing Discon- tinued Group Group UK West Africa Total South East Asia Goodwill
13.6 10.3 Exploration 0.6 10.5 11.1 17.1 28.2 18.1 Tangible fixed assets 0.2 236.7 236.9 52.1 289.0 299.8 Other non-current assets 3.4 23.3 26.8 9.9 36.7 15.3 Net working capital (3.2) 11.3 8.1 16.2 24.3 (1.5) Net funds/(debt) 5.5 (34.0) (28.5)
(42.9) Other liabilities (4.9) (12.9) (17.8) (26.2) (44.0) (21.6) Net assets 1.7 234.9 236.6 82.6 319.2 277.4 43
stake in Avion arising from Hounde disposal (2.7%)
decrease in net debt to US$28.5m, despite debt repayments & investment in capex and exploration
closure and provisions
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2010 2009 Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Production
19,838 31,225 40,461 46,208 137,732
11,370 11,184 12,311 12,715 47,580 11,297 11,899 12,333 11,365 46,894
13,669 10,461 15,020 11,934 51,084 16,077 15,664 16,041 14,512 62,654 TOTAL 44,877 52,870 67,792 70,857 236,396 27,374 27,563 28,734 25,877 109,548 Cash costs
526 511 531
635 678 657 722 674 488 501 507 710 550
818 1,119 841 1,064 944 691 669 660 811 705 TOTAL 735 701 619 641 660 608 597 595 766 639 Group realised gold price 1,107 1,203 1,1391 1,2291 1,174 916 925 966 1,103 975
1 Reflects 26,135 and 25,064 ounces delivered into the Inata hedge in Q3 and Q4 respectively at US$970/oz