Sustainable Profitability and Growth TSX: CGG | HKEX: 2099 2018 Q3 Results November 2018
Forward Looking Statements This presentation contains “forward looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward looking information” within the meaning of applicable Canadian securities legislation. Such forward -looking statements and information here include but are not limited to statements regarding China Gold International Resources anticipated future performance, including precious metals and base metals production, reserves and resources, timing and expenditures to expand mine and plant capacities and develop new mines, metal grades and recoveries, cash costs and capital expenditures. Forward looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of China Gold International Resources and its operations to be materially different from those expressed or implied by such statements. Such factors include, among others: fluctuations in metal prices and currency markets; changes in legislation, policies, taxation, regulations; political or economic developments; management, operating or technical risks, hazards or difficulties in exploration, development and mining activities; inadequate insurance, or inability to obtain insurance; availability of and costs associated with mining inputs and labor; the speculative nature of mineral exploration and development, diminishing quantities or grades of mineral reserves as properties are mined; the ability to successfully integrate acquisitions; risks in obtaining necessary licenses and permits. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place un due reliance on forward looking statements or information. the company does not intend to, and does not assume any obligation to up date such forward looking statements or information, other than as required by applicable law. We Seek Safe Harbor. 2
1 UNIQUE CORPORATE MODEL Strong support from controlling shareholder: China National Gold Group Co.,Ltd. Why Invest in 2 RAPID GROWTH, CONSISTENT PROFITABILITY China Gold 10 th year of increasing production ， 10 years of consistent operational profitability Series II of Jiama mine phase II expansion achieved commercial production ahead of International schedule 3 EFFECTIVE COST MANAGEMENT Continue to reduce overall cash costs 4 INVESTMENT GRADE CREDIT RATING August 2017: S&P reaffirmed the company’s BBB - long-term corporate credit rating 5 ABILITY TO RAISE SIZABLE FINANCING AT LOW COST July 2017: Second time successfully issued US$500 MM Bond 6 UNIQUE CAPITAL MARKET STRUCTURE Dual listed in TSX and HKEX, eligible trading under the Shenzhen-Hong Kong Stock Connect 7 HIGH STANDARD OF CSR AND HSE 3
Capital Structure MAJOR SHAREHOLDERS 1 China National Gold Group Co.,Ltd., the largest gold producer in China, owns 39.30% of China Gold International LISTINGS 39.3% China National Gold Group Corp TSX: CGG HK Stock Exchange: 2099 5.64% Van Eck Associates Corp. 2.36% Dimensional Fund Advisors 1.35% Vanguard ISSUED & OUTSTANDING SHARES 0.62% Blackrock 396.41 MM 50.73% Other Shareholders STOCK PERFORMANCE MARKET CAP 1 CASH 2 TSX: CGG (Nov/15/17-Nov/15/18) CDN$686MM US$183.5 MM 52 WEEK STOCK PRICE RANGE 1 CDN$1.59-$3.19 1. As of November 15, 2018 4 2. 2018 Q3 data
Company Operating Highlights 2018 Q3 Production Overview Copper • Copper production increased by 156% to 16,515 tonnes( ≈ 36.4 million pounds) from 6,439 tonnes ( ≈ 14.2 million pounds) compared to 2017 Q3. Gold • Total gold production was 50,860 ounces • Gold production from the CSH Mine decreased by 28% to 33,468 ounces from 46,621 ounces for the same period in 2017. (The decrease in gold production is attributed to lower volumes of ore mined during the 2018 period in accordance to the revised mining plan in relation to the slope stability issue.) • Gold production of 17,392 ounces from the Jiama Mine, increased by 42.6% compared to 2017 Q3. 5
Company Operating Highlights (cont’d) 2018 Q3 Financial Overview Q3 Ended Q2 Ended Q3 Ended Sep 30, 2018 June 30, 2018 Sep 30, 2017 • Revenue increased to US$ 158.8 Revenues (MM USD$) $158.84 $142.09 $98.54 million （ increased by 61% ） Mine operating earning (MM US$) $35.10 $35.79 $26.98 compared to 2017 Q3 Net Profit (MM US$) ($4.59) $0.39 $17.41 • Mine operating earnings was US$ Net Operating Cash Flow (MM US$) $53.56 $40.26 $54.81 35.1 million （ increased by 30% ） Earning per share (US$) (1.23cents) 0.05 cents 4.33 cents • Net profit after income taxes was Cash Costs – CSH (US$/oz) $805 $806 $657 (-US$4.6 million), mainly driven by Cash Costs – Jiama (after by- 1.11 1.37 0.99 product credit) (US$/lb) foreign exchange loss of US$11.0 Gold produced by CSH (oz) 33,880 33,468 46,621 million. Copper produced by Jiama (Mlbs) 36.41 30.29 14.20 6
Company Operating Highlights(cont’d) 2018 Q3 Performance Highlights Summary • Copper production from the Jiama Mine significantly increased to 36.4 Mlb from 14.2 Mlb compared to Q3 2017. • Net cash from operating activities was US$53.56 million • The company’s EBITA increased by 14.54% to $145.68 million from $127.19 million compared to 2017 Q3. 7
Company Operating Highlights (cont’d) Excellent CGG REVENUES FROM 2008-2017 (US$MM) Operational Track Record 412 340 339 332 311 303 278 133 81 29 Maintain profitability 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 and increase production COMBINED GOLD PRODUCTION COPPER PRODUCTION FROM JIAMA CSH & JIAMA (koz) (MM lbs) 100 234 229 211 79 181 160 153 148 142 111 40 38 83 31 28 26 57 22 22 1 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018E 2010 2011 2012 2013 2014 2015 2016 2017 2018E 8
Company Assets and Prospect Jiama Polymetallic Mine One of China’s largest Polymetallic Mines COMMODITIES Copper, Gold, Silver, Zinc, Lead and Molybdenum LOCATION 68 km NE of Lhasa, Tibet MINE OPERATION Open pit and underground PROCESSING CAPACITY increasing to 50,000tpd when phase II expansion completed 9
Company Assets and Prospect (cont’d) Jiama Mine Mineral Resources and Reserves JIAMA RESOURCES Grade Contained Metal Ore Cu Mo Au Ag Pb Zn Cu Mo Au Ag Pb Zn Resources (Mt) (%) (%) (g/t) (g/t) (%) (%) (kt) (kt) (Moz) (Moz) (kt) (kt) Measured 96.3 0.39 0.04 0.08 5.62 0.04 0.02 381 35 0.26 17.46 42 22 Indicated 1378.0 0.41 0.03 0.11 6.00 0.05 0.03 5654 466 4.88 270.57 732 460 Total M&I 1474.4 0.41 0.03 0.11 5.97 0.05 0.03 6035 500 5.14 288.03 774 482 Inferred 406.1 0.31 0.03 0.10 5.13 0.08 0.04 1247 123 1.32 66.93 311 175 JIAMA RESERVES Grade Contained Metal Ore Cu Mo Au Ag Pb Zn Cu Mo Au Ag Pb Zn Reserves (Mt) (%) (%) (g/t) (g/t) (%) (%) (kt) (kt) (Moz) (Moz) (kt) (kt) Proved 7 21.2 0.60 0.05 0.21 9.05 0.05 0.03 129 10 0.14 6.23 10 Probable 317 408.0 0.61 0.03 0.18 11.28 0.13 0.08 2499 131 2.41 149.67 548 Total 429.1 0.61 0.03 0.19 11.17 0.13 0.07 2628 141 2.56 155.90 559 324 Note: The Mineral Resources and Reserve data as of December 31, 2017, under NI 43-101 10
Company Assets and Prospect (cont’d) Major Milestone at Jiama Mine • Jiama Phase II expansion has achieved commercial production and steadily reaching its full design Commercial mineral processing capacity production on • Copper production for the full year of 2018 is Series II of Jiama expected to be more than 10% higher than the 100 Expansion million pounds forecasted at the beginning of the year We have been pleased to see that Jiama is on track to exceed its 2018 production guidance , Jiama Phase II will reach its full capacity smoothly and create more value for our shareholders and local community. ” Mr. Liangyou Jiang ， CEO 11
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