For personal use only - ASX · 2015. 11. 24. · OPEX Energy costs significantly reduced since DFS. Energy is 31% of total OPEX costs HFO reduced from US$0.691 per litre to US$0.55

Kula Gold Limited

PNG Chamber of Mines and Petroleum Conference

“Poised for Production”

24 -27 November 2015

For

per

sona

l use

onl

y

Kula Gold Limited 2

Disclaimer

Forward Looking Statements

All statements other than statements of historical fact included in this announcement including, without

limitation, statements regarding future plans and objectives of Kula Gold Limited (Kula Gold) are forward-

looking statements. When used in this announcement, forward-looking statements can be identified by

words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’ or ‘intends’ and other similar words

that involve risks and uncertainties. These statements are based on an assessment of present economic

and operating conditions, and on a number of assumptions regarding future events and actions that, as at

the date of this announcement, are expected to take place. Such forward-looking statements are not

guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and

other important factors, many of which are beyond the control of the company, its directors and management

of Kula Gold, that could cause Kula Gold’s actual results to differ materially from the results expressed or

anticipated in these statements.

The company cannot and does not give any assurance that the results, performance or achievements

expressed or implied by the forward-looking statements contained in this announcement will actually occur

and investors are cautioned not to place undue reliance on these forward-looking statements. Kula Gold

does not undertake to update or revise forward-looking statements, or to publish prospective financial

information in the future, regardless of whether new information, future events or any other factors affect the

information contained in this announcement, except where required by applicable law and stock exchange

listing requirements.

For

per

sona

l use

onl

y

Kula Gold Limited

PNG a highly prospective jurisdiction

Significant regional and resource growth

opportunities with potential to double

resources

Low cost exploration program delivers drill

ready targets

Completed DFS for 1.8Mtpa for 100koz pa

with AISC @ US$868 per ounce,

permitted and ready for development

3

Best Gold Growth Opportunity

Improving CAPEX and OPEX environment and “poised for production”

Scoping study completed showing benefits of staged upgrade to 4Mtpa

and 200koz pa, with AISC @ US$700 per ounce

For

per

sona

l use

onl

y

Kula Gold Limited

First hard rock gold mine in Papua

Historical production of 220,000 oz to 1918

Various exploration activities by others since

1960’s with limited success

New approach and commitment by Kula Gold

over the last 10 years

Greater than 2 Moz of Resource discovered

DFS complete and 766koz Ore Reserve

defined

Project approved and “poised for production”

WML expenditure on the Project to date

PNGK269 million or US$117 million dollars

4

Project History

For

per

sona

l use

onl

y

Kula Gold Limited

Corporate

5

ASX Code: KGD

Issued Shares: 316.2 M

Options: 91.1 M

Share Price (14/10/15):(5 day VWAP)

A$0.028

Market Cap:( 5 day VWAP)

A$8.8M

Cash (30 Sept 2015): A$1.6M

Debt: Nil

Major Long Term Shareholders

Pacific Road Capital – 40.97%

Franklin– 17.78%

RMB Resources – 13.80%

Completed A$2.2M Equity Raising in June 2015

Pacific Road Capital and Franklin Templeton

Provides funds until December Qtr 2016

For

per

sona

l use

onl

y

Kula Gold Limited

Poised for Production

6

Completed DFS for gold production of > 100k ounces per year

Open pit with 2.2 g/t gold Reserve of 766,000 ounces of gold

Standard 1.8Mtpa CIL processing plant with total recovery of >90%

9 year Project life with an All In Sustaining Cost (AISC) of US$868 per ounce

Project fully permitted and ready for development

Environment Permit and Mining Lease granted

PNG State equity decided at 5%

LMPs and MEs for Project infrastructure submitted for approval

MoA with stakeholders progressed to final document for government signoff

Regional exploration demonstrating resource growth potential

Funding has not been available due to low gold price and weak equity markets

WML has strong stakeholder support and is well positioned to advance the project

when gold price and equity market conditions improve

For

per

sona

l use

onl

y

Kula Gold Limited

Gold Price and Market Conditions

7

For

per

sona

l use

onl

y

Kula Gold Limited

Gold Price and Market Conditions

8

For

per

sona

l use

onl

y

Kula Gold Limited

EL1465

9

Busai

408,000 oz

(6.1Mt at 2.1g/t Au)

Current JORC Reserves of 766,000 ounces of gold

as at July 2012

ML508

Woodlark Island Gold Project Ore Reserves

Woodlark King

39,000 oz

(0.7 Mt at 1.7g/t Au)

For

per

sona

l use

onl

y

Kula Gold Limited

Woodlark Island Project Layout

10

0 2.5 5km

Busai

Kulumadau

Woodlark King

Busai Waste

Plant

Wharf

ML 508

For

per

sona

l use

onl

y

Kula Gold Limited

Commitment to the Community

11

WML recognises and respects the

Community’s culture, values and

traditions.

Strong stakeholder support during MoA

negotiation process. Final sign off of

document planned in Alotau for Dec 2015

WML has provided educational

hardware, health facilities and training

to communities across Woodlark

Island

Supportive of the return of State land

to traditional ownersFor

per

sona

l use

onl

y

Kula Gold Limited 12

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0

500

1,000

1,500

2,000

2,500

2008 2009 2010 2011 2012 2013 2014

ko

z

800,000oz

1,350,000oz

1,750,000oz

2,100,000oz

Scoping Study

PFS

DFS

WML Achievements and Investment

Continued resource growth and

favourable economic studies

Enviro

Permits

DFS

State

Equity

Decision

EIS

ML

Granted

Favourable

approvals

For

per

sona

l use

onl

y


0

10

20

30

40

50

60

70

80

0

500

1,000

1,500

2,000

2,500

2008 2009 2010 2011 2012 2013 2014 2015

KIN

A M

illio

n A

nn

ual

Exp

en

dit

ure

ko

z

PNGK 46M

Exploration,

PFS Enviro

Baseline

Studies

PNGK 64M

Infill drilling,

hydro drilling,

geotech

drilling,

Enviro data

collection and

Baseline

Studies

PNGK 3M

Approvals,

Financing,

Exploration

PNGK 16M

Exploration,L

andowner

Studies

PNGK 31M

Exploration,

Scoping Study

Enviro Baseline

Studies

PNGK 15M

EIS, Govt EIS

review cost,

Permitting

PNGK 12M

Permitting,

Financing,

Exploration

PNGK 47M

DFS, EIS and

Env Data

Collection

WML Achievements and Investment

Continued significant investment

For

per

sona

l use

onl

y

Kula Gold Limited

800,000oz

1,350,000

oz

1,750,000

oz

2,100,000

oz

14

Development Milestones – Summary

0

10

20

30

40

50

60

70

80

0

500

1,000

1,500

2,000

2,500

2008 2009 2010 2011 2012 2013 2014 2015

KIN

A M

illio

n A

nn

ual

Exp

en

dit

ure

ko

z

ML

Application

PNGK 46M

Exploration,

PFS Enviro

Baseline

Studies

PNGK 64M

Infill drilling,

hydro drilling,

geotech

drilling,

Enviro data

collection and

Baseline

Studies

PNGK 3M

Approvals

Financing,

Exploration

Scoping Study

Enviro

PermitsPFS

DFS

State

Equity

Decision

EIS

ML

Granted

PNGK 16M

Exploration,L

andowner

Studies

PNGK 31M

Exploration,

Scoping Study

Enviro Baseline

Studies

PNGK 47M

DFS, EIS

and Env

Data

Collection

PNGK 15M

EIS, Govt

EIS review

cost,

Permitting

PNGK 12M

Permitting,

Financing,

Exploration

PNGK 21M

PermittingPNGK 40M

Definitive Feas Study

PNGK 166M

Drilling, Pre Feasibility, Env Baseline

PNGK 33M

Pre 2008

PNGK 9M

Funding and

Holding

For

per

sona

l use

onl

y

Kula Gold Limited

Improving the Business Case

Improving the business case for the Woodlark Island Gold Project (WIGP)

can occur via one or a combination of the following ways:

A higher gold price

Growth in Ore Reserve and Mineral Resources

Reductions in CAPEX Costs

Improvement in OPEX Costs

WML has been working to advance the Project and attract funding for

development.

Project must be “production ready” when the gold price and equity market

conditions improve.

15

For

per

sona

l use

onl

y

Kula Gold Limited

Growth in Resources

WML has continued an exploration program since the grant of the Mining

Lease in July 2014. This has included:

Diamond drilling at the Kulumadau North Prospect

New magnetic survey and 3D modelling of results

Trenching of near surface mineralised zones with 2,185 metres of

trenches within the Woodlark King area being excavated and sampled

Regional soil and drainage geochemical sampling to identify new

regional targets

16

For

per

sona

l use

onl

y

Kula Gold Limited

New Exploration Model

17

New high quality helimag and

LiDar data

Increased geological

knowledge from DFS drilling

Improved target ranking based

on: Proximity to magnetics lows

Structural analysis NW / NE

Gold in pan concentrates

Vegetation Anomalies

Proximity to known Resources

Depth of sediment cover

Historic data

Resulting in improved on

ground targeting

Opportunity for 3D modelling

Kulumadau North

Mackenzie’s

Little Mackenzie

WatouFor

per

sona

l use

onl

y

Kula Gold Limited

DFS CAPEX and OPEX Improvements

18

CAPEX

Opportunity to utilise second plant processing equipment

Reduced new or near new mobile equipment pricings

Improved construction market compared to 2011 and 2012

Change in construction delivery method from EPC to owner construct

Reduction in CAPEX estimated at US$20 - $25 million compared to DFS

OPEX

Energy costs significantly reduced since DFS. Energy is 31% of total OPEX costs

HFO reduced from US$0.691 per litre to US$0.55 to US$0.61 range

Diesel reduced from US$1.0 per litre to US$0.70 to US$0.75 range

Change in US$ to AUD$ and PNG Kina rates translate into direct US$ reduction in labour

and Australian based contract costs. Labour is 15% of total OPEX costs

Reductions in C1 costs estimated at 9% or US$70 per ounce compared to DFS

For

per

sona

l use

onl

y

Kula Gold Limited

LMP and ME Applications

19

Description

ML508 Mining Lease

EL1172 Exploration Licence



LMP 89 New Wharf

LMP 90 Wharf laydown area

LMP 91 Waste Dump Kulumadau

LMP 92 DSTP mixing tanks site

LMP 93Kulumadau Village

relocation area

ME85

Deep Sea Tailings

Pipeline

ME86 Road to the new Wharf

For

per

sona

l use

onl

y

Kula Gold Limited

Watou

Emerging as Fourth Resource Area

20

2,185 metres of trenching completed

300 metre strike length of continuous

mineralisation identified

3 new zones of mineralisation

associated with steeply dipping,

anastomising NW structural zones

associated with carbonate and quartz

Ore grade intersections over mineable

widths, 7km from the plant site

Significant free gold identified from

panning of mineralised intercepts

Soil and drainage geochemistry indicates significant strike potential

For

per

sona

l use

onl

y

Kula Gold Limited21

Significant ore grade assays

from trenching including:

8 metres @ 4.46g/t Au

23 metres @ 2.04 g/t Au







Watou

Significant Ore Grade Mineralisation

3 New Zones of Mineralisation over

300 m strike length

For

per

sona

l use

onl

y

Kula Gold Limited22

Regional Drainage Sampling Program

Drainage sampling program covering

30 square kilometres of sub cropping

prospective Okiduse Volcanics

Improved definition of drainages from

the use of high quality LiDar data

Standard 44 kilogram sample

Panned to produce a concentrate

Pan Conc grained counted:

Detrital gold at three size fractions

Base metal sulphides and quartz

gold composites logged

Drainages ranked

For

per

sona

l use

onl

y

Kula Gold Limited23

Watou Untested Strike Potential

Watou soil and drainage

geochemistry indicates

significant strike potential

Confirmation by pan

concentrate drainage

sampling program

Anomalous area twice the

size of Watou mineralisation

Anomalous areas follow

regional NW and NE controls

on mineralisation

Further potential to add

resource ounces

For

per

sona

l use

onl

y

Kula Gold Limited

Project Growth - Increased Life

24

Conversion of Economic Inferred material and realistic new discovery

increase project life and economics

Assumed 225koz conversion of Inferred resources and 275koz exploration success

-

20,000

40,000

60,000

80,000

100,000

120,000

140,00020

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

BFS Reserves LG Stockpiles Resource Definition Exploration Success

1 1 2 3 4 5 6 7 8 9 10 11 12 13

. YearsFor

per

sona

l use

onl

y

Kula Gold Limited

Project Growth - Increased Capacity

25

Staged doubling of gold production supported by 2013 scoping study,

@ US$700 per ounce AISC, if significant new discovery revealed

-

50,000

100,000

150,000

200,000

250,000

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

BFS Reserves LG Stockpiles Resource Definition Exploration Success

Assumed 440 koz conversion of Inferred resources and 970koz exploration success

1 1 2 3 4 5 6 7 8 9 10 11 12 13

. Years

For

per

sona

l use

onl

y


Completed DFS and fully permitted 1.8Mtpa gold project

in world-class mining jurisdiction, excellent operating

environment

Strong landowner and key stakeholder support

Current market conditions reducing Project costs

Project funding still difficult at current gold price

Scoping study completed showing benefits of staged

upgrade to 4Mtpa and 200koz pa, AISC @ US$700 per

ounce

Woodlark can deliver increase in ounces:

Multiple targets identified by new exploration model

Low cost exploration delivering drill ready targets

Regional Pan Concentrate Drainage Sampling Program

Growth opportunities and Poised for Production

Why Kula Gold – Leverage to Gold

For

per

sona

l use

onl

y

Kula Gold Limited

Contact

Stuart Pether - CEO

Kula Gold Limited

Suite 2,

20 Howard Street PERTH WA

Ph: +61 8 9322 7504

www.kulagold.com.au

ASX Code KGD

For

per

sona

l use

onl

y
http://www.kulagold.com.au

Documents

For personal use only - ASX · 2015. 11. 24. · OPEX Energy costs significantly reduced since DFS. Energy is 31% of total OPEX costs HFO reduced from US$0.691 per litre to US$0.55