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0 85 129
180 151 89
Gold 35%
228 218 196
Gold 20%
239 234 221
Gold 10%
247 244 238
Acacia Mining plc
Delivering free cash flow
10.05.2016
LSE:ACA
0 85 129
180 151 89
Gold 35%
228 218 196
Gold 20%
239 234 221
Gold 10%
247 244 238
Important Notice
This presentation includes “forward-looking statements” that express or imply expectations of future events or results as opposed to historical facts. These
statements include, financial projections and estimates and their underlying
assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, projects, and statements
regarding future performance. Forward-looking statements are generally
identified by the words “plans,” “expects,” “anticipates,” “believes,” “intends,” “estimates” and other similar expressions.
All forward-looking statements involve a number of risks, uncertainties and
other factors, many of which are beyond the control of Acacia, which could cause actual results and developments to differ materially from those expressed in, or
implied by, the forward-looking statements contained herein. Factors that could
cause or contribute to differences between the actual results, performance and achievements of Acacia include, but are not limited to, changes or developments
in political, economic or business conditions or national or local legislation or
regulation in countries in which Acacia conducts - or may in the future conduct - business, industry trends, competition, fluctuations in the spot and forward price
of gold or certain other commodity prices (such as copper and diesel), currency
fluctuations (including the US dollar, South African rand, Kenyan shilling and Tanzanian shilling exchange rates), Acacia’s ability to successfully integrate
acquisitions, Acacia’s ability to recover its reserves or develop new reserves,
including its ability to convert its resources into reserves and its mineral potential into resources or reserves, and to process its mineral reserves
successfully and in a timely manner, Acacia’s ability to complete land
acquisitions required to support its mining activities, operational or technical difficulties which may occur in the context of mining activities, delays and
technical challenges associated with the completion of projects, risk of trespass,
theft and vandalism, changes in Acacia’s business strategy and ongoing implementation of operational reviews, as well as risks and hazards associated
with the business of mineral exploration, development, mining and production
and risks and factors affecting the gold mining industry in general.
Although Acacia’s management believes that the expectations reflected in such forward-looking statements are reasonable, Acacia cannot give assurances that
such statements will prove to be correct. Accordingly, investors should not place
reliance on forward-looking statements contained in this presentation.
Any forward-looking statements in this presentation only reflect information
available at the time of preparation. Subject to the requirements of the Disclosure
and Transparency Rules and the Listing Rules or applicable law, Acacia explicitly disclaims any obligation or undertaking publicly to update or revise any forward-
looking statements in this presentation, whether as a result of new information,
future events or otherwise. Nothing in this presentation should be construed as a profit forecast or estimate and no statement made should be interpreted to mean
that Acacia’s profits or earnings per share for any future period will necessarily
match or exceed its historical published profits or earnings per share. Mineral reserves and mineral resources estimates contained in this presentation have
been calculated as at 31 December 2015 in accordance with National Instrument
43-101 as required by Canadian securities regulatory authorities. Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definitions were followed
for mineral reserves and resources. The reserves and resources figures stated are
estimates. No assurances whatsoever can be given that the indicated quantities of metal will be produced and totals stated may not add up due to rounding. For
more information regarding the nature of reserves and resources estimates and
relevant CIM definitions, please see page 90 of Acacia Mining plc’s 2015 Annual Report and Accounts.
You are reminded that you have received this presentation on the basis that you
are a person to whom this presentation may be lawfully made and delivered. You may not and are not authorised to: (i) reproduce or publish this presentation; or
(ii) distribute, disclose or pass on this presentation to any other person, in whole
or in part, by any medium or in any form, in breach of any applicable securities laws. BY ACCEPTING THIS PRESENTATION, YOU ACKNOWLEDGE AND
AGREE TO THE CONTENTS OF THIS DISCLAIMER AND YOU AGREE TO BE
BOUND BY THE FOREGOING LIMITATIONS.
10.05.2016 BAML Global Metals, Mining and Steel Conference 2
0 85 129
180 151 89
Gold 35%
228 218 196
Gold 20%
239 234 221
Gold 10%
247 244 238
What we stand for
10.05.2016 BAML Global Metals, Mining and Steel Conference
A leading asset portfolio in Africa 1
Focused on free cash flow 2
Growing our footprint 5
Disciplined capital allocation 3
Becoming the partner of choice 4
Our Core Pillars
… unearthing Africa’s potential
Our People
Our Business
Our Relationships
Our Future
3
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Company overview
A leading asset portfolio amongst our peers
Our Locations Business Overview
Bulyanhulu World class deposit
Life of mine in excess of 20 years
North Mara
High-grade open pit and
underground mine
9 year life of mine
Buzwagi Low-grade bulk deposit
Short life mine, harvest mode
Exploration Contrarian view on exploration
Building pan African portfolio
10.05.2016 BAML Global Metals, Mining and Steel Conference
Producing mines Exploration properties
Tintinba Project Mali
West Kenya JV Kenya
Bulyanhulu Tanzania Houndé Belt JVs
Burkina Faso
North Mara Tanzania
Buzwagi Tanzania
4
0 85 129
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239 234 221
Gold 10%
247 244 238
Returning Business to Free Cash Flow
922
812 732 732
693 685
1,561
1,346
1,105 1,112
959 965
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2012 2013 2014 2015 Q1 16 FY 16E*
US
$/o
un
ce
AISC and Cash Cost Evolution (US$/oz)
Cash cost / ounce AISC / ounce
10.05.2016 BAML Global Metals, Mining and Steel Conference
Delivered a 40% reduction in AISC since 2012
5
* Represent mid-point of 2016 guidance ranges
0 85 129
180 151 89
Gold 35%
228 218 196
Gold 20%
239 234 221
Gold 10%
247 244 238
Bulyanhulu
Six months of consistent delivery
AISC beneath US$1,000/oz
FY 2016 AISC expected to be 15% lower than 2015
Mine generating free cash flow
Progressing towards target of 350kozpa
2016 focus areas:
Deliver further increase in development metres
Improving stope cycle times
Achieve improved recoveries
Progress drilling programmes across Reef 2 (both Upper East and Lower West)
Continuing the transformation
10.05.2016 BAML Global Metals, Mining and Steel Conference 6
1,453
1,278
1,373
999 983
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
AISC per ounce sold (US$/oz)
62 71
62
78 78
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Production (koz)
0 85 129
180 151 89
Gold 35%
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Gold 20%
239 234 221
Gold 10%
247 244 238 4.1 3.9
2.8
2013 2014 2015
Average long-hole stoping width (m)
2,225 1,843
1,197
151 111
72
2,324
1,382
1,016
2013 2014 2015
Breakdown of workforce Nationals
Internationals
Contractors
10.05.2016 BAML Global Metals, Mining and Steel Conference
2,268 2,329 2,510
2,636 2,625 2,762
H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015
Average daily ROM tonnes milled (t)
10.4 12.3
15.9
2013 2014 2015
Total Development metres (km)
KPIs have improved significantly
Dramatic productivity improvements already realised at the mine
7
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Reef 2 Resource Extensions
8
Reef 1
Extending the potential of a world class resource
10.05.2016 BAML Global Metals, Mining and Steel Conference
Reef 2M
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North Mara
Mine has been our leading driver of free cash flow over the last 3 years
Q1 continued trend with AISC of US$737/oz
Expected to be our largest producing mine and lowest cost asset in 2016
Delivered ramp up of Gokona Underground on time and delivering ahead of plan
2016 focus areas:
Initiate Nyabirama deeper drilling programme
Prepare U/G drill platforms ahead of 2017 deeper drilling programme at Gokona
Deliver CAF plant at Gokona Underground
Maintain improved community relations
Continuing to deliver strong performance
10.05.2016 BAML Global Metals, Mining and Steel Conference 9
828
968 939 932
737
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
AISC per ounce sold (US$/oz)
76 67 68
77 75
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Production (koz)
0 85 129
180 151 89
Gold 35%
228 218 196
Gold 20%
239 234 221
Gold 10%
247 244 238
Gokona Underground – Future plans
Reserve replacement has eased pressure on drilling to upgrade
approximately 1Moz of resource beneath current reserves, deeper
drilling will commence in 2017
30
0m
6
00
m
Pink blocks – reserves Green blocks – resources
250 m Reserves
640 m Resources
Planned Western Portal
Mining taking place via Eastern Portal
10.05.2016 BAML Global Metals, Mining and Steel Conference 10
0 85 129
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Gold 35%
228 218 196
Gold 20%
239 234 221
Gold 10%
247 244 238
Nyabirama - Assessing U/G potential
Mineralisation known to extend beyond final pit design, drilling
programme in 2016 designed to test geological understanding
Deep holes planned drilling target outline. 8 holes planned, success dependant
Splays Lodes
Cut 4 Pit outline
Hanging Wall Lode
Footwall Lodes
Existing holes beneath Cut 4
30
0m
3
00
m
HW Splays
Image looking South West From Eastern side-Mine Grid
10.05.2016 BAML Global Metals, Mining and Steel Conference 11
0 85 129
180 151 89
Gold 35%
228 218 196
Gold 20%
239 234 221
Gold 10%
247 244 238
Buzwagi
Operating in harvest mode
10.05.2016 BAML Global Metals, Mining and Steel Conference 12
1,118 1,065
1,394
1,236 1246
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
AISC per ounce sold (US$/oz)
44 48
34
45
37
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Production (koz) Q1 was expected to be weakest quarter of year as focus continued to be on waste stripping
Production due to step up quarter on quarter with costs dropping accordingly
For full year expect to see 10% increase in production and 15% reduction in AISC over 2015 levels
Mitigated gold price related risk to cash flow
Zero cost collars for 136koz of 2016 production between US$1,150/oz and US$1,290/oz
In Q1, added 43koz for 2017 production between US$1,150/oz and US$1,421/oz
2016 focus areas:
Maintain recoveries of 94%
Improve excavator productivity to achieve material movement plan
Assess future options for the mine
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247 244 238
Driving further cost reductions
10.05.2016 BAML Global Metals, Mining and Steel Conference
Limited benefit from foreign exchange and oil price
Tone set from the top
Board of Directors and Executive Leadership Team volunteered to take a 10% reduction in salary
Continuing to make our business more efficient in order to reduce costs
US$25 million annual saving from the restructuring of the workforce announced in late 2015
US$10 million further reduction in capital expenditure
Capex expected to be 55% lower than it was in 2013
US$10 million reduction in corporate administration costs against 2015
Spend expected to be 50% lower than it was in 2012
US$10 million of annualised savings through renegotiation of contracts across supply chain
Expect to further reduce cost base as we move through 2016
13
0 85 129
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247 244 238
Appointed Mark Morcombe as COO in Q1 2016
Supplements existing strong operating and technical capability within Acacia
Initial focus will be at Bulyanhulu
Focus on capturing longer term value
Delineation of route to 350kozpa
Scope brownfields growth to 500kozpa through Reef 2 extensions
North Mara
Focus on mine life extensions
Extensions below 250m at Gokona Underground
Scoping of Nyabirama Underground
Buzwagi
Focus on best value outcome for the asset
Together with further asset optimisation
Driving near term efficiencies and longer term value
10.05.2016 BAML Global Metals, Mining and Steel Conference 14
0 85 129
180 151 89
Gold 35%
228 218 196
Gold 20%
239 234 221
Gold 10%
247 244 238
Continuing to invest in Our Future
Tintinba Project Mali 150sqkm along highly
prospective Senegal-Mali Shear Zone
Initial drilling of targets planned from Q2 2016
West Kenya JV Kenya 2,200 sqkm over Ndori
Greenstone belt Liranda Corridor showing
best results to date 2016 programme aimed at
confirming a significant discovery
Houndé Belt JVs Burkina Faso 3 JVs covering 2,400sqkm of
the Houndé Belt Updated inferred resource on
South Houndé JV of 2.1Moz @ 1.5 g/t
Extensive gold trends identified from initial soil sampling on new projects
Drilling planned from Q2 2016
Taking advantage of current market conditions to expand our
footprint in the most prospective belts across Africa
North Mara Tanzania Drilling to test future U/G
potential below Nyabirama Stage 4 open pit
Bulyanhulu Tanzania U/G Reef 2 drilling
programme Target of 5Moz at the mine
Proterozoic-Archean volcano-sedimentary belts Brownfields projects Greenfields projects
10.05.2016 BAML Global Metals, Mining and Steel Conference 15
0 85 129
180 151 89
Gold 35%
228 218 196
Gold 20%
239 234 221
Gold 10%
247 244 238
Enhancing Our Relationships
10.05.2016 BAML Global Metals, Mining and Steel Conference
Over US$12 million of investment into community projects around our
mines in 2015 – moving focus towards “Sustainable communities”
Livelihoods –Bee-keeping project for 120 youths
Infrastructure – Bridge to provide year round access to markets for farmers
Livelihoods – Tools to support co-operative setting up a motorbike maintenance business
16
0 85 129
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228 218 196
Gold 20%
239 234 221
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247 244 238
Our People are our core asset
17
Identifying and promoting local talent whilst driving cultural change
91.0%
93.0%
94.4%
95.5%
2012 2013 2014 2015
Proportion of National Employees Reduced number of expatriates on our
mines by over 50% whilst delivering three years of increased production
Promoted Tanzanians to senior managerial levels
Buzwagi has only 10 expats out of a workforce of 750
Continuing to drive cultural change
Top 300 completed Tufanikiwe Pamoja Cultural Change Programme
Rainbow Gold Training Programme for our First Line Leaders
Behavioural safety programme, WeCare, having an impact across our mines
TRIFR down by 20% in 2015
10.05.2016 BAML Global Metals, Mining and Steel Conference
1.29
0.50 0.64
0.86 1.02
0.33
0.66 0.68
Bulyanhulu North Mara Buzwagi Acacia
TRIFR 2014 2015
0 85 129
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2016 Outlook
626 642
719 731 765*
500
550
600
650
700
750
800
2012 2013 2014 2015 2016
Production (koz)
171
112 70 74 60*
113 171
132 110 110*
47
117
61 5
0
100
200
300
400
2012 2013 2014 2015 2016E
Capital Expenditure (US$ Million)
Expansion
Cap Dev't
Sustaining
EU
S/$
mil
lio
n
1,561
1,346
1,105 1,112
965*
500
700
900
1,100
1,300
1,500
2012 2013 2014 2015 2016E
AISC per ounce sold (US$/oz)
941
827
732 772
685*
500
600
700
800
900
2012 2013 2014 2015 2016E
Cash cost per ounce sold (US$/oz)
Consolidating progress made to date to drive cash flow
* 2016 Guidance reflects mid point of respective ranges
10.05.2016 BAML Global Metals, Mining and Steel Conference 18
0 85 129
180 151 89
Gold 35%
228 218 196
Gold 20%
239 234 221
Gold 10%
247 244 238
Investment Case
Disciplined capital allocation
2016 will be 4th consecutive year of reduced capital and increased production
Continuing to invest in exploration across Africa
Dividend maintained – commitment to capital returns
Balance sheet strength maintained
Delivering further cost savings across the business
Expect a 15% reduction in AISC in 2016
Operations set up to generate strong cash flow in a gold price environment well below current levels
Strong start to 2016
Six months of free cash flow delivery
Focus on cash flow ahead of ounces
Focused on free cash flow generation and long term value creation
10.05.2016 BAML Global Metals, Mining and Steel Conference 19