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Growing Unhedged Gold Producer in China Sydney Mining Club October 2008

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Page 1: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Growing Unhedged Gold Producer in China

Sydney Mining ClubOctober 2008

Page 2: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

The information contained in this presentation has been prepared using the information available to Sino GoldLimited (‘Sino Gold’) at the time of preparation. This presentation contains forward-looking statements that werebased on expectations, estimates and projections as of the date of this presentation. Any forward-lookingstatement is subject to known and unknown factors which may cause actual results and developments tomaterially differ from those expressed by, or implied by the forward-looking statements in this presentation.External or other factors may have impacted on the business of Sino Gold and the content of this presentationsince its preparation. Sino Gold does not undertake to update any forward-looking statements that are containedin this presentation, except in accordance with applicable securities laws. In addition, this presentation may notinclude all relevant information regarding Sino Gold.Sino Gold has taken all reasonable care in preparation of this presentation. However, the content of thispresentation should not be relied upon in relation to any further action including investment in Sino Gold. Anyperson considering an investment in Sino Gold is advised to obtain independent financial advice prior to makingan investment decision. This presentation is not a prospectus or an offer, invitation, solicitation orrecommendation of securities for sale in the United States. Securities may not be offered or sold in the UnitedStates absent registration under U.S. Securities Act of 1933, as amended (the “Securities Act”), or an exemptionfrom registration therefrom.The information in this presentation which relates to Exploration Results, Mineral Resources or Ore Reserves ofSino Gold has been approved for release by Mr Phillip Uttley (FAusIMM), who is Sino Gold’s Chief Geologist andhas sufficient experience in relation to the style of mineralisation and type of deposit under consideration toqualify as a Competent Person as defined by the “Australasian Code for Reporting of Exploration Results,Mineral Resources and Ore Reserves” (The JORC Code 2004 Edition). JORC is a ‘recognized code andFAusIMM is a recognized designation’, under Canadian reporting standard NI 43-101. Mineral Resource. MrUttley has consented to inclusion of this information in the form and context in which it appears.In this presentation, Mineral Resources are always inclusive of Ore Reserves.

Further information about Sino Gold is available at www.sinogold.com.au.

Disclaimer

Page 3: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino
Page 4: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino
Page 5: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino
Page 6: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Sino Gold – Real IntegrationJune, 2008

Executive Assistant

Trudi Newman

Chief Finance Officer

Wayne Rossiter

Executive Director – CBD

Hanjing Xu

Chief Geologist Phillip Utterly

Mgr – Risk MgtLifang Zhang

Mgr, Investment Relations

Roger Howe

GM, HRYuwen Ma

GM – PGAYumin Qiu GM - JF

DianMin Chen

GM – GTSu Ping

GM – SDLong Long

GM – GR & PRYaping Wang

Consultant, Acquisition

Aaron Colleran

GM – WMAidong Yang

GM –Beyinhar

Yulin Yuan GM – BioGold

Long Long

Corp Secretary& GM, AdminIvo Polovineo

SGF Alliance Team

Chief Operations Officer

Cobb Johnstone

GM – Opt Development

Shu Zhang

President & CEOJake Klein

Page 7: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino
Page 8: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino
Page 9: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino
Page 10: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino
Page 11: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

China – Gold Industry Evolution

1995

Subsistence mining State owned minesNo listed companiesNo mining lawNo foreign minersNo focus on safety / environment

Page 12: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

China – Gold Industry Evolution1995

Subsistence mining State owned minesNo listed companiesNo mining lawNo foreign minersNo focus on safety / environment

2008

5 listed Chinese gold companiesZijin market cap =US$12 billion, 4th

largest global gold4 foreign gold minesOnly 5 mines >100Koz pa20,000 EL’s grantedMinisterial status for safety / environment

Page 13: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

China – Gold Industry Evolution1995

Subsistence mining State owned minesNo listed companiesNo mining lawNo foreign minersNo focus on safety / environment

2008

5 listed Chinese gold companiesZijin market cap =US$12 billion, 4th

largest global gold4 foreign gold minesOnly 5 mines >100Koz pa20,000 EL’s grantedMinisterial status for safety / environment

2020?

Listed Chinese miners are Top 10 globallyMany listed local junior explorersNew mines assist rural development Larger scale minesGlobal mining industry leaders

Improving relative to many countries

Page 14: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Strategy – Prospective Districts

Page 15: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

BioGold

Eastern Dragon

White Mountain

Beyinhar

Nibao Jinfeng

Strategy – Grow Into Assets

Page 16: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Note: approximate estimates, contract rates for mining costs.

China cost advantage applies in mining

Strategy - Cost Advantage

(US$’s) China Australia

Open Pit Mining $1.30/t $4.00/t

Decline Development $1,700/m $3,000/m

Shaft Sinking $4,000/m >$20,000/m

Skilled Mine Operator $20K pa >$100K pa

Senior Geologist $35K pa >$110K pa

Page 17: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Low staff turnover- (<3% YTD 2008)

Low expat requirement- ~1,500 staff, <50 expats- All site managers Chinese

Skilled workforce available- Deep pool of candidates

Foreign company attractive- Values & career path

Strategy – Develop Our People

Staff retention is key industry driver today

Page 18: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Rapidly developing into a low-cost UNHEDGED producer with several mines

Delivering on the Opportunity

3 Years Ago Now

Total Resources 3.5Moz 8.2MozTotal Reserves 2.1Moz 4.8MozJinfeng Early Construction ProducingWhite Mountain New Discovery CommissioningBeyinhar - FeasibilityEastern Dragon - Pre-Feasibility

Page 19: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Jinfeng (82%) High-grade, long-life mine

China’s 2nd largest gold mine

White Mountain (95%)First gold in 4Q 08

from ~70Koz pa mine

Strategic Position Established

BioGold (100%) Concentrate processing

facility now profitable

Beyinhar (95%) Potential heap leach oxide development with sulphide

zone upside

Eastern Dragon (80%)Evaluating high-grade

deposit with potential for <US$100/oz gold

+Sino Gold Fields Alliance exploring

all of China for >3Moz gold

deposits

Building a strong position in well-endowed gold belts

Nibao (70%)Evaluating & drilling

0.8Moz Resource

Page 20: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Jinfeng – Flagship Operation

Open Pit withUnderground Mine

5.3Moz Resource @ 4.5g/t 3.5Moz Reserve @ 5.2g/t

High-quality, efficient processing facility

>15 year mine life with district potential

China’s second largest

gold mine

Page 21: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Jinfeng - Low Cost ProductionFocus on OP grade 1H08 = 66Koz @

US$416/ozInitial UG ore being mined

BIOX plant now at design LTIFR =0.6

2H08 Fcst > 80Koz @ <US$400/oz

Gold production steadily increasing

Page 22: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Jinfeng – World Class Orebody

15 to 20 year mine life

Resource of 5.3Moz(35.9Mt @ 4.5g/t)OP Reserve of 1.1Moz(7.7Mt @ 4.4g/t)UG Reserve of 2.4Moz(13.1Mt @ 5.8g/t)Higher grade UG ore to be blended with OP oreRemains open at depth

Page 23: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

White Mountain – The Second Mine

Underground mine with650Ktpa CIL plant

1.1Moz Resource 0.8Moz Reserve

Forecast production of70Koz @ ~300/oz

Capital cost ~US60MNear excellent infrastructure

Construction on schedule for first gold

4Q08

Page 24: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Commercial gold production early 2009

White Mountain Construction

Good progress continues on schedule: Commissioning of plant has commencedRequired infrastructure completeUG mine on track - stopes accessed in 2 areasProject now > 90% complete

Page 25: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

BioGold Processing Facility

Located in China’s largest gold producing province

Treats concentrates inBacOx & CIL circuits

Base load concentratesupply secured

Successfully implemented strategic changes

Valuable experience in acquiring an operation

Page 26: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Beyinhar – Feasibility Progressing

Feasibility study being finalised

1.0Moz Resource 0.5Moz Reserve

Robust 2.5Mtpa (~50Koz) project

2 rigs testing for more oxide& higher grade sulphide

Potentially commence

heap leach in 2010

Page 27: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Eastern Dragon – Quality Asset

High-grade epithermal Au-Ag deposit

Acquired 80% For US$101M

Target is 600-800,000 ounce JORC resource4 rigs now drilling

Targeted grade 7-8g/t Au, 70-75g/t Ag

Outstanding project -

potential to become a very

low-cost operation is

being confirmed

Page 28: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

1.6m @ 2.8 Au / 9 Ag2.2m @ 2.0 Au / 36 Ag

1.4m @ 14.1 Au / 58 Ag3.0m @ 4.3 Au / 24 Ag

5.4m @ 7.6 Au / 59 Ag4.1m @ 1.7 Au / 45 Ag

Au Gram- Metres

(Intersection widths are true thickness)

Eastern Dragon – Great Grades

Drilling to infill and extend mineralisation

5.2m @ 17.8g/t Au / 242g/t Ag

20.7m @ 10.0g/t Au / 71g/t Ag

Gram-Metre Long Section with June Quarter Results

Page 29: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Resource & Reserve Growth

Plus Eastern Dragon resources & reserves to be added in 2008

Page 30: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Jinfeng UndergroundWhite Mountain

Attractive Growth Pipeline

Building the complete gold company in China

JinfengBioGold

Beyinhar Feasibility

>60 Exploration Licences

Focussed on 3 Regions

Sino Gold Fields Alliance

EXPLORATION

Eastern Dragon PermittingEVALUATION

CONSTRUCTION

OPERATIONS

Page 31: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Outlook for 2H 2008

Successfully implementing growth strategy

Jinfeng gold production ↑

to >80Koz for 2H 08

Beyinhar development

decision

Initial Eastern Dragon JORC

Resource& Reserve

Growing production for further profitability:

FirstWhite

Mountain gold

Page 32: Growing Unhedged Gold Producer in China · 2009. 1. 29. · The information contained in this presentation has been prepared using the information available to Sino Gold Limited (‘Sino

Summary

Strong production growth

Low-cost production

Unhedged gold production

Strong balance sheet

Delivering on the

strategy in the world’s largest gold producing

country