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North Mara
Analyst Site Tour
18.03.15
Unearthing Africa’s Potential
LSE:ACA
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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 2013 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 African Barrick Gold plc’s 2013 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.
18.03.15 Analyst Site Tour 2
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North Mara
High-grade open pit and underground mine
Year end 2014 reserves of 2.0Moz at 2.7g/t
9 year life of mine
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Location
4 18.03.15 Analyst Site Tour
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Our community
18.03.15 Analyst Site Tour 5
Matongo
Village
Nyakunguru
Village
Genkuru
Village
Kewanja
Village
Nyamwaga
Village
Kerende
Village
Nyangoto
Village
Mjini Kati
Village Nyabechunie
Village
Mesege
Village
Komerere Village
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North Mara: Gokona
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North Mara: Nyabirama
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Safety Safety
Improvements in 2014 a result of:
Systematic education of the employees by the safety department on a daily basis
Focus of management team
Empowering of the safety reps
Discipline
Safety shut downs after serious incidents
Contractors Controls initiatives
Visible Felt Leadership drive and monitoring
2015 focus on “We Care” programme
Safe Effective Shifts
18.03.15 Analyst Site Tour 8
0.56 0.59
0.51
0.71
0.77
0.50
0.17 0.22
0.43 0.45
0.60
0.49
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
2009 2010 2011 2012 2013 2014
Total Reportable Injury Frequency Rate(2009-2014)
TRIFR WR-RIFR
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Geology
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North Mara trend geology
18.03.15 Analyst Site Tour 10
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North Mara Geology
Deposits are hosted by a shear-bounded package of Archaean andesitic volcanic rocks
Occur as a northwest-striking steeply southwest-dipping stratigraphy and largely tuff cross-cut by doleritic dykes and sills
Rest on an intercalated sequence of mostly unaltered siltstone, greywacke and coarsely porphyritic andesites
To the south, also rest on hanging wall unit consists of a weakly schistose to massive chloritic unit considering to be of basaltic derivation
Gold mineralisation is hosted by deformed and altered granitoid.
Nyabirama deposit is shear hosted but not a classic lode type gold deposit.
Mineralisation occurs as two broad style
Disseminated
Quartz vein hosted (historical interest)
Several generations of dolerite dykes
18.03.15 Analyst Site Tour 11
Gokona & Nyabigena Nyabirama
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Cross Section of Gokona Geology
18.03.15 Analyst Site Tour 12
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Cross Section of Nyabirama Geology
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Reserves and Resources 2013 and 2014 summary
18.03.15 Analyst Site Tour 14
Open Pit kt g/t koz kt g/t koz
Gokona 5,138 5.102 843 1024 3.077 101
Nyabirama 13,258 2.710 1,155 18536 2.22 1323
Nyabigena 1,187 2.616 100 - - -
Open Pit Sub Total 19,582 3.332 2,098 19,560 2.265 1,424
Underground
Gokona - - - 1,989 8.071 516
Stockpiles 2,128 1.668 114 2,104 1.570 106
NMGM Reserves 21,710 3.169 2,212 23,653 2.692 2,046
Resources
Open Pit kt g/t koz kt g/t koz
Gokona 6,785 2.654 579 77 2.835 7
Nyabirama 7,131 2.125 487 6,077 1.765 345
Nyabigena 3,746 2.390 288 4,932 2.444 388
Komarera 2,282 3.298 242 2,281 3.298 242
Open Pit Sub Total 19,945 2.489 1,596 13,367 2.283 982
Underground
Gokona 3,905 6.878 863 3,173 4.344 443
Nyabirama 1,220 4.991 196 1,220 4.991 196
Nyabigena 197 6.053 38 197 6.053 38
Underground Sub Total 5,322 6.415 1,098 4,590 4.59 677
NMGM Resources 25,266 3.316 2,694 17,957 2.873 1,659
Measured & Indicated Measured & Indicated
Reserves2013 YE
Proven and Probable
2014 YE
Proven and Probable
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Mine Planning
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Life of Mine: Options Review
Original mine plan set up as multiple open pit operation (Gokona and Nyabirama)
Requirement to continue to purchase land for waste rock dumps through the LOM
Increasing tensions with communities over land speculation
Cash flow profile had a “hockey stick” profile
Option to mine Gokona Stage 3 via underground improves both cash flow profile and reduces mine footprint
Accesses high grade ounces, without significant material movement or requirement for additional land
Provides earlier access to potential deeper material beneath the planned Stage 3 final pit shell
Reduces risk of illegal intrusions
Focusing on cash flow & improving the social situation
Analyst Site Tour 18.03.15
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Pit Designs: Nyabirama pit
New Stage 4
Stage 3
Old Stage 4
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Pit Designs: Gokona pit
Gokona Stage 3
Gokona Stage 2
U/G Portal
Stage 3 high grade ore now U/G
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Gokona Underground
Production of 450,000 ounces over a 5 year life of mine with AISC below US$750/oz
Reduces mine footprint, supporting improved community relationships
Utilises exploration decline in the Gokona pit
Total pre-production capital of US$37 million (including exploration decline)
Potential to lower costs by contracting equipment
Submitted final applications for the required permits to commence mining underground
First ore anticipated to be in H1 2015
Moving into construction phase
Proven Probable Proven and Probable
Kt Grade
(g/t) Koz Kt
Grade
(g/t) Koz Kt
Grade
(g/t) Koz
Gokona
U/G 95.4 5.88 18 1,894 8.18 498 1,989 8.06 516
Analyst Site Tour 18.03.15
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Gokona Underground
Moving into construction phase
Physicals
Life of mine Year 5
Total tonnes Kt 2,981
Total ore tonnes Kt 1,991
Total Development metres km 17.7
Average gold grade g/t 8.06
Recovery % 88%
Tonnes Processed Kt 1,991
Gold Produced koz 453
Life of Mine Operating Costs and Capex
Pre-production Capital $m 37
Total Capital $m 130
Mining cost per tonne mined $/t 51
Milling cost per tonne of ore processed $/t 18
G&A cost per tonne of ore processed $/t 11
Cash cost per ounce $/oz 418
AISC per ounce $/oz 705
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Further Underground Potential at Gokona
Analyst Site Tour 18.03.15
Delineated a further 850koz at 4.4g/t in inferred resource beneath 990
mrl, to be tested by staged drilling from underground platforms
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Assessing the potential at Nyabirama
18.03.15 Analyst Site Tour 22
Drilling programme underway at Nyabirama to upgrade ounces in the
open pit and test underground potential
Potential UG follow up drilling
Phase 1 - priority 2 Potential ounce additions
Phase 1 - priority 1 High potential ounce additions
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Processing
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Processing Flowsheet
18.03.15 Analyst Site Tour 24
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Our Relationships
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Our Relationships
A multifaceted approach is being evolved in order to improve
stakeholder engagement
Continue to deliver on VBIA / VBA programmes*
Revise the security model where security works in parallel with community relations
Improve on:
Alternative livelihood projects with a youth focus
Engage government on both a local and national level to provide greater law enforcement
Assistance to local artisanal miners
Longer term focus will be on establishing partnerships with “respected” NGOs to ensure the continuity of the projects
Continuing to work with Government to find a safe sustainable solution to reduce intruder numbers
Analyst Site Tour 18.03.15
* Village Benefit Agreements and Village Benefit Implementation Agreements
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Background to community relations
North Mara is located in the midst of a community whom historically were/are mostly artisanal miners
Three clans Nyamongo, Nyabasi and Wairege around the mine with history of disputes among themselves
Significant in-migration to the area has increased pressures on land and infrastructure
Traditionally illegal mining poses challenges to the operation with high intrusion numbers
Community campaigns aimed at promoting alternative livelihoods:
regular community meetings and community leader engagements
youth engagements (Nyakegema Nyabigena and Wahiritui cooperatives
Continuing to work to create a new shared community horizon
18.03.15 Analyst Site Tour 27
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VBA / VBIA project summary
VBIAs/VBAs were signed in February 2012 to confirm and define legacy commitments
To date almost 65% of the commitments have been accomplished
Implementation of the VBIA/VBA helped to enhance relationship with local communities, government and politicians
ABG credibility has significantly improved
VBIA/VBA commitments expected to be completed in 2016, with current progress below:
Category Amount
VBIA expenditure to date $15.5 million
VBIA spend for 2014 $5.0 million
VBIA projection for 2015 $3.9 million
VBIA projection for 2016 $3.2 million
18.03.15 Analyst Site Tour 28
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Community engagement
Question: "I understand North Mara has a right to operate peacefully“
77%
23%
YES NO
Community (853 responses)
Youth (1012 responses)
81%
19%
YES NO
18.03.15 Analyst Site Tour 29
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Land Acquisitions
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Land purchases
The Land purchase programme has been a focal point in past three years and remains a critical sustaining capital element in support of the current North Mara LOM
Land values have been negatively impacted by speculation and hold outs which has threatened the long term economics at the mine
Land purchasing has been split two fold: Gokona and Nyabirama respectively
− Gokona U/G removes the need for further land acquisitions
− At Rama, require land purchases in order to access closer waste dumping areas, but looking at longer term economics of Rama U/G potential
For 2015 we have budgeted $15 million in respect of this, which is included in sustaining capital guidance
18.03.15 Analyst Site Tour 31
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Nyabirama: LOM requirement
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Gokona: previous LOM requirement
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Gokona: current LOM
PAF2 Dump Current Capacity –
5.1mt Current LOM – 4.6mt
Airport PAF2 Dump
Gokona Stage 2 Limit
Gokona Stage 3 Limit
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Bus. Improvement
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Key Business Improvement initiatives
18.03.15 Analyst Site Tour 36
Social Licence to Operate
Continue with the planned delivery of the VBA/VBIA projects
Ally with respected NGOs to develop long term sustainable livelihood projects
Enhance security systems / practices to link in with CSR objectives
Mine to mill productivity improvements
Operator and blasting practices
Cycle time / haul road conditions
Improve overall equipment effectiveness
Maintenance
Minimise operator / operating damage / condition monitoring
Improve planning to the supply chain cycle (6 months) / part life extension, reduced maintenance cost / hour
Process plant
Improve the grind & optimise milling circuit; 1% on recovery
Optimise steel ball usage
Extend liner life from 4 to 5 months
Shift Roster
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Maintenance
0%
20%
40%
60%
80%
100%
2012 2013 2014 2015E
Av
ail
ab
ilit
y
Planned vs. Breakdown Maintenance - Fleet
Planned Breakdown
Business Improvement – Maintenance
Increase proportion of planned vs. breakdown maintenance
Targeting 90% / 10%
Improved costing, new planning system
Eliminate reworking
Increase mean time between failure to
Excavators – 50hrs
Dump Trucks – 40 hrs
Between improved maintenance and improved truck availabilities , there is the potential to remove 15% of fleet numbers, significantly reducing hauling cost
Potential longer term savings of $10-15 million per annum
Plan the work and work to plan
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Our People
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Our People
Significant reduction in international workforce
978 969 983
850
148 92 63
42
500
600
700
800
900
1,000
1,100
1,200
2012 2013 2014 2015-2019Ave
Em
plo
ye
e N
um
be
rs
Employee Breakdown International Nationals
High Potential Tanzanians identified
Focus on skills development and retention through development / localisation programmes
Relevant skill levels must be retained
Professional coaching for newly appointed managers
Mining, OE and Sustainability managed by Tanzanians
Critical positions such as Safety, Land Section Leaders localised
Localisation to be driven and overall employee numbers to be optimised, however skill levels will not be compromised
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5 Year LOM
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North Mara 5 Year Plan
0
300
600
900
1,200
1,500
1,800
FY12A FY13A FY14A FY15E FY16E FY17E FY18E FY19E
US
$/o
un
ce
All In Sustaining Cost per Ounce Cash cost
Sustaining Capital
Capitalised Development
Other**
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
0
100
200
300
400
FY12A FY13A FY14A FY15E FY16E FY17E FY18E FY19E
Gr
ad
e (
g/t
)
Pr
od
uc
tio
n (
Ko
z)
Production & Head Grade Production Head Grade
* FY15E reflects North Mara’s share to achieve mid point of group guidance **For 2016-2019 “Other” includes corporate G&A, share based payments, rehabilitation, minex and CSR costs
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Evolution of Capital Expenditure
0
100
200
300
400
500
600
0
20
40
60
80
100
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FY12A FY13A FY14A FY15E FY16E FY17E FY18E FY19E
Su
sta
inin
g a
nd
Ca
pit
al
Str
ipp
ing
/ o
un
ce
$ m
illi
on
Capex Profile Sustaining Capital Capitalised Development / Stripping
Expansion Capital Sustaining and Capital Stripping / ounce
* FY15 sustaining capital guidance includes $15m of land acquisitions categorised as pre-payments in historic years. Per ounce data reflects mid point of guidance range
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Summary
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Summary
A high quality asset now delivering
xxx
Past 2014 Future
Poor production record Mine not optimised Limited delivery to the
community Tanzanian potential not
realised
AISC $1,693/oz^
Culture of delivery on plan
Mine optimised, exploratory decline in progress
Delivering on Community Projects
Tanzanian potential realised
Focus on skills retention
AISC $947/oz*
Maintain culture of delivery
Realise full potential of the ore bodies
Continue with localisation & optimise labour
Develop and implement Community Relations Plan
AISC ~$900/oz
Analyst Site Tour 18.03.15
^FY2012 * FY2014
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Questions?