CENTAMIN PLC/media/Files/C/Centamin/...H1 2019 in line with budget: unit AISC of US$940/oz sold for...
Transcript of CENTAMIN PLC/media/Files/C/Centamin/...H1 2019 in line with budget: unit AISC of US$940/oz sold for...
CENTAMIN PLCINTERIM PRESENTATION31 July 2019
CLEAR STRATEGY
MATERIAL UPSIDE
STAKEHOLDER RETURNS
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Forward Looking Statements: There are risks associated with an investment in theshares of Centamin plc (“Centamin” or “the Company”). Recipients of thispresentation should review the risk factors and other disclosures regardingCentamin referred to in the section entitled “Principal risks affecting the CentaminGroup”.
This presentation contains forward-looking statements which may include, but arenot limited to, statements with respect to the future financial or operatingperformance of the Company, its subsidiaries and its projects (including the SukariGold Mine) which include, but are not limited to, estimations on the future price ofgold, mineral reserves and resources, the realisation of mineral reserve estimates,the timing and amount of estimated future production, revenues and costs,government regulation of mining and exploration operations, environmental risks,title disputes or claims.
Often, but not always, forward-looking statements can be identified by the use ofwords such as “plans”, “hopes”, “expects”, “is expected”, “budget”, “scheduled”,“estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations(including negative variations) of such words and phrases, or state that certainactions, events or results “may”, “could”, “would”, “might” or “will” be taken, occuror be achieved.
Forward-looking information involves and is subject to known and unknown risks,uncertainties and other factors which may cause the actual results, performance orachievements of the Company and/or its subsidiaries to be materially differentfrom any future results, performance or achievements expressed or implied by theforward-looking information. The material factors and assumptions used to developthe forward looking statements include, among others, general business, economic,competitive, political and social consideration and assumptions concerning
economic evaluations, exchange rates, project parameters and gold and othercommodity prices.
Although the Company has attempted to identify important factors that couldcause actual actions, events or results to differ materially from those described inforward-looking information, there may be other factors that cause actions, eventsor results to differ from those anticipated, estimated or intended. Forward-lookinginformation contained herein is made as of the date of this announcement, exceptas may be required by applicable law, and the Company disclaims any obligation toupdate any forward-looking information, whether as a result of new information,future events or results or otherwise. There can be no assurance that forward-looking information or statements will prove to be accurate, as actual results andfuture events could differ materially from those anticipated in such information orstatements. Accordingly, readers should not place undue reliance on forward-looking statements.
Competent Persons: Information in this presentation which relates to exploration,geology, sampling and drilling is based on information compiled by geologist, MrNorm Baillie, who, as an accredited Chartered Professional Geologist and Managerthrough the Geological Society of the United Kingdom and the Australasian Instituteof Mining and Metallurgy, is an “Competent Person” for this purpose and a“Qualified Person” as defined in “National Instrument 43-101 of the CanadianSecurities Administrators”.
Refer to the Company’s annual results 2018, for further discussion of the extent towhich the estimate of mineral resources/reserves may be materially affected byany known environmental, permitting, legal, title, taxation, socio-political, or otherrelevant issues.
DISCLAIMERSForward Looking Statements
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83x
66x60x
40x35x 33x 31x 30x 29x
25x 23x 22x 22x 20x 17x 16x 15x 14x 13x 12x 11x 10x
5.3%4.8%
4.3%4.0%
2.9%
1.5% 1.4% 1.2%1.0% 0.8% 0.8% 0.7% 0.7% 0.5%
Dividend yields calculated over LTM, as at 25 July 2019; CEY Inclusive of announced dividendSource: FactSet
Sector leading returns to shareholders…
… at an attractive valuation.
LTM dividend yield (%)
Price / 2019E Earnings (x)
VALUE PROPOSITION
✓ Strong, liquid balance sheet with US$327m in cash and liquids, with no debt, streaming or gold loans
✓ 6th consecutive interim dividend declared of US$46.2m (4 US cents per share)
✓ Total c.US$500m paid out in cash dividends, inclusive of 2019 interim dividend
✓ Expect stronger H2 production and free cash flow generation
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2019 GOLD PRODUCTION & COST GUIDANCEH1 delivered in line with guidance; FY19 guidance maintained
Gold production
490koz – 520koz AuExpected 45:55 production weighted split from H1:H2Quarter-on-quarter production growth
Cash costs of production
US$675-US$725/oz(1)
All-in sustaining costs (AISC)
US$890-US$950/oz(2) H1 2019: 234koz (45%-48% of FY19)
H1 2019: US$692/oz
H1 2019: US$940/oz
Source: Company filings(1) Cash costs of production are reflected on a per ounce produced basis(2) All-in sustaining costs are reflected on a per ounce sold basis
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$200 /oz
$500 /oz
$800 /oz
$1,100 /oz
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2018A 2019F 2020F 2021F
H1/2019 Production Range Cash Cost AISC
BASELINE 3YR OUTLOOKUnderpins 14% production growth, excluding current upside drivers
UPSIDE DRIVERS:
▪ Improvement in underground grade
▪ Ongoing open pit optimisation
▪ Commence Cleopatra stoping
▪ Other: marginal dump leach contribution
* Baseline estimates assume: 12.5Mtpa mill feed; 75-82Mtpa open pit total material mined; 1.1.25Mtpa underground ore feed; no contribution from Cleopatra stoping, nor dump leach and no resource growth from 2018
Near-Term Outlook 2020-2021
Gold Production
510-540koz pa
Cash Costs
US$630-680/oz produced
AISC
US$880-930/oz sold
2020-2021 Outlook
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Centamin (H1 2019)($940/oz)
------
-- 25% 50% 75% 100% --
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
Cumulative Gold Production %
BASELINE 3YR OUTLOOKImproving cost profile through 2021
Source: WoodMackenzie, 2019 All-In-Sustaining Costs
✓H1 2019 in line with budget: unit AISC of US$940/oz sold for H1 2019, up 1% YoY
✓On track to deliver FY 2019 guidance: unit AISC between US$890-950/oz
✓H2 2019 costs expected to trend lower towards the bottom end of the annual guidance range with increased
production
✓Forecast declining unit AISC and cash costs through 2021, in line with increasing production profile
Competitive AISC costs, US$/oz sold
Centamin 2020/2021: Targeting <US$900/oz
US$1425/oz gold px
Centamin FY 2019: targeting lower end of the guidance
ESG REVIEW
Environmental
• No major incidents recorded
• H1 achieved 81% recycled water usage; Targeting a
50:50 (recycled : fresh water) balanced water circuit.
Reducing water levels off the active downstream
tailings storage facility
• Finalising solar plant feasibility study to reduce
reliance on fossil fuels and reduce CO2 emissions
Social
• H1 Group Lost Time Injury Frequency Rate1 (LTIFR) of
0.42; Zero-harm target
• Partnered with GIZ, providing bottom-up agricultural
skills and resources across the local communities
where we operate in Cote d’Ivoire
Governance
• Board succession programme: appointed Dr Sally Eyre
as Independent Non-Executive Director; Active
process underway to identify and attract three NED's
by 2020 AGM
• Board committee review, refresh and rotation in line
with the UK Corporate Governance Code 8
H1 2019Delivering on our ESG initiatives
1. per 200,000 workplace hours
CHANGE IMAGE
Small scale solar used for remote power supply
Cote d’Ivoire local marketplace
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22% Group
workforce (exclEgypt) is female
94% Group
workforce is employed
locally
ENVIRONMENTAL, SOCIAL & GOVERNANCECorporate social responsibility
58% suppliers to Sukari are Egyptian
Please visit the website to view the full inaugural 2018 Sustainability Report, published March 2019: https://www.centamin.com/~/media/Files/C/Centamin/documents/Sustainability/CSR_06c_Centamin_AR18.pdf
Delivering on our Sustainable Development Goals (“SDGs”)
Good health & wellbeing▪ Health education : Diabetes (including testing), built and opened a fully
equipped gym in the Youth Centre of Marsa Alam, available to men and women
▪ Improving access to health services: Providing clinics near exploration sites in Burkina Faso and Côte d’Ivoire administering vaccines and anti-venoms
Access to water and sanitation ▪ Building sanitation services for Doropo school in Côte d’Ivoire▪ Providing water supplies to local Bedouin near Marsa Alam
Education and workplace development - Investing in the future ▪ Building classrooms and providing equipment to schools in Burkina Faso, Côte
d’Ivoire and Egypt▪ Providing a range of training and development opportunities to all employees
Clean energy▪ Feasibility study to build a 40MW(AC) solar farm at Sukari in Egypt, as a
partial power solution, significantly reducing reliance on fossil fuels and CO2
emissions
Economic Growth ▪ In partnership with GIZ, providing basic agricultural development (cashew
farmers & market gardeners) and education across the local communities we operate in Côte d’Ivoire.
FINANCIAL REVIEW
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Group adjusted FCF(3) of US$36m
US$39m in profit share payments to Egypt and US$9m in royalties
Interim dividend declared of US$46.2m (4 US cents/share)
ROBUST FINANCIAL STRATEGY Managing the bottom line to maximise cash flow
Source: Company filings
1. Non-GAAP measures and are defined in the Financial Review of the 2019 Interim Report
2. Cash and liquid assets including cash and cash equivalents, bullion on hand at market price, gold sales receivable and financial assets at fair value through other profit & loss
3. Adjustments made to free cash flow, for example acquisitions of financial assets at fair value through profit and loss, which are completed through specific allocated available cash reserve
US$327m cash (1,2), as at 30 June 2019STRONG, FLEXIBLE BALANCE SHEET
Maximise return on capital
Improving efficiencies, resulting in reduced per unit consumption of fuel and consumables (i.e. reagents)
STRINGENT COST MANAGEMENT
Sustain and/or reduce costs
Sustaining capital investment of US$43m
Non-sustaining exploration spend of US$15m
DISCIPLINED CAPITAL ALLOCATION
Self funded organic growth profile
POSITIVE FREE CASH FLOW
Maximise free cash flow generation
RELIABLE STAKEHOLDER RETURNS
Return surplus capital to stakeholders
H1 2019 Delivery
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H1 2019 Financial highlights – meaningful cash flow generation
units Q2 2019 Q2 2018 % H1 2019 H1 2018 %
Gold produced oz 117,913 92,803 27% 234,096 217,099 8%
Gold sold oz 112,764 97,628 16% 224,129 228,672 (2%)
Cash cost of production US$’000 87,553 64,630 35% 159,445 135,942 17%
Unit cash cost of production US$/oz produced 752 714 5% 692 637 9%
AISC US$’000 109,319 102,212 7% 207,361 209,150 (1%)
Unit AISC US$/oz sold 982 1,073 (8%) 940 930 1%
Average realised gold price US$/oz 1,307 1,298 1% 1,305 1,316 (1%)
Revenue1 US$’000 145,671 123,929 18% 288,136 296,391 (3%)
EBITDA US$’000 52,651 45,774 15% 117,109 129,728 (10%)
Profit before tax US$’000 25,725 21,977 17% 59,627 80,376 (26%)
Basic EPS US cents 0.54 0.97 (44%) 1.71 3.57 (52%)
Capex incl. Sukari exploration US$’000 22,759 28,798 (21%) 47,987 53,877 (11%)
Operating cash flow US$’000 57,459 37,247 54% 116,376 122,662 (5%)
Adjusted free cash flow US$'000 19,117 1,594 1,099% 35,708 36,075 (1%)
1. Revenue, excludes US$4.7m in pre-production Cleopatra sales; Gross revenue is US$292m
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STRINGENT COST MANAGEMENTCosts in line with guidance
✓ Mine production costs were US$173m, up 11% YoY, and within budget
✓ Absolute cash costs were US$159m, up 17% YoY, and within budget
✓ Firm management of costs, with minimal quarterly variability
✓ Capital expenditure matched with cash flow profile
❑ Further cost saving initiatives:
▪ Solar plant (feasibility underway), subject to board approval
▪ Targeting up to 12% reduction in operating costs over near-term
▪ “No-saving-is-too-small” approach to detailed supply chain review
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Unit Cash Costs and AISC (US$/oz) vs Gold Production (koz)
Production TCC AISC
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Absolute Cash Costs and AISC (US$m)
TCC AISC
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136.0
4.2 1.9 3.05.1 (1.1) 2.4 1.6 (0.1) 6.4
159.4
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H1 2018 Fuel Contractors Labour Reagents Explosives Maintenance G&A Other Change inInventories
H1 2019
Increased consumption,
partially offset by ops
efficiency gains
Increased grade/blast,
partially offset by improved px terms
Expected level of
local wage inflation & increase in expats
Increased volumes
consume, offset by better px
Improved px & efficiency gains fully
offset impact of more tonnes mined
Larger crushing capacity
Net increase in inventory, primarily
stockpiles
COST RECONCILLIATION Areas of cost containment
Cash costs of production reconciliation, US$ million
✓ H1 2019 costs within budget and FY guidance range
✓ Volume-based cost drivers, offset by efficiency gains ▪ Increased open pit tonnages and underground development combined with higher plant throughput
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MINE PRODUCTION COSTSVolume-driven analysis
QUARTERLY
35%
8%
50%
7% 0%
Open pit
Underground
Processing
G&A
Refining/Transport
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Processing Cost per Tonne (US$/t)
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Open Pit Mining Cost per Tonne (US$/t)
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Underground Cost per Tonne (US$/t)
H2-2017 H1-2018 H2-2018 H1-2019
Open Pit Total Ex-Pit Tonnes
5% 2% 11% 1%
UG Total Tonnes 4% -1% 5% 1%
Processing Throughput 2% 3% 1% 4%
INTERIM
Change in tonnes, six monthly rolling comparison (%)
Unit costs, US$/tonne
Declining unit costs▪ Increased volumes mined and processed▪ Partially offset by improved operational productivity
and improved supply chain pricing
H1 2019 Mine Production Costs (US$174m) split
Consumables
36%38%
Contractors25%
25%
Fuel 20%19%
Labour 8%9%
Other 8% 6%
4% 4%
H1 2019 H1 2018
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COST BASE EXPOSURELimited variability
USD 51% 51%
EGP* 26%24%
AUD 15%15%
Other 7%10%
H1 2019 H1 2018
GROUP Cost Centers**
* EGP includes fuel costs which are linked to USD prices** Group cost centre and FX breakdown incorporates all group expenditure including capex
GROUP FX Exposure**
DISCIPLINED CAPITAL ALLOCATIONAligned with cash flow profile; Self-funded organic growth pipeline
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✓Sukari capex (sustaining & non-sustaining) US$48.0m,
largely investing in UG resource and infrastructure
expansion and routine fleet maintenance rebuilds
✓US$10.5m exploration expenditure in West Africa,
predominantly at Doropo Project resource drilling and
ABC Project regional and reconnaissance drilling
▪ Investment in technology to look at ways to improve identification and response times, i.e. Mill Ear and slope monitoring of the pit walls
▪ Ongoing fleet rebuild programme
▪ Second TSF engineering study
▪ Installation and commissioning of underground backfill plant to reduce stope dilution
▪ Continued Sukari exploration includes regional 3D seismic exploration programme, underground exploration and development
H2 2019 OUTLOOK
H1 2019
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FY2019
GROUP CAPITAL EXPENDITURE (US$'000)
Non-Egypt Exploration
Sukari Non-Sustaining Capex
Sukari Sustaining Capex
✓ Consistent re-investment in the future of the business, including exploration through the cycles and sustaining capital to support a world-class long-life asset
US$48m, 32%
US$58m, 38%
US$46m, 30%
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US$327m cash & liquid assets1
No debt
No hedging
No gold loans
No gold streams
BALANCE SHEETStrong financial position
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1 Cash and liquid assets including cash and cash equivalents, bullion on hand at market price, gold sales receivable and financial assets at fair value through profit and loss of US$327m as at 30 June 2019
Investment in future growth
Contribution to operating country and local
community
Shareholder returns
Balanced cash flow distribution
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0
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600
H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019
Cash Balance (US$m) Cumulative Dividend (US$m) Min. Cash Balance (US$m)
CASH RESERVE
CORPORATE STRATEGYClear and consistent
✓Cumulative direct financial investment of
c.US$4.2bn:
▪ Approx. US$275m distributed to EMRA as
dividends (profit share) since 2014
▪ Approx. US$140m in royalties since 2009
▪ Including salaries, local community
investment and project development, growth
and sustaining capex
✓c.US$500m, including 2019 interim dividend,
distributed to shareholders as dividends since
2014
✓Additional c.US$180m (over and above
US$100m cash reserve) available to support
growth and operational efficiency initiatives
Sustainable dividend policy: Delivering superior shareholder
returns for 6yrs
Create tangible stakeholder returns through maximising the value of the existing operations, while progressing an active pipeline of future growth prospects that meet our operational and cost objectives.
Competing for capital: Self-funded organic growth, innovation
driving op efficiencies & strategic opportunities
OPERATIONAL REVIEW
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SUKARI GOLD MINELong life, bulk tonnage operation
Current open pitas at 30 June 2019
Stage 5Stage 4
Stage 6
Stage 7
Hapi Zone
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H1 2019 Operational highlights; Solid performance
units Q2 2019 Q2 2018 % change H1 2019 H1 2018 % change
Open pit
Total material mined kt 20,255 18,415 10% 41,243 36,911 12%
Ore mined kt 3,615 5,532 (35%) 6,741 11,579 (42%)
Ore grade mined g/t Au 0.70 0.51 37% 0.71 0.50 41%
Strip ratio waste/ore 4.60 2.33 97% 5.12 2.19 134%
Underground
Ore mined kt 310 289 8% 580 601 (3%)
Ore grade mined g/t Au 4.83 4.62 5% 5.53 5.70 (3%)
Processing
Ore processed kt 3,359 3,172 6% 6,607 6,240 6%
Feed grade g/t Au 1.16 0.99 17% 1.22 1.15 6%
Gold recovery % 88.0 87.3 1% 88.4 88.6 0%
Total gold production oz 117,913 92,803 27% 234,096 217,098 8%
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OPEN PITAccessing higher grade Hapi Zone
970RL960RL
940RL950RL
980RL
30 June 2019
ST 5
ST 6ST 5
ST 7
ST 4
ST 6
1180RL
H2 2019 open pit, plan view, mining programme
Sukari orebody, open pit, plan view
❑Stronger H2 driven by higher open pit grades, above
1g/t as mining progresses into the Hapi Zone
❑Two thirds of H2 ounces forecast from the open pit
❑Stripping Stage 5 in parallel to ensure a smooth
transition from Stage 4 to 5 in 2021
❑c.50% decrease in ore tonnes mined as the orebody
narrows; strip ratio expected to increase to 5.85:1
H1 2019
OPEN PIT Stronger H2 driven by higher grades from the Hapi Zone
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2019 OUTLOOK
OPEN PIT MINED GRADE vs MILLED GRADE
OPEN PIT TOTAL MATERIAL MOVED and STRIP
✓Total ore mined of 6.7Mt at 0.71g/t
✓34.5Mt of waste mined as orebody tightens with depth and mining focused on lowering the Stage 4 West wall in line with Stage 4 North
✓Performance initiatives: workplace training, integrating the mine planning, optimisation programmes and rebuild programmes have seen improvements in the mining sequence
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Open Pit Ore Open Pit Waste Strip Ratio
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Open Pit Mined Grade Open Pit Feed Grade
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UNDERGROUND ORE MINED AND AVERAGE GRADE
UNDERGROUND GRADE PROFILE
UNDERGROUNDAchieved above plan; further improvements to come
▪ Total production 580kt at 5.53g/t, a 3% decrease in grade YoY▪ Production from stoping, 320kt at 7.74g/t▪ Ore from development 260kt at 2.82g/t
▪ Good equipment availability and utilisation, incl. 2x operational LHDR
▪ >4,000 metres of decline, ore drive and cross-cut development completed
▪ Performance drivers: technological upgrades improving compliance to plan and integration of new processes and controls
H1 2019
▪ Forecast QoQ improvement in grade and tonnes
▪ Increased decline development in the lower Amun and Ptah throughout H2, providing access to new production faces
2019 OUTLOOK
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Stoping Grade Development Grade
Total UG Grade Mined (ex Cleo)
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Development Ore Stoping Ore Total UG Grade Mined (ex Cleo)
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AMUN: Production & developmentPTAH: Production & developmentCLEO: Development
SUKARI UNDERGROUND2019 Work Programme (long-section)
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ORE PROCESSED
▪ Plant throughput: 6.6Mt
▪ Plant availability >95%
▪ Head grade of 1.22g/t
▪ Metallurgical recovery rates to 88.4%
▪ Cleopatra decline development in mineralised material, produced 3,622 ounces
▪ Dump leach operations produced 3,947 ounces
▪ Performance initiatives: further optimisation of the floatation stability
2019 OUTLOOK
PROCESSINGStrong operating performance
H1 2019
▪ Maintaining throughput at or above 12.5Mt pa
▪ Improved head grade YoY, driven by OP milled grade
▪ Maintaining 89% metallurgical recoveries, with further optimisation of process controls
FEED GRADE AND METALURGICAL RECOVERY RATES
85.0%
86.0%
87.0%
88.0%
89.0%
90.0%
91.0%
92.0%
93.0%
0.70
0.90
1.10
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Plant Feed Grade Recovery
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Total Ore Processed Plant Feed Grade
EXPLORATION PIPELINE
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ORGANIC GROWTH PIPELINESelf-funded value creation through the business cycle
SUKARI EXPLORATION & DEVELOPMENT
DOROPO PROJECTABC GREENFIELD
EXPLORATION Sukari Underground • Ongoing Amun/Ptah underground
development and exploration opening new production faces and targeting reserve replacement
• New structural high priority target identified: Horus Deeps
Cleopatra Decline: • Ongoing drilling and development below the
final pit shell and testing the Cleo and Ptah Deeps structures
Regional : Sukari Deeps • 2D, 3D and 4D seismic work programme
underway, compiling a complete geological architecture of the tenement area from surface to >1.5km depth
Doropo Resource Area• Drilling to continue to focus on
structural resource extensions and maiden reserve
• Concurrently progressing PEA –expected by end of 2019
Doropo Regional • Drilling to follow up on positive results
delineating a potential major structure: Kilosequi, and multiple other priority targets outside the MRE and within 35km radius
Kona Permit• Targeting resource growth and new
discovery along the 23km Lolosso Gold Corridor (“LGC”)
• Testing structural extensions between Lolosso South and Central
FarakoNafana Permit• Early stage exploration, inc geological
mapping, interpretation and target generation
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UNLOCKING SUKARI’S UNDERGROUND POTENTIALH1 2019 drill highlights: Delineating additional high-grade sources of ore
V Shear
QuartzRidge
Kurdeman
SamiSouth
SukariMine
Sukari North Prospects
Shu
▪ Sukari 11Moz resources are currently drilldefined around the 2.7km long by 0.6kmdeep Sukari porphyry which sits within amuch wider 17km x 3.7km ophiolitic shearzone
▪ There are 8 main surface prospects, withinthe license
▪ All surface prospects are within truckingdistance to the existing processing plantand infrastructure
Tenement area: 160km2
N
SUKARI DEEPS: REGIONAL UPSIDEDeveloping a 3D Architecture of the Sukari Thrust
RED SEA
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5km Marsa Alam
300km Aswan
HorusSouth
Multi-staged geo-seismic programme: 3x10km 2D seismic lines were prepared andset out across the tenement. Seismicacquisition scheduled for Q3
Surface rig arrived on site in Q2, with aexploration drilling commencing in Q3,starting with V Shear
REGIONAL EXPLORATION
31
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ADVANCED EXPLORATION Doropo Project, Côte d’Ivoire - significant resource upside
▪ Strike extensions to Souwa-Nokpa-Chegue South
▪ Drilling gaps between Nokpaand Chegue Main
▪ High-grade down-dip potential of Han and Kekeda
▪ Plunge potential of the Souwa and Nokpa HG shoots
▪ New discovery on the Kilosegui and regional P1 targets
▪ H1 2019 drilled 21,000m aircore
▪ H1 2019 drilled 21,000m RC
Han structure long-section showing structural extension to the northeast
Doropo Resource Area: 1H19 significant drill intercepts
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GREENFIELD EXPLORATION ABC Project, Côte d’Ivoire
Lolosso Gold Corridor (“LGC”)
✓ Newly discovered Birimiangreenstone inlier
✓ Mapped > 60km exposure of keel sediments / volcanics
✓ Kona Permit >23km continuous surface gold anomaly
Kona Permit
▪ 2018 Lolosso South maiden resource 0.65Moz Indicated and 0.45koz Inferred
▪ 2019 targeting resource update ▪ Lolosso Central highly prospect
area for resource growth▪ +18 Km untested gold auger
anomalies
SUMMARY
35
INVESTMENT CASEUnderpinned by strong fundamentals
Clear Corporate Strategy
Generate tangible stakeholder returns through maximising the value of the existing operations, while progressing an active pipeline of future growth prospects that meet our operational and cost objectives.
Reliable dividend stream
Low-cost, long life asset supports a sustainable long term shareholder and stakeholder dividend stream
US$500m distributed to shareholders
US$275m distributed in profit share to Egyptian gov’t
Quality asset portfolio
Sukari is a Top 10 Tier 1 asset
10yr operational track record
>30yr exploration driven growth
Life of mine >15 yrs
Low cost
Strong political risk management
Robust financial strategy
Strong, flexible balance sheet No debt; No hedging
Self-funded organic growth
Re-investment to sustain the core asset for the LT
Growth investment in future prospects
Stringent cost management
Significant FDI in operating country
Growth throughout the
value chain
Resource upside across the entire asset base
Low-capital intensive development
Maximising operational efficiencies
Increasing plant recoveries through optimisations
Responsible corporate
citizens
Targeting zero-harm safety record
Strong emphasis on workplace training & development
Core ESG initiatives in motion
Strong gov’t relations
Committed to achieving HSES, CSR and ESG best practises
36
NEAR TERM MILESTONESDelivering performance
Continue to optimise performance at Sukari including stringent cost management
❑ Deliver further operational improvements and drive production growth
❑ Deliver production and cost guidance for 2019 of 490-520koz at AISC of US$890-950/oz
❑ Deliver 2020 – 2021 baseline and upside
❑ Return surplus capital to shareholders
Unlock value from organic growth pipeline
❑ Doropo Project: further resource growth, maiden reserve, PEA study
❑ Complete Sukari Deeps seismic programme
❑ Significant exploration target generation across the portfolio
Strive to achieve the highest standards of ESG management
❑ Maintain a strong social license to operate
❑ Continued focus on workplace safety and wellbeing
❑ Deliver Sukari solar project feasibility study
❑ Board succession programme: Appointment of two independent NED’s and an NEC
Contact:Alexandra Carse
Investor Relations
+44 7700 713 738
CLEAR STRATEGY
MATERIAL UPSIDE
STAKEHOLDER RETURNS