For personal use only - asx.com.au · Presentation 28th April 2020 For personal use only MARCH...

RALEIGH FINLAYSON - Managing Director

MORGAN BALL - Chief Financial Officer

SIMON JESSOP - Chief Operating Officer

TROY IRVIN - Corporate Development Officer

Presentation

28th April 2020

MARCH QUARTER 2020 -

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QualificationThis presentation has been prepared by Saracen Mineral Holdings Limited (Saracen or the Company) based on information from its own and third party sources and is not a disclosure document. No party other than the Company

has authorised or caused the issue, lodgement, submission, despatch or provision of this presentation, or takes any responsibility for, or makes or purports to make any statements, representations or undertakings in this

presentation.

You should be aware that as an Australian company with securities listed on the ASX, the Company is required to report reserves and resources in Australia in accordance with the Australasian Code for Reporting of Exploration

Results, Mineral Resources and Ore Reserves (The JORC Code 2012 Edition ) ("JORC Code"). You should note that while the Company's reserve and resource estimates comply with the JORC Code, they may not comply with

the relevant guidelines in other countries.

This is a presentation about geology, geoscientific interpretation, geoscientific speculation, gold deposits, gold potential, engineering, infrastructure, potential values, costs, risks, and related matters pertinent to Saracen’s present

and future activities as a publicly listed mineral exploration and production company. It includes forecasts, predictions, targets and estimates of future expenditures which may vary over time.

It is uncertain if further exploration will result in the determination of a Resource or Reserve. Where exploration, evaluation, operational and feasibility study expenditure estimates and budgets amounts are presented herein,

ongoing prioritisation and scaling of expenditures will be subject to results and, where applicable, scheduling changes. Targeted production and other outcomes are subject to change, and may not eventuate, depending on the

results of ongoing performance and assessment of data. All Reserves and Resources as referred to herein are in accordance with the JORC Code. Refer to Appendix A of this presentation for the relevant Competent Person

statements. Resources are inclusive of Reserves.

Certain statements contained in the Presentation Materials, including information as to the future financial or operating performance of the Company and its projects, are forward looking statements. Such forward looking

statements:

a) are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant technical, business, economic, competitive, political and social

uncertainties and contingencies;

b) involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward looking statements; and

c) may include, among other things, statements regarding estimates and assumptions in respect of prices, costs, results and capital expenditure, and are or may be based on assumptions and estimates related to future

technical, economic, market, political, social and other conditions.

The Company disclaims any intent or obligation to publicly update any forward looking statements, whether as a result of new information, future events or results or otherwise. The words “believe”, “expect”, “anticipate”, “indicate”,

“contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward looking statements.

All forward looking statements contained in the Presentation Materials are qualified by the foregoing cautionary statements. Recipients are cautioned that forward looking statements are not guarantees of future performance and

accordingly recipients are cautioned not to put undue reliance on forward looking statements due to the inherent uncertainty therein. The Presentation Materials do not purport to be all inclusive or to contain all information about the

Company.

This presentation is not a prospectus, disclosure document or other offering document under Australian law or under any other law. It is provided for information purposes and is not an invitation nor offer of shares for subscription,

purchase or sale in any jurisdiction.

Take care to question and carefully evaluate any judgments you might make, on the basis of the Presentation Materials, as to the value of Saracen and its securities. This presentation is not intended to provide the sole or principal

basis of any investment or credit decision or any other risk evaluation and may not be considered as a recommendation by Saracen or its officers. Any investor reading the Presentation Materials should determine its interest in

acquiring securities in Saracen on the basis of independent investigations that it considers necessary, prudent or desirable.

Saracen and its officers do not accept any liability for any loss or damage suffered or incurred by any investor or any other person or entity however caused (including negligence) relating in any way to this presentation including,

without limitation, the information contained in it, any errors or omissions however caused by any other person or entity placing any reliance on the Presentation Materials, its accuracy or reliability.

2

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GOLD SECTOR LEADERSHIP BY THINKING AND ACTING LIKE OWNERS 3

Safety - LTIFR at 0.5

Record quarterly gold production - 158,132oz at AISC A$1,133/oz

At 31 March - Cash / liquids A$340m, debt A$360m

Record cash build - A$106m (pre-tax and voluntary debt repayments)

Record quarterly unaudited NPAT - A$65m to A$70m

10.5% interest in Red 5 Limited (ASX: RED) sold for A$39m (pre-tax)

Growth projects: Carosue Dam mill expansion, Thunderbox Underground development

accelerated, Thunderbox D Zone, KCGM Brown Hill and Morrison open pits

A$13.8m invested in exploration, multiple strong results point to Reserve growth

Record quarterly production and cash flow:

Highlights

All reported KCGM metrics are attributable to Saracen i.e. 50% share unless stated otherwise

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Growing:

42 46 47 50

4650 53 49

21

59

1,026964

1,098 1,133

0

200

400

600

800

1,000

1,200

0

20

40

60

80

100

120

140

160

180

Jun Q 2019 Sep Q 2019 Dec Q 2019 Mar Q 2020

A$/

oz

Rec

over

ed g

old

(koz

)

Thunderbox Carosue Dam KCGM Group AISC

HighlightsF

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GOLD SECTOR LEADERSHIP BY THINKING AND ACTING LIKE OWNERS

“The standard you walk past is the standard you accept”:

5

Sustainability

Maintaining a positive safety culture…

…with additional COVID-19 challenges

Focused on leading indicators:

Positive safety behaviors and

interactions

Hazard identification

Near miss reporting and

investigation

Workplace and equipment

inspections and audits

Lag indicators:

LTIFR 0.5

TRIFR 8.2Lost time injury frequency rate (LTIFR) - Calculated as a rolling 12 month average per million hours worked

LTIFR WA gold average www.dmp.wa.gov.au/Documents/Safety/MSH_Stats_Posters_SAfetyPerfWA_1718.pdf

0.0

1.0

2.0

3.0

4.0

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-17

Dec

-17

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-18

Dec

-18

Jan

-19

Feb

-19

Mar

-19

Ap

r-1

9

May

-19

Jun

-19

Jul-

19

Au

g-1

9

Sep

-19

Oct

-19

No

v-19

Dec

-19

Jan

-20

Feb

-20

Mar

-20

LTI LTIFR (12MMA) WA GOLD LTIFR

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http://www.dmp.wa.gov.au/Documents/Safety/MSH_Stats_Posters_SAfetyPerfWA_1718.pdf


Sustainability

Controls implemented include:

Longer FIFO rosters

Additional charter flights and buses to

support social distancing

Gym and wet mess closed with most

meals served as take away

Reduced capital works

Saracen remains vigilant and prepared to

take more extensive action if necessary

Pro-active response to COVID-19:

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Saracen’s long-standing strategy to ‘future-proof the business’ includes the build-up of

surface ore stockpiles to >1.7Moz

Months of processing on each site: Carosue Dam ~9 months, Thunderbox ~13

months, KCGM low grade ~25 months, KCGM sub-grade ~92 months

In the current June quarter, Saracen plans to prioritise the milling of higher-grade

portions of the stockpiles at Carosue Dam and Thunderbox

This will bring forward production ounces and cash flow into FY20

Although this plan will bring forward ounces from FY21, it will further insulate the

business should production be restricted by any COVID-19 impacts at a later date

Despite this pro-active plan, production guidance for FY21 remains +600,000oz

“Future proofing the business”:

SustainabilityF

or p

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Clontarf site visit

Curtin Kalgoorlie Campus Careers Fair

Graduates Day $39k donated to Bushfire Appeal

Goat Rescue CDO 10-Year Anniversary

SustainabilityF

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Sustainability

Carosue Dam - Solar Farm:

New 1MW array delivering early

results

Environmental savings since late

January include:

346t of CO2

32,816 trees

40% cheaper than current power

generation

More to come…For

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Operations - KCGM (50%)

First full quarter contribution from KCGM, immediately cash generative

Gold production - 58,563oz at an AISC of A$1,415/oz

Mine operating cash flow - A$76.7m

Net mine cash flow - A$56.1m (after growth capital of A$20.7m)

Open Pit gold mined - 29.9koz @ 1.6g/t / underground gold mined - 11.8koz @ 2.5g/t

Closing ore stockpile (inventory awaiting processing) - 1.6Moz

Milling - Processed 1,553kt of ore @ 1.4g/t with 82.9% recovery

Major 203-hour shutdown of the processing plant completed

Quarterly highlights:

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Discovery and Growth - KCGM (50%)

Morrison starter pit:

Priority open pit mining

area

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Discovery and Growth - KCGM (50%)

Brown Hill cutback underway:

Provides a third working

area

Pro-active utilisation of

mining equipment and

fixed costs

550kt of pre-stripping

moved at 31 March

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Operations - Carosue Dam


Gold production - 49,478oz at an AISC of A$1,308/oz



Karari - Dervish underground gold mined - 52.5koz @ 2.5g/t

Closing ore stockpile (inventory awaiting processing) - 46koz

Milling - Processed 585kt of ore @ 2.9g/t with 92.0% recovery

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1.0

2.0

3.0

4.0

0

10

20

30

40

50

60

Jun Q2019

Sep Q2019

Dec Q2019

Mar Q2020

g/t

Con

tain

ed

koz

Mining

Contained Gold Mine Grade

1.0

1.5

2.0

2.5

3.0

0

10

20

30

40

50

60

Jun Q2019

Sep Q2019

Dec Q2019

Mar Q2020

g/t

Recovere

d k

oz

Milling

Recovered Gold Mill Grade

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$400

$600

$800

$1,000

$1,200

$1,400

0

10

20

30

40

50

60

Jun Q2019

Sep Q2019

Dec Q2019

Mar Q2020

A$/o

z

Re

co

ve

red

ko

z

Production and AISC

Recovered Gold AISC

0.0

0.5

1.0

1.5

2.0

0

10

20

30

40

50

Jun Q2019

Sep Q2019

Dec Q2019

Mar Q2020

g/t

Co

nta

ine

d k

oz

Closing ore stockpile

Contained Gold Grade

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Discovery and Growth - Carosue Dam

Mill expansion to 3.2Mtpa:

Mill throughput increases to 3.2Mtpa (from

2.4Mtpa) during FY20/21, A$34m capital

Recovery increases to 94% (from 93%)

Unit milling costs reduce by up to A$2.50/t

Additional ore to fill the expanded mill will be

sourced from the Carosue Dam open pits

(+10 years at 800ktpa in Reserves)

Mill feed 70-75% underground ore / 30-25%

open pit ore

As previously flagged, commissioning has

been delayed until March quarter 2021 due

to COVID-19 related impacts at the mill

manufacturing plant in China

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Discovery and Growth - Carosue Dam

Mill expansion to 3.2Mtpa:

Mill footing - 32t of steel, 240m³ of concrete

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Operations - Thunderbox

Record gold production - 50,091oz at an AISC of A$682/oz



Total open pit material movement - 1.7 million BCM

Open pit ore mined - 0.7Mt with a mine grade of 2.0g/t

Closing ore stockpile (inventory awaiting processing) - 116koz

Milling - Processed 767kt of ore @ 2.1g/t with 95.6% recovery


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0.5

1.0

1.5

2.0

2.5

0

20

40

60

80

100

Jun Q2019

Sep Q2019

Dec Q2019

Mar Q2020

g/t

Co

nta

ine

d k

oz

Mining

Contained Gold Mine Grade

0.5

1.0

1.5

2.0

2.5

0

10

20

30

40

50

Jun Q2019

Sep Q2019

Dec Q2019

Mar Q2020

g/t

Re

co

ve

red

ko

z

Milling

Recovered Gold Mill Grade

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$500

$600

$700

$800

$900

$1,000

$1,100

$1,200

0

10

20

30

40

50

Jun Q2019

Sep Q2019

Dec Q2019

Mar Q2020

A$/o

z

Recovere

d k

oz

Production and AISC

Recovered Gold AISC

0.0

0.5

1.0

1.5

0

15

30

45

60

75

90

105

120

Jun Q2019

Sep Q2019

Dec Q2019

Mar Q2020

g/t

Co

nta

ine

d k

oz

Closing ore stockpile

Contained Gold Grade

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Thunderbox - ‘Does what it says on the tin’

High productivity / low cost

Top down method (no pit staging)

As the mine progresses:

Grade rises (1.0 to 1.9g/t)

Strip ratio falls (10 to zero)

AISC falls to ~A$625/oz

Stockpiles grow to 114,000oz

Cash flow increases dramatically

More open pit mining to come…

D Zone ramping-up along strike

Otto Bore 9km from mill

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Discovery and Growth - Thunderbox

D Zone:

Ramping up

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Strong cash build, net debt reduced to A$20m:

Cash and equivalents of

A$340.3m at 31 March after:

Making an additional debt

repayment of A$25m

Paying A$25m tax

Post the quarter, the A$45m

revolving credit facility was

drawn…

…to maximise cash reserves

given COVID-19 uncertainty

Net debt reduced to A$20m

Balance sheet

31 4561

83102

118 131143 153

155

196

284

340

0

50

100

150

200

250

300

350

400

Mar Q

20

17

Jun Q

201

7

Sep

Q 2

01

7

Dec Q

20

17

Mar Q

20

18

Jun Q

201

8

Sep

Q 2

01

8

Dec Q

20

18

Mar Q

20

19

Jun Q

201

9

Sep

Q 2

01

9

Dec Q

20

19

Mar Q

20

20

A$m

Cash Bullion Investments Total

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Cash Flows

Record cash build of A$106m (pre tax and voluntary debt repayment):

284

390340

369 5 134

3067

14 2 1125

25

0

100

200

300

400

500

600

700

Cash

, Bu

llion &

Inve

stmen

ts3

1/12

/19

Sale

s Re

ceipts

Inve

stme

nts

Ope

ratin

g C

ost

Susta

ining

Ca

pita

l / Oth

er

Gro

wth C

apita

l

Exp

loratio

n

Ore

Purch

ase

Working

Cap

ital A

djustm

ent

Cash

, Bu

llion &

Inve

stmen

tsb

efore

M&

A, T

ax &

De

bt

Tax P

aymen

ts

Deb

t repa

yme

nt

Cash

, Bu

llion &

Inve

stmen

ts3

1/03

/20

A$m

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~One year’s production over three years:

Hedge Book

Quarter Quantity Price

oz A$/oz

Jun-20 73,300 1,946

Sep-20 67,800 1,953

Dec-20 60,300 1,995

Mar-21 58,800 2,015

Jun-21 55,800 2,032

Sep-21 49,300 2,065

Dec-21 51,200 2,093

Mar-22 42,500 2,147

Jun-22 35,500 2,198

Sep-22 26,000 2,262

Dec-22 18,000 2,280

Mar-23 4,000 2,480

Total 542,500 $2,0561,450

1,550

1,650

1,750

1,850

1,950

2,050

0

100

200

300

400

500

600

Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20

Go

ld p

rice

(A

$/o

z)

Hed

gin

g (

koz)

Hedge Book

Hedge oz Average Hedge Price

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More

We have a simple business plan - We mine where we mill, within 300km of Kalgoorlie

We deliver - 7 year track record of meeting or beating guidance, tracking ahead of

FY20 guidance

We have acquired 50% of the globally renowned Super Pit - Immediate step-change in

cash flow generation

We have an outstanding platform for growth - People, assets, balance sheet

We are building a more sustainable gold company - Future proofing our business,

seizing the ESG opportunity

26

This presentation has been authorised for release to the ASX by Raleigh Finlayson, Managing Director

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Contact Details:

Troy Irvin

Corporate Development Officer

phone: +61 8 6229 9100

email: [email protected]

www.saracen.com.au

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mailto:[email protected]

http://www.saracen.com.au/

For personal use only - asx.com.au · Presentation 28th April 2020 For personal use only MARCH...

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