Going for Goldliongoldcorp.listedcompany.com/misc/LGC Presentation 130605.pdf · LionGold Corp Ltd...
26
June 2013 Going for Gold
Transcript of Going for Goldliongoldcorp.listedcompany.com/misc/LGC Presentation 130605.pdf · LionGold Corp Ltd...
1
June 2013
Going for Gold
2 June 2013
Disclaimer
This document may contain statements that constitute “forward-looking statements”, including, but not limited to, statements
relating to the implementation of strategic initiatives, and other statements relating to our future business development and
economic performance. While these forward-looking statements represent our judgments and future expectations
concerning the development of our business, a number of risks, uncertainties and other statutory requirements may render
actual developments and results to differ materially from our expectations. These factors include, but are not limited to, (1)
general market, macro-economic, governmental and regulatory trends, (2) movements in local and international securities
markets, currency exchange rates and interest rates, (3) competitive pressures, (4) technology developments, (5) changes in
the financial position or creditworthiness of our customers, obligors and counterparts, and changes in the developments in
the markets in which they operate, (6) legislative developments, (7) management changes and changes to our business
group structure and (8) other key factors that may adversely affect our business and financial model.
We are not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward-looking
statements whether as a result of new information, future events or otherwise. The technical and financial information
presented are best estimates of management and are not JORC or NI43-101 compliant unless otherwise stated. Investors
are cautioned not to place undue reliance on this information and not rely solely on the information presented for purposes of
making investment decisions. This material may not be reproduced, distributed or transmitted to any other person or
incorporated in any way into another document or other material without the prior written consent of LionGold.
3 June 2013
LionGold Corp Ltd
Asia’s Own - Global Gold Company
SGX’s only Main Board-listed gold company
Market Capitalisation: S$1.05 billion / US$854 million
Average Daily Trading Value: S$20-25 million / US$16-20 million
• MSCI Small Cap, Global + Singapore
• FTSE ST Mid Cap
• Market Vector Global Junior Gold Miners
• Supportive of global listings
• New focus on resource stocks, gold
• Active, diversifying investor base
Mid Cap
Liquid
Index
Inclusion
SGX-listed
Source: ShareInvestor 4 June 2013
Share price : S$1.14
52wk high/low : S$1.30/0.865
Shares in issue : 921.9m
Bloomberg : LIGO SP
Gold
Investments
Prioritising
Business
Index
Inclusion
Key
Acquisitions
New Inst’l
Shareholders
Warrant price : S$0.152
Warrants in issue : 269.9m
Bloomberg : R5UW SP
Board, Shareholder
Changes
4 June 2013
LionGold Corp - Going for Gold
Dynamic, Expanding Operations • Gold mining, from 2011
• Seven projects
- Two in commercial production
• Initial growth acquisition-led, value accretive
- 5.5m oz acquired in 2012 at US$26/oz, US$126m (S$154m)
LionGold Resources
(ounces)
Reserves (ounces)
Production
Annualised (ounces)
Current 5,506,000 897,300 40-50,000
Target 2014 10,000,000 2,000,000 200,000
Figures are extracted from previous JORC- and NI 43-101-compliant
announcements and are based on LionGold’s equitable stake in gold projects.
Differentiated Business Platform
Proactively managed project portfolio
Financial flexibility
Growth - 2-3 acquisitions pa
- Financial backing
- Operational support
• 3 acquisitions
• 1 IPO
• Funding partners Value - 1 IPOs pa
- Funding partners
- Low debt, dilution
Acquire scalable
junior miners at
attractive discounts
Augment
shareholder
returns
5 June 2013
Key Mining Assets…Today
- 5.5m oz Gold Resources since March 2012 at US$26/oz
AFRICA
AMERICAS
AUSTRALIA
Castlemaine Goldfields Central Victoria (100%)
Minera Nueva Vista (100%)
Amayapampa, Bolivia
Signature Metals (76%)
Ashanti Gold Belt, Ghana
Citigold Corporation (18%)
Queensland
Acadian Mining (9.35%)
Nova Scotia, Canada
Brimstone Resources Western Australia (100%)
Unity Mining (13%)
Tasmania + NSW
Global Projects
6 June 2013
Opportunity: Junior gold miners - Consolidation of a highly fragmented sector
Cost & time overruns
Discovery + production gaps
Risk adversity: banks and shareholders
Funding
Shortfall
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Perc
en
tag
e I
ncre
ase
Gold Prices vs Junior Miner Index May 2003 – May 2013
Dow Jones North American Select Junior Miner Gold Total Return Index
Spot Price of Gold
CONSOLIDATE Gold price volatility
Credit constraints
BOOM Rising gold prices
Easy credit
Recent gold price volatility has greatly increased opportunities to buy developed mining assets at substantial
discounts to market valuation
Gold miner prices have
fallen far further than the
price of gold
7 June 2013
Other Asian-listed Goldcos - Single-project / country focus
Company Bourse Market
Cap
Ave Dly
Trading
Volume Resource Operations
LionGold Corp SGX
Main Board US$800m US$15m 5.5m oz 7 Projects: Australia, Africa, Americas
CNMC Goldmine SGX
Catalist US$145m US$0.2m 0.5m oz Malaysia, Sokor project
G-Resources HSE US$950m US$2.5m 8.1m oz Indonesia, Martabe project
Zhaojin Mining HSE
H-Share US$4.3b US$12m 25m oz Projects in China, in production
China Gold ,,,
HSE US$1.14b US$0.8m 14m oz Projects in China, in production
Zijin Mining HSE
H-Share US$12b US$12m 30m oz Projects in China, in production
Lingbao Gold HSE
H-Share US$334m US$0.5m 1.4m oz Projects in China, in production
China Precious Metals
HSE US$800m US$1m 7.2m oz Projects in China, Mongolia, in production
June 2013
Market cap and average daily trading volume has been approximated for the past 6 months based on Bloomberg data
8 June 2013
Acquisition Strategy - Adding value today by accelerating Group Production Profile
• Gold production 100,000 oz pa - or clear path to ramp-up, 6-12mos
• > 1 million oz gold Reserve - 2 million oz gold Resource - 7 years LOM
• Organic cashflow growth - < US$1200 per ounce all in cost
- Strong working capital position
• Up to US$100m investment
LGC ALLURE
• Shares ≈ cash
• SGX-listed
• De-risking of assets
- Geographic
- Funding access
- Lower dilution risk
• Broader opportunities
- Bigger, global group
SCREENING
Gold producers globally
• Low / no debt
• Willing seller
• Competent management
• Assets vs companies
Better opportunities from April 2013
• Accelerated streamlining by gold majors - Divestment of non-core assets
• Realistic valuation expectations by juniors
• More favourable environment for negotiation, cost cutting, capital discipline
9 June 2013
End Production
Exploration
Targeting the “Sweet Spot” - Producing / near-producing assets
Mining Project Life Cycle
Pre- Feasibility Scoping Study
Feasibility Study
Extension
Va
lue Ris
k
5-10% 10-20%
Brownfields
Greenfields
Indicative Capital Allocation
70-85%
Maximise Value,
Mitigate Risk
Development
Production
10 June 2013
Geographically diversified - Risk Management
Developed Stable business environment
Infrastructure, skilled labour, funding
Can be high-cost
Australia Established global mining industry
Excellent skills-base
Many junior miners
45%
10%
“De-risking” Investment & Resource
Friendly Emerging
Developed
Friendly Emerging Bigger opportunities
Lower entry cost
Ghana, Ashanti Gold Belt Stable, foreign-friendly
Established gold industry
Highly prospective, scalable
“Challenging” Good value
Bolivia Relationships key
Bolivia
“Challenging”
BMT
CTO
CGT
Australia 60%
Ghana 34%
6%
11 June 2013
Operating Objectives - Balance & Prioritise
Mine Profile
Resource expansion
Reserve replacement
Production stable, growing
Increasing Li fe of Mine
Prioritise
Community
Environment, Health, Safety
Education & Training
P r o d u c t i o n E f f i c i e n c y
12 June 2013
Results delivered - Going forward
Project Acquired
Castlemaine Goldfields (100%) Signature Metals (77%)
Minera Nueva Vista (100%)
Brimstone Resources (100%)
Acquire
“Gold in the Ground”
Fortify
the Business
2012 2013 2014
Divest Green Businesses
Grow Organic Production
Integrate resources Grow team, alliances
Expanded Funding Options
Project IPO Project financing
Acquire Producing Assets New market opportunities
10 million oz Resource 2 million oz Reserve
200,000 oz pa Production
5 year Life of Mine
Ongoing
Initiatives
Shareholder Return
Minimise Volatility
Raise Transparency
Mitigate Balance Sheet Risk
Strategic Investments Citigold Corporation (18%)
Acadian Mining Corporation (9.35%)
Unity Mining (9.35%)
Global
Gold Co
36% Shareholder Return Junior Miners -16%, Gold +7%
US$
4% Shareholder Return Junior Miners -44%, Gold -16%
US$
13 June 2013
Optimise Funding : Projects - Maximise Growth, Protect Shareholders + Balance Sheet
LGC Market cap
~ US$850m
Grow • Bankable assets
• Gold production
• Fee income
Execution of 100 day +
2 year business plans
Fund • Listing of subsidiaries
• Project financing
• Venture capital
• Structured options
Mitigate equity dilution,
Maintain strong balance sheet
Invest
Undervalued gold interests
Up to 20% of share capital
per annum
Project
Development
Strategy
Self-fund
Grow market cap
• List cos
• Private Companies
• Assets
2-3 acquisitions yearly
14 June 2013
Shareholding Structure - Local HNW + Retail, Growing Institutional
Asian Institutional Investors
- Pension, mutual, sovereign
• Dedicated Singapore, Malaysia, ASEAN + commodity-focused funds
• Few investable metals / gold stocks, in Southeast Asia
Global Institutional Investors
- Boutique, Private Equity
• Diminished selection of mid-cap gold companies
• Few Asian-listed options
Retail Investors
- Singapore, Malaysia, HK/China
• Gold Bugs, news flow sensitive
• Limited investment options vs US, UK, Australia, Canada
• Private Equity vehicles: largely available only to HNW investors
Broadening Investor Base
Asiasons Capital Ltd 8.5%
Dato’ Md Wira Dani Bin Abdul Daim
6.4%
Van Eck: Market Vector Junior Gold Miners ETF
5.8%
Tan Sri Dato’ Nik Ibrahim Kamil
4.4%
5 June 2013
SGX-listed private equity group; early investor
Non-Executive Director
Non-Executive Chairman
Among other noteworthy institutional investors are Weiss Capital, Nomura, Macquarie and Credit Suisse
15 June 2013
Healthy Balance Sheet - As at 31 March 2013
Convertible Bond – US$23m
• 9% coupon, due 2015 • Placed with institutional investors • Convertible into 24.8m new LGC shares ~ US$20m of the bond is outstanding (~22m shares)
Warrants - 1:4 – S$15m • 229m warrants issued at 6.5¢ each • Exchangeable 1:1 into new LionGold Shares at an exercise price of S$1.1717
• SGX-listed, expiry 17 December 2015
• Raised S$15m, plus up to S$268m on warrant conversion
Placement – S$47m • 42m new shares issued at S$1.057 each + 41m new warrants issued at 6.5¢ each
• New shares to rank pari passu with existing shares
• Raised S$47m, plus up to S$48m on warrant conversion Oct
2012
S
ep
2012
M
ay
20
12
Assets
Current assets
Non-current assets
Total Assets
Current liabilities
Non-current
Total Liabilities
NET ASSETS
S$m
131.3
259.2
390.5
48.1
66.4
114.5
276.0
Placement warrants are convertible under the same terms as the rights warrants
Cash and equivalents at S$47.0m
16 June 2013
Core Management Team - Seasoned financial & technical expertise
CEO & MD Nicholas Ng
Board of Directors
General Counsel Raymond Tan
COO Matthew Gill
• Also Executive Director and
Company Secretary
• Provided legal advisory to
LionGold since 2007.
• Over 30 years legal experience
including 15 years with
Robert Wang & Woo LLP
where he was Partner, and
Head of the Corporate &
Commercial Department.
• 18 years in investment
banking and corporate
advisory in Asia-Pacific.
• Former Corporate Finance,
Co-Head for DMG Partners
and Corporate Finance Head
for HL Bank.
• Former CFO of SGX-listed
Darco Water Technologies.
• Mining engineer with over 30
years experience in all
aspects of exploration and
mining in Australia, India and
Papua New Guinea.
• Turned around Ballarat Mine
for Castlemaine and the
Beaconsfield Mine, Tasmania.
• Australian Mine Manager of the
Year for 3 years.
•17 years as a corporate
lawyer, including acting as
general legal counsel for public
listed companies.
• 7 years actively involved in the
setting up of iron ore and gold
mining operations around the
world, from Mali to Mongolia.
• Spearheading LionGold’s
M&A effort globally.
• 28 years in financial markets.
• Former CEO of DMG Partners, and MD
of Citicorp Investment Bank, Singapore.
Previous Head of Asia Investment
Banking at Rabobank.
• Concluded numerous IPO, M&A,
privatisations and other financial
transactions in Asia-Pacific.
CFO Brendan Goh
Corporate & Business Development Director
Peter Chen
• Audit Committee
• Remuneration Committee
• Nomination Committee
• Technical Committee
17 June 2013
Group Structure
- As at June 2013
Signature Metals
76%
Castlemaine Goldfields
100%
100%
18% Citigold Corporation
Operations
Brimstone Resources
Owere Mines
70%
Minera Nueva Vista
100%
Board of Directors
LionGold
Corp Ltd
Investment
Tan Sri Dato’ Nik Ibrahim Kamil
Non-Executive Chairman
Over 45 years managerial and business experience across a range of industries, including mining, media, financial, energy and infrastructure.
Asiasons WFG Financial Chairman. Actively involved in resource M&A in Asia and Africa and banking in sub-Saharan Africa.
Professionally qualified accountant with affiliations in the UK, Australia and Malaysia with experience in Australia, Southeast Asia and South Africa.
Over 40 years experience in senior technical, financial and management roles in the mining industry globally, including with Rio Tinto and Plutonic.
Ten years with PwC, followed by more than two decades evaluating, developing, financing and administrating mining projects globally.
Twenty years of legal practice with a broad range of experience ranging from litigation and conveyance to corporate and commercial matters.
Accountant with extensive experience in project development, finance and business development throughout Asia.
Nicholas Ng Chief Executive Officer and Managing Director
Raymond Tan General Counsel and
Executive Director
Dato’ Md Wira Dani Abdul Daim
Non-Executive Director
Roland Selvanayagam
Independent Non-Exec Director
Dr Denis Clarke Independent
Non-Executive Director
Gary Scanlan Independent
Non-Executive Director
Lynne Ng Su Ling Independent
Non-Executive Director
Bernard Soo Independent
Non-Executive Director
Former CEO of DMG Partners and MD of Citicorp Investment Bank, Singapore. Previously head of Asia investment banking at Rabobank.
Over 30 years legal experience including 15 years with Robert Wang & Woo LLP where he was Partner and Head of the Corporate & Commercial Department.
Acadian Mining Corporation
9%
Unity Mining
13%
18 June 2013
On track for 2014 target - 5.5 million gold ounces acquired in 9 months
Figures are extracted from previous JORC- and NI 43-101-compliant announcements. Resources include Reserves. For Projects in which LionGold has a controlling stake, the Resources and Reserves are based on 100% of the Project’s holding. For Citigold Corporation, Resources and Reserves are based on LionGold’s 18% equitable holding of the Charters Towers Project’s 11 million ounces of gold Resources, inclusive of 620,000 ounces of Reserves.
Company LGC
Interest Country Project
Resources (ounces)
Reserves (ounces)
Production Target
Annualised (ounces)
Castlemaine Goldfields 100% Australia Castlemaine 686,000
Ballarat 71,700 40-50,000
Signature Metals 76% Ghana Konongo 1,470,000 15,000
Minera Nueva Vista 100% Bolivia Amayapampa 1,280,000 787,300 20-30,000
Brimstone Resources 100% Australia Penny’s Find 52,300 Under review
Citigold Corporation 18% Australia Charters Towers 1,946,000 110,000 20-30,000
Total 5,506,000 897,300 95-125,000
TARGET 2014 10,000,000 2,000,000 200,000
Acadian Mining Corporation 9.35% Canada
Beaver Dam 950,000
Fifteen Mile Stream 308,000
Unity Mining 13.2% Australia
Henty Mine 338,000 133,000 50,000
Lakeside 66,000
Darques Reef 327,000 233,000 50,000
Significant Shareholder
19 June 2013
Castlemaine Goldfields Ltd
- High grade nuggety ore
Excellent facilities in established gold region,
Central Victoria, Australia Five concessions in total with JORC Resources
in Ballarat (producing) and Castlemaine
Ballarat Mine production at 40-50,000 oz pa - Ore processing capacity of 600,000 tpa
- Ramped up from mid-2012
- Cash Operating Costs target US$830/oz in 2013
Life of mine + production enhancement through ongoing extension and exploration
Resource Gold (ounces)
Tonnage (tonnes)
Grade (g/t)
Castlemaine 686,000 2,760,000 7.7
Ballarat 71,700 263,000 8.5
Total 757,700 3,023,000 7.9
Figures indicate historical gold production at Castlemaine Goldfields’ five tenements
100% owned by LionGold from October 2012
Figures shown are based on previously quoted JORC-compliant statements
20 June 2013
Flagship Owere Mines (70% owned) holds the
Konongo Gold Project, Ghana
192 km2 concession in Ashanti Gold Belt
- 16 known gold deposits, 12 km strike
- 80 km along strike from Ashanti AngloGold’s >200,000 ounce pa, 30 million ounce Obuasi mine
Substantial untapped high-grade UG potential
- Historic production of 1.6 million ounces at 11.8 grams per tonne, mostly from UG
Now managed in-house
Signature Metals Ltd - Prioritising exploration targets
Konongo
Gold
Project
Resources1 Gold
(ounces) Tonnage (tonnes)
Grade (g/t)
Measured & Indicated 779,600 13,100,000 1.9
Inferred 687,100 10,500,000 2.0
Total 1,466,700 23,600,000 2.0
76.22% owned by LionGold as at April 2012 and listed on the ASX.
Figures shown are based on previously quoted JORC-compliant statements.
21 June 2013
Minera Nueva Vista - Acquisition complete
Amayapampa Project Amayapampa Gold Project, Bolivia
Resources of 1.28m oz, inclusive of 787,000 Reserves
- NI 43-101 compliant
Owns the rights to 38 overlapping concessions totaling
34 km2, located 290 km southeast of La Paz
Options for an open pit facility under review;
- Low strip ratio of 1 : 1.3
Foothold in Latin America
Amayapampa
Category Gold
(ounces) Tonnage (tonnes)
Grade (g/t)
Reserves
Probable 787,300 18,900,000 1.3
Resources
Indicated 979,637 26,160,000 1.2
Inferred 300,363 8,750,000 1.1
Total Resources 1,280,000 34,910,000 1.2
100% owned by LionGold from December 2012.
Resource is inclusive of Ore Reserves. Figures based on previously quoted NI 43-101-compliant statements
22 June 2013
Citigold Corporation Ltd - 18% strategic investment
Charters Towers Project Charters Towers tenements near
Townsville, Queensland
“Australia’s highest grade gold field” - 56 mineral holdings spanning >1,500 km2
- Significant Life of Mine potential, >10 years
Ore processing capacity of 340,000 tonnes
Single largest shareholder, 2 board seats
Ripe for review, revamp
ASX-listed, 18% owned by LionGold from December 2012
Refer to www.citigold.com for JORC-compliant statements.
Indicated Resources includes Probable Reserves, and Inferred Resources includes Indicated Resources.
Charters
Towers
Category Gold
(ounces) Tonnage (tonnes)
Grade (g/t)
Reserves
Probable 620,000 2,500,000 7.7
Resources
Indicated 780,000 3,200,000 7.6
Inferred 11,000,000 25,000,000 14
23 June 2013
Unity Mining Ltd - 13.2% strategic stake
Unity Mining, ASX-listed
Australian gold resources totaling 731,000 oz
Annualised production targeted to double by year-end to 100,000 oz
Cash of A$39 million as at 31 Dec 12, no debt - Gross profit of A$0.8m for 6mos ending 31 Dec 12
Unity’s Primary Projects
13.2% owned by LionGold from May 2013, single largest shareholder
Project Category Gold
(ounces) Tonnage (tonnes)
Grade (g/t)
Henty Reserves 133,000 780,000 5.3
Resources 338,000 2,060,000 5.1
Lakeside Reserves -- -- --
Resources 66,000 750,000 2.8
Dargues
Reef
Reserves 233,000 1,390,000 5.2
Resources 366,000 2,170,000 5.3
GoldStone Resources – 35%
- 3 West African exploration project, including a 602,000 ounce Ghanaian gold project locate near LionGold’s Owere Mine
- London-listed
Henty Mine, northwest Tasmania – 100%
- Established mine, producing 50,000 oz per year
- Cash cost of US$930 per ounce, 5 year+ LOM
Dargues Reef, NSW – 100%
- On target to produce 50,000 oz per year annualised by early
2014, based on recent announcements.
Figures shown are based on previously quoted JORC-compliant statements
24 June 2013
Acadian Mining Corporation Ltd - 9.35% strategic investment
Nova Scotia Projects Canadian tenements in Nova Scotia
Under-explored gold-bearing province - Limited modern exploration
Scoping study for open pit underway Attractive royalty portfolio
Regional consolidation potential
TSX Venture-listed, 9.35% owned by LionGold from February 2013.
Refer to www.acadianmining.com for NI43-101-compliant statements.
Property Gold
(ounces) Tonnage (tonnes)
Grade (g/t)
Beaver Dam
Indicated 446,000 9,080,000 1.5
Inferred 504,000 10,400,000 1.5
Fifteen Mile Stream
Indicated 308,000 6,000,000 1.6
TOTAL 1,258,000
25 June 2013
Brimstone Resources Ltd - Early to open pit production
Prospective tenements in Western Australia
and near Castlemaine in Victoria
Penny’s Find Project (aka “Golden Feather”)
- Near mining town of Kalgoorlie
- 36 mining leases covering 59 km2
- Resources of 52,300 oz based on prelim drilling
Scope to initiate open pit operations
- Contract mining
- Third party processing of ore concentrate
Stawell East, Central Victoria
- Within proximity to Castlemaine’s processing
facility at Ballarat
Brimstone Projects
Penny’s
Find
Resources Gold
(ounces) Tonnage (tonnes)
Grade (g/t)
Measured 11,200 79,000 4.4
Indicated 16,900 132,000 4.0
Inferred 24,200 103,000 7.3
Total 52,300 314,000 5.2
100% owned by LionGold from October 2012
Figures shown are based on previously quoted JORC-compliant
statements
26 June 2013
LionGold Corp Ltd 59 Mohamed Sultan Road
Sultan Link 02-08
Singapore 238999
T: +65 6690 6860
F: +65 6690 6844
www.liongoldcorp.com
Thank you
w w w . l i o n g o l d c o r p . c o m
