Lowest Cost Gold Producer in the Sector€¦ · capital expenditures, success of mining operations,...
Transcript of Lowest Cost Gold Producer in the Sector€¦ · capital expenditures, success of mining operations,...
Lowest Cost Gold Producer in the SectorCORPORATE PRESENTATION | SEPTEMBER 2018
Important Cautionary Statements
2
This presentation contains “forward-looking statements”. Forward-looking statements include, but are not limited to, statements with respect to theCompany’s current review of potential mineral project investments and/or acquisitions, the estimation of mineral resources, the timing and content ofupcoming programs, the realization of mineral resource or reserve estimates, the timing and amount of estimated future production, costs of production,capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations oninsurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”,“is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such wordsand phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievementsof the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-lookingstatements. Such factors include, among others, risks related to international operations; actual results of planned expansion activities; changes inproject parameters as plans continue to be refined; future prices of resources; exchange rates for Canadian and U.S. currencies; possible variations ingrade or recovery rates, accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or inthe completion of development or construction activities. Although the Company has attempted to identify important factors that could cause actualactions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, eventsor results not to be as anticipated, estimated or intended. In making the forward-looking statements in this presentation, the Company has madecertain key assumptions, including, but not limited to, the assumptions that merited mineral assets or projects can be acquired and financings areavailable. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differmaterially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. TheCompany undertakes no obligation to update or revise any forward-looking statements or information made in this presentation, except as requiredunder applicable securities legislation. NI 43-101 QUALIFIED PERSON - Neil Schofield, MS Applied Earth Sciences, MAusIMM, MAIG, a QualifiedPerson as defined by NI 43-101, has reviewed and is responsible for the technical information contained in this presentation.
NOTES ON RESOURCE AND RESERVE ESTIMATES PRESENTED THROUGHOUT PRESENTATION
Moose River Consolidated (MRC): Touquoy, Beaver Dam, Fifteen Mile Stream, Cochrane Hill – The Moose River Consolidated (MRC) Phase 2Life of Mine Expansion (Touquoy, Beaver Dam, Fifteen Mile Stream, and Cochrane Hill) Mineral Reserves are current reserve estimates that are inaccordance with the current Canadian Institute of Mining, Metallurgy and Petroleum Resources (CIM) Definition Standards on Mineral Resources andMineral Reserves as required by NI 43-101 - Standards of Disclosure for Mineral Projects. A Qualified Person has done sufficient work to classify thesereserve estimates to current mineral reserves prepared in accordance with NI 43-101.
Cochrane Hill - The Cochrane Hill Mineral Resource estimates have been prepared in accordance with the Canadian Institute of Mining, Metallurgyand Petroleum Resources (CIM) as required by NI 43-101.
Fifteen Mile Stream – The Fifteen Mile Stream Mineral Resource estimates have been prepared in accordance with the Canadian Institute of Mining,Metallurgy and Petroleum Resources (CIM) as required by NI 43-101.
Atlantic’s Key Differentiators
3
Best in sector shareholder alignment: Board & Management own + 35%
Track record of company builders
Focus on risk management
Time is money
Lowest decile for both cash costs and all-in sustaining costs
Phase 2 Life of Mine Expansion boosts annual gold production above
200,000 ounces
Demonstrable upside with “string of pearls” deposit strategy along the
+ 45 km un-tested host structure (The Corridor Regional Program)
Execution, Expansion, Growth, Exploration
4
Phase 2
Expansion
Staged Integration of 2
Additional Satellite Depositsinto production schedule (staged capex)
Annual gold
production increasing
to + 200,000 oz.*
Phase 3
GrowthResource Expansion
Drill Program
Identified
extensions to known
mineralization
Phase 4
Exploration
Corridor Regional
Program
Up to 100,000 meters of
drilling along the + 45km
un-tested host structure
Phase 1
Execution
2018 Production Guidance
Between 82,000-90,000
ounces at low AISC between
C$675-$735 / oz.
(US$513-558**)
Commercial Production
Declared March 2018
*Based on forecasted results from the January 29th, 2018 pre-feasibility study
**Based on current exchange rate of 0.76CAD/USD
Fifteen Mile Stream
Cochrane Hill
Phase 1 – Execution
5
Built on budget and schedule
Mill exceeding design throughput capacity
Recovery exceeding Feasibility Study assumptions
2018 production guidance (82,000-90,000 ounces)
AISC between $CAD675-$735/oz. for 2018 (US$513-558/oz.*)
Focus on improvements
*Exchange rate of 0.76 USD/CAD
Time is Money…..
6
Consolidated
Ownership of NS
Deposits
Q3 2014
Q4 2014 Q4 2017
Q4 2017
Ramp Up
to Full
Production
Q2 2016
Execute
EPC Contract
Feasibility Study work on
MRC underway – target
completion mid 2015
Q2 2015
Q2 2016
Debt Financing
• Macquarie / CAT Debt
Commitment C$115M
• CAT finance lease facility for
mining fleet
• MOU with Ausenco October 2015
• LSTK (Lump Sum Turn Key)
Price agreed
Q1 2016Acquisition Feasibility Study
• Touquoy already has all
major permits in place
• Beaver Dam expected to
be straightforward given
it is a satellite deposit
Commence
Construction
H1 2015Drilling
Program
Environmental
and Permitting
Completed infill
drilling program
for Beaver Dam
JULY 2017
Updated
Resource
Estimate
FMS + CH
Jan 20182018
Production
Guidance
JAN 2018
Phase 2
LOM
Expansion
Study
2014
Phase 3 Expansion
Mine and Plant
Commissioning
20172016 20182015
Mar 2018Declared
Commercial
Production
Phase 4
Corridor
Regional
Program
Q2 2018 Financial Highlights
On track to meet annual production
and cost guidance
7
*Please refer to the Aug 15th, 2018 news release / Financial Statements and Q2 2018 operating / financial results tables and noted disclosures to the tables
CASH COSTS CAD $569/OZ
(USD $432/OZ @0.76 USD/CAD)
AISC
CAD $743/OZ
(USD $565/OZ @0.76 USD/CAD)
22,269 ounces of
production for Second Quarter
Cash Generated from Operating Activities
$19.4 million for Q2 and Operating cash flow per
share of $0.10
Mill throughput and recoveries exceeding
design criteria
Gold recovery of 95%
for Q2
CAD $35.8 million
in revenue and
$8.3 million
net income
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Sectors Lowest Cost Gold ProducerRelative AISC – Global Junior & Intermediate Producers
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Orv
ana
(TS
X)
TM
AC
(T
SX
)
Det
our
(TS
X)
Man
dala
y (T
SX
)
McE
wen
(N
YS
E)
New
Gol
d (T
SX
)
Asa
nko
(TS
X)
Wes
dom
e (T
SX
)
Tah
oe (
TS
X)
Bea
dell
(AS
X)
Alio
(T
SX
)
Eld
orad
o (T
SX
)
IAM
GO
LD (
TS
X)
Per
seus
(A
SX
)
Sup
erio
r (T
SX
-V)
Jagu
ar (
TS
X)
Guy
ana
Gol
dfie
lds
(TS
X)
Res
olut
e (A
SX
)
Leag
old
(TS
X)
Tor
ex (
TS
X)
Ala
mos
(T
SX
)
Gra
n C
olom
bia
(TS
X)
Ter
anga
(T
SX
)
Ave
soro
(T
SX
)
SE
MA
FO
(T
SX
)
Red
Eag
le (
TS
X)
Gol
den
Sta
r (T
SX
)
Arg
onau
t (T
SX
)
Cen
terr
a (T
SX
)
Gol
dgro
up (
TS
X)
Sar
acen
(A
SX
)
B2G
old
(TS
X)
End
eavo
ur (
TS
X)
Kirk
land
Lak
e (T
SX
)
Ala
cer
(TS
X)
Nor
ther
n S
tar
(AS
X)
Pre
tium
(T
SX
)
Rox
gold
(T
SX
)
Oce
anaG
old
(TS
X)
K92
(T
SX
-V)
Dun
dee
Pre
ciou
s (T
SX
)
St B
arba
ra (
AS
X)
Reg
is (
AS
X)
Evo
lutio
n (A
SX
)
Atla
ntic
(T
SX
-V)
2018E AISC(1)(2)
(US$/oz)
Source: Company Reports, Equity Research Note: Costs have been calendarized to CY2018 for Australian producers with a June 30 financial year-end
1. AISC are based on company guidance or consensus equity research estimates
2. When applicable, costs are shown net of by-product credits (K92, McEwen, and Mandalay are gold equivalent)
3. Using Q1 company guidance before F2018 guidance was removed
Intermediate Producers
Junior Producers
9
Mitigating gold price risk – CAD vs. USD gold price
Hedge Facility: CAD $1,550 / oz.
As of June 30, 2018, there were 189,473 ounces committed to the gold forward contracts for delivery
between July 2018 and February 2021.
CAD $1,550 Hedge
Phase 2 - Expansion
10
Central Processing
Facility
MRC
760,000 oz Au
P&P Reserves
MRC Phase 2 (Fifteen Mile Stream and
Cochrane Hill)
825,000 oz Au*
P&P Reserves
*Touquoy @ 0.40 g/t cut-off grade – 119,000 oz. (Proven), 306,000 oz. (Probable) , Beaver Dam: 191,000 oz. (Proven), 144,000 oz. , Cochrane Hill @ 0.30 g/t cut-off grade – 240,000 oz. (Proven), 153,000 oz. (Probable),
Fifteen Mile Stream: 115,000 oz. (Proven), 316,000 oz. (Probable)*
Phase 2 Expansion Life of Mine Production Schedule
11
AISC of CAD$692 / oz. Au (USD$555 / oz. Au)
-
50
100
150
200
250
300
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
73.5
96.2 93.5
171.5
230.5
254.3 244.9
202.4
80.3
13.1
Life Of Mine (years)
Moose River Consolidated LOM Production ('000 ounces)
Touquoy* Beaver Dam* Fifteen Mile Stream Cochrane Hill
Phase 4
Corridor Regional
Program
Phase 3
Resource Expansion Drilling
Fifteen Mile Stream & Cochrane Hill
• Feasibility Study Projections for Touquoy vary from 2018 guidance
Based on forecasted results from the January 29th, 2018 pre-feasibility study
12
Atlantic Peer Benchmarking
Source: Capital IQ, S&P Global Market Intelligence, NBF estimates
Note: Atlantic production figures represent NBF estimates; Operating cash flow based on street consensus
1. Analyst consensus estimates
2. Aurelia production based on FY’19 company guidance; Operating cash flow represents FY’19 figure; Implied mine life based on average FY’19-FY’21 production divided by Hera and Peak reserves
3. Dacian production based on 2019 research estimate; Operating cash flow represents ‘19 figure; Implied mine life based on average ’19-’20 production divided by Mt Morgans reserves
4. Geopolitical risk ratings calculated based on weighted score of S&P Global Market Intelligence country risks (Political, Operational, Security, Terrorism) by asset, whereby weights for each risk are ascribed as follows: Insignificant = 0, Low = 2, Medium = 8, High = 10, Extreme = 12. Risk ratings for portfolios of assets calculated using production-weighted average of all assets
5. Average ‘18-’20 production divided by attributable reserves from mines currently in production
6. Based on LOM average annual gold production and total resource, incorporates FMS and Cochrane Hill
1.5
1.5
1.5 2.0
2.0
2.0
3.5
3.5 3.8
4.5 5.0
7.0
8.0
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Wes
tgol
d
Aur
elia
Dac
ian
Atla
ntic
TM
AC
Wes
dom
e
Ter
anga
Gol
den
Sta
r
Pre
mie
r
DP
M
Arg
onau
t
Ave
soro
Rox
gold
GEOPOLITICAL RISK RATINGS (1=LOW, 10=HIGH)(4)
Low geopolitical risk
in Canada
69
86 103 12
4
125
177 19
5
198
229
234
243 25
4
254 27
0
-
50
100
150
200
250
300
Wes
dom
e
Atla
ntic
('1
8)
Pre
mie
r
TM
AC
Rox
gold
Arg
onau
t
Dac
ian
Aur
elia
Ter
anga
Gol
den
Sta
r
Ave
soro
Wes
tgol
d
Atla
ntic
('2
3)
DP
M
(2%
)
3% 4% 5% 7%
11%
11%
12%
13% 19
%
22%
23%
24%
35%
(20%)
(10%)
-
10%
20%
30%
40%
50%
Ave
soro
Pre
mie
r
Atla
ntic
('1
8-'2
0)
Gol
den
Sta
r
Rox
gold
Dac
ian
Aur
elia
Arg
onau
t
DP
M
Ter
anga
Wes
dom
e
Wes
tgol
d
Atla
ntic
('1
8-'2
3)
TM
AC
PRODUCTION CAGR (’18-’20)(1)
0.9
3.5
5.7
5.9
6.2
6.3
6.4
6.6 7.1 9.
1 9.9 10
.9 13.3
19.6
-
5.0
10.0
15.0
20.0
25.0
Ter
anga
Aur
elia
Ave
soro
Rox
gold
Gol
den
Sta
r
Wes
dom
e
Dac
ian
Atla
ntic
Pre
mie
r
DP
M
Wes
tgol
d
Arg
onau
t
Atla
ntic
*
TM
AC
Atlantic has healthy and growing reserve
base to support increased production
Atlantic’s growth profile
among strongest relative to peers
Atlantic on track to rise
to the top of the junior
ranks by 2023
Incl. FMS & CH
2018E PRODUCTION (KOZ AUEQ)(1)
IMPLIED MINE LIFE – PRODUCING ASSET RESERVES (YEARS)(5)
Backyard Canada
13
Location advantages
Low geopolitical risk
Cost advantages
1 hour from provincial capital of Halifax
Close proximity workforce and university research facilities
Phase 3 - Expansion
14
Phase 3: Resource Expansion and Definition Program:
Targeting extensions to FMS and CH deposits
Infilling existing resources to M&I categories
Phase 3 Expansion Drill ProgramFifteen Mile Stream Gold Deposit
15
Phase 3 Expansion Drill ProgramCochrane Hill Gold Deposit
16
New High-Grade Zone at Cochrane Hill
17
Long Section
Phase 4 - Corridor Exploration Targeting
18
Geological maps and
historical data
Lithogeochemistry,
alteration mapping +
gold in till sampling
Filtered geophysics for
structural analysis
Targeted drill traverses
across prospective
stratigraphy
19
Meguma vein-hosted vs argillite –hosted gold
New model
OLD MODEL
Gold-bearing quartz veins – Mainly parallel to
bedding in argillite; some cross-cut the bedding
NEW MODEL
Gold-bearing quartz veins plus additional
dispersed gold mineralization within
argillite units – e.g. Touquoy Pit
Strong
greywacke
Weak
argillite
Corridor Regional Program
20
Next Intermediate Gold Producer
21
Companies built on successful development from operations
Atlantic’s internal growth options together
with strategic and timely acquisitions of new
development properties will provide the
platform to build the next intermediate gold
producer.
OR
Be acquired at a premium?
Macraes (New Zealand): 183koz pa
Didipio (Philippines): 122koz pa
Waihi (New Zealand): 117koz pa
Haile (United States): 144koz pa
2018 Consensus Guidance: 566koz Au @ US$728 AISC**
El Limon (Nicaragua): 56koz pa
La Libertad (Nicaragua): 129koz pa
Masbate (Philippines): 176koz pa
Otjikoto (Namibia): 166koz pa
Fekola (Mali): 399koz pa (LoM Avg)
2018 Consensus Guidance: 926koz Au @ US$769 AISC**
OceanaGold
$2.2B Mkt Cap
B2Gold
$2.8B Mkt Cap
Atlantic Gold Corporation
$402M Mkt Cap
Touquoy
Beaver Dam
Cochrane
Fifteen Mile
2018 Guidance: 82-90kozpa Au @ US$513-558/oz* AISC
*Based on current exchange rate of 0.76 CAD/USD & Company 2018 Guidance
**Based on analyst consensus production guidance and provided by BMO Capital Markets
591.7%
12.8%
(34.8%)
251.5%
(100%)
0%
100%
200%
300%
400%
500%
600%
700%
800%
Ind
exed
Ret
urn
Atlantic Gold Corp Spot Gold (C$/oz)
VanEck Vectors Junior Gold Miners ETF FAANG
ETF’s vs. FAANG vs. Atlantic Team Value Add
22
Consolidated ownership
of Nova Scotia deposits
and gold camp
Debt Financing for Moose
River Consolidated Phase
1 Project
Executed EPC fixed price
contract with Ausenco
Mine and Plant
Commissioning
Production
guidance for 2018
Phase 2
expansion study
Declaration of
commercial production
Phase 1 MRC
Feasibility Study
Commenced Phase 1
Construction
Q1 2018
Financial
Results
The result of applying discipline and risk management to the gold business
Q2 2018
Financial
Results
Compelling value opportunity – Canadian single-asset gold company with
lowest decile AISC
1. Implied P/NAV multiples for acquired companies calculated based on acquisition price and forward-curve based NAV (based on prevailing Canaccord Genuity forecasts) prior to announcement of transaction. Latest trading P/NAV
multiple for AGB
2. Implied P/NAV multiples for acquired companies normalized to reflect changes in precious metal producer sector valuations since the date of acquisition.
3. Size of bubbles represents the average annual AISC margin (US$ M) assuming a gold price of $1,250/oz Au, average annual production and average AISC (based on prevailing CG estimates for three-year period following the
acquisition).
4. Average annual AISC margin (US$ M) for AGB reflects average CG forecasts for the first three years following completion of the MRC Phase 2 expansion (2022E-24E)
Source: Company Reports, Canaccord Genuity estimates
Atlantic Gold vs Past acquisitions of Canadian single-asset companies
(P/NAV multiple vs average annual AISC)
23
Richmont Mines
Lakeshore GoldBrigus Gold
Northgate MineralsClaude Resources
AuRico Gold
Osisko Mining
Atlantic Gold
$500
$600
$700
$800
$900
$1,000
$1,100
0.40x 0.50x 0.60x 0.70x 0.80x 0.90x 1.00x 1.10x 1.20x 1.30x
Ave
rag
e an
nu
al A
ISC
(U
S$/
oz)
Implied P/NAV multiple (based on acquisition price)
(Malarctic)
Share Structure
$106 million partial drawdown from the
Revolving Credit Facility
CAT Finance Lease Mining Fleet facility of
$13m
24
Atlantic Pro-Forma Capitalization
Shares Outstanding 236,547,724
Options 15.3 million
FD S/O 251.8 million
Ticker TSXV: AGB
Recent Share Price $1.70
Market Cap ($M) $402-million (undiluted)
Major Shareholders • Insiders & associates ~ 35%
• Sprott Group of Companies ~ 10%
• Other Institutional ~ 25%
*Canadian Dollars unless otherwise indicated
As of Sept 2018
Closed $150m Revolving Credit Facility and
refinanced project loan facility - ***Refer to News
Release Sept 20, 2018
Liquidity: Total Cash as at Sept 20, 2018: ~$40m
Current Balance Sheet
25
Operating and Financial
Resource Expansion & Exploration
Upcoming Catalysts
Q1 2018
Financial Results
2018
Declared Commercial Production
March 2018
Closed $150m Revolving Credit Facility
Aug 2018
Q2 2018
Financial Results
Oct 2018
Q3 2018
Production Results
Nov 2018
Q3 2018
Financial Results
Sept 2018
Q1 2019
Updated Resource /
Reserve Estimate
2018
Corridor Regional Program - Up to 100,000 meters of drilling
along + 45 km of untested host structure
2019Incorporating Phase 3 Resource
expansion drill results plus additional
2018 drilling at Cochrane Hill, Fifteen
Mile Stream, and 149 Prospect
Q3 & Q4 2018Continuation of Resource Expansion drill programs
at Fifteen Mile Stream and Cochrane Hill
Q3 & Q4 2018
Drill Results Ongoing
Environmental Impact Statements
H2 2018Progressing approval of the EIS for Beaver DamPreparation of the FMS and CH projects EIS
submission expected Q1 2019 Q1 2019
May 2018
Board and Management Strength
26
Management Team
Steven Dean
Chairman & Chief Executive
Officer
30+ year mining career with proven successes in the junior and senior mining space. Former
President of Teck Cominco. Co-founder and former Chairman of Amerigo Resources Ltd., former
Chairman of Sierra Metals Inc., Chairman of Oceanic Iron Ore. Founding management of
Normandy Mining and Pacific Mining Corporation in Australia.
Maryse Belanger
President, Chief Operating
Officer & Director
Over 30 years of experience with senior gold companies globally. Former Senior Vice President,
Technical Services for Goldcorp. Director, Technical Services for Kinross Gold Corporation for
Brazil and Chile.
Wally Bucknell
Director of Exploration &
Director
Geologist with over 44 years experience in the mining industry. Former Managing Director and
CEO of Atlantic Gold NL, and General Manager, Exploration, of Plutonic Resources Ltd. Awarded
AMEC’s ‘Prospector of the Year’ award.
Chris Batalha
Chief Financial Officer
Chartered Accountant with experience in accounting, finance, corporate governance and M&A
with a number of mining exploration and development companies. Spent 5 years with
PricewaterhouseCoopers in the Audit and Assurance Group in Vancouver.
Alastair Tiver
VP Mine Development
Mining engineer with 27 years of international mining experience involved in all phases of mine
operation, planning, permitting and mine development. Held senior management roles in many
companies including BCMetals Corporation, Copper Mountain Mining Corporation and
Yellowhead Mining Inc
Neil Schofield
Consulting Resource
Geologist
25+ year career as a mineral resource consultant. Developed resource models and grade control
systems experience with the Sunrise Dam, Hemlo, Kevitsa, Ernest Henry and Cannington
mines. Mr. Schofield has co-authored several technical papers on sampling and mineral resource
estimation, published mainly by the Australian Institute of Mining and Metallurgy.
Tony Woodfine
General Manager
21 years experience in open pit mining with 3 previous successful startup operations. Former
Mine Manager at Voisey’s Bay Nickel and former General Manager at Baffinland Iron Ore. Held
positions as Head of Technical Services, Mine Planner, General Foreman and Grade Control.
Sally Goodman
Chief Geoscientist
Structural geologist with over 30 years international experience in academia, consultancy and
industry, including 12 years as Principal Structural geologist with SRK Consulting, and most
recently five years in Corporate Technical Services and Exploration with Goldcorp Inc.
Tom Ellard
VP Business Integration &
People
Extensive experience working as a management consultant with clients in the mining sector
including Mirabela Nickel and Barrick Gold as well as clients in executive education. Tom’s
experience in gold mining includes time spent as the Director, Project Management – Technical
Services for Goldcorp where he was focused on strategic projects and initiatives to improve health
and safety, geology, metallurgy and operational excellence.
Board of Directors
Ryan Beedie
Director
President of Beedie Development Group, a leader in
industrial and residential real estate development in
BC. Recipient the 2004 Business in Vancouver's '40
under 40', the Ernst & Young 2009 BC Entrepreneur
of the Year Award, the Queen Elizabeth II Diamond
Jubilee Medal in 2013 and Simon Fraser
University's Corporate Impact Award in 2015.
Robert
Atkinson
Vice Chairman
& Director
Over 30 years in the investment industry. Former
President & CEO of Loewen Ondaatje McCutcheon
& Co Ltd. Currently serves on the board of
numerous junior resource companies.
David Black
Director
Retired corporate and securities lawyer and former
partner with DuMoulin Black LLP. Currently serves
on the board of numerous junior resource
companies.
Donald
Siemens
Director
CA and former Partner-in-Charge of Thorne Ernst &
Whinney’s (now KPMG) Vancouver office Financial
Advisory Services Group. Currently an independent
financial advisor, specializing in Corporate Finance
and M&A, and serves on the board of numerous
junior resource companies.
William
Armstrong
Director
Geological Engineer with over 45 years experience
in the mining sector. Recently retired from Teck, as
General Manager, Resource Evaluations, and
responsible for evaluation of potential acquisitions
and divestitures, as well as involvement in feasibility
studies, construction and operations.
Analyst Target price
27
As at Aug, 2018
Source(s): S&P Global Market Intelligence. based on Analyst consensus estimates.
BrokerReport
Date
Discount
Rate
Target price
/ share (C$)Analyst Email
Haywood Securities Feb-18 6.0% $1.80 Geordie Mark [email protected]
GMP Securities 15-Feb-18 5.0% $2.65 Ian Parkinson [email protected]
Raymond James Financial 4-Apr-18 5.0% $2.50 Tara Hassan [email protected]
Beacon Securities 16-Aug-18 5.0% $4.00 Michael Curran [email protected]
BMO Capital Markets 24-May-18 5.0% $2.75 Andrew Mikitchook [email protected]
Canaccord Genuity 22-Apr-18 5.0% $3.50 Rahul Paul [email protected]
PI Financial 23-Jul-18 5.0% $2.60 Chris Thompson [email protected]
National Bank Financial 25-Apr-18 5.0% $3.00 Don DeMarco [email protected]
Desjardins Capital Markets 4-Jul-18 5.0 - 6.0% $2.75 Raj Ray [email protected]
Consensus Average $2.84
Appendices
29
AGB Liquidity Analysis – Jr. Producer
As at August 31, 2018
Source(s): Bloomberg, S&P Global Market Intelligence.
0.29%
0.36%
0.23%0.20%
0.37%
0.29%
0.38% 0.37%0.40% 0.41%
0.46%0.40%
0.44%
0.34%
0.41%0.38%
0.36%0.38%
0.55%
0.40% 0.38%0.44%
0.36% 0.34%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 Aug 2018
Avg. Daily Volume as a % of Free Float
AGB Peers
-0.15%
0.01%
-0.18% -0.18%
0.02%
-0.09%
-0.17%
-0.04%
0.01%
-0.03%
0.10%
0.05%
-0.20%
-0.15%
-0.10%
-0.05%
0.00%
0.05%
0.10%
0.15%
Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 Aug 2018
Avg. Daily Volume as a % of Free Float (Delta: AGB - Peers)
AGB: Liquidity levels
higher compared to
junior producing peers
Peer group includes: Mandalay, TMAC, Teranga, Guyana, Beadell, Ramelius, McEwen, Golden Star, Alacer,
Wesdome, Roxgold, DPM, Argonaut, Alio, Premier
Pre-Concentration Flowsheet for FMS and CH
30
Q2 and YTD 2018 Operating Results
31
Disclosure of operating results does not present comparative statistics for the prior year as MRC began producing gold in Q4 2017 and commenced commercial production effective March 1, 2018.
Three months ended June
30,2018
Six months ended June
30,2018
Operating data
Ore mined Tonnes 757,865 1,852,353
Strip ratio (waste to ore) 1.39 0.85
Mining rate (Total Material) Tonnes per day 19,921 18,903
Ore milled Tonnes 567,238 986,388
Head grade g/t Au 1.28 1.35
Recovery % 95.2 94.7
Mill throughput Tonnes per day 6,233 5,450
Gold ounce produced ozs. 22,269 40,452
Gold ounces sold ozs. 22,728 39,915
Milled head grade for Q2 2018 was 11% below life of mine reserve grade due to constraints in the pit where historical
tailings had to be removed and prevented access to higher grade ore for more than 6 weeks. Access to the higher grade
mining blocks was achieved by the end of June
Continue to see good reconciliation between the resource model grade and milled grade
Steady-state mill operations with throughput and recoveries that continue to exceed design criteria
Q2 production above guidance and supporting full year production guidance of 82,000-90,000 ounces as announced on
January 19, 2018
Q2 2018 Financial Results
32
(1) MRC commenced commercial production effective March 1, 2018. As such, only financial operating results from this date are recognized in the Company’s Statement of Income (Loss) and Other Comprehensive Income (Loss) for the
three and six months ended June 30, 2018. Financial operating results prior to that were capitalized to mine development within property, plant and equipment.
(2) The Non-IFRS performance measures for the six months ended June 30, 2018 include pre-commercial production operating results from January 2018 and February 2018. For accounting purposes, pre-commercial production
financial operating results have been capitalized to property, plant and equipment (refer to note 9 of the interim financial statements for the three and six months ended June 30, 2018). Refer to the “Non IFRS Performance Measures”
section in this news release and in the Company’s Management and Discussion Analysis for the six months ended June 30, 2018.
(3) As at June 30, 2018 total cash as presented above represents the cash and cash equivalents balance on the Company’s Condensed Consolidated Interim Balance Sheet of $16,075,980 plus the restricted cash balance of
$17,040,432. As at December 31, 2017 total cash as presented above represents the cash and cash equivalents balance on the Company’s Condensed Consolidated Interim Balance Sheet of $22,093,914 plus the restricted cash
balance of $10,593,432.
For the three months
ended June 30, 2018
For the six months ended
June 30, 2018
IFRS Measures(1)
Revenue CAD $35,888,640 CAD $48,770,102
Mine operating earnings 15,483,426 21,373,169
Cash generated from operating activities 19,393,031 23,607,463
Net income and comprehensive income 8,342,731 11,653,286
Earnings per share - basic 0.04 0.06
Earnings per share – diluted 0.04 0.05
Operating cash flow per share – basic 0.10 0.12
Operating cash flow per share – diluted 0.09 0.11
Key Balance Sheet Items
Total cash(3) CAD $33,116,412 CAD $32,687,346
Total assets 264,828,828 258,565,362
Current portion of long-term debt 47,278,643 32,210,417
Long-term debt 71,150,511 105,617,533
Non IFRS Performance Measures(2)
Total cash cost per ounce CAD $569 CAD $560
AISC per ounce 743 746
Average realized price per ounce 1,583 1598
Average realized cash margin per ounce 1,014 1,038
Average realize AISC margin per ounce 840 852
Plant Site
33
Tailings Management Facility
Touquoy Pit
Coarse Ore Stockpile
Facility
Plant
Crushing Circuit
Truck Shop
Admin Building
Laboratory Mining Offices
Plant Site
34
Tailings Management Facility
35
Touquoy Open Pit
36
Grade controlled by lithology and structure
37
Current pit shell
Detailed knowledge of the Touquoy deposit has provided us with an understanding of how the mineralization is controlled by rock
type – here concentrated within the grey argillite – and also by structure – for example this blue fault is a sharp boundary between
ore and waste, and may represent part of the plumbing system that fed gold-bearing fluids into the argillites.
Greywacke
Argillite
3D Geology: Touquoy Pit
How Do We Approach The Business Differently?
38
The gold development business is really no different to other businesses – it's about risk management,
capital discipline and execution
There are more risk management tools in mining in the gold sector
• Grade control drilling in open pits provides higher data density for improved precision
for ore and waste definition in advance of mining and capital investment
• Open pit mining lower risk than underground
• Gold distribution in disseminated deposits is usually best modelled
with both geology AND modern statistical analysis
• EPC fixed price turn key contracts pass capex
over-run risk to contractor’s balance sheet
39
Corporate Head Office:Suite 3083, Three Bentall Centre, 595 Burrard Street,
Vancouver, BC, V7X 1L3 +1 604 689 5564
Sean Thompson, Director Investor Relations
Direct: +1 778 375 3125
Toll Free: 1 877 689 5599