MD’s PRESENTATION TO ANNUAL GENERAL MEETING … · MD’s PRESENTATION TO ANNUAL GENERAL MEETING....
Transcript of MD’s PRESENTATION TO ANNUAL GENERAL MEETING … · MD’s PRESENTATION TO ANNUAL GENERAL MEETING....
19 November 2013
The Manager Company Announcements Office ASX Limited PO Box H224 Australia Square SYDNEY NSW 2000
Dear Sir/Madam,
MD’s PRESENTATION TO ANNUAL GENERAL MEETING
Please find attached a copy of the presentation to be given by Saracen Mineral Holdings Limited’s Managing Director, Raleigh Finlayson, at today’s Annual General Meeting.
Yours sincerely
G F Kaczmarek Company Secretary
Saracen Mineral Holdings Ltd
ACN 009 215 347 Level 4, 89 St Georges Terrace
Perth, WA 6000 Australia
Telephone (61 8) 6229 9100 Facsimile (61 8) 6229 9199
For
per
sona
l use
onl
y
RALEIGH FINLAYSON : MANAGING DIRECTOR
ASX GOLD PRODUCER AGM 2013
For
per
sona
l use
onl
y
Qualification 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. Exploration targets presented and discussed here are conceptual in nature and there has been insufficient exploration to define a Mineral Resource (“Resource”) or Ore Reserve (“Reserve”). 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 JORC. Refer to the second last slide of this presentation for the relevant Competent Person statements. Resources are inclusive of Reserves. Some of the comments, forecasts, targeted outcomes and predictions made, or that might be interpreted from the comments herein, are subjective and speculative, in part because such is the very nature of gold exploration and exploitation, and in part also because geoscientists and engineers can be very optimistic about the future of the exploration and other work programs they are involved in. Such optimism can lead to erroneous judgments as to future results and valuations, and in many cases external factors may change the outcome. Take care to question and carefully evaluate any judgments you might make, on the basis of this presentation, 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 this presentation 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 this presentation, its accuracy or reliability. This presentation should not be construed as an offer or mooted offer in relation to Saracen securities. United States This document may not be released or distributed in the United States. This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. Any securities described in this document have not been, and will not be, registered under the US Securities Act of 1933 (as amended) and may not be offered or sold in the United States except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws.
For
per
sona
l use
onl
y
Corporate Structure CAPITAL STRUCTURE
ASX Code SAR
Shares on Issue 595m
Share Price at 12/11/13 A$0.22
Liquidity (Daily turnover) 4.1m
Market Cap A$131m
Cash & Bullion A$27.6m
Debt at 30/09/13 A$22.0m
Net Cash at 30/09/13 A$5.6m
Enterprise Value at 30/09/13 A$125m
Tax Benefits +A$60m
Hedging 159,050oz @ A$1,687/oz
Hedge Value assuming A$1,426/oz A$31.4m
BO
ARD
Guido Staltari Non-Exec Chairman
Raleigh Finlayson Managing Director
Barrie Parker Non-Exec Director
Martin Reed Non-Exec Director
Samantha Tough Non-Exec Director
Geoff Clifford Non-Exec Director
MG
MT Gerry Kaczmarek CFO
Craig Bradshaw COO
KEY METRICS
Reserves 0.9 Moz
Resources 3.9 Moz
EV / Reserves A$145/oz
EV / Resources A$32/oz
For
per
sona
l use
onl
y
Shareholders & Broker Coverage SHAREHOLDERS
Van Eck Global 8.1%
Paradice Investments 7.4%
Vinva Investments Mgt 5.1%
Timpetra Resources (ASX:TPR) 5.0%
BROKER COVERAGE - Analysts
Evans & Partners :- Cathy Moises
Canaccord Genuity :- Gary Watson
Ord Minnett :- David Brennan
Euroz :- Andrew Clayton
Phillip Capital :- Andrew Shearer
RBS Morgans :- James Wilson
Merrill Lynch BoA :- Stephen Gorenstein
Argonaut :- Adam Miethke
Baillieu Holst :- Sophie Spartalis
Source: Orient Capital
For
per
sona
l use
onl
y
Key Assets:
KALGOORLIE
Red October: • High Grade Underground Mine • 48koz planned for FY2014 • “All in” costs sub A$1,200/oz • Cash Costs sub A$900/oz • Located in a World Class Region • Significant exploration program
recently commenced aimed at doubling mine life
Carosue Dam: • 2.4mtpa modern Processing Facility • Potential to upgrade plant to 3.2mtpa • Base load feed from Whirling Dervish
containing 273koz of ore reserves • Capital Pre-strip 100% complete • Conservative reserve factors applied • Open pit mill feed for next 3 years • Significant exploration upside potential
For
per
sona
l use
onl
y
Headline goes here FY2013 Production
FY2013 Gold Production
Deep South Open Pit FY2013 Reconciliation
Karari Open Pit FY2013 Reconciliation
For
per
sona
l use
onl
y
Headline goes here FY2013 Red October Production
• The Red October Mine delivered 109,000t of ore at an average grade of 8.4g/t for 29,610 ozs in FY2013 • Production forecast to ramp up to 300,000t of ore at an average grade of 5.0g/t for 48,000 ozs in FY2014
For
per
sona
l use
onl
y
Headline goes here FY2013 Production & Costs
Through numerous actions resulting from the Strategic Review undertaken during the year, the operations have achieved a 40% reduction in cash costs per ounce and a 30% reduction in “all-in” sustaining cash costs per ounce, through a combination of lower costs and increased gold production.
For
per
sona
l use
onl
y
FY2013 Share Price Performance
Source: Commsec
ASX:SAR
For
per
sona
l use
onl
y
Headline goes here Last 5 Qtr’s Production & Costs
30.4koz 32.0koz 36.4koz 37.3koz
41.2koz
$1,363
$1,201
$968
$824
$653
$1,733
$1,607
$1,356
$1,208 $1,111
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
Sep 12 Qtr Dec 12 Qtr Mar 13 Qtr Jun 13 Qtr
A$/o
z
A$m
Revenue (A$m) Cash Costs (A$m)
Sustaining Capital (A$m) Growth Capital (A$m)
Production (koz) Cash Costs (A$/oz)
"All in" Sustaining Cash Costs (A$/oz)
Sep 13 Qtr
For
per
sona
l use
onl
y
FY2014 Share Price Performance
ASX:SAR
Source: Commsec For
per
sona
l use
onl
y
Headline goes here Saracen’s Vision – 5 Point Plan
Our Vision – “$60m Free cash flow by FY2015”
Advance Existing Operations
Pursue M&A Opportunities
Advance Exploration
Program
Manage Active Hedging Strategy
Project Development
Pipeline
Our 5 year plan – Focus on FCF generation
Delivered in an economically disciplined, safe and environmentally responsible manner For
per
sona
l use
onl
y
Headline goes here Saracen’s Vision – 5 Point Plan
Our Vision – “$60m Free cash flow by FY2015”
Advance Existing Operations
Pursue M&A Opportunities
Advance Exploration
Program
Manage Active Hedging Strategy
Project Development
Pipeline
Our 5 year plan – Focus on FCF generation
Delivered in an economically disciplined, safe and environmentally responsible manner For
per
sona
l use
onl
y
Headline goes here Guidance Cashflows
Only includes Reserves. Red October not currently factored into FY2015. See Appendix for cost definitions.
For
per
sona
l use
onl
y
Headline goes here Whirling Dervish F
or p
erso
nal u
se o
nly
Headline goes here Whirling Dervish – Cross Section F
or p
erso
nal u
se o
nly
Headline goes here Red October F
or p
erso
nal u
se o
nly
Headline goes here Red October - Longsection F
or p
erso
nal u
se o
nly
Headline goes here Guidance FY2014 & FY2015
Only includes Reserves. Red October not currently factored into FY2015. See Appendix for cost definitions.
For
per
sona
l use
onl
y
Headline goes here Global Hedging since 1990 F
or p
erso
nal u
se o
nly
Headline goes here Pick a Gold Price… Saracen has the Strategy 5 YEAR GOLD PRICE IN AUD/oz
For
per
sona
l use
onl
y
Headline goes here Saracen’s Vision – 5 Point Plan
Our Vision – “$60m Free cash flow by FY2015”
Advance Existing Operations
Pursue M&A Opportunities
Advance Exploration
Program
Manage Active Hedging Strategy
Project Development
Pipeline
Our 5 year plan – Focus on FCF generation
Delivered in an economically disciplined, safe and environmentally responsible manner For
per
sona
l use
onl
y
> 6 years of mine life
Deep South Underground Probable Reserves 936,000t @ 4.0g/t
120,000oz
18m @ 7.4g/t
Saracen Mineral Holdings Hawthorn Resources
6m @ 12.2g/t
• 2013 Reserves update based on A$1,400/oz gold price (2012: A$1,500/oz) • Over 6 years of mine life, with hedging protection at an average price of
A$1,687/oz for the first three years (FY2014 – FY2016) • Significant upside potential at key projects including Karari, Whirling Dervish,
Blue Manna (not yet in reserves), Deep South and Red October
For
per
sona
l use
onl
y
Exploration - Karari
26m @ 7.5g/t
9m @ 6.7g/t
16m @ 5.1g/t
Stage 1 Exploration Target
Stage 2 Exploration
Target
Mined Cutback
11m @ 5.0g/t
13m @ 5.0g/t
13m @ 7.9g/t
Currently being drilled and/or results pending/being validated
70m @ 2.0g/t (down dip)
For
per
sona
l use
onl
y
Headline goes here Karari – Whirling Dervish Trend
13m @ 5.0g/t 13m @ 7.9g/t
2.4mtpa Processing Plant (offset to trend)
For
per
sona
l use
onl
y
Headline goes here Exploration – Blue Manna F
or p
erso
nal u
se o
nly
Headline goes here Exploration – Blue Manna F
or p
erso
nal u
se o
nly
Deep South - Longsection
Deep South Underground Probable Reserves 936,000t @ 4.0g/t
120,000oz
18m @ 7.4g/t
Saracen Mineral Holdings Hawthorn Resources
6m @ 12.2g/t
For
per
sona
l use
onl
y
Exp
lora
tion
– W
orld
Cla
ss R
egio
n
OPEN
OPEN
OPEN
OPEN
12km Sunrise Dam Red October
Source: AngloGold Ashanti
Source: AngloGold Ashanti
For
per
sona
l use
onl
y
Headline goes here Hedgebook Value and M&A
M&A Opportunities LESS MORE
For
per
sona
l use
onl
y
Summary LAST 3 MONTHS SHARE PRICE PERFORMANCE
60%
7%4%0%
(4%)(4%)(5%)(8%)
9%6%
(7%)(12%)(15%)
(27%)
(1%)(6%)
28%23%
10%3%
(7%)(9%)
(7%)1%
Saracen
DorayNorton
RegisSilver LakeEvolution
Northern StarFocus
PapillonTeranga
EndeavourPMI
ResolutePerseus
KingsroseMedusa
BeadellAlacer
OceanagoldTroy
KingsgateSt Barbara
S&P/TSX Global Gold IndexGold (US$/oz)
Aus
tral
ia
Wes
t Afr
ica
Asi
a O
ther
/ D
iver
sifie
d
Record Gold Production of 136,168 oz (FY2013)
Produced Operations 1 millionth ounce
40% reduction in cash costs (FY2013)
30% reduction in “all-in” sustaining costs (FY2013)
Entered into gold hedging facility of 200,000 oz at an average price of A$1,695/oz
Rising hedge price profile (up to A$1,750/oz in July 2016)
Falling cost profile (down to A$950/oz aisc in FY2015)
5 point plan to deliver long-term success to Saracen Shareholders:
1. Advance Existing Operations 2. Manage Active Hedging Strategy 3. Project Development Pipeline 4. Advance Exploration Program 5. Pursue M&A Opportunities F
or p
erso
nal u
se o
nly
Summary
Source: Argonaut
$0.53/sh or A$314m EV on peer average FCF margin
Over valued
Under valued
Free Cashflow Margin v Peers September Quarter 2013:
For
per
sona
l use
onl
y
Headline goes here Appendix – Cash Cost definitions F
or p
erso
nal u
se o
nly
Headline goes here Appendix – Resources Statement F
or p
erso
nal u
se o
nly
Headline goes here Appendix – Reserves Statement F
or p
erso
nal u
se o
nly
Headline goes here Appendix – Competent Person Statement F
or p
erso
nal u
se o
nly
Appendix - Trading Multiples
Evolution
St Barbara
Regis
Endeavour
Resolute
Oceanagold
Beadell
Silver Lake
Kingsgate
Teranga
Perseus
Alacer
Norton
Saracen
Medusa
Northern Star
Troy
DorayKingsrose
0
20
40
60
80
100
120
140
160
180
200
220
240
260
200 300 400 500 600 700 800 900 1,000 1,100
EV/Resource (A$/oz Au)
FY15 Cash Cost (US$/oz)
340
320
Saracen(FY13A)
Source: Lazard
(2)
For
per
sona
l use
onl
y