Unlocking Çöpler’s Value Pursuing POX as sulfide ore ... · Pursuing POX as sulfide ore...
Transcript of Unlocking Çöpler’s Value Pursuing POX as sulfide ore ... · Pursuing POX as sulfide ore...
TSX: ASR / ASX: AQG
Unlocking Çöpler’s Value
Pursuing POX as sulfide ore processing method
Investor Road Show - November 2013
Rod Antal, Chief Executive Officer
Howard Stevenson, President and Chief Operating Officer
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Cautionary Statements
FORWARD-LOOKING STATEMENTS Except for statements of historical fact relating to Alacer Gold Corp. (“Alacer”), certain statements contained in this
presentation constitute forward-looking information, future oriented financial information, or financial outlooks (collectively "forward-looking information") within the
meaning of Canadian securities laws. Forward-looking information may be contained in this presentation and Alacer's public filings. Forward-looking information
often relates to Alacer's future outlook and anticipated events or results and, in some cases, can be identified by terminology such as "may", "will", “could”, "should",
"expect", "plan", "anticipate", "believe", "intend", "estimate", “projects”, "predict", "potential", "targeted", "possible", "continue", "objective" or other similar
expressions concerning matters that are not historical facts. Forward-looking information contained in this presentation and other Alacer filings which may prove to
be incorrect, include statements concerning, among other things, additional sale proceeds to be received from Metals X as a result of the working capital
calculation; the continued listing of Alacer shares on the ASX; the generation of free cash flow and payment of dividends; matters relating to proposed exploration;
production, cost and capital expenditure guidance and ability to target high grade ore bodies; announcements concerning proposed projects; the study,
development and construction of proposed mines and process facilities; and the preparation and dissemination of technical studies. Such forward-looking
statements are based on a number of material factors and assumptions, which Alacer believes are reasonable, including, but not limited in any manner, to those to
disclosed in any other of Alacer’s public filings, and include the inherent speculative nature of exploration results; the ability to explore; governmental relations;
commodity prices; the ultimate determination of and realization of mineral reserves; existence or realization of mineral resources; the development approach;
availability and final receipt of required approvals, titles, licenses and permits; and supplies; foreign currency exchange rates; interest rates; access to capital
markets and associated cost of funds; lack of social opposition to the mines or facilities; lack of legal challenges with respect to the property of Alacer; the timing
and amount of future production and ability to meet production targets; timing and ability to produce studies and analyses; capital and operating expenditures;
availability of sufficient financing; the ultimate ability to mine, process and sell mineral products on economically favorable terms and any and all other timing,
exploration, development, operational, financial, budgetary, economic, legal, social, regulatory and political factors that may influence future events or conditions.
Actual results may vary from such forward-looking information for a variety of reasons, including but not limited to risks and uncertainties disclosed in other Alacer
filings at www.sedar.com. Forward-looking statements are based upon management’s beliefs, estimate and opinions on the date the statements are made and,
other than as required by law, Alacer does not intend, and undertakes no obligation to update any forward-looking information to reflect, among other things, new
information or future events.
The exploration results and Mineral Resources disclosure in this presentation have been compiled and approved by Mr. James Francis, BSc (Hons) Geology and
MSc Mining Geology, MAusIMM, MAIG, Mining and Geology Manager who is a full-time employee of Alacer. The other scientific and technical information in this
announcement is based on information compiled by Robert D. Benbow, PE, who is a full-time employee of Alacer Gold. Mr. Francis has sufficient experience
which is relevant to the style of mineralization and type of deposit under consideration and to the activity which is being undertaken to qualify as a Competent
Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” and a Qualified
Person pursuant to NI 43-101. Mr. Benbow has sufficient experience with respect to the technical and scientific matters set forth above (other than those matters
related to mineral resources and reserves) to be a “qualified person” for the purposes of NI 43‐101. Messrs. Francis and Benbow consent to the inclusion in this
presentation of the matters based on this information in the form and context in which it appears.
This presentation does not represent a solicitation or offer to sell securities. All dollars in this presentation are US$’s.
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The New Alacer
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Çöpler is in industry’s lowest cost quartile
Q3 Record Production of 81,059 ounces with Total Cash Costs1 of $342/oz
2013 revised oxide attributable production guidance of 192,000 to 200,000
ozs at Total Cash Costs1 $405 to $425/oz
Strong Balance Sheet
≈$263 million in cash and cash equivalents
No debt
Significant Exploration Portfolio
14 exploration properties across Turkey
Over 79,000 hectares of holdings
Focusing on targets that provide highest return
Leveraging a world-class asset base in Turkey
1 Total Cash Costs is a non-IFRS financial performance measure with no standardized definition under IFRS. For further information and a detailed
reconciliation, please see the “Non-IFRS Measures” section of the MD&A for the three month period ended September 30, 2013.
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Recent Accomplishments
Scorecard
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Çöpler achieves record Q3 production
Sold Australian Business Unit for A$40M cash
Upgraded Çöpler 2013 oxide production guidance by 15%
Confirmed solid oxide production profile thru 2017
Committed to POX DFS
Reduced overhead by ≈$16M per annum
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Market Cap ≈$800M
Shares on Issue 290M
Fully Diluted 292M
Turnover ≈2.1M shares/day
Key Shareholder Pala Investments 19.9%
Cash ≈$263M at October 31, 2013
Debt Nil
Working Capital ≈$315M at October 31, 2013
Alacer Current Position
Strong balance sheet and cash position
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Strategic Advantage in Turkey
Quality exploration portfolio across the country
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Proven track record permitting, constructing, commissioning and operating a
mine in Turkey
Joint venture with Turkish company Lidya Mining provides strategic advantage
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Europe’s largest gold producer
20% corporate tax rate
Development incentive tax credits
Gold royalty ≈2.6%
Modern mining law
Real GDP growth > 5% per year for past decade
Actively investing in infrastructure
Turkey: Great Mining Jurisdiction
Pro-mining Investment
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New hydroelectric dam below Çöpler Mine
New provincial international airport
New highway past Çöpler Mine
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Çöpler – Continues to Exceed Expectations
Q3 Results
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Q3 2013: 81,059 ounces a 19% increase over Q2 2013
Q3 Total Cash Costs1 of $342/ounce2, a 13% decrease over Q2 2013
All-in Costs1 of $701/ounce, which includes $241/ounce of one-time
sustaining capital project costs
1 Total Cash Costs and All-in Costs are non-IFRS financial performance measures with no standardized definitions under IFRS. For further information,
see the “Non-IFRS Measures” section of the MD&A for the three month period ended September 30, 2013.
2 Includes one-time royalty credit of $68/ounce recorded in the third quarter
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Çöpler Non-Controlling Interest (ozs)
Çöpler Attributable (ozs)
Total Cash Costs ($/oz)
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Lowest Quartile All-in Cost
Alacer sits in 2nd Place
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Alacer sits second lowest on
the global all-in cost curve
2014 Global All-in Cost
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Outstanding results to date during 2013
Increased guidance by ≈15%
Total Cash Costs remaining <$425/ounce
Supports new strategy of focusing on Turkey
2013 capex includes construction of SART plant and clay-handling circuit
Lower sustaining capex after 2013
Increased Production Guidance
Çöpler setting record production
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2013
Calendar Year
Attributable1
Gold Production
(ounces)
Cash
Operating Costs2 ($/oz)
Total
Cash Costs2 ($/oz)
Attributable
CapEx
($ millions)
Revised Guidance 192,000 to 200,000 375 to 390 405 to 425 unchanged
Previous Guidance 162,000 to 178,000 340 to 375 385 to 425 52
1 Attributable gold ounces and attributable capital expenditures are reduced by the 20% non-controlling interest at Çöpler
2 Cash Operating Costs and Total Cash Costs are non-IFRS financial performance measures with no standardized definitions under IFRS. For further information,
see the “Non-IFRS Measures” section of the MD&A for the three month period ended September 30, 2013.
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New production profile is based on Mineral Resources as at June 30, 2013
Removes uncertainty around heap-leach production profile
Provides strong cash flow to make investment decisions
Çöpler Oxide Production Profile
Steady production outlook
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Çöpler 2014 2015 2016 2017
Waste tonnes mined (100%) (millions) 27 27 27 21
Sulfide tonnes mined (100%) (millions) 1.0 1.5 2.3 3.8
Oxide ore tonnes treated (millions) 6.5 6.6 6.5 6.1
Head grade (g/t gold) 1.4 1.1 1.0 1.1
Heap leach gold ounces produced (100%) (‘000’s) 200 160 140 150
Heap leach gold ounces produced (attributable) (‘000’s) 160 130 110 120
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Sulfides are 62% of 120.9 million total tonnes of M+I Resource
POX has highest gold recoveries of 94%
5,000tpd plant – option to scale up
Lower capital intensity
DFS underway and to be complete by June 2014
Commercially proven technology for whole ore applications
Whole Ore Pressure Oxidation
Optimal processing method for Çöpler sulfides
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2011 POX PFS (8,000tpd) demonstrated positive economic returns Gold Recovery = 94%
Average Sulfide Gold Grade = 2.2g/t
Capital Expenditure = $410M
Internal Rate of Return = 25%
Flat Life-of-Line Gold Price = $1,038/ounce
Average Annual Production = 210,000ozs
Mine Life = 11 years
Current market conditions require prudent approach
Exhaustive and disciplined analysis of all test work to ensure best
processing decision
Extensive Sulfide Studies
Confident that POX is best for Çöpler
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Çöpler sulfide ore is highly refractory
≈80% of gold associated with sulfide ore is completely
encapsulated in fine-grained sulfide minerals
Poor gold recoveries (15-40%) result when non-oxidative
processes are used (direct cyanidation, fine-grinding)
Flotation test work provided recoveries of 75-80% to a low-
grade concentrate
Best processing solution for Çöpler is to oxidize the sulfide ore
Çöpler Sulfide Ore
Characteristics
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Sulfide Processing Options
POX provides superior economic outcome
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Capital Costs Operating Costs
Çöpler Gold
Recovery Test
Results (%)
Industry
Benchmark
Recovery (%)1,2
Whole Ore High Temp
Pressure Oxidation (POX) High Moderately High 94 95
Whole Ore Processing
High (two-stage
roasting on par with
POX)
Moderately High 80 88-90
Concentrate Roasting Medium-High High 76-78
Concentrate High Temp
Pressure Oxidation Medium-High High 75 80-82
Concentrate Biological
Oxidation Medium High N/A 76-78
Concentrate Albion Medium High 60 70-72
Concentrate Activox Medium High N/A 76-78
1 Source: John O. Marsden LLC, dba Metallurgium
2 Includes recovery loss through flotation circuit for concentrate treatment options.
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Low flotation recoveries make whole ore processing options
more economic
POX and Two-Stage Roasting have similar capital and operating
costs
POX provides ≈15% better gold recoveries than roasting
POX provides greatest degree of oxidation
POX provides the most rapid oxidation of sulfides (≈60 minutes)
Sulfide Processing Options
POX provides optimal processing solution
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Çöpler Mine & District
Organic growth
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Çöpler Mine Exploration Defining oxide resource limits
Revised $7M exploration budget
Çöpler District Exploration First year of systematic exploration 2012
Large area with significant gold-in-soil anomalies (>30ppb) identified
Limited early-stage drill testing confirms oxide gold mineralization
Soil geochemical surveys to be completed over remaining >80% of Çöpler District tenure in 2013
$13M exploration budget to focus on drilling near-surface oxide targets
Early-stage exploration indicates excellent
potential for oxide gold discoveries
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Exceptional Regional Exploration Potential
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15 years in Turkey gives Alacer early mover advantage
Involved in 14 exploration projects across Turkey
Cevizlidere
Expect to re-commence drilling later this year, after 5-year hiatus
Large porphyry Cu-Au deposit southeast of Çöpler
Tethyan Belt has excellent mineral potential
Leveraging our expertise
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Unlocking Çöpler’s Value
For further information, please contact:
Lisa Maestas North America: +1-303-292-1299
Roger Howe
Australia: +61-2-9953-2470
Pursuing POX as sulfide ore processing method
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Appendix
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Çöpler Resource
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M+I Resource = 8.5M contained ounces of gold
Mineral Resource for the Çöpler Deposit (100%) as at June 30, 2013
Gold
Cut-off
Grade
(g/t)
Material
Type
Resource
Category
Tonnes
(million)
Gold
Grade
(g/t)
Contained
Gold
(million
ounces)
Silver
Grade
(g/t)
Copper
Grade
(%)
Sulfur
Grade
(%)
0.3 Oxide
Measured 16.3 1.7 0.9 3.7 0.2 0.3
Indicated 36.5 0.8 1.0 1.4 0.1 0.2
Measured + Indicated 52.8 1.1 1.8 2.1 0.1 0.3
Inferred 25.7 0.6 0.5 1.4 0.1 0.4
0.8 Sulfide
Measured 74.0 1.6 3.8 4.6 0.1 3.9
Indicated 46.9 1.5 2.2 4.4 0.1 3.9
Measured + Indicated 120.9 1.5 6.0 4.5 0.1 3.9
Inferred 23.9 1.2 1.0 4.6 0.1 3.0
Variable Stockpiles Measured 20.4 1.0 0.7
Variable Total
Measured 110.7 1.5 5.4 4.5 0.1 3.2
Indicated 83.4 1.2 3.2 3.1 0.1 2.3
Measured + Indicated 194.2 1.4 8.5 3.8 0.1 2.8
Inferred 49.6 0.9 1.4 3.0 0.1 1.7
Note: Resources are quoted after mining depletion and are inclusive of reserves. Resources are shown on a 100% basis, of which Alacer Gold owns 80%. Stockpiles include both
oxide and sulfide stockpiles and residual ore stacked on the heap leach stockpiles. Rounding errors will occur. Further information on this resource estimate is in the
announcement dated July 25, 2013.
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