Kingsgate Consolidated Limited · ASX:KCN
Kingsgate Consolidated — Sydney Mining Club (July 2011)
43 slides from Kingsgate Consolidated's conference presentation, Jul 7, 2011
Slide 1: Growing a Premier Mid-Tier Gold Miner in Asia/Pacific
Kingsgate Consolidated Limited For personal use only Growing a Premier Mid-Tier Gold Miner in Asia/Pacific Gavin Thomas Sydney Mining Club July 2011
Slide 2: Disclaimer
Disclaimer For personal use only Forward Looking Statements: These materials include forward looking statements. Forward looking statements inherently involve subjective judgment & analysis & are subject to significant uncertainties, risks & contingencies, many of which are outside of the control of
Slide 3: Premier ASX Mid-Tier Gold Miner
Premier ASX Mid-Tier Gold Miner For personal use only Why Gold and silver Production Growth Diversified Production Resource Growth Strong Cashflow Growth Opportunities
Slide 4: Why Gold?
US$ Why Gold ? $1600 • Flat/decreasing mine supply For personal use only $1400 • Growing physical demand • China $1200 • Central bank buying • Growing investment demand $1000 • Inflation hedge $800 • Currency protection • Safe haven/asset class $600 $400 $200 (Source: Dr M Murenbeeld) $0 1971 1975 1
Slide 5: Is This a Gold Bubble?
Is This a Gold Bubble? For personal use only Relative Performance Jan 1980 2000% $850 1500% 1000% 500% 1972-1985 May 2011 $1,572 0 1999-Present Time since beginning of Cycle (Source: Bloomberg)
Slide 6: Is This a Gold Bubble? No!
Is This a Gold Bubble? No! For personal use only Relative Performance Jan 1980 2000% $850 1500% 1000% 500% 1972-1985 May 2011 $1,572 0 1999-Present Time since beginning of Cycle (Source: Bloomberg)
Slide 7: Gold: Over Talked & Under Invested
Gold: Over Talked & Under Invested For personal use only Global Market • Bond Market : $91,200 Bn • Equity Market : $41,500 Bn Size • Total Gold Market : $1,100 Bn Gold Market • ETF’s, coins & bars ~$200 Bn • China imported 200t of gold in Jan 11 Investment Assets (~50% of world production) Growing
Slide 8: Chinese Gold Demand
Chinese Gold Demand For personal use only Total Gold Demand China Outstrips western world demand for the first time in 2010 Gold Investment Demand China catching up fast
Slide 9: Global Gold Production
Global Gold Production Mine Gold For personal use only Production (t) Price 3,000 1,600 1,400 2,500 1,200 2,000 1,000 1,500 800 600 1,000 400 500 200 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (Source: USGS)
Slide 10: Gold Industry Discovery Profile
Gold Industry Discovery Profile For personal use only Number of Contained Discoveries Gold (MOz) 16 160 14 140 12 120 10 100 8 80 6 60 4 40 2 20 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 (Source: Newcrest)
Slide 11: Why Silver?
US$ Why Silver ? $50 • Silver is a unique precious metal For personal use only • High correlation to gold • Produced primarily as a by-product • Silver is a store of value $40 • Physical demand has risen significantly over the past few years • ETF demand continues at record levels • Silver is a vers
Slide 12: Pacific Rim of Fire - The Golden Harvest
Pacific “Rim of Fire” The Golden Harvest For personal use only Beijing Sado New York Tokyo Hehaughlin Hishikari Los Angeles Mulatos Monywa Loei Sepon Didipio Masbate Bangkok Atlas Bella Vista Miwah Mamut Tampakan Bau Toka Tindung Mt Kelian Gosowong Fruta del Norte Lebong Muro Awak Ok Tedi Lihir Pier
Slide 13: Kingsgate Growth Strategy
Kingsgate Growth Strategy 2010 - One Mine One Country For personal use only Chatree
Slide 14: Thai Political Change
Thai Political Change For personal use only Landmark victory by Puea Thai Party with 265 seats out of 500 seats Formed coalition to strengthen majority Chatree Led by Yingluck Shinawatra sister of Thailand former prime minister Thaksin Bangkok Shinawatra Decisive victory should lead to a more politi
Slide 15: Chatree – Thai Gold Belt
Chatree – Thai Gold Belt For personal use only Chatree Thailand World Class Gold Bangkok Province Thai Gold Belt Phitsanulok Province First Mover Advantage Granted Phetchabun Province 70 km Chatree Phichit 1,300 km2 Tenement Province Package Pending Multiple Targets Nakhonsawan Province
Slide 16: Chatree - World Class Deposit
Chatree - World Class Deposit For personal use only World Class Gold Deposits are +5 Moz Chatree ~6Moz to date & growing Section5 km including mined to date 1.9 Moz Reserve 4.3 Moz Resource* (*As at 30 June 2010) 1 km
Slide 17: Organic Growth - Expanding Pits
Organic Growth - Expanding Pits For personal use only Chatree Grade/Tonnage Variance Versus Gold Price* Gold Price Gold Grade Tonnes Contained Gold (US$) (g/t) (Millions) (Moz) 1050 0.98 71 2.2 1150 0.96 78 2.4 1250 0.85 100 2.7
Slide 18: Underground Potential
Underground Potential For personal use only
Slide 19: Exploration Potential
Exploration Potential Phitsanulok For personal use only Province Current reserves within Chatree and Chatree North leases Phichit Province CHATREE NORTH Open to the North, East and Phetchabun South Province Ban Ban Significant near mine potential Kho Din Dong Long CHATREE 1 Km
Slide 20: Capital Projects Under Pressure
Capital Projects Under Pressure For personal use only
Slide 21: Chatree Expansion on Schedule and Under Budget
Chatree Expansion on Schedule And Under Budget For personal use only Chatree processing plant capacity increase from 2.3 to +5 Mtpa Completion expected in September Quarter 2011 Increase production rate up to 200,000 ounces per year Current Plant 2.3 Mtpa What’s Next? +2.7 Plant expansion to Mtpa +2
Slide 22: Kingsgate Diversifies
Kingsgate Diversifies 2011 - Two Mines Two Countries For personal use only Chatree Challenger
Slide 23: Challenger Gold Mine Turn Around Story
Challenger Gold Mine Turn Around Story For personal use only Acquired by KCN in Feb 2011 Underground mine in Central South Australia Annual production ~100koz Reserves ~420koz Resources of ~950koz Strong reserve increase since commencement and further reserve growth anticipated
Slide 24: Challenger Mineralised Structures
Challenger Mineralised Structures For personal use only NE SW Ventilation Shaft Challenger RL(m) 1000 M1 800 Level M2 Exploration Drive 800 M3 Identified 600 Structures 400 280 Level Exploration Drive 200 Open Upside Down 0 Dip -200 Open -400 Down Dip Long Section
Slide 25: Challenger Exploration Drilling
Challenger Exploration Drilling E W Ventilation Challenger For personal use only Shaft Challenger SIGNIFICANT CHALLENGER WEST INTERSECTIONS from surface and underground drilling West RL(m) Hole ID Interval Gold Comments Intercept Other (m) (g/t) (g/t gold) RL Structures 1000 1 1 08CDDH0083 1.21 251.
Slide 26: Challenger Upside Potential
Challenger Upside Potential E W Ventilation Challenger For personal use only Shaft Challenger West RL(m) Other Structures 1000 820 Level Area of current drilling M1 800 M2 800 Level Upside M3 Exploration Drive 600 400 280 Level Exploration Drive 200 Open Open Down Down Dip 0 Dip Open -200 Down Upsid
Slide 27: Challenger Area Opportunities
Challenger Area Opportunities For personal use only Challenger – single point gold anomaly Additional structures identified for follow-up Long term exploration Challenger potential in mine vicinity
Slide 28: Kingsgate Grows
Kingsgate Grows 2013 Three Mines Three Countries For personal use only Chatree Challenger Arqueros
Slide 29: Arqueros Project Well Located
Arqueros Project Well Located For personal use only Choquelimpie Significant experience in the gold and copper belts El Tesoro Acquired 70% of Laguna in Feb 2011 San Cristobal Arqueros project located in the world- class Maricunga Gold-Silver Belt Maricunga Belt Host to over 70Moz gold resources Pro
Slide 30: Acquired Esperanza from Kinross
Acquired Esperanza from Kinross For personal use only Chimberos Pit Esperanza Considerable surface rights and Adds ~20Moz of silver resources mine infrastructure (~340koz gold EQ) Teterita Chimberos Satellite mineralisation and Earlier plant commissioning and increased exploration potential faster r
Slide 31: Fast Track to Production
Fast Track to Production For personal use only 1.6 Million ounces gold EQ* (95 Million ounces silver EQ) Average grade of 1.5g/t* gold equivalent (cut-off: 0.7 g/t g/e) Target production of 100,000oz pa* gold equivalent by open cut mine 19,000m definition drilling completed Feasibility study commenc
Slide 32: Kingsgate to Deliver Strong Production Growth
Kingsgate to Deliver Strong Production Growth For personal use only 500 Gold Production Growth 400 (in ‘000 ounces) 300 Chatree 200 100 0 2008 2009 2010 2011F 2012F 2013F 2014F Chatree Challenger Arqueros (100%) Challenger Arqueros
Slide 33: Premier Mid Tier Gold Producer
Premier Mid Tier Gold Producer For personal use only Diversified Thailand - Chatree mine and expansion Production Australia - Challenger Gold Mine and Growth Chile - Arqueros Au/Ag project (KCN 70%) Resource • In-pit and u/g potential at Chatree Growth • Prospective u/g zones at Challenger Thailand
Slide 34: Kingsgate Consolidated Limited
Kingsgate Consolidated Limited For personal use only Shares: 134 Million Market Cap: ~A$1.1Bn ASX: KCN OTC: KSKGY www.kingsgate.com.au
Slide 35: Appendix: General Disclaimer
Appendix For personal use only General Disclaimer: The information contained in this presentation is for informational purposes only and does not constitute an offer to issue, or arrange to issue securities or other financial products. The information contained in this presentation is not investment
Slide 36: Income Statement (A$M)
Income Statement (A$M) For personal use only A$ Million : Dec 10 HY Dec 09 HY Underlying Business Profit Total Revenue 66.2 88.5 Direct Costs (36.8) (42.8) Employee Benefits (6.8) (5.7) D&A (5.4) (7.6) Finance Costs (0.6) (1.1) Exploration Expenses 0 (0.1) Forex (9.3) (8.0) Inventory 13.1 14.2 Other
Slide 37: Corporate Structure
Corporate Structure For personal use only KINGSGATE 100% 100% 70% Dominion Laguna KCN Capital Gold Operations Resources 49% 49% 49%** Phar Mai 51%* Issara Akara 51%* Sinphum Challenger Arqueros Exploration Mining Mining Co. Ltd. Gold Mine Project Limited Limited Limited 100% 100% Gold 51%* Chatree E
Slide 38: Thai Progressive Royalty Rate
Thai Progressive Royalty Rate For personal use only 20% 15% 10% US$1250/oz 5% 0% Baht/gm 0 400 600 1000 1500 2000 US$/oz 0 385 580 965 1445 1930 US$1.00=Baht 30, Jan 2011.
Slide 39: Working in Thailand
Working in Thailand For personal use only Asian Competitive Advantage Cost Comparisons – Thailand vs Australia Established Infrastructure Grid Power Open Pit Mining (US$): Sealed roads Waste: $1.70/t vs $2.50/t Lower cost support Ore: $3.40/t vs $4.00/t Skilled manufacturing “Buy Thai” sourced suppl
Slide 40: Corporate Social Responsibility
Corporate Social Responsibility For personal use only World Safest Gold Mine Over 8 years – No incidents Zero Environmental Incidents ISO Standards on all activities Zero Accident Award Only mining company granted Thailand National 2010.jpg Occupational Social Accountability SA8000 Safety & Health A
Slide 41: Chatree
Chatree For personal use only Chatree Ore Reserves as at 30 June 2010 (>0.4g/t gold cut-off grade) Source Category Tonnes Gold Grade Silver Grade Gold Contained Silver Contained (millions) (g/t) (g/t) (million ounces) (million ounces) From Pits Proved 37.4 1.00 9.5 1.20 11.42 Probable 18.7 0.98 8.4
Slide 42: Challenger
Challenger For personal use only Challenger Ore Reserves as at 30 June 2010 Source Category Tonnes Gold Grade Gold Contained (thousands) (g/t) (thousand ounces) From Mine Proved 318 5.8 59 Probable 1,834 6.0 352 Stockpiles 157 2.1 9 Challenger Total Total 2,310 5.7 420 Challenger Mineral Resources a
Slide 43: Arqueros
Arqueros For personal use only JORC Sep.2010 Million Grades, g/t Ounces, thousands Category Tonnes Gold Silver AuEQ60 Gold Silver AuEQ60 Cut- Cut-off grade 0.5 g/t Au EQ60 Indicated 7.0 0.35 83 1.73 78 18,596 387 Inferred 24.6 0.32 47 1.11 253 37,506 870 Total 31.6 0.33 55 1.24 332 56,103 1,258 Cut-
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