Red 5 — Q4 2020 Earnings Presentation
41 slides from Red 5's earnings presentation, Jan 28, 2021
Slide 1: Dec-20 Quarterly Presentation
Dec-20 Quarterly Presentation 28 January 2021 ASX Code: RED Mark Williams, Managing Director www.red5ltd.com
Slide 2: Competent Person's Statement and Disclaimer
Competent Person’s Statement and Disclaimer Competent Person Statements for JORC 2012 Mineral Resource and Ore Reserves The information in this presentation that relates to the Mineral Resources at the Siana open pit is extracted from the report titled Siana Gold Project – Open Pit Mining Review and
Slide 3: Red 5 Limited – a standout growth opportunity
Red 5 Limited – a standout growth opportunity ✓ Red 5 has two gold mines in one of the world’s safest and most prospective gold districts ✓ King of the Hills (KOTH) is a major Australian gold deposit ▪ Mineral Resource of 4.1Moz1 and Ore Reserve of 2.4Moz2 ✓ KOTH Final Feasibility Study2: ▪ 16-year
Slide 4: Red 5 Limited – corporate profile
Red 5 Limited – corporate profile Our Company Vision “To be a successful multi-operational exploration and mining company, providing benefits to all stakeholders, through the consistent application of technical excellence, and responsible and sustainable industry practices.” Shareholders Share price
Slide 5: ESG – enhancing governance and capability
ESG – enhancing governance and capability Ms Andrea Sutton, Non-Executive Director, appointed Nov-20 ▪ 25+ years experience with Rio Tinto and Energy Resources of Australia (ERA) ▪ Current Board Member of Infrastructure WA, ANSTO (Australian Nuclear Science and Technology Organisation) and NAWO (Nat
Slide 6: ESG – a company built on a strong safety culture
ESG – a company built on a strong safety culture ▪ No LTI’s for the December 2020 Quarter ▪ Continual engagement and focus on Safety ownership to address the current TRIFR spike through EHS Leading Indicator Programs, reinforcement of vital behaviours and personal safety training ▪ Darlot achieved r
Slide 7: FY21 Darlot transition year to satellite feed
FY21 Darlot transition year to satellite feed ▪ Dec-Qtr production 21,534oz, AISC A$2,181/oz1 ▪ FY21 production guidance1 revised to 80,000 – 85,000oz (previously 90,000 – 98,000oz) ▪ FY21 AISC guidance $2,150 - $2,280/oz ▪ Lower than expected mining rates and grade from the Darlot Underground, pred
Slide 8: Great Western mining starting in Feb-21
Great Western mining starting in Feb-21 ▪ Updated mineral resource1 ▪ 870kt @ 2.5g/t Au for 70koz ▪ Maiden Open Pit Ore Reserve1 ▪ 438kt @ 2.5g/t Au for 34.5koz contained gold ▪ Additional assays pending ▪ Underground Ore Reserve still to be established ▪ Deposit remains open at depth, deeper drilli
Slide 9: KOTH – Australia's next major gold mine
KOTH – Australia’s next major gold mine ✓ Final Feasibility Study highlights3: Australia’s top 10 gold deposits ▪ Initial 16-year mine life by Ore Reserve2 ▪ First production Jun-Qtr 2022 Mt g/t Moz Cadia 1480.0 0.5 22.5 ▪ First 4 years open pit and underground mining, peaking at 203koz in FY24 Bodd
Slide 10: KOTH geology is well understood
KOTH geology is well understood Mar-20 Mineral Resource1 Aug-20 Ore Reserve2 91Mt @ 1.4 g/t for 64.6Mt @ 1.2 g/t for 4.1Moz Au 2.4Moz Au ▪ Ore body hosted in a substantial granodiorite-ultramafic intrusion ▪ 4km long x 2km wide ▪ Historical understanding from previous open pit and underground mining
Slide 11: KOTH site activities commenced, orders placed
KOTH site activities commenced, orders placed A$M1 Processing and infrastructure 188 Owners costs 12 Sub-total 200 Contingency 19 Sub-total 219 Mining pre-strip 7 Mill casings in USA being loaded for transport Total (Real) capital cost 226 ▪ EPC fixed-price contract awarded to MACA Interquip ▪ Const
Slide 12: Camp to be ready for use in February 2021
Camp to be ready for use in February 2021 ▪ Camp construction progressing well ▪ First stage of village to be ready for use in Feb-21 ▪ All central facility buildings have been delivered ▪ 61 single person quarters (SPQs) installed (220 rooms) ▪ 35 SPQs and 3 laundries ordered for installation by en
Slide 13: Bulk earthworks for KOTH Plant commenced
Bulk earthworks for KOTH Plant commenced ▪ MACA Interquip mobilised to site ▪ Earthworks started in December 2020 ▪ Process plant equipment orders are being progressively issued ▪ Plate for CIL Tanks have been ordered ▪ Plant design on track ▪ Phase 2 EPC Notice of Award to be issued once Financing
Slide 14: Delivery of SAG Mill and Gyratory Crusher
Delivery of SAG Mill and Gyratory Crusher ▪ The 15MW SAG Mill, shell and motors have been shipped from Houston to Johannesburg for refurbishment and upgrade ▪ The variable speed drive for the SAG mill is undergoing inspection in Switzerland ▪ MACA Interquip is supplying a new Metso gyratory crusher
Slide 15: 15MW SAG Mill - support much higher throughput
15MW SAG Mill - support much higher throughput Hardest Ore Design Mid High ▪ Conventional 4Mtpa CIL plant ▪ Acquired 15MW, dual Power Draw (kW) 9,272 10,859 12,445 synchronous motor semi- autonomous grind (SAG) mill Grind Size (P80) 150 150 150 with VVVF drive Tonnes Per Hour (tph) 500 586 671 ▪ Del
Slide 16: KOTH on-track for first gold in June 2022 Quarter
KOTH on-track for first gold in June 2022 Quarter 2020 2021 2022 SQ DQ MQ JQ SQ DQ MQ JQ SQ DQ Final Feasibility Study approval Early site works Stage 2 permits Debt financing Final Investment Decision EPC mobilisation Site construction Mill delivery Mine contractor mobilisation Commissioning Produc
Slide 17: A large gold mine generating substantial cash flow
A large gold mine generating substantial cash flow1 Pre-tax Unit $2,000/oz $2,250/oz $2,500/oz $2,750/oz $3,000/oz At a gold price of A$2,500/oz: Project cashflow $M 1,147 1,710 2,273 2,837 3,400 ▪ Free cashflow (after tax) of: NPV8% $M 512 806 1,101 1,395 1,689 IRR % 38.0% 51.6% 64.3% 76.4% 88.0% ▪
Slide 18: KOTH project financing is underway
KOTH project financing is underway ▪ Low-risk brownfield project is attractive ▪ High gold price environment ▪ Strong project economics ▪ Long reserve tail ▪ Favorable mining jurisdiction ▪ Target Project Finance debt of up to $165m ▪ KOTH-allocated cash from FY20 equity raising was $105m ▪ $13.6m o
Slide 19: Siana Gold Project, Philippines
Siana Gold Project, Philippines ▪ The Siana Gold Mine, owned by Philippine affiliated company Greenstone Resources, suspended mine operations in April 2017 ▪ Maintaining mill and pit dewatering to preserve value ▪ Siana is a valuable gold mining asset1: ▪ 8 year Life-of-Mine plan - total production
Slide 20: Red 5 transformation to a mid-tier gold producer
Red 5 transformation to a mid-tier gold producer ▪ AISC and indicative mine reserve life of WA-based gold companies1,2 ▪ Gold companies/assets (Bubble Size = Indicative Production p.a) 2,200 Red 5 - Today The planned development of 2,000 KOTH will position RED as a leading mid-tier producer 1,800 AI
Slide 21: Red 5 EV/Reserve relative to its peers
Red 5 EV/Reserve relative to its peers ▪ Valuation of WA based-gold companies1 ▪ Bubble Size = Enterprise Value 2,000 Pantoro Ramelius Resources EV / Reserve (A$/oz) 1,500 Silver Lake Resources 1,000 Ora Banda Mining Gold Road Resources Dacian Gold Westgold Resources 500 Capricorn Metals Regis Resou
Slide 22: KOTH is a unique Project in uncertain times
KOTH is a unique Project in uncertain times Growth of the Australian gold industry ▪ Top 10 Australian gold deposit by Ore Reserve ▪ 16 year LOM, average 176kozpa in Years 1-61 ▪ Flexibility to expand Mill throughput, extend underground mine life beyond 4 years Benefits to Western Australia economy
Slide 23: Thank-you
Thank-you 23 www.red5ltd.com ASX Code: RED
Slide 24: Red 5 – appendix
a it Red 5 - appendix
Slide 25: Strong leadership team with operating expertise
Strong leadership team with operating expertise Red 5 has a strong and capable team, with many years of mining and development experience both at Red 5 and previously at multi-billion international development projects – the Company is well placed to deliver the KOTH development Board Management tea
Slide 26: Darlot long term – opportunities to extend LOM
Darlot long term – opportunities to extend LOM Darlot Gold Mine 1 Cables & Mission 4 ▪ Resource 11.8Mt @ 3.4g/t Au for ▪ Combined JORC 2004 Resource of 1.5Mt @ 3.1g/t Au for 185koz2 1.3Moz ▪ Historical drilling suggests both ▪ Reserve 2.7Mt @ 2.8g/t Au for 239koz deposits remain open along strike ▪
Slide 27: Ardea farm-in JV expands footprint to 1,923sqm
Ardea farm-in JV expands footprint to 1,923sqm ▪ Farm-in Joint Venture Agreement agreed with ASX-listed explorer Ardea Resources Ltd (ASX: ARL)1 ▪ Right to earn up to 80% over 3 years ▪ Required to spend $1.5 million within a 2-year period to earn an initial 60% interest in the tenements ▪ Elect to
Slide 28: KOTH 2.4Moz Ore Reserve – an increase of 64%
KOTH 2.4Moz Ore Reserve1 – an increase of 64% Total KOTH Ore Reserves as at September 2020 Cut-off JORC 2012 Tonnes Gold Contained Deposit Mining Method (g/t) Classification (Mt) (g/t) Gold (Moz) KOTH Open pit 0.39 Probable 58.5 1.1 2.1 KOTH Underground 1.60 Probable 2.4 2.3 0.2 Rainbow Open pit 0.3
Slide 29: KOTH satellite deposits – Resource of 308koz
KOTH satellite deposits 1 – Resource of 308koz ▪ Maiden JORC Mineral Resources announced in May 20201: o Cerebus-Eclipse: Indicated and Inferred Resource of 2.8Mt @ 1.2g/t Au for 112,000oz o Centauri: Indicated and Inferred Resource of 1.7Mt @ 1.5g/t Au for 81,300oz ▪ Adds to the existing Rainbow an
Slide 30: KOTH 4.1Moz Mineral Resource - increase of 31%
KOTH 4.1Moz Mineral Resource1 - increase of 31% Total Open Pit & Underground KOTH Resource as at March 2020 Cut-off Mining Tonnes Gold Contained Gold ▪ Cut-off date for inclusion of Classification drilling data and mining (g/t) Method (000t) (g/t) (000oz) depletion as at 19 February Indicated 0.4-1.
Slide 31: KOTH - mineralisation open in all directions
KOTH - mineralisation open in all directions White Walker Lemonwood South Pit Drilling bulk stope New Structural Corridor Proof of concept drilling confirms gold mineralisation extends 500m from Mineral Resource 1 Mineralised stockwork penetrates at least 70 metres into the granodiorite from the gra
Slide 32: 16 year initial LOM – open pit and underground
16 year initial LOM – open pit and underground ▪ Bulk open pit and underground mine ▪ Start-up benefits from existing low-grade stockpiles (1.6Mt @ 0.6g/t) and Rainbow satellite pit ▪ Minimal 3 months pre-strip required in FY22 ▪ Underground mining @ 1Mtpa for the first four years ▪ Potential for fu
Slide 33: 16 year initial LOM – open pit and underground
16 year initial LOM – open pit and underground ▪ Bulk open pit and underground mine ▪ Start-up benefits from existing low-grade stockpiles (1.6Mt @ 0.6g/t) and Rainbow satellite pit ▪ Minimal 3 months pre-strip required in FY22 ▪ Underground mining @ 1Mtpa for the first four years ▪ Potential for fu
Slide 34: Mine Plan optimises material movement over LOM
Mine Plan optimises material movement over LOM Cost of Production ($A/oz) Yrs 1-6 LOM ▪ Mining to be undertaken by mining contractors Mining 895 908 ▪ Contractors to install mining facilities Processing 273 321 ▪ Open pit fleet forecast to include 250t excavators and 140t haul trucks G&A 39 46 ▪ Ten
Slide 35: KOTH LOM Plan focussed on maximising value
KOTH LOM Plan focussed on maximising value ▪ Early years of LOM benefit from UG mining and processing of high-grade ore ▪ Potential to extend UG mining beyond FY27 ▪ Low-grade ore is stockpiled and processed in the back half of the LOM Plan ▪ Lower AISC during Years 1-6 result in short payback ▪ Fle
Slide 36: 4mtpa CIL plant with expansion capability
4mtpa CIL plant with expansion capability ▪ Conventional 4Mtpa CIL plant Classification ▪ Designed for future expansion to 6Mtpa with minimal interruption and low CAPEX Primary Gyratory Crusher ▪ Order has been placed for SAG mill Gravity Circuit ▪ Gyratory crusher with 6Mtpa installed capacity Coar
Slide 37: Further scope to increase production and extend LOM
Further scope to increase production and extend LOM ▪ Future expansion in processing capacity ▪ 6Mtpa crushing circuit included in FFS design/cost ▪ Oversize 4Mtpa SAG Mill selected ▪ Design allowance for upgrade of the grinding, leaching and elution components ▪ Minimal production interruption ▪ Gr
Slide 38: KOTH LOM plan gold sales profile
KOTH LOM plan gold sales profile1 1. Red 5 ASX Release: 15 September 2020. 38 www.red5ltd.com
Slide 39: KOTH LOM plan sensitivities
KOTH LOM plan sensitivities1 1. Red 5 ASX Release: 15 September 2020. 39 www.red5ltd.com
Slide 40: KOTH is in the Top 20 gold deposits in Australia
KOTH is in the Top 20 gold deposits in Australia Resources Reserves Mt g/t Moz Mt g/t Moz Cadia 3174.0 0.4 37.5 Cadia 1480.0 0.5 22.5 Boddington 931.1 0.6 17.4 Boddington 566.3 0.7 11.9 Golden Mile (100%) 272.6 1.4 12.0 Golden Mile (100%) 178.2 1.1 6.3 Tanami 65.5 4.3 9.1 Tanami 33.2 5.3 5.7 Lake Co
Slide 41: Appendix – Australian top 20 gold deposits
Appendix – Australian top 20 gold deposits1 Resources Reserves Resources Reserves Mt g/t Moz Mt g/t Moz Mt g/t Moz Mt g/t Moz Cadia Newcrest Sunrise Dam AngloGold Measured 32.0 0.30 0.3 Proven Measured 28.9 1.54 1.4 Proven 11.2 1.39 0.5 Indicated 3090.0 0.37 36.5 Probable 1480.0 0.45 21.6 Indicated