Centamin — Investor Day (May 2013)
33 slides from Centamin's investor day presentation, May 16, 2013
Slide 1: Delivering the Growth - Investor Day
Centamin plc Delivering the Growth Investor Day 16 May 2013
Slide 2: Forward Looking Statements
2 Forward Looking Statements There are risks associated with an investment in the shares of Centamin. Recipients of this presentation should review the risk factors and other disclosures regarding Centamin contained in the preliminary prospectus of Centamin that has been filed with Canadian securiti
Slide 3: Centamin - Rapidly growing FTSE 250 gold producer
3 Centamin - Rapidly growing FTSE 250 gold producer • Rapidly growing FTSE 250 gold producer Production growth – 262,958oz at US$669/oz produced in 2012 2010 150koz Maiden year – 2013 guidance 320,000oz at US$700/oz 2011 203koz +35% – On track for 450-500,000oz/annum from 2015 2012 263koz +30% • Ful
Slide 4: Egypt Update – Reality vs. Perception
4 Egypt Update – Reality vs. Perception • Egypt’s first democratically elected president, Government Mohammed Morsi, elected on 24 June ‘12 stabilising • New constitution approved by referendum • Parliamentary elections expected by October ‘13 Concession • Centamin’s concession agreement enshrined b
Slide 5: FY 2012 Highlights
5 FY 2012 Highlights • FY 2012 production 262,828oz vs. guidance 250,000 ounces Production • Process plant productivity consistently above nameplate • FY2013 guidance 320,000 ounces • 2012 cash cost of production US$669/oz (subsidised fuel) vs. guidance $700/oz Record earnings • Record annual EBITDA
Slide 6: Gold production picks up through 2012
6 Gold production picks up through 2012 100,000 80,000 Ounces Produced 60,000 40,000 20,000 0 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 Q4 Q1 2013 Quarter • Steady output growth through 2012, despite interruptions in Q1 and Q3 • Q1 2013 production of 87,016 ounces, on track for FY guidance of 320,000 ounces
Slide 7: Mining – productivity on the rise
7 Mining – productivity on the rise Open Pit Mining Underground Mining 12 6 140 14 120 12 10 5 Ore Extracted ('000 tonnes) 100 10 Strip ratio (waste:ore) 8 4 Million Tonnes Mined Grade (g/t) 80 8 6 3 60 6 4 2 40 4 2 1 20 2 0 0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2011 2012 2013
Slide 8: Plant – process optimisation continues
8 Plant – process optimisation continues Ore Processed and Feed Grade Plant Productivity 1.6 2.5 800 90% 1.4 700 Throughput rate (tph) 1.2 2 600 88% Million Tonnes 1.0 500 Grade (g/t) Recovery 0.8 1.5 400 86% 0.6 300 0.4 1 200 84% 0.2 100 0.0 0.5 0 82% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 9: Strategy: Positioning Centamin For Growth
9 Strategy: Positioning Centamin For Growth 1. Sukari Hill • Ramping-up to 450-500,000oz p.a. • Stage 4 plant expansion operational in H2 2013 • Resources have grown from 1.3Moz in 2000 to 15.3Moz (incl. 2.3Moz Inferred) today 1. Growth of Sukari • Focus on expanding underground resource 2. Sukari r
Slide 10: Stage 4: Doubling Capacity to 10Mtpa
10 Stage 4: Doubling Capacity to 10Mtpa • Conventional SAG and ball mill expansion – new plant will sit alongside the existing plant • Estimated capital cost of US$325m – circa US$50m remaining to completion • The bulk of commissioning to commence in H2 2013 • Expanded plant expected to complete com
Slide 11: Underground – Developing Sukari’s Full Potential
11 Underground – Developing Sukari’s Full Potential • Over 10,000m of development completed to date. • Ptah decline commenced in October 2011 • Will access down-dip of Amun (current production area) and the high grade Julius zone to the north • Moves activity away from the pit shell over the next 2
Slide 12: Underground – Multiple High Grade Targets
12 Underground – Multiple High Grade Targets
Slide 13: Further Exploration of Sukari Hill and Tenement Area
13 Further Exploration of Sukari Hill and Tenement Area Drilling the North of Sukari Hill (Pharaoh Zone) • Programme aims to convert “waste” in the current open pit plan into ore • Drilling with modified inclined underground diamond rig in previously inaccessible areas Regional Exploration • 7 other
Slide 14: Growth Beyond Sukari: Strategic Investment in Ethiopia
14 Growth Beyond Sukari: Strategic Investment in Ethiopia Centamin’s 4 • 4 properties in highly prospective northern Tigray region exploration licences • Plan to add value through exploration and development Nyota’s Tulu Kapi • Initial results show low grade mineralisation project ADDIS ABABA • Dril
Slide 15: FY 2012 Financial Review
15 FY 2012 Financial Review • 2012 revenue US$426m, a 25% increase FINANCIAL HIGHLIGHTS on 2011 US$’000 2012 2011 — Gold sales up 19% Revenue 426,133 340,479 — Gold price up 7% Cost of Sales* (202,932) (128,202) Gross Profit 223,201 212,277 • Record EBITDA US$233m, a 10% increase Finance income 898
Slide 16: FY 2012 Cash Costs Breakdown
16 FY 2012 Cash Costs Breakdown Cash Cost Per Ounce* Cash Cost Breakdown (US$/oz) 800 700 67 600 OP Mining 199 500 UG mining US$ 400 Processing 300 G&A 49 200 354 100 0 Q1 2012 Q2 Q3 Q4 • Q4 cash operating costs US$558/oz, a reduction of 23% in Q3 due to increased productivity • Full year cash opera
Slide 17: Cash Margins Strong
17 Cash Margins Strong Gold sales and margin drivers* Cash Margin* 1,200 90 1,800 80 1,600 1,000 70 1,400 60 1,200 ounces (,000) 800 US$/oz 50 1,000 US$/oz 40 800 600 30 600 20 400 400 10 200 0 0 200 Q1 2012 Q2 Q3 Q4 0 Gold sales Realised Gold Price Cash costs* Q1 2012 Q2 Q3 Q4 • Cash margin average
Slide 18: Robust Cash Generation
18 Robust Cash Generation • Cash, bullion, gold sales receivables and liquid CASH FLOW assets of US$219.4 million at 2012 year end US$’000 2012 2011 (US$208.4m at end-2011) Net cash generated by operating activities 220,507 153,542 $147.1m Cash at Bank $25.9m Bullion Net cash used in investing activ
Slide 19: Growth Strategy Fully Financed
19 Growth Strategy Fully Financed Cash Generation Sukari Expansion 2013 UG capex: (2013: US$80m US$22m >US$220m cash from ops in 2012 Stage 4 + US$30m mining fleet) Cash Balance ~US$220m in cash and Selective equivalents at end-2012 M&A Debt and Hedge Free Fully funded by cash Sustaining capex: 2013
Slide 20: Emerging From The ‘Investment’ Phase
20 Emerging From The ‘Investment’ Phase • Capex set to reduce dramatically over the next 2 years, as output and earnings rise 300 600 Ounces ('000) US$ million 500 200 400 300 Underground OP Waste 100 200 Fleet Stage 4 100 Sustaining Stage 3 Production 0 0 2011 2012 2013F 2014F 2015F 2016F 2017F
Slide 21: Return on Invested Capital Well Above Peer Average
21 Return on Invested Capital* Well Above Peer Average ROIC: Tier II Gold Producers ROIC: Tier I Gold Producers 2012 2013E 2014E 2012 2013E 2014E African Barrick Gold 3% 2% 4% Barrick Gold -2% 8% 7% Agnico-Eagle 7% 8% 5% Goldcorp Inc. 7% 5% 6% Alacer Gold 8% 0% 0% Kinross Gold 7% 3% 2% Allied Nevada
Slide 22: Strong Growth Pipeline
22 Strong Growth Pipeline 2013 Near Term Medium Term Long Term Growth Growth Growth • Deliver Stage 4 • Achieve target 450- • Regional exploration • Bring to production expansion 500,000oz p.a. development further projects in the production Arabian-Nubian Shield • Continue to ramp up • Ethiopian pro
Slide 23: Investment Summary: Positioned For Growth
23 Investment Summary: Positioned For Growth Production Growth • 2012 production of 262,958oz @ US$669/oz; a 30% increase on 2011 production • 2013 set for another significant increase to 320,000 ounces @ US$700/oz • Long-term 450-500,000/oz run rate from 2015 Resource Growth • Sukari is one of the
Slide 24: Centamin plc - Contact Us
24 Centamin plc CONTACT US Josef El-Raghy, Chairman Andy Davidson, Head of Business Development and Investor Relations +44 (0) 20 569 1671 andy.davidson@centamin.co.uk
Slide 25: Delivering the Growth Appendix
Centamin plc Delivering the Growth Appendix Investor Day 16 May 2013
Slide 26: Q1 Operational Review
26 Q1 Operational Review Q1 2013 Q4 2012 Q1 2012 Open Pit Ore Mined ('000 tonnes) 2,133 1,905 1,003 Open Pit Total Mined ('000 tonnes) 10,550 6,740 4,819 Underground Ore Mined ('000 tonnes) 119 112 72 Ore Processed ('000 tonnes) 1,402 1,233 1,020 Head Grade - Average (g/t) 2.03 2.31 1.69 Gold Recove
Slide 27: Market Information
27 Market Information Listing Information Significant Shareholders Shares Issued: 1,101,397,381 Directors & Management 7.5% Norges Bank 5.1% Share Price: 44.3p (at close on 08/05/13) ICM 5.0% Market Capitalisation: £488m (~US$760m) Franklin Resources 4.3% BlackRock 4.0% Markets: London Stock Exchang
Slide 28: The Sukari Gold Mine
28 The Sukari Gold Mine • Open pit and underground mine located in the eastern desert of Egypt – 700km from Cairo – 25km from Red Sea • Large scale, low cost producing asset • 160km2 exploitation licence • 30 year licence granted in 2005 with option for a further 30 years • >20 year life of mine at
Slide 29: Concession Agreement
29 Concession Agreement Terms of the Concession Agreement: • No taxes and duties for 15 years and CENTAMIN PLC option to extend for further 15 years • 3% royalty rate • Full cost recovery prior to 50% profit sharing over a minimum period of 3 years 100% Capex spent to date: • US$450m to bring Sukari
Slide 30: A Major Deposit With Significant Upside Potential
30 A Major Deposit With Significant Upside Potential Sukari versus the world’s largest open pit gold deposits 10 mm oz 20 mm oz 5 mm oz 3.00 Sukhoi Log 2.50 Muruntau Open Pit Lihir Island Sukari: Donlin Creek 10.1Moz 277Mt @ 1.13 g/t Au 2.00 Reserve Grade (g/t) Pascua Lama Natalka 1.50 Tarkwa Las Cr
Slide 31: Global Resources and Reserves
31 Global Resources and Reserves Sukari Global Resource Measured Indicated Total Inferred Measured + Indicated Cut-off Tonnes Grade Tonnes Grade Tonnes Grade Gold Tonnes Grade Gold g/t Au (Mt) (g/t Au) (Mt) (g/t Au) (Mt) (g/t Au) (Moz) (Mt) (g/t Au) (Moz) 0.3 150.04 1.00 238.90 1.08 388.9 1.05 13.13
Slide 32: Optimised Mine Plan
32 Optimised Mine Plan Project Year Units 2013 2014 2015 2016 2017 Open Pit Ore t 11,267,856 9,536,851 10,335,439 12,822,266 12,832,496 Waste t 33,018,969 64,051,661 64,172,929 60,053,219 61,668,781 Total t 44,286,825 73,588,512 74,508,368 72,875,486 74,501,277 Strip Ratio w:o 2.93 6.72 6.21 4.68 4.
Slide 33: Ethiopia: Country Overview
33 Ethiopia: Country Overview • Favourable government policies ― Modern Mining Act (Proclamation) effected in 2010 ― Corporate tax of 35% with negotiable breaks and holidays ― Royalty of 8% at discretion of the Minister ― 5% government free-carried interest in mining projects ― Exemption from custom