Caledonia Mining Corporation Plc · AMEX:CMCL
Caledonia Mining — Investor Presentation (May 2014)
22 slides from Caledonia Mining's investor presentation, May 2014
Slide 1: Expanding, Low-Cost, Zimbabwean Gold Producer
CALEDONIA MINING CORPORATION www.caledoniamining.com Company Expanding, Low-Cost, Presentation Zimbabwean Gold Producer August December 2011 Richmond Index, May 2014
Slide 2: Disclaimer
Disclaimer This presentation does not constitute, or form part of, any offer to sell or issue or any solicitation of any offer to purchase or subscribe for, any shares in Caledonia Mining Corporation (“Caledonia”), nor shall it (or any part of it) or the fact of its distribution, form the basis of,
Slide 3: Caledonia Group Overview
Caledonia Group Overview TSX: CAL. OTCQX: CALVF. AIM: CMCL. Blanket Gold Mine, Zimbabwe (49%) • Low-cost: – 2013 Cash-cost $613/oz – 2013 All-in sustaining cost (“AISC”): $978/oz • 2013 production 45,527oz; 2014 production guidance 48,000oz • Internally funded expansion plans • Fully indigenised Cal
Slide 4: Valuation Parameters
Valuation Parameters High Yield; Low PE Ratio Source: Bloomberg • Low rating is due largely to negative perceptions about Zimbabwe • Blanket is fully indigenised and has a highly successful track record • Investor concerns about Zimbabwe are over-done! 4
Slide 5: Zimbabwe – Background
Zimbabwe – Background Population and Economic Data • Population (2012)10.6m • GDP/head $693 • Zim dollar abolished Jan 2009, replaced by multicurrency system (US$, SA Rand etc) – All transactions denominated in US$; other than South Africa Rand procurement – Limited exchange rate risk for operations
Slide 6: The First Indigenised Zimbabwean Gold Miner
Blanket Gold Mine, Zimbabwe The First Indigenised Zimbabwean Gold Miner • Indigenisation completed and implemented in Q3 2012 − 10% of Blanket donated to local community $30m facilitation funding − 41% of Blanket sold to 3 parties for US$30.09 million Caledonia − Zimbabweans given full credit for re
Slide 7: Track Record of Growth and Cost Control
Track Record of Growth and Cost Control • Gold production quadrupled since early 2009 • 2013 cash cost per ounce of US$613/oz • Q1 2014 production adversely affected by lower • Q4 cash costs adversely affected by year end grades and one-off factors work in progress which reversed in Q1 2014 • Target
Slide 8: Africa's Lowest Cost Listed Gold Producer
Blanket Gold Mine, Zimbabwe Africa’s Lowest Cost Listed Gold Producer 8
Slide 9: A Low-Cost African Gold Producer: All-Inclusive Sustaining Costs
Blanket Gold Mine, Zimbabwe A Low-Cost African Gold Producer: All-Inclusive Sustaining Costs • Industry average AISC is estimated to be US$1,150- 1,200/oz Source: Caledonia Q4 2013 MD&A. AISC includes on-mine cash costs, sustaining capital investment, head office G&A and royalty 9
Slide 10: Exploration and Development
Blanket Gold Mine, Zimbabwe Exploration and Development 10
Slide 11: Exploration and Development: Blanket
Blanket Gold Mine, Zimbabwe Exploration and Development: Blanket • Extensions to the 14 and 18 Level Haulages will open up new mining areas – 14-Level haulage reached Lima in Q2 2013: exploration and development work is in progress to upgrade the existing resource base – 18 Level haulage reached its
Slide 12: Exploration and Development: No. 6 Winze
Blanket Gold Mine, Zimbabwe Exploration and Development: No. 6 Winze • Exploration to improve our understanding of the inferred Blanket ore bodies below 750m • Deepen existing No. 6 Winze Project to 1080m; develop new 26 & 30 Level Haulages to provide access to Blanket ore body – New winder chamber
Slide 13: Exploration and Development: Satellite Projects
Blanket Gold Mine, Zimbabwe Exploration and Development: Satellite Projects 18 exploration projects located on the Gwanda greenstone belt • GG Project (7km from Blanket) − Shaft sunk to 120m. Stations on 60m, 90m &120m. − Underground exploration and development continues Blanket − Metallurgical test
Slide 14: Highly Efficient Metallurgical Plant with Surplus Capacity
Highly Efficient Metallurgical Plant with Surplus Capacity • Over 93% gold recovery. • Surplus capacity – Hoisting capacity: 3,000tpd – CIL capacity: 3,800tpd – Crushing and milling capacity (after installation of new mills): 3,600tpd Target production • Targeted ore production 1,900tpd Current prod
Slide 15: Capital Structure, Financials
Capital Structure, Financials Capital Structure Summary Profit and Year to 31 Year to 31 Loss** Dec 2013 Dec 2012 Shares in issue (m) * 52.1 (C$’m except per share data) Options (m) * 2.7 Revenues 65.1 75.2 Fully diluted shares in issue (m) * 54.8 EBITDA 25.4 44.3 Profit before Tax 9.4 20.2 Zimbabwe
Slide 16: Directors and Management
Directors and Management Management Directors Chief Executive Stefan Hayden Chairman Leigh Wilson Finance Director Steve Curtis Chief Executive & Stefan Hayden President Chief Operating Officer Dana Roets Finance Director Steve Curtis VP Exploration Dr Trevor Pearton Independent Director Johan Holtz
Slide 17: Dividend Policy
Dividend Policy Committed to Shareholder Returns • November 2013 Caledonia announced a new dividend policy: – aggregate 2014 dividend of 6 Canadian cents – payable quarterly @1.5 cents/quarter. • 1.5 cents per share paid on January 30, 2014; 1.5 cents paid on April 30, 2014. • Total 2014 dividend co
Slide 18: Investment Case
Investment Case Fully indigenised – reduced political risk Continued strong production from Blanket • 2014 production guidance of 48,000oz - modest growth from 2013 • Low-cost producer: 2013 cash cost $613/oz; AISC $978/oz Internally funded growth supported by cash generation and strong cash positio
Slide 19: Investment Case: Analyst Forecasts
Investment Case Analyst Forecasts Edison (19 May, 2014) 2013 2014 2015 2016 Gold Price US$/oz) 1,402 1,448 1,507 n/a PBT (C$’m) 14.7* 24.4 41.8 n/a EPS (cents) 28.3* 28.3 48.3 n/a Net Cash (C$’m) 25.2 37.1 63.2 n/a Numis (13 Jan, 2014) 2013 2014 2015 2016 Gold Price US$/oz) 1,402 1,250 1,250 1,250 P
Slide 20: Investment Case: Analyst Forecasts
Investment Case Analyst Forecasts WH Ireland (31 March, 2014) 2013 2014 2015 2016 Gold Price US$/oz) 1,402 1,250 1,250 1,250 PBT (C$’m) 14.7* 19.1 20.2 29.1 EPS (cents) 28.3* 26.8 28.5 40.0 Net Cash (C$’m) 25.2 24.8 27.1 38.3 * 2013 PBT and EPS is before the impairment charge of $14.2 in respect of
Slide 21: Share Price
Share Price • Review commences Jan 2013 – after Caledonia commenced marketing following the implementation of indigenisation, announcement of medium term growth strategy and inaugural dividend policy. Initial marketing in 1:10 reverse split Announcement of London and New coincides with collapse gold
Slide 22: Contacts
Contacts Caledonia Mining Website: www.caledoniamining.com Share Codes: TSX - CAL; OTCQX – CALVF; AIM - CMCL PR (UK): BlytheWeigh Stefan Hayden, President and CEO Tim Blythe, Halimah Hussain Tel: +27 11 447 2499 Email: shayden@caledoniamining.com AIM Broker/Nomad: Numis Securities & WH Ireland Mark