China Gold International Resources Corp. Ltd. · HKEX:2099
China Gold International Resources — Investor Presentation (November 2014)
30 slides from China Gold International Resources's investor presentation, Nov 18, 2014
Slide 1: Sustainable Profitability and Growth
TSX: CGG | HKSE: 2099 November 18, 2014 China Gold International Resources Corp. Ltd. Sustainable Profitability and Growth
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains “forward looking statement’s” within the meaning of the United States private securities litigation reform act of 1995 and “forward looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking statem
Slide 3: Agenda
AGENDA Company Overview Financial Highlights CSH Gold Mine Overview and Expansion Update Jiama Polymetallic Mine Overview and Expansion Update Growth Plan (Organic Growth and M&A) Social Responsibility China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099 3
Slide 4: About China Gold International
ABOUT CHINA GOLD INTERNATIONAL Consistent Profitability Rapid Growth 4 years of consistent 7th year of growing profitability production capacity Ability to Raise Investment Grade Sizable Financing Credit Rating July 2014 – July 2014 – “BBB-” $USD 500 Million Bond by S&P Effective Cost Management Uni
Slide 5: About China Gold International
ABOUT CHINA GOLD INTERNATIONAL Inner Dual listed, profitable and growing gold and Mongolia copper producer Operating two producing mines in China: CSH Gold Mine Baotou • CSH Gold Mine - Inner Mongolia Region Tibet • Jiama Copper-Polymetallic Mine (Cu-Mo-Au-Ag-Pb-Zn) - Tibet Region The ONLY ove
Slide 6: About China National Gold Group
ABOUT CHINA NATIONAL GOLD GROUP CHINA NATIONAL GOLD GROUP OWNS 39% OF CHINA GOLD INTERNATIONAL Largest gold mining company in China Design and research institutions Employment: 50,800 people Major Shareholder in both International and Domestic Listings Expertise: – TSX and HK Stock Exchang
Slide 7: Our Unique Corporate Model
OUR UNIQUE CORPORATE MODEL In China Internationally Viewed as a local Full TSX and HK listing Chinese miner allows access to global capital markets Full support of China National Gold Group – Building international our 39% shareholder corporate and government Access to the preferential rig
Slide 8: Experienced Board and Management Team
EXPERIENCED BOARD AND MANAGEMENT TEAM Top management of China Gold International Xin Song Bing Liu Liangyou Jiang Lianzhong Sun Chairman and Executive CEO and Executive Senior Executive Vice Non-Executive Director Director Director President and Executive Director ~30 years ~30 years ~30 years Over
Slide 9: Highlights – Resources/Reserves, Production
HIGHLIGHTS – RESOURCES/RESERVES, PRODUCTION Combined Gold Reserve / Resource Copper Reserve / Resource Contained Gold Contained Copper CSH and Jiama Gold (M oz) Jiama’s Copper (Billion Pounds / Thousand Tonnes) Proven / Probable Reserve 6.3 Proven / Probable Reserve 6.0 / 2,708 Measured / Indicated
Slide 10: Highlights – Revenues, Profit
HIGHLIGHTS – REVENUES, PROFIT Realized average gold price Realized average copper price (US$ per ounce) (US$ per pound) 1650 1,611 2.84 2.82 1600 2.82 1550 15.5% 2.8 2.5% 1500 1450 2.78 1400 1,362 2.76 2.75 1350 2.74 1300 1250 2.72 1200 2.7 2012 2013 2012 2013 Revenues, Mine Operating Earnings, Net
Slide 11: Highlights – Q3 2014 vs Q3 2013
HIGHLIGHTS – Q3 2014 VS Q3 2013 FINANCIAL RESULTS - Declining costs - Strong Q3 2014 3rd Quarter ended Sept. 30, 2013 3rd Quarter ended Sept. 30, 2014 Revenues (MM USD) $75.7 $89 Net Profit (MM USD) $15.9 $16.4 Net Operating Cash Flow (MM $17.4 $(15.5) USD) Earning per share (US cents) 3.84 cents 4
Slide 12: Highlights – Cost
HIGHLIGHTS – COST Cash cost of gold in CSH Total cost of gold in CSH (US$ per ounce) (US$ per ounce) 928 7% 866 825 14% 707 2012 2013 2012 2013 Total cost of copper in JIAMA (by-product credited, US$ per pound) 2.58 10.9% 2.3 2012 2013 China Gold International Resources Corp. Ltd | TSX: CGG – HKSE:
Slide 13: Highlights – Cash Cost Reduction – Gold
HIGHLIGHTS – CASH COST REDUCTION - GOLD Company-Wide Cost Reduction Strategy Implemented Quarterly Trend in Cash Costs Reduction 25% reduction in cash costs 9 months 2014 vs 9 months 2013 ($ per oz. gold) ($ per oz. gold) 1000 800 887 721 900 812 700 800 734 600 539 700 664 626 600 585 561 500 500 4
Slide 14: Highlights – Cash Cost Reduction – Copper
HIGHLIGHTS – CASH COST REDUCTION -COPPER Company-Wide Cost Reduction Strategy Implemented Quarterly Trend in Copper Cash Costs 17% reduction in cash costs 9 months 2014 vs 9 months 2013 ($ per lbs. copper after by-product credits) ($ per lbs. copper after by-product credits) 2 1.65 1.62 1.8 1.63 1.7
Slide 15: Highlights – Investment Grade Rating
HIGHLIGHTS – INVESTMENT GRADE RATING China Gold International China National Gold Group’s Ratings by S&P Ratings by S&P and Moody’s “BBB-“ long-term corporate rating “Baa2” issuer rating to CNG with “Stable with “Stable Outlook” by Standard Outlook” by Moody’s. Poor’s Rating Services (“S&P”).
Slide 16: Highlights – Superior Financing Capability
HIGHLIGHTS – SUPERIOR FINANCING CAPABILITY US$ 500 MM Bond Issue - Benchmark in the international capital markets First US dollar denominated bond issue Amount $US 500 Million supported by a company’s credit rating Date July 17, 2014 outside of China in the history of the gold Rating BBB- companie
Slide 17: CSH Gold Mine – Overview
CSH GOLD MINE – OVERVIEW One of China’s largest gold mines Located in Inner Mongolia of China, CSH Mine Resources ~ 210km northwest of the city of Baotou Tonnage Grade Gold Content Principal product: Gold dore bars with Resources (mt) (g/t) (Moz) silver as a by-product Measured 68.9 0.65 1.44
Slide 18: CSH Gold Mine – Expansion Completed
CSH GOLD MINE – EXPANSION COMPLETED Expansion feasibility study approved Q4, 2012 Expansion from 30,000 tpd to 60,000 tpd completed on time in 2013: - August 1, 2013 New 30,000 tpd crusher and ADR Plant Completed - New 80 kilometers long 110 KV power line construction completed in November of 2013 Q
Slide 19: Jiama Polymetallic Mine – Overview
JIAMA POLYMETALLIC MINE – OVERVIEW One of China’s largest Cu-Au polymetallic mines Located 68 kilometers northeast of Lhasa, Tibet Commercial production began in September 2010 Phase I Operation successfully completed and included: – open-pit and underground mining operation – processing plant
Slide 20: Jiama Polymetallic Mine – Geology
JIAMA POLYMETALLIC MINE – GEOLOGY Current Reserves and Resources Jiama Resources Grade Contained Metal Ore Cu Mo Au Ag Pb Zn Cu Mo Au Ag Pb Zn Category (mt) (%) (%) (g/t) (g/t) (%) (%) (kt) (kt) (M oz) (M oz) (kt) (kt) Measured 100 0.41 0.035 0.11 6.53 0.04 0.02 415 36 0.35 21.04 43 24 Indicated 1,3
Slide 21: Jiama Polymetallic Mine – Design of Phase II Expansion
JIAMA POLYMETALLIC MINE Design of Phase II Expansion China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099 21
Slide 22: Jiama Polymetallic Mine – Expansion Progress
JIAMA POLYMETALLIC MINE – EXPANSION PROGRESS Expanding Operations Phase II Expansion –Feasibility released January 2014 –8 times growth processing capacity from 6,000 tpd of ore to 50,000 tpd –1H 2014, stage 1 of expansion to reach 28,000 tpd capacity completed. Testing in progress. Expansion to 5
Slide 23: Jiama Polymetallic Mine – Expansion Highlights of Phase II
JIAMA POLYMETALLIC MINE – EXPANSION Highlights of Phase II Overall project processing capacity: 16.5 Mt Expected annual production: per annum for Cu-Mo ores, open cut 9.9 Mt, • Copper: 67,000 tonnes UG 6.6 Mt. • Molybdenum: 2,400 tonnes • Silver: 2.8 million ounces 2 additional flotation circu
Slide 24: Jiama Polymetallic Mine – Expansion Economics
JIAMA POLYMETALLIC MINE – EXPANSION ECONOMICS Robust Economics Support Phase II Development Life of Mine Capital Costs Distribution Operating Costs Mining 350 M 0.33 1.58 366 M Mining Processing Processing 11.50 Total Capital Costs = $716 Million 10.06 Fixed Life of Mine Capital Costs Timing Overhea
Slide 25: Growth Vision: Organic Expansion + M&A
5 YEAR GROWTH VISION: CHINA NATIONAL GOLD: FORTUNE 500 MEMBER CHINA GOLD INTERNATIONAL: ORGANIC EXPANSION + M&A Accretive Acquisition AU 500,000 oz/year CU 330 MM lbs/year PRODUCER Organic Growth 2012 2013 2014 2015 2016 CSH Expansion construction Producing at 30,000 tpd to 60,000 tpd about 80% capa
Slide 26: Growth Plan – Accretive Acquisition Strategy
GROWTH PLAN – ACCRETIVE ACQUISITION STRATEGY Property Acquisition Criteria Valuation Transaction Structure Accretive to current Selective Significant Stake in shareholders acquisition strategy the Project and Resources/Reserves Target traded at a Financed through: internal deep discount to fun
Slide 27: China Gold International – Ultimate Investment Opportunity
CHINA GOLD INTERNATIONAL – ULTIMATE INVESTMENT OPPORTUNITY World-class deposits with exploration potential Mining friendly jurisdictions Government support Support of the largest Chinese gold producer Global and award winning management team of mining experts Rapid Growth of production c
Slide 28: Awards
AWARDS “China’s Top 10 Major Mineral Exploration Achievements CSH by Geological Society of China 2013 National Level Green Mine by the Ministry of Land and Resources Jiama Outstanding Award of National Science and Technology Development by the Ministry of Science and Technology 2012 Project of Natio
Slide 29: Social Responsibility, Harmonic Development, Highest HSE Standards
SOCIAL RESPONSIBILITY, HARMONIC DEVELOPMENT, HIGHEST HSE STANDARDS Respecting local culture and religion Economic contribution to local communities (portable water supply, schools, infrastructure) Hiring and training local people (31% of Jiama Mine’s employees are locals. Will employ more afte
Slide 30: Share Information
SHARE INFORMATION TSX: CGG – HKSE: 2099 Capital Structure and Share Info Top 10 Institutional Holders (As of November, 2014) (As of November, 2014) Issued and Van Eck Associates 31.42MM 396.4 M Corp. Outstanding Norges Bank Investment 4.90MM Fully Diluted 396.8 M Management Options 0.4 M Dimensional
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