KEFI Gold and Copper PLC · LSE:KEFI
KEFI Gold and Copper — KEFI Minerals — Investor Presentation (August 2015)
17 slides from KEFI Gold and Copper's investor presentation, August 2015
Slide 1: Emerging Gold Producer in the Arabian-Nubian Shield: Financing Development of Tulu Kapi
EMERGING GOLD PRODUCER IN THE ARABIAN‐NUBIAN SHIELD FINANCING DEVELOPMENT OF TULU KAPI August 2015
Slide 2: Disclaimer
DISCLAIMER The information contained in this document (“Presentation”) has been prepared by KEFI Minerals plc (the “Company”). While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers g
Slide 3: Tulu Kapi Development Financing
TULU KAPI DEVELOPMENT FINANCING The following slides provide information and contextual background to KEFI’s financing scenarios for Tulu Kapi: • Gold price in USD and ETB • Contracting strategy and team • Project economics • Capital requirement and sourcing • Financing scenarios to be optimised 3
Slide 4: Higher Gold Price Forecast When Tulu Kapi Commences Production in 2017
HIGHER GOLD PRICE FORECAST WHEN TULU KAPI COMMENCES PRODUCTION IN 2017 Selected broker gold price forecasts in US$/oz 2015 2016 2017 2018 Long Term Credit Suisse 1,222 1,250 1,250 1,250 1,250 UBS 1,194 1,250 1,300 1,300 1,300 Deutsche Bank 1,225 1,106 1,049 1,045 1,182 Morgan Stanley 1,225 1,169 1,1
Slide 5: Steady ETB Gold Price Since 2013
STEADY ETB GOLD PRICE SINCE 2013 • Ethiopian Birr gold price has been steady since 2013 despite sliding US$ gold price • Tulu Kapi operating costs are either in US$ or ETB, depending upon terms of procurement Source: Kitco and Google Finance 5
Slide 6: Contracting Strategy
CONTRACTING STRATEGY KEFI will appoint two principal contractors: • Mining • Construction of plant and infrastructure Preferred contractors will be selected this quarter: • Selection criteria highlight safety, quality and price • Candidates have confirmed they: o will propose targeted cost‐savings;
Slide 7: Contracting Team
CONTRACTING TEAM Wayne Nicoletto Harry Anagnostaras-Adams KME Managing Director, and Executive Chairman Group Head of Operations Founder or co‐founder Citicorp Capital Investors 30 years as a metallurgist, general manager and Australia, Pilatus Capital, Australian Gold Council, country head. Special
Slide 8: Optimising for KEFI Shareholders
OPTIMISING FOR KEFI SHAREHOLDERS • Optimised site layout (see right) for community and maximised local benefits from the mine. Reduced the number of households to be resettled from c. 460 to 260 and improved social returns. Collaborative engagement with community and authorities on livelihood restor
Slide 9: Key Production Metrics
KEY PRODUCTION METRICS Initial 10 Years 13‐year LOM (excluding low‐grade stock) (including low‐grade stock) Waste:ore ratio 9.9:1.0 7.4:1.0 Total ore processed 12.0Mt 15.4Mt Average head grade 2.5g/t gold 2.1g/t gold Total gold production 888,000 ounces 961,000 ounces Cash Operating Costs US$645/oz
Slide 10: Initial Capital Costs
INITIAL CAPITAL COSTS Initial capex of $135M is based on contract mining and an all‐new processing plant Peak funding requirement of US$130M reflects: • Initial capex reduced by initial six months operating cash surplus $12M, after preserving working capital $6M • Assumption of nil savings (as again
Slide 11: Low Operating Costs
LOW OPERATING COSTS • All‐in Sustaining Costs (AISC) include operating costs, royalties and sustaining capex • Mining costs assume mining contractor funds $10M of the mining pre‐strip costs and mine infrastructure costs, which are claimed back through the mining rates charged during operations • Est
Slide 12: Financial Sensitivities
FINANCIAL SENSITIVITIES Sensitivities for cash flows based on contract mining and building an all‐new processing plant NPV Sensitivity Analysis IRR Sensitivity Analysis 300 50.0% 250 40.0% 200 30.0% 150 NPV IRR 100 20.0% 50 10.0% 0 30% 20% 10% Base Case ‐10% ‐20% ‐30% 0.0% ‐50 30% 20% 10% Base Case
Slide 13: Key Financial Parameters for Tulu Kapi Gold Project
KEY FINANCIAL PARAMETERS FOR TULU KAPI GOLD PROJECT Cash flows based on contract mining and building an all‐new processing plant Unleveraged Leveraged IRR 27% 37% After‐tax NPV (0%) US$262M US$238M After‐tax NPV at start construction 2015 US$125M US$120M (8% real discount rate) After‐tax NPV at star
Slide 14: Financing Strategy
FINANCING STRATEGY Systematically working towards putting in place Tulu Kapi development funding: • KEFI’s development approach has reduced capex by c. 50% • Financial Advisor appointed ‐ Endeavour Financial • Independent technical review of DFS completed by Micon International • Built collaborative
Slide 15: Strategy to Minimise Further Equity Investment
STRATEGY TO MINIMISE FURTHER EQUITY INVESTMENT • Equity investment in Tulu Kapi to date: $65M • Owner mining requires further $168M funding • Contract mining reduces peak funding requirement to c. $130M, based on 2015 DFS ($136M including financing costs) • Targeting c. 10% capex savings from 2015 D
Slide 16: Project Returns Improved and Development Funding Reduced
PROJECT RETURNS IMPROVED AND DEVELOPMENT FUNDING REDUCED DFS confirmed First ten years of After‐tax NPV 8% of Tulu Kapi is an gold production = $180M (£120M) economically 888,000 ounces at at start production attractive mine AISC of US$755/oz 2017. EBITDA $45M development from open pit (US$1,250/oz
Slide 17: Contacts
CONTACTS Harry Anagnostaras‐Adams, Executive Chairman Mobile: +357 99457843 Jeff Rayner, Exploration Director Wayne Nicoletto, Head of Operations England ‐ Registered office Cyprus ‐ Group corporate team Ethiopia ‐ Development and exploration teams Saudi Arabia ‐ Exploration team Turkey ‐ Support Em