Caledonia Mining Corporation PLC · AMEX:CMCL
Caledonia Mining — Shareholder Meeting (May 2010)
40 slides from Caledonia Mining's shareholder meeting presentation, May 2010
Slide 1: AGM Presentation, May 2010
www.caledoniamining.com AGM Presentation, May 2010
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, nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection wit
Slide 3: Contents
Contents 1. Operations Blanket Gold Mine (Zimbabwe) Nama PGE’s properties 2. 2009 Financial Performance 3. Outlook 4. Corporate Issues 5. Questions 3
Slide 4: Blanket Gold Mine (Zimbabwe)
Blanket Gold Mine (Zimbabwe) 4
Slide 5: Blanket Gold Mine: Introduction
Blanket Gold Mine Introduction 1. Current Status • Safety Heath and Environment (SHE) • Production • Costs 2. Shaft 4 Expansion Project 3. Satellite Developments 4. Lima Project 5. Indigenisation 6. RBZ Bond 5
Slide 6: Current Status: SHE
Blanket Gold Mine Current Status: SHE • A reasonable safety performance in 2009 in light of increased employment levels • Decrease in the overall number of “incidents “and “near misses” • Intensive safety training continues • No occupational illnesses identified in 2009, and 1 in Q1 2010 • HIV/AIDS
Slide 7: Current Status: Production
Blanket Gold Mine Current Status: Production Blanket - Monthly Gold Production 2000 1800 Gold production (oz) 1600 1400 1200 1000 800 600 400 200 0 • Production has been scaled back to 1,200 -1,500 ounces of gold per month until shaft-bottom loading commences later in 2010 • Exhaustion of reserves a
Slide 8: Effect of Electricity Outages on Production
Blanket Gold Mine Current Status: Effect of Electricity Outages on Production • Increased frequency and duration of power outages from October 2009 continues to inhibit gold production • Average outage in October 2009 was 0.5 hours/day • Average outage in March 2010 was 7 hours per day • Average out
Slide 9: Current Status: Ore Reserves at Dec 2009
Blanket Gold Mine Current Status: Ore Reserves at 31 Dec 2009 • Stoped out areas (shown in grey) can be seen above 14 Level (510m). • Ample reserves and resources at slightly higher grade are present below our mid-shaft loading boxes on 14 Level • No. 4 Shaft Expansion Project will allow crushing, s
Slide 10: Current Status - Costs
Blanket Gold Mine Current Status - Costs • Costs were incurred throughout Q1 2009 without production in order to retain skills. • Currently approximately 60% of Blanket’s costs are fixed due to the lower production levels • Monthly cost per ounce is mainly influenced by variations in production • Co
Slide 11: No. 4 Shaft Expansion Project
Blanket Gold Mine No. 4 Shaft Expansion Project • The objective of the No. 4 Shaft Expansion Project is to allow access, and the crushing and hoisting of deeper ore reserves, in greater tonnages and more efficiently • Project has now been delayed by over 2 years from original completion date due to
Slide 12: Shaft Expansion Project – Shaft Overview
Blanket Gold Mine No 4 Shaft Expansion Project – Shaft Overview • Ore is dropped to 750m Level via ore passes and is transported by self - tipping Granby railcars along 750L • Ore is then tipped onto fixed grizzlies: oversized ore is broken on the grizzly • 3x 800t storage hoppers under the grizzlie
Slide 13: Shaft Expansion Project – Level Grizzly Tips
Blanket Gold Mine No 4 Shaft Expansion Project – 750 Level Grizzly Tips • Ore is transported along the 750m L rail haulage in 4.1 tonne side-tipping Granby cars • The Granby cars are pulled by a 10 tonne battery operated locomotive over the tipping ramp and tip the ore onto grizzlies • Oversize ore
Slide 14: Shaft Expansion Project – Section through Levels
Blanket Gold Mine No 4 Shaft Expansion Project – Section through 750m and 765m Levels • 3 x 800 tonne storage hoppers can store approximately two and half days of mine production • Allows mining activity to continue even if No. 4 Winder is temporarily unavailable due to maintenance or electricity ou
Slide 15: Shaft Expansion Project – 765m Crusher Feed Detail
Blanket Gold Mine No 4 Shaft Expansion Project – 765m Crusher Feed Detail • The 765m Level underground crushing station will increase the ore-skip loading efficiency and optimizes the efficiency of the No 4 Shaft Winder 15
Slide 16: Shaft Expansion Project – Ore Loading Station
Blanket Gold Mine No 4 Shaft Expansion Project 765-789m L Ore Loading Station • Fully automated PLC & Load cell controlled ore loading reduces manpower costs and minimizes spillage down the shaft. • Loading flasks pre-filled with 6-tonne skip loads • Loading flasks discharge automatically into the s
Slide 17: Shaft Expansion Project – Spillage Handling System
Blanket Gold Mine No 4 Shaft Expansion Project – Spillage Handling System • Pneumatically controlled Spillage Deflector Plates deflect shaft spillage into the Spillage ore bin below 802m L. • Spillage bin allows for more efficient skip loading of spillage • Spillage Loading interlinked with the Spil
Slide 18: Shaft Expansion Project: Above Ground works
Blanket Gold Mine No 4 Shaft Expansion Project: Above Ground works • Mill has been completely refurbished and transported to site • Mill trunnion bearing houses now in place, levelled and laser aligned. • The mill shell is mounted on its trunnion bearings • Mill with ore feed conveyor, rod handling
Slide 19: Shaft Expansion Project: Costs and Completion
Blanket Gold Mine No. 4 Shaft Expansion Project: Costs and Completion • The total cost to complete the project is $3.0m of which $2.0m had been spent as at 30 April 2010 • Increased production will give rise to increased working capital requirement (e.g. pre ramp-up stock build and recruitment, incr
Slide 20: Shaft Expansion Project: Standby Diesel Genset
Blanket Gold Mine No. 4 Shaft Expansion Project: Standby Diesel Genset • Installation of the initial 2.5MVA Genset and completion of the Project should reduce Blanket’s exposure to electricity outages as: – Mining operations depend on un-interrupted electricity supply to power hoists, compressors, c
Slide 21: Shaft Expansion Project: Standby Diesel Genset
Blanket Gold Mine No 4 Shaft Expansion Project: Standby Diesel Genset • Picture shows the first Genset to be installed awaiting shipment from South Africa to Blanket • Standby power, although a necessity in the existing environment is over 5 times more expensive per kWh than Blanket’s present power
Slide 22: Satellite Developments
Blanket Gold Mine Satellite Developments • Blanket has developed a number of exploration and development projects close to the current mine • Mined and crushed ore can be trucked to Blanket’s Plant, which has the capacity to receive trucked ore. • After completion of No. 4 Shaft Project, there will
Slide 23: Satellite Developments
Blanket Gold Mine Satellite Developments • GG – Approx 7km from Blanket – Pre-sink completed; head gear and winder in place – Exploration shaft to 140m expected to commence in late May – Development at 120m expected to commence by the end of 2010 to facilitate an in-house evaluation of geology, mine
Slide 24: Satellite Projects
Blanket Gold Mine Satellite Projects 24
Slide 25: Lima Project - Overview
Blanket Gold Mine Lima Project - Overview 1 1 2 1. Extend Level 22 haulage: 1,500m completed; 1,550m to go. Provides platform for resource development drilling and, ultimately connects Eroica and Lima ore bodies to Shaft 4, allowing for optimised operations 2. Extend Lima Shaft or sink new Shaft at
Slide 26: New Shaft Project: Lima or AR Main
Blanket Gold Mine New Shaft Project: Lima or AR Main • A medium-to-long term exploration and development project with the objectives of • Sustaining existing operations for an extended life of mine • Evaluating the viability of accessing the deeper continuation of the ore body on the existing Blanke
Slide 27: Indigenisation
Blanket Gold Mine Indigenisation • Currently the Act and Regulations requires 51% indigenisation to be achieved within 5 years • Despite constant press reports the situation remains unclear: there may be no early resolution • Ongoing debate within the Government regarding possible changes – Reduced
Slide 28: RBZ Bond
Blanket Gold Mine RBZ Bond • Relates to non-payment by the RBZ for gold deliveries in 2008 • Amount outstanding at 30 April (including accrued interest) approx $3.2m • Default on redemption in February 2010 has not delayed the completion of No. 4 Shaft which has always been funded by internal cash f
Slide 29: Conclusion
Blanket Gold Mine Conclusion • We continue to make considerable progress towards completing the No. 4 Shaft Project which will improve Blanket’s production and cost parameters • Other than indigenisation, the new regulatory and commercial environment in Zimbabwe provides an adequate basis for operat
Slide 30: The Nama Cobalt Project
The Nama Cobalt Project Current Project Status • 2009 work was restricted to an evaluation of all historic work to identify and prioritise future targets that appear to be prospective for the discovery of “A- type” ores. • This work also made considerable progress towards identifying the location of
Slide 31: The South African PGE Projects
The South African PGE Projects Current Project Status • Currently limited availability of internal funds for exploration • Preliminary discussions with prospective joint venture partners are ongoing. • Likely at least three years before any significant resource upgrade 31
Slide 32: Overview of 2009 Financial Performance
Overview of 2009 Financial Performance Steve Curtis – Chief Financial Officer 32
Slide 33: 2009 Financial Performance: Profit and Loss Account
2009 Financial Performance Profit and Loss Account Summary Profit and Loss Account C$’m 2007 2008 2009 • Higher production and higher gold price in 2009 were offset by increased Gross Profit 0.3 3.3 3.3 costs following the dollarisation of G&A (2.1) (3.9) (2.1) Zimbabwe, resulting in similar gross p
Slide 34: 2009 Financial Performance: Balance Sheet
2009 Financial Performance Balance Sheet Summary Balance Sheets C$’m 2007 2008 2009 • Cash reduced due to investment in Restated Blanket and ongoing corporate Cash and equivalents 0.0 3.7 1.6 expenses Other current assets 4.4 1.3 4.3 • $1.5m increase in net current assets Total current assets 4.4 5.
Slide 35: 2009 Financial Performance: Cash Flow
2009 Financial Performance Cash Flow Summary Cash Flow C$’m 2007 2008 2009 • Cash outflow from operations of $0.9m Restated is after $1.9m net absorption by Cash from operations (1.7) (3.1) (0.9) working capital at Blanket. Blanket Capital expenditure (3.3) (3.0) (1.5) was cash generative by the end
Slide 36: Outlook
Outlook • Robust gold price enhances cash flows – However, long term project planning and investment must reflect long term market forecasts • Good progress on completing No. 4 Shaft Expansion – On track for expansion to 40,000 oz pa by Q4 – Positive effect on average costs and cash generation • Str
Slide 37: Corporate Issues: Optimising Shareholder Value
Corporate Issues Optimising Shareholder Value • Caledonia has applied a consistent and conservative approach to investor relations • Caledonia’s share price has been adversely affected by several highly specific issues, which have hindered Caledonia’s ability to market itself – Zimbabwean factors, p
Slide 38: AGM Presentation, May 2010
www.caledoniamining.com AGM Presentation, May 2010
Slide 39: Questions
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Slide 40: Contact
Contact Caledonia Mining Website: www.caledoniamining.com Stefan Hayden, President and CEO Tel: +27 11 447 2499 Email: shayden@caledoniamining.com Mark Learmonth, Vice President Tel: +27 11 447 2499 Email: marklearmonth@caledoniamining.com 40