Kingsgate Consolidated Limited · ASX:KCN
Kingsgate Consolidated — Sydney Mining Club (December 2013)
38 slides from Kingsgate Consolidated's conference presentation, Dec 5, 2013
Slide 1: Adapting to change in the precious metals markets
Kingsgate Consolidated Limited Adapting to change in the precious metals markets Gavin Thomas Sydney Mining Club 5 December 2013
Slide 2: Disclaimer
Disclaimer Forward Looking Statements: These materials include forward looking statements. Forward looking statements inherently involve subjective judgment & analysis & are subject to significant uncertainties, risks & contingencies, many of which are outside of the control of, & may be unknown to,
Slide 3: Kingsgate's Vision
Kingsgate’s Vision To be a preferred precious metals company Focus on delivering shareholder & stakeholder value through: Maximising existing operations and developing high quality precious metal projects Increasing output, lowering costs and improving cashflows Strategic engagement and relati
Slide 4: Gold Price
Gold Price Landscape has changed over the course of 2013 but some respite with falling A$ $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 Jan 13 Mar 13 May 13 Jul 13 Sep 13 Nov 13 US$ Gold Price A$ Gold Price
Slide 5: Gold Industry Under Pressure
Gold Industry Under Pressure Difficult year for gold with paper vs physical Gold price has fallen 28% during 2013 Despite record physical demand from China and India of nearly 700t combined in the 1H13 But gold ETF’s have dropped by 26% (~600t) over the same period Costs were out almost out
Slide 6: Global Gold Demand & Supply
Global Gold Demand & Supply Fundamentals remain in balance 5,000 Global Gold Demand (t) 5,000 Global Gold Supply (t) 4,500 4,500 4,000 4,000 3,500 3,500 3,000 3,000 2,500 (t) 2,500 (t) 2,000 2,000 1,500 1,500 1,000 1,000 500 500 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 20
Slide 7: Gold Industry Cash Costs
Gold Industry Cash Costs Margins are under serious pressure 2,500 2,000 1H13 All-in Cost (US$/oz) 1,500 Spot Price 1,000 1H13 Total Cash Cost (US$/oz) 500 0 0 10 20 30 40 50 60 70 80 90 100 1H 2013 All-in cost US$/oz 1H 2013 Total cash cost US$/oz Source: Thomson Reuters GFMS Limited, Gold Survey.
Slide 8: Kingsgate vs Gold Price
Kingsgate vs Gold Price Gold price drives large % of performance US$1750 -5 1700 - 4.5 1600 -4 - 3.5 1500 -3 Kingsgate Gold Price 1400 - 2.5 -2 1300 - 1.5 US$1200 -1 Nov Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2012 2013
Slide 9: Get Down and Get Dirty!
Get Down and Get Dirty! Kingsgate is adapting to the weak operating environment with a sustainable business strategy Cutting overhead and operating costs Improving operating efficiencies Capital programs are being halted or deferred Reducing exploration programs Increasing cut-off grades a
Slide 10: Kingsgate Today
Kingsgate Today Geographic and operational diversity Two operating gold mines with growth potential World class Chatree mine in Thailand Challenger underground mine in South Australia Two exceptional, advanced-development silver projects Nueva Esperanza silver/gold project in Chile Chatree
Slide 11: Chatree – World Class Deposit
Chatree – World Class Deposit Asian showcase gold mine
Slide 12: Strong Commitment to Thailand
Strong Commitment to Thailand Control of a major gold province Chatree World Class Gold Province Thailand Bangkok Underexplored Thai Gold Belt Phitsanulok Province First mover advantage but need patience & SPLs Phetchabun Province persistence Pending 63 km Chatree 1,200 km2 tenements Multiple target
Slide 13: Chatree
Chatree Focus remains on production and costs Chatree Quarterly Gold Production Sept Qtr production 32,241oz and Costs Ounces US$/Oz 1,593Kt @ 0.79g/t & 80.1% 50,000 1,000 (1,553Kt @ 1.01g/t & 84.1%) 45,000 900 Total cash costs US$807 40,000 800 (incl. US$123/oz royalty) 35,000 700 Unit cost
Slide 14: Chatree - Upside
Chatree - Upside Upside within current mining leases Incremental expansion potential Resource extension outside current pit designs Potential u/g targets through deep 6 km high grade feeder structures Significant near mine resources identified
Slide 15: Chatree Gold Mine – video
Chatree Gold Mine – video
Slide 16: Akara Resources Thai IPO
Akara Resources Thai IPO IPO of Akara Resources on Thai stock exchange Advisors appointed and IPO documents lodged with Thai authorities Prospectus registration will be current for 12 months Timing will depend on a number of factors including valuation metrics and market conditions High qual
Slide 17: Challenger by Name
Challenger by Name Challenging by nature
Slide 18: Challenger Gold Mine
Challenger Gold Mine Adapting to lower metal price conditions Strategic restructure following gold price uncertainty New mine plan implemented Focused on the higher grade Challenger West orebody New mining contract and contractor: Byrnecut commenced on 1 August Higher head grade 4.67g/t
Slide 19: Challenger
Challenger Production and costs continue to improve Sept Qtr production 18,545oz Challenger Gold Production Highest production since and Costs Oz June Qtr 2012 20,000 2,500 129Kt @ 4.67g/t & 95.5% (156Kt @ 3.47g/t & 94.4%) 2,000 15,000 Higher grade with transition to Challenger west 1,500
Slide 20: Challenger Total Site Costs
Challenger Total Site Costs Significant cost improvement - achieving results Challenger Total Site Costs (opex + capex) 14,000,000 13,000,000 12,000,000 A$ per month 11,000,000 Transition month* 10,000,000 9,000,000 8,000,000 New u/g mining contract 7,000,000 and contractor 6,000,000 Jul-12 Sep-12 N
Slide 21: Nueva Esperanza
Nueva Esperanza Advanced silver/gold project in Chile Chimberos open pit
Slide 22: Nueva Esperanza
Nueva Esperanza Highly prospective growth project Nueva Esperanza Choquelimpie Teterita El Tesoro Chimberos San Cristobal Arqueros 5 Kilometres Consolidated epithermal silver/gold deposits in Maricunga belt in Chile Feasibility focused on heap leach and on-site power The EIA approvals received
Slide 23: Nueva Esperanza – Panorama of Prospects
Nueva Esperanza Panorama of Prospects CARACHITA BOULDER C° AMARILLO RIFLE C° BLANCO ARQUEROS ROSA HUANTAJAYA POTOSI GRANDOTE CHIMBEROS TETERITA
Slide 24: Positive preliminary feasibility results
Nueva Esperanza Positive preliminary feasibility results Resources 93.3Moz Silver Eq / 1.6Moz Gold Eq Throughput 3,000,000 tonnes per annum Initial mine life +6 years Annualised production (post ramp up) Silver 6,000,000 – 8,000,000 oz Gold 18,000 – 22,000 oz Estimated start-up capital cost US$130-1
Slide 25: Highly prospective regional exploration upside
Nueva Esperanza Highly prospective regional exploration upside Three established resources Multiple highly TETERITA prospective targets CHIMBEROS CERRO HUANTAJAYA POTOSI AMARILLO RIFLE High grade intercepts ROSA from historic drilling BOULDER ARQUEROS GRANDOTE CARACHITA CARACHAPAMPA
Slide 26: Bowdens Silver Project
Bowdens Silver Project Kingsgate growth project in NSW
Slide 27: Bowdens Overview
Bowdens Overview Epithermal silver deposit with lead and zinc by-products Large, continuous, near surface deposit hosted in volcanics Current resource estimate 182.million ounces AgEq (JORC) Comparable to ~4Moz gold Established infrastructure and mining workforce
Slide 28: Project timing to reflect market conditions
Bowdens Silver Project Project timing to reflect market conditions Feasibility Completion of the technical feasibility study including mine planning and infrastructure Study aligned to the finalisation of the EIS in 2014. Open pit mining with pit optimisation Mining delivering a low strip ratio
Slide 29: Kingsgate Adapting to Markets
Kingsgate Adapting to Markets Focussed on re-building profitability Solid Production Platform Gold production: 200,000 ounce FY13 Strong Resource Base Grown to over 10 million ounces gold equivalent (AuEq) Project Pipeline – Sequential Developments Feasibility studies for Nueva Esperanza and B
Slide 30: Kingsgate Consolidated Limited
Kingsgate Consolidated Limited Listed: ASX Code: KCN Shares: 152 Million Market Cap: ~A$150M www.kingsgate.com.au
Slide 31: Appendix – General Disclaimer
Appendix General Disclaimer: The information contained in this presentation is for informational purposes only and does not constitute an offer to issue, or arrange to issue securities or other financial products. The information contained in this presentation is not investment or financial product
Slide 32: Corporate Social Responsibility
Corporate Social Responsibility Asia’s Showcase Gold Mine Safety focussed gold mine – 10 years no safety incidents Zero Environmental Incidents ISO Standards on all activities Only mining company granted Social Accountability SA8000 High quality, skilled stable workforce Zero Accident Award
Slide 33: Corporate Structure
Corporate Structure KINGSGATE 100% 100% 100% 100% Challenger Laguna Res. Kingsgate KCN Capital Gold Operations Chile Bowdens Pty Ltd 49% 49%3 49%2 Phar Mai 51%1 Issara Akara Nueva Bowdens Challenger Exploration Mining Mining Esperanza Silver Gold Mine Limited Limited Limited Project Project 100% 100
Slide 34: Thai Progressive Royalty Rate
Thai Progressive Royalty Rate High royalty regime at current gold prices 20% 15% 10% US$1600/oz 5% 0% Baht/gm 0 400 600 1000 1500 2000 US$/oz 0 385 580 970 1450 1950 US$1.00=Baht 30, Jan 2011.
Slide 35: Chatree
Chatree Chatree Ore Reserves as at 30 April 2013 (>0.35g/t gold cut-off grade) Gold Silver Gold Silver Tonnes Grade Grade Contained Contained AuEq Source Category (million) (g/t) (g/t) (Moz) (Moz) (Moz) From Pits Proven 45.4 0.87 7.8 1.27 11.39 Probable 14.8 0.78 6.0 0.37 2.86 Stockpiles 9.3 0.58 9.
Slide 36: Challenger
Challenger Challenger Ore Reserves as at 30 June 2013 Gold Gold Tonnes Grade Contained Source Category (million) (g/t) (‘000 oz) From Mine Proven 0.25 5.52 40 Probable 0.22 8.30 60 Challenger Total Total 0.47 6.82 100 Challenger Mineral Resources as at 30 June 2013 Gold Gold Tonnes Grade Contained S
Slide 37: Nueva Esperanza
Nueva Esperanza Nueva Esperanza Mineral Resources as at 30 June 2013 (0.5g/t AuEq60 cut-off grade) Gold Silver Gold Equiv Gold Silver AgEq AuEq Tonnes Category Grade Grade Grade Contained Contained Contained Contained (millions) (g/t) (g/t) (g/t) (Koz) (Moz) (Moz) (Moz) Measured 1.5 0.01 101 1.69 1.
Slide 38: Bowdens
Bowdens Bowdens Mineral Resources as at 30 June 2013 (30g/t AgEq cut-off grade) Grade Contained Metal Category Tonnes Silver Lead Zinc AgEq Silver AgEq AuEq (million) g/t % % g/t (Moz) (Moz) (Moz) Measured 23.6 56.6 0.31 0.41 74.5 43.0 57 1.25 Indicated 28.4 48.0 0.27 0.36 63.6 43.8 58 1.28 Meas & I
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