Kingsgate Consolidated Limited · ASX:KCN
Kingsgate Consolidated — Denver Gold Forum 2007
22 slides from Kingsgate Consolidated's conference presentation, Sep 26, 2007
Slide 1: ASX cover letter: Denver Gold Forum presentation
For personal use only ABN 42 000 837 472 26 September 2007 Via ASX Online (22 pages including this page) Manager, Company Announcements Australian Stock Exchange Limited Level 4, 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam, Kingsgate's presentation at the Denver Gold Forum, USA Please find attac
Slide 2: Kingsgate Consolidated Limited, Sept 2007
For personal use only Consolidated Limited Sept 2007
Slide 3: Disclaimer
For personal use only 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 the control of, &
Slide 4: A Shiny New Future
For personal use only A Shiny New Future Production Discovery Growth Growth Up 40% This Year* Past Resource Growth of 0.5-1Moz/yr in Resources 110-120,000oz F’cast* Chatree 10Moz potential ~300,000oz/yr - end 08* Major new discoveries * dependent on lease grant timing within ‘regional play’ Unhedged
Slide 5: Who is Kingsgate?
Who is Kingsgate? (ASX:KCN) Thai focus – Chatree Mine For personal use only 86-155,000oz/yr since 2001 ~300,000oz/yr rate - end ‘08 Chatree Chatree 1.7 Moz Reserve Go Mkt Cap: ~US$430 million ld Bangkok Shares: 92.7 million+7M options Be lt Only 2 equity issues in 10 yrs# World Class Gold Belt ADR O
Slide 6: Production Growth
Production Growth ~330,000 Eq Oz ~300,000 For personal use only Grade Increases Grade Increases Oz with Lease with Lease Granting Granting Silver ~1.5moz/yr Silver ~1.5moz/yr ’09 ’09 Extra~30,000ozAu equiv Extra~30,000ozAu equiv## 140,000 Oz 86,000 Oz 05/06 06/07F 07/08F* 08/09F 09/10F * dependent o
Slide 7: Unhedged Cash Flow
Unhedged Cash Flow Gold Hedges Gone For personal use only ~300,000 Re-rating due Re-rating due to to Oz increased increased operational cashflow operational cashflow 120,000 Oz 59,000 Oz 140,000 Oz 90,000 Oz Nil Oz Nil Oz Nil Oz 05/06 06/07F 07/08F 08/09F 09/10F
Slide 8: Trigger to Growth - Leases
For personal use only Trigger to Growth - Leases Trigger: Chatree North Mine Lease Approval Mine Plan Approval GRANTED Environmental Approval GRANTED Provincial Mining Approvals COMPLETE Provincial Forestry Land Access COMPLETE Process now in Bangkok & nearing completion Require National
Slide 9: Current Mining Leases
For personal use only Current Mining Leases A Pit A Pit Chatree Mining HH Cutback Cutback Leases H West H West D Pit D Pit C-H Pit C-H Pit 2 miles 2.35 mtpa 2.35 mtpa Processing Plant Processing Plant
Slide 10: New Mining Leases
New Mining Leases Chatree North Mining with Mining with Q Pits Q Pits Mining Lease Applications leases For personal use only leases A Pit A Pit 3 miles Focus within Focus within K East K East H Cutback H Cutback current leases current leases HH West West C-H Pit C-H Pit D Pit D Pit Improved head gra
Slide 11: Expansion – ON TRACK
For personal use only Expansion – ON TRACK Streamlined & proven processing route 5 Million tpa treatment plant (commission Dec ‘08) ~300,000 oz/year rate from Dec ‘08 Grinding Mills on order – deposit paid Ausenco contract nearing completion Proven ON-Time/ON-Budget delivery Financed mainly by Thai
Slide 12: Chatree Plant Expansion
For personal use only Chatree Plant Expansion Future Future Current Current QQ Pits Pits A Pit A Pit Ultimate Pit Profile Combined Throughput Combined Throughput 55 mtpa mtpa Expansion Plant Expansion Plant Processing Plant Processing Plant +2.65 mtpa +2.65 mtpa 2.35 mtpa 2.35 mtpa
Slide 13: Excellent Track Record
Excellent Track Record World’s Safest Gold Mine For personal use only No other gold mine with better ISO standards Only mining company granted Social Accountability SA8000 Zero Environmental Incidents Community projects Training focus - 99% Thai High quality, stable workforce Thai investors demonstr
Slide 14: Chatree Cash Costs/t - Stable
Chatree Cash Costs/t - Stable Chatree Total Costs US$/t = Mining, Milling, Admin, Credits Percentage Change 3 yrs For personal use only 75% Oil price 60% Cost Pressures Cost Pressures Thai Baht vs USD 26% 30% 14% Chatree Cash Costs US$/t 0% 40 Cash Costs US$/t * Peers: 10 mines 1.5-3mtpa. 20 Range:
Slide 15: Return to Profit this year
Return to Profit this year First loss since mine started For personal use only FY07 Profit: (US$11m) Down substantially due to: • Low grade & production Revenue: US$45m • Delivery into hedges (US$317/oz vs spot) Profitable because unhedged Return to Profit Gold grades improve with Previously Profita
Slide 16: Chatree North Leases (looking south)
Chatree North Leases (looking south) C-H Pit C-H Pit H West H West For personal use only K Pits K Pits A Pit A Pit A East A East Mining Mining 5 w leases w leases miles Q Pits Q Pits No drilling No drilling New as yet as yet New Mineralised Mineralised Trend Trend Chatree North Mining Lease Applicat
Slide 17: Exploration - Resource Growth
For personal use only Moz Exploration - Resource Growth 5 Mine Depletion (cum) Resources 4 Ore Reserves 3 2 1 2001 2002 2003 2004 2005 2006 2007F Major growth with drilling (US$7-11m/yr)
Slide 18: Near-Mine Resource Growth
Near-Mine Resource Growth For personal use only Resistivity Resistivity Anomalous Anomalous Zones Zones Geophysics shows growth beyond Chatree Mine 14 mile Resistivity shows trend of mineralisation (red) Chatree Chatree Historically high success rate of discovery using Geophysics 14 miles strike len
Slide 19: New Discovery Potential
New Discovery Potential Phitsanulok Province For personal use only World class gold province Resistivity Resistivity 500 sq.mile explor’n leases Anomalous Anomalous Zones Zones 40 prospective targets 45 One target: Chatree-size miles Chatree North 12sq.mile Geochem Anomaly Phichit Chatree Phetchabun
Slide 20: Thai Update
Thai Update Improving political & economic situation For personal use only Stock Mkt & local currency up strongly Democratic elections on Dec 23 Thai economy to expand post elections (Fitch) Approval processes convoluted in Asia EIA approval was key event in process Working with a complex bureaucrac
Slide 21: Kingsgate: Value + Re-rating
For personal use only Kingsgate: Value + Re-rating 12 month Price Targets: Valuation Macquarie A$8/sh Consensus 30% higher GSachs JBWere A$6/sh Other Brokers A$6-9/sh Gold stock top pick KCN- Top Pick Trading below analyst NPV For many analysts Re-rating overdue – Catalyst: new leases Another great
Slide 22: Golden Boomerang
Golden Boomerang KCN controls KCN controls The Thai “Golden Boomerang” core of core of Gold Gold Belt Belt For personal use only - New World Class Gold Belt - Major gold prospects identified - 10Moz Potential- Chatree alone Chatree Chatree Area Area Go Return, with new leases, to: ld Strong producti