Kingsgate Consolidated Limited · ASX:KCN
Kingsgate Consolidated — Investor Presentation (March 2014)
55 slides from Kingsgate Consolidated's investor presentation, Mar 18, 2014
Slide 1: Building for the Future: Capital Raising
For personal use only Building for the Future Capital Raising 18 March 2014 NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer Important Notice and Disclaimer For personal use only This investor presentation (Presentation) has been prepared by Kingsgate Consolidated Limited ACN 000 837 472 (Kingsgate). This Presentation has been prepared in relation to a placement and pro-rata non- renounceab
Slide 3: Forward Looking Statements
Important Notice and Disclaimer For personal use only Forward Looking Statements This Presentation contains certain “forward looking statements”. Forward looking statements can generally be identified by the use of forward looking words such as, “expect”, “anticipate”, “likely”, “intend”, “should”,
Slide 4: Competent Persons Statements
Important Notice and Disclaimer For personal use only Competent Persons Statements In this Presentation, information concerning Thailand operations relates to Exploration Results, Mineral Resources and Ore Reserve estimates is based on and fairly represents information compiled by the following Comp
Slide 5: Executive Summary
For personal use only Section 1 Executive Summary
Slide 6: Executive Summary
Corporate Update For personal use only Kingsgate is raising at least $39.2 million (and up to $59.4 million) in New Shares to repay existing corporate debt, complete feasibility work at Nueva Esperanza and Bowdens and for working capital / general corporate purposes Resource Capital Fund VI L.P.
Slide 7: Key Investment Highlights
Key Investment Highlights For personal use only High Quality Cornerstone Asset at Chatree +6.0Moz gold mineralised system (produced and in-situ) Robust Development Project Nueva Esperanza Definitive Feasibility Study has been completed Sequential Development Pipeline Feasibility study for Bowdens is
Slide 8: Capital Raising
For personal use only Section 2 Capital Raising
Slide 9: Offer Overview
Offer Overview For personal use only Kingsgate is raising at least $39.2 million (and up to $59.4) via: — Underwritten Placement of 14.7 million shares to raise $14.7 million — Underwritten 3 for 11 accelerated non-renounceable Institutional Entitlement Offer to raise $13.4 million — Institutional
Slide 10: Sources and Uses
Sources and Uses For personal use only Sources ($M) Uses ($M) Institutional Placement 14.7 Repay corporate debt(2) 19.0 Nueva Esperanza Pre-development Institutional Entitlement Offer 13.4 5.0 capex Retail Entitlement Offer (1) 11.1 Bowdens DFS and EIS capex 4.0 Working capital / general corporate 1
Slide 11: Pro Forma Balance Sheet
Pro Forma Balance Sheet For personal use only Equity raising adds liquidity and strengthens Kingsgate's balance sheet Pro forma cash balance increased to $50.4M Pro forma net debt balance reduced to $127.4M 31 December 2013 Pro-Forma Balance Sheet Highlights(1) ($M) Underwritten Capital Pro fo
Slide 12: Offer Timetable
Offer Timetable For personal use only Tuesday, 18 March Institutional Entitlement Offer and Placement Thursday, 20 March Kingsgate shares recommence trading on ASX Friday, 21 March Record date (7pm) for eligibility in the Entitlement Offer Wednesday, 26 March Retail Entitlement Offer opens W
Slide 13: Summary of Risk Factors
Summary of Risk Factors There are various risks associated with an investment in Kingsgate Consolidated Limited, and many of these are outside For personal use only the control of the Company. Please refer to the expanded Key Risks in Section 4 of this Presentation for further detail Operating Risks
Slide 14: Operations
For personal use only Section 3 Operations
Slide 15: Kingsgate's Vision
Kingsgate’s Vision For personal use only To be a preferred precious metals company Focus on delivering shareholder & stakeholder value through: Maximising operational performance of existing mines Developing high quality precious metal projects Lowering costs, increasing margins and improving
Slide 16: Kingsgate Today
Kingsgate Today Geographic and operational diversity For personal use only Two operating gold mines High quality Chatree mine in Thailand Challenger underground mine in South Australia Two advanced-development silver projects Chatree Nueva Esperanza silver/gold project in Chile Gold Mine Bow
Slide 17: Chatree – Cornerstone Asset
Chatree – Cornerstone Asset Asian showcase gold mine For personal use only Large open pit, low grade epithermal gold deposit Long life – Reserves 1.8Moz, Resources 4.0Moz Currently operating at ~6.2Mtpa @ 0.8g/t Au FY14 guidance of 120,000oz to 130,000oz gold Produced over 1.4 million oz of
Slide 18: Chatree Gold Mine
Chatree Gold Mine Focus remains on optimising production and reducing costs For personal use only Chatree Quarterly Gold Production and Costs December Quarter 2013 Ounces US$/oz 50,000 Gold production 32,221oz 40,000 750 1,487Kt @ 0.93g/t & 80.3% recovery Total cash costs US$743/oz 30,000 (inc
Slide 19: Chatree - Potential Upside
Chatree - Potential Upside For personal use only Additional resources identified in the northern part of the mining leases in the last 12 months Potential for incremental plant expansion Reserve extension outside current pit designs Potential underground targets through 6 km deep high grade fe
Slide 20: Strong Commitment to Thailand
Strong Commitment to Thailand Uniquely positioned in a major gold province For personal use only Chatree Highly prospective Thailand underexplored Bangkok gold province Thai Gold Belt Phitsanulok Phitsanulok Province Province First mover advantage Phetchabun Phetchabun but patience SPLs Province Pro
Slide 21: Nueva Esperanza
Nueva Esperanza DFS confirms robust project economics For personal use only Nueva Choquelimpie Esperanza Chimberos Teterita El Tesoro San Cristobal Arqueros 5 Kilometres Consolidation of epithermal silver/gold deposits in Maricunga belt in Chile by Kingsgate Current development focused on heap l
Slide 22: Nueva Esperanza – Heap Leach
Nueva Esperanza – Heap Leach Positive Definitive Feasibility Study results For personal use only Resources 93.3Moz Silver Eq / 1.6Moz Gold Eq Throughput 3,000,000 tonnes per annum Initial mine life + 6 years Annualised Production Silver (average) 6,430,000 oz Gold (average) 17,500 oz Silver Equivale
Slide 23: Nueva Esperanza Project development capex and opex estimates
Nueva Esperanza Project development capex and opex estimates For personal use only Capex US$M US$M Direct Costs 110.4 Crushing circuit 34.2 Overland conveyor & agglomeration 21.8 Heap leach pads (initial) 22.4 Merrill Crowe 7.6 INCO plant 1.2 Support facilities (offices, camp, etc) 23.2 Indirect Cos
Slide 24: Nueva Esperanza Site layout and infrastructure
Nueva Esperanza Site layout and infrastructure For personal use only Heap leach with on-site power and three stage crushing including HPGR On site power costs in line with spot price of ~US$24c/kWh, eliminates a 45km power line Overland conveyor to leach pads (4.7km) Water rights secured in
Slide 25: Nueva Esperanza Development schedule
Nueva Esperanza Development schedule For personal use only DFS completed with positive results Development Addendum (DIA) to approved EIA to be lodged in March Schedule DIA approval anticipated within 6 months Order long lead items Current Value engineering of capital and operating costs W
Slide 26: Nueva Esperanza - Potential upside
Nueva Esperanza - Potential upside Highly prospective regional exploration For personal use only Extensive hydrothermal alteration footprint Three established resources TETERITA CHIMBEROS HUANTAJAYA Multiple highly CERRO POTOSI RIFLE ROSA prospective targets AMARILLO ARQUEROS BOULDER GRANDOTE High g
Slide 27: Nueva Esperanza Panorama of prospects
Nueva Esperanza Panorama of prospects For personal use only CARACHITA BOULDER CERRO AMARILLO RIFLE ROSA ARQUEROS GRAN-DOTE POTOSI HUANTAJAYA CHIMBEROS TETERITA Current reserves Prospective targets 27
Slide 28: Challenger Gold Mine
Challenger Gold Mine For personal use only 28
Slide 29: Challenger Gold Mine
Challenger Gold Mine Adapting to volatile metal price conditions For personal use only Strategic restructure accelerated following gold price volatility New mine plan implemented in 2013 Focused on the higher grade Challenger West orebody New mining contract and contractor: ― Byrnecut commen
Slide 30: Challenger Gold Mine
Challenger Gold Mine Continuing to optimise production and reduce costs For personal use only December Quarter 2013 Challenger Quarterly Gold Production and Costs Gold production 20,318oz Oz US$/oz 141Kt @ 4.64g/t & 95.9% recovery 25,000 2,500 Total site cash costs (~AISC) US$1,214/oz (incl.US
Slide 31: Challenger Total Site Costs
Challenger Total Site Costs Significant cost improvement - achieving results For personal use only Challenger Total Site Costs (operating + mine development) 14,000,000 13,000,000 12,000,000 $ per month 11,000,000 Contractor transition month(1) 10,000,000 9,000,000 8,000,000 New underground mining c
Slide 32: Bowdens Silver Project
Bowdens Silver Project Kingsgate’s growth project in NSW For personal use only 32
Slide 33: Bowdens Overview
Bowdens Overview For personal use only 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)(1) Comparable to ~4Moz gold Established infrastructure and mining workforce i
Slide 34: Bowdens Silver Project
Bowdens Silver Project Project timing to reflect market conditions For personal use only Major elements of the DFS largely completed Feasibility Study Sterilisation drilling over the proposed plant site successfully completed in December Environmental Monitoring Plan in preparation Environment
Slide 35: Group Outlook for FY14
Group Outlook for FY14 Group gold production outlook of 190,000 to 210,000oz For personal use only Mine/Project Gold Production Total cash costs (2) Capital Expenditure (oz) ($/oz) FY2014 Chatree 120,000 – 130,000 US$775 – US$875 US$20M – US$25M Challenger (1) 70,000 – 80,000 $1,300 – $1,400 $3M – $
Slide 36: Key Risks
For personal use only Section 4 Key Risks
Slide 37: Risk Factors
Risk Factors There are a number of risks, both specific to the Company and of a general nature, which may, either individually or in combination, affect the future operational For personal use only and financial performance of the Company and the mining industry in which it operates, and the value o
Slide 38: Risk Factors (cont'd)
Risk Factors (cont’d) Operating Risks (cont’d) For personal use only In particular, the Chatree Mining Complex has recently experienced low excavator availability. This problem has now largely been overcome through the provision of additional spare parts and the utilisation of standby equipment. Min
Slide 39: Risk Factors (cont'd)
Risk Factors (cont’d) Operating Risks (cont’d) For personal use only Development Projects No assurances can be given that the Company will achieve commercial viability through the successful exploration or extraction of its mineral interests and assets. There are a number of risks and uncertainties
Slide 40: Risk Factors (cont'd)
Risk Factors (cont’d) Operating Risks (Cont) For personal use only Environmental Risks The Company’s exploration and operational programs will, in general, be subject to approval by governmental authorities. Development of any of the Company’s properties will be dependent on the project meeting envi
Slide 41: Risk Factors (cont'd)
Risk Factors (cont’d) General Risks For personal use only Economic General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund thos
Slide 42: Risk Factors (cont'd)
Risk Factors (cont’d) General Risks (cont’d) For personal use only Gold and silver Changes in the market price of gold and silver, which in the past have fluctuated widely, will affect the profitability of the Company’s projected operations and its financial condition. The viability of the Company’s
Slide 43: Risk Factors (cont'd)
Risk Factors (cont’d) For personal use only Investment Speculative The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affec
Slide 44: Appendix
For personal use only Appendix
Slide 45: Appendix – December 2013 Pro Forma Balance Sheet
Appendix – 31 December 2013 Pro Forma Balance Sheet For personal use only KINGSGATE PRO FORMA STATEMENT OF FINANCIAL POSITION The 31 December 2013 pro forma statement of financial As at 31 December 2013 position (Pro Forma Balance Sheet ) has been prepared in Debt Reviewed Repayment Maximum accordan
Slide 46: Akara Resources IPO
Akara Resources IPO For personal use only Kingsgate is progressing preparations for an IPO of Akara Resources on the Thai stock exchange Approval of draft prospectus and IPO application expected shortly Prospectus registration will be current for 12 months Timing will depend on a number of fac
Slide 47: Chatree
Chatree For personal use only Chatree Ore Reserves as at 30 April 2013 (>0.35g/t gold cut-off grade) Tonnes Gold Grade Silver Grade Gold Contained Silver Contained Source Category (MM) (g/t) (g/t) (Moz) (Moz) Proven 45.4 0.87 7.8 1.27 11.39 From Pits Probable 14.8 0.78 6.0 0.37 2.86 Stockpiles 9.3 0
Slide 48: Challenger
Challenger For personal use only Challenger Ore Reserves as at 30 June 2013 Tonnes Gold Grade Gold Contained Source Category (MM) (g/t) (‘000 oz) Proven 0.25 5.52 40 From Mine Probable 0.22 8.30 60 Challenger Total Total 0.47 6.82 100 Challenger Mineral Resources as at 30 June 2013 Tonnes Gold Grade
Slide 49: Nueva Esperanza
Nueva Esperanza For personal use only 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 (MM) (g/t) (g/t) (g/t) (Koz) (Moz) (Moz) (Moz) Measured 1.5
Slide 50: Nueva Esperanza
Nueva Esperanza For personal use only Nueva Esperanza Ore Reserves (0.5g/t AuEq60 cut-off grade) Gold Silver Gold Equiv Gold Silver AgEq AuEq Tonnes Category Grade Grade Grade Contained Contained Contained Contained (MM) (g/t) (g/t) (g/t) (Koz) (Moz) (Moz) (Koz) Proved - - - - - - - - Probable 17.1
Slide 51: Bowdens
Bowdens For personal use only Bowdens Mineral Resources as at 30 June 2013—(30g/t AgEq cut-off grade) Grade Contained Metal Tonnes Silver Lead Zinc AgEq Silver AgEq AuEq Category (MM) (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 6
Slide 52: Selling Restrictions
Selling Restrictions For personal use only This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. New Shares may not be offered or sold in any country outside Australia except to the extent permitted below. E
Slide 53: Selling Restrictions (cont'd)
Selling Restrictions (cont’d) For personal use only Norway This document has not been approved by, or registered with, any Norwegian securities regulator under the Norwegian Securities Trading Act of 29 June 2007. Accordingly, this document shall not be deemed to constitute an offer to the public
Slide 54: Selling Restrictions (cont'd)
Selling Restrictions (cont’d) For personal use only Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the New Shares has only been communicated or caused to be communicated and will only be comm
Slide 55: Kingsgate Consolidated Limited
Kingsgate Consolidated Limited For personal use only www.kingsgate.com.au 55
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