China Gold International Resources Corp. Ltd. · HKEX:2099

China Gold International Resources — Investor Presentation (February 2014)

36 slides from China Gold International Resources's investor presentation, Feb 5, 2014

  1. Slide 1: China Gold International: Sustainable Profitability and Growth

    China Gold International Sustainable Profitability and Growth TSX: CGG | HKSE: 2099 February 5, 2014 China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099

  2. Slide 2: Forward Looking Statements

    FORWARD LOOKING STATEMENTS This presentation contains “forward looking statement’s” within the meaning of the United States private securities litigation reform act of 1995 and “forward looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking statem

  3. Slide 3: Agenda

    Agenda  Company Overview  Financial Highlights  CSH Gold Mine Overview and Expansion Update  Jiama Polymetallic Mine Overview and Expansion Update  Growth Plan (Organic Growth and M&A)  Social Responsibility  Industry Trends China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099

  4. Slide 4: About China Gold International

    ABOUT CHINA GOLD INTERNATIONAL Consistent Profitability: 6th year of growing revenues and profit Rapid Growth: 7th year of growing production Effective Cost Management: 29% reduction in cash cost per oz. gold in 2013 Unique Corporate Model: International company supported by largest Chinese gold

  5. Slide 5: About China Gold International

    ABOUT CHINA GOLD INTERNATIONAL  Dual listed, profitable and growing gold and copper Inner Mongolia producer  Operating two producing mines in China: CSH Gold Mine Baotou • CSH Gold Mine - Inner Mongolia Region Tibet • Jiama Copper-Polymetallic Mine (Cu-Mo-Au-Ag-Pb-Zn) - Tibet Region  The ONLY ove

  6. Slide 6: About China National Gold Group (CNG)

    ABOUT CHINA NATIONAL GOLD GROUP (CNG) China National Gold Group (CNG) owns 39% of CGG  Largest gold producer in China  Employment: 46,000 people – Produced 1.1million ounce gold in 2012 – USD 16.5Bn revenues in 2012  Resources: – USD 800 Million profit in 2012 – Gold: #1 in China (56 Million oz.)

  7. Slide 7: Our Unique Corporate Model

    OUR UNIQUE CORPORATE MODEL In China Internationally  Viewed as a local  Full TSX and HK listing Chinese miner allows access to global capital markets  Full support of China National Gold Group –  Solidifying local and our 39% shareholder international corporate and government  Local and state g

  8. Slide 8: Experienced Board and Management Team

    EXPERIENCED BOARD AND MANAGEMENT TEAM Top management of both China National Gold and China Gold International Zhaoxue Sun Xin Song Bing Liu Zhanming Wu Chairman and Executive CEO and Executive Non-Executive Director Senior Executive VP Director Director and Executive Director ~30 years ~30 years Ove

  9. Slide 9: Highlights – Resources/Reserves, Production

    HIGHLIGHTS – RESOURCES/RESERVES, PRODUCTION Combined Gold Reserve / Resource Copper Reserve / Resource Contained Gold Contained Copper CSH and Jiama Gold Jiama’s Copper (M oz) (Billion lbs) Proven / Probable Reserve 6.8 Proven / Probable Reserve 6.0 Measured / Indicated Resource (1) 10.4 Measured /

  10. Slide 10: Highlights – Strong Financial Results

    HIGHLIGHTS – STRONG FINANCIAL RESULTS Business in Vancouver named China Gold #1 International as the fastest growing enterprise in British Columbia, Canada, by percentage growth in revenue between 2007 and 2011. Revenues, Mine Operating Earnings, Net Profit 350 332 Revenue Mine Operating Earnings Ne

  11. Slide 11: Highlights – Cost Reduction

    HIGHLIGHTS – COST REDUCTION Company-Wide Cost Reduction Strategy Implemented Cash Costs ($ per oz. gold) 1000 887 900 812 800 734 700 626 600 500 400 300 200 100 0 Q4 2012 Q1 2013 Q2 2013 Q3 2013 China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099 11

  12. Slide 12: Highlights – Q3 2013 and Year End 2012

    HIGHLIGHTS – Q3 2013 AND YEAR END 2012 FINANCIAL RESULTS -The Company is in its 6th year of production and revenue growth -Last 2 years have been exceptionally strong 3rd Quarter ended Sept. 30, 2013 Year ended Dec 31, 2012 Revenues (MM USD) $75.7 $332.4 Gross Profit (MM USD) $27.3 $124.9 Net Profit

  13. Slide 13: CSH Gold Mine – Overview

    CSH GOLD MINE – OVERVIEW One of China’s largest gold mines  Located in Inner Mongolia of China, approximately 210km northwest of the city of Baotou  Principal product: Gold dore bars with silver as a by-product  Well-established basic infrastructure: – excellent access to roads – sufficient power

  14. Slide 14: CSH Gold Mine – Geology

    CSH GOLD MINE – GEOLOGY CSH Site Plan CSH Mine Resources Tonnage Grade Gold Content Resources (mt) (g/t) (koz) Measured 90.4 0.63 1,831 Indicated 172.2 0.58 3,211 Total M&I 262.6 0.60 5,066 Inferred 132.8 0.49 2,092 CSH Mine Reserves Tonnage Grade Gold Content Reserves (mt) (g/t) (koz) Proved 89.0 0

  15. Slide 15: CSH Gold Mine – Expansion Completed

    CSH GOLD MINE – EXPANSION COMPLETED Expansion feasibility study approved Q4, 2012 Expansion from 30,000 tpd to 60,000 tpd completed on time in 2013: - August 1, 2013 New 30,000 tpd crusher and ADR Plant Completed - New 80 kilometers long 110 KV power line construction completed in November of 2013 -

  16. Slide 16: CSH's Robust Economics Supports Expansion

    CSH’S ROBUST ECONOMICS SUPPORTS EXPANSION  Positive NPV and Strong Cash flows  Updated resource model supported expansion to 60 ktpd by the end of 2013 Expansion Capital Cost Summary CSH Capital Cost Timing Capital Cost $200,000,000 Initial Capital to Expand Process Facilities $184,306 $180,000,00

  17. Slide 17: CSH's Robust Economics Supports Expansion

    CSH’S ROBUST ECONOMICS SUPPORTS EXPANSION $4.2 Bn LOM (Life of Mine) Revenue Expectations $1.6 Bn LOM Operating Profit Expectations $1.25 Bn Undiscounted Total LOM Cash Flow Expectation $600,000 Revenue Operating Profit Free Cash Flow $400,000 $200,000 $0 2013 2014 2015 2016 2017 2018 2019 2020 2021

  18. Slide 18: Jiama Polymetallic Mine – Overview

    JIAMA POLYMETALLIC MINE – OVERVIEW One of China’s largest Cu-Mo-Au-Ag-Pb-Zn mines  Located 68 kilometers northeast of Lhasa, Tibet  Commercial production began in September 2010  Phase I Operation successfully completed and included: – open-pit and underground mining operation – processing plant

  19. Slide 19: Jiama Polymetallic Mine – Geology

    JIAMA POLYMETALLIC MINE – GEOLOGY Well Designed Infrastructure Supports Phase II Operations China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099 19

  20. Slide 20: Jiama Polymetallic Mine – Geology: Reserves and Resources

    JIAMA POLYMETALLIC MINE – GEOLOGY Current Reserves and Resources Jiama Resources Grade Contained Metal Ore Cu Mo Au Ag Pb Zn Cu Mo Au Ag Pb Zn Category (mt) (%) (%) (g/t) (g/t) (%) (%) (kt) (kt) (M oz) (M oz) (kt) (kt) Measured 100 0.41 0.035 0.11 6.53 0.04 0.02 415 36 0.35 21.04 43 24 Indicated 1,3

  21. Slide 21: Jiama Polymetallic Mine – Expansion

    JIAMA POLYMETALLIC MINE – EXPANSION Expanding Operations  Phase II Expansion –Feasibility released January 2014 –8 times growth processing capacity from 6,000 tpd of ore to 50,000 tpd –By 2015 capacity expected to reach 20,000 tpd (stage 1 of expansion) and then 50,000 tpd (stage 2 of expansion) by

  22. Slide 22: Jiama – Expansion Progress, January 2013

    JIAMA – EXPANSION PROGRESS, JANUARY 2013 Expansion to 20,000 tpd (stage 1) will be finished in 1st half of 2014  Completed 2/3 of development: -ventilation shafts -ore haulage levels -ore hoisting shaft -conveyor declines -initial mining area preparation  Started pre-stripping  Crushing System ne

  23. Slide 23: Jiama Mining and Production Highlights of Phase II

    JIAMA POLYMETALLIC MINE – EXPANSION Mining and Production Highlights of Phase II  Open cut mining annual production: 9.9 Mt of ROM  Expected annual production:  Underground mining annual production: 6.6 Mt of ROM • 67 thousand tonnes of copper • 2.4 thousand tonnes of molybdenum  Overall project

  24. Slide 24: Jiama Expansion Economics

    JIAMA POLYMETALLIC MINE – EXPANSION ECONOMICS Robust Economics Support Phase II Development Life of Mine Capital Costs Distribution Operating Costs Mining 350 M 0.33 1.58 366 M Mining Processing Processing 11.50 Total Capital Costs = $716 Million 10.06 Fixed Life of Mine Capital Costs Timing Overhea

  25. Slide 25: Jiama Expansion Economics: Robust Economics

    JIAMA POLYMETALLIC MINE – EXPANSION ECONOMICS Robust Economics Support Phase II Development $23.5 Bn LOM (Life of Mine) Revenue Expectations $1.3 Bn Net Present Value (9%) $5.8 Bn LOM Undiscounted Free Cash Flow Expectation  Metal Prices Assumptions: Post Tax Cashflow • $2.90/lb copper 0.50 • $15.5

  26. Slide 26: Jiama "Green Mine"

    JIAMA “GREEN MINE” NAMED BY CHINESE CENTRAL GOVERNMENT  The Tibet Autonomous Region Government has determined that any new mine operators entering the region must follow the high HSE standards set and implemented at the Jiama Mine site by CGG  Jiama Mine is covered by major medias in China and won

  27. Slide 27: CSH Receives Prestigious Award

    CSH RECEIVES PRESTIGIOUS AWARD “China’s Top 10 Major Mineral Exploration Achievements” by Geological Society of China 2013 China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099 27

  28. Slide 28: Growth Vision: Organic Expansion + M&A

    5 YEAR GROWTH VISION: CHINA NATIONAL GOLD: FORTUNE 500 MEMBER CHINA GOLD INTERNATIONAL: ORGANIC EXPANSION + M&A Accretive Acquisition GOAL AU 500,000 oz/year CU 330 MM lbs/year PRODUCER Organic Growth 2012 2013 2014 2015 2016 CSH Expansion construction Producing at 30,000 tpd to 60,000 tpd about 80%

  29. Slide 29: Growth Plan – Accretive Acquisition Strategy

    GROWTH PLAN – ACCRETIVE ACQUISITION STRATEGY Property Acquisition Criteria Valuation Transaction Structure  Accretive to current Selective  Significant Stake in shareholders acquisition strategy the Project and Resources/Reserves  Target is trading at a Financed through: internal deep discount to

  30. Slide 30: Strategy – Social Responsibility, Harmonic Development, Highest HSE Standards

    STRATEGY – SOCIAL RESPONSIBILITY, HARMONIC DEVELOPMENT, HIGHEST HSE STANDARDS  Respecting local culture and religion  Economic contribution to local communities (portable water supply, schools, infrastructure)  Hiring and training local people (35% of Jiama Mine’s employees are locals. Will emplo

  31. Slide 31: Share Information

    SHARE INFORMATION TSX: CGG – HKSE: 2099 Capital Structure and Share Info Top 10 Institutional Holders (As of February 5, 2014) (As of February 5, 2014) Issued and Van Eck Associates 19.14MM 396.4 M Corp. Outstanding Norges Bank Investment 3.95MM Fully Diluted 396.8 M Management Options 0.4 M Atlanti

  32. Slide 32: Industry Trends

    Industry Trends China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099 32

  33. Slide 33: Growing Copper Demand

    GROWING COPPER DEMAND  We believe in growing Copper consumption trend World Refined Copper Production World Refined Copper Consumption Copper Price 30,000 $5.00 25,000 $4.00 20,000 $3.00 15,000 $2.00 10,000 5,000 $1.00 0 $0.00 2008 2009 2010 2011 2012 2013 E 2014 E 2015 E 2016 E  China is world’s

  34. Slide 34: Gold Demand Trends

    GOLD DEMAND TRENDS  China is expected to surpass India to become the world’s top gold consumer 12 Month Gold Demand to Q2, 2013 China: 998 tonnes 44% 27% India: 1,049 tonnes 29% Rest of the World: 1,603 tonnes  “Chinese Dama” investor – largest gold jewelry consumer 12 Month Gold Jewelry Demand to

  35. Slide 35: Industry Trends: Supply Side

    INDUSTRY TRENDS : SUPPLY SIDE  Surge of protectionism and nationalization of the resources  High-grade deposits are getting mined out  New developments and new capital expenditure are largely on hold  Exploration by juniors is slower China Gold International Resources Corp. Ltd | TSX: CGG – HKSE

  36. Slide 36: Industry Trends: Demand Side

    INDUSTRY TRENDS: DEMAND SIDE  Urbanization (China’s Policy) = growing demand for resources Distribution of World’s Urban Population: Trends in Urbanization, by Region 1950, 2007, and 2050 Urban Population 60% 90% 85% 54% 1950 1950 82% 80% 50% 2007 50% 2000 76% 74% 2050 70% 2030 (Projected) 61% 40%

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