China Gold International Resources Corp. Ltd. · HKEX:2099
China Gold International Resources — Q2 2013 Earnings Presentation
30 slides from China Gold International Resources's earnings presentation, Aug 14, 2013
Slide 1: Strong 2013 First Half and Q2 Results, Expansion Update and Corporate Overview
China Gold International Strong 2013 First Half and Q2 Results, Expansion Update and Corporate Overview TSX: CGG | HKSE: 2099 August 14, 2013 China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099
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
Slide 3: Agenda
Agenda Company Overview Financial Highlights (Second Quarter 2013 and Annual 2012) CSH Gold Mine Overview and Expansion Update Jiama Polymetallic Mine Overview and Expansion Update Growth Plan (Organic Growth and M&A) China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099 3
Slide 4: About China Gold International
ABOUT CHINA GOLD INTERNATIONAL Inner Dual listed, profitable and growing gold and Mongolia copper producer CSH Gold Mine Operating two producing mines in China: Baotou Tibet • CSH Gold Mine - Inner Mongolia Region • Jiama Copper-Polymetallic Mine (Cu-Mo-Au-Ag-Pb-Zn) - Tibet Region The ONLY ove
Slide 5: Strong Support from Major Shareholder – CNG
STRONG SUPPORT FROM MAJOR SHAREHOLDER – CNG China National Gold Group (CNG) owns 39% of CGG Largest gold producer Low cost financing capability Strong expertise in exploration, operation, engineering and research capabilities with patents Benchmark in China for Environmental Standard and Soc
Slide 6: Experienced Board and Management Team
EXPERIENCED BOARD AND MANAGEMENT TEAM 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 Over 20 years ~12 years experience experience experience experience Ian He
Slide 7: Highlights – Resources/Reserves, Production
HIGHLIGHTS – RESOURCES/RESERVES, PRODUCTION Combined Gold Reserve / Resource Copper Reserve / Resource Gold Content Copper Content Category Category (M oz) (Billion lbs) Proven / Probable Reserve 6.7 Proven / Probable Reserve 6.2 Measured / Indicated Resource* 8.1 Measured / Indicated Resource* 10.3
Slide 8: 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
Slide 9: Highlights – Strong Q2, 2013 Financial Results
HIGHLIGHTS – STRONG Q2, 2013 FINANCIAL RESULTS Cash Costs Decrease. Revenues, Net Profit, Operating Cash Flow, EPS Grow. Quarter ended June 30, 2013 Quarter ended June 30, 2012 % change Revenues (MM USD) $81.6 $76.5 7% Net Profit (MM USD) $19.6 $12.6 56% Net Operating Cash Flow (MM $16.4 $54.2 -70%
Slide 10: Highlights – Strong 2012 Financial Results
HIGHLIGHTS – STRONG 2012 FINANCIAL RESULTS -The Company is in its 6th year of production and revenue growth -Last 2 years have been exceptionally strong Year ended Dec 31, 2012 Year ended Dec 31, 2011 % change Revenues (MM USD) $332.4 $311.3 7% Gross Profit (MM USD) $124.9 $120.8 3% Net Profit (MM U
Slide 11: 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
Slide 12: 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
Slide 13: CSH Gold Mine – Expansion Overview
CSH GOLD MINE – EXPANSION OVERVIEW An expansion feasibility study was Improving Gold Recovery % approved in Q4, 2012 55% 53% Ore production to increase from 30,000 50% tpd to 60,000 tpd in 2013 49% 45% By 2015 annual gold production is 40% 43% expected to increase to ~260,000 oz. from 37% 35%
Slide 14: CSH Gold Mine – Expansion Progress, August 2013
CSH GOLD MINE – EXPANSION PROGRESS, AUGUST 2013 All earth work completed New 30,000 tpd Crusher and ADR plant completed All major equipment arrived on site and installation is ongoing Ore storage: construction nearly completed. The Company is expected to finish construction in 2013 in acco
Slide 15: CSH Gold Mine – Expansion Capital Costs
CSH GOLD MINE – EXPANSION CAPITAL COSTS Updated resource model supports 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 $180,000,000 $160,000,000 Total Capital $212,923 $1
Slide 16: CSH's Robust Economics Supports Expansion
CSH’S ROBUST ECONOMICS SUPPORTS EXPANSION Positive NPV and Strong Cash flows under both: corporate level valuation and operation level valuation in ITR Additional value is expected from accelerated production and shorter mine life from 16 to 11 years Shorter mine life = Higher degree of confiden
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
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
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
Slide 20: Jiama Polymetallic Mine – Current 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 76 0.48 0.042 0.07 0.04 364 32 52 30 Indicated 977.1 0.44 0.036 0.21 10.
Slide 21: Jiama Polymetallic Mine – Expansion
JIAMA POLYMETALLIC MINE – EXPANSION Expanding Operations Phase II Expansion –Pre-feasibility study completed in Q3 2012 –Increase processing capacity from 6,000 tpd of ore to 40,000 tpd in 2015, and will reach 80% of the capacity in 2015 –By the end 2013 capacity expected to reach 20,000 tpd (stag
Slide 22: Jiama – Expansion Progress, August 2013
JIAMA – EXPANSION PROGRESS, AUGUST 2013 Expansion to 20,000 tpd (stage 1) will be finished in 2013 Completed 2/3 of development: -ventilation shafts -ore haulage levels -ore hoisting shaft -conveyor declines -initial mining area preparation Started pre-stripping future crushing plant major e
Slide 23: Jiama Mining and Production Highlights
JIAMA POLYMETALLIC MINE – EXPANSION Mining and Production Highlights Open cut mining methods will extract 202.2 Mt of ROM Underground mining will extract 161.3 Mt of ROM Expected life of mine: 31 years Overall project processing capacity is 13.8 Mtpa for Cu-Mo ores Expected annual producti
Slide 24: Jiama Expansion Economics – Robust Economics Support Phase II
JIAMA POLYMETALLIC MINE – EXPANSION ECONOMICS Robust Economics Support Phase II Development Life of Mine Capital Costs Distribution and Timing 27,769 24,327 $350,000,000 $300,000,000 Process Plant $250,000,000 76,273 Mining 221,310 $200,000,000 Engineering $150,000,000 355,434 Loan Interest $100,000
Slide 25: Jiama Expansion Economics – LOM Revenue and Cash Flow
JIAMA POLYMETALLIC MINE – EXPANSION ECONOMICS Robust Economics Support Phase II Development $17.5 Bn LOM (Life of Mine) Revenue Expectations $5.1 Bn LOM Operating Profit Expectations $3.8 Bn LOM Undiscounted Free Cash Flow Expectation $1,600,000 Revenue Free Cash Flow $1,400,000 $1,200,000 $1,000,00
Slide 26: Jiama Green Mine Named by Chinese Central Government
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
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
Slide 28: Growth Plan – Organic Expansion + M&A
GROWTH PLAN – ORGANIC EXPANSION + M&A Accretive Acquisition GOAL 500,000 oz/year PRODUCER Organic Growth 2012 2013 2014 2015 2016 CSH Expansion construction Producing at 30,000 tpd to 60,000 tpd about 80% capacity Producing at full capacity Jiama Development and Development and 6,000 tpd constructio
Slide 29: Growth Plan – Accretive Acquisition Strategy
GROWTH PLAN – ACCRETIVE ACQUISITION STRATEGY Property Acquisition Criteria Valuation Transaction Structure Accretive to current Aggressive Significant Stake in shareholders acquisition strategy the Project and Resources/Reserves Target is trading at a Financed through: internal deep discount t
Slide 30: Share Information
SHARE INFORMATION TSX: CGG – HKSE: 2099 Capital Structure and Share Info Top 10 Institutional Holders (As of August 14, 2013) (As of August 14, 2013) Van Eck Associates 19.73MM Issued and 396.4 M Corp. Outstanding Norges Bank Investment 3.95MM Fully Diluted 396.9 M Management BlackRock Asset 2.63MM
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