China Gold International Resources Corp. Ltd. · HKEX:2099
China Gold International Resources — Investor Presentation (September 2013)
37 slides from China Gold International Resources's investor presentation, Sep 22, 2013
Slide 1: China Gold International: Sustainable Profitability and Growth
China Gold International Sustainable Profitability and Growth TSX: CGG | HKSE: 2099 September, 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 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
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 Unique Corporate Model: International company supported by largest Chinese gold producer China Gold International Resources Corp. Ltd | TSX: CGG – HKSE:
Slide 5: 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 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 ounces gold in 2012 – USD 16.5Bn revenues in 2012 Resources: – USD 800 Million profit in 2012 – Gold: #1 in China (56 Million oz.
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 Local and state Think Global and
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
Slide 9: 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 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
Slide 11: 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 12: 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 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
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
Slide 15: CSH Gold Mine – Expansion Overview
CSH GOLD MINE – EXPANSION OVERVIEW An expansion feasibility study was approved in Improving Gold Recovery % Q4, 2012 55% 53% Ore production to increase from 30,000 tpd to 50% 60,000 tpd in 2013 49% By 2015 annual gold production is expected to 45% 43% increase to ~260,000 oz. from current 139,
Slide 16: CSH Gold Mine – Expansion Progress, September 2013
CSH GOLD MINE – EXPANSION PROGRESS, SEPTEMBER 2013 All earth work completed New 30,000 tpd Crusher and ADR plant completed All major equipment arrived on site and installation is near completion The Company is expected to finish construction in 2013 in accordance with schedule Ore storage:
Slide 17: CSH's Robust Economics Supports Expansion
CSH’S ROBUST ECONOMICS SUPPORTS EXPANSION Positive NPV and Strong Cash flows 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
Slide 18: 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 19: 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 20: 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 20
Slide 21: Jiama Polymetallic Mine – Geology: 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 22: Jiama Polymetallic Mine – Expansion
JIAMA POLYMETALLIC MINE – EXPANSION Expanding Operations Phase II Expansion –Pre-feasibility study completed in Q3 2012 –Feasibility to be completed Q4, 2013 –Increasing processing capacity from 6,000 tpd of ore to 40,000 tpd –By the end 2013 capacity expected to reach 20,000 tpd (stage 1 of expan
Slide 23: Jiama – Expansion Progress, September 2013
JIAMA – EXPANSION PROGRESS, SEPTEMBER 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 Crushing System 75% complete
Slide 24: Jiama Polymetallic Mine – Expansion: 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 25: Jiama Polymetallic Mine – Expansion Economics
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 26: Jiama Polymetallic Mine – Expansion Economics
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 27: 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
Slide 28: 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 28
Slide 29: Year 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%
Slide 30: 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 31: 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
Slide 32: Share Information
SHARE INFORMATION TSX: CGG – HKSE: 2099 Capital Structure and Share Info Top 10 Institutional Holders (As of September 18, 2013) (As of September 18, 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
Slide 33: Industry Trends
Industry Trends China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099 33
Slide 34: 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
Slide 35: 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
Slide 36: 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
Slide 37: 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%
China Gold International Resources — Investor Presentation (September 2013) on 6ix