Caledonia Mining Corporation Plc · AMEX:CMCL
Caledonia Mining — Investor Presentation (September 2015)
23 slides from Caledonia Mining's investor presentation, September 2015
Slide 1: Expanding, Low-Cost, Zimbabwean Gold Producer
Expanding, Low-Cost, Zimbabwean Gold Producer September 2015 www.caledoniamining.com
Slide 2: Disclaimer
Disclaimer This presentation does not constitute, or form part of, any offer to sell or issue or any solicitation of any offer to purchase or subscribe for, any shares in Caledonia Mining Corporation (“Caledonia”), nor shall it (or any part of it) or the fact of its distribution, form the basis of,
Slide 3: Caledonia Mining Overview
Caledonia Mining Overview • 49% owned - fully indigenised Blanket Gold Mine, • 2014 production 41,771oz Zimbabwe • Low-cost: 2014 cash-cost $652/oz; AISC $969/oz • $70m, internally-funded growth to 80koz by 2021 • Robust net cash position: C$23.7m at June 30, 2015 Caledonia Group • Low PE Ratio; Hig
Slide 4: Valuation Parameters: High Yield; Low PE Ratio
Valuation Parameters High Yield; Low PE Ratio Sources: Company Information; S&P Capital IQ • Low rating is due largely to negative perceptions about Zimbabwe • Blanket is fully indigenised and has significant, fully-funded growth plans • Investor concerns about Zimbabwe are over-done! 4
Slide 5: Blanket Mine Competitive Operational Performance
Blanket Mine Competitive Operational Performance • Caledonia compares well to other African gold producers in terms of costs • As Caledonia implements its growth strategy, Caledonia’s operational and financial performance should improve significantly – 2018 target AISC: US$741/oz 5
Slide 6: Zimbabwe Investor Concerns
Zimbabwe Investor Concerns • Political continuity: ZANU-PF in power since 1980 Political Stability • New government is pragmatic and pro-business • No civil disorder; established, functional government administration • 51% of all businesses must be owned by Zimbabweans Indigenisation • Caledonia imp
Slide 7: Blanket Gold Mine, Zimbabwe: The First Indigenised Zimbabwean Gold Miner
Blanket Gold Mine, Zimbabwe The First Indigenised Zimbabwean Gold Miner • Indigenisation completed and implemented in Q3 2012 − 10% of Blanket donated to local community − 41% of Blanket sold to 3 parties for US$30.09 million $30m facilitation funding Caledonia − Zimbabweans given full credit for re
Slide 8: Zimbabwe Improving Investment Climate
Zimbabwe Improving Investment Climate • Measures have been implemented by the Zimbabwe government to improve the operating environment for Gold producers – October 2014: royalty reduced from 7% to 5%, comparable with the royalty rate in other African countries – February 2015: discount on gold sales
Slide 9: Capital Structure, Financials
Capital Structure, Financials Capital Structure Shares in issue (m) 52.1 Options (m) 2.7 Cash (30 June 2015) C$23.7m Net Assets (30 June 2015) C$62.5m Listing and Trading Share price C$0.78 Market capitalisation (C$’m) C$40.6m 52 week low/high (C$) 0.6-1.17 Summary Profit and Loss Year H1 (C$’m exce
Slide 10: Resources
Resources 1. Tonnes are in situ Mineral Resources at August 2014 (at $1,250 gold) 2. All figures are in metric tonnes Tonnes Grade (g/t) Gold 3. Mineral Resources include Mineral Reserves (000’s) (k.oz) 4. Mineral Resources are stated at cut-off grade of 1.96g/t Measured & Indicated 4,051 3.82 498 5
Slide 11: Gold Production: Revised Investment Plan Addresses Falling Production
Gold Production Revised Investment Plan Addresses Falling Production • Quarterly production approx. 10,000 ounces per quarter compared to over 12,000 ounces per quarter in mid-2012 – Lower production due to lower grades which have fallen from a peak of 4.5g/t to 3.4g/t in Q4 2014. • Constraints on u
Slide 12: The Revised Investment Plan: Improved Logistics; Accelerate Access to Deeper Resources
The Revised Investment Plan Improved Logistics; Accelerate Access to Deeper Resources • A new tramming Loop on 22 Level (750m below surface) increases tramming capacity (ore and waste) from 400tpd to 1,000tpd Increase Underground Material Handling • Modest capital cost ($0.8m approx) completed ahead
Slide 13: Revised Investment Plan: Improved Logistics; Accelerate Access to Deeper Resources
Revised Investment Plan Improved Logistics; Accelerate Access to Deeper Resources Central Shaft No. 4 Shaft 22 Level No. 6 Winze (750m) Plan illustrative and not to scale 13
Slide 14: Revised Investment Plan: Projected Production
Revised Investment Plan Projected Production • Projected production in terms of the revised Life of Mine Plan is set out below • Revised Life of Mine Plan has been independently reviewed and confirmed by Minxcon, Johannesburg. • Projections exclude any production from the satellite exploration prope
Slide 15: Revised Investment Plan: Capital Expenditure and Funding
Revised Investment Plan Capital Expenditure and Funding • US$70m of capital investment 2015 to 2021 • Local debt funding increased from $2.5m to $5m • Blanket dividends suspended: cash redeployed into investment • At $1,200/oz all capex funded by internal cash generation • At $1,100 gold, Blanket wi
Slide 16: Revised Investment Plan: Low-Risk Growth
Revised Investment Plan Low-Risk Growth • Implementation parameters (e.g. daily sinking rate) based on achieved rates at other Blanket projects Not a “Stretch” plan • Allowance built in for slippage • Highly experienced management team with experience of similar projects • 97% of the capex is genera
Slide 17: Increasing Production and Falling Costs Boost Profit
Revised Investment Plan Increasing Production and Falling Costs Boost Profit • Strong growth in profit and cash flows ─ increasing production, falling average costs of production, reduced G&A • Robust value proposition: opportunity for rapid share price appreciation: – Increasing profit – Increasing
Slide 18: Dividend Policy: Committed to Shareholder Returns
Dividend Policy Committed to Shareholder Returns • November 2013 Caledonia announced a new dividend policy: – 2014 dividend of 6 Canadian cents – payable quarterly @1.5 cents/quarter • Total 2015 dividend cost: C$3.1m – 8x covered by cash resources • Caledonia’s Board remains committed to the mainta
Slide 19: Milestones to unlocking value proposition
Milestones to unlocking value proposition Completion of tramming loop: mid-2015 Production commences at No 6 Winze: Jan 2016 Completion of vertical Central shaft mid-2017 Commence production from Central Shaft: mid-2018 Concentrating on focused optimal extraction and lower costs 19
Slide 20: Core attributes of Caledonia
Core attributes of Caledonia In-house big project experience and Greenstone competence Fully funded development of existing resource Dividend underpinned by low cost structures Strong balance sheet with capacity Collaborative corporate culture Existing African mining expertise Fully indigenized stru
Slide 21: Contacts
Contacts Caledonia Mining PR (UK): BlytheWeigh Website: www.caledoniamining.com Tim Blythe, Halimah Hussain Share Codes: TSX - CAL; OTCQX – CALVF; AIM - CMCL AIM Broker/Nomad: WH Ireland Research: Edison Investment Research Mark Learmonth www.edisoninvestmentresearch.co.uk/research Tel: +27 11 447 2
Slide 22: Other Information: Location
Other Information: Location • Key greenstone mining district • All infrastructure in place • Skills and labour freely available • Close enough to Johannesburg for easy supply of SA- sourced supplies 22
Slide 23: Other Information: Directors and Management
Other Information Directors and Management Management Directors Chief Executive Steve Curtis Chairman Leigh Wilson (USA) Chief Finance Officer Mark Learmonth CEO Steve Curtis (S Africa) Chief Operating Officer Dana Roets CFO Mark Learmonth (S Africa VP Exploration Dr Trevor Pearton Independent Direc
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