China Gold International Resources Corp. Ltd. · HKEX:2099
China Gold International Resources — Investor Presentation (March 2014)
31 slides from China Gold International Resources's investor presentation, Mar 26, 2014
Slide 1: China Gold International: Sustainable Profitability and Growth
TSX: CGG | HKSE: 2099 March 26, 2014 China Gold International Sustainable Profitability and Growth
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 China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099 3
Slide 4: About China Gold International
ABOUT CHINA GOLD INTERNATIONAL Consistent Profitability Rapid Growth 6 years of consistent 8th year of growing profitability production capacity Effective Cost Management Unique Corporate Model: Reduction in cash cost 2013 International company vs 2012 supported by largest Chinese gold producer Chin
Slide 5: About China Gold International
ABOUT CHINA GOLD INTERNATIONAL Inner Dual listed, profitable and growing gold and Mongolia copper 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
Slide 6: About China National Gold Group
ABOUT CHINA NATIONAL GOLD GROUP CHINA NATIONAL GOLD GROUP OWNS 39% OF CHINA GOLD INTERNATIONAL Largest gold mining company in China Employment: 50,800 people The only central SOE in Chinese Gold Industry Design and research institutions Expertise: Major Shareholder in both International
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 – Building international our 39% shareholder corporate and government Local and state government sup
Slide 8: Experienced Board and Management Team
EXPERIENCED BOARD AND MANAGEMENT TEAM Top management of both China National Gold and China Gold International Xin Song Bing Liu Lianzhong Sun Zhanming Wu Chairman and Executive CEO and Executive Non-Executive Director Senior Executive VP Director Director and Executive Director ~30 years ~30 years O
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 (M oz) Jiama’s Copper (Billion Pounds / Thousand Tonnes) Proven / Probable Reserve 6.3 Proven / Probable Reserve 6.0 / 2,708 Measured / Indicated
Slide 10: Highlights – Revenues, Profit
HIGHLIGHTS – REVENUES, PROFIT Realized average gold price Realized average copper price (US$ per pound) 1650 1,611 (US$ per ounce) 2.82 1600 1550 15.5% 2.5% 1500 1450 1400 1,362 2.75 1350 1300 1250 1200 2012 2013 2012 2013 Revenues (million US$) Net Profit (million US$) 350 90 82 80 300 311 332 303
Slide 11: Highlights – Cost
HIGHLIGHTS – COST Company-Wide Cost Reduction Strategy Implemented Cash cost of gold in CSH Total cost of gold in CSH (US$ per ounce) (US$ per ounce) 928 6.7% 866 825 14.3% 707 2012 2013 2012 2013 Cash cost of copper in JIAMA Total cost of copper in JIAMA (US$ per pound) (US$ per pound) 3.04 2.9 2.5
Slide 12: 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 13: CSH Gold Mine – Geology
CSH GOLD MINE – GEOLOGY CSH Site Plan CSH Mine Resources Tonnage Grade Gold Content Resources (mt) (g/t) (Moz) Measured 68.9 0.65 1.44 Indicated 156.8 0.59 2.98 Total M&I 225.7 0.61 4.42 Inferred 85.9 0.51 1.40 CSH Mine Reserves Tonnage Grade Gold Content Reserves (mt) (g/t) (Moz) Proved 67.8 0.64 1
Slide 14: 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 -
Slide 15: CSH Gold Mine – Outlook
CSH GOLD MINE – OUTLOOK Gold Production in CSH (‘000 oz) Total Cost of CSH (USD per ounce) 300 260 260 250 825 200 200 707 712 134 139 131 150 111 83 100 57 50 22 0 2007 2008 2009 2010 2011 2012 2013 2014E 2015E LOM Average 2012 2013 LOM average Improving Gold Recovery % 60% 53% 54% 55% 50% 49% 45%
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 Expansion Capital Cost Summary CSH Capital Cost Timing Capital Cost $200,000,000 Initial Capital to Expand Process Facilities $184,306 $180,000,000 Total Capital $21
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 $‘000 $600,000 Revenue Operating Profit Free Cash Flow $400,000 $200,000 $0 2013 2014 2015 2016 2017 2018 2019 202
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 100 0.41 0.035 0.11 6.53 0.04 0.02 415 36 0.35 21.04 43 24 Indicated 1,3
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 28,000 tpd (stage 1 of expansion) and then 50,000 tpd (stage 2 of expansion) by
Slide 22: Jiama – Expansion Progress, March 2014
JIAMA – EXPANSION PROGRESS, March 2014 Expansion to 28,000 tpd (stage 1) will be finished in 1st half of 2014 Ongoing development: -ventilation shafts -ore haulage levels -ore hoisting shaft -conveyor declines -initial mining area preparation Started pre-stripping Crushing System nearly comple
Slide 23: Jiama Polymetallic Mine – Expansion: Phase II Highlights
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
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
Slide 25: Jiama Expansion 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 Post Tax Cashflow Assumptions: 0.50 • $2.90/lb copper 0.40 •
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
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 Vision
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 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
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
Slide 31: Share Information
SHARE INFORMATION TSX: CGG – HKSE: 2099 Capital Structure and Share Info Top 10 Institutional Holders (As of March 26, 2014) (As of March 26, 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 BlackRock A
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