Kingsgate Consolidated Limited · ASX:KCN
Kingsgate Consolidated — Q2 2006 Earnings Presentation
23 slides from Kingsgate Consolidated's earnings presentation, Jul 27, 2006
Slide 1: Kingsgate Consolidated Limited – June Qtr Update
Kingsgate Consolidated Limited Low Cost Growth with more leverage to gold price June Qtr June Qtr Update Update -- 27 27 July July 2006 2006
Slide 2: Low Cost Growth
Low Cost Growth Low Cost Gold US$206/0z Cash Cost 2nd lowest Total gold costs onASX US$247/0z Total Cost Lowest quartile globally Only NCM lower on ASX Near-term Growth 300,000 to 350,000 Oz Production doubling in ’08 140,000 Oz Continued drilling success FY06 2008 Long-term Growth Proven targeting
Slide 3: Global Cash Cost Curve
Global Cash Cost Curve US$/oz 600 Current Gold Price 500 400 Gold Fields Anglo 300 Newmont Gold Barrick Cash Cost Curve 2005 200 Chatree 2005 FY Chatree 2006 FY 100 Chatree 2004 FY Source: Global Mining Research 0 0% 25% 50% 75% 100%
Slide 4: Operational Results
Operational Results On Target: Production FY06 – 140,071 ozs, just below target Mill throughput – at new nameplate 2.3-2.4 mtpa Gold grade 2.4g/t – on target for FY06 Strip ratio 7.0 – on target for FY06 Costs & pressures Low costs maintained due: - Grid power, few expats, source materials locally C
Slide 5: Operational Results
Operational Results Mill Throughput Mill Throughput (Ktpa) (Ktpa) Head Grade Head Grade (g/t) (g/t) 2,350 5.3 2,100 2,000 1,829 1,671 3.9 Forecast Forecast 1,324 3.1 2.4 2.4 Forecast 665 01/02 02/03 03/04 04/05 05/06F 06/07F 01/02 02/03 03/04 04/05 05/06F 06/07F Cash Cost Cash Cost && Realised Reali
Slide 6: Forecast
Forecast Forecast FY07: Similar production to FY06 - from main Chatree pits & A pit at Chatree Nth Costs similar to June Qtr’06, but industry wide cost pressures exist Higher Mill throughput of 2.3-2.4 mtpa Mine plan adjusted due to uncertainty of timing of granting of Chatree North mining leases Gr
Slide 7: Almost Unhedged
Almost Unhedged Hedge Positions: Reduced to under 59,000oz as planned Only third of 06/07 production hedged (US$317/oz) Unhedged expansion to >300,000 oz/yr No negative IFRS impacts from hedges in future Expansion : Feasibility study being optimised at present Ausenco will likely manage project; sel
Slide 8: Selldown - in Control
Selldown - in Control Incentives: 100% ownership to Nov’06 51% “Thai Ownership” from Nov 2006 Tax holiday to Nov’09 + 5 years half tax Selldown- Commercial Deal - KCN control Fair Value expected for Selldown portion May have pre-IPO sale short term to Thai investors (~10% beneficial interest in Chat
Slide 9: Selldown & Incentives
Selldown & Incentives Investment Incentive Timetable 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 100% 60-100% 55-60% Ownership Ownership Ownership ZERO 15% 30% Tax Tax Tax Interim Initial B.O.I. Selldown of Thai Entity No B.O.I. Selldown of Incentives Incentives COMPLETE Th
Slide 10: Main Asset - Chatree
Main Asset - Chatree Low sulphidation epithermal deposit Opened in Nov’01 Chatree Chatree ~150,000 oz/yr Au Good Infrastructure Grid Power ‘Buy Thai’ policy Workforce: 915 Thai 300 Km 9 Expatriates Phuket
Slide 11: Chatree Gold Mine
Chatree Gold Mine New mining lease Mining started Feb 06 Proposed ‘A’ Pit Current mining lease boundary Chatree mine (‘C’ Pit & Plant) Looking north to Chatree North (New ‘A’ Pit)
Slide 12: Chatree Gold Mine
Chatree Gold Mine A Pit mined at Multi pits Chatree North. Oxide feed Mining in Chatree Nth Hard ore in main C-H pits New High grade zone High grade zone Chatree North (New ‘A’ Pit) Chatree mine (‘C’ Pit & ‘H’ Pit)
Slide 13: Chatree North
Chatree North Chatree North - conceptual view of A Pit and Ore Zones A Hill fil | higher grade iy underground Figure 2: \¢ potential Current A Pit shell at Chatree North showing high grade underground potential (purple) and open cut (red) wire frames of gold zones.
Slide 14: Chatree North
Chatree North Chatree North - conceptual view of A Pit and Ore Zones 3301RD 3.7m@9.332/t 914RD 7.5m@26.3¢/t 3232RD 5.15m@12.10g/t 949RD 3235RD 6.5m@5.8¢/t 12.0m@4.31 git 949 / spam 2771RD 7 6.8m@9.7¢/t New high grade zone A to deepen Pit 3330RD 10.0m@5.32¢/t Figure 3: Location of recent drillholes w
Slide 15: Chatree North – More gold
Chatree North – More gold Exciting drill results: New high grade zone in central A-pit Should deepen pit profile further Underground potential exists Underground mining being assessed for Chatree - Gain experience under C pit first Examples of drill results: 7.5m @ 26 g/t gold, incl 3.1m @ 60 g/t 5.
Slide 16: Chatree Expansion
Chatree Expansion Expansion: Double output >300,000 oz/yr >2Moz/yr silver 5mtpa plant Duplicate Plant Feasibility study Add tank farm for silver circuit being optimised Duplicate plant (+2.7mtpa) Add silver circuit (Merrill Crowe) High silver in A pit (15Moz) Aim - lift silver recoveries from 45% to
Slide 17: Super Pit
Super Pit Chatree North Chatree North Chatree: Large Pit Potential 3 – 4 Kms long Potential for 5 Mozs Proposed Proposed Pits Pits Potential for super-pit Chatree Chatree
Slide 18: Leases
Chatree North Chatree North Leases Mining Lease Mining Lease Applications Applications Chatree North Mining Leases 9 Lease Applications Mining Lease Mining Lease ‘A’ Pit ‘A’ Pit Final discussions on Environ Impact Assessment EIA approval key step for granting Not “If” but “When” Chatree Chatree Leas
Slide 19: Chatree North Resource Growth
Chatree North Resource Growth Q Growth of 1 million Q ounces gold per annum in Chatree & Chatree N Q Resource drill-out with up to 9 drill rigs 3.0 Km High conversion of resources to ore reserves A & A East 5 million ounces gold potential in Chatree K West K East
Slide 20: Ground Resistivity Targets
Ground Ling Ling Volcanic Volcanic Resistivity Complex Complex Targets 25 More than 30 targets Km Q-Resource drill out 2006 for follow-up A-Resource 65% of geophysical drill out 2006 anomalies J-Drill testing mineralized 2006 Chatree Chatree 25 km strike length Volcanic Volcanic R-Drill Complex Test
Slide 21: Regional Prospects
Regional Prospects Discovered potential new world-class gold province 39 prospective targets within economic distance of current gold processing plant Chatree Chatree Includes 10 high priority targets 114 lease applications ~1500km2 Numerous releases about exploration expected for >1 year 30 Kms
Slide 22: Kingsgate delivers
Kingsgate delivers Reliable gold producer ~140,000 oz/yr Lowest quartile cash costs US$200-250/oz World class gold province - More Chatrees Strong financials- No Debt Selldown & lease applications progressing Almost unhedged Future expansion potential >300,000 oz/yr
Slide 23: Disclaimer
Disclaimer Forward Looking Statements: These materials include forward looking statements. Forward looking statements inherently involve subjective judgment & analysis & are subject to significant uncertainties, risks & contingencies, many of which are outside of the control of, & may be unknown to,
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