Kingsgate Consolidated Limited · ASX:KCN
Kingsgate Consolidated — FY2006 Earnings Presentation
24 slides from Kingsgate Consolidated's earnings presentation, Aug 30, 2006
Slide 1: 2005/06 Full Year Financials – A 'Cracker' Result
Kingsgate Consolidated Limited 2005/06 Full Year Financials – A ‘Cracker’ Result With Responsible Low Cost Growth 30 August 30 August 2006 2006
Slide 2: FY06 - A 'Cracker' Result
FY06 - A ‘Cracker’ Result Due to increased gold Profit: $16.7m production & hedge EPS: 19.3c/sh accounting gains on Up 100% on last year hedge pre-delivery Due to 10% increase in Revenue: $74.1m plant throughput & Up 11% on last year gold production Maintains high payout Dividends: 10c/sh ratio of ~
Slide 3: FY06 - A 'Cracker' Result
FY06 - A ‘Cracker’ Result Lowest quartile of gold Low Cost: US$206/oz producers for ~5 yrs Consistent: Down 3% on last year US$247/0z Total US$247/0z Total Cost Cost Average US$145/oz for ~5 years Lowest of of ASX ASX producers producers Lowest 300,000 Production: 140koz to 350,000 Oz Consistent: Up
Slide 4: Annual Summary
Annual Summary 2005 - 06 2004 - 05 Gold Produced (oz) (oz) 140,071 126,550 Cash Cost (US$/oz) (US$/oz) 206 212 Profit (A$m) (A$m) 16.7 8.9 EBITDA (A$m) (A$m) 25 18 Operating Cash flow (A$m) (A$m) 22 22 EPS Earnings/Share (A¢/sh) (A¢/sh) 19.3 9.6 Dividends (A¢/share) (A¢/share) 10 7 Net Cash (A$m) (A
Slide 5: P&L/Income Statement
P&L/Income Statement 2005 - 06 2004 - 05 Revenue (A$m) (A$m) 74.1 66.8 Direct Costs (A$m) (A$m) (40.3) (34.9) Employee Benefits (A$m)(A$m) (8.1) (6.0) D & A (A$m) (A$m) (7.8) (8.7) Finance Cost (A$m) (A$m) (0.9) (1.0) Forex & Inventory (A$m) (A$m) (0.3) (0.7) Hedge Accounting Gain 7.0 0 Other (A$m)
Slide 6: Global Cash Cost Curve
Global Cash Cost Curve US$/oz 600 Current Gold Price 500 Gold 400 Fields Anglo Newmont Gold 300 Barrick Cash Cost Curve 2005 Chatree 2005 FY 200 Chatree 2006 FY 100 Chatree 2004 FY Source: Global Mining Research 0 0% 25% 50% 75% 100%
Slide 7: 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 8: Operational Results
Operational Results Mill Throughput Mill Throughput (Ktpa) (Ktpa) Head Grade Head Grade (g/t) (g/t) 2,350 5.3 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 05/06 06/07F 01/02 02/03 03/04 04/05 05/06 06/07F Cash Cost Cash Cost && Realised Rea
Slide 9: 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 timing of granting of Chatree North mining leases Greater leverage
Slide 10: Selldown - in Control
Selldown - in Control Currently Negotiating Outcome BOI Incentives: 100% ownership to Nov’06 51% “Thai Ownership” from Nov 2006 Selldown- Commercial Deal - KCN control Will meet the BOI guideline of Nov’06 Financial adviser circling Thai investors Fair Value expected for Selldown portion Further Val
Slide 11: 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 12: Distinctive Gold Experts
Distinctive Gold Experts Expertise – Finding & Mining
Slide 13: 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
Slide 14: Community License
Community License World Best Safety Record >7M hrs with 1incident Workplace Awards – Women, Training, Safety ISO 9001, OHSAS 18001 Awards – No Environ incidents Environment Tailings Cyanide at levels of coffee Worlds Best Practice ISO14001 Health & Education– schools, water Social Community managed
Slide 15: Community & Workplace
Community & Workplace Clockwise - Revegetating waste; New schools Donations to schools; Women in management ; Water tower
Slide 16: Chatree Gold Mine
Chatree Gold Mine A Pit mined at Chatree North. Oxide feed Multi pits 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 17: Chatree North
Chatree North - conceptual view of A Pit and Ore Zones AHill higher grade underground potential Figure 2: Current A Pit shell at Chatree North showing high grade underground potential (purple) and open cut (red) wire frames of gold zones.
Slide 18: Chatree Expansion
Chatree Expansion Expansion: Double output >300,000 oz/yr >2Moz/yr silver 5mtpa plant Duplicate Plant Add tank farm Feasibility study for silver circuit being optimised Duplicate plant (+2.7mtpa) Add silver circuit (Merrill Crowe) Aim - lift silver recoveries from 45% to >70% Ausenco finalising cape
Slide 19: Leases
Chatree North Chatree North Leases Mining Lease Mining Lease Applications Applications Chatree North Mining Leases Mining Lease Mining Lease ‘A’ Pit ‘A’ Pit 9 Lease Applications Final discussions on Environ Impact Assessment EIA approval key step for granting Chatree Chatree Not “If” but “When” Leas
Slide 20: Chatree North Resource Growth
Chatree North Q Resource Growth 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 Over 5 million ounces gold potential in Chatree; already defined & mined 4.5 million oz K Wes
Slide 21: Resource Increase
Resource Increase Chatree Resource Increase 3.8Moz Resource ,000 oz Gold US$M M&I Resource: 4400 11 3.2Moz gold ? 4000 10 Mining Depletion 3600 9 Growth 1Moz/yr 3200 8 >32Moz silver 2800 Exploration Expenditure 7 2400 6 1.8Moz Reserves 2000 5 Mineral Resources Underground 1600 4 upside 1200 3 800 2
Slide 22: Regional Prospects
Regional Prospects Discovered new world - Granted leases Granted leases class gold province 39 prospective targets within trucking distance of current gold plant Chatree Chatree 10 high priority targets Leases pending Leases pending 50 leases granted plus 51 leases pending for ~1500km2 Drill ready t
Slide 23: Kingsgate Delivers
Kingsgate Delivers Production - Low cost for ~5 yrs Profit/Divs - Consistent & Strong - Unhedged in FY07 Growth - Mine/plant Expansion - Resource growth - World class gold province
Slide 24: 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,
Kingsgate Consolidated — FY2006 Earnings Presentation on 6ix