Saracen Mineral Holdings Limited
Saracen Mineral — Diggers & Dealers 2015
28 slides from Saracen Mineral's conference presentation, August 2015
Slide 1: Low cost growth
ASX: SAR Low cost growth RALEIGH FINLAYSON MANAGING DIRECTOR August 2015
Slide 2: Qualification
Qualification This presentation has been prepared by Saracen Mineral Holdings Limited (Saracen or the Company) based on information from its own and third party sources and is not a disclosure document. No party other than the Company has authorised or caused the issue, lodgement, submission, despat
Slide 3: Doubling Gold Production to 300,000oz
Doubling Gold Production to 300,000oz • Transformation to mid-tier gold producer underway • FY16 production outlook 150-160koz (Carosue Dam only) • Gold production set to double to ~300koz at AISC <A$1075/oz within two years, driving substantial increase in free cash-flow • Two operational centres i
Slide 4: The Key Value-Drivers
The Key Value-Drivers 1. Produce – Carosue Dam FY15 record 167koz, FY16 outlook 150-160koz 2. Develop – Thunderbox On time and on budget, Stage 1 adds ~125koz pa over ~4.5 years 3. Grow – Earnings visibility Potential +4 year mine life at Karari, +10 year mine life at Thunderbox, other organic oppor
Slide 5: Corporate Overview
Corporate Overview Corporate Structure Board & Management ASX Code SAR Non-Executive Chairman Geoff Clifford Shares 792.8m Managing Director Raleigh Finlayson Share Price $0.385 Non-Executive Director Mark Connelly As at 31 July Market Cap A$305m 2015 Non-Executive Director Barrie Parker Enterprise
Slide 6: Available funding A$125m
Available funding Ore stockpile Cash and bullion A$47m A$45m or ~5.9cps or ~A5.6cps Available Funding A$125m Undrawn standby debt facility A$33m Notes: • Cash and bullion - At 30 June 2015 4 • Ore stockpile (deferred free cash flow) - Based on A$1500/oz gold price and estimated AISC $A861/oz
Slide 7: High Grade, Low Cost Production in WA
High Grade, Low Cost Production in WA Carosue Dam Operations, NE of Kalgoorlie • Strong operational track record since 2010 • Producing at ~150-160kozpa • Base load transitioning to three UG mines • Karari, Deep South, Red October Thunderbox Project, SE of Leinster Thunderbox • Acquired from Norilsk
Slide 8: Carosue Dam – The Engine Room
Carosue Dam – The Engine Room • 2.4Mtpa CIL plant, operated since 2010 with ore currently sourced from: • Karari – Multiple high-grade lodes, exciting new discovery, intensive drilling continuing • Red October – Currently ~60kozpa @ ~6-7g/t Au • Ore stockpile – ~83koz contained, mining cost sunk • T
Slide 9: Production – Past 36 Months
Production – Past 36 Months FY13 - 136koz @ A$1072/oz C1 (120-130koz @ A$1075/oz C1 Guidance) FY14 - 133koz @ A$1515/oz AISC (130-140koz @ A$1500/oz AISC Guidance) What we said for FY15 @ Diggers last year: What we delivered: FY15 Guidance: 145-155koz @ A$1150/oz AISC FY15 Actual: 167koz @ A$1139/oz
Slide 10: Production – Next 12 Months
Production – Next 12 Months FY16 outlook (Carosue Dam only): Lowest quartile costs: • 150-160koz 1800 All In Sustaining Cost (A$/oz) • AISC A$1025-1075/oz 1600 • Ounces in ~ equal proportions from: All In Sustaining Cost (A$/oz) 1400 • Karari UG Avg. A$1,206/oz 1200 • Red October UG 1000 • Whirling
Slide 11: Karari – Emerging High-Grade Discovery
Karari – Emerging High-Grade Discovery Ore stockpile of ~83koz at 30 June 2015 i.e. ~A$47m deferred FCF @~A$861/oz AISC 9
Slide 12: Karari – A Major Gold System
Karari – A Major Gold System 10
Slide 13: Karari – A Major Gold System
Karari – A Major Gold System Potential >4 years: • Multiple HG lodes • Attractive widths • New discoveries • UG much bigger than previously understood • Maiden Reserve late 2015 • Open down-plunge and to the south • Drilling continues 11
Slide 14: Karari – A Major Gold System
Karari – A Major Gold System 12
Slide 15: Red October – High-Grade Production
Red October – High-Grade Production Record FY15: • 300kt @ 6.7g/t for 65,000oz mined • AISC of A$971/oz • Very high grades • Good ground conditions Average +7g/t production • Excellent potential for strike extensions, and open at depth 13
Slide 16: Deep South – Ready for Production
Deep South – Ready for Production First production building from 2H FY16: • Low CAPEX • 2 x high grade parallel lodes • Shallow • Good ground conditions • Open along strike and at depth • Fixed costs shared with Red October 14
Slide 17: Thunderbox – Cornerstone Asset
Thunderbox – Cornerstone Asset • Existing 2.5Mtpa CIL plant to be refurbished • A$65M pre-production CAPEX (internally funded) • Resource recently upgraded from 1.6Moz to 2.0Moz • Stage 1 OP – 596koz contained, A$1032/oz AISC, 4-5 year mine life • Outstanding future growth potential – Two main lodes
Slide 18: Thunderbox – Low capital intensity
Thunderbox – Low capital intensity 400 Bubble size = Reserve oz 350 Cerro Negro Inmaculada Meliadine Capital intensity (US$/Reserve oz) 300 Otjikoto Merian 250 Deflector Certej Rainy River Blackwater 200 Çöpler Sulphides 150 Haile Lobe/Marte 100 Natalka 50 Thunderbox Kyzyl 0 0 500 1000 1500 2000 250
Slide 19: Thunderbox – Potential >10 years
Thunderbox – Potential >10 years 160,000 $1,600 140,000 $1,400 120,000 $1,200 100,000 $1,000 A$/oz 80,000 $800 60,000 $600 40,000 $400 20,000 $200 - $0 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 Stage 1 Hedged Production (oz) Stage 1 Unhedged Production (oz) Stage 2 Underground Producti
Slide 20: Thunderbox – On Time / On Budget
Thunderbox – On Time / On Budget 18
Slide 21: Thunderbox – On Time / On Budget
Thunderbox – On Time / On Budget Dry Wet Mining Mess Mess Admin Plant 19
Slide 22: Thunderbox – Open Down Plunge
Thunderbox – Open Down Plunge 20
Slide 23: Thunderbox – Consistent & Persistent
Thunderbox – Consistent & Persistent 21
Slide 24: The Vision
The Vision 1,700 1,600 Join the ASX mid-tier ranks – How? 1,500 1,400 • ~300koz pa 1,300 • < A$1,075/oz AISC 1,200 Mid-tier Juniors • +5 years LOMP Market cap (A$m) 1,100 1,000 • 100% from organic growth 900 800 • Funded from internal cash flows 700 600 500 400 300 200 100 0 Evolution (EVN) Northern
Slide 25: Five Year Production Outlook
Five Year Production Outlook 350,000 300,000 250,000 Thunderbox 200,000 CD - Stockpile oz recovered CD - Open pits 150,000 CD - Northern UG CD - Southern UG 100,000 50,000 0 FY16 FY17 FY18 FY19 FY20 Notes: • Refer to the following slides - “Qualifications” (forward looking statements), and “Producti
Slide 26: Summary – Reasons to Invest in Saracen
Summary – Reasons to Invest in Saracen • Production forecast to double to ~300kozpa within 2 years at AISC of <A$1075/oz • Leveraged to production growth and stronger gold prices • Protection against weaker prices from low costs and hedging • No debt, A$45M cash at 30 June 2015 • Outstanding explora
Slide 27: Saracen Mineral Holdings
Saracen Mineral Holdings Site Visits available Bookings at Booth 125 Contact Details Troy Irvin Chief Corporate Development Officer Phone: +61 8 6229 9100 Email: info@saracen.com.au 21 Website: www.saracen.com.au
Slide 28: Production Outlook - Notes
Production Outlook - Notes Please refer to the following ASX announcements: • 23 March 2015 – “Thunderbox Project Feasibility and Development Approval” • 30 March 2015 – “Thunderbox Feasibility Study – Additional Information” • 14 May 2015 – “Thunderbox Resource Upgrade” • 9 October 2014 – “2014 Min