Kingsgate Consolidated Limited · ASX:KCN
Kingsgate Consolidated — Diggers and Dealers 2013
36 slides from Kingsgate Consolidated's conference presentation, August 2013
Slide 1: Kingsgate Consolidated Limited – Building Shareholder Value
Kingsgate Consolidated Limited Building Shareholder Value Diggers and Dealers August 2013
Slide 2: 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,
Slide 3: Kingsgate's Vision
Kingsgate’s Vision To be a preferred precious metals company Delivering shareholder & stakeholder value through: Maximising efficient expansion from existing operations and developing high quality precious metal projects Increasing output, lowering production costs and improving cashflows, over
Slide 4: Kingsgate Today: Geographic and operational diversity
Kingsgate Today Geographic and operational diversity Two operating gold mines with growth potential World class Chatree mine in Thailand Challenger underground mine in South Australia Two exceptional, advanced-development silver projects Chatree Nueva Esperanza silver/gold project in Chile
Slide 5: Record June Quarter
Record June Quarter • Record Group quarterly gold production of 61,973oz at total cash cost of US$824/oz. • Full year Group gold production in-line with guidance of 200,000 ounces. • Second highest quarterly gold production from Chatree at 46,053oz at total cash cost of US$686/oz. • Chatree Mineral
Slide 6: Strong Commitment to Thailand
Strong Commitment to Thailand Control of a major gold province Chatree World Class Gold Province Thailand Underexplored Bangkok Thai Gold Belt Phitsanulok Province First mover advantage But need patience & SPLs Phetchabun Province persistence Pending 63 km Chatree 1,200 km2 tenements Phichit Provinc
Slide 7: Chatree – World Class Deposit
Chatree – World Class Deposit Asian showcase gold mine Large open pit, low grade epithermal gold deposit Long life – Reserves 1.8Moz, Resources 4.0Moz Currently operating at ~6.2Mtpa @ 0.8g/t Au Producing 120,000oz to 130,000oz gold in FY14 Produced over 1.4 million oz of gold to date Chat
Slide 8: Chatree - Unit Operating Costs
Chatree - Unit Operating Costs Stable unit costs despite cost pressures $20 18.65 18.37 18.36 16.48 16.41 15.11 15.21 15.42 $15 13.77 12.48 10.45 10.03 $10 $5 $0 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09* 2009/10 2010/11 2011/11 2012/13 Total direct cost per tonne milled ($/t)
Slide 9: Chatree Resources & Reserves
Chatree Resources & Reserves Increases following successful drilling campaign and after mining depletion Mineral Resources increase by 9% to 4.03 Moz 0.30g/t gold cut-off Increase driven by successful drilling campaign initiated during the year with greatest contribution from Q Prospect Recove
Slide 10: Chatree Ore Reserves
Chatree Ore Reserves Reconciliation of April 2013 to June 2012 (Koz) 2,500 ▲310 1,817 2,000 1,730 ▲3 ▼122 ▲6 ▼110 1,500 1,000 500 0 2012 Change in Mine Change in Increase Upgraded 2013 Reserves stockpiles depletion gold price in cut-off Resource Reserves grade Model and new pit designs
Slide 11: Challenger Gold Mine
Challenger Gold Mine Underground gold mine in South Australia Narrow vein medium grade u/g gold mine Challenger March Quarter: 152Kt @ 3.47g/t Au for 15,920oz Gold Mine Total production to date of around 950,000ozAu
Slide 12: Challenger Gold Mine: Adapting to lower metal price conditions
Challenger Gold Mine Adapting to lower metal price conditions Mine plan reviewed following gold price volatility Mining to shift focus principally to the higher grade Challenger West Lower costs through: 30% reduction in mine development costs New mining contract and contractor, Byrnecut,
Slide 13: Challenger Mine Development
Challenger Mine Development Development completed in FY2013 CW Access CW CW CW CW Access Aminus M1/M2
Slide 14: Challenger West: Planned development in FY2014
Challenger West Planned development in FY2014 CW CW CW CW CW
Slide 15: Challenger West
Challenger West Life-of-mine development for current resources
Slide 16: Challenger Deeps
Challenger Deeps Access remains available for mining in the future
Slide 17: Challenger Ground Conditions
Challenger Ground Conditions Narrow stopes but high grade gold Challenger West Challenger West Challenger Main 870 Stope - Panel #1 870 Stope - Panel #2 below 79 Fault 205 Aminus
Slide 18: Advanced Development Projects: Strategic rationale
Advanced Development Projects Strategic rationale • Identify cost effective projects that will add long-term shareholder value • Projects must have significant upside, utilising Kingsgate’s core skill base in epithermal mineralisation and project delivery • Two exceptional value opportunities were a
Slide 19: Nueva Esperanza
Nueva Esperanza Advanced silver/gold project in Chile Gold production 209,000oz @ US$720/oz (including US$118/oz royalties) Revenue A$357 million EBITDA A$168 million Profit before tax A$91 million Net profit after tax A$75 million, up 255% Earnings per share 52.5 cents Final dividend
Slide 20: Nueva Esperanza: Highly prospective growth project
Nueva Esperanza Highly prospective growth project Nueva Esperanza Choquelimpie Teterita Chimberos El Tesoro San Cristobal Arqueros 5 Kilometres Consolidated epithermal silver/gold deposits in Maricunga belt in Chile Feasibility focused on heap leach and on-site power options with lower capex and
Slide 21: Nueva Esperanza: Heap leach testwork
Nueva Esperanza Heap leach met. testwork delivering results 5 metre test columns Chimberos Open Pit
Slide 22: Nueva Esperanza: Regional exploration upside
Nueva Esperanza Regional exploration upside Three established resources TETERITA Multiple highly prospective targets CHIMBEROS CERRO HUANTAJAYA POTOSI AMARILLO RIFLE ROSA BOULDER ARQUEROS GRANDOTE High grade intercepts from historical drilling: CARACHITA CARACHAPAMPA
Slide 23: Bowdens Silver Project
Bowdens Silver Project Kingsgate growth project in NSW Gold production 209,000oz @ US$720/oz (including US$118/oz royalties) Revenue A$357 million EBITDA A$168 million Profit before tax A$91 million Net profit after tax A$75 million, up 255% Earnings per share 52.5 cents Final dividend
Slide 24: Bowdens Silver Project: Significant growth project with upside
Bowdens Silver Project Significant growth project with upside Located 25km east of Mudgee, around 240km NW of Sydney Epithermal silver deposit with lead and zinc by-products Large, continuous, near surface deposit hosted in volcanics Initial resource and feasibility work completed in 2004
Slide 25: Bowdens: Project timing to reflect market conditions
Bowdens Silver Project Project timing to reflect market conditions Completion of the technical feasibility study Feasibility including mine planning, infrastructure and Study metallurgy aligned to the finalisation of the EIS in 2014. Open pit mining with pit optimisation Mining delivering a low
Slide 26: Kingsgate – Great Value Proposition
Kingsgate – Great Value Proposition Focussed on profit and shareholder return Solid Production Platform Gold production: 200,000 ounce FY13 Strong Resource Growth Grown to over 10 million ounces AuEq over the past 3 years Project Pipeline – Sequential Developments Feasibility studies for Nueva
Slide 27: Kingsgate Consolidated Limited
Kingsgate Consolidated Limited Listed: ASX Code: KCN Shares: 152 Million Market Cap: ~A$250M www.kingsgate.com.au
Slide 28: Appendix: General Disclaimer
Appendix General Disclaimer: The information contained in this presentation is for informational purposes only and does not constitute an offer to issue, or arrange to issue securities or other financial products. The information contained in this presentation is not investment or financial product
Slide 29: Corporate Social Responsibility
Corporate Social Responsibility Asia’s Showcase Gold Mine Safety focussed gold mine – 10 years no safety incidents Zero Environmental Incidents ISO Standards on all activities Only mining company granted Social Accountability SA8000 High quality, skilled stable workforce Zero Accident Award
Slide 30: Corporate Structure
Corporate Structure KINGSGATE 100% 100% 100% 100% Dominion Laguna Res. Kingsgate KCN Capital Gold Operations Chile Bowdens Pty Ltd 49% 49%3 49%2 Phar Mai 51%1 Issara Akara Nueva Bowdens Challenger Exploration Mining Mining Esperanza Silver Gold Mine Limited Limited Limited Project Project 100% 100%
Slide 31: Thai IPO
Thai IPO IPO of Akara Mining on Thai stock exchange Current ownership structure of Akara Mining: KCN 49% (100% ordinary shares and 100% economic interest) Thai interests 51% via preference shares Process to commence following Board approval IPO potentially completed by the end of 2013 High
Slide 32: Thai Progressive Royalty Rate
Thai Progressive Royalty Rate High royalty regime at current gold prices 20% 15% 10% US$1600/oz 5% 0% Baht/gm 0 400 600 1000 1500 2000 US$/oz 0 385 580 970 1450 1950 US$1.00=Baht 30, Jan 2011.
Slide 33: Chatree
Chatree Chatree Ore Reserves as at 30 April 2013 (>0.35g/t gold cut-off grade) Gold Silver Gold Silver Tonnes Grade Grade Contained Contained AuEq Source Category (million) (g/t) (g/t) (Moz) (Moz) (Moz) From Pits Proven 45.4 0.87 7.8 1.27 11.39 Probable 14.8 0.78 6.0 0.37 2.86 Stockpiles 9.3 0.58 9.
Slide 34: Challenger
Challenger Challenger Ore Reserves as at 30 June 2012 Tonnes Gold Gold Source Category Grade Contained (million) (g/t) (‘000 oz) From Mine Proven 0.64 4.32 90 Probable 2.61 6.61 550 Challenger Total Total 3.25 6.16 640 Challenger Mineral Resources as at 30 June 2012 Gold Gold Tonnes Grade Contained
Slide 35: Nueva Esperanza
Nueva Esperanza Nueva Esperanza Mineral Resources as at 30 June 2012 (0.5g/t AuEq cut-off grade) Tonnes Gold Silver Gold Silver AgEq AuEq Category Grade Grade Contained Contained Contained Contained (million) (g/t) (g/t) (Moz) (Moz) (Moz) (Moz) Measured 1.8 0.01 90 0.00 5.1 5.2 0.12 Indicated 20.2 0
Slide 36: Bowdens
Bowdens Bowdens Mineral Resources as at 19 November 2012 (30g/t AgEq cut-off grade) Grade Contained Metal Category Tonnes Silver Lead Zinc AgEq Silver AgEq AuEq (million) g/t % % g/t (Moz) (Moz) (Moz) Measured 23.6 56.6 0.31 0.41 74.5 43.0 57 1.25 Indicated 28.4 48.0 0.27 0.36 63.6 43.8 58 1.28 Meas