Evolution Mining Limited · ASX:EVN

Evolution Mining — Merger or Acquisition (August 2016)

54 slides from Evolution Mining's merger presentation, Aug 24, 2016

1. Slide 1: Acquisition of Economic Interest in Ernest Henry & Capital Raising

   For personal use only Acquisition of Economic Interest in Ernest Henry & Capital Raising 24 August 2016 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

2. Slide 2: Important notes & disclaimer

   For personal use only Important notes & disclaimer IMPORTANT: You must read the following before continuing Not for distribution or release in the United States NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES This presentation is issued by Evolution Mining Limited (“Company” or “Evolution” or “

3. Slide 3: Important notes & disclaimer (cont'd)

   Important notes & disclaimer (cont’d) Financial data For personal use only All dollar values are in Australian dollars (“$”or “A$”) unless stated otherwise. The pro forma financial information included in this presentation is for illustrative purposes and does not purport to be in compliance with Ar

4. Slide 4: Important notes & disclaimer (cont'd)

   For personal use only Important notes & disclaimer (cont’d) Disclaimer NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Neither the joint lead managers and their affiliates nor any of their, or Evolution's, advisers or their respective related bodies corporate, affiliates, directors, officers, p

5. Slide 5: Table of contents

   For personal use only Table of contents NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 1. Transaction overview 5 2. Investment highlights 11 3. Overview of Ernest Henry 19 4. Evolution – Executing a clear and sound strategy 24 Appendix A. Transaction summary 30 Appendix B. Capital structure an

6. Slide 6: 1. Transaction overview

   For personal use only 1. Transaction overview 5

7. Slide 7: Overview of transaction and strategic rationale

   For personal use only Overview of transaction and strategic rationale Transaction overview Strategic rationale NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Acquiring significant economic Continuation of portfolio interest in world class Ernest Henry upgrade strategy copper-gold mine Exposure

8. Slide 8: Transaction Summary

   Transaction Summary Acquisition of an Economic Interest in the World Class Ernest Henry Operation For personal use only  Evolution has acquired an economic interest in Glencore’s Ernest Henry operation, for A$880 million and an obligation to meet a proportion NOT FOR DISTRIBUTION OR RELEASE IN THE

9. Slide 9: Acquisition funding

   For personal use only Acquisition funding Acquisition funding  Entitlement offer: NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES  Approximately A$401 million equity raising via an underwritten accelerated renounceable entitlement offer (“Entitlement Offer”)  New corporate term loan:  New A

10. Slide 10: Entitlement Offer details

    For personal use only Entitlement Offer details Entitlement offer  Equity raising of approximately A$401 million via a 2-for-15 pro-rata Accelerated Renounceable NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Entitlement Offer Creating shareholder value  Record date is 29 August 2016 (at 7:0

11. Slide 11: Entitlement Offer timetable

    For personal use only Entitlement Offer timetable  Wednesday, 24th August NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Announcement of Transaction and the Entitlement Offer  Monday, 29th August Record date under the Entitlement Offer  7:00pm Despatch of Retail Offer booklet and Entitlemen

12. Slide 12: 2. Investment highlights

    For personal use only 2. Investment highlights 11

13. Slide 13: Continued focus on improving the quality of Evolution's asset portfolio

    Continued focus on achieving Evolution’s strategic ambition of improving the quality of its asset portfolio Acquisition of  Proven large scale, long life copper-gold mine located in Australia For personal use only economic interest  Pro-forma FY16 gold production from Evolution’s interest of 88koz

14. Slide 14: Diversified Australian portfolio

    Diversified Australian portfolio Cowal (100%) Ernest Henry For personal use only Gold Reserves (Moz)(1) 2.85 (Evolution economic interest) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Gold Resources (Moz)(1) 5.05 Reserves (Moz)(7) 1.0Moz Au, 184Kt Cu Reserve Grade (Au g/t)(1) 0.9 Resources (

15. Slide 15: Ernest Henry enhances the portfolio by lowering costs, extending mine life and increasing FCF

    Ernest Henry materially enhances the portfolio by lowering costs, extending mine life and increasing FCF For personal use only Bubble size represents NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES $1,800 FY17F attributable production guidance(1) Maintaining 6-8 mine strategy, recycling capital

16. Slide 16: Further enhancing global relevance in the mid-tier gold mining sector

    Further enhancing global relevance in the mid-tier gold mining sector A leader in the Australian gold sector … … well established in the global mid-tier peer group For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES $7,000 $8,000 21,236 6,865 $6,000 $7,000 Enterprise Value (US

17. Slide 17: Stand-out production and margin profile amongst peers

    Stand-out production and margin profile amongst local and global mid-tier peers For personal use only Bubble size represents NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 1,000 enterprise value(1) Evolution 900 pre deals Evolution + Ernest Henry 800 IAMGOLD Acacia ex Pajingo Evolution FY16A P

18. Slide 18: Compelling pro-forma metrics of portfolio upgrade

    Compelling pro-forma metrics of portfolio upgrade FY16A production (Koz, Au only) December 2015 ore reserves (%)(1)(2) For personal use only Pajingo Ernest NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Edna 2% Henry May 15% 69 88 Cracow Edna Mt May Rawdon Cowal 5.9Moz Cowal Cracow 6.8Moz 803

19. Slide 19: Cash generation supports a strong balance sheet and financial profile

    Cash generation supports ability to maintain a strong balance sheet and financial profile For personal use only  High cash margin of Ernest Henry expected to New Facility D Term Loan amortisation schedule (A$M) further enhance current strong cash generation NOT FOR DISTRIBUTION OR RELEASE IN THE UN

20. Slide 20: 3. Overview of Ernest Henry

    NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only 3. Overview of Ernest Henry 19

21. Slide 21: Ernest Henry overview

    For personal use only Ernest Henry overview Asset overview(1) Asset location NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Operator Parent  Glencore plc  Located in the Cloncurry copper mining region Location in north-west Queensland  Mining operations commenced in 1997 Commencement Year 

22. Slide 22: A large scale, well capitalised asset

    For personal use only A large scale, well capitalised asset NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES  Ernest Henry is a world-class Ernest Henry Decline Ernest Henry Headframe copper-gold operation with high quality assets and infrastructure  Approximately A$600M invested between 2009

23. Slide 23: Mining and processing

    Mining and processing Mining Processing For personal use only  Underground mining operation employing sub-level  Current ore processing rate of ~6.4Mt p.a. NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES caving ore extraction method (8.5Mt p.a. capacity and scalable to ~11Mt p.a.)  Concentra

24. Slide 24: A world-class asset with significant untested potential

    A world-class asset with significant untested potential  Expansion of mining rate at Ernest Henry to 7Mt p.a. is Ernest Henry deep orebody For personal use only 1 Potential extension exploration potential acceleration of currently being considered NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATE

25. Slide 25: 4. Evolution – Executing a clear and sound strategy

    NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only 4. Evolution – Executing a clear and sound strategy 24

26. Slide 26: Evolution Mining overview

    Evolution Mining overview ASX code EVN For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Shares outstanding 1,469M Market capitalisation(1) A$3,540M Average daily share turnover(2) A$31M Forward sales(3) 706,989oz at A$1,624/oz Dividend policy 4% of revenue Major shareholder

27. Slide 27: Cowal

    For personal use only Cowal Asset overview Asset schematic NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Growth  Ore Reserves increased from 1.56Moz to 2.85Moz (+83%) under Evolution ownership(1)  Expansion of E42 pit prioritised  Current LoM Plan includes Stage H cutback to access an addi

28. Slide 28: Mungari

    For personal use only Mungari Asset overview Asset schematic NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Growth  Significant potential to expand production and extend mine life Zuleika North  ~880 km2 land position in a world-class terrane (49koz) Ora Banda (312koz)  Potential for the di

29. Slide 29: Mt Carlton

    Mt Carlton Asset overview For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES A quality asset  One of the highest grade open pit gold mines in the world  Developed by Evolution and commissioned in 2013  Low mining strip ratio over LoM Plan  Strong FY16 performance driven b

30. Slide 30: Executing a clear and sound strategy

    For personal use only Executing a clear and sound strategy Australia  Low risk, politically stable jurisdiction  NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Cost base has normalised  Low Australian dollar  Evolution acquiring an economic interest in a high quality Queensland asset Mid-t

31. Slide 31: Appendix A Transaction summary

    NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only Appendix A Transaction summary 30

32. Slide 32: Transaction Summary

    Transaction Summary Production from LoM  Under the transaction agreements, Evolution has agreed to acquire 100% of future gold produced from the LoM Area and 30% of future For personal use only copper and silver produced from the LoM Area, and Evolution is required to pay A$880 million and to contr

33. Slide 33: Appendix B Capital structure and pro forma metrics

    NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only Appendix B Capital structure and pro forma metrics 32

34. Slide 34: Evolution pro forma capitalisation

    For personal use only Evolution pro forma capitalisation NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Evolution pro forma A$ millions Evolution standalone (+) Ernest Henry acquisition for Ernest Henry acquisition Share price 2.41(3) 2.05 2.37(4) (×) Shares outstanding 1,468.8 195.8 1,664.6 M

35. Slide 35: Appendix C JORC Mineral Resources and Ore Reserves

    NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only Statements Appendix C JORC Mineral Resources and Ore Reserves 34

36. Slide 36: Competent Person statements

    For personal use only  The information in this document that relates to Evolution’s Mineral Resources and Ore Reserves is extracted from the NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES ASX report entitled “Annual Mineral Resources and Ore Reserves Statement” created on 21 April 2016 (the “

37. Slide 37: Evolution Ore Reserves December 2015

    Evolution Ore Reserves December 2015 Gold Proved Probable Total Reserve For personal use only Gold Gold Gold Gold Gold Gold Competent NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Cut-off Tonnes Tonnes Tonnes Project Type Grade Metal Grade Metal Grade Metal Person (g/t Au) (Mt) (Mt) (Mt) (g/t

38. Slide 38: Evolution Mineral Resources December 2015

    For personal use only Evolution Mineral Resources December 2015 Gold Measured Indicated Inferred Total Resource Competent NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Cut-off Gold Gold Gold Gold Gold Gold Gold Gold Person Tonnes Tonnes Tonnes Tonnes Project Type (g/t Grade Metal Grade Metal

39. Slide 39: Ernest Henry Mineral Resource and Ore Reserve December 2015

    Ernest Henry Mineral Resource and Ore Reserve December 2015 For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Mineral Resource Statement (at 31 December 2015) at a CuEq cut-off of 0.9% Tonnes Copper Copper Gold Gold Classification (Mt) Grade (%) Metal (kt) Grade (g/t) Metal

40. Slide 40: Appendix D Key risks

    NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only Key risks Appendix D 39

41. Slide 41: Key risks

    Key risks  There are various risks associated with investing in Evolution, as with any stock market investment. This section sets out: − existing business and operational risks for Evolution - these risks are generally common to gold, silver and copper mining operators in Australia, including For p

42. Slide 42: Existing business and operational risks for Evolution (cont.)

    Existing business and operational risks for Evolution (cont.) Replacement of  Evolution must continually replace reserves depleted by production to maintain production levels over the long term. Reserves can be Ore Reserves replaced by expanding known ore bodies, locating new deposits or making acq

43. Slide 43: Existing business and operational risks for Evolution (cont.)

    Existing business and operational risks for Evolution (cont.) For personal use only Environmental  Mining and exploration can be potentially environmentally hazardous, giving rise to potentially substantial costs for environmental NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES risks rehabilit

44. Slide 44: Risks specific to the transaction

    For personal use only Risks specific to the transaction NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Production risk  Under the proposed transaction, Evolution will acquire from Glencore a right to receive an amount of gold, copper and silver referable to a proportion of the actual future p

45. Slide 45: Risks specific to the transaction (cont.)

    Risks specific to the transaction (cont.)  Evolution will not have direct rights to control the operations of the Ernest Henry mine, and therefore future production from the mine. For personal use only Management risks Under the proposed transaction, mine operations are conducted by the operator (a

46. Slide 46: Entitlement Offer and share investment risks

    Entitlement Offer and share investment risks Underwriting Evolution has entered into an underwriting agreement under which the joint lead managers have agreed to fully underwrite the Entitlement For personal use only risk Offer (other than with respect to the La Mancha pre committed amount), subject

47. Slide 47: Entitlement Offer and share investment risks (cont.)

    For personal use only Entitlement Offer and share investment risks (cont.) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Renouncement  Eligible shareholders who renounce their entitlement under the Entitlement Offer are not guaranteed to receive any value for their risk renounced entitlement

48. Slide 48: Appendix E International selling restrictions

    NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only Appendix E International selling restrictions 47

49. Slide 49: International selling restrictions

    For personal use only International selling restrictions International Offer Restrictions NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES This document does not constitute an offer of entitlements ("Entitlements") or new ordinary shares ("New Shares") of the Company in any jurisdiction in which

50. Slide 50: International selling restrictions (cont.)

    For personal use only International selling restrictions (cont.) Statutory rights of action for damages and rescission NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Securities legislation in certain of the Provinces may provide purchasers with, in addition to any other rights they may have at

51. Slide 51: International selling restrictions (cont.)

    For personal use only International selling restrictions (cont.) European Economic Area – Germany and Netherlands NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES The information in this document has been prepared on the basis that all offers of Entitlements and New Shares will be made pursuant

52. Slide 52: International selling restrictions (cont.)

    For personal use only International selling restrictions (cont.) Hong Kong NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong K

53. Slide 53: International selling restrictions (cont.)

    For personal use only International selling restrictions (cont.) Singapore NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES This document and any other materials relating to the Entitlements and the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with

54. Slide 54: International selling restrictions (cont.)

    For personal use only International selling restrictions (cont.) United Kingdom NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United

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