Kingsgate Consolidated Limited · ASX:KCN
Kingsgate Consolidated — Investor Presentation (May 2016)
32 slides from Kingsgate Consolidated's investor presentation, May 2016
Slide 1: Corporate Presentation April-May 2016
Corporate Presentation April-May 2016
Slide 2: Disclaimer
Disclaimer 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, the company. Actual results
Slide 3: Kingsgate in 2016
Kingsgate in 2016 Renewal and re-focus New CEO – Greg Foulis (June 2015) Back to basics approach Success and capability is epithermal gold in the Pacific Rim Core capabilities are explore, develop and produce Chatree and Nueva Esperanza in geological terms are big epithermal systems Kingsgate will g
Slide 4: Kingsgate Today
Kingsgate Today ASX Listed: Enterprise Value ~ A$153 M Market Cap ~ A$82 M as @ 15 April 2016 Net debt ~ A$71 M* Key Assets: Chatree Gold Mine (Thailand) Production Average 130,000 Koz /year Resources 3.9 Moz AuEq601 Reserves 1.1 Moz AuEq60 Nueva Esperanza Project (Chile) Status Pre-Feas (PFS) relea
Slide 5: Corporate Snapshot
Corporate Snapshot Total Shareholder Composition 2% 1% Institutional 4% 2% Corporate Information – as at 15 April 2016 Unanalysed ASX Listed KCN Retail 20% 41% Share Price A$0.37 Broker Issued Shares 223.6M Related Party Market Cap A$82M Corporate Cash Balance (available) A$34M* Custodian Total Debt
Slide 6: Macro backdrop
Macro backdrop Renewed interest in gold and silver Gold Price US$ - One Year Chart Signs the 3 to 5 year gold down cycle is ending Increasing global financial market volatility Concerns on global growth and interest rate tightening from the US Fed Investors are seeking precious metals exposure as a
Slide 7: Kingsgate performance re-cap
Kingsgate performance re-cap Kingsgate Scorecard Financial Year 2013 2014 2015 1st Half 16 Comments Chatree (Koz) 133.7 134.5 125.1 50.7 Operations Challenger (Koz) 66.2 75.0 80.2 39.6 Mine disposal 3rd Q FY16 KCN Production (Koz) 199.9 209.5 205.2 90.3 Gold Price – Ave (US$/oz) 1,588 1,291 1,208 1,
Slide 8: Australia – portfolio rationalisation
Australia – portfolio rationalisation Challenger Gold Mine Divestment executed on 15 March 2016 Strong performance of ~50Koz gold in FY16 Solid FY16 cashflow contribution Further reduces Kingsgate’s business risk Bowdens Silver Project Selling 85% interest for A$20M cash ($0.08/share) Retaining 15%
Slide 9: Nueva Esperanza, Chile – a great address
Nueva Esperanza, Chile – a great address Chile – a premier jurisdiction Favoured mining investment destination Ranked 11th in Fraser Institute mining survey Worlds largest copper producer Ranked 14 in global gold production Maricunga Belt - new discoveries Defined total gold resources of >100 Moz Au
Slide 10: Nueva Esperanza – A Flagship Project
Nueva Esperanza – A Flagship Project History Historic bonanza silver production pre-Kingsgate Consolidation of tenements and resources by Kingsgate in 2011 Extensive feasibility work completed 2012-14 Gold discoveries in 2014 and 2015 Nueva Esperanza Status Teterita Resources 1.9 Moz AuEq601 Chimber
Slide 11: Nueva Esperanza – Optimisation Summary
Nueva Esperanza – Optimisation Summary The Optimisation Study blends historic elements and new updates Completed to a Pre-Feasibility Level in conjunction with Ausenco The Pre-Feasibility Study released in April has confirmed: NPV5% of US$168m1 2 Mtpa Initial 11.6 year First 5 years Ave. with Proces
Slide 12: Pre-Feasibility Study – Key Outcomes
Pre-Feasibility Study – Key Outcomes First 5 Macro Assumptions Life of Mine Years Gold Price US$/oz 1,200 1,200 Silver Price US$/oz Project and Operating parameters 19 19 Robust Economics Investment capital (initial) US$M 206 Life of Project Gold Produced Year Moz 11.6 0.275 Long life 0.206 Sh
Slide 13: Nueva Esperanza, Chile - Checklist
Nueva Esperanza, Chile - Checklist Investment checklist 100% ownership Favourable mining investment jurisdiction Grid Power Skills to explore, build, operate Options Optimisation Study - PFS completed Viable economics 100Kozpa AuEq open pit operation Nueva Initial permitting in place
Slide 14: Nueva Esperanza, Chile – Exploration
Nueva Esperanza, Chile – Exploration FY16 Program Regional scale baseline work Regional bedrock drilling Prospect RC drill campaigns 14
Slide 15: Nueva Esperanza - FY16 Regional Target Generation
Nueva Esperanza - FY16 Regional Target Generation A systematic, multi-layered approach to unlocking potential 485 air-blast drillholes 15
Slide 16: Nueva Esperanza - Chimberos Gold Discovery
Nueva Esperanza - Chimberos Gold Discovery 16
Slide 17: Nueva Esperanza - Carachitas Gold Discovery
Nueva Esperanza - Carachitas Gold Discovery Carachitas 17
Slide 18: Nueva Esperanza – FY16 Plan
Nueva Esperanza – FY16 Plan Technical work streams -> enhance economics Completed - Optimisation study (PFS level) – viable project Rolling into Feasibility work streams Technical, environmental & CSR inputs for permitting Permitting -> derisking Submit permit modifications 3rd Quarter calendar
Slide 19: Chatree Gold Mine, Thailand
Chatree Gold Mine, Thailand Proven track record Discovered, developed, expanded Highly efficient mining of low grade epithermal gold Produced over 1.8 Moz gold Chatree Outstanding safety and environmental record Operating Cashflow FY15 production: 125 Koz, EBITDA A$71M Bangkok FY16 budget: 95-105 Ko
Slide 20: Chatree Gold Mine - Performance
Chatree Gold Mine - Performance Financial Year 2011 2012 2013 2014 2015 A highly efficient gold mine Production - Chatree An experienced operating team Ore mined (‘000 bank cubic metres) 2,352 1,947 2,709 2,378 1,831 Ore mined (‘000 tonnes) 5,301 4,986 7,051 6,176 4,768 High volume – Ore treated (‘0
Slide 21: Chatree Gold Mine – FY16
Chatree Gold Mine – FY16 A Cash Generator Key operating initiatives for FY16 include: Mining fleet roster changes implemented to achieve higher daily operating hours per machine Milling initiatives to achieve higher and more consistent throughput rates A mining fleet refresh is under consideration f
Slide 22: Chatree Gold Mine – Pit A Cutback
Chatree Gold Mine – Pit A Cutback A major cutback of Pit A is progressing with better grades scheduled FY17 22
Slide 23: Chatree – CSR & Regulatory
Chatree – CSR & Regulatory Direct Benefits to Community Health & Environment International certifications (ISO) include: OHSAS18001 (Health & Safety); ISO14001 (Environment); SA8000 (Social Accountability) Community 99% of 1000 strong workforce are Thai 65% of staff from surrounding villagers Signif
Slide 24: Chatree – Thailand Regulatory
Chatree – Thailand Regulatory Government Mining Policy The Thai government continues to consider a New Gold Policy The policy is reinvigorate exploration and investment Chatree Review The 30 day Minister of Industry Review of Chatree is continuing The review was initiated in October 2015 to consider
Slide 25: Chatree Gold Mine –Exploration Optionality
Chatree Gold Mine –Exploration Optionality Country, Regional, Local Thailand Exploration Potential Chatree Kingsgate is a leader in modern gold exploration and Bangkok mining in Thailand Thai Chatree Gold Kingsgate has over 70km Belt Mine Area strike length of the highly 70 Km prospective Chatree tr
Slide 26: Kingsgate – Investment Opportunity
Kingsgate – Investment Opportunity Core capabilities in-house Explore, develop, build and operate World class mine at Chatree +6.0 Moz gold mineralised system (produced and in-situ) 15 year operating history Cash generator with 7 year reserve life Flagship project in Nueva Esperanza – 1.9 Moz AuEq1
Slide 27: Thank you
Kingsgate Consolidated Limited Thank you
Slide 28: Appendix – Competent Persons Statement
Appendix Competent Persons Statement – Nueva Esperanza The information in this report that relates to exploration results and data quality is based on and fairly represents information compiled by Mr Ron James who is a member of the Australasian Institute of Mining and Metallurgy and a full time emp
Slide 29: Mineral Resource and Ore Reserve Statement as at 30 June 2015
Mineral Resource and Ore Reserve Statement as at 30 June 2015 29
Slide 30: Board of Directors
Board of Directors Ross Smyth-Kirk Sharon Skeggs Executive Chairman Non-Executive Director Investment Management Marketing and Change Management • 40+ years experience in investment management • 35+ years experience in marketing and change and mining management in Australia the UK and Asia. • Former
Slide 31: Senior Management
Senior Management Greg Foulis Ronald James Chief Executive Officer GM – Exploration & Resource Development Mining and Financial Markets Gold Exploration • 30+ years experience in mining and financial markets • 30+ years experience in gold exploration & mining • Previously SVP Business Development fo
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