Acacia Mining plc 2014 Preliminary Results Presentation February - PowerPoint PPT Presentation

LSE:ACA Acacia Mining plc 2014 Preliminary Results Presentation February 2015

Important Notice This presentation includes “forward - looking statements” that express or imply Although Acacia’s management believes that the expectations reflected in such expectations of future events or results as opposed to historical facts. These forward-looking statements are reasonable, Acacia cannot give assurances that statements include, financial projections and estimates and their underlying such statements will prove to be correct. Accordingly, investors should not place assumptions, statements regarding plans, objectives and expectations with reliance on forward-looking statements contained in this presentation. respect to future production, operations, costs, projects, and statements Any forward-looking statements in this presentation only reflect information regarding future performance. Forward-looking statements are generally available at the time of preparation. Subject to the requirements of the Disclosure identified by the words “plans,” “expects,” “anticipates,” “believes,” “intends,” and Transparency Rules and the Listing Rules or applicable law, Acacia explicitly “estimates” and other similar expressions . disclaims any obligation or undertaking publicly to update or revise any forward- All forward-looking statements involve a number of risks, uncertainties and looking statements in this presentation, whether as a result of new information, other factors, many of which are beyond the control of Acacia, which could cause future events or otherwise. Nothing in this presentation should be construed as a actual results and developments to differ materially from those expressed in, or profit forecast or estimate and no statement made should be interpreted to mean implied by, the forward-looking statements contained herein. Factors that could that Acacia’s profits or earnings per share for any future period will necessarily cause or contribute to differences between the actual results, performance and match or exceed its historical published profits or earnings per share. Mineral achievements of Acacia include, but are not limited to, changes or developments reserves and mineral resources estimates contained in this presentation have in political, economic or business conditions or national or local legislation or been calculated as at 31 December 2014 in accordance with National Instrument regulation in countries in which Acacia conducts - or may in the future conduct - 43-101 as required by Canadian securities regulatory authorities. Canadian business, industry trends, competition, fluctuations in the spot and forward price Institute of Mining, Metallurgy and Petroleum (CIM) definitions were followed of gold or certain other commodity prices (such as copper and diesel), currency for mineral reserves and resources. The reserves and resources figures stated are fluctuations (including the US dollar, South African rand, Kenyan shilling and estimates. No assurances whatsoever can be given that the indicated quantities of Tanzanian shilling exchange rates), Acacia’s ability to successfully integrate metal will be produced and totals stated may not add up due to rounding. acquisitions, Acacia’s ability to recover its reserves or develop new reserves, You are reminded that you have received this presentation on the basis that you including its ability to convert its resources into reserves and its mineral are a person to whom this presentation may be lawfully made and delivered. You potential into resources or reserves, and to process its mineral reserves may not and are not authorised to: (i) reproduce or publish this presentation; or successfully and in a timely manner, Acacia’s ability to complete land (ii) distribute, disclose or pass on this presentation to any other person, in whole acquisitions required to support its mining activities, operational or technical or in part, by any medium or in any form, in breach of any applicable securities difficulties which may occur in the context of mining activities, delays and laws. BY ACCEPTING THIS PRESENTATION, YOU ACKNOWLEDGE AND technical challenges associated with the completion of projects, risk of trespass, AGREE TO THE CONTENTS OF THIS DISCLAIMER AND YOU AGREE TO BE theft and vandalism, changes in Acacia’s business strategy and ongoing BOUND BY THE FOREGOING LIMITATIONS. implementation of operational reviews, as well as risks and hazards associated with the business of mineral exploration, development, mining and production and risks and factors affecting the gold mining industry in general. 2014 Preliminary Results Presentation 2 February 2015

Introduction

What we stand for Our Three Pillars 1 A leading asset portfolio in Africa Our People 2 Focused on free cash flow Our 3 Disciplined capital allocation Our Relationships Business 4 Becoming the partner of choice 5 Growing our footprint … unearthing Africa’s potential 2014 Preliminary Results Presentation 4 February 2015

Building a track record of delivery Consistently improving performance Increasing production Efficient Delivery Financial discipline  Production of 719koz in  Nine successive quarters of  Strong balance sheet - net 2014 reduction in costs cash position  CIL Expansion brought on  Over US$600/ounce  Delivering free cash flow stream reduction in quarterly AISC  Consistent dividend payer  Upper East zone brought  Delivered US$185m of  Tulawaka sold without any forward Operational Review savings residual liability  Gokona underground  Focused exploration  Greenfield and brownfield programme exploration success 2014 Preliminary Results Presentation 5 February 2015

Highlights

FY 2014 - Highlights A watershed year for Acacia  Gold production of 719koz, 13% higher than 2013 and ahead of guidance AISC of US$1,105/oz, 18% lower than 2013  Returned to cash generation from Q2 2014 onwards  Generated over US$100m of free cash, pre growth, dividends and Tulawaka disposal  Operating cash flow of US$290 million and EBITDA of US$253 million  40% increase in proposed full year dividend to US4.2 cents per share  Significant return on investment in exploration programmes  2.3Moz of resources added at Bulyanhulu as a result of drilling  Set out 5 year vision for the company  2014 Preliminary Results Presentation 7 February 2015

Consistent reduction in costs Quarterly AISC and Cash Cost Evolution (US$/oz) 1,800 1,600 1,400 1,200 1,000 US$/ounce 800 600 400 200 0 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 FY 12 FY 13 FY 14 Cash cost / ounce AISC / ounce 2014 Preliminary Results Presentation 8 February 2015

Outlook Investing for growth, while increasing production and reducing costs Cash cost per ounce sold (US$/oz) Production (koz) 750-800 800 900 941 750 700 800 719 EUS/$ million 827 695-725 650 700 732 642 600 626 600 550 500 500 2012 2013 2014 2015E 2012 2013 2014 2015E AISC per ounce sold (US$/oz) Capital Expenditure (US$ Million) 1 Expansion 400 1,500 1,561 117 Cap Dev't 1,300 47 300 Sustaining 1,050- 1,346 5 1,100 113 171 1,100 61 200 1,105 130 132 900 171 100 700 112 95 61 500 0 2012 2013 2014 2015E 2012 2013 2014 2015E 1 Sustaining capital guidance includes US$15 million of land purchases which is not included in historic numbers as treated as a pre-payment for accounting purposes 2014 Preliminary Results Presentation 9 February 2015

Operations Review

Operational highlights Operational Performance 2014 2013 % change Tonnes mined (thousands of tonnes) 41,684 54,076 (23)% Ore tonnes mined (thousands of tonnes) 8,170 7,225 13% Ore tonnes processed (thousands of tonnes) 8,413 7,914 6% Process recovery rate (percent) 88.0% 88.4% 0% Head grade (grams per tonne) 3.0 2.8 7% Gold production (ounces) 718,651 637,002 13% Gold sold (ounces) 1 703,680 643,597 9% Cash cost per tonne milled 1,2 (US$) 61 66 (8)% Per ounce data (US$) Average spot gold price 1 1,266 1,411 (10)% Average realised gold price 1 1,258 1,379 (9)% Total cash cost 1 732 812 (10)% All-in sustaining cost 1 1,105 1,346 (18)% 1 Non-IFRS financial performance measures with no standard meaning under IFRS. Refer to ”Non IFRS measures”’ on page 24 of preliminary results for definitions. 2 Cash cost per tonne milled excluding the reprocessing of tailings at Bulyanhulu amounted to US$69 per tonne for the quarter and US$65 for the year ended 31 December 2014. 2014 Preliminary Results Presentation 11 February 2015

Bulyanhulu  Year end 2014 underground Reserves of 9.2Moz at 9.7g/t  Produced 235koz at AISC of US$1,266/oz in 2014 Progressing implementation of efficient mechanised mining  Significant investment in development to increase flexibility in mine plan   Mine now being set up in order to deliver on its geological endowment 2014 Preliminary Results Presentation 12 February 2015

North Mara  Year end 2014 Reserves of 2.0Moz at 2.6g/t  Production of 274koz at AISC of US$947/oz in 2014  Becoming a combined open pit (Nyabirama) & underground ( Gokona) operation Local community relations significantly improved  2014 Preliminary Results Presentation 13 February 2015