Acacia Mining plc 2018 Preliminary Results Presentation February - PowerPoint PPT Presentation

LSE:ACA Acacia Mining plc 2018 Preliminary Results Presentation February 2019

Important Notice This presentation includes “forward - looking statements” that express or imply such statements will prove to be correct. Accordingly, investors should not place expectations of future events or results as opposed to historical facts. These reliance on forward-looking statements contained in this presentation. Any statements include, financial projections and estimates and their underlying forward-looking statements in this presentation only reflect information assumptions, statements regarding plans, objectives and expectations with available at the time of preparation. Save as required under the Market Abuse respect to future production, operations, costs, projects, and statements Regulation or otherwise as may be required under applicable law, Acacia regarding future performance. Forward-looking statements are generally explicitly disclaims any obligation or undertaking publicly to update or revise any identified by the words “plans,” “expects,” “anticipates,” “believes,” “intends,” forward-looking statements in this presentation, whether as a result of new “estimates” and other similar expressions. information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast or estimate and no statement made should be All forward-looking statements involve a number of risks, uncertainties and interpreted to mean that Acacia’s profits or earnings per share for any future other factors, many of which are beyond the control of Acacia, which could cause period will necessarily match or exceed its historical published profits or actual results and developments to differ materially from those expressed in, or earnings per share. implied by, the forward-looking statements contained herein. Factors that could cause or contribute to differences between the actual results, performance and Any mineral reserves and mineral resources estimates contained in this achievements of Acacia include, but are not limited to, changes or developments presentation have been calculated as at 31 December 2018 in accordance with in political, economic or business conditions or national or local legislation or National Instrument 43-101 as required by Canadian securities regulatory regulation in countries in which Acacia conducts - or may in the future conduct - authorities. Canadian Institute of Mining, Metallurgy and Petroleum (CIM) business, industry trends, competition, fluctuations in the spot and forward price definitions were followed for mineral reserves and resources estimates. Any of gold or certain other commodity prices (such as copper and diesel), currency reserves and resources figures stated in this presentation are estimates only. All fluctuations (including the US dollar, South African rand, Kenyan shilling and estimates stated are subject to a variety of unknown factors, risks and Tanzanian shilling exchange rates), Acacia’s ability to successfully integrate considerations, such that no assurances whatsoever can be given that any acquisitions, Acacia’s ability to recover its reserves or develop new reserves, indicated quantities of metal will be produced. In addition, estimated figures and including its ability to convert its resources into reserves and its mineral totals stated may not add up due to rounding. potential into resources or reserves, and to process its mineral reserves This presentation is provided for general information purposes only. It does not successfully and in a timely manner, Acacia’s ability to complete land constitute an invitation or offer to underwrite, subscribe for or otherwise acquire acquisitions required to support its mining activities, operational or technical or dispose of any securities of Acacia in any jurisdiction. You are reminded that difficulties which may occur in the context of mining activities, delays and you have received this presentation on the basis that you are a person to whom technical challenges associated with the completion of projects, risk of trespass, this presentation may be lawfully made and delivered. You may not and are not theft and vandalism, changes in Acacia’s business strategy and on -going authorised to: (i) reproduce or publish this presentation; or (ii) distribute, implementation of operational reviews, as well as risks and hazards associated disclose or pass on this presentation to any other person, in whole or in part, by with the business of mineral exploration, development, mining and production any medium or in any form, in breach of any applicable securities laws. BY and risks and factors affecting the gold mining industry in general. ACCEPTING THIS PRESENTATION, YOU ACKNOWLEDGE AND AGREE TO Although Acacia’s management believes that the expectations reflected in such THE CONTENTS OF THIS DISCLAIMER AND YOU AGREE TO BE BOUND BY forward-looking statements are reasonable, Acacia cannot give assurances that THE FOREGOING LIMITATIONS. 2018 Preliminary Results Presentation 2 February 2019

Full Year Review Strong operational performance following stabilisation of the business  2018 gold production of 522koz, substantially ahead of initial 2018 guidance range of 435- 475koz Higher grade ore from Nyabirama open pit at North Mara  Favourable performances at Buzwagi and Bulyanhulu   2018 AISC of US$905/oz sold, well below 2018 guidance range of US$935-US$985/oz Driven by higher production base, lower capital allocation and strong cost discipline   Return to free cash flow generation in Q2 2018, sustained throughout rest of year Net cash balance rose US$78 million during 2018 to US$88 million   Highly encouraging provisional outcomes of the Bulyanhulu optimisation study  Assumes a resolution of disputes with GoT and resumption of concentrate sales  Supports an expected 18 year life of mine  Opportunity to achieve an average steady state production rate of 300koz-350koz per year at an AISC of US$700 to US$750/oz 2018 Preliminary Results Presentation 3 February 2019

Update on Tanzania

Update on Tanzania Discussions between Barrick Gold Corporation and the Government of Tanzania (“GoT”) continued during 2018  Barrick and the GoT continued their discussions aimed at agreeing and documenting the details of the framework they announced in October 2017  Acacia has been providing support to Barrick in its discussions with the GoT, but has not been directly involved in those discussions to date  On 24 September 2018 Barrick and Randgold Resources (“Randgold”) announced their intention to merge and, following successful shareholder votes, the merger completed on 2 January 2019  Acacia has not yet received a detailed proposal agreed in principle between Barrick and the GoT for a comprehensive resolution of Acacia’s disputes with the GoT  Acacia is engaging with Barrick to understand Barrick’s plans for the next steps in its direct discussions with the GoT  International arbitration is underway to protect the businesses and continue to be progressed. The GoT is engaging in the process and filed its defence in October 2018  In Q4 2018, operating environment became increasingly challenging with criminal charges by the GoT against three local companies and three current Acacia employees and a former employee, three of whom are still being held under non-bailable offences  The allegations and charges are denied and being defended 2018 Preliminary Results Presentation 5 February 2019

Major Contributor to Tanzania Over 15 yrs Acacia has invested >US$4bn and paid >US$1.3 bn in taxes  In 2018 we paid US$127 million of taxes and royalties  Tanzanian localisation strategy to Tanzania  In 2018 spent over US$273 million with local suppliers  Includes corporate taxes of US$42 million  Spending with Tanzanian-owned businesses set to rise to  Royalties of US$51 million US$140 million by early 2019  Payroll and other taxes of US$34 million  97% of our employees are Tanzanian Nationals, 85% fall in number of international employees in past 5 years  70% of our management positions are held by Tanzanians  Independent EY report  Transitioning key business support functions to Tanzania by  Acacia contributed US$712 million to the national economy mid-2019 in 2017 Last 11 Years Annual Tax Contributions to Tanzania (US$m) (1) 168 143 127 122 117 114 111 92 70 63 44 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1. Includes royalties, corporate tax, payroll tax, withholding tax, import duties, and fuel and local levies 6 2018 Preliminary Results Presentation February 2019

Strategic Investment in our Communities Our Sustainable Communities projects positively impacted over 150,000 people in 2018 and we have contributed US$92m since 2010  Bulyanhulu  US$1 million investment in Bugarama Health Centre to provide healthcare for 100,000 community members.  Investing US$2 million in the construction of a 55-kilometre pipeline to carry water from Lake Victoria to 100,000 local residents.  North Mara  Upgrade to the Nyamwaga Health Centre completed in April at a cost of over US$1 million and serving 350,000 people  Annual eye screening initiative benefiting over 3,000 patients  Breast and cervical cancer awareness and testing for 1,200 women, in partnership with Medical Women Association of Tanzania  Buzwagi  Agricultural Improvement Programme at Buzwagi: Investment of US$1.1 million over three years in support of over 3,000 farmers. 2018 Preliminary Results Presentation 7 February 2019

Operations Review