Avocet Mining PLC –RBC Capital Markets’ 2011 African Gold Conference June 2011
Corporate overview Largest shareholders Market statistics* OSE & AIM - AVM 225.0 p o Elliott 13.0 % Market capitalisation US$779.9 m o Datum 12.2 % Shares outstanding 199.5 m o BlackRock 10.0 % Cash (31.03.11) US$47.0 m o JP Morgan 7.7 % Net debt (31.03.11) US$25.0 m Enterprise value US$804.9 m Directors Share price performance (12 months) o Russell Edey, Chairman o Harald Arnet 280 o Mike Donoghue 260 o Robert Pilkington DATA REBASED TO AVM SHARE PRICE 240 o Barry Rourke 220 o Brett Richards, CEO 200 o Mike Norris, Finance Director 180 Exco 160 140 o Brett Richards 120 o Mike Norris 100 o Peter Flindell o Richard Gray 80 o Hans-Arne L’orange AVOCET GOLD FTS E GOLD MINES INDEX 2 * All figures as of 03.05.11, unless otherwise stated
Focused on West Africa • Conditional sale of assets in Asia for US$200 million cash announced Dec. 2010 INATA (2.1 Moz) US$110 million placed in escrow account to date Mali o • Inata gold mine in Burkina Faso 2010 production: 137,732 oz at US$531/oz o 2011 guidance: 165,000 oz o Burkina Faso • Burkina Faso: 200,000 m drilling Guinea programme in progress (DD/RC) Targeting a doubling of Inata’s reserves by the end o Tri-K of Q3 2011 Bélahouro (Koulékoun) (0.6 Moz) (1.1 Moz) • Guinea: 100,000 m drilling programme in progress (DD/RC) Producing asset Advancing Tri-K to start feasibility study by year end o Exploration asset Targeting 2 Moz Mineral Resource estimate in 2011 o 100% Resources reported for each asset 3
Q1 2011 summary Group Inata Financial SE Asia sale Exploration Production Production performance Total gold SE Asia sale – Inata production of production of EBITDA of Inata resource US$110m 47,963 ounces at a 71,708 ounces at a US$33.0 million in increased to 2.12 consideration cash cost of total cash cost of Q1 2011 million ounces received in escrow US$533 per ounce US$678/oz but outstanding pre-conditions remain to be satisfied Compared with Compared with Up from US$29.7 On target to double 70,857 ounces in 46,208 ounces at million in the Inata reserves to Q4 2010 at US$511* per ounce previous quarter c.1.8 million ounces US$641/oz in Q4 2010 Q4 2010 by Q3 2011 Positive drilling Q1 2010 Q1 2010 results from production: 44,877 production: 19,838 Kodiéran and ounces at ounces Koulékoun in US$735/oz Guinea * Includes US$2.7m adjustment to reflect a government decree on 31 December 2010 that government royalties for 2010 should be charged at 3% rather than 5% 4 Royalty rate from 2011: up to $1,000 Au price – 3%; $1,000 to $1,300 Au price – 4%; >$1,300 Au price – 5%
Financial summary Cash and net Project finance Corporate Gold hedge debt facility facility • Cash at bank of • US$65m project • 324,193 oz, at an • US$25m corporate US$47.0 m 1 average US$970/oz 1 revolving credit finance facility with Macquarie Bank facility with Standard Chartered Bank, fully • Net debt of US$25 m 1 • Hedge delivery drawn • Outstanding schedule of ~25,000 balance 1 : US$47m oz per quarter - commenced Q3 2010 • Repayment schedule of US$6m per quarter 5 1 As of 31 March 2011
Q1 2011: financial highlights Quarter Quarter Quarter Year ended ended ended ended 31 March 31 March 31 December 31 December 2011 2010 2010 2010 Period Unaudited Unaudited Unaudited Audited Total gold production (ounces) 71,708 44,877 70,857 236,396 Average realised gold price (US$/oz) 1,241 1,107 1,229 1,174 Cash production costs (US$/oz) 678 735 641 660 EBITDA from continuing operations (US$000) 25,403 (4,148) 22,425 54,597 EBITDA from continuing and discontinued 32,994 4,115 29,738 86,272 operations (US$000) Profit before tax from continuing operations (4,143) 7,986 12,570 17,475 (US$000) Profit/(loss) before tax (US$000) 20,321 196 9,145 33,549 Notes: • Inata costs and revenues in the quarter to 31 March 2010, prior to the commencement of commercial mining operations, were capitalised. 19,838 ounces of gold poured in this period were however included in total gold production. • EBITDA represents earnings before exceptional items, finance items, tax, depreciation and amortisation. EBITDA is not defined by IFRS but is commonly used as an indication of underlying cash generation. 6
Conditional sale of South East Asian assets • Announced 24 December 2010 o Completion expected in Q2 2011 • Binding agreement signed for conditional sale of all SE Asian assets to J&Partners o J&Partners is a mining fund established by the Indonesian family that sold Indonesia’s 2nd largest mining contractor in November 2009 o Current focus is on gaining government approvals and satisfying other conditions precedent that remain • Cash consideration of US$200m* o Initial consideration and second tranche received in escrow: US$110m o Final tranche (on completion): US$90m o Net proceeds estimated: US$170m 7 * On a cash free, debt free basis, and subject to working capital adjustment
Operational review – Burkina Faso Inata gold mine & Bélahouro district 8
Gold mining and exploration in Burkina Faso • Mining code adopted in 2003 o 3-4 year tax holiday o 20% corporation tax o 3-5% royalty Essakane (IAMGold) o 10% free carried interest Inata (Avocet) 135,900 oz 137,732 oz • Rapidly expanding Taparko (High River) mining sector 127,684 Kalsaka (Cluff) o Only 1 gold mine operating in 74,000 oz 2007 o 6 gold mines operational Mana (Semafo) o Mines produced over 700,000 179,700 oz ounces in 2010 • Over 20 listed gold Youga (Endeavour) producers and explorers 82,400 oz Prospective Birimian geology operating in country Gold deposit / resource Producing gold mine; number of ounces shown represent 2010 gold production 9
Inata: successful ramp-up completed • Mining: Inata North pit continues to contribute majority of ore to mill o Mining of Inata Central commenced in June 2010 – ore o production increasing throughout 2011 In line with LoM plan, as mining advances deeper in the pits o and harder host rock is encountered, more drilling and blasting has been required • Processing: Q1 average throughput of 318 tph - above 287 tph o nameplate capacity Production statistics Q1 2011 Q4 2010 Plant expansion underway towards target of 340 tph o Ore mined (t) 618,000 638,000 Total movement (t) 5,291,000 5,007,000 • Production and cash costs: Ore processed (t) 645,000 593,000 Higher royalty rate and increased reagent costs of o Average head grade (g/t) 2.37 2.68 explosives and cyanide compared with Q4 2010 Gold recovery rate (%) 94% 94% Costs in the rest of the year are expected to increase due to o an increase in explosives and cyanide usage, and fuel and Gold production 47,963 46,208 reagent costs; but also as mining volumes rise (third fleet) due to a higher strip ratio. Cash costs (US$/oz) • 2011 Guidance: - mining 136 132 - processing 205 209 Production: 165,000 oz (unchanged) o - royalties & overheads 192 170 Inata Cash Costs: US$600-$650/oz (increase) o Total cash cost 533 511* * Includes US$2.7m adjustment to reflect a government decree on 31 December 2010 that government royalties for 2010 should be charged at 3% rather than 5% 10 Royalty rate from 2011: up to $1,000 Au price – 3%; $1,000 to $1,300 Au price – 4%; >$1,300 Au price – 5%
Inata: expanding the orebody to the north • Drilling results announced 7 February 2011 o 55,000 m of drilling completed o Assays received from 28,579 m of drilling, testing northern extensions of resource at Inata North and Sayouba, as well as mineralisation below the current 1.84 Moz resource o Near surface intercepts are broader than indicated by previous wide-spaced exploration drill holes and of similar gold grade Inata North highlights: • 39 m @ 3.01 g/t Au from 93 m Inata North o incl. 10 m @ 5.41 g/t Au Sayouba • 28 m @ 3.13 g/t Au from 146 m o incl. 8 m @ 4.30 g/t Au Plant site Sayouba highlights: Inata • 3 m @ 18.5 g/t Au from 31 m Central • 17 m @ 1.60 g/t Au from 81 m • 18 m @ 1.29 g/t Au from 158 m o incl. 5 m @ 2.81 g/t Au • 7 m @ 2.83 g/t Au from 125 m Inata o incl. 3 m @ 5.86 g/t Au South 11
Bélahouro: VTEM survey results Oka N Gakinde WESTERN CENTRAL EASTERN 5km DOMAIN DOMAIN DOMAIN Kourfadie Dynamite Gassel Gomde Barrage Garafo Miilam Gomde Barrage Damba INATA Fete Kole Pali Image: VTEM survey overlain with existing drill hole data. Key: Priority drilling target 12 Warm colours (red/orange) indicate regions of more conductive geology
Inata: encouraging exploration results in Q1 • Further positive drilling results for the quarter at Sayouba, Minfo and extensions to the existing Inata North pit, including: o 39 m @ 3.01 g/t Au from 93 m o incl. 10 m @ 5.41 g/t Au o 28 m @ 3.13 g/t Au from 146 m o incl. 8 m @ 4.30 g/t Au o 3 m @ 18.5 g/t Au from 31 m • Inata Mineral Resource increased during Q1 to 2.12 Moz o Including the 0.56 Moz resource at Souma, the Mineral Resource across the Bélahouro district now stands at 2.68 Moz • 200,000 m drilling campaign continues throughout 2011 13
Recommend
More recommend
