For personal use only Discovery-Leveraged Investment in Gold Nov ovember 2 r 2018 18 AGM U Update te
DG DGO C Corporate Ove verview ew For personal use only Boa oard of of Di Director ors Mana nagem emen ent Shares 24.9 m Share P Price 61 c Eduard Eshuys Dr Darryl Clark Executive Chairman Managing Director Marke ket $ 15.1 m Dr Darryl Clark Cindie Jupp Capit italis lisation Managing Director Chief Financial Bruce Parncutt Officer Cas Cash (30 $ 3.2 m 30 th Sept) Non-Executive Director Ross Hutton Non-Executive Director 7 Majo jor S Shareh eholders 84% Michael Ilett Board 24% Non-Executive Director 2
DGO’s purpose For personal use only To apply expertise and To build on the To provide an successful history of the disciplined allocation outstanding WA gold industry and to of capital to maximise opportunity for lead the cost effective returns for investors to participate discovery of gold shareholders in the in a discovery-leveraged resources underpinning gold sector. investment in gold. substantial future growth. 3
DGO DGO’s S s Strateg egy DGO strongly differentiates itself by identifying large scale gold discovery For personal use only opportunities that meet three key selection criteria: Brownfield gold resource discovery opportunities where finding costs are 1 Low finding assessed to be comfortably below the brownfield average of $20 per cost resource ounce. 2 Initial resource potential of greater than 3 million ounces as Potential a base line required to support successful development. for scale Potential for long term resource growth, well beyond 3 million ounces . 3 Optionality to the Potential for upside surprise via either a world class discovery upside (+10 million ounces) or substantial high grade mineralization. 4
Gold h historically a a proven hedge a against e economic a c and financial t turmoil For personal use only Gold Prices and Historic Events forecast 2500.00 Middle- Eastern GFC instability wars 2000.00 US$/Oz September 11 1500.00 Oil Crisis 1000.00 Great Depression WW2 WW1 500.00 0.00 1910 1930 1950 1970 1990 2010 Nominal Value Inflation Adjusted Value 5
Dental - Australia is the 2 nd largest producer of gold in the world Elect ctronics cs Me Medic ical 7.1 % 0.6 % Central Ba Ce Bank Jewelry For personal use only Reser erves es 35 47 % 8.7 % 30 Equity T Traded Gold Fund Funds 12 % Millions of Ounces 25 Australia Uses 2nd largest producer 20 15 10 Co Coin & Ba & Bars / / Investments 24 % 5 0 1970 1979 1987 1996 2014 2017 S Africa USA Australia Canada China 6
Western Australia is Australia’s major gold Western Australia has: producing state For personal use only • Substanti tial k known wn go gold bearing s g structural t tren ends Australian Gold Production 12 2,500 that h t have not b t been een Gold Price adequatel ely e explored ed 10 2,000 Production increased due to improved discovery technology Millions of Ounces • Wel Adjusted Gold Price ell e established ed 8 infrastructure & e & low 1,500 sover erei eign gn r risk 6 1,000 4 • A strong p g pool o of explorati tion, d dev evel elopmen ent 500 2 and m mining c g capabilities es. 0 0 1851 1858 1865 1872 1879 1886 1893 1900 1907 1914 1921 1928 1935 1942 1949 1956 1963 1970 1977 1984 1991 1998 2005 2012 Western Australia Australia Adjusted gold price 7
Corp orpor orate O Object ctive For personal use only Individual portfolio DGO Gold’s investments can primarily through objective is to realistically be strategic equity anticipated to build a investment return 30 % to 100 % portfolio of WA IRR’s based on brownfield successful ASX listed brownfield discovery discovery and opportunities development and also through outcomes over the tenement past five years. acquisitions and joint ventures 8
Brownfield discovery finding costs have averaged DGO Gold defines $20 per resource ounce and generate venture For personal use only brownfield capital type IRR’s over a 3 to 5 year time frame exploration as that occurring adjacent to known economic Res. Resource Expl. Costs IRR Company ASX Period Discovered Finding Cost gold mineralisation $m % Moz $/oz where the Northern Star NST Over 3 years to Oct 2018 150.0 7.1 21 59 geological controls Dacian Gold DCN From IPO to Jul 2016 55.0 2.5 22 71 and settings are understood . Kin Mining KIN From IPO to Jul 2016 26.0 1.0 26 83 Gold Roads GOR Over 3 years to Jun 2016 104.0 6.4 16 37 Total 335 17 20 62 9
3 Is the t thres esho hold d For personal use only for suc uccess i ss in value creating development Moz ASX l SX listed d explorer-held gold r reso sources $ 150 /oz oz Producer ers v valued ed oz & $ 55 bet etween een are v e valued ed a at $ 250 /oz an aver erage o e of Resource Ounce Producer ers w with less than 1 Moz in resources es are o e often en v valued ed a at ~ ~$55 / resource o e oz 10 Source: GoldNerds Data Base Nov 2018 *Adj. Excludes Top & Bottom 10%
Dacian G Gold b brownfi field r res esource d discovery success, 7 71% I IRR a and f finding costs ts o of $ f $22 p per er o ounce Exploration 3.4 years Feasibility 1.6 years Development 1.25 years Production For personal use only 4.0 $4.00 71% IRR $25m Raised $49m Raised @$2.50 @$2.70 3.5 $3.50 3.0 $3.00 Dacian Gold Share Price $ Resource M oz $110m Raised 2.5 $2.50 @$2.0 31% IRR 2.0 $2.00 Pre-IPO $10m Raised $25m Raised IPO $20m @$0.69 1.5 $1.50 Raised @$0.50 1.0 $1.00 0.5 $0.50 0.0 $0.00 Measured M oz Indicated Moz Infererred M oz Share price $ 11
DGO’s investment approach exploits market inefficiencies For personal use only • Most explorer strategies reflect limited short term funding and inadequate geological Opportunity to reposition market analysis and planning expectations • Drilling programmes typically are short term and sub-optimal for success • Establishment and communication of a JORC • Explorers are often priced on latest news compliant Exploration Target • The market is not transparent • Longer term exploration planning 2-3 years • There is a no comprehensive broker analysis of • A comprehensive funding strategy the explorer sector • Increased drilling activity 12
DGO’s selection p proce cess for brownfields d discovery o opportunities For personal use only Selection criteria for ASX listed companies Process ~90 ASX listed explorers in WA goldfields Assess scale of geological structures and expected cost of discovery 20 long list 7-8 short list 2 invested to date De Grey Mining Ltd MC $48.3M NTM Gold Ltd MC $12.5M 13
Investment in De Grey Mining meets our selection criteria • Low finding costs For personal use only Brownf nfield o d opportuni unity with multiple gold deposits aggregating over 1.39 Mozs of gold 1 . DEG’s recent exploration success DGO expects average fin inding c cos osts of of $5-$10 d $10 dollars validates our initial prospectivity per/oz. analysis: • Scale 56m @ 3.0g/t gold from 14m depth (DEG ASX announcement 15 th Oct 2018). DGO sees resource growth potential well a abo bove e 3M ounces from depth and strike extensions of existing resources. • Upside optionality DEG’s land position in the Mallina Shear Zone has over 40 gold g d geochem emical ano nomalies a es along 2 200km of strike with very little drilling below 100 metres. DEG’s holding of the 200km • Influential stake long Mallina Shear Zone has DGO 7% (10% fully diluted); Kirkland Lake Gold 9.% the potential to become a (13% fully diluted). world class gold province. 14 1 ASX:DEG Announcement 3rd October 2018
DGO & De Grey control an emerging world class gold province For personal use only Mallina- WA Kirkland Lake - Canada 1.4Moz – 200km (and growing) 70Moz - 300km Ashanti-Ghana 130Moz – 130km Kalgoorlie-WA 80Moz – 100km Source: compilation prepared by DGO Expert Research Advisor, Professor Neil Philips 15 *Note all province maps are at the same scale
DGO h has a a commandi nding ng p position i n in an e emerging ng w world c d class g gold p provinc nce For personal use only Pilbara Gold Province 16 DGO has 35km’s of prospective shear zones in addition to 7% of De Grey’s 200km’s
Recent exploration DEG’s Mallina: Outstanding exploration drill results success validates our initial prospectivity For personal use only analysis. Mallina • 56m @ 3.0g/t Au from 14m 1 Toweranna • 7m @ 17.3g/t from 101m 2 Withnell • 7.97m @ 7.48g/t Au from 137.03m 2 Mt Berghaus • 26m @ 3.5g/t Au from 3m 2 17 1 ASX:DEG Announcement 15 th October 2018 2 ASX:DEG Announcement 31 st October 2018
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