Phu Kham Operations, November 2013 David Reid, General Manager - PowerPoint PPT Presentation

Phu Kham Operations, November 2013 David Reid, General Manager

Safety performance – zero harm objective Total Reportable Injuries & Frequency Rate Last 12 Months 4 2 1.8 1.82 1.6 Number of Injuries 3 1.4 1.2 TRIFR 2 1 0.8 0.6 1 0.4 0.2 0 0 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 TRI Occurances 12 Mth TRIFR YTD TRIFR TRI Target Lost Time Injuries & Frequency Rate Last 12 Months Restricted Work Injuries & Frequency Rate Last 12 Months 6 0.35 6 0.60 0.3 5 0.50 5 0.25 Number of Injuriies 4 Number of Injuries 0.40 0.2 4 3 RTIFR LTIFR 0.30 0.15 3 2 0.20 0.1 2 0.10 1 0.05 1 0.00 0 0 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 0 -0.10 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Month Month LTI Occurances 12 Mth LTIFR YTD LTIFR LTI Target RWI Occurances 12 Mth RWIFR YTD RWIFR RWI Target

Phu Kham Operation – Outlook Summary  Established operation with competitive cash costs  2013 production expected to be 62,000t to 65,000t copper at an average C1 cash cost i of approx. US$1.35/lb; total cash costs (incl. royalty, sustaining capital and lease and finance charges) US$2.14/lb for 9 months to 30 Sep 2013  Production expected to rise to between 65,000t and 70,000t copper in 2014 and over 70,000t in 2015  2016 onwards: production rates to increase progressively to a peak of approximately 90,000t in 2018 and 2019 i: C1 direct operating costs, based on payable copper in concentrate produced, after precious metal credits. Assumes DecH2013 prices of US$1300/oz gold and US$20/oz silver. Data shown on a 100% equity basis.

Phu Kham Operation – Overview  Commenced production 2008: 12Mtpa nominal capacity exceeded  Process plant expanded in 2012 to 16Mtpa nominal: processing rates exceeding design on transitional ores  Increased Recovery Project completed 2013 ahead of schedule and under budget: recovery performance exceeding design for ore types processed  Potential for further mine and mill optimisation  2013 Ore Reserve estimate confirmed 10-year mine life  Phu Kham district exploration upside Data shown on a 100% equity basis.

Phu Kham: progressive upgrades 2 nd filter Increased flotation capacity six additional cleaner cells 2 nd regrind mill 2 nd ball mill 3 rd transformer 16Mtpa Upgrade Project Increased Recovery Project

Phu Kham: Upgrade Project  Mill processing rate to increase from 12Mtpa by 33% to a design capacity of 16Mtpa on primary ore  Commissioned in the SepQtr2012; quick ramp-up; record throughput achieved in December 2012 demonstrating high throughput rates at 21Mtpa, running at 18Mtpa rates in 2013  Timed to offset a decline in head grades as deeper primary ore is mined and processed  Grinding and flotation capacity increased by 50%; collectively deliver 2% absolute improvement in copper recovery  Capital cost within the US$95M budget Data shown on a 100% equity basis.

Phu Kham: Increased Recovery Project  Increased recovery achieved through less selective rougher flotation together with increased regrind, cleaner flotation and concentrate handling capacity  Project completed April 2013, several months ahead of schedule and under budget  Utilises existing plant technology: low technical risk, rapid payback  Metallurgical recovery performance to date is exceeding design model expectations for copper and gold based on ore types processed Data shown on a 100% equity basis.

Increased Recovery Project  90 Expecting an average 6% absolute 80 increase in copper and gold recovery Copper recovery (%) 70 60  Actual recovery rates achieved will 50 depend upon ore type (S:Cu ratio) and 40 30 production strategy including grind size 20 vs throughput rate trade-off; moderate 10 positive correlation with copper grade 0 0 10 20 30 40 Sulphur : copper ratio  S:Cu ratio expected to decline (11-13) as 90 the proportion of primary ore increases 80 Copper recover (%) 70  Minor increase in unit processing costs 60 due to power and grinding media 50 40 required for the second regrind mill…. 30 20  …increased metal production is expected 10 to reduce C1 cash cost by more than 5%; 0 0.3 0.4 0.5 0.6 0.7 capital cost under budget by $10m Copper grade (%) Charts show actual daily performance data from July 2013 onwards.

Throughput optimisation  Crusher bottleneck at 18 to 18.5Mtpa on softer ore, examining options to improve  SAG mill capacity ~20Mtpa  Original plant design required a pebble crusher in order to maintain nameplate throughput on primary ore  Evaluating options to improve in-pit ore fragmentation (mine to mill studies) and improving crusher operating time to allow optimal SAG mill operation  Opportunity to circumvent crusher by providing crushed ore from satellite pits – KTL & LCT potential – and low- grade stockpiles Data shown on a 100% equity basis.

Open-pit  Geotechnical instability detected in the interim pit west wall in December 2012  Revised mine schedule necessitated lower grade transitional ore to be prioritised thereby delaying access to higher grade ore in the pit floor  Average copper head grade for 2013/2014 is expected to range from 0.45% to 0.50%  Interim wall slope angle being reduced; no change to final pit wall design  The interim west wall failure was mined out from January to October 2013, new walls established

Revise mine plan: October 2013  Revised life of mine plan developed; copper production to progressively increase to a peak of around 90,000t in 2018 and 2019  Ore processing rate of 18Mtpa expected to be sustained  Phu Kham open pit mine life remains 10 years (from start of 2013) at a copper price of US$3.00/lb  Potential for mineralisation from satellite deposits close to Phu Kham and near Phonsavan to augment mill feed and/or extend mine life Data shown on a 100% equity basis.

Material movements and strip ratios  Material movements of approx. 50Mtpa from 2014 to 2016 then reducing; additional mine shovel and drill required in 2014; LOM strip ratio of 1.2:1  Low-grade stockpile strategy developed reducing effective strip ratio in high material movement years  Truck fleet scheduled to increase from Q1 Mining pit stages 2016 by six trucks as haulage distances increase with open-pit depth  Accounting standard amended for 2013: deferred waste mining costs now limited to waste mining relating to future mining areas  Approximately US$23.3M (or 8.1Mt) of waste stripping for 2013 is expected to be capitalised Mining areas (red) in 2014 Data shown on a 100% equity basis.

Tailings Storage Facility  Progressive TSF wall lifts have historically been a significant component of sustaining capital at Phu Kham  Implementation of floating discharge of tailings and continuous discharge of decant water in 2012 has led to a revised TSF construction schedule Annual sustaining costs for 2013 –  2015 are expected to reduce significantly but will vary depending upon requirements for accommodating waste as a construction material Data shown on a 100% equity basis.

Site costs for the 9 months to 30 Sep 2013 Total on-site operating costs: US$1.71/lb (before credits) Labour 0.09 0.07 0.31 Fuel 0.08 Process power 0.08 Grinding media Maintenance, mill liners and other spares 0.28 Explosives 0.32 Reagents Tyres Other 0.26 0.22

Mine and ore body performance  Current production fleet comprises: Tonnes/month  48 CAT777D 100t trucks 4,000,000  2 PC3000 & 2 RH90 face shovels Total material mined 3,500,000  2 PC2000 excavators Ore mined 3,000,000  Reconciliation: ore processed to Ore 2,500,000 Reserve; project to late 2012: Extreme 2,000,000 rainfall  -6% contained copper events 1,500,000  +4% contained gold 1,000,000  +24% contained silver 500,000  -5% ore tonnes 0 Apr-08 Nov-08 Jun-09 Jan-10 Aug-10 Mar-11 Oct-11 May-12 Dec-12 Jul-13  Low LOM strip ratio: 1.2:1 based at a US$3.00/lb copper price  Mining costs: US$2.50/t – US$3.00/t, average $2.60/t

Process plant performance: ore milled  Design process plant capacity of Tonnes/month Tonnes/hr 16Mtpa has been exceeded on 2,000,000 3,000 softer transitional ores, site uses a 1,800,000 2,500 blending regime (S:Cu, hardness) 1,600,000 1,400,000 2,000  End Sep 2013 YTD average 1,200,000 processing rate of 2,244t/hr versus 1,000,000 1,500 design 2,000t/hr 800,000 Ore milled 1,000 600,000  Ball mill Bond work index range Mill throughput rate (t/hr) 400,000 10-17 kWh/t 500 200,000  Primary grind: P80 of ~90 μ m 0 0 Apr-08 Nov-08 Jun-09 Jan-10 Aug-10 Mar-11 Oct-11 May-12 Dec-12 Jul-13  Regrind: P80 of ~30 μ m  Processing cost: averaging US$6.50/t Data shown on a 100% equity basis.