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Resolute Mining Limited Investor Presentation 2017
10548_rns_2017-08-06_789c3e14-4ed5-45f1-8f5b-f0c535ac101f.pdf
Investor Presentation
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Mine Gold. Create Value.
Presentation by Mr John Welborn, Managing Director & CEO Diggers & Dealers Conference, Kalgoorlie, Monday 7 August, 2017
Cautionary Statement
This presentation includes certain statements, estimates and projections with respect to the future performances of Resolute. Such statements, estimates and projections reflect various assumptions concerning anticipated results, which assumptions may prove not to be correct. The projections are merely estimates by Resolute, of the anticipated future performance of Resolute's business based on interpretations of existing circumstances, and factual information and certain assumptions of economic results, which may prove to be incorrect. Such projections and estimates are not necessarily indicative of future performance, which may be significantly less favourable than as reflected herein. Accordingly, no representations are made as to the fairness, accuracy, correctness or completeness of the information contained in this presentation including estimates or projections and such statements, estimates and projections should not be relied upon as indicative of future value, or as a guarantee of value of future results. This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase securities in Resolute Mining Limited.
The information in this report that relates to the Exploration Results, Mineral Resources and Ore Reserves is based on information compiled by Mr Andrew Goode who is a member of the Australasian Institute of Mining and Metallurgy and Mr Bruce Mowat, a member of The Australian Institute of Geoscientists. Mr Andrew Goode and Mr Bruce Mowat both have more than 5 years' experience relevant to the styles of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person, as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Andrew Goode and Mr Bruce Mowat are full time employees of Resolute Mining Limited Group and each hold equity securities in the Company. They have consented to the inclusion of the matters in this report based on their information in the form and context in which it appears. This information was prepared and disclosed under the JORC code 2012 except where otherwise noted. Particular Reserves and Resources remain 2004 JORC compliant and not updated to JORC code 2012 on the basis that information has not materially changed since it was last reported.
In providing this presentation, Resolute has not considered the objectives, financial position or the needs of the recipient. The recipient should obtain and rely on its own financial advice from its tax legal accounting and other professional advisers in respect of the recipients objectives financial position and needs. To the maximum extent permitted by law neither Resolute nor its related corporations ,directors, employees or agents nor any other person accepts liability for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it. You represent and confirm by attending and or retaining this presentation that you accept the above conditions.
Corporate Summary (ASX:RSG)
| Resolute |
|---|
| ---------- |
| Shares on issue | 736,982,768 | Share Price |
|---|---|---|
| Share Price | A$1.07 | |
| MarketCapitalisation | A$792M(US$628M) | |
| Averagedaily volume | 8.0M Shares | DUA |
| Cash,bullion, investments | A$290M (US$223M) at 30 Jun 2017 | $ |
| Debt | A$34M (US$26M) at 30 Jun 2017 | Jul 11,Aug 22,Oct 03,Nov 14,Dec 28,Feb 10, |
| FY18 Guidance | 300,000oz gold production@ AISC A$1,280/oz(US$960/oz) | 201620162016201620162017 |
| Dividend Policy | 2% of annual gold productionofferedin gold or cash | ArgonautBaillieu HolstCanaccordGenuity |
| SubstantialShareholders | ICM GlobalFunds20.43%Van Eck 8.97% | CitigroupAnalystEurozGlobalMining ResearchCoverage |
| InstitutionalShareholders | Oppenheimer FundsIFMInvestors | HartleysMacquarieMorganStanley |
| offeredin gold or cash | Analyst | ArgonautBaillieu HolstCanaccordGenuity | James WilsonWarren EdneyPatrick Chang | |
|---|---|---|---|---|
| ICM GlobalFunds20.43%Van Eck 8.97% | Coverage | CitigroupEurozGlobalMining Research | Trent AllenJon BishopDavid Cotterell | |
| Oppenheimer FundsIFMInvestorsBaker Steel Capital Managers | HartleysMacquarieMorganStanleyRBC Capital Markets | Paul HowardBen CrowleyBrendan FitzpatrickPaul Hissey |
FY17
329,834oz Total Gold Production
A$1,132/oz All-In Sustaining Cost (AISC)
317,242oz Total Gold Sold
A$1,717/oz Average Price Received (A$/oz)
Create Value.
FY17
Revenue from gold and silver sales
A$177M Gross profit from operations
Three years running…
Track record of strong operating performance
| FY15 | FY16 | FY17 | ||
|---|---|---|---|---|
| Original Guidance | 315koz | 315koz | 300koz | |
| Production(oz) | Actual | 329koz | 315koz | 330koz |
| Achieved | ✔ | ✔ | ✔ | |
| OriginalGuidance | A$1,280/oz | A$1,280/oz | A$1,280/oz | |
| AISC(A$/oz) | Actual | A$1,094/oz | A$1,200/oz | A$1,132/oz |
| Achieved | ✔ | ✔ | ✔ | |
| Average Spot | A$1,457/oz | A$1,602/oz | A$1,661/oz | |
| Price(A$/oz) | Received | A$1,467/oz | A$1,624/oz | A$1,717/oz |
| Achieved | ✔ | ✔ | ✔ |
ASX-listed peer group >300kozpa Australian producer peer group
| ResoluteMining(RSG) | EvolutionMining(EVN) | Northern StarResources(NST) | RegisResources(RRL) | St BarbaraLimited(SBM) | SaracenMinerals(SAR) | |
|---|---|---|---|---|---|---|
| Market Cap | A$0.79B | A$3.72B | A$2.82B | A$1.96B | A$1.39B | A$1.07B |
| Resources | 12.1Moz | 14.2Moz | 10.2Moz | 8.1Moz | 9.1Moz | 9.0Moz |
| Reserves | 5.6Moz | 7.0Moz | 3.5Moz | 2.2Moz | 4.0Moz | 2.1Moz |
| Annual Production | 330kozpa | 844kozpa | 515kozpa | 324kozpa | 381kozpa | 273kozpa |
| AISC | A$1,132/oz | A$905/oz | A$1,013/oz | A$945/oz | A$907/oz | A$1,348/oz |
| Achieved Price | A$1,717/oz | A$1,641/oz | A$1,673/oz | A$1,691/oz | A$1,685/oz | A$1,642/oz |
| EV / Resource Oz | A$50/oz | A$292/oz | A$216/oz | A$220/oz | A$130/oz | A$116/oz |
| EV / Reserve Oz | A$109/oz | A$592/oz | A$629/oz | A$811/oz | A$297/oz | A$494/oz |
| EV / Production Oz | A$1,617/oz | A$4,898/oz | A$4,288/oz | A$5,610/oz | A$3,114/oz | A$3,831/oz |
| EV / FY17 EBITDA | 2.5x | 5.9x | 5.3x | 7.2x | 3.6x | 8.9x |
| P / NAV | 0.6x | 1.5x | 1.3x | 1.3x | 1.0x | 0.9x |
300kozpa Australian producer peer group
300kozpa Australian producer peer group
300kozpa Australian producer peer group
All-In Sustaining Costs (AISC)
300kozpa Australian producer peer group
300kozpa Australian producer peer group
Source: Publicly available company documents, presentations and broker research. Market data as at 3 August 2017
300kozpa Australian producer peer group
Source: Publicly available company documents, presentations and broker research. Market data as at 3 August 2017
Reserve Life Benchmarking >300kozpa Australian producer peer group
Reserve life (years)
Syama Gold Mine Operation Highlights
FY17 Operating Performance
| Ore Mined(t) | Ore Milled(t) | Head Grade(g/t) | Recovery(%) | Total Production(Gold oz) | AISCA$/oz | |
|---|---|---|---|---|---|---|
| Syama Sulphide | 1,215,153 | 2,106,371 | 2.59 | 69.8 | 136,000 | 1,001 |
| Syama Oxide | 1,319,596 | 1,340,097 | 2.84 | 83.2 | 101,830 | 960 |
| Syama Total | 2,534,749 | 3,446,468 | 2.68 | 75.3 | 237,830 | 984 |
FY18 Production Guidance
| Gold Production | AISC | AISC | |
|---|---|---|---|
| (oz) | (A$/oz) | (US$/oz) | |
| Syama Sulphide | 130,000 | 1,050 | 788 |
| Syama Oxide | 90,000 | 1,260 | 945 |
| Syama Total | 220,000 | 1,140 | 855 |
Syama Gold Mine Overview
6.0Moz Total Resource 3.1Moz Total Reserve
2.4Mtpa (170kozpa) Sulphide Production Rate 1.5Mtpa (70kozpa) Oxide
12 Year Underground Mine Life
US$881/oz LOM AISC - Underground
17
Syama Underground
A world class sublevel cave in the making…
Automation & Development Syama Underground
- Automated drilling and longer rounds delivering rapid underground development
- Underground mine development has advanced more than 3km
- First development ore has commenced ramping up to ~500ktpa
- Pre-production underground ore of ~1.3Mt before first sublevel cave production ore in December 2018
Depth of peer group underground Peer group mining at depths beyond 12 years at Syama
- Average depth of peer group underground mines is 600m below surface
- Peers are currently mining at depths well beyond the next 12 years at Syama
- The 8Moz Syama orebody has been drill tested to ~800m below surface
- Peers mining at up to twice the depth of the current limit of drilling at Syama
A major gold discovery at Syama Game changing new discovery at Nafolo
- Adjacent to 8Moz Syama Deposit
- Potential to transform Syama operation
- Untested to the south and at depth
- All drillholes to date have intersected gold mineralisation
- Remains open in all
A world class opportunity 10Moz and counting, 80km of strike untested below ~200m
Scratching the surface
No deep drilling outside of the Syama deposit
All drilling
Drilling >100m
Drilling >200m
Tabakoroni long section – high grade sulphide at depth
Syama's high grade satellites High grade underground satellite opportunities
- High grade (>5g/t Au) sulphide extensions below satellite oxide pits:
- 20m @ 18.28g/t Au from 117m
- 23m @ 9.61g/t Au from 140m
- 25m @ 8.06g/t Au from 160m
- 14m @ 16.65g/t Au from 89m
- High grade feed to supplement base load Syama Underground Sublevel Cave (2.8g/t Au)
Syama Gold Mine One of Africa's premier gold mines
| Randgold | Acacia | Centamin | Newmont | Resolute | Randgold |
|---|---|---|---|---|---|
| Kibali | Bulyanhulu | Sukari | Ahafo | Syama | Loulo |
| 19.7Moz | 18.7Moz | 12.9Moz | 10.4Moz | 10.0Moz | 9.9Moz |
| Goldfields | AngloGold | Goldfields | AngloGold | Iamgold | Randgold |
| Tarkwa | Geita | Damang | Iduapriem | Essakane | Gounkoto |
| 9.1Moz | 7.3Moz | 6.0Moz | 5.6Moz | 5.1Moz | 4.8Moz |
Ravenswood Gold Mine Operation Highlights
FY17 Operating Performance
| Ore Mined(t) | Ore Milled(t) | Head Grade(g/t) | Recovery(%) | Total Production(Gold oz) | AISCA$/oz | |
|---|---|---|---|---|---|---|
| FY17 Actual | 2,366,159 | 1,995,293 | 1.54 | 93.1 | 92,004 | 1,406 |
| FY18 Production Guidance | Gold Production(oz) | AISC(A$/oz) | AISC(US$/oz) | |||
| FY18 Production Guidance | 80,000 | 1,520 | 1,145 | |||
| LOM Average AnnualProduction | 123,500 | 1,166 | 872 |
Mt Wright is one of Australia's most successful underground mines, having mined a ~2.5g/t Au orebody at an average cash cost of A$850/oz over the last 5 years, down to a depth of ~900m below surface
26
Ravenswood Gold Mine Overview
+130kozpa Production Rate Post 2020
2.8Mtpa Process Capacity - Current
5.0Mtpa Nameplate Capacity
27
Development Highlights Ravenswood Expansion Project
- Mt Wright underground to finish in late-FY18
- Open pit mining recommenced at Nolans East
- Processing capacity increased to 2.8Mtpa and expanding to 5.0Mtpa
- Regulatory approvals tracking on schedule
- Buck Reef West open pit mining approvals expected in mid-2018
- Beneficiation of low grade ore (0.3 0.7g/t Au)
- Staged development plan targeting up to 140kozpa at a Life of Mine AISC of A$1,166/oz for 13 years
Bibiani Gold Mine Overview
1.2Mtpa >100koz Proposed Annual Production
Mining Rate
1.8Moz Total Resource 0.6Moz Total Reserve
5 Year Initial Mine Life
9 months Timeline to production
29
Bibiani Gold Mine Phase 2 drilling success
- A substantial gold deposit:
- Production to date of >4Moz
- 1.8Moz Total Resource
- Phase 2 drilling underway to upgrade inferred resources to an indicated category
- Phase 2 drilling has intersected mineralisation better than the inferred resource predicted
- Currently drilling to extend mine life beyond the initial five years
- Targeting 100kozpa, 10 year mine
Exploration Exploring world class tenure in West Africa and Australia
Active drilling programs in Mali, Ghana, Côte d'Ivoire & Queensland
Exploring
6,600km2
across Australia & Africa
of prospective tenure
A compelling value gap
EV / Reserve (A$/oz)
EV / Resource(1) (A$/oz)
Source: Publicly available company documents, presentations and broker research. Market data as at 3 August 2017.
Notes: (1) Resource inclusive of reserve. (2) Based on broker consensus estimates calendarised to June year end. EV / FY17E Production(2) (A$/oz)
EV / FY17E EBITDA(2) (x)
33
RSG Opportunity Analyst 12 month price targets: 100% 'BUY'
Mine Gold. Create Value.
| Scale | Longevity | Value |
|---|---|---|
| 5.6MozReserves | 12yrs@ Syama13yrs@ Ravenswood | P/NAV0.6x |
| Balance sheet | Track Record | Growth |
| $290MCash, Bullion & Listed Investments | 288yrsMozproducing& counting | NafoloBibianiTabakaroni |
Your gold awaits
Mine gold. Create value.
ASX:RSG | www.rml.com.au
