bulyanhulu - acacia mining/media/files/a/... · expectations of future events or results as opposed...

Bulyanhulu

Investor Site Tour 04.02.16 Unearthing Africa’s Potential

LSE:ACA

Important Notice

This presentation includes “forward-looking statements” that express or imply expectations of future events or results as opposed to historical facts. These statements include, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, projects, and statements regarding future performance. Forward-looking statements are generally identified by the words “plans,” “expects,” “anticipates,” “believes,” “intends,” “estimates” and other similar expressions.

All forward-looking statements involve a number of risks, uncertainties and other factors, many of which are beyond the control of Acacia, which could cause actual results and developments to differ materially from those expressed in, or implied by, the forward-looking statements contained herein. Factors that could cause or contribute to differences between the actual results, performance and achievements of Acacia include, but are not limited to, changes or developments in political, economic or business conditions or national or local legislation or regulation in countries in which Acacia conducts - or may in the future conduct - business, industry trends, competition, fluctuations in the spot and forward price of gold or certain other commodity prices (such as copper and diesel), currency fluctuations (including the US dollar, South African rand, Kenyan shilling and Tanzanian shilling exchange rates), Acacia’s ability to successfully integrate acquisitions, Acacia’s ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, and to process its mineral reserves successfully and in a timely manner, Acacia’s ability to complete land acquisitions required to support its mining activities, operational or technical difficulties which may occur in the context of mining activities, delays and technical challenges associated with the completion of projects, risk of trespass, theft and vandalism, changes in Acacia’s business strategy and ongoing implementation of operational reviews, as well as risks and hazards associated with the business of mineral exploration, development, mining and production and risks and factors affecting the gold mining industry in general.

Although Acacia’s management believes that the expectations reflected in such forward-looking statements are reasonable, Acacia cannot give assurances that such statements will prove to be correct. Accordingly, investors should not place reliance on forward-looking statements contained in this presentation.

Any forward-looking statements in this presentation only reflect information available at the time of preparation. Subject to the requirements of the Disclosure and Transparency Rules and the Listing Rules or applicable law, Acacia explicitly disclaims any obligation or undertaking publicly to update or revise any forward-looking statements in this presentation, whether as a result of new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast or estimate and no statement made should be interpreted to mean that Acacia’s profits or earnings per share for any future period will necessarily match or exceed its historical published profits or earnings per share. Mineral reserves and mineral resources estimates contained in this presentation have been calculated as at 31 December 2014 in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities. Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definitions were followed for mineral reserves and resources. The reserves and resources figures stated are estimates. No assurances whatsoever can be given that the indicated quantities of metal will be produced and totals stated may not add up due to rounding. For more information regarding the nature of reserves and resources estimates and relevant CIM definitions, please see page 90 of African Barrick Gold plc’s 2013 Annual Report and Accounts.

You are reminded that you have received this presentation on the basis that you are a person to whom this presentation may be lawfully made and delivered. You may not and are not authorised to: (i) reproduce or publish this presentation; or (ii) distribute, disclose or pass on this presentation to any other person, in whole or in part, by any medium or in any form, in breach of any applicable securities laws. BY ACCEPTING THIS PRESENTATION, YOU ACKNOWLEDGE AND AGREE TO THE CONTENTS OF THIS DISCLAIMER AND YOU AGREE TO BE BOUND BY THE FOREGOING LIMITATIONS.

2 04.02.2016 Investor Site Tour

Introduction

Overview

A leading asset amongst our peers

Our Location

Producing mines Exploration properties

Tintinba Project Mali

West Kenya JV Kenya

Bulyanhulu Tanzania

Hounde Belt JVs Burkina Faso

North Mara Tanzania

4

Buzwagi Tanzania

Bulyanhulu

04.02.2016 Investor Site Tour

* Including produced ounces

World class – high grade narrow vein deposit

Geological endowment of over 20 million ounces*

Located in a mining friendly and stable country

However, history of under-delivery and lack of free cash generation

Undertaking fundamental re-engineering of the mine to ensure delivers to its geologic potential

Setting the scene

5 04.02.2016 Investor Site Tour

Past Present

LOM focused on labour intensive mining methods

Converted to mechanised mining methods

Lack of investment in development 50% increase in development metres due to bringing in contractor

Poor maintenance practices, limited planned maintenance Over 80% of maintenance is planned

Over capitalised (too much equipment on site)

Sustaining capital spend has more than halved, whilst production has increased

Optimistic planning led to culture of failure

Setting achievable targets, in tandem with a dedicated cultural change programme

Too many people, both local and expat 50% reduction in total workforce, with expats down by 55%

In 2013 we started the process of fundamentally re-designing Bulyanhulu

We’ve made great progress, but still more to do to achieve our goals

Safety

04.02.2016 Investor Site Tour 6

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Rat

e

Incident frequency rates 2006 - 2014

TRIFR LTIFR

Geology

Geology


A A’

Schematic Cross Section

Geological Units


X Y

Gabbro

Argillite

Mineralized Qtz vn

Pillow Basalts

Facing

Mining

Life of Mine: Options Review

Moved away from CCF (handheld methods) towards modern mechanised mining

Previous plan saw mine sourcing over 75% of tonnes coming from hand held

Significantly improved safety profile

Investment in development to increase flexibility in mine plan

Driving mining accuracy to reduce dilution

Long Hole as main mining method

Setting mine up to deliver on its geological endowment

11

Fundamental redesign of LOM plan

Investor Site Tour 04.02.2016

78

6

13

37 33

53

9

31

25

21

25 42

26

0

20

40

60

80

100

2013A 2014A 2015A 2016 (Plan)

Per

cen

tage

(%

)

Breakdown of Mining Method (tonnes)

CCF Longhole Alimak Ore development

* 2013 planning allocated development to each of the mining method categories

Significant progress to date

1,344 1,266 1,253

999

800

900

1,000

1,100

1,200

1,300

1,400

2013 2014 2015 Q4 15

AISC per ounce sold (US$/oz)

198 235

274

Q1 - 62

Q2 - 71

Q3 - 62

Q4 -78

-

50

100

150

200

250

300

2013 2014 2015 2015

Production (koz)


185

132 101

0

50

100

150

200

2013 2014 2015

Capital Expenditure ($m)

871

909

993

800

850

900

950

1,000

2013 2014 2015

Ore Tonnes hoisted (Kt)

4.1 3.9

2.8

0.0

1.0

2.0

3.0

4.0

5.0

2013 2014 2015

Average long-hole stoping width (m)

2,225 1,843

1,197

151

111

72

-

500

1,000

1,500

2,000

2,500

3,000

2013 2014 2015

Breakdown of workforce Nationals

Internationals


2,268 2,329 2,510

2,636 2,625 2,762

1,000

1,500

2,000

2,500

3,000

H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015

Average daily ROM tonnes milled (t)

10.4 12.3

15.9

-

5.00

10.00

15.00

20.00

2013 2014 2015

Total Development metres (km)

KPIs have improved significantly

Dramatic productivity improvements already realised at the mine

Upper East

Area located 2km east of shaft with existing small scale decline to the area

Includes material on both Reef 1 and the Reef 2 series

Commenced production from development ore in H2 2015

Expected stoping ramp-up in 2016

When developing saw divergence between reserve model and results from the production drilling in Reef 2 series

Previous drill spacing of 100m centres, not tight enough to accurately predict variation in the lode geometries

Spacing is the same as has been used across the mine successfully for last 15 years

Deferred development in the Reef 2 Series whilst undertake definition drilling programme


Deferred ramp up whilst undertake further definition drilling

2m 2

i

2g

2M

2I

2G

2O

2N

Reserve blocks

UG Diamond Drill Holes

Area Covered By

Recent Drilling

Reef 1

Oblique Section View Looking NE

Upper East Reef 2 - Reserve and Resource

500m

Undertaken further detailed review of operating assumptions within reserves

2015 reserve price of US$1,100/oz vs 2014 price of US$1,300/oz

Taken more conservative view of future development rates and mining widths


DARK GREEN: REEF 1 UPPER CENTRAL Hosts [2 %] of reserve ounces

BLUE: REEF 1 LOWER WEST REEF 1 Hosts [ 50%] of reserve ounces

GREEN: REEF 1 LOWER CENTRAL Hosts [13 %] of reserve ounces

PURPLE: REEF 2 Hosts [ 18% ] of reserve ounces

YELLOW: REEF 1 UPPER EAST Hosts [ 6%] of reserve ounces

RED: REEF 1 LOWER EAST Hosts [ 7%] of reserve ounces

Reserve Distribution

LIGHT BLUE: REEF 1 UPPER WEST Hosts [ 4 %] of reserve ounces LIGHT BLUE: REEF 1 UPPER

WEST Hosts [ 4 %] of reserve ounces

DARK GREEN: REEF 1 UPPER CENTRAL Hosts [2 %] of reserve ounces

BLUE: REEF 1 LOWER WEST REEF 1 Hosts [ 50%] of reserve ounces

RED: REEF 1 LOWER EAST Hosts [ 7%] of reserve ounces

YELLOW: REEF 1 UPPER EAST Hosts [ 6%] of reserve ounces

PURPLE: REEF 2 Hosts [ 18% ] of reserve ounces

GREEN: REEF 1 LOWER CENTRAL Hosts [13 %] of reserve ounces

LIGHT BLUE: REEF 1 UPPER WEST Hosts 4 % of reserve ounces

BLUE: REEF 1 LOWER WEST REEF 1 Hosts 50% of reserve ounces

DARK GREEN: REEF 1 UPPER CENTRAL Hosts 2 %of reserve ounces

GREEN: REEF 1 LOWER CENTRAL Hosts 13 % of reserve ounces

PURPLE: REEF 2 Hosts 18% of reserve ounces

YELLOW: REEF 1 UPPER EAST Hosts 6% of reserve ounces

RED: REEF 1 LOWER EAST Hosts 7% of reserve ounces

Production Areas - 2016

17

Upper East 5% Zones

0 & 7 15%

Zones B & C 35%

Zone 2 20%

Zones 9 & A 25%

04.02.2016 Investor Site Tour

Processing

Processing Operations


The following processes are utilised:

Crushing, Grinding, Gravity, Flotation, Carbon-In-Leach, Thickening, Cyanide destruction, Filtration and Paste Backfill

Nameplate process plant throughput is 155tph / 1.1Mt per annum

Currently over 10% spare capacity

Bulyanhulu produces two saleable products: dore and copper concentrate

Dore bars are produced from Gravity and CIL plants

Copper Concentrate is produced from the flotation plant and sold to copper smelters mainly in China and Japan

Tailings Re-treatment

In Q4 2014 completed construction of new 2.4Mtpa Carbon in Leach (CIL) circuit to process TSF material

Project also designed to upgrade CIL capacity for ROM material

Previous infrastructure only allowed for processing of 30% of flotation tailings

Plant produced 33koz in first full year of operation

Struggled to hit design recoveries

Re-commissioned old CIL in late Q4 15 to better assess long term recoveries and costs of


Our People

Our People

Management layers reduced from 14 to 4

Implementation of Accountable Management System

Move to mechanisation significantly reduces workforce numbers

Dispatch systems in process of being implemented to drive productivity

Altered shift patterns to improve time at site and at the face

Implemented a behavioural safety programme (WeCare/Tunajali ) to embed a culture of safety in the workplace

22

Continuing to implement changes to the workforce to improve productivity and drive

2,397 2,225

1,843

1,197

159 151

111

72

500

1,000

1,500

2,000

2,500

3,000

2012 2013 2014 2015

No.

of E

mp

loye

es

Breakdown of Employees Internationals

Nationals


Cost Initiatives

24

Ensuring the mine returns to positive cash flow

Investor Site Tour

Further Cost Saving Focus Areas

Looking to make savings across all operating costs categories:

Reduction in over 600 employees compared to 2015

Majority of US$25 million group savings will be at Bulyanhulu

Improving consumable usage, aided by re-commissioning of old CIL

As planned maintenance is achieving targets, able to move to a condition based monitoring approach going forward

Energy costs will benefit from reduction in price of diesel hedges

2016 hedges struck at $72/bbl vs 2015 hedges at $97/bbl

Continuing to negotiate with suppliers and contractors to improve terms

Continuing to allocate capital efficiently

2016 capex expected to be $5-10 million lower than 2015

Despite continuing investment into development

04.02.2016

Our Relationships

Social License to Operate


Key CSR focus area are:

Strategic social infrastructure

Progression to residential model

Infrastructure to drive wealth creation in community

Local business development

Entrepreneurships skills for co-ops and SMEs,

access to financing

Agribusinesses including market linkages,

ASM

Social capital enhanced

Sports programs with Sunderland

Support for the performing arts and cultural events

Stakeholder engagement, Social Impact Management and Grievance mechanisms to continue

Livelihoods –Bee-keeping project for 120 youths

Infrastructure – Bridge to provide year round access to markets for farmers

Creating shared value

Our Future

Bulyanhulu – Reef 2 resource extensions

28

Extending the potential of a world class resource

Focused on reserve conversion and resource expansion of Reef 1 and the Reef 2 series

Surface and Phase 1 underground drilling in 2013/14 added over 2.3Moz to resources

Current focus of drilling on Reef 2 series west of shaft position from underground

Phase 2 drilling commenced in H2 2015, with the 16,000m programme due to continue into H1 2016

Completed 18 holes for 9,240m in 2015

Phase 3 programme expected to commence in late 2016

Initial results are encouraging and have intersected mineralisation across a number of the reefs that make up the Reef 2 series at mineable widths and grades


Summary

Summary

Over past two years the mine has been fundamentally re-engineered into a modern fully-mechanised mine

Dramatic improvements across a range of key indicators in that time

2016 is a year of consolidation, expect to maintain 2015 production levels

Impact of cost saving initiatives coming through, driving more than a 15% reduction in AISC

Already seen in Q4 2015 performance

Confident that Bulyanhulu will produce 350,000 ounces per annum over the medium term

Continue to assess the potential above this through an ongoing 3 year drilling programme, primarily on the Reef 2 series.


Consolidating progress to date to drive cash flow

Appendix

Process Plant Flowsheet Gravity Circuit Crushing & Grinding Circuit

Cu Conc

SAG

Mil

l

Ball Mill

Jaw Crusher

Prim cycl Knelson CTR’s

Acacia reactor

Bullion

ORE from U/G

Dewatering and Paste Circuit

Larox

Flotation Circuit

U/G ops

Paste Backfill Plant

Ro’s

Regr Mill

Contact Cell

Flash Clnr 1

Flash flotation

Clnr 1

Clnr 3

Clnr 2 Regr cycl

Clnr 4

Flash Clnr 2

Clnr Scav

Acid Wash

To Paste Thickener

Pre-Leach Thickener

Quench Tank

Pregnant

Solution Tank

Electro wining

TSF cell 4

New CIL Circuit Old CIL Circuit

Bullion

A/W Elution Regeneration Kiln

CIL Tanks

CN Detox

TSF Reclamation

A/W Elution

CIL Tanks

Quench Tank

Bullion

Pregnant Solution

Tank

Pregnant Solution

Tank

Rougher tails

Electro wining

TSF cell 1-2

Regeneration Kiln Pre-Leach Thickener

CST

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