lse:aca - acacia mining/media/files/a/acacia... · 10.05.2016 lse:aca . 0 85 129 180 ... are a...

0 85 129

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Acacia Mining plc

Delivering free cash flow

10.05.2016

LSE:ACA

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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 2015 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 Acacia Mining plc’s 2015 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.

10.05.2016 BAML Global Metals, Mining and Steel Conference 2

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What we stand for

10.05.2016 BAML Global Metals, Mining and Steel Conference

A leading asset portfolio in Africa 1

Focused on free cash flow 2

Growing our footprint 5

Disciplined capital allocation 3

Becoming the partner of choice 4

Our Core Pillars

… unearthing Africa’s potential

Our People

Our Business

Our Relationships

Our Future

3

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Company overview

A leading asset portfolio amongst our peers

Our Locations Business Overview

Bulyanhulu World class deposit

Life of mine in excess of 20 years

North Mara

High-grade open pit and

underground mine

9 year life of mine

Buzwagi Low-grade bulk deposit

Short life mine, harvest mode

Exploration Contrarian view on exploration

Building pan African portfolio


Producing mines Exploration properties

Tintinba Project Mali

West Kenya JV Kenya

Bulyanhulu Tanzania Houndé Belt JVs

Burkina Faso

North Mara Tanzania

Buzwagi Tanzania

4

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Returning Business to Free Cash Flow

922

812 732 732

693 685

1,561

1,346

1,105 1,112

959 965

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2012 2013 2014 2015 Q1 16 FY 16E*

US

$/o

un

ce

AISC and Cash Cost Evolution (US$/oz)

Cash cost / ounce AISC / ounce


Delivered a 40% reduction in AISC since 2012

5

* Represent mid-point of 2016 guidance ranges

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Bulyanhulu

Six months of consistent delivery

AISC beneath US$1,000/oz

FY 2016 AISC expected to be 15% lower than 2015

Mine generating free cash flow

Progressing towards target of 350kozpa

2016 focus areas:

Deliver further increase in development metres

Improving stope cycle times

Achieve improved recoveries

Progress drilling programmes across Reef 2 (both Upper East and Lower West)

Continuing the transformation


1,453

1,278

1,373

999 983

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016

AISC per ounce sold (US$/oz)

62 71

62

78 78

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016

Production (koz)

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247 244 238 4.1 3.9

2.8

2013 2014 2015

Average long-hole stoping width (m)

2,225 1,843

1,197

151 111

72

2,324

1,382

1,016

2013 2014 2015

Breakdown of workforce Nationals

Internationals

Contractors


2,268 2,329 2,510

2,636 2,625 2,762

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

Average daily ROM tonnes milled (t)

10.4 12.3

15.9

2013 2014 2015

Total Development metres (km)

KPIs have improved significantly

Dramatic productivity improvements already realised at the mine

7

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Reef 2 Resource Extensions

8

Reef 1

Extending the potential of a world class resource


Reef 2M

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North Mara

Mine has been our leading driver of free cash flow over the last 3 years

Q1 continued trend with AISC of US$737/oz

Expected to be our largest producing mine and lowest cost asset in 2016

Delivered ramp up of Gokona Underground on time and delivering ahead of plan

2016 focus areas:

Initiate Nyabirama deeper drilling programme

Prepare U/G drill platforms ahead of 2017 deeper drilling programme at Gokona

Deliver CAF plant at Gokona Underground

Maintain improved community relations

Continuing to deliver strong performance


828

968 939 932

737

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016


76 67 68

77 75

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016

Production (koz)

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Gokona Underground – Future plans

Reserve replacement has eased pressure on drilling to upgrade

approximately 1Moz of resource beneath current reserves, deeper

drilling will commence in 2017

30

0m

6

00

m

Pink blocks – reserves Green blocks – resources

250 m Reserves

640 m Resources

Planned Western Portal

Mining taking place via Eastern Portal


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Nyabirama - Assessing U/G potential

Mineralisation known to extend beyond final pit design, drilling

programme in 2016 designed to test geological understanding

Deep holes planned drilling target outline. 8 holes planned, success dependant

Splays Lodes

Cut 4 Pit outline

Hanging Wall Lode

Footwall Lodes

Existing holes beneath Cut 4

30

0m

3

00

m

HW Splays

Image looking South West From Eastern side-Mine Grid


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Buzwagi

Operating in harvest mode


1,118 1,065

1,394

1,236 1246

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016


44 48

34

45

37

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016

Production (koz) Q1 was expected to be weakest quarter of year as focus continued to be on waste stripping

Production due to step up quarter on quarter with costs dropping accordingly

For full year expect to see 10% increase in production and 15% reduction in AISC over 2015 levels

Mitigated gold price related risk to cash flow

Zero cost collars for 136koz of 2016 production between US$1,150/oz and US$1,290/oz

In Q1, added 43koz for 2017 production between US$1,150/oz and US$1,421/oz

2016 focus areas:

Maintain recoveries of 94%

Improve excavator productivity to achieve material movement plan

Assess future options for the mine

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Driving further cost reductions


Limited benefit from foreign exchange and oil price

Tone set from the top

Board of Directors and Executive Leadership Team volunteered to take a 10% reduction in salary

Continuing to make our business more efficient in order to reduce costs

US$25 million annual saving from the restructuring of the workforce announced in late 2015

US$10 million further reduction in capital expenditure

Capex expected to be 55% lower than it was in 2013

US$10 million reduction in corporate administration costs against 2015

Spend expected to be 50% lower than it was in 2012

US$10 million of annualised savings through renegotiation of contracts across supply chain

Expect to further reduce cost base as we move through 2016

13

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Appointed Mark Morcombe as COO in Q1 2016

Supplements existing strong operating and technical capability within Acacia

Initial focus will be at Bulyanhulu

Focus on capturing longer term value

Delineation of route to 350kozpa

Scope brownfields growth to 500kozpa through Reef 2 extensions

North Mara

Focus on mine life extensions

Extensions below 250m at Gokona Underground

Scoping of Nyabirama Underground

Buzwagi

Focus on best value outcome for the asset

Together with further asset optimisation

Driving near term efficiencies and longer term value


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Continuing to invest in Our Future

Tintinba Project Mali 150sqkm along highly

prospective Senegal-Mali Shear Zone

Initial drilling of targets planned from Q2 2016

West Kenya JV Kenya 2,200 sqkm over Ndori

Greenstone belt Liranda Corridor showing

best results to date 2016 programme aimed at

confirming a significant discovery

Houndé Belt JVs Burkina Faso 3 JVs covering 2,400sqkm of

the Houndé Belt Updated inferred resource on

South Houndé JV of 2.1Moz @ 1.5 g/t

Extensive gold trends identified from initial soil sampling on new projects

Drilling planned from Q2 2016

Taking advantage of current market conditions to expand our

footprint in the most prospective belts across Africa

North Mara Tanzania Drilling to test future U/G

potential below Nyabirama Stage 4 open pit

Bulyanhulu Tanzania U/G Reef 2 drilling

programme Target of 5Moz at the mine

Proterozoic-Archean volcano-sedimentary belts Brownfields projects Greenfields projects


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Enhancing Our Relationships


Over US$12 million of investment into community projects around our

mines in 2015 – moving focus towards “Sustainable communities”

Livelihoods –Bee-keeping project for 120 youths

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

Livelihoods – Tools to support co-operative setting up a motorbike maintenance business

16

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Our People are our core asset

17

Identifying and promoting local talent whilst driving cultural change

91.0%

93.0%

94.4%

95.5%

2012 2013 2014 2015

Proportion of National Employees Reduced number of expatriates on our

mines by over 50% whilst delivering three years of increased production

Promoted Tanzanians to senior managerial levels

Buzwagi has only 10 expats out of a workforce of 750

Continuing to drive cultural change

Top 300 completed Tufanikiwe Pamoja Cultural Change Programme

Rainbow Gold Training Programme for our First Line Leaders

Behavioural safety programme, WeCare, having an impact across our mines

TRIFR down by 20% in 2015


1.29

0.50 0.64

0.86 1.02

0.33

0.66 0.68

Bulyanhulu North Mara Buzwagi Acacia

TRIFR 2014 2015

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2016 Outlook

626 642

719 731 765*

500

550

600

650

700

750

800

2012 2013 2014 2015 2016

Production (koz)

171

112 70 74 60*

113 171

132 110 110*

47

117

61 5

0

100

200

300

400

2012 2013 2014 2015 2016E

Capital Expenditure (US$ Million)

Expansion

Cap Dev't

Sustaining

EU

S/$

mil

lio

n

1,561

1,346

1,105 1,112

965*

500

700

900

1,100

1,300

1,500

2012 2013 2014 2015 2016E


941

827

732 772

685*

500

600

700

800

900

2012 2013 2014 2015 2016E

Cash cost per ounce sold (US$/oz)

Consolidating progress made to date to drive cash flow

* 2016 Guidance reflects mid point of respective ranges


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Investment Case

Disciplined capital allocation

2016 will be 4th consecutive year of reduced capital and increased production

Continuing to invest in exploration across Africa

Dividend maintained – commitment to capital returns

Balance sheet strength maintained

Delivering further cost savings across the business

Expect a 15% reduction in AISC in 2016

Operations set up to generate strong cash flow in a gold price environment well below current levels

Strong start to 2016

Six months of free cash flow delivery

Focus on cash flow ahead of ounces

Focused on free cash flow generation and long term value creation


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