Bank of America Merrill Lynch Conference - May 18, 2017
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Transcript of Bank of America Merrill Lynch Conference - May 18, 2017
UNEARTHINGTHE FUTURE
Bank of America Merrill Lynch 34th Annual Global Mining Metals & Steel ConferenceBarcelona, Spain | May 16-18, 2017
This presentation contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties andassumptions and accordingly, actual results and future events could differ materially from those expressed or implied in such statements. You arehence cautioned not to place undue reliance on forward-looking statements. Forward-looking statements include words or expressions such as"growth", “strategy”, “under “targeted", “guidance”, “projected", “payback", “schedule”, “milestones”, “initial”, “creating”, “objective”, “expand”,“continue”, “next steps”, “evaluate”, “potential”, “prospective”, “priorities” and other similar words or expressions. Factors that could cause futureresults or events to differ materially from current expectations expressed or implied by the forward-looking statements include the ability to startproduction at Natougou in H2 2018, the ability to meet our 2017 guidance of between 190,000 and 205,000 ounces of gold at a total cash cost ofbetween $685 and $715 per ounce and all-in sustaining cost of between $920 and $960 per ounce, the ability to achieve the highlights ofNatougou’s feasibility study in terms of (i) after-tax NPV and IRR, (ii) payback period, (iii) average annual production, total cash cost and AISC, (iv)projected LOM, LOM total cash cost (TCC) and all-in sustaining cost (AISC), the ability to meet Natougou’s construction milestones, the ability tomeet Boungou’s (Natougou) initial production schedule, ore feed, grade, gold recovery, TCC and AISC, the ability to expand reserves andresources, the ability to drill up the inferred resources into the indicated category in H1 2017, the ability to evaluate the potential for an undergroundoperation, the ability to execute on our 2017 priorities, the accuracy of our assumptions, fluctuation in the price of currencies, gold prices andoperating costs, mining industry risks, uncertainty as to calculation of mineral reserves and resources, delays, political and social stability in Africa(including our ability to maintain or renew licenses and permits) and other risks described in SEMAFO’s documents filed with Canadian securitiesregulatory authorities. You can find further information with respect to these and other risks in SEMAFO’s 2016 Annual MD&A, as updated inSEMAFO’s 2017 First Quarter MD&A, and other filings made with Canadian securities regulatory authorities and available at www.sedar.com.These documents are also available on our website at www.semafo.com. SEMAFO disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law.
All mineral resources are exclusive of mineral reserves. All amounts are in US dollars unless otherwise indicated.
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FORWARD-LOOKING STATEMENTS
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OUR ASSETS
STRONG IN-HOUSE TECHNICAL TEAM
TRACK RECORD OF OPERATING SUCCESS IN WEST AFRICA
HIGH-GRADE OPEN-PIT DEPOSITS
FINANCIAL STRENGTH
LARGE EXPLORATION PACKAGE
DISCIPLINED GROWTH STRATEGY
RESPECTED CSR PROGRAMS
Unearthing the future
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LONG-STANDING PRESENCE IN WEST AFRICA
NATOUGOUConstruction under wayTargeted Production H2 2018
Côte d’Ivoire
Commissioned3 mines in West Africa over
20 YEARS7,000 km2in Burkina Faso over three prospective belts
0.9 0.8
2.2 2.0 1.9 2.3 2.23.3 3.01.0 1.6
1.1
2.8 3.0 2.4 2.8
2.93.0
0.5
0.9
2.7
2.1 1.91.4 1.2
2.1 2.6
2008 2009 2010 2011 2012 2013 2014 2015 2016
Proven and Probable Reserves
Measured and Indicated Resources
Inferred Resources
NATOUGOU NABANGA
■2015
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EXPLORATION AND ACQUISITION SUCCESS
DEPOSITS
FOFINAFOBIRI
■2010
YAHO■
2011
SIOU■
2012
- Reserves estimate using a gold price of $1,100/oz - Resources estimate using a gold price of $1,400/oz* All mineral resources are exclusive of mineral reserves.
Unearthing the future
2016
WEST FLANK NATOUGOU
5% Others126,000 oz
23% Siou5.0 Mt @ 4.3 g/t Au689,000 oz
30% Wona12.4 Mt @ 2.3 g/t Au913,000 oz
42% Natougou9.6 Mt @ 4.15 g/t Au1,276,000 oz
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MANA PRODUCTION AND COST PROFILE
GUIDANCE 2017 2016Total gold ounces produced (K) 190-205 240Total cash cost/ounce sold1 ($) 685-715 548All-in sustaining cost/ounce2 ($) 920-960 7201Total cash cost is a non-IFRS financial performance measure with no standard definition under IFRS and represents the mining operation expenses and government royalties per ounce sold.2 All-in sustaining cost is a non-IFRS financial performance measure with no standard definition under IFRS and represents the total cash cost, plus sustainable capital expenditures and stripping costs per ounce.
CONSTRUCTION OF THE BOUNGOU MINE
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POSITIVE FEASIBILITY STUDY HIGHLIGHTS
During the first three years, • Average annual production of more than 226,000 ounces
• Average total cash cost of $283/oz and AISC of $374/oz
• Average head grade 5.72 g/t at a gold recovery rate of 93.8%
Projected LOM total cash cost of $408/oz and AISC of $518/oz
Maiden open pit mineral reserves of 9.6 million tonnes at a grade of 4.15 g/t Au for 1,276,000 ounces of gold
Project economics at $1,100/oz:• After-tax NPV 5%: $262 million
• After-tax IRR: 48%
• Payback period: 1.5 years
Production of some 1.2 million ounces over a projected LOM in excess of 7 years
Unearthing the future
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ROBUST PROJECT ECONOMICS
GOLD PRICE SENSITIVITY ANALYSISBase Case
Gold Price ($/oz) $1,000 $1,100 $1,200
After-tax NPV5% ($M) $199 $262 $334
After-tax IRR (%) 38 48 58
Payback period (years) 1.7 1.5 1.3
BOUNGOU - INITIAL PRODUCTION
YEAR 1 YEAR 2 YEAR 3
Feed ore (t) 1,256,000 1,343,200 1,343,200
Grade (g/t) 5.93 5.59 5.65
Gold recovery (%) 93.9 93.7 93.7
Ounces (oz) 224,918 226,100 228,502
TCC ($/oz) 319 304 227
AISC ($/oz) 380 406 337
STRONG FREE CASH FLOW 10Unearthing the future
2016 2017 2018
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
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CONSTRUCTION OF THE BOUNGOU MINE
SCHEDULE MILESTONES
Unearthing the future
Mining Permit AwardDetailed Engineering
EarthworksConstruction Accommodation
Water Storage Facility & DamsTailing Storage Facility
Milling & Feed PreparationLeaching & CIP Circuit
Gold RoomPlant Services
Power PlantFuel Depot
Pre-StrippingMining Ore
1st Gold Pour
Process Plant
2017 budget of $23MCREATING VALUE THROUGH EXPLORATION
Prior to its acquisition, Natougou had seen little near-pit
or regional exploration
773 km2 of exploration ground
2017 budget of $15M
NATOUGOU: AN UNDEREXPLORED PROPERTY
Objective is to expand
reserves and resources to continue creating value
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PROXIMAL AND REGIONAL EXPLORATION PROGRAM:
$15M IN 2017
Boungou Mine
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DDH drilling of 8,000 meters
RC drilling of 70,000 meters
Auger drilling of 60,000 meters
$8.5M to convert current inferred resources of West Flank
into the indicated category
$1.3M to carry out studies into a potential underground
operation on the West Flank
$5M for regional exploration
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Next steps
To drill up the inferred resources into the indicated category in H1 2017
To evaluate the potential for an underground operation
DISCOVERY OF 754,000 OZ OF INFERRED RESOURCES IN THE WEST FLANK – BOUNGOU MINE
Unearthing the future
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$3M FOR EXPLORATION ONOTHER PROSPECTIVE PROPERTIES
Côte d’Ivoire
Korhogo West - Côte d’Ivoire
Trenching program of 2,000 m
RC drilling program of 6,000 m on best targets
Houndé Belt - Kongolokoro Sector (Bantou)
Drilling program of 8,400 m on Dynikongoloand Milpo permits
RC drilling program of 7,200 m and DDH of 1,200 m
Nabanga - Inferred resources of 1.84 Mt @ 10 g/t Au for 590,000 ounces
Drilling programs to investigate parallel structures in the intrusive of Nabanga
─ 5,000 m of auger and 7,000 m of RC drilling
MANA MINE in Burkina Faso
BURKINA FASO
Ouagadougou(Capital)
KORHOGO
NABANGA
BANTOU
NATOUGOU
GhanaBenin
Togo
Niger
Mana
FINANCIAL FLEXIBILITY
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Cash at March 31, 2017 - $255M
Long-term debt (LIBOR +4.75%) of $60M
Additional $60M available
Unearthing the future