Bulyanhulu - Acacia Mining/media/Files/A/... · expectations of future events or results as opposed...
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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
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* 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
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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
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A A’
Schematic Cross Section
Geological Units
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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
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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$/oz)
198 235
274
Q1 - 62
Q2 - 71
Q3 - 62
Q4 -78
-
50
100
150
200
250
300
2013 2014 2015 2015
Production (koz)
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185
132 101
0
50
100
150
200
2013 2014 2015
Capital Expenditure ($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
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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
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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
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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
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Upper East 5% Zones
0 & 7 15%
Zones B & C 35%
Zone 2 20%
Zones 9 & A 25%
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Processing
Processing Operations
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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
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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
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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
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Cost Initiatives
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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
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Our Relationships
Social License to Operate
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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
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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
Investor Site Tour 04.02.2016
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.
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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