Corporate Presentation - Galane Gold: Home – a massive pipe shaped body with a thickness of 35m...
Transcript of Corporate Presentation - Galane Gold: Home – a massive pipe shaped body with a thickness of 35m...
Corporate Overview
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1 See Note 1 on slide 7 2 This is a forward looking statement and is based on a number of assumptions, including Galane’s ability to generate sufficient cash to fund the exploration program.
3 See slide 8 for further details
Low cost production growth from the recently acquired Galaxy Mine1, 2.
Phased, low-cost gold production expansion to over 60,000 oz Au/year at AISC below US$400/oz
M&I resources of 602,696 oz Au at 3.01 g/t Au. Inferred resource of 886,199 oz Au at 3.40 g/t Au
Operating improvements at the Mupane Mine2
Improved grades, higher recoveries and consistent ore supply forecast to increase annual gold production to over 30,000 oz and decrease AISC to US$980/oz Au
Substantial exploration upside3
Excellent potential to expand gold resources at the Galaxy Mine to over 4.0 million oz
Mupane owns ~90% of the highly prospective, 1,200 km2 Tati Greenstone Belt area
Excellent re-rating potential and leverage to rising gold prices Trading at a fraction of the P/NAV multiples of other gold producers in Africa
Opportunity to quickly expand production at a low capital cost at higher gold prices
Experienced management team Extensive mine operating experience and exploration expertise in Botswana and South Africa
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Galane Capital Structure
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Share Price (September 1, 2016) C$0.11
Basic Shares Outstanding 142,628,884
Stock Options1 12,155,000
NLE Contingency Shares2 7,375,000
Deferred Share Units 3,749,044
Warrants3 4,076,598
Fully Diluted Shares Outstanding 170,084,526
Basic Market Capitalization4 C$15.7 million
Cash US$2.4 million
Debt (see appendix) US$14.9 million
Capital Structure Ownership Breakdown
Galane Share Price Performance against the ETF Market Vector Junior Gold Miners
1. Outstanding options have a weighted average exercise price of C$0..22/share and a weighted average time to expiration of 2 years from year-end December 31, 2015
2. Galane is obligated to issue up to 8,750,000 additional common shares to shareholders relating to the NLE Properties. dependent upon reaching certain milestones . All of the shares will be issuable if the company reports over
1,000,000 M&I NI 43-101 compliant ounces on the former NLE properties in Botswana. On April 7th, 2014 the company issued 1,375,000 NLE Contingency Shares
3. Outstanding warrants have an exercise price of C$0.102/share and expire on November 30, 2019
4. As of September 1, 2016 closing price.
Galaxy Gold Property3
Location • Barberton in Northeastern South Africa
Ownership • 74% - Acquired in November and December
2015 with a mandatory offer for remaining
shares commenced
Operating
History
• Production commenced in 1884 and through
to date approximately 1.3 million oz Au
mined2
Resources • 602,696 oz Au Measured and Indicated and
886,199 oz Au Inferred (as of August 2015)
Type • Conventional gold mine with mill and carbon-
in-leach processing
Mine Life • Technical report indicates 9 years but new
prefeasibility study to be commenced to
hopefully extend beyond that.
Production
Forecast
• Average of over 15,000 oz Au per annum
• US$688 / oz all-in cost1 in Technical Report
(based on an exchange rate of ZAR
11.70/US$ 1)
BIOX Plant
Main Offices
1 Non-GAAP measure. See “Non-GAAP Measures” below. 2 See Note 1 on slide 7 3 See the Technical Report titled "A Technical Report on the Galaxy Gold Mine, Mpumalanga Province, South Africa" issued on January 4, 2016 with an effective date of September 1, 2015, a copy of which is
available under Galane’s profile on SEDAR at www.sedar.com (the “Galaxy Technical Report”).
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Why Galaxy
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• Near term production asset with
existing mine and processing facilities
• Cost is a fraction of replacement cost
• Ability to increase production in easy
manageable steps with minimal capital
requirements
• Ability to increase resource
substantially
• Greenbelt underground project which
is a good fit with our existing property
Mupane both in location and skill set
• Surrounded by prospective targets
Galaxy History
• Jack Greaves was a prospector from the UK and discovered
gold at Galaxy in 1888.
• The mine was originally named Agnes Gold after his wife
Jessie Agnes.
• Galaxy in various forms has now existed for over 120 years
and has produced over 1.3 million ounces of gold
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(1) The historical estimates set out in the table above (the “Historical Estimate”) were disclosed in a report provided by Ga laxy to Galane entitled “Anhaeusser, C R (1986). Archean Mineralization in the Barberton Mountainland. Mineral Deposits of
Southern Africa. Volume 1. (GSSA) and Cluff Mining : AGNES GOLD MINE – BIOLOGICAL LEACHING OF REFRACTORY ORE RESOURCES - PRE-FEASIBILITY STUDY”. The Historical Estimate was prepared in accordance with the South African
Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves and does not comply with the CIM Defini tion Standards on Mineral Resources and Mineral Reserves as required by National Instrument 43-101 – Standards of
Disclosure for Mineral Projects (“NI 43-101”). A qualified person has not done sufficient work to classify the Historical Estimate as a current mineral resource in accordance with NI 43- 101 and the issuer is not treating the Historical Estimate as a current
mineral resource.
Galaxy Location
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Pan African Mines
Barberton is Pan African’s flagship
gold project, producing 115,000 oz per
year at an average cash cost of
approximately US$778/oz. It has a
total of 2.8 million ounces of measured
indicated and inferred mineral
resources.1
Vantage Goldfields
Vantage annual production is
around 30,000 oz per year at an
average cash cost of approximately
US$861/oz. It has a total of 1.9
million ounces of measured
indicated and inferred mineral
resources.2
The Barberton
Greenstone belt
is part of the
Kaapvaal craton
which also
covers our
mining
operation in
Botswana.
1 Pan African Mineral Resource and Mineral Reserves Report, 2014 (as at June 30, 2014). 2 www.vantagegoldfields.com 3 There is no guarantee that Galane will generate similar results at the Galaxy Gold Mine.
1 See the Galaxy Technical Report, a copy of which is available under Galane’s profile on SEDAR at www.sedar.com .
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Mineral Resource1
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Processing Plant
• Current plant can process 500 tonnes
per day
• Conventional crush, mill, flotation
followed by CIL plant.
• Operational tailings dam
• BIOX plant was in production but will
need to be restarted or alternative
oxidation process acquired to improve
recovery.
• Prefeasibility study to commence to
support Plant Capacity expansion in
two stages in Year 4 to 1,100tpd and
then Year 8 to 1,500tpd.
• Galaxy – a massive pipe shaped body with a thickness of 35m and a strike of around 100m. Mining
may be carried out using mechanised long hole stoping.
• Woodbine and Giles – both narrow steeply dipping with a thickness of up to 2.4m and a strike of
900m. Mining may be carried out using a fully mechanised cut and fill method.
• Princeton – a steeply dipping body with a thickness of 2m and a strike of 300m. Mining in the
Technical Report envisages a fully mechanised long hole stoping method.
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Mining Methods1
1 See the Galaxy Technical Report, a copy of which is available under Galane’s profile on SEDAR at www.sedar.com .
Mining
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Current Infrastructure
• Adit access to all mineral bodies
• Rail bound and trackless equipment
• Functional shaft to 700 m
• Mining sub-contractor with available
mining fleet
• 21 houses and hostel for employees
Work to commence on a new
prefeasibility study for the following
planned infrastructure amendments
• Year 4 plan to owner operate
underground mining
• Additional adit access
Exploration Plan1,2 - 4,000,000 ozs Au
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1 In house drilling plan dependent upon generating sufficient free cash flows from operations to fund with no guarantees additional ounces will be discovered. 2 Previous exploration has been used to outline an exploration target of 30.1 million tonnes grading 3.0 to 5.0 g/t (2.9 to 4.8 million oz Au). The potential quantity and grades are conceptual in nature and are based on previous drill results that defined the approximate length, thickness, depth and grade of the portion of the historic resource estimate. There has been insufficient exploration to define a current resource and the Company cautions that there is a risk further exploration will not result in the delineation of a current mineral resource.
Mupane Gold Property
Location • 30 km SE of Francistown (population
~100,000) in Northeastern Botswana
Ownership • 100% - Acquired from IAMGOLD in August of
2011
Operating
History
• Production commenced in 2005 and through
September 30, 2014 there has been a total of
640,606 oz. Au mined
Resources • 422,207 oz Au Measured and Indicated and
213,454 oz Au Inferred (as of Dec 31,
2015)(2)
Type • Conventional gold mine with mill and carbon-
in-leach processing
Mine Life • Currently 5+ years; with opportunity to
significantly extend
Production
Forecast
• Average of 32,000 oz Au per annum
• Approximately $1,050 / oz all-in cost on
5 year plan (incl. operating, capex,
exploration, royalties) (1)
Mupane Gold Mine
Processing Plant
(1) Non-GAAP measure. See “Non-GAAP Measures” below.
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(2) Measured and Indicated includes 6,227,000 tonnes at 1.53 g/t and 9,639,000 tonnes at 0.35 g/t for the tailings dam . Inferred is 4,330,000 tonnes at 1.53 g/t
Tau Underground
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• As part of our strategy of low-risk
brownfield expansion we have
pursued underground mining at the
previously mined Tau open pit. A
mine plan was been completed
based on the reported resource, to
produce ~75,000 oz Au.
• Two bodies Eastern and Main.
• Stoping commenced in the Eastern
body and as September 30, 2015
62,332 tonnes of ore at 2.6 g/t has
been mined.
• Main ore body stoping commenced
in Q2 2016.
• Exploration will commence in 2017
to try and find an extension of the
Main body at depth.1
1 This is a forward looking statement and is based on a number of assumptions, including Galane’s ability to generate sufficient cash to fund the development..
Low Grade Stockpiles
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• 471,000 tonnes of low grade stockpile
at an average grade of 0.85 g/t.
• There is a further 1.1 million tonnes of
sub grade at an estimated grade of
0.70 g/t.
• Screening plant installed in 2014 can
upgrade by approximately 10% the
sulphide stockpiles.
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Ravi Sood
Chairman
• Chairman of Feronia Inc., one of Africa’s oldest operating companies and
largest employers
• Former CEO of Navina Asset Management, a Toronto based investment firm
that was acquired by a major financial institution
• Canadian
Nicholas Brodie
CEO & Director
• 22 years experience in accounting, with 8 years in Africa, including the last 7
years focused on the mining industry in Africa
• Former CFO of Katanga Mining, Financial Advisor to Metallon Gold,
CFO of Copperbelt Energy Corporation, Head of Finance at Cinergy
and Financial Controller of Total SA in the UK
• British
Wayne
Hatton Jones
Chief Operating
Officer & Director
• Mining Professional with 26 years experience in Africa, Asia and Europe
• Former GM (Goldridge), COO (Galaxy Gold), GM Metallurgy (Avocet),
Process Manager (Randgold) and Metallurgical Manager (Harmony)
• B.Sc. (Witwatersrand), MDP (University of South Africa)
• South African
Management Team
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Charles Byron
Chief Geologist
• 30+ years as geologist focused on Archean gold exploration
• Previously with Phelps Dodge, Falconbridge and Gallery Gold, where he led the team that
discovered the Mupane Gold Deposit and saw it into production in 2004
• B.Sc. (Hons) Geology, Soils, Geography (University of Natal)
• Motswana (Botswana)
Kevin Crossling
Business
Development
• Mining Professional with 13 years experience in progressively snr roles
• Former Operations Mgr (Allied Gold), Geology Manager (St Barbara), Principle Geologist
(Geocross), Mineral Resource Manager (Pilanesberg)
• B.Sc. (Hons) Geology
• South African
Cedric Sam
Mining
Manager
• Mining Engineer with 17 years of experience
• Inspector of Mines & Explosives with Dept of Mines, Manager Mine Planning with Tati Nickel
Mining Company and Mining Manager with African Copper Mining
• BSc in Mining Engineering from the Queens University in Kingston, Ontario, Canada
• Motswana
Management Team
Investment Highlights
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Immediate Leverage to Spot Gold
Unhedged gold producer
Free operating cash flow
from current Mupane LOM
plan
Ability to size production to
prevailing gold price and
remain nimble1
Exploration Upside
Control virtually 100% of
the Tati Greenstone belt
Substantial portfolio of drill-
ready targets at Galaxy
Potential to increase
reported resource to over 4
million oz.1
Skilled & Trusted Management Team
Strong operators with the
know-how to optimize and
expand production
The Company successfully
put Tau Underground into
production in less than 6
months.
Compelling Valuation Prospect
Current Valuation
Gold Price
Exploration New Valuation
Galaxy Production
1 This is a forward looking statement and is based on a number of assumptions, including generating sufficient funds to undertake exploration program, prevailing gold price and economic production and different
production levels.
Cautionary Statements
Certain statements contained in this presentation constitute “forward-looking statements.” All statements other than statements of historical fact contained in this presentation, including,
without limitation, those regarding Galane Gold’s results of operations, strategy, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the
words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions or the
negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only Galane Gold’s expectations, estimates and projections regarding
future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may
differ materially from what is expressed, implied or forecasted in such forward-looking statements.
Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to: Galane Gold’s dependence on two mineral projects;
gold price volatility; risks associated with the conduct of Galane Gold’s mining activities in Botswana and South Africa; regulatory, consent or permitting delays; risks relating to Galane
Gold’s exploration, development and mining activities being situated in two countries; risks relating to reliance on Galane Gold’s management team and outside contractors; risks
regarding mineral resources and reserves; Galane Gold’s inability to obtain insurance to cover all risks, on a commercially reasonable basis or at all; currency fluctuations; risks
regarding the failure to generate sufficient cash flow from operations; risks relating to project financing and equity issuances; risks arising from Galane Gold’s fair value estimates with
respect to the carrying amount of mineral interests; mining tax regimes; risks arising from holding derivative instruments; Galane Gold’s need to replace reserves depleted by
production; risks and unknowns inherent in all mining projects, including the inaccuracy of reserves and resources, metallurgical recoveries and capital and operating costs of such
projects; contests over title to properties, particularly title to undeveloped properties; laws and regulations governing the environment, health and safety; operating or technical
difficulties in connection with mining or development activities; lack of infrastructure; employee relations, labour unrest or unavailability; health risks in Africa; Galane Gold’s interactions
with surrounding communities and artisanal miners; Galane Gold’s ability to successfully integrate acquired assets; the speculative nature of exploration and development, including the
risks of diminishing quantities or grades of reserves; development of Galane Gold’s exploration properties into commercially viable mines; stock market volatility; conflicts of interest
among certain directors and officers; lack of liquidity for shareholders of Galane Gold; risks related to the market perception of junior gold companies; and litigation risk. Details of
certain of the risk factors relating to Galane Gold are discussed under the heading “Risks and Uncertainties” in Galane Gold’s annual management’s discussion and analysis for the
year ended December 31, 2014, a copy of which is available on Galane Gold’s SEDAR profile at www.sedar.com. Management provides forward-looking statements because it
believes they provide useful information to readers when considering their investment objectives and cautions readers that the information may not be appropriate for other purposes.
Consequently, all of the forward-looking statements made in this presentation are qualified by these cautionary statements and other cautionary statements or factors contained herein,
and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on,
Galane Gold. These forward-looking statements are made as of the date of this presentation and Galane Gold assumes no obligation to update or revise them to reflect subsequent
information, events or circumstances or otherwise, except as required by law.
The forward-looking statements in this presentation are based on numerous assumptions regarding Galane Gold’s present and future business strategies and the environment in which
Galane Gold will operate in the future, including assumptions regarding gold prices, business and operating strategies, and Galane Gold’s ability to operate on a profitable basis.
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Cautionary Statements
For more information regarding the mineral resource figures and technical information set out in this presentation, please refer to: (i) the news release dated March 18, 2013 entitled
“Galane Gold Ltd. Announces a Mineral Resource Update For its Botswana Properties”; (ii) the news release dated February 5, 2013 entitled “Galane Gold Ltd. Releases Drilling
Results from the Jim’s Luck Project That Shows Significant Gold Mineralization from Surface Open at Depth and Along Strike”; (iii) the news release dated October 31, 2013 entitled
“Galane Gold Ltd. Announces Mineral Resources at the Tekwane Prospect”; (iv) the news release dated August 5, 2014 entitled “Galane Gold Ltd. Commissions New Screening Plant
to Process Seven Hundred Thousand Tonnes of Low Grade Ore”; (v) the news release dated November 20, 2015 entitled “Galane Gold Ltd. Completes Acquisition of Galaxy Gold
Mining Limited; (vi) the news release dated January 26, 2016 entitled “Galane Gold Ltd. Files Technical Report for Galaxy Gold Mine”; (vii) the technical report in respect of the Mupane
Property entitled “Independent Technical Report on the Mupane Gold Mine” dated May 10, 2011; and (viii) the technical report in respect of the Galaxy Gold Mine entitled "A Technical
Report on the Galaxy Gold Mine, Mpumalanga Province, South Africa" issued on January 4, 2016 with an effective date of September 1, 2015, each of which is available under Galane
Gold’s profile on SEDAR at www.sedar.com.
Economic assessments in this presentation are preliminary in nature and include inferred mineral resources that are considered to be too speculative geologically to have the economic
considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the economic assessments will be realized. Mineral resources
are not mineral reserves and do not have demonstrated economic viability. There is no guarantee that any of the mineral resources disclosed in this presentation will be converted to
mineral reserves. There is also no guarantee that any of the inferred mineral resources will be upgraded to measured or indicated mineral resources. Information of a technical and
scientific nature that forms the basis of the disclosure in this presentation has been approved by Charles Byron Pr. Sci. Nat., MAusIMM., MGSSA and Chief Geologist for Galane Gold,
and a “qualified person” as defined by NI 43- 101.
Non-GAAP Measures
The presentation often refers to earnings from mining operations per ounce, total operating cash cost excluding royalties per ounce, direct cash cost per ounce, all in cash cost per
ounce and cash flows from operations before working capital adjustments, all non-GAAP performance measures, in order to provide investors with information about measures used by
management to monitor performance. This information is used to assess how well the producing gold mines are performing compared to plan and prior periods, and also to assess the
overall effectiveness and efficiency of gold mining operations. Cash cost figures are calculated in accordance with a standard developed by the Gold Institute, which was a worldwide
association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is still an
accepted standard of reporting cash costs of gold production in North America. Adoption of the standard is voluntary, and the cost measures presented herein may not be comparable
to other similarly titled measures of other companies. Cash cost includes mine site operating costs such as mining, processing, administration, and attributable realized derivative gain
or loss, but are exclusive of amortization, reclamation, and exploration and development costs. Cash cost excluding royalties is cash cost less royalties. Operating cash cost is the total
cash cost less those costs capitalized as attributable to the removal of excess waste in developing new resources. Operating cash cost excluding royalties is operating cash cost less
royalties. These costs are then divided by the Company’s ounces of gold produced to arrive at the cash cost measures on a per ounce basis. These measures, along with sales, are
considered to be key indicators of a company’s ability to generate operating earnings and cash flow from its mining operations. These measures of cash costs do not have any
standardized meaning prescribed by IFRS and differ from measures determined in accordance with IFRS. They are intended to provide additional information and should not be
considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures are not necessarily indicative of net earnings or cash flow
from operations as determined under IFRS.
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Contact Info
Ravi Sood Chairman
Mobile: +1 647 987 7663
Nick Brodie Chief Executive Officer
Mobile +44 7905089878
Investor Relations [email protected]
Mobile: +44 7905089878
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