Kingsgate Consolidated Limited · ASX:KCN
Kingsgate Consolidated — Macquarie's Gold Rush 2006
28 slides from Kingsgate Consolidated's conference presentation, June 2006
Slide 1: Kingsgate Consolidated - Macquarie's Gold Rush 2006
Kingsgate Consolidated Limited Sustainable Growth Macquarie’s Gold Macquarie’s Gold Rush Rush 2006 2006
Slide 2: A Focused Gold Miner
A Focused Gold Miner Total Returns Focus Production Profit Growth
Slide 3: Sustainable Growth
Sustainable Growth Production Increase 300,000 to 350,000 Oz Doubling by ’08 150,000 Oz Easily financed - high cash flow Today 2008 Near-term Growth Reserves 1,840,000 Oz Resource increase>1Moz/year Reserves 9 rigs drilling – US$9-10m/yr 807,000 Oz 2001 2005 Long-term Growth Proven targeting method
Slide 4: A Sustainable Gold Miner
A Sustainable Gold Miner Long Term Total Returns Workplace Environment Community
Slide 5: Distinctive Results
Distinctive Results Production +300,000 oz/yr in ‘08 Cash Cost Lowest Quartile Discovery Costs World’s lowest Growth Strategy Organic Exploration Project stage M&A Shareholder Capital Growth Returns Profits & Dividends
Slide 6: Almost Unhedged
Almost Unhedged Hedge Positions: Plan to reduce to 58,500oz by end June Only third of 06/07 production hedged (US$317/oz) Unhedged expansion to >300,000 oz/yr No negative IFRS impacts from hedges in future Expansion – Simple to Finance: Expansion capex: US$35-40m +/-30% scoping May’05 Updated capex:
Slide 7: Selldown - in Control
Selldown - in Control Incentives: 100% ownership to Nov’06 51% “Thai Ownership” from Nov 2006 Tax holiday to Nov’09 + 5 years half tax Selldown- Commercial Deal - KCN control Fair Value expected for Selldown portion May have pre-IPO sale short term to Thai investors (~10% beneficial interest in Chat
Slide 8: Selldown & Incentives
Selldown & Incentives Investment Incentive Timetable 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 100% 60-100% 60-70% Ownership Ownership Ownership ZERO 15% 30% Tax Tax Tax Interim Initial B.O.I. Selldown of Thai Entity No B.O.I. Selldown of Incentives Incentives COMPLETE Th
Slide 9: Main Asset - Chatree
Main Asset - Chatree Low sulphidation epithermal deposit Opened in Nov’01 Chatree Chatree ~150,000 oz/yr Au Good Infrastructure Grid Power ‘Buy Thai’ policy Workforce: 915 Thai 300 Km 9 Expatriates Phuket
Slide 10: Operational Results
Operational Results Mill Throughput Mill Throughput (Ktpa) (Ktpa) Head Grade Head Grade (g/t) (g/t) 1.9mtpa rate 2.4 g/t Au To Mar 06 To Mar 06 2,350 5.3 2,100 1,829 1,671 3.9 FF oo rr ee cc aa ss tt Forecast 1,324 3.1 2.4 2.4 2.3 Forecast Forecast 665 01/02 02/03 03/04 04/05 05/06F 06/07F 01/02 02/
Slide 11: Operational Update
Operational Update Risks to Meeting Forecast Production Early start to wet season Heavy rains & flooding in Northern Thailand Access to high grade limited by rain (deeper pits) Wet season otherwise managed (pumps) Delayed geotechnical work Limited access to high grade areas prior to rain Potential i
Slide 12: Global Cash Cost Curve
Global Cash Cost Curve US$/oz 600 Current Gold Price 500 400 Gold Fields Anglo 300 Newmont Gold Barrick Cash Cost Curve 2005 200 Chatree 2005 FY Chatree 2006 &2007 FY 100 Chatree 2004 FY Source: Global Mining Research 0 0% 25% 50% 75% 100%
Slide 13: Chatree Gold Mine
Chatree Gold Mine New mining lease Mining started Feb 06 Proposed ‘A’ Pit Current mining lease boundary High grade intercepts 17m @ 7.4g/t Au Chatree mine (‘C’ Pit & Plant) Looking north to Chatree North (New ‘A’ Pit)
Slide 14: Chatree Gold Mine
Chatree Gold Mine A Pit mined at Multi pits Chatree North. Oxide feed Mining in Chatree Nth Hard ore in main C-H pits New High grade zone Mine in June-July’06 Rain affected High grade zone Chatree North (New ‘A’ Pit) Chatree mine (‘C’ Pit & ‘H’ Pit)
Slide 15: Chatree Expansion
Chatree Expansion Expansion: Double output >300,000 oz/yr >2Moz/yr silver 5mtpa plant Duplicate Plant Feasibility study Add tank farm for silver circuit due June 06 Duplicate plant (+2.7mtpa) Add silver circuit (Merrill Crowe) High silver in A pit (15Moz) Aim - lift silver recoveries from 45% to >70
Slide 16: Super Pit
Super Pit Chatree North Chatree North Chatree: Large Pit Potential 3 – 4 Kms long Potential for 5 Mozs Proposed Proposed Pits Pits Potential for super-pit Chatree Chatree
Slide 17: Leases
Chatree North Chatree North Leases Mining Lease Mining Lease Applications Applications Chatree North Mining Leases 9 Lease Applications Mining Lease Mining Lease ‘A’ Pit ‘A’ Pit Requires approval of Environ Impact Assessment Ready for granting once complete Not “If” but “When” Chatree Chatree Lease
Slide 18: Organic Growth
Organic Growth Reserve Doubled in 15 months to Sept 05 Discovery cost US$ 12 / ounce gold Resource Doubled in 12 months to Sept 05 Discovery cost US$ 7 / ounce gold Continuing Growth over next few years World class gold province confirmed Enables continued rapid, low cost growth
Slide 19: Resources & Ore Reserves
Resources & Ore Reserves 4,000 12.0 Updated Resource Updated Resource 3,000 Reserve Statement Reserve Statement 9.0 000' Ozs Gold in June in June ‘06 ‘06 US$ Million 2,000 6.0 1,000 3.0 0 0.0 Sep05 2001 2002 2003 2004 2005 Sep05 Ore Reserves Ore Reserves Mineral Resources Mineral Resources Mine Depl
Slide 20: Chatree North Resource Growth
Chatree North Resource Growth Q Growth of 1 million Q ounces gold per annum in Chatree & Chatree N Q Resource drill-out with up to 9 drill rigs 3.0 Km High conversion of resources to ore reserves A & A East 5 million ounces gold potential in Chatree K West K East
Slide 21: Ground Resistivity Targets
Ground Ling Ling Volcanic Volcanic Resistivity Complex Complex Targets 25 More than 30 targets Km Q-Resource drill out 2006 for follow-up A-Resource 65% of geophysical drill out 2006 anomalies J-Drill testing mineralized 2006 Chatree Chatree 25 km strike length Volcanic Volcanic R-Drill Complex Test
Slide 22: Regional Prospects
Regional Prospects Discovered potential new world-class gold province 39 prospective targets within economic distance of current gold processing plant Chatree Chatree Includes 10 high priority targets 114 lease applications ~1500km2 Numerous releases about exploration expected for >1 year 30 Kms
Slide 23: Community License
Community License World Best Safety Record >7M hrs with 1incident Workplace Awards – Women, Training, Safety ISO 9001, OHSAS 18001 Awards – No Environ incidents Environment Tailings Cyanide at levels of coffee Worlds Best Practice ISO14001 Health & Education– schools, water Social Community managed
Slide 24: Andean Takeover Bid
Andean Takeover Bid Diversification Strategy for Kingsgate All scrip 1-for-15 offer for AND.ASX KCN holds 13.5% of Andean currently Cerro Negro project, Argentina: Low sulphidation epithermal gold Numerous mineralised drill intercepts Inferred Resource: 840,000 oz @ 1.7g/t Gold district near Cerro V
Slide 25: Andean's Strategic Fit
Andean’s Strategic Fit Company Strategy Organic growth: greenfields exploration & brownfield expansions Acquisitions required to develop into a significant mid-tier gold producer Prefer quality, early stage gold assets + upside Leverage exploration & development expertise Apply Chatree experience to
Slide 26: Filling Mid-tier Void
Filling Mid-tier Void Balanced Portfolio of Assets Exploration Greenfield Thailand Exploration Chile, Peru, Argentina Thailand near Chatree Advanced Cerro Negro Project Exploration Goldstar Resources NL Feasibility / Chatree North Development MLAs at advanced stage Chatree Operating 2005/06F 145,000
Slide 27: Why Kingsgate?
Why Kingsgate? Reliable gold producer ~150,000 oz/yr Lowest quartile cash costs <US$220/oz Rapid resource expansion >1Moz/yr World class gold province - More Chatrees Strong financial; Cash, No Debt, Dividends Selldown & lease applications progressing Almost unhedged from July’06 Future expansion po
Slide 28: Disclaimer
Disclaimer Forward Looking Statements: These materials include forward looking statements. Forward looking statements inherently involve subjective judgment & analysis & are subject to significant uncertainties, risks & contingencies, many of which are outside of the control of, & may be unknown to,