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Amara Mining plc
Developing a Top African Gold Mine
European Gold Forum
14-15 April 2015
Disclaimer
This document comprises an institutional presentation (the “Presentation”) which has been prepared by and
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Peter Brown is a “Qualified Person” within the definition of National Instrument 43-101 and has reviewed and
approved the information contained within this Presentation. Dr Brown (MIMMM) is the Group Exploration
Manager for the Company.
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www.amaramining.com
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Forward-Looking Statements: Information contained in this Presentation may include 'forward-looking
statements'. All statements other than statements of historical facts included herein, including, without
limitation, those regarding the Company's financial position, business strategy, plans and objectives of
management for future operations (including exploration and development plans and acquisition
opportunities) are forward-looking statements. Such forward-looking statements involve known and unknown
risks, uncertainties and other important factors which could cause the actual results, performance or
achievements of the Company or the markets and economies in which the Company operates to be materially
different from future results, performance or achievements expressed or implied by such forward-looking
statements. Factors that could cause actual results or events to differ from current expectations include,
among other things, political, regulatory and economic risks and other risks involved in the mineral exploration
industry. The Company believes that the assumptions inherent in the forward-looking statements are
reasonable; however, forward-looking statements are not guarantees of future performance and accordingly
undue reliance should not be put on such statements due to the inherent uncertainty therein. The Company
expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forwardlooking statements contained in this Presentation to reflect any changes in its expectations with regard thereto
or any change in events, conditions or circumstances on which any statement is based, save as required by
relevant law or regulatory authority.
Any mineral resource figures referred to in this Presentation are estimates and no assurances can be given that
the indicated levels of minerals will be produced. Such estimates are expressions of judgment based on
knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a
given time may significantly change when new information becomes available. By their nature, mineral
resource estimates are imprecise and depend, to a certain extent, upon statistical inferences which may
ultimately prove unreliable. If such mineral resource estimates are inaccurate or are reduced in the future, this
could have a material adverse impact on the Company. Due to the uncertainty that may be attached to inferred
mineral resources, it cannot be assumed that all or any part of an Inferred mineral resource will be upgraded to
an indicated or measured mineral resource as a result of continued exploration. Mineral resources that are not
mineral reserves do not have demonstrated economic viability.
2
Building on Exploration Success
•
AIM-listed West African focused gold
explorer/developer
•
Largest resource base of any Londonlisted junior miner1 – 6.7 Moz M&I,
2.9Moz Inferred
•
Yaoure Gold Project has potential to be
one of top 15 largest gold mines in
Africa by production
•
Yaoure is located in central Côte
d’Ivoire – low cost power and reliable
infrastructure
•
Fully-funded to the point of a
construction decision for Yaoure
following US$22m placing
•
Second strong growth opportunity
through high grade Baomahun Gold
Project
BURKINA FASO
GUINEA
Tongon
(Randgold)
FREETOWN
Baomahun
(Amara)
CÔTE d’IVOIRE
Yaoure
(Amara)
SIERRA LEONE
Ity
(La Mancha)
LIBERIA
Bonikro
(Newcrest)
GHANA
YAMOUSSOUKRO
Agbaou
(Endeavour)
Abidjan
Brownfield site
www.amaramining.com
Hydro-electric power
Dual carriageway within 40km
1.
A junior miner is defined here as an explorer/developer or a producer with
projected FY14 production of <200koz
3
Strong Board and Technical Leadership
EXECUTIVE DIRECTORS
John McGloin, Chairman and CEO
Geologist
Former mining analyst with
extensive African mining experience
TECHNICAL LEADERSHIP
Pete Gardner, Finance Director
Chartered Accountant
Corporate finance experience and
former FD of Alexander Mining
Peter Brown
Group Exploration Manager
Geologist with 25 years’ experience
including working for Gold Fields
Nigel Tamlyn
Senior Project Manager
Mining engineer, formerly COO of La
Mancha, GM of Bogoso Prestea mine
NON-EXECUTIVE DIRECTORS
Hendrik Faul
Mining engineer
Held a number of senior roles
within Anglo American plc
Peter Hain
UK Member of Parliament
Former Minister of State
with responsibility for Africa
www.amaramining.com
Geoff Stanley
Geologist
Former mining analyst with
capital markets experience
Peter Cowley
Geologist
Extensive experience leading
African mining companies
Alex Davidson
Geologist
Former EVP of Exploration and
Corp. Dev. at Barrick Gold
4
Yaoure: A Rapid Growth Story
Delivered

Resources increased from 249koz to 2Moz
March 2013

Resources increased from 2Moz to 6.3Moz
December 2013

Compelling PEA delivered based on 8Mtpa plant
March 2014

Placing completed – fully-funded to deliver PFS
March 2014
Amara’s Resource Growth1
12
2012-2015: Growth
of Yaoure resource
10
Million ounces Au
Yaoure: Key Milestones To Date
8
Inferred
2007-2011: Growth of
Baomahun resource
6
M&I
4
2

Extensive drilling programme commenced in
both CMA and Yaoure Central zones
April 2014

Alternative throughput scenarios announced 5Mtpa and 6.5Mtpa plants
May 2014

NI 43-101 compliant technical report published
following PEA
May 2014
Yaoure US$950/oz in
pit resources2,3

Encouraging drilling results announced
May-November
2014

First of two Mineral Resource updates
September 2014

Second of two Mineral Resource updates
January 2015

Placing completed – fully-funded to the point of
a construction decision (including BFS)
January 2015
www.amaramining.com
0
2007 2008 2009 2010 2011 2012 2013 2014 2015
Years
Tonnes
(Mt)
Grade
(g/t)
Gold
(Moz)
Indicated
64.8
1.48
3.08
Inferred
20.2
1.28
0.83
Total
85.0
1.43
3.91
2.
1. Resource numbers exclude Kalsaka and Sega
See slide 22 for resource footnotes regarding assumptions
3. Using a 0.5g/t cut-off grade
5
Yaoure: Mineral Resource increased to 6.8 Million Ounces
•
65% of Mineral Resources now in higher confidence category
•
Almost 80% of Mineral Resources within US$950 and US$800/oz pit
shells are in higher confidence Indicated category
•
Further exploration upside as deposit remains open along strike –
potential to add further ounces into pit shells
•
Results from CMA zone confirmed high grade nature and strong
continuity
•
Results from Yaoure Central zone confirmed moderate grade nature,
with some high grade areas
Significant intercepts from 2014 Drilling Programme
www.amaramining.com
Zone
Boreholes
Length (m)
Grade (g/t)
From (m)
CMA
YDD0240
10
6.1
158
CMA
YRC0682
31
5.4
184
CMA
YRC0688
22
9.1
48
CMA
YRC0698
36
4.2
108
Yaoure Central
YDD0215
17
7.3
180
Yaoure Central
YDD0216G
42
3.2
249
Yaoure Central
YDD0229R
5
17.0
179
Yaoure Central
YDD0273
20
4.1
239
6
Yaoure: Strong Continuity Throughout Deposit
Yaoure Section 6900N
Yaoure Section 7100N
Yaoure Section 7300N
Yaoure Section 7500N
www.amaramining.com
7
Yaoure: Top 15 Producer, Bottom 5 Operating Costs
Top 10 African Gold Mines for Lowest Total
Costs2
600,000
500,000
Yaoure 8Mtpa Yaoure 6.5Mtpa
400,000
300,000
200,000
100,000
0
•
•
Yaoure is expected to be one of top 15 largest gold
mines in Africa in both throughput scenarios
Total costs rank bottom 5 lowest in African gold
mines in both scenarios
AISCs of US$624/oz (6.5Mtpa scenario) – less than
50% of African average (US$1,280/oz)3
•
Low costs driven by cheap power, economies of
scale and simple metallurgy (>90% recovery rate)
•
One of the few projects that is expected to remain
robust at a gold price of US$1,000/oz
www.amaramining.com
2,500
Yaoure 6.5Mtpa
Yaoure 8Mtpa
IRR and NPV Sensitivity to Gold Price
80
70
2,000
NPV (US$m)
•
900
800
700
600
500
400
300
200
100
0
60
50
1,500
40
1,000
30
IRR (%)
2013 Total Cash Costs (US$/oz)
2013 Production (oz)
700,000
Top 15 Gold Mines in Africa by 2013
Production1
20
500
10
0
0
8Mtpa NPV
6.5Mtpa NPV
2.
8Mtpa IRR
6.5Mtpa IRR
1. Source: and Intierra (SNL) database
Source: Intierra (SNL) database and company data
3. In the Canaccord Genuity coverage universe
8
Yaoure: Low-Cost Power from Nearby Hydro-Electric Dam
Tongon
Map of the Power
Grid of Côte d’Ivoire
and Producing Gold
Mines
Satellite image of Yaoure’s
proximity to hydro-electric power
Kossou dam and hydro-electric
power station
Lake Kossou
5km
Yaoure
Yaoure resource area
Ity
Bonikro
Agbaou
Source: Enerdata
www.amaramining.com
Hydro-electric
power station
Producing Mine
Company
2014 Production
(oz)
Cost per kWh
Tongon
Randgold Resources
227,1031
11
Agbaou
Endeavour Mining
146,7571
8
Bonikro
Newcrest Mining
94,9941
7
Ity
La Mancha
70-75,0002
83
3.
1. Actual production
2. Forecast production
Estimated as this data has not been published
9
Yaoure: Compelling Economics Reported in PEA
Mining
Unit
Medium Case
Total Cash Cost Breakdown –
6.5Mtpa
Mining
Processing
G&A
Plant Throughput
Mtpa
6.5
Mine Life
Years
10
Ore Mined
Mt
63.9
Average Head Grade
g/t
1.53
Waste Mined
Mt
314
Total Material
Mt
378
Strip Ratio
w:o
4.9
Contained gold
Moz
3.1
Recovery rate
%
95
Gold Produced
Moz
3.0
Capital Costs (US$m) - 6.5Mtpa
Annual Average Production
Koz
279
Process plant
Processing
Pre-Production Capital
Operating Cash Costs
Freight and refining
Royalties / CSR fund
Total Cash Costs
Sustaining Capex
All-In Sustaining Cost
US$/oz
produced
305
217
15
US$/t processed
2.411
10.13
1.03
537
7
50
594
30
624
124.0
Plant infrastructure including TMF
32.5
Plant & Infrastructure Cost
US$m
244
Other infrastructure
26.6
Total Pre-Production Capital Cost
US$m
357
Miscellaneous
18.0
EPCM and Indirects
43.2
Results at US$1,250/oz
Post-tax NPV at 8% discount
US$m
613
%
33
Capital efficiency
Ratio
1.72:1
Payback
Years
2.6
Post-tax IRR
www.amaramining.com
Plant and Infrastructure Capital Cost
244.3
Contingency
37.4
Mining fleet
75.0
Total Pre-Production Capital Cost
356.7
1.
US$/t mined
10
Yaoure: Optimisation Opportunities
•
•
•
Staged development - Potential to
decrease upfront capex in terms of mill
capacity, process route and targeting
oxides for soft start to production
Yaoure Proposed Site Layout
Selective mining - Bulk mining
approach assumed - selective mining
of higher grade zones may result in
lower dilution and higher grade plant
feed
Equipment optimisation - Larger
equipment may be more appropriate
for Yaoure given the bulk mining
approach
•
Project layout - Further potential to
optimise
locations
of
site
infrastructure
to
take
greater
advantage of project topography,
reducing operating costs
•
Process selection - Pre-concentration
via flotation and SAG milling warrant
further testing
www.amaramining.com
Processing
plant
Heap leach pads
(not currently
used)
ROM
pad
Tailings
Storage
Facility
US$950/oz
open pit shell
Waste
dump
Tailings
Storage
Facility
11
Yaoure: Long Term Exploration Potential
www.amaramining.com
•
Regional exploration potential on wider 317km2 licence area
•
Resource area is very small part of total licence area
•
Soil geochemistry has identified other areas similar to the
Yaoure resource area – anomaly to south-west of resource area
•
Low-cost regional exploration work undertaken in Q4 2014
12
Baomahun: A Second Strong Growth Opportunity
•
Feasibility stage project in central Sierra Leone
•
Archean-age deposit with high grade core and grades that
improve at depth
•
Feasibility Study delivered in Q2 2013 based on 2Mtpa
open pit only scenario – strong economics at US$1,350/oz
gold price
•
Potential to increase production to 100,000oz in 1Mtpa
scenario
www.amaramining.com
Probable Mineral
Reserves
Head Grade of Mineral
Reserves
1.2Moz
1.62g/t
Indicated Mineral
Resources
Inferred Mineral
Resources
2.2Moz
0.5Moz
Average Production
over life of mine*
98,460oz
Life of Mine*
12 years
*According to Baomahun Feasibility Study (2Mtpa CIL plant)
13
Strategy for Baomahun in 2015
•
During 2014 Baomahun remained in an evaluative
phase due to Ebola situation in Sierra Leone
•
Focus at Baomahun in 2015 will continue to be on desktop optimisation work to:
— Gain a better understanding of the high grade
core of the deposit
— Further grow 2.8Moz Mineral Resource
www.amaramining.com
•
First step will be to re-log the core – ensure Amara has
a through geological understanding of the deposit from
the drilling conducted to date
•
Second step will be to undertake a small-scale, low-cost
drilling programme if appropriate
•
Also improve Amara’s understanding of the optimal
place in the orebody to transition between open pit
and underground mining
14
Substantial Opportunity to Increase Value
Current EV/Resource
Valuation for Amara
Average discovery cost
in Africa in 2013*
Valuation of later
stage Papillon by
B2Gold bid
Valuation of earlier
stage Orbis by Semafo
bid
US$7/oz
US$33/oz
US$113/oz
US$90/oz
West African Gold Mining Companies’ EV/Resource Valuations
160
3.5
3.0
120
2.5
100
79.1
80
65.9
60
41.1
40
20
4.6
7.3
8.5
9.0
10.5
10.8
12.2
22.1
23.3
23.5
50.7
1.5
25.8
1.0
0.5
0
-20
-3.1
3
Producer
Developer
0.0
Grade (g/t)
1.
www.amaramining.com
2.0
Grade (g/t)
EV/MI&I Resource (US$/oz)
140
Graph as at 09 April 2015 2. Amara’s resources no longer include Kalsaka/Sega
3. Roxgold’s weighted average grade is 12.6g/t
Source: Intierra RMG database and company disclosures
*Source: Article by MinEx Consulting in Mining Journal, August 2014
15
Focused On Delivery: Key Milestones For H2 2014-2015



First Yaoure Mineral Resource update
Delivered: September 2014
Second Yaoure Mineral Resource update
Delivered: January 2015
US$22m placing – funded to the point of a construction decision
Delivered: January 2015
Yaoure Pre-Feasibility Study
Expected: Early Q2 2015
Drilling updates from 2015 drilling programme
Expected: Throughout Q2 and Q3 2015
Yaoure Bankable Feasibility Study
Expected: December 2015
www.amaramining.com
16
Amara Mining plc
Contact Us
John McGloin
Chairman and Chief Executive Officer
Katharine Sutton
Head of Investor Relations
+44 (0)20 7398 1420
[email protected]
www.amaramining.com
17
Appendix: Market Information
Listing Information1
One Year AIM Share Price Performance1
AIM Ticker:
AMA
Shares Issued (undiluted):
Shares Issued (diluted):
420,386,077
444,808,577
Share Price:
Market Capitalisation:
3 month average daily volume:
1 year average daily volume:
15.12p
£66m (US$97m)
747k shares
1.1m shares
Analyst Coverage1
Recommendation
TP
Top Shareholders2
BMO Capital Markets
Canaccord Genuity
Cantor Fitzgerald
Cenkos Securities
GMP Europe
Mirabaud Securities
Oriel Securities
Peel Hunt
Whitman Howard
Outperform
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Hold
30p
28p
U/R
40p
34p
30p
30p
29p
30p
Aurum Holdings (RDV Corporation)
Franklin Templeton
JP Morgan
Ingalls & Snyder
Tembo Capital
Van Eck
Sustainable Capital
Total Director’s Holding
www.amaramining.com
15.2%
13.7%
7.7%
7.4%
5.9%
4.1%
3.4%
0.7%
1. As at 09 April 2015
2. As at 31 March 2015
18
Benefits of Yaoure’s Infrastructure on Capex
•
For the 6.5Mtpa scenario Yaoure’s total
pre-production capital cost is US$357m
Employee Camp:
US$7m
Power Station:
US$30m
•
Yaoure’s capex is positively impacted by
a number of factors, which means it is
significantly lower than for other
projects of a similar size
Camp for 300 people was
built with another 500
transported in from local
villages daily
A 26MW HFO power station,
plus associated infrastructure,
was built plus 3 800KW diesel
gen sets as emergency back
up
Water Supply:
US$12m
Relocation of Local People:
US$20m
Reservoir built to store water
from nearby river to service
mine during the dry season
2,562 households (over
11,000 people) had to be
relocated
COMPARISON: YAOURE VS SIMILAR MINE
IN WEST AFRICA
Key Parameters of Comparator Mine
•
Open pit mine – production
315,000oz for 10 year LOM
of
•
7.5Mtpa gravity circuit and CIL plant
•
Total pre-production capital cost of
US$420m (within past 5 years)
Total cost of additional infrastructure at comparator mine: US$69m
www.amaramining.com
19
Benefits of Yaoure’s Infrastructure on Operating Costs
Cost
Yaoure PEA
Mine elsewhere in West
Africa using grid power
Mine elsewhere in West
Africa using diesel
Power cost
9 cents/kWh
16.5 cents/kWh
30 cents/kWh
Processing
cost*
US$10.13/t
US$12.90/t
US$17.87/t
Total Cash
Costs*
US$594/oz
US$653/oz
US$853/oz
All-In
Sustaining
Costs*
US$624/oz
www.amaramining.com
US$683/oz
US$893/oz
*The average cost based on a 6.5Mtpa plant over a 10 year LOM
20
Kalsaka/Sega: Cessation of Mining
Structure of Amara Mining Group before the liquidation of SMSA
KEY POINTS
•
All cash assigned to delivery of Yaoure PFS
remains committed to this aim
•
Amara remains focused on the delivery of the
the PFS for Yaoure
•
US$3m bond in place to cover rehabilitation of
Kalsaka/Sega site
•
Amara’s financing strategy does not rely on
receiving any funds from Burkina Faso
•
Mining ceased at Kalsaka/Sega on 04 August 2014 – Directors put local Burkina Faso subsidiary SMSA into liquidation
•
Decision followed the receipt of a default notice from BCM, mining contractor at Kalsaka/Sega
•
Amara was due to begin liquidation of its operational subsidiaries in Q4 2014 anyway – does not materially change
strategy for Kalsaka/Sega
•
Following the transition from producer to developer, Peter Spivey resigned as CEO and John McGloin was appointed
www.amaramining.com
21
Group Resources and Reserves
Reserves
Baomahun1
Category
Tonnage
(Mt)
Grade
(g/t)
Contained Gold
(koz)
Probable
23.3
1.62
1,210
Resources
Baomahun1
Yaoure 2
Category
Tonnage
(Mt)
Grade
(g/t)
Contained Gold
(koz)
Indicated
38.4
1.82
2,242
Inferred
6.6
2.52
535
Indicated
106.3
1.29
4,416
Inferred
63.0
1.19
2,405
TOTAL
Indicated
6,658
TOTAL
Inferred
2,940
1.
2.
Resources shown as inclusive of reserves. The reserves were calculated using a 0.5g/t cut-off and a US$1,100 gold price. The resources were
calculated using a cut-off grade of 0.5g/t within a US$1,500/oz open pit shell and a 2.0g/t cut-off for resources suitable for underground mining. A
technical report titled “Feasibility Study of the Baomahun Project in Sierra Leone NI 43-101 Technical Report” and dated 28 June 2013 is filed on
SEDAR
The resources were calculated using a 0.5g/t cut-off and a US$1,500 gold price. A NI 43-101 compliant technical report entitled ‘Yaoure Gold
Project, Côte d’Ivoire, Technical Report and Mineral Resource Estimates for Amara Mining Côte d’Ivoire SARL’ dated 05 January 2015 is available on
Amara’s website.
www.amaramining.com
Group Reserves and Resources
Reserves: 1.2Moz
Indicated Resources1: 6.7Moz
Inferred Resources1: 2.9Moz
1. Inclusive of Mineral Reserves
22