For personal use only GRUYERE GOLD PROJECT IN JOINT VENTURE WITH GOLD FIELDS LTD

Size: px

Start display at page:

Download "For personal use only GRUYERE GOLD PROJECT IN JOINT VENTURE WITH GOLD FIELDS LTD"

Amie Merritt
5 years ago
Views:

1 GRUYERE GOLD PROJECT IN JOINT VENTURE WITH GOLD FIELDS LTD 1

2 Disclaimer Imprtant Ntices Nature f this dcument: The purpse f this presentatin is t prvide general infrmatin abut Gld Rad Resurces Limited (the Cmpany ). Unless therwise stated herein, the infrmatin in this presentatin is based n the Cmpany s wn infrmatin and estimates. In attending this presentatin r viewing this dcument yu agree t be bund by the fllwing terms and cnditins. Nt an ffer: This presentatin is fr infrmatin purpses nly and des nt cnstitute r frm any part f any ffer r invitatin t sell r issue, r any slicitatin f any ffer t purchase r subscribe fr, any securities in the Cmpany in any jurisdictin. This presentatin and its cntents must nt be distributed, transmitted r viewed by any persn in any jurisdictin where the distributin, transmissin r viewing f this dcument wuld be unlawful under the securities r ther laws f that r any ther jurisdictin. Nt financial prduct advice: This presentatin des nt take int accunt the individual investment bjectives, financial situatin and particular needs f each f the Cmpany s Sharehlders. Yu may wish t seek independent financial and taxatin advice befre making any decisin in respect f this presentatin. Neither the Cmpany nr any f its related bdies crprate is licensed t prvide financial prduct advice in respect f the Cmpany s securities r any ther financial prducts. Frward-lking statements: Certain statements in the presentatin are r may be frward-lking statements and represent the Cmpany s intentins, prjectins, expectatins r beliefs cncerning, amng ther things, future perating and explratin results r the Cmpany s future perfrmance. These frward lking statements speak, and the presentatin generally speaks, nly at the date heref. The prjectins, estimates and beliefs cntained in such frward lking statements necessarily invlve knwn and unknwn risks and uncertainties, and are necessarily based n assumptins, which may cause the Cmpany s actual perfrmance and results in future perids t differ materially frm any express r implied estimates r prjectins. Disclaimer: N representatin r warranty, express r implied, is made by the Cmpany that the material cntained in this presentatin will be achieved r prve t be crrect. Except fr statutry liability which cannt be excluded, each f the Cmpany, its directrs, fficers, emplyees, advisers and agents expressly disclaims any respnsibility fr the accuracy, fairness, sufficiency r cmpleteness f the material cntained in this presentatin, r any pinins r beliefs cntained in this dcument, and excludes all liability whatsever (including in negligence) fr any lss r damage which may be suffered by any persn as a cnsequence f any infrmatin in this presentatin r any errr r missin there frm. The Cmpany is under n bligatin t update r keep current the infrmatin cntained in this presentatin r t crrect any inaccuracy r missin which may becme apparent, r t furnish any persn with any further infrmatin. Any pinins expressed in the presentatin are subject t change withut ntice. Unverified infrmatin: This presentatin may cntain infrmatin (including infrmatin derived frm publicly available surces) that has nt been independently verified by the Cmpany. 2

Gruyere Jint Venture with Gld Fields Ltd Gruyere Gld Prject t be develped in a Jint Venture with Gld Fields Ltd 50% interest in JV assets sld fr cnsideratin f: A$350M cash 1.

3 Gruyere Jint Venture with Gld Fields Ltd Gruyere Gld Prject t be develped in a Jint Venture with Gld Fields Ltd 50% interest in JV assets sld fr cnsideratin f: A$350M cash 1.5% NSR beynd 2 millin unce prductin 1 Up t 10% cst ver-run and perfrmance bnding supprt Gld Rad assets, in additin t cash, pst deal include: 50% interest in future Gruyere prductin and cash flw 50% interest in Gruyere and Attila-Alaric Mining Tenements 100% interest in Nrth Yamarna explratin tenements 50% interest in existing Suth Yamarna JV with Sumitm Strng balance sheet t cntinue aggressive explratin campaign % Net Smelter Return Ryalty (NSR) payable n Gld Fields share f gld prductin nce ttal gld prductin exceeds 2 millin unces. 3

4 Transactin Highlights Clear strategic ratinale that maximises value fr sharehlders Crystallises immediate value while retaining significant upside expsure t Gruyere JV tenements Partnership with Gld Fields de-risks Gruyere develpment and unlcks significant peratinal and financial benefits Gld Rad fully funded t develp Gruyere Gld Prject Gld Rad fully funded t prudently ramp up explratin acrss the highly prspective Yamarna Greenstne Belt Transactin Cnsideratin Nte Acquisitin f a 50% interest in the Gruyere Jint Venture fr A$350 millin 1 Uncapped 1.5% NSR ryalty n Gld Fields share f prductin frm the Gruyere Jint Venture tenements nce ttal gld prductin exceeds 2 millin unces 2 Sle funding f up t 10% f capital verruns n the Gruyere develpment budget f A$507 millin 3 Funding supprt fr prject-level guarantees and perfrmance bnds required t supprt third party suppliers and prviders t the Gruyere Gld Prject as required 4 1. Cash cnsideratin cmprises A$250 millin payable n cmpletin and A$100 millin cntributed by Gld Fields t fund Gld Rad s initial cash calls during the cnstructin phase. Gld Rad has circa A$109 millin in unaudited tax lsses that it expects will be available t be utilised. 2. Estimated t generate circa A$15 millin between based n the Feasibility Study LOM and spt gld price f ~A$1,700/z. This amunt des nt include any ptential upside frm Gruyere at depth r the satellite depsits in the Gruyere Jint Venture tenements such as the YAM14 discvery and Attila, Alaric, and Central Bre Resurces. 3. Based n Gruyere Initial Develpment Plan and Budget f A$507 millin. Excludes frce majeure and agreed scpe change. 4. Full amunt t cver perfrmance guarantees required t supprt prject-level cntracts including Gas Pipeline and Pwer Statin guarantees. 4

5 Transactin Overview Gld Rad t frm a 50:50 Gruyere Jint Venture with Gld Fields Australia Develpment and peratin f the 6.2 Mz Gruyere Gld Prject Gruyere Jint Venture spans a 144 km 2 tenement area cmprising: Gruyere Mining Lease, including the YAM14 and Tt prspects Attila-Alaric tenements including Central Bre, Attila and Alaric resurces Gld Rad retains Explratin expsure t the Yamarna Greenstne Belt with: 50% wnership f the Gruyere Jint Venture tenements 100% wnership f the Nrth Yamarna tenements 50% wnership f the Suth Yamarna Jint Venture tenements JV t be gverned by Jint Venture Agreement (JVA) and Reginal Cperatin Memrandum f Understanding (Reginal MU) JVA and Reginal MU subject t refinement and final agreement Transactin cmpletin targeted fr December 2016 subject t satisfactin f custmary cnditins precedent including: FIRB WA DMP apprvals Yilka Native Title cnsent 5

6 Highly cmpelling fr Gld Rad sharehlders Strategic Access Gld Fields experience in develping and perating wrld class gld prjects Allws Gld Rad t fcus n its prven strength f gld explratin Reginal MU expected t prvide platfrm fr reasnable access t the prcessing plant and extensive site infrastructure develped at Gruyere Enhances ptins fr future discveries made by Gld Rad acrss the Yamarna Greenstne Belt Financial Gld Rad fully funded fr Gruyere develpment and increased explratin expenditure Gld Fields funds up t 10% f any Gruyere develpment capital verruns 2 Gld Fields supprts funding f any prject-level guarantee requirements N requirement by Gld Rad t raise debt r capital frm sharehlders Unlcks peratinal and financial benefits (i.e. supply chain, purchasing pwer, systems and capabilities) Ptential t cnsider future capital management initiatives Cnsideratin A$350m in cash (pre-tax) at an attractive pre-develpment valuatin Upside expsure via 1.5% NSR Ryalty 1 See-thrugh transactin value represents a significant premium t Gld Rad s current share price Gld Rad maintains expsure t: > 50% ecnmics 1 frm Gruyere ver its initial 13 year mine life plus extensinal upside 50% f JV tenements fr explratin 100% f Nrth Yamarna tenements 50% f Suth Yamarna tenements 1. NSR Ryalty applicable t Gld Fields share f future prductin nce ttal mine prductin exceeds 2 millin unces. 2. Excludes frce majeure and agreed scpe change. 6

7 Strategic apprach t unlcking the Yamarna Belt Gld Rad n track t becme a leading mid-tier Australian gld prducer underpinned by an unparalleled explratin package Gruyere prgressed frm discvery t develpment within 3 years at ~A$10 per Reserve unce Strategic partnerships with Gld Fields Australia at Gruyere and Sumitm Metal Mining Oceania at Suth Yamarna Gld Rad retains 100% wnership f the highly prspective Nrth Yarmana tenements (~2,300 km 2 ) Strng balance sheet and frecast cash flw generatin frm Gruyere Gruyere Jint Venture Suth Yamarna Jint Venture Asset Ownership JV Partner Tenement Area Pririty Camp Scale Targets 50% Gld Fields 144 km 2 Suth Drthy Hills 50% Sumitm Metal Mining Oceania 2,651 km 2 Breelya-Tppin Hill Riviera-Smkebush Metrplitan-Beefwd Nrth Yamarna 100% Sle Owner 2,326 km 2 Pacific Dunes-Crkwd Sun River-Wanderrie Key Prjects/ Prspects Gruyere Atilla-Alaric Central Bre YAM14 YAM10 Riviera Yaffler Suth Kingstn Nrth Ibanez Satriani Santana Renegade Drilled Hles (FY16) Drilled Metres (FY16) 1,052 48,893 2,705 20, ,869 7

8 Future Capital Management Fully funded fr multiple strategies: 1. Fund ur 50% share f the Gruyere Prject cnstructin Access t significant future free cash flw Ptential t be a dividend payer within three years 1 2. Fund ur 50% share f explratin n the Gruyere JV >A$5M pa 2 Fcus n Reserve additins frm satellite depsits Adding incremental value and mine life t the Gruyere JV 3. Fund explratin n 100% Nrth Yamarna Prject at A$10-20M pa Fcus n discvery f Wrld Class Depsits >1 Mz Au 4. Fund ur 50% share in Suth Yamarna JV at A$2-3M pa Fcus n discvery f Wrld Class Depsits >2 Mz Au 5. Fund search fr new Explratin assets d anther Yamarna Prject Generatin t identify immature explratin belts Business Develpment fr early stage assets Glbally 1. Based n Gruyere Feasibility Study Schedule assuming fully funded cnstructin and 50% f FY19 frecast cash flws. 2. Explratin budgets fr the Gruyere JV t be determined. Gld Rad expects cntributin in early years f >A$5 millin per year. 8

Appendix A: Abut Gld Fields Our visin is t be the glbal leader in sustainable gld mining Wrld s 7 th largest gld prducer, with 8 peratins in 4 cuntries Gld Fields Ltd has been perating in Australia

led by a highly experienced Senir Management Team Strng relatinships exist between the Gld Fields and Gld Rad acrss multiple levels f the respective rganisatins Recent develpment activities ver last

9 Appendix A: Abut Gld Fields Our visin is t be the glbal leader in sustainable gld mining Wrld s 7 th largest gld prducer, with 8 peratins in 4 cuntries Gld Fields Ltd has been perating in Australia as Gld Fields Australia since 2001 Currently wns and perates the Granny Smith, St Ives, Agnew, and Darlt gld mines lcated in Western Australia, prducing 466kz f gld in H Gld Fields Australia is led by a highly experienced Senir Management Team Strng relatinships exist between the Gld Fields and Gld Rad acrss multiple levels f the respective rganisatins Recent develpment activities ver last 3 years in Western Australia include: Invincible pen pit at St Ives, significant mine extensins t the Wallaby Mine at Granny Smith, and new gas-fired pwer statin at Granny Smith Extensive and diverse glbal grwth pipeline with fur majr Develpment and Feasibility prjects Ttal managed gld-equivalent Mineral Reserves f 64 millin unces and Mineral Resurces f 155 millin unces Gld Fields has a market capitalisatin f circa A$5 billin and is listed n the JSE Limited (primary listing), the New Yrk Stck Exchange (NYSE), NASDAQ Dubai Limited, Eurnext in Brussels (NYX) and the Swiss Exchange (SWX) 9

10 Appendix A: Abut Gld Fields The Gld Fields Glbal Presence 10

11 Appendix B: Key Gruyere Jint Venture terms Item Structure Develpment Plan Tenements Manager Oversight Gvernance Rights Reginal MU Key Terms Gld Fields and Gld Rad have established a 50:50 unincrprated jint venture t develp and perate the Gruyere Prject Bth parties will assume respnsibility fr their respective share f pst-feasibility Study expenditure Initial Develpment Prgram and Budget agreed and cmmitted t prgressing t cnstructin phase Immediate pririties include EPC, Bulk Earthwrks and Pwer Supply cntracts, purchasing lng lead items and cmmencing FEED Gruyere Jint Venture tenements include thse under the Gruyere Mining Lease, including the YAM14 and Tt Prspects, and the Central Bre, Attila and Alaric depsits Gld Rad will cntinue t manage the Gruyere Gld Prject during a transitin perid f up t 6 mnths pst cmpletin, after which Gld Fields will becme the Manager n a n prfit / n lss basis All f the existing Gruyere Owner s Team will be transferred t the Gruyere Jint Venture, with Gld Rad able t secnd up t five emplyees t the develpment r prductin teams Gld Rad will cntinue t manage agreed explratin activities n the Jint Venture tenements A Management Cmmittee, tgether with Technical and Steering Cmmittees, will be frmed during the develpment and cmmissining stages f the Gruyere Jint Venture, with equal membership frm bth JV partners Cmmittees respnsible fr prviding versight f the Manager and apprving key decisins including business plans and budgets Gld Rad and Gld Fields will initially have the right t appint three representatives each t the respective cmmittees The initial Chairpersn will be appinted by Gld Rad during the transitin perid, after which the right t nminate the Chairpersn will rtate every 12 mnths unless changed by supermajrity vte. The Chairpersn will nt hld a casting vte Pre-emptive rights will exist in relatin t the transfer f all r part f a Jint Venturer s interest t a nn-affiliated party, except in relatin t a change f cntrl at the listed parent cmpany level Reginal MU expected t prvide a platfrm fr reasnable access fr Gld Rad t the prcessing plant and extensive site infrastructure develped at the Gruyere Prject acrss its 100%-wned Nrth Yamarna and 50%-wned Suth Yamarna tenements 11

Appendix C: Gruyere Feasibility Highlights 1 Ore Reserve f 91.6 Mt @ 1.20 g/t Au fr 3.52 Mz 1 >3.

12 Appendix C: Gruyere Feasibility Highlights 1 Ore Reserve f g/t Au fr 3.52 Mz 1 >3.2 Mz f gld prduced ver 13 years First gld pur in Q Average annual prductin f 270,000 unces Ttal Capital A$507M 2,3 (US$370M 4 ) Ttal Susex A$77M (US$56M 4 ) Pre-tax cashflw f A$1.22B 5 (US$892M 4 ) AISC f A$945 (US$690 4 ) per unce gld A$730M EBITDA ver first 4.5 years prductin Prject payback 48 mnths 5 (33% f LOM) NPV 6 f A$486M (US$355M) pre-tax and A$305M (US$223M) pst-tax 1 Refer t ASX annuncement dated 19 Octber 2016 and Appendix 3 2 Csts are estimated includes cntingency and with a Q Base Date t accuracy f -10%/15% 3 The frecast capital cst including ptential escalatin t Prject cmpletin (Q4 2018) is estimated t be A$514M 4 Exchange rate f A$1.00:US$ FS financials calculated at A$1,500/z gld price 6 8% Discunt rate applied t NPV 12

Appendix D: Crprate Summary Share price perfrmance Gruyere Maiden Resurce 3.8Mz Gruyere Discvery Gruyere Scping Study Gruyere Resurce 5.

Pyle Sharn Warburtn Kevin Hart Nn-Executive Chairman Managing Directr & CEO Executive Directr Explratin & Grwth Nn-Executive Directr Nn-Executive

Macquarie Haywd Securities Argnaut RBC Canaccrd Bell Ptter Petra Capital Eagle Research Capital Structure Issued Shares 1 As at 4 Nvember 2016,

13 Appendix D: Crprate Summary Share price perfrmance Gruyere Maiden Resurce 3.8Mz Gruyere Discvery Gruyere Scping Study Gruyere Resurce 5.6Mz NT Agreement & Mining Lease Gruyere PFS & Maiden Reserve Gruyere Feasibility Study Gld Rad Bard Tim Netscher Ian Murray Justin Osbrne Martin Pyle Sharn Warburtn Kevin Hart Nn-Executive Chairman Managing Directr & CEO Executive Directr Explratin & Grwth Nn-Executive Directr Nn-Executive Directr Cmpany Secretary Sharehlder Base (Tp 20 = 60%) Substantial Sharehlders: RCF ~10% Platypus ~7% Van Eck ~6% Masn Hill/Equinx ~6% Research: Macquarie Haywd Securities Argnaut RBC Canaccrd Bell Ptter Petra Capital Eagle Research Capital Structure Issued Shares 1 As at 4 Nvember 2016, based n last clse price f A$0.63 per share. 2 As at 30 September 2016 (unaudited) 870M Perfrmance Rights 8.8M Unlisted Optins 3.0M Market Cap A$548M 1 Cash A$79M 2 13

14 Appendix E: Gld Rad Cmpetent Persn Statement The infrmatin in this reprt which relates t Explratin Results is based n infrmatin cmpiled by Mr Justin Osbrne. The infrmatin in this reprt that relates t the Mineral Resurce Estimatin fr Gruyere is based n infrmatin cmpiled by Mr Justin Osbrne, Executive Directr fr Gld Rad and Mr Jhn Dnaldsn, Principal Resurce Gelgist fr Gld Rad. Mr Osbrne is an emplyee f Gld Rad, as well as a sharehlder and share ptin hlder, and is a Fellw f the Australasian Institute f Mining and Metallurgy (FAusIMM ). Mr Dnaldsn is an emplyee f Gld Rad as well as a sharehlder, and is a Member f the Australian Institute f Gescientists and a Registered Prfessinal Gescientist (MAIG RPGe Mining 10147). Messrs Osbrne and Dnaldsn have sufficient experience that is relevant t the style f mineralisatin and type f depsit under cnsideratin and t the activity being undertaken t qualify as Cmpetent Persns as defined in the 2012 Editin f the Australasian Cde fr Reprting f Explratin Results, Mineral Resurces and Ore Reserves. The infrmatin in this reprt that relates t the Mineral Resurce Estimatin fr Attila Trend is based n infrmatin cmpiled by Mr Justin Osbrne, Executive Directr fr Gld Rad, Mr Jhn Dnaldsn, Principal Resurce Gelgist fr Gld Rad and Mrs Jane Levett, Senir Resurce Gelgist fr Gld Rad. Mr Osbrne is an emplyee f Gld Rad, as well as a sharehlder and share ptin hlder, and is a Fellw f the Australasian Institute f Mining and Metallurgy (FAusIMM ). Mr Dnaldsn is an emplyee f Gld Rad as well as a sharehlder, and is a Member f the Australian Institute f Gescientists and a Registered Prfessinal Gescientist (MAIG RPGe Mining 10147). Mrs Levett is a part time emplyee f Gld Rad, and is a Member f the Australasian Institute f Mining and Metallurgy and a Chartered Prfessinal (MAusIMM CP ). Messrs Osbrne and Dnaldsn and Mrs Levett have sufficient experience that is relevant t the style f mineralisatin and type f depsit under cnsideratin and t the activity being undertaken t qualify as Cmpetent Persns as defined in the 2012 Editin f the Australasian Cde fr Reprting f Explratin Results, Mineral Resurces and Ore Reserves. The infrmatin in this reprt that relates t the Mineral Resurce Estimatin fr Central Bre is based n gestatistical mdelling by Ravensgate using sample infrmatin and gelgical interpretatin supplied by Gld Rad. The Mineral Resurce estimates were undertaken by Mr Craig Harvey, previusly Principal Cnsultant at Ravensgate and Mr Neal Legg, Principal Cnsultant at Ravensgate. Messrs Harvey and Legg are bth Members f the Australian Institute f Gescientists. Messrs Harvey and Legg have sufficient experience relevant t the style f mineralisatin and type f depsit under cnsideratin and t the activity which they are undertaking t qualify as a Cmpetent Persn as defined in the 2012 Editin f the Australasian Cde fr Reprting f Explratin Results, Mineral Resurces and Ore Reserves. The infrmatin in this reprt that relates t Ore Reserves is based n infrmatin cmpiled by David Varce f AMC Cnsultants, a cmpetent persn wh is a Member f The Australasian Institute f Mining and Metallurgy. Mr Varce has sufficient experience that is relevant t the style f mineralisatin and type f depsits under cnsideratin and t the activity currently being undertaken t qualify as a Cmpetent Persn as defined in the 2012 Editin f the Australasian Cde fr Reprting f Explratin Results, Mineral Resurces and Ore Reserves. The Cmpany cnfirms that it is nt aware f any new infrmatin r data that materially affects the infrmatin included in the riginal market annuncements and, in the case f estimates f Mineral Resurces and Ore Reserves, that all material assumptins and technical parameters underpinning the estimates in the relevant market annuncements cntinue t apply and have nt materially changed. The Cmpany cnfirms that the frm and cntext in which the Cmpetent Persns findings are presented have nt materially changed frm the riginal market annuncement. 14

15 Appendix F: Gld Rad Mineral Resurce Table Prject Name Tnnes (Mt) Grade (g/t Au) Cntained Metal (Mz Au) Gruyere 1 (2016) (0.5 g/t) Measured Indicated Inferred Central Bre 2 (2013) (1.0 g/t) Measured Indicated Inferred Attila Trend 3 (2015) (0.7 g/t) Measured Indicated Inferred Ttal Mineral Resurce NOTES: 1. Gruyere Mineral Resurce reprted t JORC 2012 standards, at 0.5 g/t Au cut-ff (refer ASX annuncement dated 22 April 2016). 2. Attila Trend Mineral Resurce (including Attila Suth and Alaric 3) reprted t JORC 2012 standards, at 0.7 g/t Au cut-ff (refer ASX annuncement dated 16 September 2015). 3. Central Bre Mineral Resurce reprted t JORC 2012 standards, at 1.0 g/t Au cut-ff (refer Annual Reprt dated 15 Octber 2014). 4. All figures are runded t reflect apprpriate levels f cnfidence. Apparent differences may ccur due t runding. 15

16 Appendix G: Gld Rad Gruyere Ore Reserve Table Ore Reserve Categry Tnnes (Mt) Grade (g/t Au) Cntained Metal (Mz Au) Prved Prbable Ttal Ore Reserve NOTES: 1. The Ore Reserve cnfrms with and uses the JORC 2012 Cde definitins (Refer ASX annuncement dated 19 Octber 2016) 2. The Ore Reserve is evaluated using a gld price f A$1,500/z 3. The Ore Reserve is evaluated using a 0.5 g/t cut-ff 4. Ore blck tnnage dilutin averages 3.2%; Ore blck gld lss is estimated at 1.4% 5. All figures are runded t reflect apprpriate levels f cnfidence 6. Apparent differences may ccur due t runding 7. A ttal f 407 kt at 0.87 g/t fr 11.4 kz at 0.5 g/t Au cut-ff f Inferred Mineral Resurce assciated with the dispersin blanket Dmain is cntained within the FS pit design (with the majrity lcated within Stage 2). This xide material has nt been included in the ptimisatin, the Ore Reserve estimate nr the FS prcessing schedule and presents ptential upside subject t further definitin with RCdrilling 16

17 17

For personal use only

For personal use only ASX ANNOUNCEMENT / MEDIA RELEASE ASX: ABU 14 April 2015 Further Update n the Develpment f the Old Pirate High Grade Gld Depsit ABM Resurces NL ( ABM r the Cmpany ) is pleased t annunce an update n the