The Road to Production
Kobada Gold Project
MINING LICENSE GRANTED
ENVIRONMENTAL PERMITS APPROVED
PRODUCTION READY
Investor Presentation
February 2016
1
Corporate Fact Sheet
Trading Symbol
Toronto, Canada – TSX-V: AGG
Capitalization
Common Shares
Options
Warrants
250,483,600
15,917,000
79,799,591
Fully Diluted
330,283,191
Stock Performance
Share Price (Feb 12, 2016)
52-week Range
Avg. Daily Volume (3 month)
Market Capitalization
C$0.045
C$0.03-$0.07
112,000
~C$11.3 MM
Nil
C$272,000
Debt
Cash (Feb 5, 2016)
Sale of Ghana assets about to release a further US$1 million
Major Shareholders
Georges Cohen
Sentry Select
Sprott Asset Mgmt
TD Securities
18.5%
5%
4%
2%
Insider ownership
+30%
2
AGG – Management & Board
Management Team
Declan Franzmann, FAusIMM, President and CEO
 Mining engineer with 23 years of mining and management experience;
 Significant experience in gold projects, both hard and soft rock environments;
 Track record in project development and operations.
Torben Michalsen, Chief Operating Officer
 Engineer with 15 years of resource industry experience;
 Significant experience with developing gold projects in remote locations (Guyana Goldfields Inc).
Michael A. Nikiforuk, Director, Past President and Founder
 Former Vice President, Corporate Development and Former Director, Banro Resource Corp.
 Focus on corporate social responsibility programs, community stakeholder and government relations initiatives.
Marco J. Durante, Director, Secretary and Founder
 Substantial past experience with mining companies including Banro Resource Corporation and Lyndex Exploration;
 Focus on Investor Relations strategies and financing initiatives.
Sékou Konate, Country Manager, Mali
 Significant and invaluable experience facilitating exploration and mining activities in Mali.
Jaimie MacPherson, Chief Financial Officer
 String background in public company accounting, audit and corporate governance.
Board of Directors
David S. Brown, LL.B, Chairman
 Partner, Corporate Practise, WeirFoulds LLP, Toronto, Canada;
 Founding President & Director Private Capital Markets Association of Canada;
 Past Chair & Co-Founder, Toronto Venture Group and Toronto Angel Group (now the Maple Leaf Angels).
Pierre Lalande, P. Geo., Director
 40 years field experience – 35 years West African experience, 10 years as AGG’s Chief Geologist.
Dr. Antony Harwood, BSc(Honours), PhD Eco. Geology, Director
 CEO of Montero Mining & Exploration;
 Vice President of Placer Dome (1998 – 2006);
 Significant geological and management experience throughout Africa.
Georges Cohen, Director




Chairman and CEO of Robex Resources;
Significant corporate and management experience in Cap Gemini Group;
Founder of Transiciel and oversaw its integration into Cap Gemini Group;
Grenada’s Ambassador to the United Nations.
3
Mali
Fostering Development
 Project is located in relatively
stable southern Mali.
 Mali has a long history of gold
production and is the 3rd largest
gold producer in Africa.
 Major mining companies (with
Mali gold production):

Randgold Resources (749koz per annum)

Resolute Mining Ltd (165koz per annum)

IAMGold (60koz per annum)

Anglogold Ashanti (60koz per annum)
 Active mining culture and
experienced work force.
 Favorable fiscal regime with
accelerated depreciation.
 Government supportive of mining
investment.
4
Corporate Strategy
Mine Development
Our Vision
To be a +50,000 oz
Au per annum
producer
 Targeting the processing of 1.6 million
tonnes of ore per annum
 Simple Mining + Simple Processing
= Low capital costs
 Simple Mining + Simple Processing
= Low operating costs
5
Kobada Development
Development Status
 Mining License approved 31 July 2015;
 Environmental Permit for Kobada Project granted 2 June 2015;
 Community Development Plan completed (essential in permitting process);
 Planning permission for road upgrade granted;
 Feasibility Study completed and about to be published.
 Negotiation of Malian Government participation yet to commence.
 AGG is seeking funding solutions to build the project.
6
Kobada Development
Tenement Status
Mining License
• covers an area of 135.7 km2;
• “Decret No 2015‐0528/PM‐RM issued on 31 July 2015. Exploration License
• The remaining area (79.3km2) of
AGG’s concessions are covered
by the original exploration
permit
which
was
the
amalgamation
of
several
permits under “Arrete No 2012‐
2338/MCMI‐SG” on August 9th,
2012. This document is also
provided in Appendix A.
7
Kobada Development
Ownership Structure
8
Feasibility Study
Economics
Total pre production capital expenditure of US$45 million;
Production planned to commence September 2017;
High early cash flows from starter pits with higher grade and lower strip ratio;
Payback of pre‐production capital in 2.6 years from commitment to build;
Total project cash flow of US$122 million over eight years of production (US$1,200 per oz).
Project Cash Flow
$40
$122 $36 $20
$20 $15 $10
$13 $17 $(0.8)
$(13)
$(10) $(13.0)
$(24)
$(13)
$(11.2)
$18 $(10.8)
$80 $(4.3)
$19 $23 $63 $80
$18 $46 $‐
$(20)
$120
$103 $(2.5)
$(2.7)
$(1.3)
$(3.0)
$40
$33 $(2)
$‐
$(32.5)
Cumulative Cash Flow USD millions
$30
USD millions
•
•
•
•
•
$(30)
$(37)
$(40)
$(40)
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Year of Production
Total CAPEX [LHS]
Cash Flow (after tax) [LHS]
Cumulative Cash Flow [RHS]
9
Feasibility Study
Economics
Year
Production
Ore Mined
Gold Grade
Contained Gold
Waste Mined
Total Tonnes Mined
Total BCM Mined
Production Summary
Total
000t
g/t
000oz 000t
000t
000 BCM
Strip Ratio
000t
000oz
%
000oz
Gold Price US$/oz 2017
2018
2019
2020
2021
2022
2023
2024
2025
12,735 1.25 511 41,811 54,547 26,847 951 1.49 46 1,689 2,640 1,212 1,807 1.34 78 3,125 4,932 2,379 1,338 1.22 52 9,125 10,463 5,058 1,505 1.18 57 9,572 11,077 5,503 1,842 1.18 70 7,179 9,021 4,508 1,311 1.15 49 3,763 5,073 2,530 1,598 1.19 61 3,570 5,168 2,581 1,564 1.25 63 2,964 4,528 2,260 819 1.36 36 824 1,643 815 3.28 1.78 1.73 6.82 6.36 3.90 2.87 2.23 1.89 1.01 1,601 72 84%
60 1,601 64 82%
53 1,605 61 81%
50 1,601 61 81%
49 1,601 60 81%
48 1,601 61 81%
50 1,605 64 82%
53 1,002 43 83%
36 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 W:O
Tonnes Processed
Contained Gold
Recovery
Gold Recovered
2016
12,735 511 82.2%
420.460 518 25 85%
22 1,200 Income Statement
Income Statement
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Gold revenue
Mali Government Royalty
Net Revenue
$MM
$MM
$MM
505 (15)
489 ‐
‐
‐
25.9 (0.8)
25.1 72.3 (2.2)
70.1 63.7 (1.9)
61.8 59.9 (1.8)
58.1 59.2 (1.8)
57.4 57.7 (1.7)
56.0 59.5 (1.8)
57.7 63.3 (1.9)
61.4 43.0 (1.3)
41.7 Mining Costs
Processing Costs (incl. transport & refining)
Site General & Administrative
Cash Operating Costs
$MM
(107)
‐
(7.2)
(12.9)
(11.2)
(13.0)
(17.2)
(13.4)
(14.1)
(12.8)
(5.3)
$MM
$MM
$MM
(83)
(44)
(234)
‐
‐
‐
(3.5)
(2.5)
(13.1)
(10.4)
(5.2)
(28.5)
(10.5)
(5.6)
(27.3)
(10.5)
(5.6)
(29.1)
(10.4)
(5.5)
(33.1)
(10.5)
(5.3)
(29.2)
(10.4)
(5.4)
(29.9)
(10.4)
(5.3)
(28.5)
(6.9)
(3.2)
(15.4)
Operating Margin ‐ before depreciation
$MM
255 ‐
12.0 41.6 34.6 29.0 24.3 26.8 27.8 32.8 26.3 Depreciation
Debt interest and fees
Income before Tax
$MM
$MM
$MM
(82)
(2)
172 ‐
‐
‐
(5.8)
(0.1)
6.1 (16.2)
(0.2)
25.2 (15.6)
(0.2)
18.8 (12.3)
(0.2)
16.6 (4.6)
(0.2)
19.5 (5.2)
(0.2)
21.4 (6.3)
(0.2)
21.3 (7.5)
(0.2)
25.1 (8.7)
(0.1)
17.5 Mali Tax
Other Tax
After Tax Net Income
$MM
$MM
$MM
(52)
‐
120 ‐
‐
‐
(1.9)
‐
4.2 (5.4)
‐
19.7 (3.6)
‐
15.2 (3.9)
‐
12.7 (6.8)
‐
12.7 (7.5)
‐
13.9 (7.5)
‐
13.8 (8.8)
‐
16.3 (6.1)
10‐
11.4 Feasibility Study
Economics
Cash Flow Calculation
Cash Flow Calculation
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Net Income
Add back: Depreciation
Add back: debt interest and fees
Total Adjustments
$MM
$MM
$MM
$MM
120 82 2 84 ‐
‐
‐
‐
4.2 5.8 0.1 5.9 19.7 16.2 0.2 16.4 15.2 15.6 0.2 15.7 12.7 12.3 0.2 12.5 12.7 4.6 0.2 4.8 13.9 5.2 0.2 5.4 13.8 6.3 0.2 6.5 16.3 7.5 0.2 7.7 11.4 8.7 0.1 8.8 Accounts Recievable
Accounts Payable
Total Change in Working Capital
$MM
$MM
$MM
‐
‐
0 ‐
‐
‐
(3.4)
1.2 (2.1)
0.5 (0.0)
0.4 0.2 0.1 0.2 0.3 0.0 0.3 (0.1)
0.1 0.0 0.0 (0.2)
(0.1)
(0.1)
0.0 (0.1)
(0.2)
(0.0)
(0.2)
2.7 (1.2)
1.5 Initial Capex Sustaining Capex
Capitalised waste mining
Working capital
Free Cash Flow
$MM
$MM
$MM
$MM
$MM
(45)
(16)
(21)
‐
122 (13.0)
‐
‐
‐
(13.0)
(32.5)
‐
‐
(2.1)
(24.5)
‐
(0.1)
(0.7)
0.4 35.7 ‐
(1.8)
(9.4)
0.2 20.0 ‐
(2.0)
(8.8)
0.3 14.6 ‐
(2.2)
(2.0)
0.0 13.2 ‐
(2.5)
‐
(0.1)
16.7 ‐
(2.7)
‐
(0.1)
17.5 ‐
(1.3)
‐
(0.2)
22.5 ‐
(3.0)
‐
1.5 18.7 Equity Distribution / Funding
Government Free Carry
AGG Net Equity Distribution $MM
$MM
$MM
122 12 109 (13.0)
‐
(13.0)
(24.5)
‐
(24.5)
35.7 ‐
35.7 20.0 2.0 18.0 14.6 1.5 13.1 13.2 1.3 11.9 16.7 1.7 15.0 17.5 1.8 15.8 22.5 2.3 20.3 18.7 1.9 16.9 Project Sensitivity to Gold Price
Gold Price
After tax Project cashflow
US$/oz
US$MM
900 1,000 38 68 Project NPV5.0% after tax
Project IRR
Payback Period
US$MM
%
years
22 17%
5.8 45 28%
3.4 1,100 95 1,200 122 1,300 148 1,400 174 66 36%
2.8 86 43%
2.6 106 49%
2.4 126 55%
2.3 11
Feasibility Study
Economics
Life of mine All in Sustaining Cost (AISC) of US$788 per ounce;
Cash cost of US$557/oz;
Capital Expenditures of US$195/oz;
Royalties US$36/oz (3% of gross revenue);
Average production of 52,600 ounce per annum over 8 years.
Gold Production and Cost
1,000
912 842 60,000
865 801 779 900
750 766 720 708 50,000
40,000
800
700
600
$672
$607
30,000
$607
$583
$474
$603
500
$541
$513
$429
20,000
400
300
200
10,000
Production Cost US$/oz Au
70,000
Au ouces produced
•
•
•
•
•
100
0
‐
2017
2018
2019
2020
2021
2022
2023
2024
2025
Year of Production
Gold Production (oz) [LHS]
Cash Operating Cost [RHS]
AISC [RHS]
12
Feasibility Study
Geology and resource
13
Feasibility Study
Geology and resource
Total Mineral Resource
Mineral Resource Category
Measured
Indicated
Total M&I
Inferred
Kobada Gold Project Mineral Resource, November 2015
Lower Cutoff Grade
Tonnes
Average Grade (g/t Au)
(Mt)
(g/t Au)
0.3
11.0
1.1
0.3
24.4
1.1
0.3
35.4
1.1
0.3
32.8
1.0
Gold Metal
(kozs)
380
835
1,215
1,024
Oxide Mineral Resource
Oxide Mineral Resource – November 19, 2015 (0.3g/t cutoff)
Oxide Mineral Resource
Mineral Resource Category
Mt
Au g/t
koz
Measured and Indicated
18.1
1.1
622
Inferred
10.3
0.9
290
Geology at surface
• Feasibility only processes oxide ore types;
• Orebody consists mostly saprolite rock type which is mostly comprise of clay;
• Weathering profile is very deep, with saprolite present to 120m below surface;
• Around 10% of resource is contained in laterite, which overlies the saprolite orebody.
14
Feasibility Study
Mining
Mineral Reserve Estimate (cut off 0.53g/t Au and US$1200/oz Au)
Category
Tonnes
(Mt)
Average Grade (g/t Au)
Gold Metal
(kozs)
Measured
5.7
1.22
225
Indicated
7.0
1.27
286
Total Proved and Probable
12.7
1.25
511
Material Mined (Mt)
• Mining of oxide ore only;
• Two pits over 2.5km of strike;
• Use of local Malian mining contractor.
12.0
12.0
10.0
10.0
8.0
8.0
6.0
6.0
4.0
4.0
2.0
2.0
‐
‐
2017
2018
2019
Waste mined
2020
2021
2022
Year
Ore Mined
2023
2024
2025
Strip Ratio W:O
15
Strip Ratio (Waste to Ore)
Note: Appropriate rounding has been applied.
Feasibility Study
Processing
Simple processing methodology to take advantage of the Kobada ore types.
• Gold distribution is significantly coarser (+100mm) than saprolite matrix (‐100mm);
• 70% of plant feed can be rejected with cyclones immediately after washing and crushing with less than 6% loss of gold;
• Less than 5% of process feed is produced as a concentrate, which is then ground and leached. This lowers CAPEX and OPEX, but achieves recovery greater then 82%. General arrangement of plant
Processing consists of:
1. Pre‐concentration;
2. Gravity concentration;
3. Grinding and leaching of concentrates; 4. Recovery of gold from cyanide solution;
5. Cyanide destruction of leached tailing. Overall recovery > 82.1% with a constant tail grade of 0.23g/t expected .
16
Feasibility Study
Processing
Processing Flow Sheet
17
Feasibility Study
Capital Expenditure
Summary of Capital Expenditures
Item
Processing Plant
Tailing Storage
General Infrastructure
Owners Costs
Contingency Capitalised waste mining
Closure
Total Capital
Pre‐production
$ millions
35.8 3.3 2.9 3.0 0.4 ‐
‐
45.4 Sustaining
$ millions
2.2 9.6 ‐
‐
‐
21.0 4.0 36.7 TSF design to 24Mt capacity
Key Capital Projects
•
•
•
•
•
•
•
•
•
•
•
•
Process plant and equipment – US$22.4 million;
EP and Project Management – US$3.1 million;
Plant transport and shipping – US$1.6 million;
Earthworks and civils – US$0.9 million;
Plant Construction – US$5.8 million;
Plant Commissioning ‐ US$2 million;
Access infrastructure (bridge and community roads) – US$2.9 million;
Accommodation camp, offices, medical centre –
US$1.4 million;
Tailings storage facilities – US$12.6 million over LOM (for 12.7Mt of processed ore);
Security fencing – US$0.4 million;
Capitalised waste stripping (2018 to 2021) –
US$21 milllion;
Closure costs – US$4 million.
18
Feasibility Study
Operating Costs
Mining operating costs
Item
Technical services
Grade control drilling
Drill and Blast
Load and haul
Dayworks and subcontracting
Total Mine
G&A costs
LOM US$ million
US$/t mined US$/t ore
6.6 0.12 0.52 14.2 0.26 1.11 0.5 0.01 0.04 63.9 1.17 5.02 43.0 0.79 3.38 128.2 2.35 10.07 Process operating costs
Item
Utilities (Power and Water)
Labour and Administration
Reagents
Consumables
Maintenance
Laboratory
Miscellaneous (Incl. Mobile Vehicles)
Total
LOM US$ millions
31.3 7.1 5.8 10.5 14.8 6.3 7.6 83.4 US$/t ore
2.46 0.56 0.46 0.82 1.16 0.50 0.60 6.55 Item
General Aministration
Community Relations
Emergency Response
Safety, Health & Environment
Medical Clinic
Security
Warehouse & Logistics
Training Accomodation
Total
LOM US$ million
US$/t ore
11.5 0.90 7.5 0.59 0.7 0.05 1.4 0.11 3.0 0.23 4.8 0.38 1.6 0.12 1.1 0.09 13.5 1.06 45.1 3.54 Summary of operating costs
US$45.1 M, 18%
Mining
US$128.2 M, 50%
US$83.4 M, 32%
Processing
G&A
19
Exploration Potential
Improve project outcomes
There are significant exploration
opportunities on the mining and
exploration licenses.
There is an inferred resource of
10.3Mt at 0.9g/t (290,000 ounces) to
the immediate north and south of the
reserve pits. A minor amount of
drilling will improve the resource
confidence.
Exploration targets
The resource covers around 4km of
strike length. There is at least another
8km of strike with enough information
to indicate mineralisation exists. The
company plans to initially target
shallow resource (~25m) to extend
the initial years of low waste stripping
requirements.
20
Recent Work Program
Mess hall & kitchen under construction
New accommodation modules
Recently completed drilling
for metallurgical and geotechnical testwork.
21
Why Invest in AGG?
Look beyond the Explorer….
 Scalable modular production
 Simple open pit – free digging materials
 Excellent metallurgical characteristics – high mass rejection
with high gold recovery
Look beyond the Market….
 Simple mining + simple processing = Low CAPEX
 Simple mining + simple processing = Low OPEX
 High free cash flow = fast payback
Look beyond the Deposit….
 Kobada – 2.1 M ounces of Mineral Resource;
Brownfields exploration targets with potential to double oxide
resource base.
22
The Road to Production
Low Cost Gold from Southern Mali
Investor Relations
[email protected]
+61 438 758 960
www.africangoldgroup.com
23