©2015, Mwana Africa PLC, All Rights Reserved
INVESTOR PRESENTATION
APRIL 2015
www.mwanaafrica.com
Kalaa Mpinga, CEO
121 Mining Investment Conference
London
20 April 2015
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121 Mining Investment Conference April 2015
1
WHO WE ARE, WHAT WE ARE
•
Mwana – a diversified multi-commodity miner and explorer
•
Producing assets – gold, nickel, diamonds (Zimbabwe and South Africa)
•
Significant resources – gold, diamonds and copper (DRC and Angola)
PRECIOUS
BASE
PROCESSING
ZIMBABWE
DRC
SOUTH AFRICA
ANGOLA
GOLD
GOLD
DIAMONDS
DIAMONDS
NICKEL
COPPER
SMELTER
DIAMONDS
PRODUCTION
RESOURCE
RESTART
121 Mining Investment Conference April 2015
2
RECENT DEVELOPMENTS
•
•
•
Strong progress following strategic review in 2013 reflected in Interim Results to
30 September 2014:
•
Revenue up 30.6% to US$84.9m (H1 FY2014: $65.0m)
•
EBITDA up 32.6% to US$17.1m (H1 FY2014: $12.9m)
•
Profit after tax: US$7.7m (H1 FY2014: $7.5m)
•
Cash: US$6.9m
US$20m bond raised in Q4 FY2015
•
first mining company with both Prescribed and Liquid Asset status in Zimbabwe
to be issued corporate bond
•
bond proceeds to finance Bindura smelter start up
•
re-start scheduled nine months after bond issue closure
Mwana on track to have four operating assets which demonstrate operational progress
121 Mining Investment Conference April 2015
3
STRATEGIC FOCUS
•
Improve the business
•
•
•
improve efficiency
•
improve operational performance
•
add value through smelter restart
Deliver on strategy
•
•
increase production base
revenue growth
Revenue split (per product)
US$m
90
80
70
60
50
40
30
20
10
0
Sep-14
Sep-13
Sep-12
Gold
Sep-11
Sep-10
Nickel
Strengthen the business
•
continue to contain and control corporate costs
•
focus on reducing all-in sustaining cost at operational level
121 Mining Investment Conference April 2015
4
FINANCIAL HIGHLIGHTS: CONTINUOUS IMPROVEMENT
Revenue growth
160
US$m
140
US$ millions
120
100
H1
80
Revenue
FY
FY
FY
FY
H1
2011
2012
2013
2014
2015
43.7
81.3
109.1
142.5
84.9
FY
FY
FY
FY
H1
2011
2012
2013
2014
2015
3.9
17.8
25.0
17.1
60
40
20
0
2011
2012
2013
2014
2015
EBITDA
US$m
30
25
H1
20
US$ millions
15
EBITDA
10
(20.0)
5
0
-5
2011
2012
2013
2014
2015
-10
-15
-20
-25
121 Mining Investment Conference April 2015
5
FINANCIAL HIGHLIGHTS: COST REDUCTION
Exploration spend
18
US$m
16
US$ millions
14
FY
FY
FY
FY
H1
2011
2012
2013
2014
2015
12.3
10.2
15.3
5.3
5.1
FY
FY
FY
FY
H1
2011
2012
2013
2014
2015
7.9
8.0
*8.5
6.4
2.7
12
10
8
H1
Exploration
spend
6
4
2
0
2011
2012
2013
2014
2015
Corporate costs
9
US$m
8
US$ millions
7
6
5
H1
4
3
Corporate
costs
Following a decision to reduce corporate costs, certain staff retrenchment costs and once‐off
costs in respect of restructuring were incurred during the six months ended 30 September
2014 in respect of London, Johannesburg and DRC (SEMHKAT).
2
1
0
2011
2012
2013
2014
2015
121 Mining Investment Conference April 2015
6
©2015, Mwana Africa PLC, All Rights Reserved
OPERATING FOOTPRINT: ZIMBABWE
Commodities: gold, nickel
www.mwanaafrica.com
ZIMBABWE OVERVIEW
•
Politically stable
•
ZANU-PF party in power since 1980 independence
•
Multi-currency system: US$ and ZAR
•
Free movement of investment capital and proceeds
•
Educated workforce: >90% literacy
•
Mining economic underpin: >120 years
•
Infrastructure adequate, developing
•
Robust banking, commercial and financial systems
•
Indigenisation: 51% ownership by Zimbabweans
•
Royalty on Zimbabwean gold producers reduced from 7% to 5% effective 1 October 2014
121 Mining Investment Conference April 2015
8
ZIMBABWE: LOCATIONS
121 Mining Investment Conference April 2015
9
FREDA REBECCA GOLD MINE
•
Freda Rebecca – 85%-owned
•
Zimbabwe’s largest gold producer
•
gold resource: 2.3Moz
•
mine life: +10 years
•
steady-state operations
•
stable workforce
•
58,714oz gold sold in FY2015
•
Mechanised operations from large
underground open stopes offer
low-cost mining
•
Proven mining methods
•
FY2016 gold production in line with
FY2015 production
121 Mining Investment Conference April 2015
10
FREDA REBECCA: PERFORMANCE
Recoveries achieved (% per quarter)
Tonnes milled (per quarter)
350,000
300,000
319,767
90
322,216
297,953
263,531
76.8
80
83
80
77.5
Sep-14
Dec-14
70
250,000
60
200,000
50
150,000
40
30
100,000
20
50,000
10
0
0
Jun-14
Sep-14
Dec-14
Jun-14
Mar-15
Gold ounces produced per quarter
16,555
16,000
14,000
Costs ($/t)
1,400
18,000
14,298
13,503
Mar-15
14,358
1,200
1,304
1,283
1,078
1,062
1,118
1,254
1,076
1,000
850
12,000
800
10,000
600
8,000
6,000
400
4,000
200
2,000
0
0
Jun-14
Sep-14
Dec-14
Mar-15
Jun-14
Sep-14
Cash cost
Dec-14
Mar-15
All-in sustaining cost
121 Mining Investment Conference April 2015
11
FREDA REBECCA: OPERATIONS
Quarter ending
Mar 2014
Jun 2014
Sep 2014
Dec 2014
Mar 2015
279,879
263,531
319,767
322,216
297,953
Tonnes milled
(t)
Head grade
(g/t)
1.91
2.07
2.25
1.89
1.81
Recovery
(%)
83.0
76.8
80.0
77.5
83.0
Gold produced
(oz)
13,380
13,503
16,555
14,298
14,358
Average gold price realised
($/oz)
1,303
1,296
1,272
1,195
1,222
Cash cost
($/oz)
1,060
1,078
880
1,118
1,076
All-in sustaining cost
($/oz)
1,331
1,283
1,062
1,304
1,254
Figures shown are unaudited and may vary upon final audit. Gold ounces produced incorporate gold released from or caught in ‘lock-up’ for each period.
Cash cost per ounce sold includes costs for mining, processing, administration, accounting movements for stockpiles and gold in-circuit, and, net proceeds from by-product
credits. It excludes capital costs for exploration, mine development or processing mill capital works, and, the cost of royalties.
All-in sustaining cost reflects cash costs per ounce sold plus depreciation and amortisation, thus incorporating the capital cost of production, plus interest, other indirect costs and
royalties. All-in sustaining cost represents all costs attributable to gold production over the period.
121 Mining Investment Conference April 2015
12
GOLD PRODUCTION: ORGANIC GROWTH
•
Focus on reducing all-in sustaining cost through efficiency initiatives
•
Partial crushing to ease plant bottleneck, increase production
•
Modifications to tailings retreatment plant to treat the run on mine ore remain under review
•
Near-mine 3rd party feed provides opportunities
•
Resource update
•
Q1 FY2016 production expected to improve on March 2015 quarter
•
sustained recoveries
•
improved mill throughput from secondary crushing
•
grades expected to remain at current levels
121 Mining Investment Conference April 2015
13
BINDURA NICKEL CORPORATION (BNC): OVERVIEW
•
Africa’s only integrated nickel mine, smelter, refinery
•
Built by Anglo American
•
Zimbabwe Stock Exchange Listing: 1971: BINDURA
•
First nickel concentrate shipped to Glencore,
April 2013
TROJAN NICKEL MINE: OUTLOOK
•
Lower production outlook for Q1 FY2016
•
Trojan redeepening and other planned upgrade
•
Annualised production expected to remain flat
121 Mining Investment Conference April 2015
14
TROJAN NICKEL MINE: PERFORMANCE
Tonnes milled per quarter
180,000
Nickel sales (tonnes per quarter)
2,500
161,107
148,882
Head grade (% Ni)
148,712
150,000
140,045
1.8
2,008
2,000 1,871
1.669
1.6 1.519
2,072
1.496
1.4
120,000
1,500
1.156
1.2
1,395
1
90,000
0.8
1,000
60,000
0.6
0.4
500
30,000
0.2
0
0
Jun-14
Sep-14
Dec-14
0
Jun-14
Mar-15
Sep-14
84.1
82.5
80.5
Mar-15
Jun-14
Sep-14
Dec-14
Mar-15
Costs ($/t)
BNC recoveries achieved
(% per quarter)
100
Dec-14
14,000
86.9
11,491
12,000
10,666
10,000
80
8,000
60
8,480
7,454
8,059
7,0107,293
7,392
6,000
40
4,000
20
2,000
0
0
Jun-14
Sep-14
Dec-14
Mar-15
Jun-14
Sep-14
Cash cost
Dec-14
Mar-15
All-in sustaining cost
121 Mining Investment Conference April 2015
15
TROJAN NICKEL MINE: OPERATIONS
Quarter ending
Jun 2014
Sep 2014
Dec 2014
Mar 2015
148,882
161,107
148,712
140,045
1.519
1.496
1.156
1.669
84.1
82.5
80.5
86.9
Tonnes milled
(t)
Head grade
(% Ni)
Recovery
(%)
Nickel in concentrate
(t)
1,902
1,989
1,383
2,032
Nickel sales
(t)
1,871
2,008
1,395
2,072
Average nickel price realised
(US$/t)
11,534
12,085
10,313
9,489
C1 cash cost
(US$/t)
7,454
7,392
10,666
7,010
C3 all-in sustaining cost
(US$/t)
8,480
8,059
11,491
7,293
Figures shown are unaudited and may vary upon final audit.
Cash cost per tonne includes costs for mining, processing, administration, off-take costs and penalties, transport costs, accounting movements for stockpiles, and
net proceeds from by-product credits. It excludes capital costs for exploration, mine development or processing mill capital works, and, the cost of royalties.
All-in sustaining cost reflects cash cost per tonne plus depreciation and amortisation, thus incorporating the capital cost of production, plus interest, other indirect
costs and royalties. All-in sustaining cost represents all costs attributable to nickel production over the period.
121 Mining Investment Conference April 2015
16
NICKEL: VALUE POSITIONING
•
Potential to process PGMs
•
Possible re-start of refinery after smelter
121 Mining Investment Conference April 2015
17
BNC: SMELTER RESTART
•
•
Benefits of smelter restart
•
improved payability
•
eliminate penalty on deleterious minerals
•
significantly reduced transportation costs
•
increased profitability
•
aligns with government strategy of
domestic beneficiation
Smelter expected to be in operation by H2, 2016
121 Mining Investment Conference April 2015
18
AFRICAN DIAMONDS
•
Angola – 18% free-carry in Camafuca,
largest known undeveloped kimberlite
complex
•
DRC – 20% interest in MIBA, mining
and exploration titles
•
South Africa – 70% interest in
Klipspringer mine
Klipspringer, South Africa
121 Mining Investment Conference April 2015
19
KLIPSPRINGER: SOUTH AFRICA
•
•
•
Klipspringer kimberlite diamond mine
•
70:30 JV on diamond production from all sources
•
underground operations on care and maintenance
Klipspringer fine tailings project
•
operated by Greenhurst Mining & Exploration on revenue-share basis
•
present production from 50/50 JV retreatment of surface slimes dams
•
commissioned at no cost to Klipspringer JV partners
•
current operation recovering fine diamonds from Marsfontein slimes deposit
•
contained carats remaining: 458,000ct
•
Klipspringer slimes dams (dams 2 and 3) to be measured
Klipspringer coarse tailings project
•
•
bulk-sampling work planned for Q1 FY2016
Underground – Leopard fissure
•
attributable resource: 1.142Mct
Q4 PRODUCTION AND EXPLORATION April 2015
20
KLIPSPRINGER: PERFORMANCE
Tonnes treated per quarter
Recoveries achieved (% per quarter)
60,000
120
49,939
50,000
44,200
43,493
99.6
98.4
99.7
99.7
Jun-14
Sep-14
Dec-14
Mar-15
100
40,350
40,000
80
30,000
60
20,000
40
10,000
20
0
0
Jun-14
Sep-14
Dec-14
Mar-15
Diamond sales (ct)
Average diamond price (US$/ct)
50,000
25
44,200
45,000
20
20.9
20
40,000
19.3
19.5
Dec-14
Mar-15
35,000
30,000
15
23,150
25,000
20,000
10
15,960
15,000
11,748
10,000
5
5,000
0
0
Jun-14
Sep-14
Dec-14
Mar-15
Jun-14
Sep-14
121 Mining Investment Conference April 2015
21
KLIPSPRINGER: OPERATIONS
Quarter ending
Mar 2014
Jun 2014
Sep 2014
Dec 2014
Mar 2015
Tonnes treated
(t)
16,000
40,350
44,200
49,939
43,504
ROM diamonds produced
(ct)
14,150
23,710
32,425
31,850
17,877
Head grade
(cpht)
88.4
58.8
73.3
63.8
41.1
Recovery
(%)
99.8
99.6
98.4
99.7
99.7
Diamond sales
(ct)
12,860
15,960
23,150
44,200
11,748
Average diamond price
(US$/ct)
21.03
20.00
20.93
19.31
19.50
121 Mining Investment Conference April 2015
22
OPERATING FOOTPRINT: DRC
Zani-Kodo – north-east DRC
•
3Moz gold resource confirmed by drilling
•
Highly prospective greenstone region
•
Located near other operating mines and prospects
Katanga Copper
•
Early phase copper/cobalt exploration
in Katanga province
•
Chinese partners farming in by
financing exploration costs
121 Mining Investment Conference April 2015
23
IN CONCLUSION
•
Proven track record: two mines returned to production
•
Rising cashflows: gold and nickel operations
•
Growing gold production
•
Strategic and highly scaleable position in nickel value chain
•
High prospective copper exploration zones
•
Experienced Board and management team combined mining experience of 200+ years
•
Proven track record ability to deliver variable projects in Sub Saharan Africa
•
Investment offers opportunity to buy into a highly undervalued and successful gold and
nickel operation
121 Mining Investment Conference April 2015
24
APPENDIX 1: EXECUTIVE MANAGEMENT
Executive team with proven ability to deliver in Africa
CEO: Kalaa Mpinga
Financial Director: Yim Kwan
Held senior positions at Bechtel Corporation, Anglo American
Corporation of South Africa (AAC) from 1991. In 1997, became director
of AAC, leaving in 2001 to pursue business opportunities in mining,
founding Mwana Africa Holdings (Pty) Limited.
Chartered accountant with 30 years’ experience in finance, commerce
acquired from positions in accounting firms, private and public
corporations. Formerly a director of TSX-V listed MBMI Resources Inc.,
a mining company focused on exploration, development of nickel
projects in the Philippines.
Executive Vice-President – Operations: James Arthur
BNC Managing Director: Batirai Manhando,
More than 20 years’ mining experience in southern Africa, including
South Africa, Botswana, Zimbabwe and Zambia. Previous managerial
experience in precious metals, base metals and coal. Holds an MBA
and is currently a Fellow of the Southern African Institute of Mining and
Metallurgy (SAIMM).
Total of 22 years’ experience, 14 in senior roles at BNC concentrators,
smelter and refinery, before being appointed COO in 2008. Holds an
MBA and a BSc (Hons) in metallurgical engineering and is a member of
the SAIMM.
Executive Vice-President – Projects: Tom Mashungupa
Freda Rebecca Managing Director: Toindepi Muganyi
Some 23 years’ engineering experience in cement manufacturing, pulp
and paper , mining and process plants. Led project teams in shaft
sinking, winder installations, process plant upgrades as well as furnace
re-builds. Holds BSc (Hons) in mechanical engineering (UZ), MDP
(Unisa) and is a member of the Zimbabwe Institute of Engineers.
More than 18 years’ mining experience in Southern Africa, including
Botswana and Zimbabwe. Recently employed as production manager at
BCL in Botswana and mining manager of African Copper in Botswana.
Holds a BSc mining engineering degree and is a member of SAIMM.
Managing Director - Klipspringer Diamond Mine: Barry Tooth
Head of Group Investor Relations: Caroline Mathonsi
Responsible for Mwana’s diamond interests in Africa. Experience in
diamond, coal, platinum mining operations, opencast and underground.
Began career in 1972 at De Beers, moving subsequently to Anglo
American Coal, then SouthernEra. Part of team to establish
Marsfontein, Klipspringer diamond operations; instrumental in reopening SouthernEra’s platinum section, Messina Platinum’s
Voorspoed Shaft.
Qualified accountant with 13 years UK experience in banking, Fund
management and The Bank of New York Mellon and with CCLA
Investment Management Limited. Holds a BA in Business Administration
and International Finance, PRINCE2 and is a Fellow of the Association
of Chartered Certified Accountants (ACCA).
121 Mining Investment Conference April 2015
25
APPENDIX 2: RESOURCE STATEMENT
Gold resources (100% basis)
Cut off
Reserves
Measured and indicated
TOTAL
Project name
(g/t)
Mt
Grade
(g/t)
Koz
Mt
g/t
Koz
Mt
g/t
Koz
Freda Rebecca
1.5
-
-
-
21.0
2.48
1 675
29.8
2.42
2 314
Zani-Kodo
0.5
-
-
-
5.9
3.33
634
38.0
2.43
2 975
-
-
-
TOTAL
2 310
5 290
Nickel resources (100% basis)
Cut off
Project Name
Grade %
Reserves
Kt
Grade %
Measured and indicated
Ni (t)
Kt
Grade %
TOTAL
Ni (Kt)
Kt
Grade %
Ni (t)
Trojan
0.45%
3 168
1.04%
32 975
4 181
1.25%
52 155
8 219
1.44%
117 971
Shangani
0.40%
-
-
-
2 320
0.58%
13 590
12 030
0.56%
67 870
Hunters Road*
0.40%
-
-
-
36 437
0.55%
200 404
36 437
0.55%
200 404
TOTAL
32 975
266 149
386 245
*The JORC compliant Hunter’s Road resource of 36,437kt is found in the West Ore body of Hunter’s Road and includes 2,377kt of resource which forms part of a 30m cap of oxide ore
mineralisation. In addition, in 1993, an Anglo American MinRED estimate showed 11,000kt grading 0.43% Ni approximately 600m east of the West Ore body of Hunter’s Road which is
not included in the resource shown above.
121 Mining Investment Conference April 2015
26
CORPORATE INFORMATION
Number
of shares
% of
issued capital
China International Mining Group Corporation
299,424,282
21.4%
Lynchwood Nominees Limited*
137,356,388
9.8%
HSBC Client Holdings Nominee (UK) Limited**
126,665,392
9.1%
Yat Hoi Ning
106,709,262
7.6%
Barclayshare Nominees Limited
44,988,683
3.2%
T D Direct Investing Nominees (Europe) Limited
44,354,032
3.2%
Hargreaves Lansdown (Nominees) Limited
43,565,626
3.1%
Major Shareholders
* Includes Smart Landscape Holdings Limited 57,980,796 shares (4.15% of issued share capital) and UBS Zurich 42,493,851 shares (3.04% of issued share capital)
* * Comprises Lansdowne Developed Markets Master Fund
Number of 1p ordinary shares
Ordinary shares in issue 1,397,780,675
Listed on AIM (ticker: MWA)
121 Mining Investment Conference April 2015
27
©2015, Mwana Africa PLC, All Rights Reserved
CONTACT DETAILS
Mwana Africa PLC
Kalaa Mpinga, CEO
Tel: +44 (0) 203 696 5470
www.mwanaafrica.com
Nominated Adviser & Broker
Peel Hunt LLP
Matthew Armitt /Ross Allister
Tel: +44 (0) 20 7418 8900
Public & Investor Relations
Mwana Africa,
Caroline Mathonsi
Tel: +44 (0) 203 696 5470
Mob: +44 (0) 787 675 4360
+263 (0) 772 164 486
Email:
[email protected]
Russell and Associates
Jim Jones/Leigh King
Tel: +27 (0) 11 880 3924
Email: [email protected]
[email protected]