Silver Lake Resources Ltd Les Davis Managing Director

Transcription

1 Silver Lake Resources Ltd Les Davis Managing Director

2 2013 ASX Spot Light Small to Mid Caps Conference New York Les Davis - Managing Director ASX: SLR ABN:

3 Important Notice and Disclaimer Silver Lake Resources Limited has prepared this presentation based on information available to it. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. All dollar terms expressed in this presentation are in Australian dollars unless otherwise stated. To the maximum extent permitted by law, none of Silver Lake Resources Limited, its directors, employees or agents, advisers, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it. This presentation is not an offer, invitation, solicitation or other recommendation with respect to the subscription for, purchase or sale of any security, and neither this presentation nor anything in it shall form the basis of any contract or commitment whatsoever. This presentation may contain forward looking statements that are subject to risk factors associated with gold exploration, mining and production businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimations, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory changes, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. The information in this presentation that relates to mineral resources, mineral reserves and exploration results are based on information compiled by Mr Christopher Banasik who is a Member of the Australasian Institute of Mining and Metallurgy. Any statement herein, direct or implied, as to a potential gold deposit is conceptual in nature and a reference to the targeted gold potential and not to any JORC compliant Mineral Resource. Mr Banasik is a full time employee of Silver Lake Resources Ltd, and has sufficient experience which is relevant to the style of mineralisation under consideration to qualify as a Competent Person as defined in the 2004 edition of the JORC Code. Mr Banasik has given his consent to the inclusion in this presentation of the matters based on the information in the form and context in which it appears. The information in this presentation that relates to exploration and production targets refers to targets that are conceptual in nature, where there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. The information on exploration targets in this presentation are based on a conceptual range of targets as follows: Tonnage range: Grade range: Ounces: 80 million to 120 million tonnes ~3 g/t Au 7 million to 10 million Slide 3

4 Company Overview ASX Code: SLR Ordinary Shares - Fully Diluted million Market Cap: A$2.20 per share A$835 Finance - 31 December 2012 Range (12 month) Average Daily Volume (2013CY) A$28.2M cash & bullion A$75.0M finance facility A$ A$ M shares ($6.8M) Investor Shares (M) % Directors Dynamic Funds Sprott Asset Management Blackrock Acorn Capital Baker Steel Top 20 + Directors Directors Paul Chapman Les Davis Chris Banasik David Griffiths Peter Johnston Brian Kennedy Source: CommSec Chairman Managing Director Director Exploration and Geology Non Executive Director Non Executive Director Non Executive Director Slide 4

5 Company Performance & Key Milestones A$15M exploration programme commenced over large landholding not subjected to modern systematic exploration techniques 2007 Completes IPO in November for $30 million at $0.30 ps 1Moz AU resource base achieved following the acquisition of Comet Gold and Kurrajong nickel projects 2008 First gold bar produced at the Lakewood Gold Processing facility from Daisy Milano ore A$8M net cash flow; A$7.5mm pre-tax unaudited profit $10.7M NPAT in first full year of operation Raised $18M of equity (at $0.79 per share) to accelerate exploration 2009 Poured first pure tonne of gold Discovery of Daisy East and Emma at Mount Monger Discovery of Genesis in the Murchison Poured first 100,000 oz of gold bullion 2010 Awarded 2009 Gold Miner of the Year from Gold Mining Journal and Paydirt Admitted to ASX 300 list of companies Raised $70M of equity (at A$3.40 per share) to develop Murchison & advance base metal exploration 2011 Admitted to ASX 200 list of companies High grade copper discovery at Hollandaire Produced first 250,000 oz of gold Record quarter ounces poured & sold of 28,123 ounces at A$640 C1 Cost 2012 Commenced construction at Murchison Project Acquired Great Southern Assets $28.2M cash and bullion (31 December 2012) FY2009A Number of Operating Mines 1 Life of Mine (years) 3 Market Capitalisation A$M $108 Gold Production (koz) 47.3 Revenue A$M $58.1 EBITDA A$M $19.7 EBITDA Margin 34% NPAT A$M $10.7 FY2012E Number of Operating Mines 5 Life of Mine (years) ~10 Market Capitalisation A$M $700 Gold Production (koz) 83.4 Revenue A$M $135.4 EBITDA A$M $59.0 EBITDA Margin 44% NPAT A$M $ th January 2013: Scheme of arrangement completed with IGR to create a large Australian gold producer Slide 5

6 A Quality, Diversified, Western Australian Portfolio Producing Assets 5,000 sqkm of highly prospective under explored tenements containing gold, silver, copper & zinc Exploration Copper Lakes Rock chip samples: - 26% Cu, 10 g/t Au, 0.1% Co Murchison 1.9Moz gold resource 0.4Moz ore reserve Commissioning - first production March 2013 quarter 1.2mtpa processing facility 14 open pits and 4 underground feed sources Target production rate of 100koz p.a., 8-10 year mine life Eelya Complex 8 large geophysical surface electromagnetic conductors Hollandaire - high grade copper discovery Copper resource of 45.1kt (Supergene zone 4.7% Cu) A$20 million drilling program in progress Great Southern 0.9Moz gold resource 0.5Moz ore reserve Potential third production centre Includes Munglinup exploration project Mount Monger 3.8Moz gold resource 0.9Moz ore reserve In operation - 4 underground mines and 1 open pit mine 2 processing facilities with 2.1mtpa capacity with ability to expand Targeting sustained production of 300koz p.a Expected mine life >10 years 1: Refer to appendix - JORC Resource & Reserve Inventory 2: Mount Monger is inclusive of Aldiss Slide 6

7 Compelling Project Pipeline Producing Murchison Rosemary Daisy Milano Haoma Maxwells OP Stockpiles Wombola Dam Development Magic Haoma West Lorna Doone Majestic Santa UG Cock Eyed Bob UG Maxwells UG Imperial Advanced Exploration Great Southern Hollandaire Hammer & Tap Fingalls Santa Fly Camp Harry s Hill Greenfields Exploration Lake Austin Comet East Copper Lakes Vostok Mount Monger Other Mt Eelya Murchison Other Colonel Randalls Other QE1 Aldiss Other Karonie Spice Peters Dam French Kiss Queen Lapage 1: Size of bubble represents potential minable inventory Refer to disclaimer on slide 2 Slide 7

8 What Do Investors Want In A Gold Company? Management skin in the game SLR directors hold 6.8% Single Asset Risk Diversification Multiple mines & 3 mills Mine Life, Scale & Growth Project Delivery 6.6Moz resource inclusive of 1.8Moz reserves 8-10 year life of mine 2 large production centres targeting 400kozpa Development project & exploration upside Expanded Mount Monger & developed Murchison Gold Project Deliver Operationally Distinguish gold equities from an ETF Mining run rate always achieved Variable ore body difficult to accurately predict grade Managed costs, delivered YOY production & profit growth Diversification = Predictability Maiden dividend in 2014, then yield Slide 8

9 Merger Benefits The expanded Silver Lake becomes one of the largest all Australian gold producers Synergies and Cost Savings Operational Flexibility Outcome Reduction in corporate overheads Multiple underground & open pit operations Predictability Reduction in site overheads Operational efficiency Capacity to treat surface stockpiles and/or fast track project pipe line + = Optimised milling strategy at Mount Monger with 2.1mtpa milling capacity Risk diversification Economies of scale Shared infrastructure Next production centre in the Murchison online March Qtr 2013 Shareholder returns Tenement expenditure Contiguous tenement holding Common contractors Slide 9

10 Merger Synergies - Where are we at? Realised Work In Progress Item Savings per annum A$M Item Savings per annum A$M ~Timing Reduction in corporate overheads 5.0 Connect mains power to Daisy Milano mths Reduction in site overheads 3.5 Reduction in exploration spend at Mount Monger following review & prioritisation 15.0 Total to February Further operational reviews & optimisations mths Potential Target As Per Scheme Booklet = A$30 - A$40 Million per annum Slide 10

11 Mount Monger Operations - Overview + 30koz stockpile koz stockpile 1 1: As at 31 December 2012 Slide 11

12 Mount Monger Business Optimisation Current Production Rate: ~3.0 g/t Au = 190kozpa Enhancing Projects For Optimisation Mine Type Mine Type Daisy Milano Underground Majestic Open Pit Haoma Underground Magic 2 Underground Western Make / Rosemary Maxwells Stockpile Underground Open Pit Surface + Haoma West Wombola Dam Lorna Doone 3 Underground Open Pit Open Pit = Target 1 270koz Cock-Eyed Bob Underground Imperial Open Pit Santa Open Pit Maxwells Underground Lorna Doone 3 Underground Un-Optimised No Mill Expansion 1: Refer to disclaimer on slide 2 This target is not guidance going forward. Production rate going forward is subject to the optimisation results. 2: Requires sulphide flotation 3: Metallurgical test work in progress Results in June 2013 Quarter Slide 12 Optimised Mining Rate & Milling Strategy

13 Daisy Complex - Multiple Underground Mines Christmas Flats Ventilation Shaft Rosemary Dinnie Riggio Western Make East Haoma Open Haoma West Daisy Milano Currently Drilling Current depth of mine development ~640 metres West West Open All accessible from same infrastructure containing 1.1Moz of resource Multiple mines & structures all open at depth SLR production 7.0 g/t Au = 320koz Current endowment 2,000 to 3,000 ounces per vertical metre Mining rate: ~600,000 tonnes per annum Slide 13

14 Maxwells Deposit Large scale open pit: 1.6km long planned to ~140 vertical metres depth grade increasing with depth Mining Reserve (June 2012): 4.3 g/t Au = 115,710 oz Potential underground mine Drilling below planned pit shell includes: 3.4 metres at 12.8 g/t Au from 150 metres 4.6 metres at 21.4 g/t Au from 189 metres 3.0 metres at 39.2 g/t Au from 221 metres Maxwells Open Pit Looking North (December 2012) 2.2 metres at 9.9 g/t Au from 404 metres (deepest drill hole to date) Slide 14

15 Can Mount Monger Become A Gold Camp? Mount Monger Region Produced 0.9Moz c Produced 0.6Moz Golden Mile Produced 55Moz Res s/res v 12Moz Produced 4Moz Res s/res v 2Moz Fragmented for 100 years now unified under SLR ownership Produced 1.5Moz Res s/res v 3.8Moz 1 Produced 11Moz Res s/res v 5Moz 1. Refer to Appendix - JORC Resource & Reserve Inventory Other statistics quoted from public sources Slide 15

16 Feed Sources,000 Murchison - Overview Location Stage First Gold Production Milling & Surface Infrastructure (to Dec 12) 600km North of Perth Commissioning March 2013 Quarter A$67.8 million to 3 production sources at any given time Feed Sources Mining - Planned Feed Sources 14 open pit mines 4 underground mines 1000 Caustons, Comet, Tuckabianna West, Lena Processing 1.2 mtpa g/t Au to 4.5 g/t Au Blended Feed Grade Blended Recovery 92.7% Production FY13: g/t Au LOM: g/t Au FY13: 35koz to 45koz Tuckabianna Pits x 6 Comet Pits x 5 Lena Pits x 3 Resource 1 Reserve 1 1.9Moz 0.45Moz g/t Au to 3.0 g/t Au Mine Life ~8 to 10 years Av. C1 Cash Cost oz A$720 - A$770 0 FY13 FY14 FY15 FY16 FY17 Av.Waste Development (Capital & Pre-Paid) A$26 million per annum Open Pit Underground Sustaining Capital A$4 million per annum 1: Refer to appendix - JORC Resource & Reserve Inventory Slide 16

17 Murchison Mill - Commissioning in Progress Commissioning First gold bar poured 22 February 2013 Multiple ore sources feeding a centralised processing facility Slide 17

18 Eelya Complex - Overview Location Stage Regional Geology 4km North of Tuckabianna Exploration Felsic Volcanic Rocks Potential for VMS mineralisation Copper/Gold Previous Exploration Limited base metal exploration in the 1970 s No meaningful exploration since 1981 Zinc SLR Exploration 8 large electromagnetic conductors over 50 sqkm area Current Exploration $20 million exploration programme in progress Priority Targets Hollandaire, Rapier, Mt Eelya, Colonel Gold Copper/Gold Next Steps Continue exploration Metallurgical test work as drilling progresses Strategy Add copper circuit to Murchison gold mill Modest capex to bring into production Production circa 2015/ : Subject to further exploration and development Refer to disclaimer on slide 2 Slide 18

19 Hollandaire Copper / Gold Discovery Discovered September 2011 Pre-feasibility study due in June 2013 quarter Strategy: develop project for marginal capital cost produce a concentrate for marginal operating cost enhance economics of the Murchison project Current resource Drill core showing supergene chalcocite with copper grades up to 45% Supergene zone averages 4.7% grade Inferred Domain Tonnes Cu Au Ag Cu Metal Au Metal Ag Metal Hollandaire JORC resource as of September 2012 T % g/t g/t Tonnes Ounces Ounces Oxide Au 220, ,900 19,400 Oxide Cu 280, , ,700 Supergene 390, ,500 11, ,700 Primary 1,910, ,700 13, ,000 Total 2,800, ,100 34, ,800 Slide 19

20 Great Southern - Overview Location Stage Regional Geology 450km south east of Perth Advanced exploration Proterozoic & Archean litholigies (Kundip) Volcanic successions (Munglinup) Broome Projects Kundip Gold & Copper Trilogy Polymetallic (Cu, Au, Ag, Zn, Pb) Munglinup Gold Resource 1 Reserves 1 Priority Targets 1.9 g/t Au 20.5 g/t Ag 0.6% Cu 1.8 g/t Au 34.8 g/t Ag 0.8% Cu Kundip Mining Centre Munglinup Next Steps Ramp up exploration in 2013 Resource to Reserve conversion Assess low capital milling options Geraldton Port Hedland Carnarvon Mt Magnet PERTH Leonora Newman Kalgoorlie Laverton Esperance Great Southern Strategy Third production centre Production circa 2016/ : Refer to appendix - JORC Resource & Reserve Inventory 2: Subject to further exploration and development Refer to disclaimer on slide 2 Slide 20

21 Kundip Mining Centre - DFS Outputs Kaolin Open Pit Flag Open Pit Kaolin Underground Harbour View Open Pit Flag Underground Area Mining Reserve 1 Kaolin Open Pit Kaolin Underground Harbour View Open Pit Harbour View Underground Flag Open Pit Flag Underground Total g/t Au 4.4 g/t Au 3.2 g/t Au 3.5 g/t Au 4.0 g/t Au 5.0 g/t Au 3.4 g/t Au Harbour View Underground 1: Refer to appendix - JORC Resource & Reserve summary Excludes Trilogy 2: Rounding may give discrepancies in this table Slide 21

22 Million Ounces Exploration Plan Mount Monger, Murchison & Great Southern: 8 tenement boundary constraints removed 7 6 infill, extensional & green fields 5 Objectives: Moz 1 Au target over time 2 1 Significant gold resource upside: highly prospective, underexplored tenement holding 0 Nov 2007 (IPO) Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jan-13 Future Years Mount Monger Murchison Great Southern results to date support this view continue with A$27 million per annum programme Advance base metal exploration at Eelya Complex: A$20 million exploration programme 1. Refer to Appendix - JORC Resource & Reserve Inventory 2. Refer to disclaimer on slide 2 Slide 22

23 Why Silver Lake Resources? Growth profile to 400,000 oz: excludes production from Great Southern excludes gold production from Hollandaire Risk diversification: multiple mines and mills operational flexibility Financial: substantial cost savings delivered through clear synergies cashflow to internally fund growth plans robust profitable business Large gold resource base with significant upside: 6.6Moz resource inclusive of 1.8Moz of reserves highly prospective, underexplored tenement holding long term commitment to exploration Outcome: one of the largest Australian gold producers well positioned for further growth maiden dividend in 2014 Geraldton Port Hedland Carnarvon Mt Magnet PERTH Broome Leonora Newman Murchison Kalgoorlie Laverton Mount Monger Esperance Great Southern 1: Refer to appendix - JORC Resource & Reserve Inventory 2: Refer to slide 2 - Exploration Targets Slide 23

24 Presentation Appendix ASX: SLR ABN:

25 Gold Resources & Ore Reserves M easured Resources Indicated Resources Inferred Resources T otal Resources Ore Grade T otal Ore Grade T otal Ore Grade T otal Ore Grade T otal Deposit t g/t Au O z Au t g/t Au O z Au t g/t Au O z Au t g/t Au O z Au 000s 000s 000s 000s 000s 000s 000s 000s T otal M ount M onger 3, , , , , , ,756.8 Hollandaire , , T otal M urchison , , , , ,907.7 T otal G reat S outhern , , , T otal 3, , , , , , ,616.8 Proved Reserves Probable Reserves Total Reserves Ore Ore Ore tonnes Grade Total tonnes Grade Total tonnes Grade Total 000s 000s 000s 000s 000s 000s Mount Monger 2, , , Murchison , , Great Southern , , Total Ore Reserve 2, , , , ,792.4 As at June 2012 Gold resources are inclusive of ore reserves Slide 25

26 SLR JORC Base Metal Resource Measured Resources Indicated Resources Inferred Resources Total Resources Ore Ore Ore Ore tonnes Grade Increment Total Unit tonnes Grade Increment Total Unit tonnes Grade Increment Total Unit tonnes Grade Increment Total Unit 000s 000s 000s 000s 000s 000s 000s 000s Kundip Project Silver - - g/t Ag - oz 4, g/t Ag oz 4, g/t Ag oz 8, g/t Ag oz Copper - - % Cu - t 4, % Cu 15.6 t 4, % Cu 14.7 t 8, % Cu 30.2 t Trilogy Project Silver g/t Ag oz 5, g/t Ag 8,859.6 oz g/t Ag 73.4 oz 6, g/t Ag 9,339.7 oz Copper % Cu 0.9 t 5, % Cu 62.3 t % Cu 1.4 t 6, % Cu 64.6 t Hollandaire Silver oz oz 2, g/t Ag oz 2, g/t Ag oz Copper t t 2, % Cu 45.1 t 2, % Cu 45.1 t Total Resource Silver g/t Ag oz 10, g/t Ag 9,213.5 oz 4, g/t Ag oz 17, g/t Ag 10,465.5 oz Copper % Cu 0.9 t 10, % Cu 77.8 t 7, % Cu 61.2 t 17, % Cu t As at September 2012 Slide 26

27 Silver Lake Resources Ltd Les Davis Managing Director