1 / 23

Growing Gold Production in Kazakhstan

Growing Gold Production in Kazakhstan. Annual General Meeting 29 June 2012. Disclaimer. THIS PRESENTATION IS BEING SUPPLIED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED, FURTHER DISTRIBUTED TO ANY OTHER PERSON OR PUBLISHED IN WHOLE OR IN PART, FOR ANY PURPOSE.

blair-gibbs
Download Presentation

Growing Gold Production in Kazakhstan

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Growing Gold Production in Kazakhstan Annual General Meeting 29 June 2012

  2. Disclaimer THIS PRESENTATION IS BEING SUPPLIED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED, FURTHER DISTRIBUTED TO ANY OTHER PERSON OR PUBLISHED IN WHOLE OR IN PART, FOR ANY PURPOSE. This Presentation has been prepared solely to provide a basis for potential investors to further consider whether to pursue a possible acquisition of Ordinary Shares in the Company and does not consider and is not tailored to the specific circumstances or interests (tax, legal or otherwise) of any particular investor. This Presentation does not constitute a prospectus, admission document or listing particulars relating to the Company, nor does it constitute or form part of any offer or invitation to purchase, sell or subscribe for, or any solicitation, invitation or inducement of any such offer to purchase, sell or subscribe for, any interest in securities in the Company nor shall this Presentation or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract thereof. No reliance may be placed, for any purposes whatsoever, on the information contained in this Presentation or on its completeness and this Presentation should not be considered a recommendation by the Company or any of its respective affiliates in relation to any purchase of or subscription for Ordinary Shares. No representation or warranty, express or implied, is given by or on behalf of the Company, or any of their respective directors, partners, officers, employees, advisers or any other persons as to the accuracy, fairness or sufficiency of the information or opinions contained in this Presentation. Save in the case of fraud or fraudulent misrepresentation, no liability is accepted for any errors, mis-statements, omissions or inaccuracies in such information or opinions contained in this Presentation nor for any direct or consequential loss howsoever arising from any use of, or reliance on, this document or otherwise in connection with it. This Presentation is exempt from the general restriction (in section 21 of the Financial Services and Markets Act 2000) on communications, invitations or inducements to engage in investment activity pursuant to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”) on the grounds that it is solely made to and directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the FPO and (ii) high net-worth companies, unincorporated associations and other bodies within the meaning of Article 49 (2) (a) to (d) of the FPO. The investment or investment activity to which this Presentation relates is available only to such persons and will be engaged in only with such persons. Persons who fall outside categories (i) or (ii) above must not attend or receive copies of this Presentation. Any person who does not fall within categories (i) or (ii) above must not rely on or act upon the matters communicated at this Presentation. The distribution of this Presentation in jurisdictions other than the United Kingdom may be restricted by law, and persons into whose possession this Presentation comes must inform themselves about, and observe, all such restrictions. The Company does not accept any responsibility arising from any distribution of this document in such jurisdictions in breach of this obligation. Neither this Presentation nor any copy of it may be (i) taken or transmitted into the United States of America, (ii) distributed, directly or indirectly, in the United States of America or to any US Person (within the meaning of regulation ‘S’ made under the United States Securities Act 1933, as amended), (iii) taken or transmitted into or distributed in Canada or Australia or to any resident thereof, or (iv) taken or transmitted into or distributed in Japan or to any resident thereof. Any failure to comply with these restrictions may constitute a violation of the securities laws or the laws of any such jurisdiction. The distribution of this document in other jurisdictions may be restricted by law and the persons into whose possession this document comes must inform themselves about, and observe, any such restrictions. The Company does not accept any responsibility arising from any distribution of this document in such jurisdictions in breach of this obligation. Safe Harbour statement: this Presentation may contain forward-looking statements that reflect the Company's current expectations regarding future events, including the development of the Company's projects, as well as the Company's working capital requirements and future capital raising activities. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors, including the success of the Company's development strategies, and the ability of the Company to obtain financing for its operations, general political and/or economic instability and the market conditions affecting the availability and terms of such financing. This Presentation is being made available on the basis that the recipients keep confidential any information contained herein or otherwise made available, whether orally or in writing, in connection with the Company. This Presentation is confidential and must not be copied, reproduced, published, distributed, disclosed or passed to any other person at any time without the prior written consent of the Company. Any person attending this Presentation should seek their own independent legal, investment and tax advice as they see fit.

  3. The Company Corporate Overview: Key Executives: • Tim Daffern, Chief Executive Officer • Chartered Mining Engineer (UK), MBA • 24 years international experience in underground and open pit operations • Joined Q4, 2010, 20 months with company • Onsite every month, lives at mine during visits • Baurzhan Yerkeyev, Executive Director • Chairman of Supervisory Boards of Kazakh subsidiary companies • Graduate from Tomsk Polytechnic Institute, Geology (Russia) • Formerly project manager for State Geophysical-Geochemical Expedition • Lives in Kazakhstan, in Ust Kamenogorsk and Almaty • Bill Morgan, Chief Financial Officer and Company Secretary • Chartered accountant (UK) • 32 years accountancy and financial management experience • 9 years in Kazakhstan, lives in local city, Ust Kamenogorsk, • Charles Zorab, Investor Relations – London • Former broker and mining analyst Source: Company – 27.6.2012

  4. A growing gold profile • Sekisovskoye produces from open pit and underground mines • Target production for 2012 - 26,000 oz Au • First underground production commenced in November 2011 • One month ahead of schedule • Agreement signed* with Akmola Gold LLP, Sept. 2011 - purchase of two precious metals projects, Tellur and Stepok • The company is able to develop all projects to reach >100,000 oz /Au • Executed a loan agreement with EBRD for a US$15M loan facility, June 2012 • Exploration potential: underground and nearby properties • Continued appraisal of new projects but remain regionally focused • Forged important local relationships with strong government support • Cash in hand, $10.5M USD, $10M drawdown now received from EBRD Source: Hambledon Mining *subject to certain government waivers and consents

  5. Location of Company’s projects The Republic of Kazakhstan Source: Hambledon Mining North Kazakhstan East Kazakhstan

  6. Hambledon – brief outline • Complete ownership of projects • 100% interest in Sekisovskoye and expected 100% in Tellur and Stepok gives company control over work programmes and revenues • Growing gold production for the next five years • Higher grade from the Sekisovskoye underground ore; feed grade between approx. 3-4 g/t Au • This is after mining and dilution effects • Proposed development and near-term production potential of Tellur and Stepok • Considerable exploration upside potential • 25,000 metre underground exploration campaign well advanced at Sekisovskoye • Tellur / Stepok have combined resources of some 440,000 oz of Au plus Ag and other metals, with considerable up-side potential after further drilling • Successfully delivered underground mine at Sekisovskoye • Commenced underground mining in November 2011 • Current mining on budget, • On-going technical studies to optimise the increase in production • Extensive management experience in operating in the FSU • Active in country since 1998

  7. The 2012 placing and the EBRD equity investment Use of proceeds from 2012 placing, the EBRD equity investment: • Delay to EBRD funding due to Tailings Dam 3 incident • US$1.2M – to repay Alfa Bank loan to release the security / collateral for EBRD loan • US$3.8M – penalties and administrative fines for the Tailings Dam 3 incident • US$2.5M – for repair of Tailings Dam 3 • US$4.0M – for working capital and underground development

  8. European Bank for Reconstruction & Development • The EBRD and Hambledon • EBRD debt facility (US$15M), LIBOR (0.75%) +7% interest rate • US$10M in Q2 2012 • US$5M in Q1 2013, after meeting target of 175,000tpa on a quarterly basis from underground • EBRD Warrants – 30,000,000 (valid for two years, strike price 4.875p) • EBRD Equity Investment (US$3m) - 58,794,708, shares issued • “EBRD will assist Kazakhstan to promote economic diversification and move towards a more sustainable model of financial development. • In its support to the corporate sector, the Bank will address immediate financing needs as part of the EBRD’s best business and environmental practices, and energy efficiency.” The EBRD and Kazakhstan* *Source: EBRD.com

  9. Company project overview Sekisovskoye • Open Pit Mining (Au, Ag) operational since 2007 until Q4, 2014 • Underground Mining (Au, Ag) now operational and progressing as planned Tellur* • Anticipated site establishment H1, 2013 • Anticipated Underground Mining (Au, Ag) to commence H2, 2013 Stepok* • Anticipated site establishment H1, 2014 *subject to certain government waivers and consents

  10. Company strategy We aim to: • Become a significant gold producer in Kazakhstan via organic growth and acquisition • Focus on mineral rich areas of Kazakhstan • Improve productivity of Sekisovskoye and implement cost improvements to reduce operating costs • Use the cash flow from Sekisovskoye open pit mine to fund underground mine exploration and development opportunities • Respect local communities close to the Company’s operations and promote social and economic development schemes to benefit them for the longer term

  11. Sekisovskoye Key points and competitive advantage: • 100% interest in the Sekisovskoye gold mine • Located in a mineral rich province with access to skilled local workforce • 40 kilometres from the regional capital of Ust Kamenogorsk • Management enjoys good relations with local government and community representatives • Substantial local Infrastructure • Increasing gold production levels and head grade • Significant exploration upside, mineralisation is open to depth Source: Hambledon Mining

  12. Sekisovskoye production in 2011 Gold poured – 20,851 oz Au (2010: 22,802) Mined ore – 594,152t – up 2.5% (2010: 579,579) Total mined ore and waste – 4,515,867t – up 23% (2010: 3,661,579) Milled ore – 748,485t – up 5% (2010: 713,088) Grade 1.09g/t Au (2010:1.18g/t Au) down 7.7% • Plant stopped for nine days, loss of 650 ounces • Lower grade = lower gold plant recovery Five months on low grade ores whilst we removed the open pit remnant waste

  13. Sekisovskoye production in 2012 A combination of open pit and underground mining Target: 26,000 oz Au Highlights • Underground ores adding high gold grade ore to milling operations • Open pit operating more normally with waste removed • Process plant recovery affected by the characteristics of the ores • Plant operating at 90% capacity due to tailings dam capacity constraint until October, 2012

  14. Sekisovskoye target cost of production $ / ounce gold What makes up a cost of an ounce of gold at Sekisovskoye in 2012? Mining costs: $625/oz (open pit and underground combined) Mineral processing: $476/oz Sub total - cash costs: $1,101 Royalties: $60/oz Depreciation: $47/oz Target cost of gold production: $1,208/oz (2011: $1,417/oz) High costs related to mineral process plant recovery

  15. Underground project ‘ore bodies’ - the future Existing shaft North Design pit 240 level 120 level Main decline View from South looking North Showing the existing open pit (light brown), design pit (pink), ore bodies (dark green), existing old underground level (yellow), main underground levels (white) and planned underground decline (blue)

  16. 2011-12: A time of transition Achievements 2011 and 2012 • Process plant realised record levels of throughput –2011: 744kt; (2010: 712kt) • Tailings dam 4: 65% complete • Design of Dam 5 (final dam) complete, with construction due to start in Q3, 2012 • Underground mine started in November 2011 – ahead of schedule • Expanded surface engineering workshops • Main jaw crusher replaced • Main cone crusher replaced • New excavator, mine trucks, bulldozers, front end loaders replaced in the open pit mine • New drill rig purchased • Remaining excavators refurbished with new engines and hydraulic components • Fifty percent of the conveyors in the crushing and screening plant replaced • New boiler in elution circuit and replacement furnace for doré smelting installed • Reagent building erected • Diesel fuel cleaning system installed • Laboratory upgrade and expansion completed • Mineral processing of underground ores underway – 25kt at 3.25 g/t Au treated • Remediation of Tailings Dam 3: 35% complete • Modification to waste management: 65% complete

  17. Tellur and Stepok Significant future value for Hambledon: • Tellur • Awaiting governmental waivers and consents – expected to be received early Q3 2012 • Development work at Tellur expected to commence in Q2 2013 • Work programmes includes • Site establishment • UG Portal • Building workshops and workforce accommodation • Ore extraction targeted for late H2, 2013 • Targeted production of 50,000 tpa in 2014 – nominally 20,000 Au oz/pa • In-situ grade 17 g/t Au, expected head grade 12 g/t Au • Stepok • Located 3 kilometres from Tellur • Development work at Stepok expected to commence in 2014 • Targeted production of 350,000 tpa – nominally 30,000 Au oz/pa • In-situ grade 2.5 g/t Au, process plant head grade 2.0g/t Au • Mineral resource 3.4Mt oxide ores (GKZ classified) • Site process plant • To be established in 2015, treating Stepok and Tellur ores to produce 50,000 oz/pa

  18. Akmola Acquisition timing Development timetable: pursuing completion with best endeavours • Awaiting government waiver – expected Q3 2012 • Payment to vendors of cash and shares (made from available cash in hand), • Industrial development plans lodged and accepted by government • Establishment site security second half, 2012 • Site works commence first half, 2013

  19. Akmola – expenditure for acquisition In order to execute the acquisition Hambledon has had to: • Resurrect the defunct company Akmola Gold LLP • Establish the exploitation licences • Complete and have approved industrial plans • Complete and submit plans for various government ministries • Draft and execute a sale and purchase agreement Expenditure • Legal: $1.7M • Administrative: $0.7M • Government: $0.9M

  20. Hambledon Mining plc: share price Why are the shares underperforming? • Concerns over the extent of fines for TD3 • Failure to reach production targets • Completion of TD3 in a timely manner • Obtaining Akmola Gold LLP waivers • Delays to EBRD funding • High cost operation How are we addressing these issues? • Returning the business to normal operations in Q3, 2012 • Increasing business gold production from underground mine production • Expanding the underground mine infrastructure • Improving process plant recovery of gold • Cost reduction programmes

  21. HMB share price – peer comparison

  22. Contacts Registered office Hambledon Mining Plc Daws House33-35 Daws LaneLondonNW7 4SD Investor relations: Charles Zorab Telephone: +44 207 233 1462 e-mail: c.zorab@gmail.com

More Related