Shanta Gold Investor Presentation
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Transcript of Shanta Gold Investor Presentation
Investor RoadshowJune 2012
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DisclaimerThis Document comprises an institutional update presentation (the “Presentation”) which has been prepared by and is the sole responsibility of Shanta Gold Limited (the “Company”).
This Presentation does not constitute or form part of an admission document, listing particulars or a prospectus relating to the Company or any offer for sale or solicitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever or constitute an invitation or inducement to engage in investment activity under section 21 of the UK Financial Services and Markets Act 2000. This presentation does not constitute a recommendation regarding any decision to sell or purchase securities in the Company.
Notwithstanding the above, in the United Kingdom, this Presentation is only being given to persons reasonably believed by the Company to be investment professionals within the meaning of paragraph (5) of Article 19 persons in the business of disseminating information within the meaning of Article 47 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) or to high net worth companies or unincorporated associations within the meaning of paragraph (2)of Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529), and the Proposed Offer will only be available to such persons who are also qualified investors within the meaning of section 86(7) FSMA purchasing as principal or in circumstances under section 86(2) FSMA. This Presentation is only being sent to persons reasonably believed by the Company to be investment professionals or to persons to whom it may otherwisebe lawful to distribute it. If you are not such a person (i) you should not have received this Presentation and (ii) please return this Presentation to the Company's registered office as soon as possible and take no other action. If you are not such a person you may not rely on or act upon matters communicated in this Presentation. By accepting this Presentation the recipient represents and warrants that they are a person who falls within the above description of persons entitled to receive this Presentation.
This document has not been approved by an authorised person under Section 21 of the Financial Services and Markets Act 2000 (“FSMA”).
This Presentation is not intended to be distributed, or passed on, directly or indirectly, to any other class of person and in any event under no circumstances should persons of any other description rely or act upon the contents of this Presentation. This Presentation and its contents are confidential and must not be distributed or passed on, directly or indirectly, to any other person. This presentation is being supplied to you solely for your information and may not be reproduced, further distributed or published in whole or in part by any other person.
No representation or warranty, express or implied, is made or given by or on behalf of the Company, its advisers or any of their respective parent or subsidiary undertakings or the subsidiary undertakings of any such parent undertakings or any of the directors, officers or employees of any such person as to the accuracy, completeness or fairness of the information or opinions contained in this Presentation and no responsibility or liability is accepted by any person for such information or opinions or for any liability, howsoever arising (directly or indirectly) from the use of this Presentation or its content or otherwise in connection therewith. No person has been authorised to give any information or make any representations other than those contained in this Presentation and, if given and/or made, such information or representations must not be relied upon as having been so authorised. The contents of this Presentation are not to be construed as legal, financial or tax advice.
The information has not been verified nor independently verified by the Company’s advisers and is subject to material updating, revision and further amendment.
The Company has not been, and will not be, registered under the United States Investment Company Act of 1940, as amended, and investors will not be entitled to the benefits of that Act.
Neither this Presentation nor any copy of it may be taken or transmitted into the United States of America or its territories or possessions (the “United States”), or distributed, directly or indirectly, in the United States, or to any U.S Person as defined in Regulation S under the Securities Act 1933 as amended, including U.S resident corporations or other entities organised under the laws of the United States or any state thereof or non-U.S branches or agencies of such corporations or entities or into Canada, Australia, Japan, South Africa or the Republic of Ireland. Neither this Presentation nor any copy of it may be taken or transmitted into or distributed in Canada, Australia, Japan, South Africa or the Republic of Ireland, or any other jurisdiction which prohibits the same except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of United States or other national securities law.
Forward-Looking Statements. Information contained in this Presentation may include 'forward-looking statements'. All statements other than statements of historical facts included herein, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's business) are forward-looking statements.
Such forward-looking statements are based on a number of assumptions regarding the Company's present and future business strategies and the environment in which the Company expects to operate in future. Actual results may vary materially from the results anticipated by these forward-looking statements as a result of a variety of factors. These forward-looking statements speak only as to the date of this Presentation and cannot be relied upon as a guide to future performance. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this Presentation to reflect any changes in its expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.
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Shanta Overview
• Gold explorer/developer, approaching first production
• AIM-listed (Ticker: SHG)
• Tanzania-focused
• 2.6Moz JORC-compliant resource
• Strong team• in-country experience• successful track record in exploration,
development, operations
• Two advanced projects• New Luika• Singida
• Growth pipeline
• JV with Great Basin Gold
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Corporate Summary
(1) As of market close on 21 June 2012
Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-120.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45Sh
are
pric
e (£
)
0
3,000
6,000
9,000
12,000
15,000
18,000
21,000
Volu
me
(000
s)
FTSE AIM All Share: Basic Resources (rebased) Shanta Gold Ltd.
£0.4252-week High
£0.1752-week Low
Share Price £0.22
Shares outstanding 318.8m
Market cap. $110m
Cash (April – post placing) $41m
Debt $20m
Enterprise Value $89m
Financial Summary (1)
3.9%12.4mGreat Basin Gold
3.4%10.7mBlackrock
1.4%4.5mGenerali
1.7%5.6mMajedie
10.9%35.0mBlakeney
10.2m
17.0m
32.0mExport Trading 10.1%
Investec 5.3%
W. Imrie (Exec. Chairman) 3.2%
Top Shareholders
Source: FactSet & investor disclosures as at 21 June 2012
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Board and Key Management
Maheshkumar PatelAlternative DirectorTanzanian businessman with extensive experience at board levelPeet PrinslooHead of geology and explorationBraam JankowitzGeologist, General Manager of New Luika
Walton ImrieExecutive Chairman34 years’ gold exploration, mining experienceGareth TaylorChief Executive Officer37 years’ total mining experience, eight in Tanzania as GM of AngloGold Ashanti’s Geita Mine Edward Johnstone FCAChief Financial Officer7 years’ experience in East Africa, 5 years’ experience in the mining sectorPaul HeberNon-executive Director19 years’ total mining experience, six in TanzaniaKetan PatelNon-executive Director23-year business career in Tanzania
Philbert Rweyemamu Mining Engineer, General Manager of Singida
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Why Tanzania?• Africa’s third-largest gold
producer
• Fraser Institute Policy Potential Index: ranks ahead of South Africa
• Stable democracy
• Sound, well-administered mining legislation
• Workable tax regime
• Good infrastructure
• Small, under-explored orebodies
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Cut-off Measured & Indicated Inferred Total
Project Name (g/t) Mt g/t Ounces Mt g/t Ounces Mt g/t Ounces
New Luika 1.0 4.5 3.15 458,563 5.2 3.09 515,590 9.7 3.12 974,153
Singida 1.0 5.2 3.30 549,977 4.2 2.28 308,508 9.4 2.84 858,485
Mgusu 0.0 1.1 3.53 127,000 5.0 3.80 614,000 6.2 3.74 741,000
Total 10.8 3.26 1,135,540 14.4 3.10 1,438,098 25.3 3.17 2,573,638
2.6Moz total resource
Source: Dave Briggs – Geologix Independent resource consultant
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1st project approaching production –New Luika Gold Mine• 100% owned
• 974,153 resource at 3.12g/t (1g/t cut-off)
• First gold pour mid-Q3 2012
• June 2010 feasibility study highlights:
• LOM gold production: c.450Koz
• Average grade recovered: 2.7g/t
• LOM: 10 years
• First three years total production of 175-190,000oz at $560-610/oz total cost (1)
• Ore-bodies open at depth and along strike
• January 2012: 31m at 12.97g/t in total, including 14m at 18.49g/t (CSR325)
• Increase in mineable resources and grade expected Q2 2012
Bauhinia Creek Pit (24 March 2012)
Ball Mills (3 June 2012)
(1) As per September 2010 company estimates
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New Luika (Bauhinia Creek) pit progression
Increase in pit size to include higher graderesources to 200 metres depth
Old June 2011 pit(to 120m)
New pit (2)
(to 200m)
April 2011
June 2011(1)
January 2012
January 2012 update - drilling highlightsBorehole ResultCSR332 10m at 26.9g/t in total
CSR324 11m at 21.71g/t in totalCSR325 31m at 12.97g/t in total, including 14m at 18.49g/tCSR338 14m at 11.6g/t in total CSR330 13m at 8.19g/t in totalCSR331 6m at 11.93g/t and 8m at 13.24g/t in total
(1) Temporary pit(2) Internal conceptual design
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New Luika – commissioning underwayMining• Ore mining commenced November 2011
(over 100Kt stockpiled)
• Stockpiles estimated to contain over 22,000oz ready for processing
• High grade stockpiles provide commissioning flexibility
• First gold production expected by mid-Q3
• Q4 guidance of 13,000 - 17,500 ounces of gold
Plant & Infrastructure• Achieved plant wet commissioning
• Hot commissioning to commence imminently
• Crushing circuit complete; milling and leaching circuits approaching completion
• On-site laboratory fully commissioned allowing quick turnaround of assays for grade and metallurgical controls
• Power infrastructure complete (6x diesel generator sets – 8.5Mwt)
• River weir construction complete
Crushing Circuit (22 June 2012)
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New Luika Plant
Ball Mills (7 June 2012)Crushing Circuit (23 June 2012)
Leach Tanks (17 June 2012)
Metallurgical Lab (1 April 2012)
Tailings Screening (18 June 2012) Gold Room (17 June 2012)
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Gold price of 1,200$/oz used in financials
Singida – next golden opportunity
• Minor royalty agreement with JV partner
• 858,485oz resource at 2.84g/t (1g/t cut-off)
• Four open pits for mining flexibility
• $130M NPV11 @ 1200$/oz
• Ore-bodies open at depth
• First three years total production of 170-200,000oz at $210-310/oz total cost (1)
• Project development and financing strategy to be executed post commencement of gold production at New Luika
(1) As of August 2011
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130
120
45,000
5.43
450,000
30
255,000
2.5
23.5Total tonnes mined million
Total tonnes treated million
Annual treatment rate t
Total construction cost US$ million
LOM gold production oz
Average grade recovered g/t
Average annual production oz
Return on investment %
Net present value 11% US$ million
LOM years
Singida updated feasibility (August 2011)
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Growth pipeline
• JV with Great Basin Gold covering prolific Lupa goldfields in SW Tanzania
• Exploration underway, c.3,800 km2 of target area
• Drilling has commenced on initial targets • Deal structure
• 80% SHG – 20% GBG• First earn-in of US$2m by Dec. 2012• Total $12m earn-in by Dec. 2014
• Exploration upside within New Luika licence• Elizabeth Hill
• Wide vein system c.2km from plant • 800m drilled, open along strike and at
depth• Black Tree Hill
• Near-vertical vein system directly adjacent to plant
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The right address – Lupa Goldfield licences under JV
JV gives Shanta the opportunity to earn-in to 80% of >100 exploration licences within the Lupa Goldfield
New Luika
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Upcoming Milestones
Increased JORC resources to 2.6Moz
Established $15m credit facility with FBN Bank
Commenced ore mining
Constructed river weir for water to feed plant
Constructed tailings dam
Raised $40m through convertible loan note and equity placing
Commissioned geological on-site laboratory
Stockpiled ore estimated to contain over 22,000 ounces
Completed wet commissioning of the plant
Complete hot commissioning of the New Luika plant
Announce New Luika resource update
Strengthen board of directors
Achieve first gold pour at New Achieve first gold pour at New LuikaLuika
Achieve New Luika run rate production
Update New Luika mine plan post resource update
Progress exploration programme
Execute Singida development strategy
Ore Stockpiles (17 June 2012)
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Pre-exploration Scoping study Feasibility study Mine construction Production
Moving projects up the value curveHIGH
TIMELOW
ExplorationTargets
Singida
New Luika
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The case for small(er)
< 2 g/t> 2 g/tAverage head grade
Vital statistics New Luika A bigger player
Exploration 3 years 5-7 years
Development 15 months 36-48 months
Construction cost $29.4M $400m
Production cost/oz $560-610 $700-900
Return on investment 71% 20% + is good
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Investment case
• Excellent projects• low costs• early returns• substantial expansion upside
• Attractive growth pipeline• backed by reputable JV partner
• Extensive in-country experience• Investor-friendly domain