Scotia investor conference final v1.compressed
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Transcript of Scotia investor conference final v1.compressed
FOCUSINGONOPERATIONALDELIVERY
2017ScotiaMining&MetalsConferenceInvestorPresentation
December2017
This document has been prepared by Asanko Gold Inc. (the “Company”)solely for informational purposes. This presentation is the soleresponsibility of the company. Information contained herein does notpurport to be complete and is subject to certain qualifications andassumptions and should not be relied upon for the purposes of making aninvestment in the securities or entering into any transaction. Theinformation and opinions contained in the presentation are provided as atthe date of this presentation and are subject to change without noticeand, in furnishing the presentation, the company does not undertake oragree to any obligation to provide recipients with access to any additionalinformation or to update or correct the presentation.
No securities commission or similar regulatory authority has passed onthe merits of any securities referred to in the presentation, nor has itpassed on or reviewed the presentation. Cautionary note to United Statesinvestors - the information contained in the presentation uses terms thatcomply with reporting standards in Canada and certain estimates aremade in accordance with National Instrument 43-101 (“NI 43-101”) -standards for disclosure for mineral projects. The presentation uses theterms “other resources”, “measured”, “indicated” and “inferred”resources. United States investors are advised that, while such terms arerecognized and required by Canadian securities laws, the SEC does notrecognize them. Under United States standards, mineralization may notbe classified as “ore” or a “reserve” unless the determination has beenmade that the mineralization could be economically and legally producedor extracted at the time the reserve determination is made. United Statesinvestors are cautioned not to assume that all or any part of measured orindicated resources will ever be converted into reserves. Further,“inferred resources” have a great amount of uncertainty as to theirexistence and as to whether they can be mined legally or economically. Itcannot be assumed that all or any part of the “inferred resources” willever be upgraded to a higher category. Therefore, United States investorsare also cautioned not to assume that all or any part of the inferredresources exist, or that they can be mined legally or economically.
Under Canadian rules, estimates of “inferred resources” may not form thebasis of feasibility or pre-feasibility studies except in limited cases.Disclosure of “contained ounces” is permitted disclosure under Canadianregulations; however, the Securities Exchange Commission (SEC) normallyonly permits issuers to report mineralization that does not constitute“reserves” as in place tonnage and grade without reference to unitmeasures. Accordingly, information concerning descriptions ofmineralization, mineral resources and mineral reserves contained in thepresentation, may not be comparable to information made public by UnitedStates companies subject to the reporting and disclosure requirements ofthe SEC.
The presentation may contain “forward looking statements” within themeaning of the United States private securities litigation reform act of 1995and “forward looking information” with the meaning of applicable Canadiansecurities legislation concerning, among other things, the size and thegrowth of the company’s mineral resources and the timing of furtherexploration and development of the company’s projects. There can be noassurance that the plans, intentions or expectations upon which theseforward looking statements and information are based will occur. “Forwardlooking statements” and “forward looking information” are subject to avariety of risks, uncertainties and assumptions, including those that arediscussed in the company’s annual information form. Some of the factorswhich could affect future results and could cause results to differ materiallyfrom those expressed in the forward looking statements and informationcontained herein include: market prices, exploitation and explorationsuccesses, continued availability of capital and financing and generaleconomic, market, business or governmental conditions. Forward lookingstatements and information are based on the beliefs, estimates andopinions of management at the date the statements are made and aresubject to change without notice. The Company does not undertake toupdate forward looking statements or information if management believes,estimates forward or opinions or other circumstances should change. TheCompany also cautions potential investors that mineral resources that arenot material reserves do not have demonstrated economic viability. 2
FORWARDLOOKINGINFORMATION
LargeScale,Multi-PitAsset
• 11deposits
• 6.6Moz M&I Resources&5.1MozReserves
StableJurisdiction
• Ghanaislongestfunctioningdemocracyinsub-SaharaAfrica
• Mininggoldfor+100years,ranked 10th globally&2nd inAfrica
• Highlytrained&educatedworkforce
CashGenerativeOperations• Avecashflowfromops(beforeWC)~US$29m/qtr
IndustryLeadingSafetyRecord
• LTIFRof0.19
• Over3millioninjury-freemanhoursworked
HighlyProspectiveLandPackage
• LargestholderonhighlyprospectiveAsankrangwa Belt
• Significantexplorationpotential=>Miradani Project
StrongSocialLicensetoOperate
• Successfullypermittedcurrentmine&Esaase +overlandconveyor
• WinnerofindustryCSRAward 3
ASANKO ATAGLANCE
The11Multi-PitAsanko GoldMineComplex
ExplorationTargets
• CurrentminingfocusedonCut2
• Commencedin2017,currently50%through,completionexpectedinQ32018
• Continuallyyieldsorethroughoutthepushback
• WesternwallremediatedinQ2,dualrampsystemfullyfunctional
• EasternandSouthernwall:geotechnicalredesignofoxidesslopesto26ohaveaddedwastestrip~4Mtin2018(equivalentto2monthswastemining)
• EasternwallredesigncausesloweroreyieldandhigherstripcostsinH12018
• Benchwidthsbeingincreasedfrom~35mtoanaverageof45m
• Cut2enablesaccessto9Mtofore
• OreexposureratesperverticalmeterforCut2&Cut3anticipatedtobesimilartowhathasbeenminedsofar
NKRANMININGOPERATIONS
Section‘A’SouthofNkranPit
Oct’17,959mRL
Nov/Dec‘17
JAN2017
Dec.2018/Cut2East
4
0
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10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
0
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900,000
-192
-174
-156
-138
-120
-102 -84
-66
-48
-30
-12 6 24 42 60 78 96 114
132
150
168
186
204
222
AuOz
Tonnes
Tonnes perBench
6mBenchIncrements- DepthAbove(-ve)andBelow(+ve)Sept2017baseofpitelevation(962mRl)
Tonnes Ounces
MININGINITIATIVESIMPROVINGOPERATIONALEFFICIENCIES&DELIVERY
Operationalinterventions
• PitMapping! structuralgeologydrivingoredelineation
• Lithology⎼ rocktypeconstrainingmineralization
• StrikeAlignment⎼ blastdesignsalignedwithstrike
• BlastMovementTechnology⎼ oremovementmeasured&mining
polygonsadjusted
• BlastingFragmentation⎼ improveddig-abilityresultsinimproved
cutcompliance
• BondWorkIndex(BWI)⎼ BWImapped&fundamentaltoblendplan
• GeotechnicalFocus⎼ reducesoperatingrisk& thereforenegative
variancestoplan
DroppingBlastMovementMonitoring(BMM)Ballinhole
BMMReading
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• Nkran
– NewCSAresourceimplementedinApril/May
– Positiveresource&reservereconciliation– validatingNkran MRE• +7%variancebetweenthegradecontroltoresourcemodels• +1%variancebetweenthemillfeedactualandreserve model
– Cut2pushbackprogressingaccordingtoplan
• Akwasiso
– CommencedmininginJune
– Extensiveartisanalworkings=>resultedin1MtreductioninoxideorefromLoM mine
– Auouncescontainedinhardergraniteore,restrictingthroughputratesduetohighBWIIndex=>impactingproductionfor2017&2018
• DynamiteHill
– 2.8Mtore,[email protected]/t
– Gradecontroldrillingconfirmingtheresourcemodel
– Yieldingore,rampinguptofullproductionratesof~70,000tpminQ12018
– Flexibilitytoincreaseminingrates
• Miningflexibilitysignificantlyimprovedwith4oressourcesnowavailable
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2017MININGPERFORMANCE
• VolumetricupgradestoprocessingplantinstalledinQ22017
– Completedaheadofschedule&withinbudget
– Plantdesign:9,000tpdfresh(3Mtpa)&6,000tpdoxide(2Mtpa)
– Nowachieving+14,000tpdwithreducedoxideblend
– Goldrecoverymaintainedat94%despitehigherthroughput
PerformanceCatalysts
• InstallingupgradedmillmotorsinQ12018deliveringadditionalmillingenergy(+700kW)
• Optimizingcommunition circuit
– Reductionin2018oxides=>feedinghigherquantitiesofharderfreshore
– Currentthroughputbasedonhighercostmobilecrushingunits
– SecondarycrushertobeinstalledinQ22018 (capex~US$4m)&commissionedinQ32018,optimizingfeedsizedistributiontoSAGmill,improvingmillingperformanceonharderrockblend
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2017PROCESSINGPERFORMANCE
2018MINEPLAN
• Implications
! Alloresourcesrequiredtomeettheplantfeedrequirement
! StockpilefeedrequiredtooffsetAkwasisooxideloss&Nkranstrip=>highercosts
! Millfeedgradewillrepresentblendoforesourcegrades
! BWI– granitesblendedatlimitedratesintofeed
>
• MultipleOreSources
– Nkran(loweroreyieldsinH12018)
– Akwasiso(granites– highBWIrestrictingthroughput)
– DynamiteHill(2018predominantlyoxideore)
– Stockpiles([email protected]/t)
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• P5Mmineplanbeingrefocused:
– Reducestripratio
– OptimizeAISC
– MaintainingP10Moptionality
– Reviewingpitsequence,oretypecut-offgrades&feedmaterialtypeblendratios
– Willbeapprovedoncefundingfinalisedwithlenders=>targetingQ12018
• P5M includesdevelopmentoflargeEsaasedeposit:
– Reserves:[email protected]/tfor2.9Mozgold
– 37%oxides:63%fresh
– 4kmlongstrike=>miningflexibilitywithmultiplefaces
– Conveyorrouteandminepermitted
– ConstructionofconveyorwillbeapprovedatBoard’sdiscretion
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P5M:11PITOPTIMIZATION
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MIRADANI:HIGHLYPROSPECTIVENEAR-MINEEXPLORATION
• Acquisitionoflarge,highlyprospectiveexplorationground
• Onexistingmininglease=>enablesaccelerated production
• 44historictrenchescovering4,479moflengthat30mintervalsovera3.2kmstrikelength
• 3drilltargetsidentified:Miradani,CentralZone&Tontokrom
– Multiplemineralizedlenses,individuallyupto37minwidth
• PhasedRC&DDdrillingcampaigntocommenceinQ42017
• TargetingmaidenresourceinH22018
MIRADANI TRENDTARGETS
ThreeclearwalkuptargetareasThetwohighestprioritytargetswillbetestedinthePhase1drillingprogram
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580mstriketobeultimatelytested320mcoretobeinitiallytestedinPhase1Cumulativewidthofmineralizationupto>60minmultiplezones
Cumulativewidthofmineralization>80minmultiplezones400mcoretobeinitiallytestedinPhase1650mstriketobeultimatelytested
ACCESS TO WORK & FI
NAN
CE
IMPRO
VED LIVIN
G STANDARDS
ACCE
SS
TO EDUCATION
VOCATIONAL TRAIN
ING
1
DELIVERING AN OPPORTUNITY CYCLE THROUGH PARTNERSHIPS TO STRENGTHEN AND ENHANCE OUR SOCIAL LICENCE TO OPERATE
COMMUNITY
CODEandAsanko“ReadingGhana”program
Asanko-GIZvocationalskillsdevelopmentprogram
ObotanCooperativeCreditUnion(OCCU)
Asanko healthfacilitiessupport
program
• Strong,respectfulrelationshipskeytosuccess
• Creatingalegacybeyondthelifeofthemine
• Focusonhealth,financialliteracy,skillstraining
• 2016CSRwinneroftheGhanaMiningIndustryAwardsforObotan CooperativeCreditUnion
• PartnershipwithCODE’s“ReadingGhana”toimproveliteracyinschools
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ARESPONSIBLEMINER
TheObotan CooperativeCreditUnion,inpartnershipwithGIZ“ReadingGhana”ProjectwithCanada’sCODE
TheAsanko OpportunityCycle
RedKiteDebtFacility
• No covenants,nohedging,nocashsweep,norestrictionsonM&A
• Currentlyrepayinginterestonly,optiontoextend capitalrepaymentholidayby1yeartoJuly1,2019(ifexercisedbyMarch31,2018)
• Goldoff-takeatspotgoldpriceswith9daypricingwindow
• IndiscussionsregardingbroaderfundingsolutionforP5MOptimizedPlan,expectedtoconcludeinQ12018
• YTDproduction:153,496oz@AISCUS$955/oz
• Strongcashflow– Operatingcashflowbeforeworkingcapital~US$87m
• Positiveearningsforthreeconsecutivequarters
– YTDEBITDAofUS$85m
– YTDEPSofUS$0.06/share
• US$64.3mincashandimmediatelyconvertibleworkingcapital,asatendofQ32017
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2017YTDFINANCIALPERFORMANCE
CashflowfromoperationsbeforeworkingcapitalchangesUS$,thousands
24,000
25,000
26,000
27,000
28,000
29,000
30,000
31,000
32,000
33,000
Q1'17 Q2'17 Q3'17
Trailing5 quarteraverage~US$29m
QuarterlyEBITDAUS$,thousands
28,479 25,276 31,293
Q1'17 Q2'17 Q3'17
Trailing5quarteraverage~US$28m
• Operations
– Operationalfocusareas:
• Finetuningresource&reserveconversion&miningsystems
• Continuedefficiencyimprovements
• Unitcostsofproduction
• Exploration
– Midras SouthMaidenResourceinQ12018
– Miradani drillinghascommenced,earlyresultsexpectedinQ12018
• 2018Guidance
– 2018productionexpectedtobesimilarto2017
– 2018costguidanceformspartofP5MOptimizedPlan
• P5MOptimizationPlan
• Progressingwell,intandemwithfundingsolution
• TargetingQ1201814
2018OUTLOOK
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AlexBuckInvestorRelations
N.AmericanToll-Free:18552467341Telephone:+44-7932-740-452Email:[email protected]
RobSlaterCorporateDevelopment&Strategy
N.AmericanToll-Free:18552467341Telephone:+27-11-467-2758Email:[email protected]
CONTACT US
QualifiedPersonsStatement:BenjaminGelber (P.Geo),Manager:GenerativeExplorationandFrederikFourie (Pr.Eng),SeniorMiningEngineeraretheAsanko QualifiedPersons,asdefinedbyCanadianNationalInstrument43-101(StandardsofMineralDisclosure),whohaveapprovedthepreparationofthetechnicalcontentsofthispresentation.
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