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African Barrick Gold Bulyanhulu – Site Presentation
March 2014
1. Introduction 1
2. Asset Overview 7
3. Mining Overview 11
4. Processing Overview 25
5. Business Improvement 29
6. Social Licence to Operate 33
7. Cultural Transformation 36
8. Summary 38
1
Contents
Biography
2
Peter Burger joined ABG in 2011 and having been General Manager of Tulawaka and Buzwagi ahead of joining Bulyanhulu in October 2013. Prior to ABG, Peter has worked for a number of mining companies such as Anglo American and Acquarius Platinum in numerous managerial roles. Peter has over 20 years of operational experience and has worked at a range of underground operations. Peter is a mining engineer with a degree from the University of Johannesburg.
Location
3
History
Asset Overview
Mine History
2011 2001 1999 1994 1992 1985 1980 1976
1976: Gold First discovered at Bulyanhulu
1980 to 1982: First Exploration by State Mining Corporation
1989 to 1992: Placer Dome JV to manage the property and conduct exploratory work
1999: Acquisition of Sutton Resources by Barrick
1983 to 1985: JV with Outo Kumpu and Kone Corp to conduct further drilling
1994: Prospecting License granted to Sutton Resources
2001: Commencement of Production
2011: Bulyanhulu celebrates 10 years of operations and 3 million ounces of production
High Grade, narrow vein, steeply dipping ore body
Underground gold mine owned and operated by Bulyanhulu Gold Mine Limited
Located in Kahama District, in the Shinyanga Region, North West Tanzania, 55km South of Lake Victoria
Access to Bulyanhulu is by road from Mwanza (155km) or Kahama (55km) and by air through own-operated airstrip within the property
Well established mine site with administration office, a mill, laboratory, warehouse, clinic, security installations, housing and other support structures
Majority of Tanzanian workforce is drawn from surrounding communities
4
People
Who we are
BGML draws its human capital from various corners of the world, with the majority sourced locally or within Tanzania
Total current Bulyanhulu workforce:
− Tanzanians: 2,237
− International Staff: 159
− Contractors: 1,007
Facilities such as the health centre, underground clinic, employee transportation and the Housing Scheme are part of what is intended to make BGML “an Employer of Choice”
5
Safety incident frequency rates 2006 - 2013
Management Commitment – Visible Felt Leadership
Employee Involvement – “Stop and Fix”
Personal Accountability – Safety Standards 6
TRIFR
LTIFR
1. Introduction 1
2. Asset Overview 7
3. Mining Overview 11
4. Processing Overview 25
5. Business Improvement 29
6. Social Licence to Operate 33
7. Cultural Transformation 36
8. Summary 38
7
Contents
Geology
8
Geological cross-section
X Y
Pillow Basalts
Facing
Gabbro
Argillite
Mineralized Qtz vn
9
Reef 1 long section: grade distribution
10
BGMDD0055W11.5m @ 2.27/t Au
BGMDD0054W11.29m @ 11.7g/t Au
BGMDD0054W24.5m @ 8.07g/t Auincl. 1.5m @ 16.6g/t Au
UX4700-071.04m @ 76.7g/t Au
1. Introduction 1
2. Asset Overview 7
3. Mining Overview 11
4. Processing Overview 25
5. Business Improvement 29
6. Social Licence to Operate 33
7. Cultural Transformation 36
8. Summary 38
11
Contents
Reserves and Resources
Mineral Reserve and Resources at 31st December 2013
Historical Operating Metrics
Capacity
Ore Production is currently ±3,300 tpd (~1.0 Mtpa)
Shaft capacity is ~1.7 Mtpa (waste and ore)
Mill capacity is currently ~1.1 Mtpa
LOM is currently 34 years
2010 2011 2012 2013 Production (koz) 260 262 236 198 Cash Cost ($/oz) 539 610 803 875 All in Sustaining Cost ($/oz) n/a n/a 1245 1323 Head Gold Grades (g/t) 9.19 8.47 8.02 7.85
2012 YE 2012 YE 2013YE 2013 YE contained Mozs Grade contained Mozs Grade
Proven 0.266 10.01 0.149 11.40 Probable 10.613 11.38 9.238 9.50 Total Reserve 10.879 11.34 9.387 9.53 Measured - - Indicated 3.320 9.68 3.502 8.44 Inferred 3.252 11.95 2.745 12.88 Total Resource 6.572 10.68 6.274 11.53
12
Reasons for reserve grade drop
Reserve Gold Price: • Reserve 2012: US$ 1,500/Oz • Reserve 2013: US$ 1,300/Oz
Mining Method Changes
Increase in Dilution (Internal Dilution + Overbreak)
Cost Changes
Other contributions: Additional Drilling in 2013 reduced grade in some areas Mine Depletion
Gold Price
(-13%)
Reserve Dilution Increase (+28%)
1
2
3 (Gold Price – Cost)
13
4
PINK: UPPER WEST TONNES: 1,639,361@ 10.80g/t Contained Ounces: 569,380
BLUE: DEEP WEST TONNES: 6,834,932@ 14.53g/t Contained Ounces: 3,193,857
GREEN: DEEP CENTRAL TONNES: 2,632,798@ 11.56g/t Contained Ounces: 978,176
RED: DEEP EAST TONNES: 1,171,418@ 13.85g/t Contained Ounces: 521,431
LIGHT BLUE: UPPER CENTRAL TONNES: 635,127@ 10.20g/t Contained Ounces: 208,222
ORANGE : REEF 2 CENTRAL TONNES: 2,189,037@ 11.36g/t Contained Ounces: 799,727
CCF
CCF
LH
CCF
2012 Reserve
14
2013 Reserve
1.24g/t (-11%)
1.07g/t (-10%)
3.03g/t (-21%)
4.13g/t (-36%)
6.09g/t (-44%) LH
DnF
CCF
PINK: UPPER WEST TONNES: 2,276,199@ 9.39g/t Contained Ounces: 687,633
BLUE: DEEP WEST TONNES: 9,278,161@ 11.50g/t Contained Ounces: 3,431,269
GREEN: DEEP CENTRAL TONNES: 5,777,343@ 7.43g/t Contained Ounces: 1,380,004
RED: DEEP EAST TONNES: 2,338,100@ 7.76g/t Contained Ounces: 583,708
LIGHT BLUE: UPPER CENTRAL TONNES: 579,188@ 9.131g/t Contained Ounces: 170,030
ORANGE : REEF 2 CENTRAL TONNES: 3,014,406@ 10.12g/t Contained Ounces: 980,670
1.41g/t (-13%)
15
Mining operations
Mining Overview
Kt 2008 2009 2010 2011 2012 2013
Ore Hoisted (Kt) 756
967
960
1,048
959 872
Waste Hoisted (Kt) 372 524 559 556 507 475
Underground mine with shaft and ramp access
Life of Mine plan average mining rate of 1 million tonnes of ore mined per annum from two reefs
Mobile equipment fleet includes drill jumbos, scoops, dump trucks, utility vehicles and handheld equipment
Owner Maintenance
Introducing contractors to undertake critical development
16
Split of Mining Methods
(Actual for 2013)
0%
20%
40%
60%
80%
100%
2013 2014 LOM
Ore Dev't
Drift & Fill
CCF
Alimak
Long hole
LOM changes to achieve reserve grade
2013 LOM Plan
2013 LOM Plan had CCF Mining in Deep West, Deep Central and Deep East per previous LOM Plans
CCF targeted the Footwall and Hangingwall Veins with inefficient, labour intensive handheld, stoping with minimal dilution
CCF = Higher Mined Grade but, higher labour requirements, low daily tonnage, requiring +/- 200 stopes monthly to sustain LOM production in later years
2014 LOM Plan
2014 LOM Plan – No CCF Mining in the Deep areas
CCF converted to either Underhand Longhole Stoping in the Deep West or Mechanised Drift & Fill in the Deep Central and Deep East Zones
Accelerated Development focused on the Deep West to open up more productive mechanised stopes
Mechanised Underhand Longhole Stoping employed in Deep West to bring in stopes earlier, and bring ounces forward
Monthly stoping: Alimak – 4, Long Hole – 10, CCF - 12
17
2015 LOM – in progress
Contract miners engaged to accelerate waste development specifically on the main decline and ore drives
Underhand long hole mining will be used to ensure earlier production from stoping areas
Areas non-economical for long hole is being reviewed for drift and fill
Trial mine will be done in Upper East in 2014 for 1.5m wide long hole stopes
Re-focusing next 5 years to areas with high grade (West Deeps)
Grade control in place to reduce overbreak
Exploration plan to add ounces in Reef 1 and 2 (starting in 2014 in both reefs)
2014 - 2030 2030 - 2046
18
Underhand Long Hole
19
KPI review – reducing long hole overbreak
20
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Jan-
12
Mar
-12
May
-12
Jul-1
2
Sep
-12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-1
3
Sep
-13
Nov
-13
Jan-
14
OVERBREAK TARGET Geology and Survey assessment every 2 weeks
Weekly discussion between BI, TS and Ops
Drill hole surveys to improve drilling accuracy
Long hole machines were brought back to standard
Use right explosives – emulsion vs ANFO
Training of Long hole drillers
Reducing Alimak tonnes in the LOM
What is being done? Improving trend in reducing overbreak
Upper East Zone
21
The Bulyanhulu Upper East Zone is approximately 2.5 km east of the main Bulyanhulu shaft
The Zone contains approximately 6.5 million ore tonnes at an average 9.05g/t containing approximately 1.8 million gold ounces within Reef 1 and Reef 2 from surface to 1km depth
The mineralisation in the “Zone” is included in current reserves, but it was not scheduled for mining until later in the mine life
However, following model and study reviews we may accelerate mining within the overall life of mine
This would make use of an existing 1.8 km decline to this zone, which has been dewatered and rehabilitated, and would look at developing a second access decline from a box-cut at surface between Reefs 1 & 2 to allow flexibility in mining
The material mined from the Upper East Zone would initially use excess milling capacity in the process plant, followed by debottlenecking of plant to increase capacity
We are conducting an updated feasibility study on this area to incorporate both Reef 1 and Reef 2 and are planning “early works” development of test stopes on Reef 1
Mining Methods proposed are:
− Reef 1 - Mechanised Drift & Fill
− Reef 2 - Underhand Longhole Stoping
Upper East Zone Reefs 1 and 2
Shaft Potential Box Cut Paste Fill Hole Existing Box Cut
Upper East Reef 1&2
22
Upper East
23
Feasibility and Board approval expected
in Q2 2014
Development expected to commence in
H2 2014
First gold in early 2015
2-3 year ramp up to full production
Next Steps
Route to 350koz
24
Sources of Production Growth
198
198
250
250 290
350
52
40
60
100
150
200
250
300
350
400
2013A Grade & Productivity
Improvements
Existing U/G Mine (2015 exit rate)
CIL Expansion Upper East 2015E exit rate
Koz
1. Introduction 1
2. Asset Overview 7
3. Mining Overview 11
4. Processing Overview 25
5. Business Improvement 29
6. Social Licence to Operate 33
7. Cultural Transformation 36
8. Summary 38
25
Contents
Processing Operations
Processing Key Points
The following processes are utilised; Crushing, Grinding, Gravity, Flotation, Carbon-In-Leach, Thickening, Cyanide destruction, Filtration and Paste Backfill
ICMI Cyanide code compliant
Bulyanhulu produces two saleable products: dore and copper concentrate
Dore bars are produced from Gravity and CIL plants
Copper Concentrate is produced from the flotation plant and sold to copper smelters mainly in China and Japan
The concentrate requires processing in a copper smelter with a gold refinery
26
CIL Expansion Project
New Carbon In Leach (CIL) Plant 2.4 Mtpa
‒ 1.0 Mtpa ROM + 1.4 Mtpa Hydraulic Reclamation
‒ Including SMBS Detoxification
‒ New Tailings Storage Facility (TSF 4) and Return Water Dam (RWD)
Total cost of the project of $167 million (majority funded by debt facility)
Will add over 40koz per annum over the next 6 years and 10Koz per annum from rougher tailings for the remaining LOM
‒ AISC for reclaimed tailings will be below $800 per ounce
‒ Will increase overall recoveries from 91% to 94%
27
Site activity progress
Description Actual
Overall Completion 96.6%
Construction Progress 92.9%
Commissioning Progress 12%
Completion of Commissioning Q2 2014
28
1. Introduction 1
2. Asset Overview 7
3. Mining Overview 11
4. Processing Overview 25
5. Business Improvement 29
6. Social Licence to Operate 33
7. Cultural Transformation 36
8. Summary 38
29
Contents
Cost Savings
Key 2014 cost savings initiatives:
Labour cost reduction – expat reduction focus & improvement of controls regarding T&A
Maintenance – improved condition based monitoring & root cause analysis processes
Mining Consumables – focused on tyre life management program and underground support supplier management
Processing Consumables – trialing of more cost efficient grinding media in progress and optimisation of gravity control processing
External services – focus has been centered around contract management (rates and fixed cost reduction)
G&A – reduced travel and accommodation costs together with improved camp service contact management
Grade control – focused on Alimak and Long Hole grade control improvement programs
30
-50,000
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2012A 2013A 2014E
Progression of Total Site Costs
Labour Energy/Diesel
Consumables Maintenance
Contracted services G&A costs
Sales related costs Sustaining Capital
Activity/One-off cost adjustment Total Direct Costs - Absolute
Total Direct Costs - Activity adj
Cost Savings: Workforce requirements
31
Plan* Overall Workforce Split between Underground vs Support Staff
* Excluding Upper East
Business Improvement projects planned for 2014 and 2015
32
Integrated planning – improve co-ordination of planning between departments
Overall equipment effectiveness
Maintenance management system
Improved “live” dispatch system
Cultural and behavioural intervention
People / Organisation – installation of an Accountable Management System (AMS)
Safety culture – revamp of the mine safety culture “We care programme” in Q2 14
1. Introduction 1
2. Asset Overview 7
3. Mining Overview 11
4. Processing Overview 25
5. Business Improvement 29
6. Social Licence to Operate 33
7. Cultural Transformation 36
8. Summary 38
33
Contents
Community Relations
Involvement of communities in project appraisals
Health: Investment in a clinic in Bugarama, Kakola VCT and support health programs at district level
Education: Schools and supporting facilities, support of IMTT
Utilities: Support road maintenance, electrification and provision of water at various points
Pipeline to supply sufficient water to the community from Lake Victoria
Employee Assistance: Support of the employees living in the community through the housing scheme, the counseling services and loans through BUIKA SACCOS
Enterprise development: Supporting commercialisation of small ventures to supply Bulyanhulu
Sports and Culture: Support community in sports events
CSR Highlights
34
Government Relations and Stakeholder Engagement
Conducted at Regional (Shinyanga), District (Msalala) and at Village (14 villages of immediate impact) levels
Conducted with government, political, commercial, civil society and community sectors , amongst others
Offers mine site’s social license to operate while addressing top priority risks
Addresses key CR and BGML areas of interest - fulfillment of Social Obligations, Grievance Management, Influx Management, Trespassing and Illegal Mining Management, Community Safety, Local Procurement (Alternative Livelihood programs) and Local Employment
Work with various departments to attain goals – Security, HR, Supply Chain, OH, Safety, Environment , among others
Informed by Stakeholder Perception Monitoring (last major one undertaken in 2012, however, perception is gathered periodically through various engagements)
35
1. Introduction 1
2. Asset Overview 7
3. Mining Overview 11
4. Processing Overview 25
5. Business Improvement 29
6. Social Licence to Operate 33
7. Cultural Transformation 36
8. Summary 38
36
Contents
Cultural Transformation Program
37
Liberating the capability of our people
Increasing leadership and membership skills
Driving key behaviours throughout the business to deliver our strategy
Our key people including all our leaders, influencers, and key operational personal both from ABG and our major contractors
Social process literacy and role clarity
Managing Culture: Cultural Change Curve
The Revolution Model, getting it right
1. Introduction 1
2. Asset Overview 7
3. Mining Overview 11
4. Processing Overview 25
5. Business Improvement 29
6. Social Licence to Operate 33
7. Cultural Transformation 36
8. Summary 38
38
Contents
Key priorities going forward
Improve on our excellent safety record
Re-engineer and right size the mine to deliver potential
Drive leadership transformation and accountability
Which will drive production of 350Koz at AISC of around $900 per ounce
by the end of 2015
39
Disclaimer
Important Notice
This presentation has been provided to you for information purposes only. It does not constitute an offer, solicitation, invitation or inducement to purchase, subscribe or otherwise acquire or to sell or otherwise dispose of any securities of African Barrick Gold plc ("ABG") or engage in any investment activity in connection with the capital of ABG in any jurisdiction. The information or opinions contained in this presentation shall not form the basis of, or be relied on in connection with, or act as any inducement to enter into, any contract or commitment or investment decision whatsoever in connection with ABG.
The information and opinions contained in this presentation are provided as of the date of this presentation and are subject to change without notice. ABG explicitly disclaims any responsibility, obligation or undertaking to update or revise any information contained in this presentation after its date, whether as a result of new information, future events or otherwise. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this presentation or on its completeness and no liability whatsoever is accepted for any loss howsoever arising from any use of this presentation or its contents.
Certain information, statements, beliefs and opinions in this presentation are forward looking. Forward-looking statements are statements that are not historical facts. These statements include, without limitation, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words "plans," "expect," "anticipates," "believes," "intends," "estimates" and other similar expressions. All forward-looking statements involve a number of risks, uncertainties and other factors. Although ABG’s management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of ABG, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, forward-looking information and statements contained in this presentation. Factors that could cause or contribute to differences between the actual results, performance and achievements of ABG include, but are not limited to, political, economic and business conditions, industry trends, competition, fluctuations in the spot and forward price of gold or certain other commodity prices, changes in regulation, currency fluctuations (including the US dollar, South African rand and Tanzanian shilling exchange rates), ABG’s ability to successfully integrate future acquisitions, to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves and to timely and successfully process its mineral reserves, trespass, theft and vandalism, changes in its business strategy, as well as risks and hazards associated with the business of mineral exploration, development, mining and production. Accordingly, investors should not place reliance on forward-looking statements contained in this presentation. Any forward-looking statements in this presentation speak only as of the date of this presentation and only reflect information available at the time of preparation. Subject to the requirements of the Disclosure and Transparency Rules and the Listing Rules or applicable law, ABG explicitly disclaims any obligation or undertaking publicly to update or revise any forward-looking statements contained in this presentation, whether as a result of new information, future events or otherwise.
No statements made in this presentation regarding expectations of future profits are profit forecasts or estimates, and no statements made in this presentation should be interpreted to mean that ABG’s profits or earnings per share for any future period will necessarily match or exceed the historical published profits or earnings per share of ABG or any other level.
You are reminded that you have received this presentation subject to the disclaimer and important notices contained herein and on the basis that you are a person to whom this presentation may be lawfully made and delivered in accordance with the laws of the jurisdiction in which you are located. You may not and are not authorised to: (i) reproduce or publish this presentation; or (ii) distribute, disclose or pass on this presentation to any other person, in whole or in part, by any medium or in any form, whether electronically or otherwise. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS PRESENTATION IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS NOTICE MAY RESULT IN A VIOLATION OF APPLICABLE SECURITIES LAWS.
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