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North Mara Analyst Site Tour 18.03.15 Unearthing Africa’s Potential LSE:ACA

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Page 1: LSE:ACA - acaciamining.com · North Mara Geology ... Pit Designs: Nyabirama pit New Stage 4 Stage 3 Old Stage 4 18.03.15 Analyst Site Tour 17 . 0 85 129 180 151 89 Gold 35% 228 218

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North Mara

Analyst Site Tour

18.03.15

Unearthing Africa’s Potential

LSE:ACA

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Important Notice

This presentation includes “forward-looking statements” that express or imply expectations of future events or results as opposed to historical facts. These

statements include, financial projections and estimates and their underlying

assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, projects, and statements

regarding future performance. Forward-looking statements are generally

identified by the words “plans,” “expects,” “anticipates,” “believes,” “intends,” “estimates” and other similar expressions.

All forward-looking statements involve a number of risks, uncertainties and

other factors, many of which are beyond the control of Acacia, which could cause actual results and developments to differ materially from those expressed in, or

implied by, the forward-looking statements contained herein. Factors that could

cause or contribute to differences between the actual results, performance and achievements of Acacia include, but are not limited to, changes or developments

in political, economic or business conditions or national or local legislation or

regulation in countries in which Acacia conducts - or may in the future conduct - business, industry trends, competition, fluctuations in the spot and forward price

of gold or certain other commodity prices (such as copper and diesel), currency

fluctuations (including the US dollar, South African rand, Kenyan shilling and Tanzanian shilling exchange rates), Acacia’s ability to successfully integrate

acquisitions, Acacia’s ability 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 process its mineral reserves

successfully and in a timely manner, Acacia’s ability to complete land

acquisitions required to support its mining activities, operational or technical difficulties which may occur in the context of mining activities, delays and

technical challenges associated with the completion of projects, risk of trespass,

theft and vandalism, changes in Acacia’s business strategy and ongoing implementation of operational reviews, as well as risks and hazards associated

with the business of mineral exploration, development, mining and production

and risks and factors affecting the gold mining industry in general.

Although Acacia’s management believes that the expectations reflected in such forward-looking statements are reasonable, Acacia cannot give assurances that

such statements will prove to be correct. Accordingly, investors should not place

reliance on forward-looking statements contained in this presentation.

Any forward-looking statements in this presentation 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, Acacia explicitly disclaims any obligation or undertaking publicly to update or revise any forward-

looking statements in this presentation, whether as a result of new information,

future events or otherwise. Nothing in this presentation should be construed as a profit forecast or estimate and no statement made should be interpreted to mean

that Acacia’s profits or earnings per share for any future period will necessarily

match or exceed its historical published profits or earnings per share. Mineral reserves and mineral resources estimates contained in this presentation have

been calculated as at 31 December 2013 in accordance with National Instrument

43-101 as required by Canadian securities regulatory authorities. Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definitions were followed

for mineral reserves and resources. The reserves and resources figures stated are

estimates. No assurances whatsoever can be given that the indicated quantities of metal will be produced and totals stated may not add up due to rounding. For

more information regarding the nature of reserves and resources estimates and

relevant CIM definitions, please see page 90 of African Barrick Gold plc’s 2013 Annual Report and Accounts.

You are reminded that you have received this presentation on the basis that you

are a person to whom this presentation may be lawfully made and delivered. 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, in breach of any applicable securities laws. BY ACCEPTING THIS PRESENTATION, YOU ACKNOWLEDGE AND

AGREE TO THE CONTENTS OF THIS DISCLAIMER AND YOU AGREE TO BE

BOUND BY THE FOREGOING LIMITATIONS.

18.03.15 Analyst Site Tour 2

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North Mara

High-grade open pit and underground mine

Year end 2014 reserves of 2.0Moz at 2.7g/t

9 year life of mine

18.03.15 Analyst Site Tour 3

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Location

4 18.03.15 Analyst Site Tour

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Our community

18.03.15 Analyst Site Tour 5

Matongo

Village

Nyakunguru

Village

Genkuru

Village

Kewanja

Village

Nyamwaga

Village

Kerende

Village

Nyangoto

Village

Mjini Kati

Village Nyabechunie

Village

Mesege

Village

Komerere Village

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North Mara: Gokona

18.03.15 Analyst Site Tour 6

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North Mara: Nyabirama

18.03.15 Analyst Site Tour 7

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Safety Safety

Improvements in 2014 a result of:

Systematic education of the employees by the safety department on a daily basis

Focus of management team

Empowering of the safety reps

Discipline

Safety shut downs after serious incidents

Contractors Controls initiatives

Visible Felt Leadership drive and monitoring

2015 focus on “We Care” programme

Safe Effective Shifts

18.03.15 Analyst Site Tour 8

0.56 0.59

0.51

0.71

0.77

0.50

0.17 0.22

0.43 0.45

0.60

0.49

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

2009 2010 2011 2012 2013 2014

Total Reportable Injury Frequency Rate(2009-2014)

TRIFR WR-RIFR

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Geology

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North Mara trend geology

18.03.15 Analyst Site Tour 10

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North Mara Geology

Deposits are hosted by a shear-bounded package of Archaean andesitic volcanic rocks

Occur as a northwest-striking steeply southwest-dipping stratigraphy and largely tuff cross-cut by doleritic dykes and sills

Rest on an intercalated sequence of mostly unaltered siltstone, greywacke and coarsely porphyritic andesites

To the south, also rest on hanging wall unit consists of a weakly schistose to massive chloritic unit considering to be of basaltic derivation

Gold mineralisation is hosted by deformed and altered granitoid.

Nyabirama deposit is shear hosted but not a classic lode type gold deposit.

Mineralisation occurs as two broad style

Disseminated

Quartz vein hosted (historical interest)

Several generations of dolerite dykes

18.03.15 Analyst Site Tour 11

Gokona & Nyabigena Nyabirama

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Cross Section of Gokona Geology

18.03.15 Analyst Site Tour 12

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Cross Section of Nyabirama Geology

18.03.15 Analyst Site Tour 13

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Reserves and Resources 2013 and 2014 summary

18.03.15 Analyst Site Tour 14

Open Pit kt g/t koz kt g/t koz

Gokona 5,138 5.102 843 1024 3.077 101

Nyabirama 13,258 2.710 1,155 18536 2.22 1323

Nyabigena 1,187 2.616 100 - - -

Open Pit Sub Total 19,582 3.332 2,098 19,560 2.265 1,424

Underground

Gokona - - - 1,989 8.071 516

Stockpiles 2,128 1.668 114 2,104 1.570 106

NMGM Reserves 21,710 3.169 2,212 23,653 2.692 2,046

Resources

Open Pit kt g/t koz kt g/t koz

Gokona 6,785 2.654 579 77 2.835 7

Nyabirama 7,131 2.125 487 6,077 1.765 345

Nyabigena 3,746 2.390 288 4,932 2.444 388

Komarera 2,282 3.298 242 2,281 3.298 242

Open Pit Sub Total 19,945 2.489 1,596 13,367 2.283 982

Underground

Gokona 3,905 6.878 863 3,173 4.344 443

Nyabirama 1,220 4.991 196 1,220 4.991 196

Nyabigena 197 6.053 38 197 6.053 38

Underground Sub Total 5,322 6.415 1,098 4,590 4.59 677

NMGM Resources 25,266 3.316 2,694 17,957 2.873 1,659

Measured & Indicated Measured & Indicated

Reserves2013 YE

Proven and Probable

2014 YE

Proven and Probable

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Mine Planning

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Life of Mine: Options Review

Original mine plan set up as multiple open pit operation (Gokona and Nyabirama)

Requirement to continue to purchase land for waste rock dumps through the LOM

Increasing tensions with communities over land speculation

Cash flow profile had a “hockey stick” profile

Option to mine Gokona Stage 3 via underground improves both cash flow profile and reduces mine footprint

Accesses high grade ounces, without significant material movement or requirement for additional land

Provides earlier access to potential deeper material beneath the planned Stage 3 final pit shell

Reduces risk of illegal intrusions

Focusing on cash flow & improving the social situation

Analyst Site Tour 18.03.15

16

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Pit Designs: Nyabirama pit

New Stage 4

Stage 3

Old Stage 4

18.03.15 Analyst Site Tour 17

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Pit Designs: Gokona pit

Gokona Stage 3

Gokona Stage 2

U/G Portal

Stage 3 high grade ore now U/G

18.03.15 Analyst Site Tour 18

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Gokona Underground

Production of 450,000 ounces over a 5 year life of mine with AISC below US$750/oz

Reduces mine footprint, supporting improved community relationships

Utilises exploration decline in the Gokona pit

Total pre-production capital of US$37 million (including exploration decline)

Potential to lower costs by contracting equipment

Submitted final applications for the required permits to commence mining underground

First ore anticipated to be in H1 2015

Moving into construction phase

Proven Probable Proven and Probable

Kt Grade

(g/t) Koz Kt

Grade

(g/t) Koz Kt

Grade

(g/t) Koz

Gokona

U/G 95.4 5.88 18 1,894 8.18 498 1,989 8.06 516

Analyst Site Tour 18.03.15

19

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Gokona Underground

Moving into construction phase

Physicals

Life of mine Year 5

Total tonnes Kt 2,981

Total ore tonnes Kt 1,991

Total Development metres km 17.7

Average gold grade g/t 8.06

Recovery % 88%

Tonnes Processed Kt 1,991

Gold Produced koz 453

Life of Mine Operating Costs and Capex

Pre-production Capital $m 37

Total Capital $m 130

Mining cost per tonne mined $/t 51

Milling cost per tonne of ore processed $/t 18

G&A cost per tonne of ore processed $/t 11

Cash cost per ounce $/oz 418

AISC per ounce $/oz 705

Analyst Site Tour 18.03.15

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Further Underground Potential at Gokona

Analyst Site Tour 18.03.15

Delineated a further 850koz at 4.4g/t in inferred resource beneath 990

mrl, to be tested by staged drilling from underground platforms

21

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Assessing the potential at Nyabirama

18.03.15 Analyst Site Tour 22

Drilling programme underway at Nyabirama to upgrade ounces in the

open pit and test underground potential

Potential UG follow up drilling

Phase 1 - priority 2 Potential ounce additions

Phase 1 - priority 1 High potential ounce additions

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Processing

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Processing Flowsheet

18.03.15 Analyst Site Tour 24

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Our Relationships

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Our Relationships

A multifaceted approach is being evolved in order to improve

stakeholder engagement

Continue to deliver on VBIA / VBA programmes*

Revise the security model where security works in parallel with community relations

Improve on:

Alternative livelihood projects with a youth focus

Engage government on both a local and national level to provide greater law enforcement

Assistance to local artisanal miners

Longer term focus will be on establishing partnerships with “respected” NGOs to ensure the continuity of the projects

Continuing to work with Government to find a safe sustainable solution to reduce intruder numbers

Analyst Site Tour 18.03.15

* Village Benefit Agreements and Village Benefit Implementation Agreements

26

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Background to community relations

North Mara is located in the midst of a community whom historically were/are mostly artisanal miners

Three clans Nyamongo, Nyabasi and Wairege around the mine with history of disputes among themselves

Significant in-migration to the area has increased pressures on land and infrastructure

Traditionally illegal mining poses challenges to the operation with high intrusion numbers

Community campaigns aimed at promoting alternative livelihoods:

regular community meetings and community leader engagements

youth engagements (Nyakegema Nyabigena and Wahiritui cooperatives

Continuing to work to create a new shared community horizon

18.03.15 Analyst Site Tour 27

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VBA / VBIA project summary

VBIAs/VBAs were signed in February 2012 to confirm and define legacy commitments

To date almost 65% of the commitments have been accomplished

Implementation of the VBIA/VBA helped to enhance relationship with local communities, government and politicians

ABG credibility has significantly improved

VBIA/VBA commitments expected to be completed in 2016, with current progress below:

Category Amount

VBIA expenditure to date $15.5 million

VBIA spend for 2014 $5.0 million

VBIA projection for 2015 $3.9 million

VBIA projection for 2016 $3.2 million

18.03.15 Analyst Site Tour 28

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Community engagement

Question: "I understand North Mara has a right to operate peacefully“

77%

23%

YES NO

Community (853 responses)

Youth (1012 responses)

81%

19%

YES NO

18.03.15 Analyst Site Tour 29

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Land Acquisitions

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Land purchases

The Land purchase programme has been a focal point in past three years and remains a critical sustaining capital element in support of the current North Mara LOM

Land values have been negatively impacted by speculation and hold outs which has threatened the long term economics at the mine

Land purchasing has been split two fold: Gokona and Nyabirama respectively

− Gokona U/G removes the need for further land acquisitions

− At Rama, require land purchases in order to access closer waste dumping areas, but looking at longer term economics of Rama U/G potential

For 2015 we have budgeted $15 million in respect of this, which is included in sustaining capital guidance

18.03.15 Analyst Site Tour 31

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Nyabirama: LOM requirement

18.03.15 Analyst Site Tour 32

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Gokona: previous LOM requirement

18.03.15 Analyst Site Tour 33

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Gokona: current LOM

PAF2 Dump Current Capacity –

5.1mt Current LOM – 4.6mt

Airport PAF2 Dump

Gokona Stage 2 Limit

Gokona Stage 3 Limit

18.03.15 Analyst Site Tour 34

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Bus. Improvement

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Key Business Improvement initiatives

18.03.15 Analyst Site Tour 36

Social Licence to Operate

Continue with the planned delivery of the VBA/VBIA projects

Ally with respected NGOs to develop long term sustainable livelihood projects

Enhance security systems / practices to link in with CSR objectives

Mine to mill productivity improvements

Operator and blasting practices

Cycle time / haul road conditions

Improve overall equipment effectiveness

Maintenance

Minimise operator / operating damage / condition monitoring

Improve planning to the supply chain cycle (6 months) / part life extension, reduced maintenance cost / hour

Process plant

Improve the grind & optimise milling circuit; 1% on recovery

Optimise steel ball usage

Extend liner life from 4 to 5 months

Shift Roster

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Maintenance

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015E

Av

ail

ab

ilit

y

Planned vs. Breakdown Maintenance - Fleet

Planned Breakdown

Business Improvement – Maintenance

Increase proportion of planned vs. breakdown maintenance

Targeting 90% / 10%

Improved costing, new planning system

Eliminate reworking

Increase mean time between failure to

Excavators – 50hrs

Dump Trucks – 40 hrs

Between improved maintenance and improved truck availabilities , there is the potential to remove 15% of fleet numbers, significantly reducing hauling cost

Potential longer term savings of $10-15 million per annum

Plan the work and work to plan

Analyst Site Tour 18.03.15

37

Page 38: LSE:ACA - acaciamining.com · North Mara Geology ... Pit Designs: Nyabirama pit New Stage 4 Stage 3 Old Stage 4 18.03.15 Analyst Site Tour 17 . 0 85 129 180 151 89 Gold 35% 228 218

0 85 129

180 151 89

Gold 35%

228 218 196

Gold 20%

239 234 221

Gold 10%

247 244 238

Our People

Page 39: LSE:ACA - acaciamining.com · North Mara Geology ... Pit Designs: Nyabirama pit New Stage 4 Stage 3 Old Stage 4 18.03.15 Analyst Site Tour 17 . 0 85 129 180 151 89 Gold 35% 228 218

0 85 129

180 151 89

Gold 35%

228 218 196

Gold 20%

239 234 221

Gold 10%

247 244 238

Our People

Significant reduction in international workforce

978 969 983

850

148 92 63

42

500

600

700

800

900

1,000

1,100

1,200

2012 2013 2014 2015-2019Ave

Em

plo

ye

e N

um

be

rs

Employee Breakdown International Nationals

High Potential Tanzanians identified

Focus on skills development and retention through development / localisation programmes

Relevant skill levels must be retained

Professional coaching for newly appointed managers

Mining, OE and Sustainability managed by Tanzanians

Critical positions such as Safety, Land Section Leaders localised

Localisation to be driven and overall employee numbers to be optimised, however skill levels will not be compromised

18.03.15 Analyst Site Tour 39

Page 40: LSE:ACA - acaciamining.com · North Mara Geology ... Pit Designs: Nyabirama pit New Stage 4 Stage 3 Old Stage 4 18.03.15 Analyst Site Tour 17 . 0 85 129 180 151 89 Gold 35% 228 218

0 85 129

180 151 89

Gold 35%

228 218 196

Gold 20%

239 234 221

Gold 10%

247 244 238

5 Year LOM

Page 41: LSE:ACA - acaciamining.com · North Mara Geology ... Pit Designs: Nyabirama pit New Stage 4 Stage 3 Old Stage 4 18.03.15 Analyst Site Tour 17 . 0 85 129 180 151 89 Gold 35% 228 218

0 85 129

180 151 89

Gold 35%

228 218 196

Gold 20%

239 234 221

Gold 10%

247 244 238

North Mara 5 Year Plan

0

300

600

900

1,200

1,500

1,800

FY12A FY13A FY14A FY15E FY16E FY17E FY18E FY19E

US

$/o

un

ce

All In Sustaining Cost per Ounce Cash cost

Sustaining Capital

Capitalised Development

Other**

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

0

100

200

300

400

FY12A FY13A FY14A FY15E FY16E FY17E FY18E FY19E

Gr

ad

e (

g/t

)

Pr

od

uc

tio

n (

Ko

z)

Production & Head Grade Production Head Grade

* FY15E reflects North Mara’s share to achieve mid point of group guidance **For 2016-2019 “Other” includes corporate G&A, share based payments, rehabilitation, minex and CSR costs

Analyst Site Tour 18.03.15

41

Page 42: LSE:ACA - acaciamining.com · North Mara Geology ... Pit Designs: Nyabirama pit New Stage 4 Stage 3 Old Stage 4 18.03.15 Analyst Site Tour 17 . 0 85 129 180 151 89 Gold 35% 228 218

0 85 129

180 151 89

Gold 35%

228 218 196

Gold 20%

239 234 221

Gold 10%

247 244 238

Evolution of Capital Expenditure

0

100

200

300

400

500

600

0

20

40

60

80

100

120

140

FY12A FY13A FY14A FY15E FY16E FY17E FY18E FY19E

Su

sta

inin

g a

nd

Ca

pit

al

Str

ipp

ing

/ o

un

ce

$ m

illi

on

Capex Profile Sustaining Capital Capitalised Development / Stripping

Expansion Capital Sustaining and Capital Stripping / ounce

* FY15 sustaining capital guidance includes $15m of land acquisitions categorised as pre-payments in historic years. Per ounce data reflects mid point of guidance range

Analyst Site Tour 18.03.15

42

Page 43: LSE:ACA - acaciamining.com · North Mara Geology ... Pit Designs: Nyabirama pit New Stage 4 Stage 3 Old Stage 4 18.03.15 Analyst Site Tour 17 . 0 85 129 180 151 89 Gold 35% 228 218

0 85 129

180 151 89

Gold 35%

228 218 196

Gold 20%

239 234 221

Gold 10%

247 244 238

Summary

Page 44: LSE:ACA - acaciamining.com · North Mara Geology ... Pit Designs: Nyabirama pit New Stage 4 Stage 3 Old Stage 4 18.03.15 Analyst Site Tour 17 . 0 85 129 180 151 89 Gold 35% 228 218

0 85 129

180 151 89

Gold 35%

228 218 196

Gold 20%

239 234 221

Gold 10%

247 244 238

Summary

A high quality asset now delivering

xxx

Past 2014 Future

Poor production record Mine not optimised Limited delivery to the

community Tanzanian potential not

realised

AISC $1,693/oz^

Culture of delivery on plan

Mine optimised, exploratory decline in progress

Delivering on Community Projects

Tanzanian potential realised

Focus on skills retention

AISC $947/oz*

Maintain culture of delivery

Realise full potential of the ore bodies

Continue with localisation & optimise labour

Develop and implement Community Relations Plan

AISC ~$900/oz

Analyst Site Tour 18.03.15

^FY2012 * FY2014

44

Page 45: LSE:ACA - acaciamining.com · North Mara Geology ... Pit Designs: Nyabirama pit New Stage 4 Stage 3 Old Stage 4 18.03.15 Analyst Site Tour 17 . 0 85 129 180 151 89 Gold 35% 228 218

0 85 129

180 151 89

Gold 35%

228 218 196

Gold 20%

239 234 221

Gold 10%

247 244 238

Questions?