Galane gold company presentation


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Galane gold company presentation

  1. 1. Company Presentation June 2012
  2. 2. Forward Looking StatementsCertain information set forth in this presentation contains “forward-looking statements” and “forward-looking information” underapplicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-lookingstatements which include management’s assessment of Galane Gold‘s future plans and operations and are based on Galane Gold‘scurrent internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Forward-lookingstatements are provided to allow potential investors the opportunity to consider management’s beliefs and opinions in respect of thefuture so that they may use such beliefs and opinions as one factor in evaluating an investment in Galane Gold. Some of the forward-looking statements may be identified by words such as “may”, “will”, “estimates”, “intends”, “expects”, “anticipates”, “believes”,“potential”, “projects”, “plans”, and similar expressions. These statements are not guarantees of future performance and unduereliance should not be placed on them. In addition, the projections contained herein are based on the assumptions set out inAppendix A. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may causeGalane Gold‘s actual performance and financial results in future periods to differ materially from any projections of futureperformance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are notlimited to: liabilities inherent in mining; technical problems; Galane Gold‘s inability to obtain permits and regulatory approvalsrequired in connection with operations; dependence on third party transportation systems; competition for, among other things,capital, land, inputs and skilled personnel; incorrect assessments of the value of acquisitions; changes in commodity prices andregulations related to mining; the effects of competition and pricing pressures in the market; the oversupply of, or lack of demand for,mineral products; currency and interest rate fluctuations; various events which could disrupt operations and/or the transportation ofmining products, including labor stoppages and severe weather conditions; the demand for and availability of rail, port and othertransportation services; and management’s ability to anticipate and manage the foregoing factors and risks. Galane Gold undertakesno obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except asrequired by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements. Suchforward looking statements and forward-looking information in this presentation speak only as of the date of this presentation. 2Galane Gold Ltd. Company Presentation
  3. 3. Galane Gold SummarySummary Trading Symbol GG:TSX-V• Owner (100%) of the Mupane gold mine in Botswana, in Shares O/S 48,233,000 production since 2005• Annual gold production of approximately 57,000 oz Shares O/S fully-diluted 78,161,233• No hedges, no NSRs Recent Price (Apr 24, 2012) C$0.85• Control all prospective ground for gold on the Tati Greenstone Market Cap C$40,998,050 belt in Botswana Working Capital (at Mar 31, 2012) US$27,331,442• Low-risk opportunity for resource expansion from existing properties through: Enterprise Value ~C$18,700,000 – Large portfolio of drill-ready targets obtained via soil Institutional Ownership 81.0% sampling and previous drilling Management & Board 11.8% – Drilling previously mined open pits where gold mineralisation is known to be open at depth Mupane Gold Mine MillCompany History• Acquired Mupane Gold Mining (Pty) Ltd. from IAMGOLD Corp. (effective date: July 1, 2011)• Acquired Northern Lights Exploration (compl. 10 April 2012)Investment Case• Low Geological Risk – Region has been producing gold for > 1,000 years, large portfolio of low-risk targets• Low Operating Risk – Mupane operation has been mining and processing since 2005• Low Financing Risk – Galane Gold can fund its expansion through internally generated cash-flows 3Galane Gold Ltd. Company Presentation
  4. 4. Management Team Philip Condon • 25 years experience in mining industry, focus on gold and base metals • Former CEO of National Mining Company of Oman, Technical Expert & Chief Executive Development Specialist for Freeport McMoran Copper & Gold Inc., Officer and Engineering Manager for Golden Shamrock (Ashanti Goldfields), Project Director Engineer and Manager, Engineering Services for Conzinc (Rio Tinto plc) • B.Eng (Hons), MBA, Member of Australian Institute of Company Directors • Australian Charles Byron • 30 years experience as geologist focused on Archaen gold exploration and mining Chief Geologist • Previously with Phelps Dodge, Falconbridge and Gallery Gold where he and Director led the team that discovered the Mupane Gold Deposit and saw it into production in 2004 • B.Sc. (Hons) Geology, Soils, Geography (University of Natal) • Botswana Lawrence • 15 years experience in open cut and underground mining of gold, base metals, platinum and ferrochrome across a diversified spectrum of countries and Manjengwa cultures • Former Mining Director of Nordgold in Guinea, Mine Manager of National General Manager Mining Company in Oman, Production Manager of Anglo Base Metals’ Skorpionzinc Mine in Namibia, Senior Mining Engineer of Zimplats in Zimbabwe and Mine Manager of Maranatha Ferrochrome in Zimbabwe. • B.Sc.(Hons)Eng, Member of AusIMM • Zimbabwean 4Galane Gold Ltd. Company Presentation
  5. 5. Board of Directors Ravi Sood • Chairman of Feronia Inc., one of Africa’s oldest operating companies and largest employers Chairman (non- • Former CEO of Navina Asset Management a Toronto-based investment exec) firm • Director of several companies in the Agriculture, Mining, and Oil & Gas sectors • Canadian Ian Egan • More than 30 years experience in the mining industry • Currently a director of Kenmare Resources plc Independent • Previous experience includes holding senior management positions at BHP, Director Utah Mining Australia, Mineral Deposits Ltd and N L Industries Inc., as well as being a director of Ok Tedi Mining Ltd. • Fellow of the Australian Institute of Mining and Metallurgy (FAusIMM) and a Fellow of the Australian Institute of CPAs (FCPA) • BEc in Accounting and Law, MEc in Industry Economics • Australian Amar Bhalla • President of Capital Investment Corp., an investment management Independent firm focused on private equity and venture capital Director • Previously served as CEO of Crescent Logic Inc., a Toronto-based software firm • Chairman of Ursa Major Minerals, a TSX listed nickel producer and director of several TSX-V listed companies • Canadian 5Galane Gold Ltd. Company Presentation
  6. 6. Botswana Overview Strong Economic Environment Stable and Simple Legal System• Ranked as best mining country in Africa1 • Corporate Tax Rate as low as 22% − Ranked 7th best mining country globally • 5% Royalty on Gold Sales − Political Stability and Legal Stability • IFRS Accounting System• Strong GDP growth • English Law• AA credit rating • Banking system adheres to international standards• English speaking¹ Source: Fraser Institute Emerging Mining Powerhouse Map of Botswana• Mineral rich and historically underexplored − Largest diamond exporter in world − Gold producer − Nickel producer Indian Ocean − Copper producer Atlantic Ocean − Platinum producer − Potential uranium producer − One of world’s largest measured coal resources Operating in a stable and economically sound mining-friendly jurisdiction 6 Galane Gold Ltd. Company Presentation
  7. 7. Galane Operations – The Mupane gold mineType • Conventional open-pit gold mine with mill and carbon-in- Mine Location leach processingLocation • Northeastern Botswana in southern Africa • 30 km southeast of the town of Francistown (population of around 100,000)Ownership • 100% of the Mupane gold deposits and mining operationsOperating History • Commercial production started in January 2005 • Historical production is 545,688 oz Au to end Mar, 2012Reserves and As at 31 December 2010 and a $1,200/oz. gold price:Resources • Reserves: 130,000 oz Au • Resource: 356,000 oz Au M&I and 77,000 oz Au Inferred Processing OperationsAnnual Production • Processing capacity of 1.2 million tonnes per annum ofCapacity oxide ore and 1.0 million tonnes per annum of sulphide ore • 50,206 oz of gold production in 2011. • 37,716 oz gold produced from 1 Sept to 31 Mar, 2012Mine Life • Currently 5+ years, opportunity to significantly extendProduction • 50,000 oz Au per annum / $1,100 all-in cash cost (incl.Forecast royalties, CAPEX and Exploration) • Opportunity to improve production and reduce cash costs 7Galane Gold Ltd. Company Presentation
  8. 8. Tenements 8Galane Gold Ltd. Company Presentation 8
  9. 9. Regional Soil Sampling Gold MONARCH Francistown TEKWANE MAP NORA GOLDEN EAGLE JIM’S LUCK MUPANE RAINBOW Galane Gold Ltd Mining Licences Galane Gold Ltd Exploration Targets MATOPI Greenstone belt outline MOLOMOLO SIGNAL HILL 9Galane Gold Ltd. Company Presentation 9
  10. 10. Simplified Geology of the Tati Greenstone Belt 10Galane Gold Ltd. Company Presentation 10
  11. 11. Tati Greenstone Belt Geology & AeroMagnetics 20 kilometres Francistown Total Field AeroMagnetics Geology Directional Filtered AeroMagnetics 11Galane Gold Ltd. Company Presentation 11
  12. 12. Southern Tati Schist Belt Faulting Mupane Radiometrics (Potassium) Mupane AeroMagnetics Unfiltered Mupane AeroMagnetics Filtered 20 kilometres Mupane Geology Mupane Au (ppb) in Soils 12Galane Gold Ltd. Company Presentation 12
  13. 13. Northern Tati Schist Belt Faulting Ultramafic Intrusions Ultramafic Ultramafic Intrusions Intrusions Monarch Radiometrics (Potassium) Monarch AeroMagnetics Unfiltered Monarch AeroMagnetics Filtered Monarc h Mine Ultramafic City of Intrusions Francistown 20 kilometres Shashe Mines Monarch Geology Monarch Au (ppb) in Soil 13Galane Gold Ltd. Company Presentation 13
  14. 14. Proximity of Key Gold Targets to Mill Location of existing Mupane processing and tailings facility Potential for discovery of numerous large gold deposits located within 20 km of existing processing operations 14Galane Gold Ltd. Company Presentation 14
  15. 15. Exploration ProgramTarget Cost Description (US$M)Drill and define resource at US$1.9M • Definition and in-fill drilling on known mineralized zones toJim’s Luck define an NI 43-101 reserve and resource • Drilling of mineralized zones along strike to add to the resourceTau and Tholo Pit drilling US$0.5M • Prove up additional gold ore below and between existing pits(existing pits that are open at • Tau already has one hole from pit base with 52 m at 4.5 g/t Audepth) including 20 m at 6.5 g/t AuDrill known gold anomalous US$1.5M • These locations are consistent with previous gold depositstargets having soil sample anomalies but have not had significant drilling carried out if at allGolden Eagle pit drilling (open US$0.4M • Gold mineralisation known to continue below current mineat depth) plan pit depth but not included in reserve/resourceReview of exploration US$0.1M • A complete and extensive database has not been utilised indatabase respect of extensive exploration activity • Also requires review with 2010 technology (currently based on 1995) – especially geophysical dataTargeting increase in reserves and resource to +1 million oz Au at a cost of approximately $4.4 million to end of 2013 15Galane Gold Ltd. Company Presentation 15
  16. 16. Low Risk Resource Expansion – Tau and Tholo Pits• Recent drilling results at the previously mined Tau pit include a 53 m intersection averaging 4.55 g/t Au including: – 24 m at 6.57 g/t Au – 15 m at 5.86 g/t Au• Potential for underground mines at Tau, Golden Eagle, and other locations 16Galane Gold Ltd. Company Presentation 16
  17. 17. Low Risk Resource Expansion – Jim’s Luck• The Jim’s Luck Project constitutes a 0.5 million oz exploration target• In excess of 7 km of strike of prospective ironstone lithologies – 830 meters has been drill tested – Known low grade mineralization exists over the balance (6km+)• Production could commence quickly from the drilled out portion• 140 RC holes (13,170m) and 7 diamond drill holes (1,212m) completed by Gallery Gold (1999 to 2004) and IAMGOLD (2006) – 77 RC and 7 diamond holes outline the 830m long target zone averaging 6.0m @ 1.87g/t Au, which ‘envelopes’ a higher grade core averaging 3.18m @ 2.77g/t Au – Two wider, higher grade ‘shoots’ have also been identified within the 830m – 30m of strike averaging 6.8m @ 4.65g/t and 50m of strike averaging 6.6m @ 4.28g/t – Drilling to 100m+ has shown the mineralization generally, including the high grade shoots, to be open at depth with strong down plunge continuity• Preliminary work is in progress on open pit resources and metallurgical testing Historical Workings Historical Workings 17Galane Gold Ltd. Company Presentation 17
  18. 18. Jim’s Luck – 7km of Strike 18Galane Gold Ltd. Company Presentation 18
  19. 19. Jim’s Luck – Detailed Drilling 19Galane Gold Ltd. Company Presentation 19
  20. 20. Additional Growth OpportunitiesMonarch Mine (Under Application for Prospecting Licence) • Largest historic gold producer (240,000 oz @ +6 g/t Au) and mined to 200 m below surface • Approximately 500,000 tonnes of fines dump at 1.4 g/t Au (preliminary estimate) • Examine the potential below 200 m where limited drilling by previous workers indicates that the reef continues with intersections that include 3.20 m @ 3.56 g/t Au and 1.51 m @ 3.62 g/t Au – Design a “deep drilling” program to test this potential – Also examine the Northern extension up to the old Mambo workings, some 1.5 km – There is potential for 250,000 ozs for every 200m vertical depth tranche • Planning work to be completed by mid 2012 Fines Dump at Monarch Mine 20Galane Gold Ltd. Company Presentation 20
  21. 21. Additional Growth OpportunitiesMapNora (Shashe Mine)• Historical operation impeded by the refractory nature of the ore• The Phelps Dodge attempt in late 1980s to early 1990s failed due to metallurgical complexities• High grade shoots (>10 g/t Au) are continuous down plunge allowing for a potential of 150,000 contained oz Au to depth of 300m vertical depth• The potential exists for 200,000 oz Au for every 300m vertical depth tranche• Underground infrastructure, including shaft, headgear and winder, in place and in good order to 340 m vertical depth• Metallurgy now better understood and a concentrate could be processed at bioleach facilities in South Africa• Extract a bulk sample from underground for metallurgical test work in late 2012 Headgear at Map Nora Underground Mine 21Galane Gold Ltd. Company Presentation
  22. 22. Additional Growth OpportunitiesMatopi• Virgin discovery by Gallery Gold in 1997 as a coincident gold and arsenic in soil geochemistry anomaly• Preliminary trenching and drilling show a large but low grade and discrete ultramafic unit with uniform mineralization e.g. 35 m @ 0.85g/t Au (including 4 m @ 2.25g/t Au) and 41 m @ 0.86 g/t Au (including 16 m @ 1.85 g/t Au)• Additional work planned for early 2012 to better understand this significant anomaly and to test for better mineralization possibly missed by the previous workRainbow• Favourably located geologically and physically, between Jim’s Luck and Matopi and close to Signal Hill• An historic underground mine exploiting narrow high grade ‘shoots’ with the potential for larger, lower grade mineralized ‘halos’• Access to site needs to be repaired before work can commence – planned for Q2 2012, after the rain seasonOrapa Road Anomalies• A string of subtle gold in soil geochemical anomalies sporadically developed over a strike length of 20 km and coincident with a strong linear aeromagnetic geophysical anomaly typical of a significant fault system• This group of anomalies potentially constitutes a classic case of gold ‘leakage’ up and along a structural system and could be indicative of significant gold mineralization at depth• More detailed magnetic surveys are planned with drilling of any targets generated in late 2012Tekwane• This manifests itself as a “standout” gold in soil geochemical anomaly some 4.5 km2 in size and caused by an auriferous quartz rubble horizon in the soil profile• Origin of the quartz rubble needs to be established –theory is it could originate from an as yet undiscovered underlying “stockwork” system associated with existing favourable lithologies• A systemic and extensive, but phased, pitting exercise commences in late 2011 22Galane Gold Ltd. Company Presentation
  23. 23. Milestones 2011  Complete Review of Org Structure and skills requirements  Implement Organisational Restructuring  Complete Exploration Plan  Carryout Initial Mine Plan Review  Identify impediments to performance above plan 2012  Complete Acquisition of Northern Lights Exploration  Resource Expansion – commence drilling programme  Resolution of dilution, fragmentation, mine geology and productivity issues  Complete optimised ore tonnage throughput and gold recovery  Complete Mine Geology and Resource Review  Complete revised mining plan  Botswana Stock Exchange Listing  Capital Expenditures – complete full 2 year capital plan 23Galane Gold Ltd. Company Presentation
  24. 24. Investment Highlights Immediate Leverage Experienced Operating Exploration Upside to Spot Gold Management• Unhedged gold producer • Control all prospective ground on • Strong operators with the ability• Free cash flow from current 2016 the Tati Greenstone belt to optimize and expand the mine plan in excess of $100 million at • Substantial data set and portfolio • Ability to leverage African $1,700/oz gold price and over of drill-ready targets relationships with accretive $200 million at $2,000/oz • Likelihood of underground external growth expansion of existing pits Compelling Valuation on Current Production Alone Current Valuation Extended Mine Valuation Re- Life Rating 24Galane Gold Ltd. Company Presentation
  25. 25. The Galane Gold logo was designed by an employee in a company-wide contest. The blue and black bars in the official colours of Botswana represent the hands of Batswana protecting the country’s resources for the betterment of the country and its people. 25Galane Gold Ltd. Company Presentation
  26. 26. Contacts Philip Condon Chief Executive Officer Mobile: +267 72 338 331 Ravi Sood Chairman (non-executive) Mobile: +1 647 987 7663 Investor Relations Phone: +1 416 907 2027 26Galane Gold Ltd. Company Presentation
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