Precious Metals and the Pacific Rim The Golden Harvest Gavin Thomas Gold Symposium November 2011
DisclaimerForward Looking Statements: These materials include forward looking statements. Forward looking statements inherently involve subjective judgment & analysis & are subject to significant uncertainties, risks & contingencies, many of which are outside of the control of, & may be unknown to, the company. Actual results and developments may vary materially from that expressed in these materials. The types of uncertainties which are relevant to the company may include, but are not limited to, commodity prices, political uncertainty, changes to the regulatory framework which applies to the business of the company & general economic conditions. Given these uncertainties, readers are cautioned not to place undue reliance on such forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, the company undertakes any obligation to publicly update or revise any of the forward looking statements, changes in events, conditions or circumstances on which any such statement is based.Some statements in this presentation regarding estimates or future events are forward looking statements.They involve risk and uncertainties that could cause actual results to differ from estimated results. Forwardlooking statements include estimates of future production, cash and total costs per ounce of production,reserve and mineralized material estimates, capital costs, and other estimates or prediction of futureactivities. They include statements proceeded by words such as “believe,” “estimate,” “expect,” “intend,”“will,” and similar expressions. Actual results could differ materially depending on such things as politicalevents, labour relations, currency fluctuations and other general economic conditions, market prices forDominion Mining Limited and/or Kingsgate Consolidated Limited products, timing of permits and othergovernment approvals and requirements, changes in operating conditions, lower than expected ore grades,unexpected ground and mining conditions, availability and cost of materials and equipment, and risksgenerally inherent in the ownership and operation of mining properties and investment in foreign countries.
Exploration Leads Success Why Gold and Silver Geology - Epithermal Gold Pacific Rim of Fire Frontier Exploration in 70-80‟s Eastern Pacific in „90–‟00‟s Opportunities in Asia
Is This a Gold Bubble? Relative Performance Jan 1980 2000% $850 1500% 1000% 500% 1972-1985 Sept 2011 $1,899 0 1999-Present Time since beginning of Cycle(Source: Bloomberg)
Is This a Gold Bubble? No! Relative Performance Jan 1980 2000% $850 1500% 1000% 500% 1972-1985 Sept 2011 $1,899 0 1999-Present Time since beginning of Cycle(Source: Bloomberg)
Gold: Over Talked & Under Invested Global Market • Bond Market : $91,200 Bn • Equity Market : $41,500 Bn Size • Total Gold Market : $1,100 Bn Gold Market • ETF‟s, coins & bars ~$200 Bn • China imported 200t of gold in Jan 11Investment Assets (~50% of world production)Growing Inflation • Which currency do you invest in? • If global inflation x2 bonds may fall >10% Fears • Hard assets & gold the only real currency • A lot of talk for 2 years about this but Where to? no real investment – except China & India
Gold Price vs US Interest Rates$/troy oz Gold price % 1600 US 10 Year tips Yield 0.5 1400 1.0 1200 1.5 1000 2.0 Gold has a strong 800 2.5 correlation to low 600 3.0 interest rates 2007 2008 2009 2010 2011 Russia Vietnam Indonesia UK Most countries currently HongKong India have negative real USA Italy interest rates Retail Deposit Rates Germany minus China Forecast 2011 Inflation Rates France Switzerland Japan Turkey Situation unlikely to-5% -4% -3% -2% -1% 0 + 1% change soon
Return of the Gold Standard?
Chinese Gold DemandTonnes 700 China Developed West 600 500 400 Total Gold Demand 300 200 China outstrips western 100 world demand for the first 0 2001 2005 2010 time in 2010 Source: GFMS, World Gold CouncilTonnes 250 China 200 India Gold Investment Demand 150 100 China catching up fast 50 0 2001 2005 2011 H1 Source: GFMS, World Gold Council
Gold Grade Decreasing Global Mine Production 2,000 s 2.4 nageng Weighted Av. Head Grade (g/t)Total Gold Ore Processed (Mt) 1,800 Tonreasi 2.2 i nc 1,600 2.0 1,400 1,200 1.8 1,000 1.6 800 1.4 600 G dec rades 1.2 400 reas i ng 1.0 200 0 0.8 1995 2000 2005 2010 Total OP ore milled Dump tails milled Average grade Total UG ore milled Total ore heap leachedSource: Company data, Credit Suisse estimates
US$ Why Silver ?$50 • Silver is a unique precious metal • High correlation to gold • Produced primarily as a by-product • Silver is a store of value$40 • Physical demand has risen significantly over the past few years • ETF demand continues at record levels • Silver is a versatile industrial metal$30 • New uses are being developed • Relied upon in advancement of developed and emerging economies$20$10 (Source: Silver I Whea$0 1971 1975 1980 1985 1990 1995 2000 2005 2010
Geology Underlies Opportunity Epithermal Modelw sulphidation gold deposits = geothermal hot spring environment
Pacific “Rim of Fire” The Golden Harvest Beijing Sado New York Tokyo Hehaughlin Hishikari Los Angeles Mulatos Monywa Loei Sepon Didipio Masbate Bangkok Atlas Bella VistaMiwah Mamut Tampakan Bau Toka Tindung Mt Kelian Gosowong Fruta del Norte Lebong Muro Awak Ok Tedi Lihir Pierina Pongkor Mas Grasberg Porgera Gold Ridge Yanacocha Batu Hijau Mt Kasi Kidston Emperor Escondida Mt Leyshon Chuquicamata Cracow El Peñon Cadia Santiago Peak El Teniente Hill Sydney Waihi Buenos Adelaide Esquel Aires Macraes Cerro Negro Epithermal/Porphyry Deposits
Lihir Island • Resources ~56Moz • Reserves ~31Moz Lihir Island Papua New GuineaAustralia
Precious Metals in the Pacific Rim 2011 – Two Mines and Two Advanced Projects Chatree Nueva EsperanzaChallenger Bowdens
Chatree Gold Mine in Thailand Asian showcase gold mine Chatree
Chatree - World Class Deposit Phitsanulok Province Chatree ~6Moz to date & growing Phichit (including mined to date) Province CHATREE NORTH Phetchabun Province BanLarge low grade and low Kho Din Ban Dong Long cost gold deposit CHATREE Significant near mine potential 1 Km
Nueva EsperanzaAdvanced silver/gold project in Chile Nueva Esperanza
Project Well Located Choquelimpie Significant experience in the gold and copper belts El Tesoro High sulphidation silver/gold San Cristobal epithermal Currently 94% of Laguna in Nov 2011 Project located in the world-class Maricunga Gold-Silver Belt Maricunga Belt Host to over 70Moz gold resources Produced over 10Moz gold
Nueva Esperanza Combined Mineral Resources:Updated Resources 28.5Mt @ 0.25g/t Au and 78g/t Ag 1.8Moz Au (AuEq) or 81.6Moz Ag (AgEq) Coffey undertaking feasibility study Feasibility Study • Stage 1 completed in July 2011 • Final draft expected early in 2012 Esperanza: A number of targetsExploration Potential Southern Maricunga: Field work to resume at Maricella and Catchitos
Kingsgate Growth Project Bowdens Silver project In NSW Bowdens
Bowdens Overview• Epithermal silver deposit with lead and zinc by-products• Located 25km E of Mudgee, some 240km NW of Sydney• Established infrastructure and mining workforce• Large, continuous, near surface deposit hosted in a volcanic sequence of breccia and tuff (Rylstone Volcanics)
Bowdens Upside Potential 1 kilometre• Significant resource potential 10,750mN along strike and at depth• Pit shell reflects the current base of drilling 10,500mN• High grade starter pit 10,250mN 10,000mN 14,750mE 15,000mE 15,250mE 15,500mE 9,750mN
Bowdens Acquisition completed in SeptemberUpdated Resources Resource estimate 99Moz Ag (JORC) 131Moz AgEq (incl Pb & Zn) Ausenco to undertake feasibility Feasibility Study RW Corkery to co-ordinate EIS Community consultation plan underway Resource Growth Mineralisation open at depth and along strike. Potential Drilling program to start in next few months.
Challenger Gold Mine Acquired by Kingsgate in Feb 2011Challenger
Challenger Gold Mine Turn Around Story Underground gold mine in remote South Australia . Production rate ~100koz pa to grow to ~120Kozpa over next 12 - 18mths Third quartile costs expected to improve in 2012 Strong reserve growth achieved. Current reserves ~610Koz , up over 100% on 2010 incl. mine depletion Resources ~1.09Moz to grow significantly over next 2 to 5
Challenger Upside PotentialE W Ventilation Shaft Challenger Challenger Oblique Section West RL(m) Other Structures 1000 820 Level Area of current drilling M1 800 M2 800 Level Upside M3 Exploration Drive 600 400280 LevelExploration Drive 200 Open Open Down Down Dip 0 Dip Open -200 Down Upside Dip
Kingsgate Active in Pacific Rim Strong Production Growth Chatree Nueva EsperanzaChallenger Bowdens
Precious Metals and the Pacific Rim Gold and Silver Focus Geology - Epithermal Gold Pacific Rim of Fire Prospectivity Big Deposits - porphyries Major Silver Credits The Gold and Silver Harvest
AppendixGeneral Disclaimer:The information contained in this presentation is for informational purposes only and does not constitute anoffer to issue, or arrange to issue securities or other financial products. The information contained in thispresentation is not investment or financial product advice and has been prepared without taking intoaccount the investment objectives, financial situation or particular needs of any person. To the maximumextent permitted by law, none of Dominion Mining Limited, Kingsgate Consolidated Limited, theirrespective directors, employees or agents, nor any other person accepts any liability including withoutlimitation any liability arising out of fault or negligence for any loss caused from the use of the informationcontained in this presentation. No representation or warranty, express or implied, is given as to theaccuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts orother forward looking statements.Competent Persons Statements:Information in this presentation that relates to Kingsgate‟s Exploration Results, Mineral Resource and OreReserve estimates, geology, drilling and mineralisation, is based on information compiled by Ron James,who is an employee of the Kingsgate Group and is a member of The Australasian Institute of Mining andMetallurgy. Ron James is a Competent Person under the meaning of the JORC Code with respect toExploration Results, Mineral Resource and Ore Reserve estimates, geology, drilling and mineralisationbeing presented. He has given his consent to the Public Reporting of these statements concerningExploration Results, Mineral Resource and Ore Reserve estimates, geology, drilling and mineralisation,and is in agreement with the contents and format of this presentation.The information in this presentation that relates to Challenger‟s Exploration Results, Mineral Resources orOre Reserves is based on information compiled by Peter Bamford, Tony Poustie and Paul Androvic whoare full-time employees of the Company, members of the Australasian Institute of Mining and Metallurgy.Peter Bamford, Tony Poustie and Paul Androvic have sufficient experience, which is relevant to the style ofmineralisation and type of deposit under consideration and to the activity, which they are undertaking toqualify as Competent Persons as defined in the 2004 Edition of the „Australasian Code for Reporting ofExploration Results, Mineral Resources and Ore Reserves‟. Peter Bamford, Tony Poustie and PaulAndrovic, consent to the inclusion in the report of the matters based on their information in the form andcontext in which it appears. www.kingsgate.com.au
Corporate Structure KINGSGATE 100% 100% 70% Dominion Laguna KCN Capital Gold Resources Operations 49% 49% 49%**Phar Mai Challeng 51%* Issara Akara 51%* Thai ArqueroExplorat er Mining Mining Sharehol s ion Gold Limited Limited ders ProjectLimited Mine 100% 100% Gold Chatree 51%* Explorat Gold * Held via Preference shares ion Thai Mine ** Kingsgate owns 100% of the Thailand Ordinary Shares and receiveShareholde 100% of the Cashflow and rs Ordinary Dividends
Thai Political Change Landmark victory by Puea Thai Party with 265 seats out of 500 seats Chatree Formed coalition to strengthen Thailand majorityBangkok Led by Yingluck Shinawatra sister of former prime minister Thaksin Shinawatra Decisive victory should lead to a more politically stable Thailand Thai politics confined to Bangkok
Working in Thailand Asian Competitive Advantage Cost Comparisons – Thailand vs Australia Established Infrastructure Grid Power Open Pit Mining (US$): Sealed roads Waste: $1.70/t vs $2.50/t Ore: Lower cost support $3.40/t vs $4.00/t Skilled manufacturing “Buy Thai” sourced supplies Power: 8c/Kwh vs 20c/Kwh Labour – Skilled & available Assays: $3/sample vs $20/smp Robust Deposit Simple mining & metallurgy Safe Mine = Efficient Mine Safest gold mine globally
Corporate Social ResponsibilityWorld Safest Gold Mine Over 8 years – No incidents Zero Environmental Incidents ISO Standards on all activities Only mining company granted Social Thailand National Zero Accident Award Occupational 2010.jpg Accountability SA8000 Safety & Health Award 2010 Training focus – 99% Thai 31% women in management High quality, stable workforce Created local support industry Prime Ministers Award 2010
Chatree Chatree Ore Reserves as at 30 June 2010 (>0.4g/t gold cut-off grade) Gold Silver Gold Silver Tonnes Source Category Grade Grade Contained Contained (millions) (g/t) (g/t) (Moz) (Moz)From Pits Proved 37.4 1.00 9.5 1.20 11.42 Probable 18.7 0.98 8.4 0.59 5.02Stockpiles 5.60 0.79 12.1 0.14 2.19Chatree Total Total 61.7 0.97 9.4 1.93 18.63 Chatree Mineral Resources as at 30 June 2010 (>0.3g/t gold cut-off grade) Gold Silver Gold Silver Tonnes Source Category Grade Grade Contained Contained (millions) (g/t) (g/t) (Moz) (Moz)From Pits Measured 79.8 0.81 7.4 2.07 18.85 Indicated 56.7 0.76 6.1 1.39 11.07 Inferred 31.4 0.71 4.8 0.72 4.86Stockpiles 5.60 0.79 12.1 0.14 2.19Chatree Total Total 173.5 0.77 6.6 4.32 36.97Competent Persons Statement. Information in this presentation relates to Exploration Results, Mineral Resource and Ore Reserve estimates based on information compiled by thefollowing Competent Persons: Ron James, Fiona Davidson, Guy Davies and Suphanit Suphananthi who are employees of the Kingsgate Group and members of The Australasian Instituteof Mining and Metallurgy and Rob Spiers who is an employee of Hellman & Schofield Pty Ltd and member of The Australian Institute of Geoscientists. These people qualify as CompetentPersons as defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2004 edition) and possess relevant experience inrelation to the mineralisation being reported herein as Exploration Results, Mineral Resources and Ore Reserves. Each Competent Person has consented to the Public Reporting of thesestatements and the inclusion of the material in the form and context in which it appears.
Challenger Challenger Ore Reserves as at 30 June 2010 Gold Gold Tonnes Source Category Grade Contained („000) (g/t) („000 oz)From Mine Proved 318 5.8 59 Probable 1,834 6.0 352Stockpiles 157 2.1 9Challenger Total Total 2.310 5.7 420 Challenger Mineral Resources as at 30 June 2010 Gold Silver Tonnes Source Category Grade Contained („000) (g/t) („000 oz)From Mine Measured 310 6.3 63 Indicated 2,232 6.4 460 Inferred 1,672 7.8 418Stockpiles 157 1.8 8Challenger Total Total 4,371 6.8 950Competent Persons Statement. The information in this presentation that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by PeterBamford, Tony Poustie and Paul Androvic who are full-time employees of the Company, members of The Australasian Institute of Mining and Metallurgy. Peter Bamford, Tony Poustie andPaul Androvic have sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking, to qualify asCompetent Persons as defined in the 2004 Edition of the „Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves‟. Peter Bamford, Tony Poustie andPaul Androvic consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.
Nueva Esperanza Mineral Indicated Inferred Total Resources Tonnes Gold Silver Tonnes Gold Silver Tonnes Gold Silver Gold Silver>0.5g/t AuEq M g/t g/t M g/t g/t M g/t g/t MOz MOz Arqueros 16.3 0.32 81 4.0 0.3 50 20.0 0.32 75 0.20 48.1 Chimberos 3.7 0.2 85 3.7 0.20 85 0.02 10.1 Teterita 4.8 0.0 85 4.8 0.01 85 0.00 13.1 Total 16.0 0.32 81 12.5 0.2 74 28.5 0.25 78 0.23 71.3 Mineral Tonnes AuEq Tonnes AuEq Tonnes AuEq AuEq Resources M g/t M g/t M g/t MOz Gold Indicated Inferred Total Equivalent Arqueros 16.0 2.12 4.0 1.4 20.0 1.98 1.27 Chimberos 3.7 2.1 3.7 2.09 0.25 Teterita 4.8 1.9 4.8 1.90 0.29 Total 16.0 2.12 12.5 1.8 28.5 1.98 1.81 Silver Indicated Inferred Total Equivalent Arqueros 16.0 95 4.0 64 20.0 89 57.2 Chimberos 3.7 94 3.7 94 11.2 Teterita 4.8 85 4.8 85 13.2 Total 16.0 95 12.5 81 28.5 89 81.6Notes: Au = gold; Ag = silver; M = million; g/t = grams per tonne; MOz = million ounces.1.In situ density 2.0 t/bcm, based on 350 measurements at Arqueros. This is lower than previously used 2.2 t/bcm. 2. Gold equivalent on basis of gold/silver revenueratio of 45; calculated as Au + Ag/EQ (gold plus [silver divided by 45]). 3. Silver equivalent on the basis of gold/silver revenue ratio of 45; calculated as Au x EQ + Ag([gold times 45] plus silver]). 4. EQ = (Price Gold x Recovery Gold) / (Price Silver x Recovery Silver). 5. Price basis US$1250/oz Au and US$30/oz Ag. 6. Metallurgicalrecovery basis 85% Au and 78% silver. 7. Rounding of numbers may generate rounding errors.
Bowdens Grade Contained Silver Resource Cut-off Tonnes Silver Lead Zinc AgEq Silver AgEq Class AgEq (g/t) (t) g/t % % g/t (Moz) (Moz) Indicated 30 31.2 60.6 0.30 0.40 77.5 60.8 78 Inferred 30 27.0 44.0 0.30 0.40 61.0 38.7 53 Indicated 30 58.2 52.9 0.30 0.40 69.8 99.4 131 & InferredCompetent Person StatementThe information in this report that relates to mineral resource estimation is based on work completed by Mr Jonathon Abbottwho is a full-time employee of Hellman & Schofield Pty Ltd and a member of the Australasian Institute of Mining and Metallurgy.Mr Abbott has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration andto the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the „Australasian Codefor Reporting of Exploration Results, Mineral Resources and Ore Reserves‟. Mr Abbott consents to the inclusion in the report ofthe matters based on his information in the form and context in which it appears.