Shanta Gold Investor Presentation


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Shanta Gold Investor Presentation

  1. 1. Investor Roadshow June 2012
  2. 2. DisclaimerThis Document comprises an institutional update presentation (the “Presentation”) which has been prepared by and is the sole responsibility of Shanta Gold Limited (the “Company”).This Presentation does not constitute or form part of an admission document, listing particulars or a prospectus relating to the Company or any offer for sale or solicitation of any offerto buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitmentwhatsoever or constitute an invitation or inducement to engage in investment activity under section 21 of the UK Financial Services and Markets Act 2000. This presentation does notconstitute a recommendation regarding any decision to sell or purchase securities in the Company.Notwithstanding the above, in the United Kingdom, this Presentation is only being given to persons reasonably believed by the Company to be investment professionals within the meaning ofparagraph (5) of Article 19 persons in the business of disseminating information within the meaning of Article 47 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI2005/1529) or to high net worth companies or unincorporated associations within the meaning of paragraph (2)of Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order2005 (SI 2005/1529), and the Proposed Offer will only be available to such persons who are also qualified investors within the meaning of section 86(7) FSMA purchasing as principal or incircumstances under section 86(2) FSMA. This Presentation is only being sent to persons reasonably believed by the Company to be investment professionals or to persons to whom it may otherwisebe lawful to distribute it. If you are not such a person (i) you should not have received this Presentation and (ii) please return this Presentation to the Companys registered office as soon as possibleand take no other action. If you are not such a person you may not rely on or act upon matters communicated in this Presentation. By accepting this Presentation the recipient represents and warrantsthat they are a person who falls within the above description of persons entitled to receive this Presentation.This document has not been approved by an authorised person under Section 21 of the Financial Services and Markets Act 2000 (“FSMA”).This Presentation is not intended to be distributed, or passed on, directly or indirectly, to any other class of person and in any event under no circumstances should persons of any other descriptionrely or act upon the contents of this Presentation. This Presentation and its contents are confidential and must not be distributed or passed on, directly or indirectly, to any other person. Thispresentation is being supplied to you solely for your information and may not be reproduced, further distributed or published in whole or in part by any other person.No representation or warranty, express or implied, is made or given by or on behalf of the Company, its advisers or any of their respective parent or subsidiary undertakings or the subsidiaryundertakings of any such parent undertakings or any of the directors, officers or employees of any such person as to the accuracy, completeness or fairness of the information or opinions contained inthis Presentation and no responsibility or liability is accepted by any person for such information or opinions or for any liability, howsoever arising (directly or indirectly) from the use of this Presentationor its content or otherwise in connection therewith. No person has been authorised to give any information or make any representations other than those contained in this Presentation and, if givenand/or made, such information or representations must not be relied upon as having been so authorised. The contents of this Presentation are not to be construed as legal, financial or tax advice.The information has not been verified nor independently verified by the Company’s advisers and is subject to material updating, revision and further amendment.The Company has not been, and will not be, registered under the United States Investment Company Act of 1940, as amended, and investors will not be entitled to the benefits of that Act.Neither this Presentation nor any copy of it may be taken or transmitted into the United States of America or its territories or possessions (the “United States”), or distributed, directly or indirectly, in theUnited States, or to any U.S Person as defined in Regulation S under the Securities Act 1933 as amended, including U.S resident corporations or other entities organised under the laws of the UnitedStates or any state thereof or non-U.S branches or agencies of such corporations or entities or into Canada, Australia, Japan, South Africa or the Republic of Ireland. Neither this Presentation nor anycopy of it may be taken or transmitted into or distributed in Canada, Australia, Japan, South Africa or the Republic of Ireland, or any other jurisdiction which prohibits the same except in compliancewith applicable securities laws. Any failure to comply with this restriction may constitute a violation of United States or other national securities law.Forward-Looking Statements. Information contained in this Presentation may include forward-looking statements. All statements other than statements of historical facts included herein, including,without limitation, those regarding the Companys financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relatingto the Companys business) are forward-looking statements.Such forward-looking statements are based on a number of assumptions regarding the Companys present and future business strategies and the environment in which the Company expects tooperate in future. Actual results may vary materially from the results anticipated by these forward-looking statements as a result of a variety of factors. These forward-looking statements speak only asto the date of this Presentation and cannot be relied upon as a guide to future performance. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions toany forward-looking statements contained in this Presentation to reflect any changes in its expectations with regard thereto or any change in events, conditions or circumstances on which anystatement is based. 2
  3. 3. Shanta Overview• Gold explorer/developer, approaching first production• AIM-listed (Ticker: SHG)• Tanzania-focused• 2.6Moz JORC-compliant resource• Strong team • in-country experience • successful track record in exploration, development, operations• Two advanced projects • New Luika • Singida• Growth pipeline• JV with Great Basin Gold 3
  4. 4. Corporate Summary 0.45 21,000 0.40 18,000 0.35 15,000 Share price (£) Volume (000s) 0.30 12,000 0.25 9,000 0.20 6,000 0.15 3,000 0.10 0 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 FTSE AIM All Share: Basic Resources (rebased) Shanta Gold Ltd. Financial Summary (1) Top Shareholders Share Price £0.22 Blakeney 35.0m 10.9% 52-week High £0.42 Export Trading 32.0m 10.1% 52-week Low £0.17 Investec 17.0m 5.3% Shares outstanding 318.8m Great Basin Gold 12.4m 3.9% Market cap. $110m Blackrock 10.7m 3.4% Cash (April – post placing) $41m W. Imrie (Exec. Chairman) 10.2m 3.2% Debt $20m Generali 4.5m 1.4% Enterprise Value $89m Majedie 5.6m 1.7% (1) As of market close on 21 June 2012 Source: FactSet & investor disclosures as at 21 June 2012 4
  5. 5. Board and Key Management Walton Imrie Executive Chairman 34 years’ gold exploration, mining experience Gareth Taylor Chief Executive Officer 37 years’ total mining experience, eight in Tanzania as GM of AngloGold Ashanti’s Geita Mine Edward Johnstone FCA Chief Financial Officer 7 years’ experience in East Africa, 5 years’ experience in the mining sector Paul Heber Non-executive Director 19 years’ total mining experience, six in Tanzania Ketan Patel Non-executive Director 23-year business career in Tanzania Maheshkumar Patel Alternative Director Tanzanian businessman with extensive experience at board level Peet Prinsloo Head of geology and exploration Braam Jankowitz Geologist, General Manager of New Luika Philbert Rweyemamu Mining Engineer, General Manager of Singida 5
  6. 6. Why Tanzania? • Africa’s third-largest gold producer • Fraser Institute Policy Potential Index: ranks ahead of South Africa • Stable democracy • Sound, well- administered mining legislation • Workable tax regime • Good infrastructure • Small, under-explored orebodies 6
  7. 7. 2.6Moz total resource Cut-off Measured & Indicated Inferred TotalProject Name (g/t) Mt g/t Ounces Mt g/t Ounces Mt g/t OuncesNew Luika 1.0 4.5 3.15 458,563 5.2 3.09 515,590 9.7 3.12 974,153Singida 1.0 5.2 3.30 549,977 4.2 2.28 308,508 9.4 2.84 858,485Mgusu 0.0 1.1 3.53 127,000 5.0 3.80 614,000 6.2 3.74 741,000Total 10.8 3.26 1,135,540 14.4 3.10 1,438,098 25.3 3.17 2,573,638Source: Dave Briggs – Geologix Independent resource consultant 7
  8. 8. 1st project approaching production –New Luika Gold Mine Bauhinia Creek Pit (24 March 2012)• 100% owned• 974,153 resource at 3.12g/t (1g/t cut-off)• First gold pour mid-Q3 2012• June 2010 feasibility study highlights: • LOM gold production: c.450Koz • Average grade recovered: 2.7g/t Ball Mills (3 June 2012) • LOM: 10 years• First three years total production of 175- 190,000oz at $560-610/oz total cost (1)• Ore-bodies open at depth and along strike • January 2012: 31m at 12.97g/t in total, including 14m at 18.49g/t (CSR325) • Increase in mineable resources and grade expected Q2 2012 (1) As per September 2010 company estimates 8
  9. 9. New Luika (Bauhinia Creek) pit progression January 2012 update - drilling highlights April 2011 Borehole Result CSR332 10m at 26.9g/t in total CSR324 11m at 21.71g/t in total CSR325 31m at 12.97g/t in total, including 14m at 18.49g/t CSR338 14m at 11.6g/t in total CSR330 13m at 8.19g/t in total June 2011(1) CSR331 6m at 11.93g/t and 8m at 13.24g/t in total January 2012 Old June 2011 pit (to 120m) New pit (2)(1) Temporary pit(2) Internal conceptual design (to 200m) Increase in pit size to include higher grade resources to 200 metres depth 9
  10. 10. New Luika – commissioning underway Mining Plant & Infrastructure • Ore mining commenced November 2011 • Achieved plant wet commissioning (over 100Kt stockpiled) • Hot commissioning to commence imminently • Stockpiles estimated to contain over 22,000oz ready for processing • Crushing circuit complete; milling and leaching circuits approaching completion • High grade stockpiles provide commissioning flexibility • On-site laboratory fully commissioned allowing quick turnaround of assays for grade and • First gold production expected by mid-Q3 metallurgical controls • Q4 guidance of 13,000 - 17,500 • Power infrastructure complete (6x diesel generator ounces of gold sets – 8.5Mwt) • River weir construction completeCrushing Circuit (22 June 2012) 10
  11. 11. New Luika PlantMetallurgical Lab (1 April 2012) Crushing Circuit (23 June 2012) Ball Mills (7 June 2012)Leach Tanks (17 June 2012) Tailings Screening (18 June 2012) Gold Room (17 June 2012) 11
  12. 12. Singida – next golden opportunity Singida updated feasibility (August 2011)• Minor royalty agreement with JV partner Total tonnes mined million 23.5• 858,485oz resource at 2.84g/t (1g/t cut-off) Total tonnes treated million 2.5• Four open pits for mining flexibility Annual treatment rate t 255,000• $130M NPV11 @ 1200$/oz Total construction cost US$ million 30 LOM gold production oz 450,000• Ore-bodies open at depth Average grade recovered g/t 5.43• First three years total production of 170- Average annual production oz 45,000 200,000oz at $210-310/oz total cost (1) Return on investment % 120• Project development and financing strategy to be executed post commencement of gold Net present value 11% US$ million 130 production at New Luika LOM years 10 (1) As of August 2011 Gold price of 1,200$/oz used in financials 12
  13. 13. Growth pipeline• JV with Great Basin Gold covering prolific Lupa goldfields in SW Tanzania • Exploration underway, c.3,800 km2 of target area • Drilling has commenced on initial targets • Deal structure • 80% SHG – 20% GBG • First earn-in of US$2m by Dec. 2012 • Total $12m earn-in by Dec. 2014• Exploration upside within New Luika licence • Elizabeth Hill • Wide vein system c.2km from plant • 800m drilled, open along strike and at depth • Black Tree Hill • Near-vertical vein system directly adjacent to plant 13
  14. 14. The right address – Lupa Goldfield licences under JV New LuikaJV gives Shanta the opportunityto earn-in to 80% of >100exploration licences within theLupa Goldfield 14
  15. 15. Upcoming Milestones  Increased JORC resources to 2.6Moz  Complete hot commissioning of the New Luika plant  Established $15m credit facility with FBN Bank  Announce New Luika resource update  Commenced ore mining  Strengthen board of directors  Constructed river weir for water to feed plant  Achieve first gold pour at New Luika  Constructed tailings dam  Achieve New Luika run rate production  Raised $40m through convertible loan note and equity placing  Update New Luika mine plan post resource update  Commissioned geological on-site laboratory  Progress exploration programme  Stockpiled ore estimated to contain over 22,000 ounces  Execute Singida development strategy  Completed wet commissioning of the plantOre Stockpiles (17 June 2012) 15
  16. 16. Moving projects up the value curveHIGH New Luika Singida Exploration TargetsLOW TIME Pre-exploration Scoping study Feasibility study Mine construction Production 16
  17. 17. The case for small(er) Vital statistics New Luika A bigger player Exploration 3 years 5-7 years Development 15 months 36-48 months Construction cost $29.4M $400m Average head grade > 2 g/t < 2 g/t Production cost/oz $560-610 $700-900 Return on investment 71% 20% + is good 17
  18. 18. Investment case• Excellent projects • low costs • early returns • substantial expansion upside• Attractive growth pipeline • backed by reputable JV partner• Extensive in-country experience• Investor-friendly domain 18