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Investor Presentation | Kula Gold (ASX:KGD) | Gold Investment Symposium 2014

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Investor presentation delivered by Kula Gold's CEO Stuart Pether, at the Gold Investment Symposium held in Sydney, 8th 9th October 2014

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Investor Presentation | Kula Gold (ASX:KGD) | Gold Investment Symposium 2014

  1. 1. Kula Gold Limited Investor Presentation The Gold Investment Symposium Sydney 8 and 9 October 2014
  2. 2. Kula Gold Limited 2 Disclaimer Forward Looking Statements All statements other than statements of historical fact included in this announcement including, without limitation, statements regarding future plans and objectives of Kula Gold Limited (Kula Gold) are forward-looking statements. When used in this announcement, forward-looking statements can be identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’ or ‘intends’ and other similar words that involve risks and uncertainties. These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this announcement, are expected to take place. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the company, its directors and management of Kula Gold, that could cause Kula Gold’s actual results to differ materially from the results expressed or anticipated in these statements. The company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this announcement will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements. Kula Gold does not undertake to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this announcement, except where required by applicable law and stock exchange listing requirements.
  3. 3. Kula Gold Limited  PNG a highly prospective jurisdiction  Large scale base metal carbonate, low sulphidation epithermal systems  Potential to double resources  A revised exploration model will result in lower cost gold discovery  Completed BFS for 1.8Mtpa for 100koz pa @ AISC <US$900 per ounce, permitted and ready for development 3 Best Gold Growth Opportunity  Scoping study completed showing benefits of staged upgrade to 4Mtpa and 200koz pa, AISC < US$800 per ounce
  4. 4. Kula Gold Limited Corporate Structure Major Long Term Shareholders  Pacific Road Capital – 44.1%  Franklin– 13.41%  RMB Resources – 12.31%  Board and management team with strong operational, construction and PNG experience 4 ASX Code: KGD Issued Shares: 151.5M Options: 36.5M Share Price (5/9/14): A$0.08 Market Cap: A$12.1M Cash (30 June 2014): A$2.695M Debt: A$3.0M
  5. 5. Kula Gold Limited Poised for Production 5  Completed 1.8Mtpa BFS for gold production of > 100,000 ounces per year  High-grade open pit with 2.2 g/t gold Reserve at US$1200 per ounce  Standard 1.8Mtpa CIL processing plant with total recovery of >90%  Good community and operating environment  9 year Project life with an All In Sustaining costs (AISC) of US$868 per ounce  2.1Moz Mineral Resource and 766,000 ounce Ore Reserve  Over US$100 million of Project investment to date  Project fully permitted, de-risked and ready for development  Environment Permit and Mining Lease granted  PNG State equity decided at 5%
  6. 6. Kula Gold Limited 1.8Mtpa Feasibility Study Highlights  9 year life with mining inventory of 813k oz  Reserve of 11.0 Mt at 2.2 g/t estimated at US$1,200/oz  Low risk open pit and CIP mill  Start up capital of US$160M  Sustaining capital of US$67M  C1 costs of US$730/oz and AISC of US$868/oz  Identified exploration upside  Fully permitted and construction ready 6 Gold Price US$1300/oz Gold Price US$1400/oz Gold Price US$1600/oz Pre-tax NPV @ 7%* (Millions) US$75 US$133 US$237 Pre-tax IRR 17% 23% 34% Post-tax NPV @ 7%*Millions) US$63 US$110 US$194 Post-tax IRR 16% 22% 31% Payback 3.5 years 3.2 years 2.6 years
  7. 7. Kula Gold Limited 7 Kulumadau 319,000 oz (4.2Mt at 2.2g/t Au) Busai 408,000 oz Woodlark King (6.1Mt at 2.1g/t Au) 39,000 oz (0.7 Mt at 1.7g/t Au) Current JORC Reserves of 766,000 ounces of gold as at July 2012 EL1465 EL 1172 EL 1279 MLA 508 Woodlark Island Gold Project Ore Reserves
  8. 8. Kula Gold Limited Good Operating Environment 8  Strong support from PNG Government with 5% equity stake decided, de risking the Project  Strong relationships with local Government, landowner groups and communities  Good community and operating environment  Strong community engagement by providing access to health care facilities, skills training and educational opportunities  Focus on employing and up skilling local people
  9. 9. Kula Gold Limited Proven Growth Potential and Pipeline 9 2008 2010 2012 Future Resources: 800k oz Pre Feasibility Study Resources: 1.75m oz Reserves: 584k oz Focused on exploration and discovery Feasibility Study Resources: 2.1m oz Reserves: 766k oz Focused on Resource quality and technical studies with limited exploration Projected Growth Potential Resources: 3 - 5m oz Reserves: 1- 2 m oz New exploration phase Resource Growth Pipeline  Regional Growth  Resource Expansion  Resource Conversion
  10. 10. Kula Gold Limited Road Map to Growth 10  Revised understanding of geological setting for large scale base metal carbonate low sulphidation mineralisation, driven by Porphyry systems  Large areas of alteration and gold mineralisation on periphery of Porphyry systems, controlled by NW/SE and NE/SW structures  Identification and ranking of new targets with the goal of doubling known Resources  Drilling and trenching work has demonstrated the new Exploration Model as an effective on ground targeting tool
  11. 11. Kula Gold Limited 11 0 3 6km Old Exploration Model  Historic Magnetics  Fixed wing survey - 1989  Coarse grid  Correction errors Smoothed image  Structure from regional geology  Limited benefit for exploration under cover  Focused around historic Resources with success  2.1Moz Mineral Resource
  12. 12. Kula Gold Limited 12 New Magnetics Data  Helicopter survey - 2014  Close spaced grid 50 to 100 metre line spacing  Minimal correction errors Detailed image  Structure interpreted from magnetics and LiDar  Proving to be effective on ground targeting tool  Levering off the 2.1 Million ounces of Resource Acquisition of High Quality Data
  13. 13. Kula Gold Limited Revised Geological Setting 13 Revised dual Porphyry model  Large epithermal system  Gold mineralisation at periphery of Porphyries  Gold crystallises when hot fluids meet cooler country rock  Controlled by structure  Fluids causing alteration of andesite and reduced magnetism  Improved targeting A B
  14. 14. Kula Gold Limited Revised Geological Setting 14 Woodlark King Busai + + + + + + + + + + + Kiriwina Sediments Propylitic Alteration Argillic Alteration Micromonzonite Advanced Argillic Alteration Phyllic Alteration 10BMD001 Postualted Potassic Alteration Dykes Mineralisation Direction of Block Faulting Marginal Breccias Helimag Low Postulated Porphyry Centre Greentree Fault Murua United Fault Helimag Low Postulated Porphyry Centre Peripheral Epithermal Mineralisation Exposed Peripheral Epithermal Mineralisation Exposed Peripheral Mineralisation Under Cover B A
  15. 15. Kula Gold Limited New Exploration Model 15  Helimag and LiDar data  Increased geological knowledge – 2 Moz Resource  Improved target ranking based on:  Proximity to magnetics lows  Structural analysis NW and NE  Gold in pan concentrates  Vegetation Anomalies  Proximity to known Resources  Depth of sediment cover  Historic data  Resulting in improved on ground targeting  Opportunity for 3D modelling Kulumadau North Mackenzie’s Little Mackenzie Watou
  16. 16. Kula Gold Limited 16 Mackenzie’s and Munasi Complex 09WSR102 3m @ 2.0g/t Au 09WSR010 6m @ 3.1g/t Au 09WSR092 3m @ 5.6g/t Au Mackenzie’s Target  2014 Helimag with structures  Target zones at NW/SE and NE/SW structures in proximity of magnetic lows  Multiple parallel structures  Historic drilling with ore grade zones  Large zone  Exploration halted due to focus on BFS 09WSR114 8m @ 1.6 g/t Au 09WSR083 10m @ 2.5g/t Au 09WSR084 1m @ 17.3g/t Au 09WSR117 2m @ 3.3g/t Au 09WSR132 4m @ 2.8g/t Au Busai Deposit Munasi Deposit Munasi Target
  17. 17. Kula Gold Limited Little Mackenzie and Watou 17  2014 Helimag with structures  Target areas at NW/SE and NE/SW structures in proximity to magnetic lows  Watou located on WKIFZ displaced by NE/SW structure  Exposed and amenable to trenching  Ore grade results in 300m long zone. Little Mackenzie Trenching Zone 4 metres @ 4.8 g/t Au 13 metres @ 2.0 g/t Au 4 metres @ 1.9 g/t Au Woodlark King Illawarra Fault Zone Woodlark King Deposit Watou Prospect Trenching Zone 10 metres @ 1.6 g/t Au 15 metres @ 1.6 g/t Au 10 metres @ 3.4 g/t Au 2 metres @ 25.3 g/t Au 4 metres @ 5.9 g/t Au 4 metres @3.1 g/t Au 3 metres @ 4.4 g/t Au Postulated NE/SW Structure Target Area Target Area
  18. 18. Kula Gold Limited 18 Kulumadau and Kulumadau North New Target Area for Resource Expansion Kulumadau North Diamond Drilling 2m @ 1.8g/t Au from 3m 6m @ 3.6g/t Au from 41m 3m @ 1.6g/t Au from 55m  2014 Helimag with structures  Target zones at NW/SE and NE/SW structures in proximity of magnetic lows  Leverage of known Resources and geology  Resource expansion opportunities  Further analysis of magnetics data via 3D modelling New Target Areas for
  19. 19. Kula Gold Limited Resource Conversion 19 Whittle Optimisations of M+I+Inf at Kulumadau Based on FS Assumptions BFS Optimal Pits M+I+I Optimal Pits Resource Class M+I Inferred Showing Ore blocks >0.8g/t Au  Project wide for 200 to 250koz at cost of US$900 to US$950 per ounce  Additional cash flow of > US$100M @ US$1,400/oz Kulumadau Village
  20. 20. Kula Gold Limited Project Growth - Increased Life 20 Doubling of Project NPV to US$180 to US$200M at US$1,400 per gold price at 7% discount Assumed 225koz conversion of Inferred resources and 250koz exploration success - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 BFS Reserves LG Stockpiles Resource Definition Exploration Success 1 1 2 3 4 5 6 7 8 9 10 11 12 13 . Years
  21. 21. Kula Gold Limited Project Growth - Increased Capacity 21 Staged doubling of gold production supported by scoping study, delivering <US$800 per ounce AISC and NPV in the range US$350 to US$400M at US$1,400 per gold price at 7% discount - 50,000 100,000 150,000 200,000 250,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 BFS Reserves LG Stockpiles Resource Definition Exploration Success Assumed 440 koz conversion of Inferred resources and 880koz exploration success 1 1 2 3 4 5 6 7 8 9 10 11 12 13 . Years
  22. 22. Kula Gold Limited Why Kula Gold – Leverage to Gold 22  Fully permitted gold project in world-class mining jurisdiction, excellent operating environment  Current gold price requires more Resources to expand current mine life and enable staged upgrade  Scoping study completed showing benefits of staged upgrade to 4Mtpa and 200koz pa, AISC < US$800 per ounce  Woodlark can deliver the required ounces:  Large mineralising systems driven by dual porphyries  Multiple targets identified by new exploration model  Targeted exploration will result in lower gold discovery costs  Continuing news flow and growth opportunities
  23. 23. Kula Gold Limited Contact Stuart Pether – CEO Kula Gold Limited Suite 2, Level 15 1 York Street Sydney Ph: 02 9262 5651 www.kulagold.com.au ASX Code KGD
  24. 24. Kula Gold Limited Appendix 24
  25. 25. Kula Gold Limited Project Layout and Mining Lease 25 0 2.5 5km Busai Kulumadau Woodlark King Plant Wharf MLA 508
  26. 26. Kula Gold Limited Board and Management Team 26 Stuart Pether – Chief Executive Officer Mining Engineer with 25 years experience in mining operations, project development and corporate management. Previously COO for Catalpa Resources and VP Project Development for Evolution Mining. David Frecker – Non - exec Chairman Commercial lawyer with over 40 years experience in practice in Australia and PNG. Louis Rozman – Non – exec Director Mining Engineer with 30 years experience operating and constructing gold projects in Africa, Australia and PNG. Previously was COO of Aurion Gold Limited and was instrumental in the development of its predecessor, Delta Gold Limited. Mark Stowell – Non - exec Director Chartered accountant with over 20 years of corporate finance and resource business management experience. Founder of Anvil Mining Ltd, a copper producer in the DRC and Incremental Petroleum Limited, an oil and gas producer with operations in Turkey and the USA. Lee Spencer – Non – exec Director Geologist with over 30 years experience exploration, project development and operating mines in South East Asia and PNG. Previously CEO of Kula Gold and lead resource growth to 2.1Moz Resource at Woodlark Island Gold Project Woodlark Mining Limited the wholly owned Papua New Guinea (PNG) subsidiary Sam Akoitai – Non – exec Director WML Mr Akoitai was a member of the national parliament of PNG from 1997 until 2007, serving firstly as Minister for Bougainville Affairs (1997- 2000) and subsequently as minister for Mining from 2002 until 2007. He also implemented the establishment of PNG’s Mineral Resources Authority (MRA), Mr Akoitai is a director of Marengo Mining Limited’s (ASX & POMSoX: MGO) PNG subsidiary Marengo Mining (PNG) Limited
  27. 27. Kula Gold Limited Resource Expansion – Estimated Benefits 27 Mining Reserve (Yr 1-6) (koz) 766 1,200 1,800 Exploration Discovery (koz) Note 1 434 1,034 $M $/oz $M $/oz $M $/oz C1 Cost US$ per ounce Note 2 na 730 na 730 650 Royalty US$1,400 /oz 32 na 32 32 Sustaining Capital Note 4 67 87 20 73 55 68 Exploration Note 5 11 9 26 14 Corp G and A ($2.5M pa) Note 6 15 20 20 10 All In Sustaining Costs (AISC) 869 863 773 Initial Capital Note 3 160 209 na 133 95 141 Full Cost (AISC + Initial Capex) 1077 na 996 95 915 Financials NPV @ US$1,400 / oz (US$M) Note 7 110 180 -200 350 -400 IRR @ US$1,400 / oz (%) Note 8 22 25 - 27 36 -39 Note 1 - Exploration success from identified near Resource and Regional targets Note 5 - Exploration discovery assumed at $25 per ounce for additonal oz Note 2 - based on Lycopodium 4Mtpa Scoping Study - reported Sept 2013 Qtr report Note 6 - Assumed 200koz pa production average in 4Mtpa case Note 3 - 4Mtpa Based on Lycopodium Capital Study plus 10% - reported Sept 2013 Qtr report Note 7 - NPV After Tax 7% discount rate and IRR after tax Note 4 - Sustaining capital of $5M per year for each year of project extension beyond BFS yr 6 BFS 1.8Mtpa Extended 1.8Mtpa Scoping Study 4Mtpa BFS 1.8Mtpa Extended 1.8Mtpa Scoping Study 4Mtpa Additonal to BFS Additonal to BFS
  28. 28. Kula Gold Limited Resource and Reserve Statement 28 The information in the three tables above was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported
  29. 29. Kula Gold Limited Competent Person Statement 29 The information in this report that relates to Exploration Results are based on information compiled by Mr. Lee Spencer. Mr Spencer was the CEO of Kula Gold Limited until 1 July 2013 and remains on the Kula Gold Board as a Non-executive director. Mr. Spencer is a Member of The Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Spencer consents to the inclusion in the report of these matters based on information in the form and context in which it appears. The information in this announcement that relates to the Mineral Resource estimates for Kulumadau, Busai and Woodlark King is based on information compiled by Mr. John Doepel, Principal Geologist for Continental Resource Management Pty Limited (Resource Report, Woodlark Island). CRM has acted as independent consulting geologist to WML since 2005 and has undertaken several visits to the island and to the sample preparation facilities. Mr. Doepel is a Member of The Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ’Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Doepel consents to the inclusion in this announcement of these matters based on information in the form and context in which it appears. The information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported The information in this announcement that relates to Ore Reserves is based on information compiled by Mr.Linton Putland, Principal of LJ Putland & Associates and a consultant to Kula Gold’s 100% subsidiary, Woodlark Mining Limited. Mr.Putland is a Member of The Australasian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Putland consents to the inclusion in this announcement of these matters based on information in the form and context in which it appears. The information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported

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