Thubelisha. AVENG MINING Investor Conference 19 & 20 October 2015

Transcription

1 Thubelisha AVENG MINING Investor Conference 19 & 20 October 2015

2 AGENDA OVERVIEW MARKET OPERATIONAL STRATEGY OUTLOOK Q & A 2

3 Surveyor at Siguiri Gold Mine, Guinea 3 OVERVIEW

4 OVERVIEW Operating structure A leading open-cut contract miner on the African continent One of only four deeplevel shaft-sinking companies worldwide Stuart White Managing Director Number of people Aveng Moolmans Aveng Shafts & Underground Combined

5 OVERVIEW Service offering and location WHAT WE DO Aveng Mining offers services across the mining value chain: Shaft sinking Underground development Open-cut and underground contract mining Construction of mining related infrastructure The operating group s experience spans a broad range of commodities, and it has worked successfully in several remote and difficult locations. Current Past 5

6 OVERVIEW Aveng Moolmans ABOUT Began open-cut mining in late 1970's One of the largest open-cut mining contractors in Africa Moves up to 20 million tonnes of material each month Operates in remote and challenging locations Extensive resources ensures delivery of a world-class mining service OSHAS 18001:2007 and ISO 9001:2008 certified SERVICES Offers complete open-cut mining capability with over 40 years experience in both hard and soft rock environments Complete mining solution from short-term waste mining and bulk earthmoving to long-term steady state mining applications Can provide mine planning, surveying, production scheduling and grade control services in addition to drill, blast, load, haul and dump functions Has mined a range of commodities for several reputable clients FLEET Owns and operates diverse fleet of mining equipment to suit diverse operations and client requirements Effective maintenance systems to ensure maximum availability, utilisation and productivity Years of experience with mining equipment, effective supplier interface and implementation of best practices LOGISTICS Able to quickly mobilise and deploy appropriate resources to enabling clients to establish and develop their operations 6

7 CAT 6050 loading a CAT 789C at Sishen Iron Ore Mine South Africa 7

8 OVERVIEW Aveng Shafts & Underground Shaft sinking Access development Contract mining Infrastructure development Project management ABOUT Expertise to sink and equip shafts of various diameters to depths of 2,000 metres and beyond Ability to sink and equip both vertical and decline shafts through all types of rock formations Technical expertise and resources to deliver multidisciplinary projects that include design work, civil works and mechanised mining and to provide turnkey solutions Recognised leader in the field of mechanised mining and access development Extensive experience in coal, platinum, gold, copper and manganese mining; encompassing board and pillar methods Expertise to undertake any metalliferous mining venture, from conception to execution and completion ISO 9001:2008 OSHAS 18001:2007 and ISO 14001:2004 certified SERVICES Geared to provide a design function that includes: Conceptual pre-feasibility and feasibility studies relating to shaft design, shaft sinking and infrastructural services Mine design for sinking of decline and vertical shafts, mine development, stoping, surface and underground infrastructure Shaft and shaft furnishing including conveyor belt systems Design and drafting for mechanical, structural, piping, electrical and civil work Innovative and cost effective techniques are used in the execution of pre-sinking as well as mechanised sinking to complete a fully lined and equipped shaft Strives to deliver exceptional value to its clients, in a safe and sustainable manner while upholding highest quality in all projects that are undertaken 8

9 Eland Platinum Mine- Atlas Copco twin boom Drill Rig in Decline 9

10 ACHIEVEMENTS OVERVIEW Achievements CONTRACTING Successful transition of Nkomati - now outperforming targets 5 year contract extension awarded at the Tshipi Borwa manganese mine Shaft bottom reached at Wesizwe 820m deep Chuquicamata shaft now in steady state rate of progress Pending extension to Sadiola Mine Company has retained substantial contracts at Sishen, despite depressed iron ore price Letter of intent for further 5 years at Langer Heinrich mine SAFETY Sadiola - Mali 1360 days without any lost time injury as of 30 Sep 2015 Langer Heinrich - Namibia 635 days without any lost time injury as of 30 Sep 2015 Tumela Shaft 1552 days without any lost time injury as of 30 Sep 2015 Spud Shaft 926 days without any lost time injury as of 30 Sep 2015 Platreef 623 days without any lost time injury as of 30 Sep

11 OVERVIEW Achievements 2,10 2,00 1,90 1,80 1,70 1,60 1,50 1,40 1,30 1,20 1,10 Aveng Mining AIFR Trend - 12 Months Rolling Period Ending September 2015 (12 Month rolling period based on hours) Reduction of All Injuries from 158 to 120 1,00 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 AIFR 1,87 1,88 1,93 1,91 1,94 1,82 1,81 1,78 1,72 1,64 1,49 1,42 11

12 Total Recordable Injury Frequency Rate* Aveng Mining FY2015 OVERVIEW Achievements LEARNING ABOUT US AND OUR RELATIVE CULTURE STRENGTH FY2015 TRIFR TRIs Mining Industry 3.5 (Average Rate Per Mine) 296 (Average Injuries Per Mine) Aveng Mining Aveng Moolmans Aveng S&U TRIFR based on hours 2 Benchmark Test within the Mining Industry

13 Blast Block Preparation at Kolomela Iron Ore Mine South Africa 13

14 OVERVIEW Aveng Mining s key objective To capitalise on the enhanced value offering made possible through the integration of the two business units into the Aveng Mining entity, and to position this organisation for maximum sustainable growth 14

15 Shondoni Mine Secunda- Main Shaft double drum Stage Winder for Main Sink 15 MARKET

16 MARKET Trading conditions The weak Rand somewhat shielded the local mining sector, but cannot fully compensate for the new decade lows in commodity prices Iron Ore Gold Coal The global economic environment and a decrease in commodity prices has contributed to a slowdown in mining investment. In South Africa, this is exacerbated by labour and electrical power challenges Operating cost pressures and demand weakness has resulted in shrinking margins Manganese The Operating Group s experience spans a broad range of commodities Nickel Limited new mining opportunities prevail across most commodities, and postponement and scale back of existing projects over the medium term is the norm Uranium Copper Platinum 16

17 MARKET Trading conditions MARKET CONDITION POTENTIAL IMPACT ON BUSINESS RESPONSIVE STRATEGY Continued downturn in the commodities market Impact of industrial action on operations Lower activity levels Pressures from customers to lower production costs Contract cancellations Aveng Moolmans largely unaffected Aveng Shafts and Underground affected Retain existing work through close customer contact and ongoing superior performance Cooperate with clients and suppliers on cost saving initiatives Ensure portfolio diversification Best practise from Aveng Moolmans is being implemented across the now integrated Aveng Mining 17

18 MARKET Mining 5 C s Client Market risk spread over the following 5 C s Climate Country Currency Commodity 18

19 MARKET Aveng Moolmans opportunities Opportunities: Medium Term Commodity Coal Gold Nickel Phosphate Grand Total Area CIS 1 1 Middle East 2 2 SADC West Africa 3 3 Grand Total Opportunities: Long Term Commodity Bauxite Coal Gold Iron Ore Uranium Grand Total Area SADC West Africa Grand Total

20 MARKET Aveng Shafts & Underground opportunities Opportunities: Medium Term Commodity Coal Copper Gold Potash Tin Grand Total Area ASIA SADC West Africa 1 1 Grand Total Opportunities: Long Term Commodity Bauxite Coal Gold Iron Ore Grand Total Area ASIA 1 1 SADC South America 1 1 Grand Total

21 In-Pit Haul Roads at the Phoenix Nickel Mine in Botswana 21 OPERATIONAL

22 OPERATIONAL Project update Meet expectation in current market Challenging under current conditions Performing below expectation Project (Ultimate) Client Commodity Country Type Status Tshipi Borwa Tshipi Borwa Manganese Manganese South Africa Open-Cut Mining Langer Heinrich Paladin Resources Uranium Namibia Open-Cut Mining Chuquicamata Codelco Copper Chile Shaft Sinking Kolomela Kumba Iron Ore / Anglo American Iron Ore South Africa Open-Cut Mining Shondoni Sasol Coal South Africa Shaft Sinking Bakabung Wesizwe Platinum South Africa Shaft Sinking Phoenix Botswana Government/ Norilsk Nickel Nickel Botswana Open-Cut Mining Sadiola AngloGold Ashanti Gold Mali Open-Cut Mining Sishen Kumba Iron Ore / Anglo American Iron Ore South Africa Open-Cut Mining Platreef IvanPlats Platinum South Africa Shaft Sinking Nkomati ARM/Norilsk Nickel JV Nickel South Africa Open-Cut Mining 22

23 OPERATIONAL Nkomati Country Client Commodity South Africa Nkomati JV (ARM / Norilsk Nickel) Nickel: Open-cut Contract Mining Mining Since July 2014 Current Contract Production 5 years 10.2mil bcm/year 23

24 OPERATIONAL Nkomati planned vs actual production BCM X MILLION Q1 Q2 Q3 Q4 Q1 Q2 Q CY 2015 CY Planned Prior to contract commencement Aveng Moolmans Actual 24

25 OPERATIONAL Nkomati improvement process PRIOR TO CONTRACT COMMENCEMENT TRANSITION IMPROVEMENTS EXCEED TARGETS Fast-tracked selection and recruitment process. (Contractually obliged to take on previous labour force) Intensive training conducted Instilled a safety culture Focused on work ethics Built and improved organised labour & community relationships Achieved Zero Injuries in the first quarter of FY2016 Production tempo increased Maintenance strategies implemented through AMT Pit conditions improved Up communications with workforce and organised labour Commenced community projects and supported current initiatives Maximised use of simulator training Continuous improvement projects Further improve in-pit conditions Optimise equipment availabilities Purchase crusher to provide floor dressing material Best blasting practises Training 25

26 OPERATIONAL Nkomati improvement process pit improvements Legacy blasting results Aveng Moolmans improved blasting results 26

27 OPERATIONAL Nkomati improvement process pit improvements Floor conditions at commencement Current example of pit floors 27

28 OPERATIONAL Nkomati improvement process pit improvements General improvement in pit loading conditions 28

29 OPERATIONAL Nkomati improvement process Community initiatives Nkomati Community Initiatives: Emakhazeni Municipality Projects Elukwatini Municipality Projects Tinikeleni Hospice 29

30 Shondoni Mine Secunda Ventshaft 350 Kw Single Drum pre-sink Winder 30 STRATEGY

31 STRATEGY Closing the Shafts & Underground Head Office to further optimise and strengthen the business Grow by leveraging clients and geographies of open-cut and underground businesses Grow underground business internationally Re-establish and extend open-cut s international footprint Grow underground contract mining locally and internationally to improve portfolio blend Pursue opportunities for the idle mining fleet Carefully consider new investment opportunities that could improve the average age of the fleet 31

32 Wesizwe Platinum Mine- Cactus Grab suspended from bottom of Stage 32 OUTLOOK

33 OUTLOOK Mining industry is expected to remain constrained in the medium term Securing work for the idle fleet remains a focus and is challenging in the short term, however the volume of tender enquiries is increasing 15%-20% idle fleet at Aveng Mining available for new project opportunities (Significant capital expenditure not required) Average age of fleet (40% - 60% of economic life) Sufficient spending on repairs and maintenance Unencumbered fleet no requirement to pursue unprofitable work to service debt Cost and efficiency initiatives have been successfully implemented in line with market challenges Improved cash flow Current economic conditions have led to a resizing and streamlining of the business Now well positioned for future growth once the commodity market improves 33

34 Shift Change CAT 785C Dump Trucks at Iduapriem Mine Ghana 34 Q & A

35 Thubelisha Mine Secunda- Lowering of Continuous Miner and entire fleet down Vent Shaft 35 PROJECT ANNEXURE

36 PROJECT ANNEXURE Tshipi Country South Africa Client Tshipi é Ntle Manganese Mining Commodity Manganese: Open-cut Contract Mining Mining Since December 2011 Current Contract 5 years Production 7.2 mil bcm/year 36

37 PROJECT ANNEXURE Langer Heinrich Country Client Commodity Namibia Langer Heinrich Uranium (Paladin Resources) Uranium: Open-cut Contract Mining Mining Since August 2006 Current Contract 5 years Production 10.5 mil bcm/year 37

38 PROJECT ANNEXURE Chuquicamata Copper Mine Country Chile Client Codelco VP Chile Commodity Copper: Ventilation Shaft Mining Since 2012 Current Contract 5 years Production 918m shaft 38

39 PROJECT ANNEXURE Kolomela Country South Africa Client SIOC (Kumba / Anglo American) Commodity Iron Ore: Open-cut Contract Mining Mining Since December 2011 Current Contract 4 years Production 4.8 mil bcm/year 39

40 PROJECT ANNEXURE Shondoni Country South Africa Client SASOL Mining Commodity Coal: Shaft System Mining Since 2012 Production 120m / 152m shaft 40

41 PROJECT ANNEXURE Bakabung Country South Africa Client Wesizwe Commodity Platinum: Shaft System Mining Since 2012 Production 820m / 810 shafts 41

42 PROJECT ANNEXURE Phoenix Country Client Commodity Botswana Tati Nickel Mining Company (Botswana Government / BCL) Nickel: Open-cut Contract Mining Mining Since February 2002 Current Contract 2 years Production 7 mil bcm per year 42

43 PROJECT ANNEXURE Sadiola Country Mali Client SEMOS (Anglo Gold Ashanti / IamGold) Commodity Gold: Open-cut Contract Mining Mining Since January 1996 Current Contract 2 years Production 8.4 mil bcm/year 43

44 PROJECT ANNEXURE Sishen Country South Africa Client SIOC (Kumba / Anglo American) Commodity Iron Ore: Open-cut Contract Mining Mining Since August 2006 Current Contract 5 years Production 30 mil bcm/year 44

45 PROJECT ANNEXURE Platreef Country South Africa Client Ivan Plats Commodity Platinum: Bulk Sample Shaft Mining Since 2013 Production 845m shaft 45

46 Thubelisha AVENG MINING Investor Conference 19 & 20 October 2015