mandalay resources september 2016 investor presentation

Download Mandalay Resources September 2016 Investor Presentation

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  • This presentation contains "forward-looking statements" within the meaning of applicable securities laws, including statements relating to life of

    mine production plans, exploration plans and the growth and strategy of Mandalay. Actual results and developments may differ materially from

    those contemplated by these statements depending on, among other things: exploration results or production results not meeting managements

    expectations; capital, production and operating cost results not meeting current plans; and changes in commodity prices and general market and

    economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. A

    description of additional risks that could result in actual results and developments differing from those contemplated by forward looking

    statements in this news release can be found under the heading Risk Factors in Mandalays annual information form dated March 30, 2016 and

    in its final prospectus dated July 18, 2016, copies of which are available under Mandalay's profile at www.sedar.com. Although Mandalay has

    attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-

    looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be

    no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those

    anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

    Quality Control and AssuranceQuality control and assurance programs are implemented in line with the standards of National Instrument 43-101.

    The exploration programs at Costerfield and Bjrkdal are supervised by Chris Gregory (Member, Australian Institute of Geoscientists, VP of

    Operational Geology for Mandalay and a Qualified Person as defined under National Instrument 43-101. Mr. Gregory regularly visits Costerfield

    and Bjrkdal, and supervises the collection and interpretation of scientific and technical information contained in this presentation.

    The exploration programs at the Cerro Bayo and Challacollo projects are supervised by Scott Manske, Chief Cordilleran Geologist of Mandalay

    Resources, and an Oregon registered Professional Geologist. A Qualified Person as defined by NI 43-101, he has reviewed and approved the

    technical and scientific information on these projects contained in the presentation.

    Dr. Mark Sander (Member: AusIMM), President and CEO of Mandalay, has visited the Costerfield, Cerro Bayo, Challacollo, and Bjrkdal and

    has supervised the preparation of this presentation.

    All currency references in US$ unless otherwise indicated

    Forward-looking Statements

    2

  • A Values-Based and Value-Focused Company

    We create exceptional shareholder value through the acquisition of undervalued assets that can rapidly

    become cash generative, self-fund exploration, establish and maintain high operating margins and return

    cash to shareholders within a planned period of time. Mandalay is committed to operating safely and in

    an environmentally responsible manner, while developing a high level of community and employee

    engagement

    WE ARE SUCCESSFUL WHEN:

    Our employees live and work safely and experience the personal

    satisfaction that comes with high performance and recognition

    The communities in which we operate value our presence

    Our environmental impact is minimized and causes no permanent harm

    We have a large, diversified set of customers who are delighted with

    and compete for our products

    Our shareholders realize a superior total return on their investment and

    support our corporate values

    Our values are visibly demonstrated by strong local management, at the

    point of impact with or stakeholders, and coordinated across the

    Company for maximum effect

    Profitable and Dividend-Paying: (2.9% yield)*

    *Trailing 12 months dividends divided by current market capitalization (Sept 1, 2016)

    3

  • Designed for Value: How We are Different

    Acquire only when we see possibility of 3-5X value uplift in 3-5 years

    Target cash cost of production: 50% of reversion to mean metal price

    Au

  • 2009

    Costerfield, Australia

    Gold & Antimony

    2010

    Cerro Bayo, Chile

    Silver & Gold

    2014

    Challacollo, Chile

    Silver & Gold

    2014

    Bjrkdal, Sweden

    Gold

    Results: Strong performance across the price cycle

    1. The Company defines EBITDA as earnings before interest, taxes and non cash charges/ (income). EBITDA should not be considered by an investor as

    an alternative to net income or cash flow as determined in accordance with IFRS EBITDA figures reflect adjusted EBITDA, please see the Companys Managements Discussion

    and Analysis.

    TIMELINE

    2016 Quarterly

    Financial

    Measures

    Revenue,

    EBITDA(1) &

    Cash from

    Operations

    Revenue

    EBITDA

    Cash from

    Operations

    Record

    Revenue

    2nd best EBITDA &

    Cash from Operations

    No acquisition

    Optimize operations

    Pay down debt

    Exchange warrants

    Begin dividends

    2011-2013

    5

  • 1. 2016 metal price assumptions: $1,202/oz Au, $16.87/oz Ag and $6,820/t Sb

    2. Please refer to Mandalays NI 43-101 Mineral Reserves and Resources Estimates, filed on SEDAR and available on the Companys website.6

    Based on Matched Production and Reserve Growth

    6

    15,854 63,351

    107,941 126,908

    154,810 166,679

    254,000

    520,000 633,000

    772,000

    1,123,000 1,070,000

    0

    200,000

    400,000

    600,000

    800,000

    1,000,000

    1,200,000

    0

    50,000

    100,000

    150,000

    200,000

    250,000

    300,000

    2010 2011 2012 2013 2014 2015 2016E

    Oz A

    u E

    q.

    Ye

    ar-

    En

    d R

    es

    erv

    es

    Oz A

    u E

    q.

    An

    nu

    al

    Pro

    du

    cti

    on

    165,000

    180,000(1)

    With Continuing Low Cash and All-In Production Costs

    $/O

    z A

    u E

    q. (C

    os

    t) o

    r A

    u (

    Pri

    ce

    )

    600

    800

    1,000

    1,200

    1,400

    1,600

    1,800

    -

    10,000

    20,000

    30,000

    40,000

    50,000

    60,000

    Production Cash Cost AISC Average Au price

    Au

    Eq

    . O

    z/Q

    tr

    Reducing volatility with growing number of operations

    1 mine restart

    1 mine restart

    1 mine transformation1 mine restart

    1 mine transformation2 mines producing

    1 mine transformation

    P&L Margin

    EBITDA Margin

    2010 2011 2012 2013 2014 2015 1H-2016

  • And Adding Reserves Cost-Effectively

    1. 2016 metal price assumptions: $1,202/oz Au, $16.87/oz Ag and $6,820/t Sb

    2. Please refer to Mandalays NI 43-101 Mineral Reserves and Resources Estimates, filed on SEDAR and available on the Companys website.7

    0

    20

    40

    60

    80

    100

    120

    140

    160

    180

    2010 2011 2012 2013 2014 2015

    US

    $/o

    z A

    u E

    q. P

    &P

    Ad

    ded

    Mandalay Cost of Acquiring and Exploring for Reserves

    Cumulative Cost per oz Au Eq. Acquired or Discovered

    Cost Per oz Au Eq. Discovered in yr

    Cost Per oz Au Eq. Acquired in yr

    Exploration adds at

    cumulative average

    $50/oz Au Eq.

    Acquisition + Exploration

    adds at cumulative

    average $78/oz Au Eq.

    (for developed &

    producing reserves)

  • 0

    2

    4

    6

    8

    10

    12

    14

    16

    18

    20

    -$20,000

    $0

    $20,000

    $40,000

    $60,000

    $80,000

    $100,000

    Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15

    Volu

    me (

    mill

    ions)

    Invest

    ment

    Valu

    e

    (1) Adjusted for reinvested dividends. Assumes investment in Mandalay made as part of private placement announced on 24-Sep-09 to fund acquisition of Costerfield and accounts for warrant exchange offer of

    0.47 shares per warrant. (2) Peer Index: Argonaut, Dundee PM, Kirkland, Lake Shore, OceanaGold, Perseus, Primero, Timmins. (3) Gold Seniors: Agnico Eagle, AngloGold, Barrick, Goldcorp, Gold Fields,

    Kinross, Newcrest, Newmont, Polyus, Yamana. (4) End date as at July 26, 2016.

    Creating Superior Value for Shareholders

    $0

    $2,000,000

    $4,000,000

    $6,000,000

    $8,000,000

    $10,000,000

    $12,000,000

    $14,000,000

    2010 2011 2012 2013 2014 2015 9M-2016

    Dividends Paid (USD)**

    6% of revenues (dividend contribution)

    16.2% Cumulative Total Return (% Value Change)*

    *Q3 2010 to Sept 1, 2016, includes all dividends paid. Source: MetalPrices.com for metal spot prices Index: September 30, 2009 = 100. Mandalay share price: $1.10.

    Graph updated quarterly, prices as at the last trading day of each respective quarter.

    **Annual cash dividend paid quarterly, based on 6% of the Companys trailing quarters gross revenue and the future cash requirements of the Company

    Mandalay(1) Peer Index(2) Gold Senior(3)

    Total Return vs. Peers and Seniors

    A $10,000 investment on September 24,