peter hambro mining plc - petropavlovsk plc · 1 peter hambro mining plc preliminary results –...
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PETER HAMBRO MINING PLCPreliminary Results – April 2006
En route to the 2009 target
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Statutory disclaimer
Some statements contained in this presentation or in documents referred to in it are or may be forward-looking statements. Actual results may differ from those expressed in such statements, depending on a variety of factors.
Past performance of the Company or its shares cannot be relied on as a guide to future performance.
Any forward-looking information contained in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect, and accordingly, actual results may vary.
This presentation does not constitute, or form part of or contain any invitation or offer to any person to underwrite, subscribe for, otherwise acquire, or dispose of any shares in Peter Hambro Mining plc or advise persons to do so in any jurisdiction, nor shall it, or any part of it, form the basis of or be relied on in any connection with or act as an inducement to enter into any contract or commitment therefore. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this document or on its completeness and no liability whatsoever is accepted for any loss howsoever arising from any use of this document or its contents otherwise in connection therewith.
This presentation has been prepared in compliance with English law and English courts will have exclusive jurisdiction over any disputes arising from or connected with this presentation.
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Today’s Presentation2005 Results
OperationsFinancials
One Million Ounces2005 Exploration WorkFinancials
Beyond a millionYamal assets
PHM UpdateQ & A
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2005 Results
Highlights of Unaudited Preliminary Results for 2005
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Mining – Pokrovskiy & Pioneer
Processing high quality ore through:MicroMine optimisation of mine plan2004/5 advanced stripping
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Group Total Attributable Production
Consistent increase in production for the Group:
Steady advances at Pokrovskiy & PioneerReduction of contribution from Omchak JVIncrease in PHM portfolio of regional strategic assets
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Summary Financials - Turnover
Turnover increased:Steady advances at Pokrovskiy & PioneerReduction of contribution from Omchak JVIncrease in PHM portfolio of regional strategic assetsAppreciating gold price
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Summary Financials – Operating Costs
Operating costs suffered increase:+36% fuel prices+26% energy prices+30% plant consumable prices
Global average total cash cost –
US$269/ozSource: GFMS 2005 Survey
deeper miningharder ore
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Summary Financials – Cost Controls
+ 36% Fuel prices
+ 26% Energy prices+ 30% Plant
Consumables prices
New Technologies
Economies of Scale
PHM is instituting a programme of tight cost control through:
External inflationary pressures balanced with cost-cutting measures
COSTSPokrovskiy Mine is
Russia’s lowest costgold producer
Improved Energy Contracts
Optimisation of Production Processes
Long Term Contracts with Suppliers
CO
ST
PRES
SUR
ESC
OST
C
ON
TRO
LS
Deeper mining with harder ore
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Summary Financials – Cost analysis
45%
7%
48%
2004
40%
10%
50%
2005
Direct Mining Expenses
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Summary Financials - ProfitabilityEPS (fully diluted)Operating Profit
17%23%
Decrease in profitability due to cost pressures
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Summary Financials – Balance Sheet StrengthNet Cash (pre lease/s&l back)Net Assets
Increase in shareholder fundsFunding in place for growth, cash at year end of US$144.5m
21%
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One million ounces
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Resources = 32% Increase
Reserves = 21% Increase
Group Reserves and Resources
Increase in QuantityIncrease in Quality
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Group Exploration & Development
Semi annual independent review on
Exploration and development work carried out in 2005Current status of each project in the PHM portfolioReserve and resource estimates
Executive summary available at www.peterhambro.com
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Pokrovskiy Deposit – MicroMine model2005
9,000m of drillingEmphasis on Pokrovka-1Extensions of the ore bodies, both laterally and at depth Drill hole evidence for high-grade extension of Glavnoye ore body (at grades of 6g/t down to the 120m level
FuturePit expansion to the east identifiedExploit ore bridge between the Glavnoye and Ozernoye ore bodies
GlavnoyeOzernoye
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Pokrovskiy Deposit…exploration
CURRENT PIT DESIGN
Ore body high-grade extension
at depth (6g/t down to 120m)Concentration on
brown field expansion of PokrovkaExploration bringing near pit resources into reserves to extend mine life
Pokrovka 1
POTENTIAL PIT EXPANSION
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Pokrovskiy Flanks – Exploration
Drill programme follows targets identified by geochemical modelDrill programme aim to confirm resource consistent with the “1Moz” target
Trenching and drilling along Sergeevsky fault
showing ‘significant mineralisation’
All at locations previously indicated by 3D geochem
model
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Pokrovskiy flanks – The fanglomerates
1Moz+ found in new style of orebodydiscovered at Pokrovka 2Gold in conglomerates, termed “fanglomerate”, with coarse gold-bearing rock within fine sandsOrebody low grade but nature of the ore means fine sands can be washed out at minimal costPost washing:
10% of ore remainsHosts 70% of original goldIncreased grade of c. 8.0g/t
Reserves & resources identifiedC2 - 220,000ozP1 & P2 - 830,000oz
CURRENT PIT
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Pioneer – Exploration
Work in 2005 concentrated on supporting planned production of 250,000oz paExploration drilling and trenching, and completion of all outstanding assays on the three main ore zones (Bakhmut, Promezhutochnaya, and Yuzhnaya), allowed the conversion of P1+P2 resources to C2 reserves
C2 RESERVES ARE MORE THAN DOUBLED & NONE REMAIN IN THE P2 CATEGORY
C2 RESERVES ARE MORE THAN DOUBLED & NONE REMAIN IN THE P2 CATEGORY
P1+P2C2
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Pioneer – High grade ore columns
Resources and Reserves are expected to grow with the delineation of high grade ore columns as predicted by geochemical and structural modelling.Exploration in 2005 has proved a number of these additional ore columns
Apophysis 1 (previously discovered)Bakhmut (previously discovered)Promezhotchnaya north east NEWYuzhnaya north NEWYuzhnaya south NEW
Andreevskaya
Ore Columns
YUZNAYA
GEOCHEM MAP WITH NOW PROVED HIGRADE COLUMNS
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Pioneer – ‘Bonanza’ high grade zone
At the Andreevskaya target, to be further drilled this year, the hole drilled to confirm the existence of the target intersected 222.7g/t over 8.5m, with peak grades within the interval of over1,000g/t
HIGH GRADE INTERSECTION IN ZONE PREDICTED BY 3D GEOCHEM MODEL
HIGH GRADE INTERSECTION IN ZONE PREDICTED BY 3D GEOCHEM MODEL
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Pioneer – Development work
Preparations for heap leach operations scheduled to commence at 2007Stripping open pit areas, remove all surface material on the first major ore column at the junction of Apophysis 1 and the main orebody.Further work on the second identified ore column. A total amount of 836,000m³ of material moved Further processing undertaken of technological sample.
Sample 53,156 tonnesAverage gold content 5.7g/tRecovery rate 90%.
ONE OF TWO PITS OPENED TO DATE AT
PIONEER
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Malomir – Summary
Central deposit acquired early 2005 for c.US$1mCurrent NPV analysis shows deposit represents c.25% of PHM valuation5mtpa plant to be constructed by 2009 then expanded further to 7mtpa by 2011Total CapEx estimate is c.US$112m
Data from Jan-06 Analyst Workshop
Full presentation available at www.peterhambro.com
Data from Jan-06 Analyst Workshop
Full presentation available at www.peterhambro.com
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Malomir – Large Scale Exploration and Development Operations
197,000m³ of trenching
PRIORITY – Confirmation and Enlarging Reserve Base at Diagonal Zone
Large exploration & development
camp at site
2,632m of drilling
Core drilling with 4 rigs
New Tokur laboratory 100%
committed to Malomir samples
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Malomir – Exploration & Development
110kv Power Line
PHM constructing road
ZOOM TO FOLLOWING
IMAGE
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Malomir – Exploration & Development
QUARTZITE ZONE
DIAGONAL ZONE
DIAGONAL ZONE
POSSIBLE EXTENSION
PHM EXPLORATION CAMP
Further detail contained in Annual Report & Accounts
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Laboratory Capacity - PHM Group Facilities
New assay laboratories provide largest capacity in RussiaOne of the biggest competitive advantages of the Group Ensures uninterrupted implementation of exploration programme
PokrovskiyAssay 10,000 samples/month
Pokrovskiy & flanks, Pioneer, Odolgo
Yamal(commissioning)
Assay 5,000 samples/monthGeochemical 3,000 samples/month
Novogodnee, PetroPavlovsk, Yarmal
TokurAssay 3,000 samples/month
Tokur, Voroshilovskoye, Malomir
BlagoveschenskReference lab for all deposits
Assay 3,000 samples/monthGeochemical 6,000 samples a month
X-Ray analysis of polymetallic ore
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Beyond 1 million ounces
Yamal assetsFurther update to follow in annual report
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Yamal assets – SRK review
Quote:“Overall SRK considers that the two licences combined represent a valuable addition to the PHM portfolio and that it is reasonable to expect that the feasibility study at Novogodnee Manteau, combined with ongoing exploration of the Toupugol-Khanmeishorkaya, will in due course confirm the existence of ore grade mineralization containing in excess of 5 million ounces of gold.”
Executive summary available shortly at www.peterhambro.com
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PHM Update
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2006 Forecast – Production & Costs
2006 budget shows estimated attributable production of 250,000 ounces
184,800oz from Pokrovskiy41,300oz from the Omchak
JVAmur region strategic assets
Cost pressures remain & cost optimisation programmes continue
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Queens Award
Delighted to announce that Peter Hambro Mining PLC has been granted the Queen’s Award for Enterprise for the years 2006 to 2009 due to the company’s outstanding success in international tradeOne of the UK’s most prestigious awards acknowledging business achievement
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Questions & Answers