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A European Gold Royalty Company
November 2008Business and Strategy
2
Contents
1. A unique gold royalty company
2. A cash generating business
3. Management
4. Business Strategy
5. Appendix
FORWARD LOOKING STATEMENTS This presentation contains certain “forward-looking” statements regarding the Company’s overall objectives and strategic plans, mineral interests and outlook. Forward-looking statements express, as at the date of this presentation, the Company’s plans, estimates, forecasts, projections or beliefs as to future events or results. Forward-looking statements involve a number of risks and uncertainties, many of which are beyond the Company’s control and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. The reader is cautioned not to place undue reliance on these forward-looking statements. The Company does not undertake to update any forward-looking statement that is contained in this presentation.
3
April 1993: French company formed as Guyanor Ressources SA - Acquired Golden Star’s gold properties in French Guiana – listed in Paris and Toronto
Gold production ceased: losses exceeded $50million
June 2004: focus on gold royalties following a reorganization
December 2004: acquired the ROSEBEL ROYALTY, a 10% royalty interest on production from Rosebel gold mine in Suriname, operated by Cambior
July 2005: changed name to EURO Ressources SA – ”EUR” on NYSE Euronext, Paris and TSX, Toronto
March 2006: shares trade on a continuous basis in Paris - high market liquidity
November 2006: Cambior acquired by IAMGOLD
July 2007: IAMGOLD announces mill expansion
March 2008: Scoping studies prepared on Paul-Isnard (2 million ounces of gold identified in target: study based on 660 000 ounces recovered)
August 2008: IAMGOLD tender offer for EURO at €1.20 per share
November 2008: anticipated completion date of mill expansion and optimization
Key milestones for EURO
1993
1998
2004
2008
2005
2006
1. A unique gold royalty company
2007
4
Key Strengths
100% GOLD Royalties Limited risk profile compared to mine operation
− No direct operating cost risk
− No capital cost risk
− No environmental risk The Rosebel Royalty:
− a « crown jewel » gold royalty
− Long life gold mine
− Strong operator Strong Cash Flow
− Support acquisition strategy
− Enables dividend 2009
− No net debt
1. A unique gold royalty company
1
2
3
4
5
1. A unique gold royalty company
The Rosebel Royalty : a « crown jewel » gold royalty
Participation right, calculated and payable quarterly
Calculated on gold price over ~ $320 ounce based on 60% “soft” rock ($300 threshold) and 40% “hard” ($350 threshold)
87,000 ounces produced in Q3 2008, 350,000 ounces annual rate
Projected long term production of + 400,000 ounces per annum
10% royalty rate equivalent to roughly 40,000 oz annual production – one of the 3 largest gold royalties
~ $20 million annual cash flow at $800 per gold oz and 400,000 ounces annual production
Participation right, calculated as a royalty payable by IAMGOLD on attributable production up to 7 MM oz of gold
5.6 MM oz participation remaining as at September 30, 2008, with 1.4 MM oz already paid since mine start up in 2004
SourcePress release EURO (October 23, 2008), annual reports EURO
6
The Rosebel gold mine
1. A unique gold royalty company
Notes1 Source: CIA – The World Factbook2 Also see appendix
Population: 476 000 (July 2008) Government type: constitutional democracy Economy: mining industry (alumina, gold, oil) accounting for 85% of exports and 25% of government revenues
Republic of Suriname1
Open pit mine
Ball Mill Mill Expansion
Rosebel is located approximately 100 kilometers south of Paramaribo2
7
The Rosebel gold mine – a quality operation
A long mine life based on existing reserves and resources− Current mine life: 15+ years− Approx 400,000 ounces annual gold production− Continuing exploration and confirmatory drilling program− Production potential recently increased following new mine
plan and mill expansion− Production likely to merit a further increase on completion of
committed drilling program− Measures indicated an inferred resources of 8.8 million gold
ounces as of 31/12/07
Benefiting from a reputable operator− IAMGOLD is a global operator with interests in 8 gold mines
EURO is the only gold company on Euronext Paris
EURO is the sole listed pure gold royalty company in Europe
1
2
3
1. A unique gold royalty company
4
SourcePress release EURO (October 23, 2008), press release IAMGOLD (September 22, 2008), Offer Note IAMGOLD (August 29, 2008)
8
The Rosebel gold mine : recent capital investment Over the last two years, IAMGOLD invested 45 MM USD in optimization
and expansion programs to increase level of production:
− US$26 million mill expansion program • started in July 2007
− US$18.4 million mill optimization project • launched in February 2008
− Expected to be completed in November 2008
− Objectives• Increase throughput capacity to 11.0 MM tonnes of ore
(+ 400k oz in annual production)• Maintain reserve grade of 1.3g/tonne• Boost metallurgical recovery from 94% to 95%
US$16 MM exploration and confirmatory drilling expenditure in 2008 with US$20 MM forecast for 2009
1. A unique gold royalty company
SourceIAMGOLD presentation at the Denver Gold Forum (September 9, 2008)
9
The Paul-Isnard royalty
Sale of Paul Isnard properties to Golden Star Resources Ltd negotiated in 2007
Consideration calculated as a Royalty based on the gold price over $400 and future production: 10% x gold production for first 2 MM ounces 5% x gold production for next 3 MM ounces
2 million oz contained identified - 33.2 MM tonnes @ 1.69 g/t
Scoping study based on 660,000 oz recovered
Considerable exploration potential based on historic work
Golden Star did not complete required feasibility study
1. A unique gold royalty company
10
Rosebel Royalty: long term established cash flow
Rosebel Royalty = 10% x Production x (Gold Price > $320)
Production = mine production (less 2% royalty to Suriname Government)
Gold Price = London PM gold price average per calendar quarter
Gold Price over $320 = Gold Price less− $300/oz for “soft” and “transitional” ore (~60%) − $350/oz for “hard” ore (~40%)
~ $20 MM annual cash flow at $800 gold and 400,000 oz annual production
15 years current mine life
2. A cash generating business
Rosebel Royalty
11
2. A cash generating business
Rosebel Royalty - A cash generative asset
Last hedging
Hedge settlements No hedge
…2007Q1 Q2 Q3 Q4
2008Q1 Q2 Q3 Q4
2009Q1 Q2 Q3 Q4
2010…Q1 Q2 Q3 Q4
RoyaltiesCash in
Cash out
- $2.2MM- $5MM +$1MM +$3MM +$10MMNet
Cash
No hedge
Today
Loan repayments No loan
100% royalty cash flow
SourceEURO consolidated financial statements
12
The Rosebel gold royalty: increasing royalty cash-flow…
History of the Rosebel royalty revenue in Euro and US dollars
2. A cash generating business
$1 066 $1 103
$2 429
$1 613
$2 475
$3 855
$4 434
€714
€1 518
€1 213
€1 990
€2 641€2 806
$4 728
$4 521
$2 427
$1 837
$1 455
$1 100
$2 706
$783
$289
$1 220
$735
$2 108
€3 665
€1 833
€2 861
€237
€1 597€1 711
€1 785
€1 233
€912€820
€897
€637€607500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
Q12004
Q22004
Q32004
Q42004
Q12005
Q22005
Q32005
Q42005
Q12006
Q22006
Q32006
Q42006
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Rosebel royalty ('000$) "Rosebel royalty ('000€)USD/EUR 0.82 0.83 0.65 0.74 0.70 0.76 0.75 0.74 0.74 0.68 0.63 0.63
$ ‘000
0.780.830.850.770.740.810.83
SourcePress releases EURO, Quarterly reports EURO
13
Gold production by quarter vs. average gold price
…benefiting from higher gold prices
2. A cash generating business
31
85
79
93
8690
82 82
7578
70
75
83
76
87
48
797176
$872
$896$925
$819
$668$660$652$625
$440$408
$622
$428$428$401$393
$434
$484
$554
$628
0
10
20
30
40
50
60
70
80
90
100
Q12
004
Q22
004
Q32
004
Q42
004
Q12
005
Q22
005
Q32
005
Q42
005
Q12
006
Q22
006
Q32
006
Q42
006
Q12
007
Q22
007
Q32
007
Q42
007
Q12
008
Q22
008
Q32
008
300
400
500
600
700
800
900
1 000
Gold production ('000 oz) Average gold price ($/oz)
‘000 oz $
SourcePress releases EURO
14
114 000
57 000
37 60031 200
22 80017 100
5 7000
0
20 000
40 000
60 000
80 000
100 000
120 000
30/06/2005 30/06/2007 31/12/2007 31/03/2008 30/06/2008 31/10/2008 Q2-Q4 2009 2010
Current hedge Position @ 458,50 USD/oz
oz
Historic gold Hedging – a « dehedging » story (1/2)
Remaining Hedge position
2. A cash generating business
Hedging was required by Macquarie Bank to protect repayment of loan made for acquisition of Rosebel
SourceEURO consolidated financial statements, press releases
15
3 265
4 821
6 017
3 207
-2 036 -2 224
-974
890
-3 000
-2 000
-1 000
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
HY1 2007 HY2 2007 HY1 2008 Q3 2008
Total Royalties Gold hedge costs
k€
2. A cash generating business
Historic royalties revenue vs. gold hedge cash costs
Historic gold Hedging – a « dehedging » story (2/2)
SourceEURO consolidated financial statements
16
James H. Dunnett – Directeur Général and Director
− 30+ years experience in mining industry finance
− largest shareholder of EURO
Allan J. Marter – Président of the Board of Directors
− 30+ years experience in mining industry as corporate director and chief financial officer
Susanne A. Hermans – VP Finance
− CPA, MBA - responsible for developing and maintaining accounting system and preparing financial statements and related reporting
3. Management
A management team with recognized experience in mining industry finance
17
Build a portfolio of gold mining royalties by
− Acquisitions and…
− …creating royalties through financial structuring
Many opportunities identified by EURO management
Strategic business strengths are:
− Strong Cash flow generation from Rosebel royalty
− Financial Expertise of EURO’s management
− 100% gold royalty income
Create increased value for all its shareholders through diversified portfolio resulting in higher multiple to cash flow, in keeping with its peer group
4. Business strategy
Stand alone business model
18
5. Appendix
Asset structure
Rosebel
(Incorporated in Canada)
95%5%
10% Rosebel Royalty on 100% production
SOTRAPMAG
100%
« P.E.R » ConcessionsRosebel Royalty
Payments
100%
Potential royalty income
100%
Paul Isnard
(Republic of Suriname)
19
The Rosebel gold mine property
5. Appendix
SourceIAMGOLD Denver Presentation Forum (September 9, 2008)
20
Detailed P&L over the last semester
2007 - HY1 2008 P&L statementIn €k HY1 2007 HY2 2007 HY1 2008
Total Royalties 3 265 4 821 6 017% Growth na 48% 84%
Rosebel Royalties 3 076 4 686 5 851
Other Royalties 189 135 166Gold hedge costs1 (2 036) (2 224) (974)
Net Royalties 1 229 2 597 5 043% Growth -38% 111% 310%
Operating expenses (1 064) (857) (839)
Depreciation and amortization expenses (257) (328) (210)
Other income - 9 -
Other expenses - -12 -Operating Costs (1 321) (1 188) (1 049)
Operating Profit after hedging (92) 1 409 3 994 % Net Royalties -3% 29% 66%
Interest on Macquarie loan (138) (98) (47)
Interest on Golden Star loan (135) (62) -
Net f inancial instruments gain (expenses)2 1645 (3 979) (926)
Others f inancial income (expenses) (169) (82) (13) Financial Costs 1 203 (4 221) (986)
Profit (loss) after tax 1 111 (2 812) 3 008
Future income tax recovery 236 702 (981)
Net profit (loss) for the year 1 347 (2 110) 2 027 % Net Royalties 41% -44% 34%1 Gold hedge expense is the total of realised losses on liquidation of derivative gold hedges
2 Financial instrument gain and expense is the variation between periods in mark-to-market 2aluation of the derivative gold hedges
5. Appendix
SourceEURO consolidated financial statements
21
Detailed P&L over the last 9 months
5. Appendix
9 months ended 2007-2008 P&L statement
In €k 09/2007 09/2008
Total Royalties 5 289 9 224% Growth na 74%
Rosebel Royalties 5 026 8 986
Other Royalties 263 238Gold hedge costs1 (2 938) (979)
Net Royalties 2 351 8 245% Growth na 251%
Operating expenses (1 597) (1 222)
Others3 (248)
Depreciation and amortization expenses (414) (363) Operating Costs (2 011) (1 833)
Operating Profit after hedging 340 6 412 % Net Royalties 6% 70%
Interest on Macquarie loan (192) (59)
Interest on Golden Star loan (200) -
Net f inancial instruments gain (expenses)2 (711) -
Others f inancial income (expenses) (219) 71 Financial Costs (1 322) 12
Profit (loss) after tax (982) 6 424
Future income tax recovery 807 (2 196)
Net profit (loss) for the year (175) 4 228 % Net Royalties -3% 46%1 Gold hedge expense is the total of realised losses on liquidation of derivative gold hedges2 Financial instrument gain and expense is the variation between periods in mark-to-market 2aluation of the derivative gold hedges
3 Expenses related to IAMGOLD arbitration and usolicited takeover bid
SourceEURO consolidated financial statements
22
Detailed Balance sheet
Balance sheet as of 30/09/08
In €k 06/2008 09/2008
Non current assets 14 258 13 793
Intangible assets 7 598 8 183
Others 5 5
Deferred tax 6 655 5 605Current assets 3 489 4 604
Trade receivables and similar accounts 3 276 3 849
Other current assets 114 163
Cash and cash equivalents 99 592Total assets 17 747 18 397
Equity - group share 7 641 10 268Issued capital stock 606 606Additional paid-in capital 45 559 45 559Translation adjustment 659 1 083Other reserves (41 210) (41 209) Retained earnings 2 027 4 229Non-current liabilities 5 176 3 244Derivative f inancial instruments 5 176 3 244Current liabilities 4 930 4 885Loans 1 171 871Derivative f inancial instruments 1 704 1 607Gold hedge liability 1 487 1 603Trade payables and similar accounts 488 676Other liabilities 80 129Total equity and liabilities 17 747 18 397
5. Appendix
SourceEURO consolidated financial statements