Growing gold production in kazakhstan
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Growing Gold production in Kazakhstan

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Growing gold production in kazakhstan

Growing Gold production in Kazakhstan

February 2011


Disclaimer

Disclaimer

  • This Presentation has been prepared solely to provide a basis for potential investors to further consider whether to pursue a possible acquisition of Ordinary Shares in the Company and does not consider and is not tailored to the specific circumstances or interests (tax, legal or otherwise) of any particular investor. This Presentation does not constitute a prospectus, admission document or listing particulars relating to the Company, nor does it constitute or form part of any offer or invitation to purchase, sell or subscribe for, or any solicitation, invitation or inducement of any such offer to purchase, sell or subscribe for, any interest in securities in the Company nor shall this Presentation or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract thereof.

  • No reliance may be placed, for any purposes whatsoever, on the information contained in this Presentation or on its completeness and this Presentation should not be considered a recommendation by the Company or any of its respective affiliates in relation to any purchase of or subscription for Ordinary Shares. No representation or warranty, express or implied, is given by or on behalf of the Company, or any of their respective directors, partners, officers, employees, advisers or any other persons as to the accuracy, fairness or sufficiency of the information or opinions contained in this Presentation. Save in the case of fraud or fraudulent misrepresentation, no liability is accepted for any errors, mis-statements, omissions or inaccuracies in such information or opinions contained in this Presentation nor for any direct or consequential loss howsoever arising from any use of, or reliance on, this document or otherwise in connection with it.

  • This Presentation is exempt from the general restriction (in section 21 of the Financial Services and Markets Act 2000) on communications, invitations or inducements to engage in investment activity pursuant to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”) on the grounds that it is solely made to and directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the FPO and (ii) high net-worth companies, unincorporated associations and other bodies within the meaning of Article 49 (2) (a) to (d) of the FPO. The investment or investment activity to which this Presentation relates is available only to such persons and will be engaged in only with such persons. Persons who fall outside categories (i) or (ii) above must not attend or receive copies of this Presentation. Any person who does not fall within categories (i) or (ii) above must not rely on or act upon the matters communicated at this Presentation.

  • The distribution of this Presentation in jurisdictions other than the United Kingdom may be restricted by law, and persons into whose possession this Presentation comes must inform themselves about, and observe, all such restrictions. The Company does not accept any responsibility arising from any distribution of this document in such jurisdictions in breach of this obligation.

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  • This Presentation is being made available on the basis that the recipients keep confidential any information contained herein or otherwise made available, whether orally or in writing, in connection with the Company. This Presentation is confidential and must not be copied, reproduced, published, distributed, disclosed or passed to any other person at any time without the prior written consent of the Company.

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Key executives

Key executives

  • Tim Daffern Chief Executive Officer

  • Chartered Mining engineer, MBA

  • 22 years international experience in underground and open pit operations

  • Formerly COO with Angel Mining Plc and previously Director Wardell Armstrong International

  • Joined Q4, 2010

  • Baurzhan Yerkeyev Executive Director

  • Graduate from Tomsk Polytechnic Institute, Geology (Russia)

  • Formerly project manager for State Geophysical-Geochemical Expedition

  • Previously director of CRS, geological consultants

  • Bill Morgan Chief Financial Officer and Company Secretary

  • UK Chartered accountant.

  • 30 years accountancy and financial management experience

  • 8 years in Kazakhstan, lives in Kazakhstan

  • Charles Zorab Corporate Development – London

  • Consultant, former mining analyst


Business plan

Business plan

  • To maximise the value of the business by development and improvement of gold assets in Kazakhstan

  • Increase Productivity and implement cost reduction programmes

    • Result = Margin improvement

  • Target increased annual production to over 100,000 ounces Au by 2016

    • CAGR = 31% pa

  • Identifying and developing new gold based projects


  • Major shareholders and corporate information

    Major shareholders and corporate information

    As at 31 December, 2010

    Source: Datastream


    Location

    Location

    The Republic of Kazakhstan

    East Kazakhstan Region


    Sekisovskoye competitive advantage

    Sekisovskoye Competitive Advantage

    • Location

      • 40km from regional capital - Ust Kamenogorsk

      • Good local infrastructure and transport links - on major road to Ridder mining centre

      • Skilled workforce available locally

      • Experienced, predominantly local management

    • Deposit

      • Large scale (economies of scale)

      • Free gold (simple, low cost plant with good recovery)

      • Not contaminating (not acid generating, no arsenic)

      • 100% owned

    • Result = low capital cost, mid-tier operating cost, low risk


    Sekisovskoye resources jorc

    Sekisovskoye resources (JORC)


    Sekisovskoye project

    Sekisovskoye project

    • Production

      • Target gold production - 2011: > 26,000 ounces

        • 2016: > 100,000 ounces

  • Sekisovskoye Open Pit Mine

    • JORC reserve157,614 oz (01/01/2010)

    • Open Pit life to Q3 2014

    • Produced 55,006 oz since start-up to 30 December 2010

  • Sekisovskoye Underground Mine

    • JORC resource of 1,804,685 oz (01/01/2010)

    • Existing underground infrastructure refurbished

    • Target extraction rate of 850,000 tpa by 2016

    • First extraction targeted December 2011

    • 25,000m diamond drill programme is underway for 2011; four drill holes complete


  • Sekisovskoye

    Sekisovskoye

    • Sekisovskoye process plant

      • Crushing and milling capacity 850,000 – 1,000,000 tpa

      • Main Jaw Crusher has been problematic

        • being replaced Q1, 2011

        • Cost $750,000 USD

        • Reduce downtime, reduce costs

      • Process Recovery

        • Current 82% to 90%

        • Additional cyclones to reduce grinding size have been installed in Q1 2010; cost $65,000 USD,

      • Result = improved efficiency, lower operating costs


    Sekisovskoye underground project

    Sekisovskoye – underground project

    • Construction works on target

    • Production target increased from 500,000 tpa to target 850,000 tpa

    • Production from main shaft, triple internal decline, plus service shaft; single excavation methodologies, with 100% open ‘stoping’; underground infrastructure based on flexible deployment of men and material

    • 5 – 6 g/t Au, 6-7 g/t Ag in situ grade

    • Expected mill feed grade at 4.2 g/t Au after dilution

    • Cash flow sufficient for 95% of expected development costs


    Underground project ore bodies

    Underground project ‘ore-bodies’

    North

    West


    Undergound development

    Undergound development


    Sekisovskoye targeted gold production

    Sekisovskoye targeted gold production

    CAGR – 31%


    Operational objectives

    Operational objectives

    • Increase annual throughput to 1M tpa (compared with design capacity of 850,000 tpa)

    • Increase process plant recovery to 90% in 2012, 95% in 2015

    • Focussed development of the underground mine to access high grade ore as soon as possible, increasing annual production to 100,000 oz

    • Reduce operating costs to industry ‘mid quartile’ cost basis

    • Look to further near-term production opportunities for gold in Kazakhstan

    • Result = Increase EV/oz to industry average or better

      • Increase delineation and continue expansion of the geological resource

      • Expand gold production and earnings value


    Use of funds 1

    Use of funds 1

    • Plant Waste management system

    • Capital required$4.2M

      • Expenditure Q2 – Q4, 2011

  • Reduction in operating costs target : $55/oz

    • Waste system based on making ‘waste paste’

    • All engineering works overseen by Golders Associates

    • Reduced tailings impoundment construction costs

    • Reduced water abstraction

    • Eliminates water management on in surface dams during winter

    • Recycle metallurgical plant reagent solution

    • Reduce environmental costs to government

  • Backfill from ‘paste plant; used in underground mine

  • Paste plant underpins the target 850,000 tpa extraction


  • Use of funds 2

    Use of funds 2

    • High Voltage Electrical Infrastructure

    • Capital required$1.8M

      • Expenditure Q2 – Q4, 2011

  • Reduction in operating costs target : $15/oz

    • Establish dual High Voltage Electrical infrastructure to project site

    • Currently some ten days lost during the year due to single source electrical supply

    • Improve continuity of all project operations

    • All engineering works overseen by Kazakhstan Electrical Authorities

  • New electrical infrastructure required to meet statutory safety regulations for underground operations

  • Infrastructure is designed to underpin the target 850,000 tpa extraction


  • Use of funds 3

    Use of funds 3

    • Mineral Process Plant ‘Increase Gold Recovery’

    • Capital required$2.1M

      • Expenditure Q2 – Q4, 2011

  • Reduction in operating costs target : $35/oz

    • Replace system for adding dissolved oxygen to cyanide tanks

    • Automate the system for addition of cyanide

    • Automate the system for control of reagents

    • Replace the smelting furnace

    • Upgrade the laboratory


  • Use of funds 4

    Use of funds 4

    • Expansion of Engineering workshops

    • Capital required$0.9M

      • Expenditure Q2 – Q4, 2011

  • Reduction in operating costs target :$15/oz

    • Establish self sufficient site based engineering facilities for underground and open pit mining equipment

    • Additional workshops, welding equipment, wash-down facility

    • Enable currently outsourced works to be undertaken by site staff

    • Improve continuity of all project operations

  • Infrastructure is designed to underpin the target 850,000 tpa extraction


  • Use of funds 5

    Use of funds 5

    • Corporate development

    • Capital required$1.0M

      • Expenditure Q2 – Q4, 2011

      • Accelerate the current programme of sourcing targets for future growth

      • Enable use of professional advisors to progress due diligence


    Placing

    Placing

    • Placing and Shares

      Net Proceeds: $10M

      Book Close: 10th March 2011

      Use of funds:CapitalOpEx Cost savings

      • Plant Waste management system$4.2M$55/oz

      • High Voltage Electrical Infrastructure$1.8M$15/oz

      • Mineral process plant gold recovery $2.1M$35/oz

      • Expansion of engineering workshops $0.9M$15/oz

      • Corporate development $1.0M-

        Open offer :up to 2.5M Euro

        Secondary :up to $3M


    Growth opportunities

    Growth opportunities

    • Management experience in review and development

    • Kazakhstan

      • Supportive environment

      • Good local source of opportunities

    • ‘Local’ reputation of Hambledon

      • Good relationship with authorities

      • Ability to get things done

      • Attracts opportunities

    • Criteria

      • Kazakhstan

      • Gold based,

      • 0.75M oz to 5M oz,


    Hambledon key factors

    Hambledon – key factors

    • Sekisovskoye

      • Large gold resource 1.8m oz JORC, expansion to 2.5m ounces underway

      • Production now at 25,000 oz per year, rising to 100,000 oz in 2016

        • CAGR = 31% pa

    • Advantageous location

    • Free milling, environmentally benign

    • Experienced, predominantly local management

    • Good underground mining conditions


    Contacts

    Contacts

    Registered office

    Hambledon Mining Plc Daws House33-35 Daws LaneLondonNW7 4SD

    Investor relations: Charles Zorab

    Telephone: +44 207 233 1462 e-mail: [email protected]


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