Akobo Minerals Ab

Good morning, everyone, and welcome to the first half year 2024 presentation. And happy Mesko to all our Ethiopian friends. We are a bit spread today. To meet me, we have Helge Rochefort, head of operations on the mining and processing side, and also Dr. Matt Jackson, who will take us through some of the exploration slides to us today. I'm sorry for my voice. I hope it will take me through the whole presentation. Just been out traveling and caught a small bug. So let's start. So a lot has happened during this first half year. Many milestones achieved and probably the most important thing is that we have now reached but I would say a long-awaiting stage of daily mining, stockpiling, and also batch processing from the Segella ore body. This is what we've been working towards for the last couple of years. And I would say, happy to say that we're finally there. And we've successfully commissioned the processing plant. We have produced the first gold from the Segella ore body. Again, we achieve daily mining operations and consistently moving ore from the mine to the processing plant. And this is mostly what it's all about going forward. It's about taking the ore out of the mine and bringing it to the processing plant and producing gold out of it. It might seem like a very easy operation and it's not the most complicated either, but we are working underground. We are working in a mine and there's a lot of, of course, safety and other health issues that we need to take into consideration when doing this. I have to say that we have also applied for a new large exploration license. We have to start looking forward, ensuring the future growth and sustainability of the company. Of course, as Matt will guide you through, we have many, many interesting targets in our existing license area. But we have to look to the future. And this is a very, very exciting area for us to start exploring. As you might have noticed, the gold price is record high. Of course, that has an impact on our profits and our revenues. It will significantly boost our future mine cash flow. However, as we all know, gold prices can be volatile, but right now it looks like the trend is favorable to us and that it will stay at these levels going forward. We've also started engaging in discussions with both financial, industrial and strategic partners to investigate potential corporations. A key A very big event in Ethiopia was the successful launch of financial reform that came together with agreements with IMF and the World Bank, which meant that the local currency has been floated in Ethiopia. So far, it looks like this has been a very successful reform. And for us as a mining company, a national company, This looks to be very interesting, and I hope this will be a bit of a restart of the Ethiopian economy. Key events. Dr. Matt Jackson, or Matt as I like to call him, he will unfortunately move on to a new role outside of the cobalt minerals. He's been with us for several years, working hard in a very challenging environment. We have worked closely on all different aspects of developing this company. He will certainly be missed, but he will not be gone. He will continue as our competent person and also help us a lot on strategic directions and some of the work on the exploration side. So we're happy to still have him with us but in a smaller presence than today. So, next slide. For those not familiar with the company, I'll go through some of the more standard slides. As you can see here, we are located in Oslo, Norway. We're listed on the Euronext Growth Exchange, trading on the OTCQX. are a gold exploration mining company our only asset is in ethiopia so we are a pure play ethiopia mining and exploration company our only asset so far is the sagela mine we have our exploration and mining licenses in the gambela region we've been there now for more than 14 years have a very good relationship with all all communities and everyone in the area so developed a strong local foothold. We have to do it the right way and we're doing it the right way. So we've been there and have really developed ourselves as part of the community. And given the nature of the Ethiopian mining sector, still a few players in there, but with a great potential. We think that we're uniquely positioned to become a major player in this industry over the years. And we think that this region and our project has a significant gold production potential. You can see from the map that we're located all the way to the border of South Sudan. It's a very nice quiet area. We've never had any major or minor almost incidents since we started there. We have 182 square kilometer exploration license. We have a 16 square kilometer mining license. We have plants and machines and equipment, some state of the art. And really some of the best, I think, available processing plants out there today that will be efficient in producing our gold going forward. As you can see here, the Segele mineral resource estimated by SRK. It's not the biggest resource out there. But the grade, as you can see, is fantastic, some of the highest grade in the world. It's a 68,000, 69,000 ounces gold deposit of an average of 22.7 gram per ton. The indicated part of this that sits closest to the surface is 41,000 ounces with an average grade of 40.6 gram per ton. So this is some of the highest grade you'll find in the world, which is why we see that there is a great potential to really do high margin gold production. And to refine our gold, finally, once it's been produced at site, we will ship it to MKS PAMP in Switzerland, one of the few LBMA-approved refineries in the world, where it will be processed into LBMA-approved gold bars and sold at the London Bullion Market Stock Exchange. Next slide, yes. So we can't operate in an area like Gambela doing mining, looking for gold without having a strong ESG policy. And we worked hard on this and we've been recognized for all the hard work and good work we've been doing by receiving different awards, working also with some of the best in the industry. So we're really happy to have a a sound and solid ESG policy in place. And to me, it's all about doing it right. And that's what we're doing. There is no other way. And the financial impact on this, you can see by the fact that we have been able to reach an agreement or become a partner and client of MKS PAMP. Had we had not done this, We would not have been a client of them and we would not have been able to sell our gold at a spot price in the market. We would have been forced to sell it into a different market with a significant discount to it. So this all makes sense, first of all, because it's the right thing to do, but also it has a financial impact that is really considerable. And they've been hard at work the last six months, especially working on the operational readiness and compliance side since we're now starting production. But also followed up on the sustainable natural resource management plan and health and sustainability schools program and continuous community engagement. So we are active and we're doing it right. And going back to what I said earlier, the record, the gold price is record high. It's now, I think, maybe also above $2,600 per ounce. And as you can see from the numbers here, that has a significant impact on the cash flow and also the value of the Segele resource. So if you look at the value of the Segele resource based upon the gold price when we started out this project to build the mine right now with the current gold price it's closer to 180 million dollars and same goes for the operational cash flow from Segele. So you see the value here it's based upon the financial model that we had in the share issue earlier this year. And if you look at the different gold price scenarios with that same model, we have just the value of the cash flow from beginning of the year has increased by close to $30 million. So of course, the gold price has a significant effect

on the cash flow from the Segele gold mine.

So the financial development of the year, we've... Of course, we're still not making... We haven't made any money so far in the first six months. We are in the process of... Helge will talk more about running the second batch from the mine through the... through the processing plants. It'll be interesting to see if we can get a small gold bar out of that. But the financial development during the year has been the same as previously. So looking at what we've done this year is We did the financial restructuring and completed that earlier in the year. We raised additional equity. We converted all convertible debt to equity and we restructured the gold loan that we had with monetary metals. So right now we have only monetary metals as our only external debt provider. Everything else is converted to equity. And of course, the production and revenues from gold production going forward will impact our financial situation. We have produced the first small batch of very low grade. The ramp-up phase is ongoing. As I said, the second batch is in production. It's still difficult to estimate how much gold we will produce in this current ramp-up phase. But we will get back to that when we have more knowledge and understanding from the first batches that we run and see what comes out. We do have a lower burn rate than previously anticipated. And with every day we are stockpiling and mining, we're getting closer to break even. As I mentioned earlier, we have had ongoing and we have ongoing discussions with financial and industrial and strategic partners. Again, to investigate potential cooperation and also including short-term capital requirements which will increase our liquidity buffer. Some of these conversations have been ongoing for a very long time. They are mature and we will get back with more information once once we have more information to share with the market. But these are exciting and very interesting dialogues that we're working on.