AFRICAN GROWTH UNDERWAY
Annual Report
www.managemgroup.com 2 INTRODUCTION ANNUAL REPORT 2018 MANAGEM
INTRODUCTION Managem 2018 in figures… … and words
TURNOVER Throughout OPERATING IN 4.356 MMAD its 90-year history,
COUNTRIES the Group has successfully consolidated INVESTMENTS its expertise at every link in the mining 1.703 value chain, from MMAD exploration, extraction MINES and development to Managem is an African the marketing of raw mining operator with materials. a balanced portfolio of assets and metals. The PRODUCTS AND 6.000 Group provides natural EMPLOYEES 4 DERIVATIVES resources of strategic 5 importance for the global economy and contributes to meeting EBIDTA the worldwide demand INDUSTRIAL for raw materials driven 1.323 by an international MMAD UNITS market that is expanding fast technologically and economically. Contents INTRODUCTION AN AFRICAN THE STRATEGY THE ESSENTIALS MANAGEM, FINANCIAL
Managem 2018 in figures FUTURE Managem 2020, 2018 operations and PROACTIVE STATEMENTS and words P. 04 a strategy for sustainable achievements P. 61 Managem, WITHIN ITS growth in Africa P. 22 (by metal) P. 34 90 years of expertise P. 12 ECOSYSTEM
INSIGHT Tomorrow, 2020 P. 26 Capital & Stock Market Moroccan market leader performance P. 45 Strong values and Imad Toumi P. 08 and committed African Safety, an important unshakeable unity P. 52 operator P. 14 driver of performance P. 28 Governance P. 46 CSR, a proven Profile P. 11 News P. 16 P. 54 R&D & technology-focused Financial performance P. 49 commitment investment, the essence of the Managem Human capital... the heart of P. 58 pioneering spirit P. 30 our growth strategy Managem, an investor in sustainable growth P. 59
Annual Report
www.managemgroup.com INSIGHT ANNUAL REPORT 2018 MANAGEM
INSIGHT Imad Toumi Chief Executive Officer - Managem
THE BUSINESS QUESTION THE SUCCESS QUESTION THE CSR QUESTION Was 2018 a year like We hear a lot about Having a positive social and societal impact any other at great successes. But and values to transmit, is that the “Miner Managem ? what is your best mindset” ?
All our business lines are exposed and sensitive to victory ? Acting in the best interests of society has always been The sustainable development of our business activities market volatility. That’s why we’ve focused our efforts part of our genetic make up. So at Managem, CSR is is also central to our aims. Our global strategy for water on building a diversified portfolio and developing high- I’m in no doubt that our best victory of 2018 is our neither a fad nor just another topic of communication. conservation, reduced energy consumption, anticipating potential projects. openness and the affirmation of our African roots. This practical and effective commitment was recognised the negative impacts of Group activities on biodiversity 2018 marked a new turning point and rewarded By openness I mean our open attitude to Africa, the last year by our inclusion for the fifth year running in and the environment, facilitating a circular economy all the efforts of our teams and the strategic continent in which our business is so deeply rooted, the Top Performers of 2018 and our selection to join to spearhead waste management, and lastly an R&D investments made by the Group. It saw the inception its rich diversity and the promise it holds out for the the ESG 10 index, which calculates the real-time stock strategy of developing enhanced technology-based or commencement of work on some major projects, future. There’s the openness we demonstrate through market performance of socially responsible companies capabilities to achieve environmental excellence... with particular emphasis on gold, cobalt and copper. our investments in operations that create sustainable listed on the Casablanca Stock Exchange. While we’re all of these were introduced during 2018, and will be Whether we look at Tri-K in Guinea, Gabgaba in long-term value for the communities and regions delighted to receive awards and accolades like these, actively pursued going forward to support our vision of Sudan, Pumpi in the DRC or Imiter in Morocco, we’ve we work in. Our openness to new, more ambitious, our commitment runs much deeper. The nature of sustainable and responsible growth. succeeded in creating new opportunities and once again projects, to new perspectives on our business lines by the mining industry demands that we operate where For years, we have been committed to transforming 8 demonstrated our advanced expertise in exploration, embracing more new technologies for integration into the deposits are located; those locations are often our mining waste into resources and to creating value 9 research, operational performance and innovation. all our processes and future operations. Not to mention isolated and their communities put their trust in us. throughout our mines lifecycle. Since we acquired our first permits in Africa more than our openness to more sustainable, more responsible So integrating the communities in these regions from Thanks to our R&D efforts, we were able to recycle, in 20 years ago, our operational activities have expanded means of production. To make Managem an integrated, the very outset of operations is crucial if we want 2018, more than 40% of our mining waste across all our continually to the point where we now have a presence prosperous, resilient and high value-added Group. our projects to be viable and sustainable for the long sites. in 9 African countries, including Morocco, with a portfolio term. Contributing to the socio-economic development This year, we also completed the construction of the of balanced assets at different stages of maturity. We of Managem operating locations is one of the six tailings treatment plant at Imiter silver mine. are in no doubt of the potential for growth offered by the commitments set out in the new Group CSR charter This is an important and sustainable investment, continent of Africa to which Morocco belongs, and we adopted in 2018; others address key issues such as contributing to creating regional jobs and reducing our remain fully committed to being a proactive contributor health and safety, environmental protection and wastes while creating value. to its economic and social development. business ethics. We also make sure to actively participate in the growth We are also aware that our operational excellence This is the background against which we continue our of our sites surrounding communities. In this matter, wouldn’t be complete without exemplariness in terms of dynamic of constructive engagement with stakeholders, we focus on the promotion of entrepreneurship for a Health and Safety at work. because we understand that this is the only way to sustainable development. This year, we have signed We make concrete efforts to reach our objective of “0 create mutual prosperity and move forward together a partnership with Injaz Al-Maghrib, a non-profit accident” and we will maintain our highest requirement on the shared issues of sustainable development by organization, to roll-out entrepreneurship initiation level for optimal safety. pooling our resources to achieve mutually beneficial programs around the mining areas where we operate, outcomes. targeting primary and high schools students but also cooperatives.
INSIGHT ANNUAL REPORT 2018 MANAGEM
THE INNOVATION QUESTION diversification will allow us to reduce the risk of cobalt price decline.
Innovating to trans- THE FUTURE QUESTION Profile form, stimulate and unite... Is that a reality Today’s companies YOUR MOTTO ? WHAT WAS YOUR Agility, resilience and durability. MOST UNFORGETTABLE within the Group ? are all on a quest for EVENT OF 2018 ? YOUR SOURCE OF Acquiring a majority stake in the meaning. So what Tri-K project and the completion of In a world of constant change where progress and INSPIRATION ? The story of Managem is my inspi- its feasibility study, which confirmed technological innovation go hand-in-hand with ration. A Group that has grown over the presence of more than 1 million development and provide powerful economic leverage, actually is the voca- many years to establish itself as ounces of reserves. This high-po- innovation is becoming a necessary and even essential a leader in its industry in Morocco, tential project is one of the Group’s alternative. It is inseparable from the sustainability tion of Managem ? and which is engaged in a process of most important for a decade, and of mining and a vector for growth. So it must be The vocation of Managem in 2018 was absolutely to continual future-focused transfor- represents an important milestone encouraged through investment in research and generate meaningful outcomes. The actions we take mation. in the new era of growth for the development: that’s something we are fully aware of, have practical outcomes that impact not only on local Managem strategy for gold and the and which we are already engaged in. communities, but also on the wider world. The metals continent of Africa. We are absolutely focused on the future, which is THE THING YOU’RE we mine, process and produce are essential to the world why Managem is engaged in a continual process of MOST PROUD OF ? we live in today. Gold, silver, cobalt, fluorite, to name just Our extraction and value-added transformation through the introduction of a shared AN AMBITION THAT HAS a few, are at the heart of the essential objects we use processing of strategic raw mate- vision built around goals and imperatives driven by the BECOME A REALITY ? every day. But beyond this primary mission, Managem rials means that Managem makes The practical implementation of the challenges of a demanding future. This point is proved gives meaning to everything it does through its practical its own particular contribution to project to extend the industrial units on the one hand by the level of investment we commit commitment to its operating regions and the people building the world around us. That’s at our Gabgaba mine in Sudan. In a to R&D - our acquisition of the Raise Boring Rig is an who live in them, and by working actively for the future what I’m most proud of today. context that is far from simple, and innovation of real technical prowess that will support we will all share. We are also anticipating that future despite the complexity of the terrain our ambitions in exploration - and on the other hand by by committing the Group to a process of redesigning and the issues surrounding the our increasingly advanced research centre and upgraded A VALUE YOU HOLD its business lines in ways that allow them to meet the country’s economy, we’ve succee- processes. In this way, Managem will make an active DEAR ? needs of our markets more accurately. Innovation : always thinking about ded in building one of the country’s contribution to decompartmentalising and expanding We will face the important phase of digitalizing our tomorrow today. It’s time for us to first industrial units to international all sectors. Our most innovative project consists on the 10 activities. A new step which is becoming a necessity to achieve a very high level of industrial standards. This plant is the first step 11 invention of lithium-ion battery, characterized by its reach operational performance. Our Group will pursue performance. Other challenges in our ambitious investment plans safety and performance. It can be used in mobile phone its activities development to meet the needs of world include embracing digitalisation for Sudan, and a significant 2020 industry and electrical vehicles. mutation with the apparition of new energy sources. through connected mines and even strategy achievement in 2018. Our R&D team also conducted important works on the We are moving into new business lines that will boost more modern processes, and also synthesis of batteries components, particularly mixed our performance and make us resilient at every link in recycling and production chain hydroxides and cobalt salts. The end products comply the value chain. expertise. with the requirements of Li-ion battery market. This
IN 3 WORDS Africa Safety Digital The potential at the heart of our “Zero accidents”, Challenge, innovation and ambitions. is a non-negotiable priority. adaptability. An absolutely essential transformation. AN AFRICAN FUTURE ANNUAL REPORT 2018 MANAGEM
2016 2014 Agreement with Wanbao Mining Start of Copper to develop the Lamikal mine in the DRC. production at the Oumejrane 2013 mine. Partnership with Avocet Mining PLC AN AFRICAN FUTURE Opening of the waste for the Tri-K Gold mine in Guinea. processing unit at the Guemassa polymetals plant.
2018 Managem, 90 years Construction of the gold 2012 processing unit in Sudan. 1997 Startup of gold production Startup of at Bakoudou in Gabon. Construction cobalt cathode of expertise of the tailings production using reatment plant at hydro-metallurgical the Imiter mine upgrading of concentrates in Morocco Expertise amassed over the years ; from the Bou-Azzer mine. 2011 a clear vision for the future Managem capital increase. Powerful upswing 1992 Formation of Manadist Startup of the Hajar to strengthen the Group’s polymetals mine trading structure. in Marrakesh. 1996 Acquisition of SMI
1961 Formation of Fluorite 1969 1949 producer Formation of Société Formation of Société des Mines SAMINE. Métallurgique d’Imiter (SMI) 2007 de Bouskour to work a copper and the start of operations Reopening of the Akka mine as a result of developing deposit in Ouarzazate region. to reclaim silver waste new copper production processes. from Imiter. African Formation of the sales and marketing company Manatrade. OperOperationalational ambitions uupdatingpdating
2005 Sale of the majority 1942 stake in SEMAFO. Beginning of manganese extraction at Tiouine.
12 13 TheThe start Accelercceleration ofof ddiviversificationersification aandnd structuraall 2004 oorganisationrganisation Startup of the Draa Sfar 1997 2002 polymetals mine. Acquisition of an equity stake Startup of the in Canadian exploration Kiniero gold Beginning of gold-related company SEMAFO. mine in Guinea. activities in Niger.
2001 Startup of the zinc Startup of oxide production the Akka gold unit at Guemassa. mine. 2000 1930 Managem stock FFirstirst Formation of CTT and opening 1983 market flotation. stepssteps of the Bou-Azzer mine for Startup of engineering the specialist production and R&D functions with of cobalt concentrate. the formation of Réminex. MANAGEM, A LONG HISTORY, AND A STRATEGY FOR TODAY 1981 1928 Start of the copper The beginnings of the company lie in the economic potential of the cobalt Discovery of the Cobalt deposit project in the Bleida mine. found at Bou-Azzer and the formation of CTT (Compagnie de Tifnout at Bou-Azzer. Tighanimine). 1934 saw the formation of the mining holding company ONA. 1996 was the year in which Société Anonyme Managem was formed ahead of its stock market flotation in 2000. AN AFRICAN FUTURE ANNUAL REPORT 2018 MANAGEM
MOROCCO Managem Head O ce A leading force in Moroccan mining El Hammam mine Draâ Sfar mine Oumejrane mine and hydrometallurgy since 1930, Bouskour project Guemassa Hydrometallurgical Bleida mine Managem operates 13 mines Complex Bou-Azzer mine and holds 850 research permits. Mine d’Imiter Managem also produces a diverse SWITZERLAND range of commodities from base metals (Copper, Zinc and Lead) to Akka mine precious metals (Silver and Gold), Cobalt and Fluorite. Moroccan market leader and committed MOROCCO African operator UAE GUINEA The Group is developing the high- MALI SUDAN potential Tri-K gold based project The Moroccan mining group in partnership with Avocet Mining. BURKINA FASO In 2018, Managem increased its Managem continues to GUINEA expand with a presence in 8 equity stake to 70% to secure IVORY ETHIOPIA a majority shareholding in this COAST African countries in addition project. to its home in Morocco. With 13 mines in operation SUDAN GABON DEMOCRATIC - the majority of them in REPUBLIC Managem has been developing OF THE CONGO Morocco - and capital mining gold mining assets here since 14 projects initiated throughout 2009. Its exploration permits cover 15 Africa, Managem continues approximately 14,000 km². In 2018, to develop its diversified, Managem completed construction balanced and high growth of its production plant, which is potential portfolio. designed to produce two tonnes of gold per year.
GABON DEMOCRATIC REPUBLIC Managem is engaged in the OF THE CONGO exploration aspects of the Etéké Managem has been engaged in developing gold project, which is currently the Pumpi Copper and Cobalt deposit in Katanga at the pre-feasibility stage. province since 2008. In 2017, the Group signed a partnership agreement with Wanbao Mining Group giving it the majority shareholding in the project. The project target is annual production of more than 40,000 tonnes of Copper and 5,000 tons of Cobalt. AN AFRICAN FUTURE ANNUAL REPORT 2018 MANAGEM
KEY FINANCIAL INDICATORS FOR 2018
News Managem has successfully delivered stable profits, despite high price volatility.
CONSOLIDATED INDICATORS UNDER IFRS 2018 YEAR-ON-YEAR (MMAD) TREND VS. 2017* The diversified portfolio that Managem performed impressively in 2018 by achieving major advances in balances the cash profile of its African strategy, despite a volatile market environment and challenging Turnover 4356 -16% the Group ensured that NIGS operational conditions. Focus on the highlights of the past year. Earnings Before Interest and Taxes (EBIT) 1323 -31% remained stable at around 370 MMAD. Operating income* 669 -18% A MARKET OF CONTRASTS Financial income -230 -18% Net Income Group Share* 370 +2%
2018 was a year of contrasts in a challenging economic environment (*) Changes are restated to reflect the impact of the Pumpi development in 2017 influenced by a number of factors, including the closure of Bakoudou, the A SIGNIFICANT decrease in grades at SMI and lower metals prices in the second half DOWNWARD TREND of the year. IN METAL PRICES Cobalt prices quadrupled at the beginning of the year, while Copper and during H2 TANGIBLE PROGRESS ON OUR STRATEGIC PROJECTS Nickel prices rose by 44% and 53% respectively, and Zinc prices were at twice their 2016 level. However, Gold and Silver prices remained highly -30% volatile. Nevertheless, an analysis of 2018/2017 price trends reveals a more for Cobalt SUSTAINED INVESTMENT IN GROUP DEVELOPMENT 400 MMAD in CAPEX on exploration nuanced reality. On average, prices of the major non-ferrous metals have PLAN IMPLEMENTATION... to continue development of our shown a relatively positive trend year-on-year, with a 9% price increase operating sites and launch new across all 6 major non-ferrous metals in 2018. It is, however, important to -20% growth projects. note that the second half of 2018 experienced a relative decline in prices. for Zinc 50% devoted to new 39% development 500 MMAD in Capex on our Organic devoted to new projects Growth Project (Gold, Silver and development -11% projects Cobalt). for Copper & Silver 670 MMAD invested in new project development. 16 2217 17
1703
1226 Total 672 1271 New development 283 projects 356 266 235 Research on operating 748 sites 635 680 Renewal 2017 2018 F’CAST. 2019 AN AFRICAN FUTURE ANNUAL REPORT 2018 MANAGEM
GUINEA DRC THE TRI-K PROJECT MOVES AHEAD FINALISATION OF THE PUMPI FEASIBILITY STUDY 2018: an enhanced exploration programme The Tri-K project successfully passed a series of and a new approach to geological data processing important milestones. Designed to ensure full Located at Kolwezi in Katanga province, Pumpi is a compliance with international standards, the project major mining project developed out of a Managem feasibility study was completed during the year. The ten-year commitment to research in the Democratic environmental and social impact study was also begun Republic of the Congo. Revealed by an independent in 2018 for final delivery in early 2019. The second assessment report in 2016, this site has both Copper highlight was the completion of the 2nd closing, which and Cobalt deposits. Further research has identified enabled the Group to strengthen its position. Lastly, the reserves of around 640,000 tonnes of Copper end of 2018 marked the start of the funding phase for metal and 95,000 tonnes of Cobalt metal. The 2018 the commencement of construction work. completion of the Pumpi project feasibility study marked the first major milestone, which triggers the commencement of construction work in preparation for the scheduled start of production in 2020. The project target is to produce more than 45,000 tonnes of Copper and 5,000 tonnes of Cobalt per year.
SUDAN PLANT EXTENSION FINALISED COBALT POLYMETALS SILVER
In accordance with the Managem strategy for Gold, • The discovery of new Cobalt • 2018 was marked by the • The exploration programme which is to be producing 5 tonnes of gold per year reserves extends the operating discovery of new Polymetals accelerated in 2018, despite the by 2020, construction work to extend its production life of the Bou-Azzer mine by a reserves, extending the level of resources remaining plant in Sudan was completed in 2018, having been further two years. operating life of CMG mines stable, compared with 2017. commenced in the second half of 2017. With operations by two years, or around 2.5 scheduled to begin in the first quarter of 2019, this • Greenfield exploration million tonnes. • 2018 also saw the extension has targeted a production rate of 2,400 investment was resumed development of a new tonnes per day. The first production unit in Sudan, during the year. approach to the digitalisation this state-of-the-art plant has attracted investment of geological data processing 18 of USD40.8 million, including €12.9 million in local and mining operations 19 investments. scheduling at SMI. GABON FINALISATION OF THE ETÉKÉ FEASIBILITY MOROCCO STUDY AND ENVIRONMENTAL IMPACT FINALISATION OF THE TIZERT ASSESSMENT PROJECT FEASIBILITY STUDY
The feasibility study for this project was conducted in The Tizert copper project in Taroudant province has parallel with an environmental impact assessment last geological resources estimated at approximately year. 657,000 tonnes of metal content. 2018 saw the continuation of exploration work, as well as the completion of the Trade Off of the Tizert copper project to define the optimal mining method. The launch of the project feasibility study is scheduled for 2019 following close collaboration between Managem Engineering and international experts. AN AFRICAN FUTURE ANNUAL REPORT 2018 MANAGEM
A PROACTIVE INVESTMENT IN R&D AND ADVANCED CSR : TWO NEW ACCOLADES PRESENCE AT TRADE TECHNOLOGIES TO SUPPORT GROUP The Managem Group CSR policy was once again the focus of official recognition in 2018. The Group was selected FAIRS EXPANSION from among Morocco’s 44 largest companies with the greatest commitment to corporate social responsibility to In 2018, the Managem Group was join the ESG 10 non-financial index that measures CSR performance. The selection was made by Vigeo Eiris on the represented at a number of mining basis of its environmental, social and good governance criteria. Managem and its subsidiary SMI were, for the fifth industry trade shows around the time, ranked as Top Performers among the 15 Casablanca stock market listed companies rated as most committed world. This level of presence raises to CSR. the profile of the Group, at the The Managem Group is a CSR policy pioneer in Morocco thanks to the impetus provided by the Al Mada Group, same time as providing it with the its own Top Management team and the uncompromisingly dedicated commitment of all its employees, from opportunity to interact and network SCANNING ELECTRON MICROSCOPE CONSTRUCTION MACHINERY operational to corporate, who make their own daily contribution to the Group’s status as a leading force for CSR in with its international counterparts. (SEM) & 2 EDX MICROANALYSIS & RAISE BORING RIG Morocco. These major events also provide SPECTROMETERS mining industry stakeholders with a forum for sharing their expertise. 4,5 60 MMAD INVESTED MMAD INVESTED PDAC - CANADA As in previous years, Managem was well represented at this A HI-TECH ACQUISITION AND ANOTHER STEP international event in 2018. Every TOWARDS ACHIEVING MANAGEM year, this major international AMBITIONS industry event brings together around 25,000 mining industry In 2018, Managem acquired a powerful RBR 600 Raise Boring Rig - only professionals from more than 130 the 6th in existence worldwide - which makes it possible to drill large- countries to meet with investors scale vertical shafts for ore extraction or underground mine ventilation. and international experts. With more than 65 years of expertise in surveying and mining, Managem subsidiary Techsub has expanded INDABA MINING its fleet with this new hi-tech Raise COBALT DEVELOPMENT ADOPTION OF A NEW CHARTER PARTNERING WITH INJAZ AL-MAGHRIB SOUTH AFRICA Boring Rig. This hi-tech acquisition Indaba Mining is the largest mi- INSTITUTE TO PROMOTE ENTREPRENEURSHIP brings with it the major benefit of ning trade show in Africa, and is The principles and requirements of CSR are changing having the in-house ability to carry Managem is a member of the IN MINING AREAS attended every year by around all the time, so in 2018, the Managem Group updated 20 out large-scale drilling operations international Cobalt Development 21 7,000 visitors from the African its CSR charter with the incorporation of new topics into Under the aegis of the Al Mada Foundation and with on key projects. This one machine Institute (CDI) whose members mining industry. It provides a very its social and environmental responsibility guidelines. support from the Ministry of National Education, increases the company’s drilling include all the leading Cobalt special opportunity to meet mining The new charter reasserts the ongoing commitment Managem and the INJAZ Al-Maghrib association capacity by a factor of eight, and industry stakeholders. The • industry decision-makers and key of the Group by crystallising it in a formal charter built joined forces with the 2018 signature of a partnership provides the capability of drilling to CDI works to promote the stakeholders from all over the around six founding principles: agreement to introduce entrepreneurship training depths of up to 1,200 metres in a sustainable and responsible continent. programmes in those mining areas where Managem single operation. The key goals of production and marketing of • Respecting individuals, employees and society as a operates. Structured around three initiatives - "jamaati" this major acquisition are to boost Cobalt. whole, SIMFE - SUDAN for primary school students, It’s my Business for efficiency and performance, at the • Promoting social dialogue and Human Capital SIMFE brings together the leading secondary school students and Cooper’Up for same time as reducing lead times. development, cooperatives and non-profits, this new programme mining stakeholders operating in This capital investment will help to deliver the Group growth ambitions • Reducing its environmental footprint, is designed to open up new opportunities for future Sudan and worldwide. It promotes set out in the Managem Group development strategy. The purchase of generations. the mining potential of its region, in this machine gives Managem the resource it needs to deliver future • Contributing to the socio-economic development which Managem is an experienced projects and reduce the time taken on major mining and drilling projects, of local communities, and respected operator. while providing its operators with the benefits of greater safety and ease • Complying with its own demanding code of business of operation. ethics, • Delivering continuous corporate social responsibility improvements. THE STRATEGY ANNUAL REPORT 2018 MANAGEM
THE STRATEGY OPERATIONAL EXCELLENCE, A STRATEGIC PRIORITY
The Group’s sites spearhead its growth strategy of "Managem 2020"... delivering the best-possible operational returns, renewing reserves every year, and continuing to discover new deposits. The Group is committed a strategy for to maintain an optimum level of productivity by extending and expanding its industrial production units. In 2018, 75 MMAD was allocated to extending sustainable growth in the SMI Silver plant, and 280 MMAD to extending the Africa Gold industrial unit in Sudan. EXPLORATION, A KEY AREA OF EXPERTISE
The "Managem 2020"strategic plan was adopted in 2016 as a Historically the Group’s key area of expertise, roadmap for the development of the Group, and sets out the exploration at Managem continues its record of targets for achieving its vision. The central ambition of strategy is success in discovering new deposits. These successes to double the size of the Group by expanding its Gold and Copper include flagship achievements such as the Pumpi activities, at the same time as maintaining a properly balanced Copper and Cobalt project in the DRC and the Wadi and diversified portfolio. Boosting operational excellence and Gabgaba Gold project in Sudan. accelerating investment in Africa through a series of partnerships are the cornerstones of this development strategy.
22 23 THE STRATEGY ANNUAL REPORT 2018 MANAGEM
A MULTI-PHASE IN-HOUSE EXPLORATION PROCESS
STRATEGIC EXPLORATION Traditionally at the cutting where the aim is to pinpoint edge of new global exploration targets for exploration using a technologies, the Group’s geological range of mapping, geophysical and expertise continued to deliver geochemistry techniques. excellent outcomes during the year. The Group constantly interacts TACTICAL EXPLORATION and consults with external experts to maintain an advanced level of which involves test drilling to uncompromising expertise in a identify the existence of mineral constant quest for innovation in extraction potential as soon as models and techniques. targets for exploration have been identified.
RESOURCE DELIMITATION In 2018, 30 active to systematically verify the extent exploration projects of the resource once its mineral covering more than 55,000 extraction potential has been km² were underway at confirmed. various stages of progress. ACCELERATING INVESTMENTS AND PARTNERSHIPS, OUR STRATEGIC SPRINGBOARD FOR DEVELOPMENT RESOURCE CERTIFICATION The Group maintains a sustained is the final step in which resources level of research to ensure its With proven expertise at every This strategy was introduced at the are certified in accordance with the ongoing corporate development, link in the mining value chain, the end of 2016 with the completion of usual industry standards specific to renew its reserves and discover Managem Group is an integrated two major deals with international each type of deposit. new resources. In 2018, around corporate group that leverages a mining groups. one-third of investment for the multitude of techniques and skills year - 400 MMAD - was focused on acquired over many decades to Delivery of this strategy continued 24 exploration to ensure the long-term drive its development. in 2018 with a feasibility study 25 future of our operating sites and conducted to the highest standards launch new growth projects. for the Tri-K Project in Guinea, and "Managem 2020" defines the successful Second Closing of a new era of growth for the partnership with Avocet Mining. Managem. Managem has also increased 1/3 its stake in the Tri-K project to of annual investment 70%. The Group’s ultimate aim The Group has entered a new is to consolidate its pan-African focused on exploration. and more open phase of its Its balanced asset portfolio makes positioning and pursue its future development with the aim of it more resilient to fluctuations in growth. boosting its capabilities by drawing metals prices, while its presence on external expertise to accelerate in high-potential locations gives its growth. For this purpose, the Group significant scope for Managem has proactively formed development going forward. strategic partnerships with high- profile mining groups and is repositioning itself around its most profitable assets. THE STRATEGY ANNUAL REPORT 2018 MANAGEM
NEW DIRECTIONS
Tomorrow 2020 • Developing new sectors that create value for the Group by optimising activities around the recovery of metal content. • Accelerating the Group’s Greenfield projects for Cobalt, Gold and polymetals, with particular focus on project development via new The Group ambition for 2020 is to become a leading African mining operator com- acquisitions and/or partnerships. mitted to responsible operation and the ongoing development of the continent. • Investing in exploration by sustaining ongoing efforts to achieve a higher level of reserves. Between now and 2020, Managem is committed to establishing itself as an international force in mining that develops natural resources locally and regionally while meeting the highest safety, environmental and technology standards in its creation of shared wealth. This ambition is built around a portfolio of mines and projects that is SIGNIFICANT ACHIEVEMENTS well balanced between base and precious metals to ensure the long-term future of the Group and its high level of resilience to price volatility. FROM LARGE-SCALE PROJECTS THAT WILL CHANGE THE SCALE OF MANAGEM… AMBITION 2020 : A CHANGE OF SCALE… COPPER GOLD SILVER Progress with development work 2018 delivery of the feasibility Completion of construction work OUR AMBITION and studies required for the study for the Tri-K gold project on the SMI dyke reclamation and Tizert copper project in Guinea treatment plant "To become a regional leader through sustainable & responsible growth". ADVANCED FEASIBILITY CONSTRUCTION EXPLORATION STUDY AND FUNDING
COBALT & COPPER GOLD 2018 completion of the Completion of feasibility study for the construction work on Organic growth: 2018 saw the achievement Pumpi project in the DRC the Sudan plant Extending the capacities of major milestones for of operating mines the delivery of our African 26 growth strategy. 27
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Accelerating Maintaining our growth 2 4 strategic 4 our leadership through new priorities in social and acquisitions and environmental partnerships responsibility 3
Developing large-scale projects & Strengthening our reserves THE STRATEGY ANNUAL REPORT 2018 MANAGEM
Safety : an important performance criterion EVERYDAY ACTIONS
As a responsible African mining operator, Managem is committed to making Safety is a collective responsibility within which every employee is a its contribution to the development of the continent, while meeting the highest responsible contributor in his or her own working environment. safety, environmental and technology standards in its creation of shared wealth. To achieve its safety goals, the Managem Group has implemented a fully resourced Group-wide organisational structure and action plan. Safety is one of the Group’s leading performance criteria. This commitment flows down from the highest level of management through a formal framework, and is visibly present on all Group mining sites through implementation of the Managem Safety Policy.
AN UNCOMPROMISING SAFETY POLICY
100% strict and 0 tolerance.
The new safety policy targets two decisive aspects of this crucial issue: safety framework and safety 28 29 culture. At the operational level, safety awareness begins workstation startup. To achieve these targets, the Managem Group has Potential safety issues are the subject of constant analysis to ensure consequently implemented a safety roadmap for compliance with standards, especially in terms of wearing appropriate the period to 2020. This roadmap allows for Health personal protection equipment and preventing accidents in high-risk & Safety policy to be reviewed in order to achieve situations. Close attention is paid to industrial risk analysis, which drives the ultimate goal of 0 accidents. a number of Group-wide projects rolled out and managed by the Safety Department, on-site operations employees and the Risk Management Department. The safety process is assessed internally and externally on every Group operating site. THE STRATEGY ANNUAL REPORT 2018 MANAGEM
A HIGHLY R&D & technology-focused ACCREDITED RESEARCH CENTRE
investment... The Managem research centre is fully certified as compliant with many international standards. the essence of the Managem These certifications include the ISO 9001 (quality), ISO 14000 (environmental) and OHSAS pioneering spirit 18000 (safety) standards. It has also successfully completed the upgrading of its certifications to the ISO 9001 : 2015 and ISO 14001 : The R&D department is an invaluable cornerstone of Managem growth, and 2015 versions. continued to push forward with its development of innovations during 2018, as 2018, A YEAR OF INNOVATION Its analytical laboratories are well as acquiring new cutting-edge technologies that offer unmissable growth accredited compliant with opportunities for the Group. In a business environment characterised by very pronounced price the NF EN ISO/IEC 17025 : 2017 fluctuations, increased reserve complexity and very high pressures (Accreditation 1-0789 www.cofrac. For more than 30 years, the Managem Research Centre has been engaged in developing many treatment and imposed by new regulatory and customer requirements, the research fr) standard for three programmes: recovery processes, as well as new value-added products for the Group. Alive to the crucial importance of R&D centre played a decisive role in supporting Managem to cope with, and - Materials, metallic materials and and innovation challenges, the Managem Group accelerated the development of its research centre in 2018. withstand, all these pressures thereby supporting its development and physico-chemical analyses operational excellence plan. - Environment, water quality and R&D SUPPORTS THE GROUP AT EVERY LINK During 2018, the research centre also played a key role in advancing physico-chemical analyses IN THE VALUE CHAIN Managem development projects in Morocco in the context of the Tizert - Industrial equipment and project, and internationally with the Tri-K project in Guinea and the engineering products, industrial From exploration to production, R&D monitors product quality, optimises Gold project in Sudan. Variability studies have been conducted and new process products and physico- resources and maximises customer satisfaction at each stage to create processes developed. chemical analyses. value for the Group. Its commitment to R&D has enabled Managem Intense effort has been focused on improving the fundamentals of to develop innovative home-grown processes that create value and processing for all Group operations by seeking to optimise recovery, 30 diversification in ways that facilitate eco-respectable growth. In 1997, the handle difficult mineralisations and improve the quality of finished 31 work done by R&D teams brought the Group’s Cobalt sector the benefits of products. a process developed to upgrade Cobalt into high-quality Cobalt Cathodes by creating a hydrometallurgy process that generated added value for the Expertise assignments in all these areas have been organised across all entire Group. In practical terms, it is essential for Managem to integrate the Managem Group operations. concept of sustainability into the development of its mining activities, in The Group’s exploration teams continue to receive full support for their order to conserve its resources, implement only the cleanest technologies efforts to identify the optimum processes and conditions for enhancing and limit its environmental impact. Thanks again to the efforts of the R&D the value of new projects within the mining asset base of Managem. teams, processes for treating and reclaiming mining waste on production sites have now been developed. In 2018, the Managem Group continued to step up the pace of its tailings treatment programmes by introducing non- hazardous industrial waste treatment programmes at its operating sites. 2018 also saw the construction of a treatment plant for the Imiter mine dyke at a total capital expenditure cost in excess of 80 MMAD. This plant now creates value by reclaiming metals from mine tailings stored above ground. This eco-responsible project is integral to a circular economy. THE STRATEGY ANNUAL REPORT 2018 MANAGEM
AN R&D STRATEGY TO BOOST THE TECH CAPABILITY OF MANAGEM TO DELIVER ENVIRONMENTAL EXCELLENCE
The Managem Group is also developing a materials recovery policy for dykes. The aim here is to recover their metals content while creating value and reducing the Group’s ecological footprint by recovering final waste products from tailings.
Research into other areas of sustainable development is also part of the R&D remit, and is focused particularly on projects design to optimise water use, treatment and recycling. These areas of research also include WEEE (Waste Electrical and Electronic Equipment) recycling to enable the exploitation of other urban deposits and promote a circular economy.
Reusable electronic waste (WEEE) is also a subject of great interest to the Managem Group, which, through its work as a member of the French waste recovery coalition COVAD, shares practical experience useful for developing specialist end-of-life reprocessing businesses throughout Morocco.
HI-TECH ACQUISITIONS AND ENHANCED EXPERTISE Innovation is a key Managem value for all RAISE BORING, A NEW MINERALOGIC SYSTEM Group business lines, and is integral to its DRILLING AND MINING MICROSCOPE, A MAJOR business model. ASSET ADVANCE
Innovation drives competitiveness and is essential for : With more than 65 years of expertise in In 2018, the Managem Group surveying and mining, Techsub expanded research centre saw the practical • Accessing new markets ; its fleet in 2018 with the addition of a new implementation of several projects • Extending the value chain ; hi-tech Raise Boring Rig: a Herrenknecht with the introduction of new • More effective development and conservation of natural resources ; RBR 600. technologies and the development • Improved performance and fundamentals. of its battery, electrochemical 32 33 characterisation and precious KEY ACHIEVEMENTS IMPRESSIVE CAPACITIES FOR GUARANTEED metals recovery laboratories. Development of a patent for a Li-ion battery that generates zero heat. PERFORMANCE AND EFFICIENCY During the year, the Managem Reclamation of concentrates and tailings from the Bou-Azzer mine for Group invested around 40 MMAD recycling as cobalt cathodes. The RBR 600 is capable of drilling shafts up to 7 metres in diameter. The in an automated scanning electron Processing and reclamation of mining waste. result is wider and much more efficient ventilation shafts for underground microscope linked to a latest- mines. generation mineralogic system that conducts extremely detailed The acquisition of this machine at a capital expenditure cost of 60 MMAD analyses of mineralogical data. gives the Managem Group the resource it needs to deliver its future projects and speed up major mining and drilling projects, at the same time as improving operator safety and convenience.
This acquisition also an integral part of the Group’s strategy to provide Techsub with the resources required to update the subcontracting of underground mining operations through advanced mechanisation and strategic partnerships. THE ESSENTIALS ANNUAL REPORT 2018 MANAGEM
THE ESSENTIALS LOWER PRODUCTION AS A RESULT OF CHALLENGING CONDITIONS IN SUDAN
Operations and Gold production (kg) Block 15 resources 2017-2018 (oz.) achievements (by -26% 2,8 million
802 metal) in 2018 596 1.6 million oz. of Reserves
GOLD : A MIXED YEAR IN AN UNSTABLE 2017 2018 GLOBAL CONTEXT AVERAGE PRICE IN 2018 : 1 269 2018, A YEAR OF MAKING AFRICAN AMBITIONS A REALITY Gold price trend between January 2017 and June 2018 AVERAGE PRICE IN 2017 : 1 257 1 450 YEAR-ON-YEAR TREND : + 1 % For twenty years, the Managem Group has been • In Gabon, Managem conducted a feasibility and
1 350 exploiting its gold deposits in Africa, at the same environmental impact study for the Etéké project time as conducting exploration campaigns at various during the year. The Group also maintained the stages of advancement. In 2018, the Group continued level of its investment in this country through its 1 250 to develop African gold projects with high growth exploration projects. At the Bakoudou mine, the potential : Group began an accelerated pace of remediation and 1 150