Transcript Logo - tom winnifrith

AIM:EMED
TSX:EMD
www.emed-mining.com
Presentation 19 December 2012 at General Meeting of Shareholders, Minas de Riotinto, Spain
FORWARD LOOKING STATEMENTS
This Presentation contains “forward looking information” which may include, but is not limited to, statements with respect to the
future financial or operating performance of the Company, its subsidiaries and its projects, the future price of metals, the
estimation of ore reserves and resources, the conversion of estimated resources into reserves, the realization of ore reserve
estimates, the timing and amount of estimated future production, costs of production, capital, operating and exploration
expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for
additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or
claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters.
Often, but not always, forward looking statements can be identified by the use of words such as “plans”, “expects”, “is
expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes” or
variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”,
“could”, “would”, “might” or “will” be taken, occur or be achieved. Accordingly, readers should not place undue reliance on
forward looking statements.
Forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company and/or its subsidiaries to be materially different from any future results,
performance or achievements expressed or implied by the forward looking statements. Such factors include, among others,
general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities;
actual results of reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue
to be refined; future prices of metals; the future costs of capital to the company; possible variations of ore grade or recovery
rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the
mining industry; political instability, terrorist attacks, insurrection or war; delays in obtaining governmental approvals or
financing or in the completion of development or construction activities, as well as those factors discussed in the section
entitled “Risk Factors” in this Presentation.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ
materially from those described in forward looking statements, there may be other factors that cause actions, events or results
to differ from those anticipated, estimated or intended. Forward looking statements contained herein are made as of the date
of this Presentation and the Company disclaims any obligation to update any forward looking statements, whether as a result
of new information, future events or results or otherwise. There can be no assurance that forward looking statements will
prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward looking statements.
Sources for technical information and financial forecasts (except where noted) in this presentation are the “Amended
and Restated NI43-101 Technical Report on Reopening the Rio Tinto Copper Mine Huelva Province, Spain” and the
“Amended and Restated NI43-101 Technical Report on Biely Vrch Gold Deposit, Detva Licence Area in Slovakia”.
Both of these reports are dated 17 November 2010. Mr Ron Cunneen, BSc (Geology), Head of Exploration for EMED
Mining, a qualified person as defined by National Instrument 43-101, supervised the preparation of the scientific and
technical information in this presentation.
2
SHAREHOLDERS SUMMARY OF STATUS
Market Cap
vs NPV
•
•
Market cap US$215M (£134M), NPV US$300-1,300M at $3.00-4.00/lb Cu
NPV is only the base and target case of the first mine restart at Riotinto
•
•
Engineering: have completed costing and scheduling
Financing: have mandated Goldman Sachs; arranged Xiangguang and
Red Kite; and have triggered independent expert for financing
All project trigger permits are being processed for approval together, to
reduce risk of further delays. Expected sequence is as follows:
• H1-13:
• Administrative Standing Mineral Rights + Environmental Plans
• Restoration Plan and Project (Exploitation Rights)
• H2-13: project works commence
•
Inflection Points
in Spain
Team in Place
Solid Platform
and Pipeline of
Growth Projects
•
•
•
Shareholders, financiers, board, senior management
Supportive mining communities, local contractors and consultants
EMED Mining also has first-class local & international specialist advisers
•
•
•
Robust Base Case for near term start of cash flow
Potential brownfields copper mines next to main mine in Spain
Exploration potential at gold deposit discovered in Slovakia, which has
just received initial approval of Mining Lease Area
3
ONE OF BEST PERFORMING COPPER SECTOR
SHARES OVER PAST TWO YEARS
The sector performed poorly in 2011 and 2012 in stock market terms.
EMED has outperformed the majority of TSX and TSXV listed copper exploration, development and
producing companies since the TSX IPO in December 2010
Relative Share Performance Since Dec. 17, 2010 – Copper Developers and Producers
Lumina
NGEx
Panoro
Copper Fox
EMED
Imperial
-2%
First Quantum
-7%
Nevada Copper
-12%
Duluth
-13%
-17%
Inmet
Lundin
-23%
Yellow head
-32%
Redhaw k
-35%
Copper Mountain
-35%
Augusta
-37%
-42%
Abacus
Taseko
-43%
HudBay
-44%
Los Andes
-45%
Capstone
-49%
Median
-50%
-50%
Duran
Amerigo
-52%
Polymet
-54%
CuOro
-55%
Katanga
-55%
Thundermin
-60%
-65%
VMS Ventures
Constantine
-67%
Coro
-69%
Turquoise Hill
-72%
Northern Dynasty
-74%
Western Copper
-74%
-74%
Sarengeti
Copper One
-76%
International PBX
-80%
Candente
-80%
Intrepid
-85%
Hana
-85%
-88%
Baja
Mercator
-88%
AQM-92%
Source: Capital IQ, as of 28 November 2012
49%
30%
100%
113%
112%
CONTROLLED BY GLOBAL MINING INVESTORS
Board and Management
6%
Resource Capital Funds
(USA/Australia, mining investor)
13%
Yanggu Xiangguang Copper Co. Ltd.
(strategic investor and off-take customer)
11%
RBC Asset Management
(Canada, institutional investor)
8%
Rand Merchant Bank
(UK/Australia, mining bank)
5%
Red Kite
(USA, metals trader and financier)
5%
Rumbo 5 Cero
(Andalucia, Spain. Investment group)
4%
Astor Holdings, formerly MRI Group
(Switzerland, metals trader and financier)
3%
Standard Life
(UK, institutional investor)
3%
5
STEPS TO ACHIEVE 9MTPA PRODUCTION RATE
2012
Q1
Approval Mineral Rights
Environmental Plans
Q2
Q3
2013
Q4
Q1
Q2
2014
Q3
Q4
Q1
Q2
Q3
2015
Q4
Q1
Q2
Q3
Q4
Administrative Standing : informally
advised that we have satisfied the Legal,
Technical , Economic Tests
Environment Plans (AAU): await approval.
Everything has been submitted
Restoration Plan: flows from AAU.
Approval Restoration Plan
Exploitation Rights (Project)
Project approval flows from reports
now done by IGME & CEDEX. CEDEX
requires due diligence on newly
acquired sections of dams
Flows from Restoration Plan
Closing before Execution
Environmental Bonding
Bankable Engineering &
Technical Studies
Project Finance and
Product Off take
Production Planning and
Expansion Studies
Operations Development
Operating Licences
Phase 1 Project Execution
& Commissioning
Feasibility Studies
Capex , Opex,
Works Schedule.
Documents,
D. Diligence,
Closing
Production Planning to 9Mtpa , Drilling,
Expansion Studies beyond 9Mtpa
Systems, Contracting, Recruitment & Training
Operating Licenses are processed in parallel with project execution works
Phase 1 Project execution and
commissioning
Production 5 Mtpa
Phase 2 Project Execution
& Commissioning
Phase 2 Project execution and commissioning
Production 9 Mtpa
6
BASE AND TARGET CASE for first mine to be
redeveloped – Cerro Colorado Open Pit
Base Case
3.00
3.50
4.00
Operating cash flow
(pre-tax) $Mpa
109
139
169
321
415
469
591
654
803
Project NPV US$M at
discount rate 10%
discount rate 7.5%
(1) Base Case assumes extraction of existing ore reserves at 9Mtpa only over 14 years. Target Case 15Mtpa.
(2) Scenarios under $3.50/lb assume 50% of years 2-7 are hedged at $3.50/lb.
(3) C1 assumed $1.50 (Operating Costs). C3 assumed $1.90 (Capital, Operating and Closure Costs).
(4) Estimates being independently reviewed, to be released in accordance with NI-43-101 which is being updated.
Target Case
3.00
3.50
Project NPV US$M at
discount rate 10%
730
976
4.00
1,287
7
RIO TINTO: WORLD’S LARGEST VMS SYSTEM
• 100% ownership of assets, including the
Cerro Colorado open pit and other mines,
processing facilities and all project lands
• Last operated in 2001 and was put on care
and maintenance due to then-prevailing
low Cu prices
SPAIN
SPAIN
• Excellent infrastructure in place:
– Access to towns, roads, port, power & water
Rio Tinto
– Only 75 km from Freeport McMoRan’s
Atlantic Cu smelter
8
“GROWTH AGENDA” TASKS FOR 2013, SO AS TO
RE-ESTABLISH RIO TINTO AS A MINING DISTRICT
Cerro Colorado Pit, initial target increase reserves - 600Kt to 900Kt Cu
Drilling programs to commence 2013. No past drilling below 250 meters & open
Concentrator, increase output – 37Ktpa Cu (9Mtpa) to 60Ktpa Cu (15Mtpa)
Engineering studies to commence 2013. Some plant capacity already 15Mtpa
Tailings Treatment, target reduced enviro impact and increased capacity
Engineering studies to commence 2013. Optimise tailings thickening/deposition
San Dionisio Underground Mine, evaluate this adjacent high grade deposit
Validate and interpret database under today’s standards and economics
San Antonio Underground Mine, evaluate this adjacent high grade deposit
Validate and interpret database under today’s standards and economics
Tailings Reprocessing Joint Venture, evaluate treatment of precious metal
Metallurgical testing and engineering programs to commence 2013
Rio Tinto is the world’s largest VMS system. Historical production
2Mt Cu at 1.5% + 60M oz Ag. No exploration for 25 years.
9
SLOVAKIA: GOLD PORPHYRY DISCOVERY
• 100%-owned Detva Gold Project
SLOVAKIA
• Background of Biely Vrch deposit
• NI-43-101 Indicated & Inferred Resource
• Focused on shallow, oxidised 1M oz
• First Permit “National Resource”
• Encouraging Independent Scoping Study
• Now consulting communities
Poland
Germany
Czech
Republic
SLOVAKIA
Ukraine
Biely Vrch
Austria
Hungary
Romania
• “Mining Lease Area” initial approval done
10
GROWTH PIPELINE
GROWTH
Slovakia, potential which
has been identified:
DETVA
CYPRUS
Gold Project
Copper
– To optimise open pit
resources for higher gold price
– To consider the impact of
potentially higher gold prices
on the economics of deeper
zones of mineralisation
– To keep testing Hodrusa Field
(95%-owned) deposit
and other targets
– To re-start drilling after
addressing higher
priorities elsewhere
RIO TINTO
Copper Mines
Spain, potential which has been identified:
– To optimise open pit reserves of 123 Mt
for copper price higher than $2/lb
– To convert more of 203 Mt open pit
resources to reserves
– To increase open pit resources of 203 Mt
– To re-evaluate the San Dionisio deposit
previously mined by RTZ
– To test other deposits RTZ reported on the
company’s Rio Tinto Mine property
– To test targets on one or more of the
surrounding mineral concessions
11
FINANCE STRATEGY
Finance plan with customers Goldman Sachs, Xiangguang and Red Kite
potentially covers $240M when “fully-bankable”
USES OF FUNDS
Repairs and initial plant improvements
Bonding for environmental and social
Outstanding payment for project acquisition (on drawdown project finance)
Rio Tinto Mine
Support permitting of Slovakia Gold
Provisions for working capital and contingencies
TOTAL Capital to be Committed
US$M
135
30
9
174
2
64
240
All estimates subject to revision and upon independent review for updating of the NI-43-101 Technical Report.
12
DIRECTORS
Ronnie Beevor - Non-Executive Chairman
Director of several mining companies
Former MD, investment banking, Rothschild Australia
Harry Anagnostaras-Adams - Managing Director
John Leach - Finance Director
NON-EXECUTIVE DIRECTORS
Jasper Bertisen
Principal of Resource Capital Funds and engineer
Roger Davey
Former Director of Rothschild, mining company director and mining engineer
Bob Francis
Former senior partner of Deloitte & Touche specialising in mining
Harry Liu
Vice President Xiangguang responsible for corporate development
Ashwath Mehra
CEO of Astor Group and commodities trader
Jose Sierra
30 years minerals policy & regulation, Spain (Director-General Mines) and EU
13
RESERVES & RESOURCES
RIO TINTO COPPER – CERRO COLORADO OPEN PIT
Mt
Proven
39
0.38
148
Probable
84
0.54
458
123
0.49
606
TOTAL Ore Reserves
Cu%
Cu ‘000t
RESERVES
Mt
Measured
48
0.38
179
Indicated
155
0.49
754
TOTAL Measured &
Indicated Resources
203
0.46
933
2
0.50
10
Inferred
Cu%
Cu ‘000t
RESOURCES
Source: Behre Dolbear NI-43-101 Report and based on a 0.2% cut-off grade
Resources Inclusive of Reserves
Resources based on $3.00/lb pit shell
Reserves based on $2.00/lb pit shell
14
DETVA GOLD PROJECT (100%)
BIELY VRCH (SLOVAKIA) MINERAL RESOURCES
Gold Resources
RESOURCES
Mt
Gold Grade
g/t
Contained Gold
(ounces)
Indicated
17.7
0.81
461,000
Inferred
24.0
0.77
596,000
Source: Amended and Restated NI-43-101 Technical Report on Biely Vrch Gold Deposit, Detva Licence Area in Slovakia - dated 17 November 2010
• Multi-million ounce system, consistently mineralized from surface
• Shallowest1 million ounce is focus of current planning
• Consult community and advance permitting prior to more detailed studies
15
Contacts
CONTACTS
EMED Mining
Harry Anagnostaras-Adams – Managing Director
[email protected]
John Leach – Finance Director
[email protected]
Roger Howe – Manager, Investor Relations
[email protected]
Research Coverage
Cannacord , Orest Wowkodaw
[email protected]
Fox Davies, Peter Rose
[email protected]
Paradigm, Jeff Woolley
[email protected]
Jennings, Garnet Salmon
Angel, Carole Ferguson
Equity Development, Conor Fahy
Edison, Michael Stoner
[email protected]
[email protected]
[email protected]
[email protected]
Craig Foggo
[email protected]
Matt Greene
[email protected]
Listed on AIM (Code:EMED) and TSX (Code:EMD)
www.emed-mining.com
AIM:EMED
TSX:EMD
www.emed-mining.com
Presentation 19 December 2012 at General Meeting of Shareholders, Minas de Riotinto, Spain