csi investor presentation
TRANSCRIPT
Serra Pelada Building Brazil’s Next Gold Mine
Forward Looking Statements
Forward-looking statements in this presentation include statements regarding the timing and nature of future exploration and development programs that are dependent on projections that may change as drilling continues, or if unexpected ground conditions are encountered. The Company does not currently have any mineral properties that are in production or that contain a reserve as defined by National Instrument 43-101. In addition, areas of exploration potential are identified which will require additional drilling to determine whether or not they contain similar mineralization to areas that have been explored in more detail. Significant additional drilling is required at Serra Pelada to fully understand system size. Certain information contained in this presentation, including any information relating to Colossus Minerals Inc.’s (“Colossus” or the “Company”) future financial or operating performance may be deemed “forward-looking”. All statements in this presentation, other than statements of historical fact, that address events or developments that Colossus expects to occur, are “forward- looking statements”. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “does not expect”, “plans”, “anticipates”, “does not anticipate”, “believes”, “intends”, “estimates”, “projects”, “potential”, “scheduled”, “forecast”, “budget” and similar expressions or their negative connotations, or that events or conditions “will”, “would”, “may”, “could”, “should” or “might” occur. All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and are subject to important risk factors and uncertainties, many of which are beyond the Company’s ability to control or predict. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause Colossus’ actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such factors include, without limitation: price levels and volatility in the spot and forward markets for commodities; the uncertainties inherent to current and future legal challenges Colossus is or may become a party to; controls, regulations and political or economic developments in the countries in which the Company does or may carry on business; changes in national and local government legislation in Canada, Brazil or any other country in which Colossus currently does or may in the future carry on business; the lack of certainty with respect to foreign legal systems, which may not be immune from the influence of political pressure, corruption or other factors that are inconsistent with the rule of law; the speculative nature of mineral exploration and development, including the risks of obtaining and maintaining the validity and enforceability of the necessary licenses and permits and complying with the permitting requirements of each jurisdiction that Colossus operates; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States and Brazil; significant capital requirements; impact of any hedging activities; taxation; additional funding requirements; loss of key employees; changes in project parameters as plans continue to be refined; accidents; labour disputes; defective title to mineral claims or property or contests over claims to mineral properties; and competition. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding as well as other risks discussed under the heading “Risks Factors” included in Colossus’ latest Annual Information Form filed at www.sedar.com. Forward-looking statements are not guarantees of future performance, and actual results and future events could materially differ from those anticipated in such statements. All of the forward-looking statements contained in this presentation are qualified by these cautionary statements. Colossus expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise, except in accordance with applicable securities laws. The technical information in this presentation has been reviewed by Graham Long, VP of Exploration of Colossus Minerals Inc. and Qualified Person for the project.
June 18, 2013 2
Serra Pelada
• Develop the Serra Pelada Mine in a cost-effective, sustainable and safe manner
• Provide leading cash flow per share, earnings per share and dividend yield to investors
• Deliver low cost, high margin growth from organic sources
THE VISION
June 18, 2013 3
Serra Pelada 2013 OBJECTIVES
Objective Target
Extract bulk sample from the CMZ Second quarter
Complete process plant construction Third quarter
Process bulk sample Third quarter
Initial NI 43-101 outlining 12 months resources
Following bulk sample
Initial production and first gold pour Third quarter
Design & engineer flotation plant Fourth quarter
Complete PGM flotation plant Third quarter ‘14
June 18, 2013 4
Capital Structure AS AT JUNE 12, 2013 EXCEPT WHERE OTHERWISE NOTED
All dollar amounts $CDN, unless noted Current Position
Shares outstanding - basic 125.0 million
Shares outstanding - fully diluted 139.0 million
Market capitalization (06/18/13) C$198.7 million
Share price (06/18/13) C$1.59
52-week range C$1.52 – C$6.03
Insider ownership* (approximate) 17%
Institutional ownership* (approximate) 58%
Options & Warrants (5,175,000 - CSI.WT.A –Exp. Nov 8/16 ) 14.0 million
Cash balance (March 31/13) US$32.1 million
Gold-linked Note – CSI.NT - Matures Dec 31/16 C$86.25 million
Precious metals sale (35% Pt and Pd, 1.5% Au) US$75 million
Major Shareholders
Arias Resources, Acuity, Sprott Asset Management, Van Eck, Franklin Advisers, Fidelity, Franklin Templeton, BC Investment, MFS, Manulife, JP Morgan *Shares held by Arias Resources included in total as Alberto Arias is a director of CSI
June 18, 2013 5
Focused on Brazil
• Resource-rich country
• Pro-mining government
• World’s 6th largest economy by GDP and largest in South America
• Real GDP growth of 2.5% forecast in 2013
• Inflation estimated at 5.7% and stable monetary policy
June 18, 2013 6
Serra Pelada
• Prolific Carajas region
• Major deposits of iron ore, copper-gold, manganese
• Robust infrastructure with access to roads, power, water and skilled labour
• Vale S.A. investing billions of dollars over the next decade in the region
LOCATION AND INFRASTRUCTURE
June 18, 2013 7
Serra Pelada LAND AND PERMITS
• Preliminary Environmental License – issued March 2010 • Precedes balance of permits –
issued by COEMA
• Installation License – issued April 2010 • Para State environmental council
• Mining License – issued May 2010 • Ministry of Mines and Energy
Permits
Land Package • 874 hectare property
• Ownership Structure: Colossus 75% Coomigasp 25%
June 18, 2013 8
High Grade Deposit GRADE VARIABILITY
June 18, 2013 9
High Grade Deposit GRADE VARIABILITY
June 18, 2013 10
Underground Drilling DEFINING AND DELINEATING THE CMZ
• Exploration and definition underground drilling commenced in Dec 2011
• Bulk sample, being extracted from CMZ, will be processed at site
• An initial NI 43-101 resource statement will follow which will outline the initial resource estimate for approximately one year, allowing the Company to more accurately predict future earnings
• The drill spacing for this resource statement will be as tight as possible (5 to 10 metre centres)
• As decline and underground development advances, so will the pace of drilling
June 18, 2013 11
Serra Pelada DEVELOPMENT TIMELINE
2010 2011 2012 2013 2014
Exploration
Permitting
Construction
Underground Development
NI 43-101 Resource
Initial Production
Ramp up to 1000 tpd
Design & Engineer Flotation Plant
Complete PGM Flotation Plant
June 18, 2013 12
Process Plant SIMPLIFIED FLOWSHEET
June 18, 2013 13
Process Plant DESIGN OVERVIEW
Gold Room
Scrubbing, Screening and
Reagents
Primary Crushing Ball Mill and Gravity
Concentrators
June 18, 2013 14
Primary Crushing 90% COMPLETE
June 18, 2013 15
Primary Crushing TIPPING RAMP FOUNDATION – PRIMARY CRUSHING IN BACKGROUND
June 18, 2013 16
Scrubbing & Screening ERECTING COLUMNS & CONVEYOR
June 18, 2013 17
Scrubbing & Screening PRIMARY SCREEN INSTALLED
June 18, 2013 18
Scrubbing & Screening ADVANCING CONVEYOR SYSTEM
June 18, 2013 19
Reagents Building TANKS INSTALLED – SECONDARY CRUSHER BUNKER IN FOREGROUND
June 18, 2013 20
June 18, 2013
Process Plant BALL MILL, GRAVITY CONCENTRATORS & GOLD ROOM DESIGN
Gold Room
Ball Mill
Gravity Concentrators
21
Grinding Building PLACING THE BALL MILL
June 18, 2013 22
Grinding Building BALL MILL RING GEAR INSTALLED
June 18, 2013 23
Grinding Building THREE GRAVITY CONCENTRATORS INSTALLED
June 18, 2013 24
Control Room WITH BALL MILL IN BACKGROUND
June 18, 2013 25
Gold Room FINAL HEIGHT
June 18, 2013 26
Gold Room START OF MECHANICAL INSTALLATIONS
June 18, 2013 27
Thickener PROCESS WATER TANKS
June 18, 2013 28
Thickener PROCESS WATER TANKS
June 18, 2013 29
Power House
June 18, 2013 30
Power House CONTROL ROOM
June 18, 2013 31
Laboratory READY FOR MODULAR UNITS
June 18, 2013 32
Transformers MASTER CONTROL CENTRE 1 – IN PLACE
June 18, 2013 33
Ventilation Shaft COLLAR
June 18, 2013 34
Ventilation Shaft COLLAR
June 18, 2013 35
Tailings Dam VARIOUS ELEMENTS
June 18, 2013 36
1 – Spillway wall rebar 4 – Cut off Excavation 2 – Spillway wall rebar 5 – Clean up of borrow area 3 – Spillway wall rebar and formwork
Development Decline
June 18, 2013 37
Mining Method UNDERHAND CUT & FILL
• Underhand Cut & Fill mining method for 100% extraction of the ore
• Work from top of the orebody down
excavating under cemented rock fill • Used in a number of high-grade gold
mines including Goldcorp’s Red Lake Mine, Barrick’s Miekle Mine, Turquoise Ridge Mine, former Eskay Creek Mine and Newcrest Kencana Mine
• Trucks to haul ore to surface via the decline
• Target a 1,000 TPD mining rate
June 18, 2013 38
Run of Mine (ROM) Pad CMZ MATERIAL
June 18, 2013 39
Underground EXCAVATION IN CMZ
June 18, 2013 40
Underground CMZ – AT THE FACE
June 18, 2013 41
Exploration Potential
• Down-plunge extension of Central Mineralized Zone
• Connecting the Lower Limb to the Central Mineralized Zone
• Elefante – Potential satellite deposit two kilometres away
THREE PROSPECTIVE AREAS
June 18, 2013 42
Exploration Potential CONNECTING THE LOWER LIMB TO THE CMZ
June 18, 2013 43
Exploration Potential ELEFANTE – POTENTIAL DEPOSIT TWO KILOMETRES AWAY
• Hole EL-12-001 returned 5.70 metres grading 5.41 g/t gold, 0.04 g/t platinum and 0.29 g/t palladium
• Hole EL-12-002 returned 5.10 metres grading 0.45 g/t gold, 1.27 g/t platinum and 2.04 g/t palladium
• Auger drilling included SPTRD-017 (124.78g/t Au, 6.52g/t Pt and 7.67g/t Pd over 1.5 m)
• Auger drilling in saprolite together with diamond drilling suggest a broad halo of mineralization in the Elefante Area sourced by deeper bedrock zone
Please see news releases issued November 14, 2011, March 12, 2012, August 20, 2012 and January 10, 2013 for complete NI 43-101 compliant disclosures.
June 18, 2013 44
Sierra Pelada
Cutia
Cutia Project DRILLING COMMENCES IN 2013
• 75% ownership interest purchased from COOMIC for R$3.6 million (~USD $2.0 million) payable in installments upon satisfaction of certain milestones.
• Mesothermal gold and silver project
• 633 hectares, 13 km SE of Serra Pelada, accessed by same road
• Mineralized vein system occurs along the Cutia Fault Zone that separates two major lithologic domains
• 3 metre thick quartz veins outcropping on surface
• ~ 65,000 ounces produced by artisanal miners between 1988 and 1992
• 2.5 km of strike length and still open to the west and east
June 18, 2013 45
Serra Pelada A COMPELLING INVESTMENT
• Gold & PGM grades at Serra Pelada are among the highest on record
• High grade, potential low cost emerging producer
• Project is permitted and construction is well underway
• 110,000 metres drilled, significant exploration upside
June 18, 2013 46
TSX: CSI www.colossusminerals.com
OTCQX: COLUF
Colossus Minerals Inc. 1 University Avenue, Suite 401
Toronto, ON M5J 2P1
Ann Wilkinson Vice President, Investor Relations
416.643.7655 [email protected] www.colossusminerals.com
June 18, 2013 47
APPENDICES
June 18, 2013 48
Community
• Striving to build a stronger community – community
based projects • Hiring locally is a priority • Education and training • Community donations (ambulance and police
vehicles) • Health and dental services • Children’s programs (sports teams, first aid training,
social events)
June 18, 2013 49
Community Programs
Community based projects • Donation of ambulance and police vehicles
• Public security and police training
• School renovation
• Hospital renovation
• Municipal stadium renovation
• Municipal theatre renovation
• 2012 - installation of a community centre focused on worker training and qualifications, income generation programs, computer training centre and environmental education
Health • Vaccination programs
• Medical and dental services
June 18, 2013 50
Community Programs
Children
• Soccer school
• Sporting events
• Social events
• Visual arts workshops
• Reading programs
Education and training programs
• Literacy programs
• First aid and safety training
• Serra Pelada Capoeira school for children, teenagers, youth and adults
June 18, 2013 51
Area A PAYMENT STRUCTURE
Range of production (millions of ounces of
metal)
Royalty as a percentage of gold price on precious
metal sold* From To
--- 2.03 ~ 2.1%
2.03 4.79 ~ 1.4%
4.79+ --- ~ 1.3%
Colossus must pay COOMIGASP R$350,000 (US$175,000**) per month and payments cease when production begins.
In addition Colossus will finance their portion of CAPEX (25%). * Precious metal is defined as any one of gold, platinum, palladium, rhodium, osmium, ruthenium or iridium ** Basis 2.00 R$ per US$ (4/30/13)
June 18, 2013 52
Area B PAYMENT STRUCTURE
• COOMIGASP paid R$8 million (US$4.5 million*)
• Will pay COOMIGASP a royalty payment of 0.4326 of gold price of precious metals sold**
• Exercised option on Vale agreement Mar 18/13
• Vale has 45 days to request additional documents to support US$5 million spent over 3 years
• Assignment of mining rights expected to occur 30 days after Vale is satisfied requirements met.
• Pay Vale a fee of US$35/oz of gold, platinum, palladium based on the reserve estimate.
700 – Hectare Land Tenement
*Calculated at historical exchange rates. **Precious metal is defined as any one of gold, platinum, palladium, rhodium, osmium, ruthenium or iridium.
June 18, 2013 53
Area C PAYMENT STRUCTURE
• Have paid COOMIGASP R$4 million (US $2.2 million*)
• Will pay COOMIGASP a royalty of 2.0908% of gold price on precious metals sold**
*Calculated at historical exchange rates. **Precious metal is defined as any one of gold, platinum, palladium, rhodium, osmium, ruthenium or iridium
Consideration
74 - Hectare Land Tenement
June 18, 2013 54
Warrants and Options AS AT APRIL 30, 2013
Warrant price # of warrants Expiry
$8.50 5,175,000 Nov 8, 2016
Range Options Outstanding
Options Exercisable
$0.48CAD - $1.50CAD
150,000 150,000
$1.51CAD - $3.00CAD 285,000 83,750
$3.01CAD - $4.50CAD 2,945,000 1,633,750
$4.51CAD - $6.00CAD 2,485,000 1,203,750
$6.01CAD - $8.37CAD 2,980,000 2,830,000
TOTAL: 8,845,000 5,901,250
June 18, 2013 55
Senior Management
Claudio Mancuso, CA CEO, Director
• Over 10 years experience in mining industry and capital markets • Previously VP, Treasurer of Agnico-Eagle Mines Limited • Involved in raising over $4 billion over the past five years in both equity and debt capital markets
David Anthony President & COO
• Previously Senior Vice President, Mining of Forbes & Manhattan • Previously worked for Kinross, as the Project Director, responsible for execution of the Fruta del Norte Project and held Senior positions
at Barrick Gold in Tanzania responsible for the development of the Bulyanhulu, Buzwagi and Tulawaka mines
Alden Greenhouse, CFA CFO
• Over 10 years capital markets experience in commodity risk management, foreign-exchange and fixed income • Senior management positions with RBC Capital Markets and Senior Analyst at Dominion Bond Rating Service
Graham Long VP, Exploration Qualified Person under NI 43-101
• Over 25 years’ experience in the mining industry, spent the majority of his career with Agnico-Eagle Mines where he held progressively changing roles from exploration geologist to Exploration Manager for Canada.
• Mr. Long has a broad range of mining experience having worked in several operating mines both underground and open-pit as well as experiencing the discovery of a gold deposit and seeing it through to production.
Luis Albano Tando VP, Operations & Country Manager, Brazil Qualified Person under NI 43-101
• Mining engineer with twenty five years’ experience working at increasingly senior levels of a number of organizations. • Previously COO at OROSUR Mining Inc. • Prior to this, worked in a variety of capacities for Kinross • He is also a fellow of the Australian Institute of Mining and Metallurgy (AusIMM)
Jason Brooks VP, Finance
• More than 10 years of finance and accounting experience in the mining industry. He most recently served as Assistant Controller of NewGold Inc., an intermediate gold producer. Previously, he spent six years with Barrick Gold Corporation in various financial management positions. Prior to joining Barrick, he spent five years at BDO Dunwoody LLP, a public accounting firm.
Ann Wilkinson VP, Investor Relations
• 20 years in the mining industry in investor relations and other management roles. Prior to joining Colossus, served as Vice President, Investor Relations of Breakwater Resources Ltd. Prior to Breakwater she held a number of roles with several capital market firms and a couple of junior gold exploration companies.
June 18, 2013 56
Board of Directors
John Frostiak, P.Eng Chairman Qualified Person under NI 43-101
• Over 35 years experience in the mining industry. Managed Metallurgy and Process Development for Barrick Gold Corp. • Lead developer of both Pierina Mine and Bulyanhulu Mine for Barrick
Claudio Mancuso, CA Chief Executive Officer
• Over 10 years experience in mining industry and capital markets • Previously VP, Treasurer of Agnico-Eagle Mines Limited • Involved in raising over $4 billion over the past five years in both equity and debt capital markets
J. Alberto Arias • Founder, General Partner and Portfolio Manager of Arias Resource Capital Management LP • Previously Managing Director of Goldman Sachs – Metals & Mining Research from 1998 to 2006, • Mr. Arias has engineering degrees in mining and metallurgy and an MBA (B.Sc. from the Colorado School of Mines and three
Masters degrees from Columbia University), mining industry operational experience, and holds a patent for a gold mineral processing technology.
David Garofalo • President and Chief Executive Officer of Hudbay Minerals Inc. • Previously served as Senior Vice President, Finance and Chief Financial Officer and a director with Agnico-Eagle Mines Limited
Mr. Garofalo worked in various finance roles including Treasurer with Inmet Mining Corporation.
Greg Hall Qualified Person under NI 43-101
• Over 40 years experience in the mining industry. Chief geologist world-wide of Placer Dome until the Barrick takeover • Credited discoveries include Granny Smith Mine (Barrick), Yandi Mine (Rio Tinto)
Mel Leiderman, CA, CPA
• Managing Partner of Lipton LLP, Chartered Accountants. • Current Member of Agnico-Eagle Mines Limited Audit Committee (Chair from 2005 – 2011) • Board of Trustees – Morguard North American Residential REIT. Audit committee member.
Douglas Reeson, MBA
• Current CEO of Gossan Resources Limited and a director of Lithium Americas Corp., Mega Uranium Ltd. and Soltoro Ltd.
John S.M. Turner • Partner at Fasken Martineau DuMoulin LLP and the Leader of its Global Mining Group • Has been recognized on numerous occasions including Best Lawyers in Canada for Natural Resources Law • Recipient of the Queen's Golden Jubilee Medal and is a member of both the Canadian Association and the Law Society of
England and Wales.
June 18, 2013 57
Analyst Coverage
Research Firm Analyst Latest Coverage Target/Rating
Clarus Securities Jamie Spratt June 2013 $2.50 – Accumulate
GMP Securities George Albino June 2013 $7.15 – Buy
Canaccord Genuity Nicholas Campbell May 2013 $7.50 – Spec. Buy
Stifel, Nicolaus Craig Stanley April 2013 $3.55 – Buy
Dundee Securities Joseph Fazzini May 2013 $4.25 – Spec. Buy
Macquarie Securities Michael Gray May 2013 $2.25 – Neutral
June 18, 2013 58
NOTES
June 18, 2013 59