Download - AIM: EMED TSX: EMD
A I M : E M E D T S X : E M D
Presentation 19 December 2012 at General Meeting of Shareholders, Minas de Riotinto, Spain
www.emed-mining.com
FORWARD LOOKING STATEMENTS
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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.
SHAREHOLDERS SUMMARY OF STATUS
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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
Inflection Points
in Spain
• 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
Team in Place• Shareholders, financiers, board, senior management • Supportive mining communities, local contractors and consultants• EMED Mining also has first-class local & international specialist advisers
Solid Platform and Pipeline of Growth Projects
• 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
-88%-88%
-85%-85%
-80%-80%
-76%-74%-74%-74%
-72%-69%
-67%-65%
-60%-55%-55%-54%
-52%-50%-50%-49%
-45%
-35%-32%
-23%-17%
-13%-12%
-7%-2%
100%112%
49%
-44%-43%
-35%
-92%
-37%-42%
30%
113%
AQMMercator
BajaHana
IntrepidCandente
International PBXCopper One
SarengetiWestern Copper
Northern DynastyTurquoise Hill
CoroConstantine
VMS VenturesThundermin
KatangaCuOro
PolymetAmerigo
DuranMedian
CapstoneLos Andes
HudBayTaseko
AbacusAugusta
Copper MountainRedhaw k
Yellow headLundin
InmetDuluth
Nevada CopperFirst Quantum
ImperialEMED
Copper FoxPanoro
NGExLumina
ONE OF BEST PERFORMING COPPER SECTORSHARES OVER PAST TWO YEARS
Relative Share Performance Since Dec. 17, 2010 – Copper Developers and Producers
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
Source: Capital IQ, as of 28 November 2012
CONTROLLED BY GLOBAL MINING INVESTORS
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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%
STEPS TO ACHIEVE 9MTPA PRODUCTION RATE
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Approval Mineral Rights Environmental Plans
Environmental Bonding
Project Finance and Product Off take
Bankable Engineering & Technical Studies
Production Planning and Expansion Studies
Operations Development
Operating LicencesPhase 1 Project Execution& Commissioning
Production 5 Mtpa
Phase 2 Project Execution& Commissioning
Production 9 Mtpa
2012 2013 2014 2015Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Documents, D. Diligence, Closing
Feasibility StudiesCapex , Opex, Works Schedule.
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
Phase 2 Project execution and commissioning
Approval Restoration Plan Exploitation Rights (Project)
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.
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
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) $Mpa 109 139 169
Project NPV US$M at discount rate 10% discount rate 7.5%
321415
469591
654803
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(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 $1.90 (Capital, Operating and Closure Costs).(4) Estimates being independently reviewed, to be released in accordance with NI-43-101 which is being updated.
Target Case 3.00 3.50 4.00
Project NPV US$M at discount rate 10%
730 976 1,287
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
• Excellent infrastructure in place:– Access to towns, roads, port, power & water
– Only 75 km from Freeport McMoRan’s Atlantic Cu smelter
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SPAIN
Rio Tinto
SPAIN
“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
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Rio Tinto is the world’s largest VMS system. Historical production 2Mt Cu at 1.5% + 60M oz Ag. No exploration for 25 years.
SLOVAKIA: GOLD PORPHYRY DISCOVERY
• 100%-owned Detva Gold Project • 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• “Mining Lease Area” initial approval done
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SLOVAKIA
Biely Vrch
Poland
Czech Republic
Germany
Hungary
Austria
Ukraine
Romania
SLOVAKIA
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GROWTH PIPELINE
– 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
– To re-start drilling after addressing higher priorities elsewhere
Slovakia, potential which has been identified:
(95%-owned) deposit and other targets
DETVA
GROWTH
RIO TINTO
CYPRUS
– To optimise open pit reserves of 123 Mt for copper price higher than $2/lb
– To convert more of 203 Mt open pit resources to reserves
– To increase open pit resources of 203 Mt
Spain, potential which has been identified:– To re-evaluate the San Dionisio deposit
previously mined by RTZ– To test other deposits RTZ reported on the
company’s Rio Tinto Mine property– To test targets on one or more of the
surrounding mineral concessions
Gold Project
Copper Mines
Copper
FINANCE STRATEGY
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USES OF FUNDS US$M
Repairs and initial plant improvements 135
Bonding for environmental and social 30
Outstanding payment for project acquisition (on drawdown project finance) 9
Rio Tinto Mine 174
Support permitting of Slovakia Gold 2
Provisions for working capital and contingencies 64
TOTAL Capital to be Committed 240
All estimates subject to revision and upon independent review for updating of the NI-43-101 Technical Report.
Finance plan with customers Goldman Sachs, Xiangguang and Red Kite potentially covers $240M when “fully-bankable”
Ronnie Beevor - Non-Executive ChairmanDirector of several mining companiesFormer MD, investment banking, Rothschild Australia
DIRECTORS
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NON-EXECUTIVE DIRECTORS
Harry Anagnostaras-Adams - Managing DirectorJohn Leach - Finance Director
Jasper Bertisen Principal of Resource Capital Funds and engineer
Roger DaveyFormer Director of Rothschild, mining company director and mining engineer
Bob FrancisFormer senior partner of Deloitte & Touche specialising in mining
Harry LiuVice President Xiangguang responsible for corporate development
Ashwath MehraCEO of Astor Group and commodities trader
Jose Sierra30 years minerals policy & regulation, Spain (Director-General Mines) and EU
RESERVES & RESOURCES
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RESERVES Mt Cu% Cu ‘000t
Proven 39 0.38 148
Probable 84 0.54 458
TOTAL Ore Reserves 123 0.49 606
RESOURCES Mt Cu% Cu ‘000t
Measured 48 0.38 179
Indicated 155 0.49 754TOTAL Measured & Indicated Resources 203 0.46 933
Inferred 2 0.50 10
Source: Behre Dolbear NI-43-101 Report and based on a 0.2% cut-off gradeResources Inclusive of ReservesResources based on $3.00/lb pit shellReserves based on $2.00/lb pit shell
RIO TINTO COPPER – CERRO COLORADO OPEN PIT
DETVA GOLD PROJECT (100%)
• 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
Source: Amended and Restated NI-43-101 Technical Report on Biely Vrch Gold Deposit, Detva Licence Area in Slovakia - dated 17 November 2010
RESOURCES Mt Gold Grade g/t
Contained Gold(ounces)
Indicated 17.7 0.81 461,000
Inferred 24.0 0.77 596,000
BIELY VRCH (SLOVAKIA) MINERAL RESOURCES
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Gold Resources
www.emed-mining.com
Contacts
Listed on AIM (Code:EMED) and TSX (Code:EMD)
EMED MiningHarry Anagnostaras-Adams – Managing Director [email protected]
John Leach – Finance Director [email protected]
Roger Howe – Manager, Investor Relations [email protected]
Research CoverageCannacord , Orest Wowkodaw [email protected]
Fox Davies, Peter Rose [email protected]
Paradigm, Jeff Woolley [email protected]
Jennings, Garnet Salmon [email protected]
Angel, Carole Ferguson [email protected]
Equity Development, Conor Fahy [email protected]
Edison, Michael Stoner [email protected]
Craig Foggo [email protected]
Matt Greene [email protected]
CONTACTS
A I M : E M E D T S X : E M D
www.emed-mining.com
Presentation 19 December 2012 at General Meeting of Shareholders, Minas de Riotinto, Spain