Post on 24-Jun-2020
transcript
THE ROVINA VALLEY PROJECT, ROMANIA
A Case Study in Environmental, Social, and Governance Principles: The Keys to Success for Mining in Romania
TSX: ESM | Corporate Presentation | February 2020
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
2
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
Statements and certain information contained in this presentation and anydocuments incorporated by reference may constitute “forward-looking statements”within the meaning of applicable Canadian securities legislation which mayinclude, but is not limited to, information with respect to the Corporation’s expectedproduction from, and further potential of, the Corporation’s properties; theCorporation’s ability to raise additional funds; the future price of minerals,particularly gold and copper; the estimation of mineral reserves and mineralresources; conclusions of economic evaluation; the realization of mineral reserveestimates; the timing and amount of estimated future production; costs ofproduction; capital expenditures; success of exploration activities; mining orprocessing issues; currency exchange rates; government regulation of miningoperations; and environmental risks. Often, but not always, forward-lookingstatements/information can be identified by the use of words such as “plans”,“expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”,“anticipates”, or “believes” or variations (including negative variations) of suchwords and phrases, or statements that certain actions, events or results “may”,“could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-lookingstatements/information is based on management’s expectations and reasonableassumptions at the time such statements are made. Estimates regarding theanticipated timing, amount and cost of exploration and development activities arebased on assumptions underlying mineral reserve and mineral resource estimatesand the realization of such estimates are set out herein. Capital and operating costestimates are based on extensive research of the Corporation, purchase ordersplaced by the Corporation to date, recent estimates of construction and miningcosts and other factors that are set out herein. Forward-looking informationinvolves known and unknown risks, uncertainties and other factors that may causethe actual results, performance or achievements of Euro Sun Mining and/or itssubsidiaries to be materially different from any future results, performance orachievements expressed or implied by the forward-looking statements. Suchfactors include: uncertainties of mineral resource estimates; the nature of mineralexploration and mining; variations in ore grade and recovery rates; cost ofoperations; fluctuations in the sale prices of products; volatility of gold and copperprices; exploration and development risks; liquidity concerns and future financings;risks associated with operations in foreign jurisdictions; potential revocation orchange in permit requirements and project approvals; competition; no guarantee oftitles to explore and operate; environmental liabilities and regulatory requirements;dependence on key individuals; conflicts of interests; insurance; fluctuation inmarket value of Euro Sun Mining’s shares; rising production costs; equipmentmaterial and skilled technical workers; volatile current global financial conditions;and currency fluctuations; and other risks pertaining to the mining industry.Although Euro Sun Mining has attempted to identify important factors that couldcause actual actions, events or results to differ materially from those described inforward-looking statements, there may be other factors that cause actions, eventsor results to differ from those anticipated, estimated or intended. Forward-looking
information contained herein or incorporated by reference are made as of the dateof this presentation or as of the date of the documents incorporated by reference,as the case may be, and Euro Sun Mining does not undertake to update any suchforward-looking information, except in accordance with applicable securities laws.There can be no assurance that forward-looking information will prove to beaccurate, as actual results and future events could differ materially from thoseanticipated in such information. Accordingly, readers are cautioned not to placeundue reliance on forward-looking information. The forward-looking informationcontained or incorporated by reference in this document is presented for thepurpose of assisting shareholders in understanding the financial position, strategicpriorities and objectives of the Corporation for the periods referenced and suchinformation may not be appropriate for other purposes.
*Mineral resources that are not mineral reserves do not have demonstratedeconomic viability. Mineral resource estimates do not account for mineability,selectivity, mining loss and dilution. These mineral resource estimates includeinferred mineral resources that are normally considered too speculativegeologically to have economic considerations applied to them that would enablethem to be categorized as mineral reserves. There is also no certainty that theseinferred mineral resources will be converted to measured and indicated categoriesthrough further drilling, or into mineral reserves, once economic considerations areapplied.
• CAUTIONARY NOTE REGARDING UNITED STATES SECURITIES LAWS
This presentation does not constitute an offer to sell or the solicitation of an offer tobuy, nor shall there be any sale of the securities of the Euro Sun Mining Inc., inany jurisdiction in which such offer, solicitation or sale would be unlawful prior toregistration or qualification under the securities laws of such jurisdiction. Thesecurities of Euro Sun Mining Inc. have not been and will not be registered underthe United States Securities Act of 1933, as amended (the "U.S. Securities Act"),or any state securities laws and may not be offered or sold within the United Statesor to, or for the account or benefit of, "U.S. persons," as such term is defined inRegulation S under the U.S. Securities Act, unless an exemption from suchregistration is available.
The information contained herein concerning the properties and operations of EuroSun Mining Inc. has been prepared in accordance with Canadian standards underapplicable Canadian Securities Laws in accordance with NI 43-101 underguidelines set out in the Definition Standards for Mineral Resources and MineralReserves adopted by the Canadian Institute of Mining, Metallurgy and Petroleum(the “CIM Standards”), which differ in material respects from the requirements ofU.S. Securities Laws applicable to U.S. companies subject to the reporting anddisclosure requirements of the SEC and may not be comparable to similarinformation disclosed by such U.S. companies.
Cautionary Notes
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
3
Euro Sun Mining – Company Overview
▪ Developing a large-scale bulk tonnage open pit mine
▪ Long life production profile
▪ Significant leverage to Gold and Copper prices
▪ 7 million ounces of Gold ( Measured & Indicated)
▪ 1.4 Billion lbs of Copper (Measured & Indicated)
▪ Mining License issued and ratified by Romanian State in
Nov. 2018; valid for 20 years and renewable
▪ Past-producing region – excellent infrastructure in place:
rail, power, paved access, skilled labour, and town of 13,000
within 5km of the project
▪ Completion of Urbanization Certificate and BFS in 2020
An advanced 10 million ounce* project in the European Union
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
4
Capital Structure
Avg. Daily Volume (90 day)
Shares Outstanding
Share Price (30/01/20)
Market Cap (CAD)
52-Week High
300,000
$1.25
~$32 million
$0.29
111,786,339
Warrants Outstanding
17,982,111 (strike $0.40-$0.50)
Gold Development Peers
30
236
252
338
442
528
1170
0 200 400 600 800 1000 1200
Euro Sun
Belo Sun
Gabriel
Barkerville
Orla
Sabina
Continental ACQUIRED
ACQUIRED
Market Cap ($CAD)
Key Institutional Shareholders:
Ruffer LLP ( UK) ~10%Orion Mine Finance (UK) ~4%
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
Romania at a Glance
5
• Area: 238,391 km2
• Population: ~20M (Bucharest: ~2M)
• Joined the European Union in 2007
• Climate: 4 distinct seasons (0-35ºc)
• Currency: Leu (RON) = US$0.25
• Tax Rate: 16% (corporate profits)
• Royalty rate: 5% NSR Cu; 6% NSR Au Bulgaria
Greece
Hungary
Italy
France
Spain
Poland
Germany
UKIreland
Sweden Finland
Slovakia
Slovenia
Czech Republic
Austria
Portugal
Belgium
Netherlands
Denmark Lithuania
Latvia
Estonia
Romania
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
6
Installed Infrastructure Minimizes Environmental Footprint
• Modern network of roads and rail in place
• Low-cost environmentally friendly hydro power generation and distribution - all installed
• Economically challenged region since Barza mine closure in 2006
• Barza mine produced 13 million ounces over 80 years of production
* See slide 10 for details related to the mineral resource estimation
3kmTo MintiaPower Plant
Barza Mine
Town of Brad
ROVINA DEPOSIT
COLNIC DEPOSIT
CIRESATA DEPOSIT
Proposed Plant Location
Hydroelectric Dam
110 kva Power Lines
Railhead, Brad
Cu-Au Porphyry
M&I: 1 Moz of Gold
573 M lbs of Copper
Au-Cu Porphyry
M&I: 2.2 M oz Gold
302 M lbs Copper
Au-Cu Porphyry
M&I: 3.8 Moz of Gold
518 M lbs of Copper.
3km
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
Rovina Valley Project – Permitting Status
7
Official Gazette no. 0970 of 2018 Act no. 900 of 09 November 2018 Issuer: Government of RomaniaDecision regarding the approval of the Concession License no. 18.174 / 2015 of the mining activity of copper ore containing gold in the Rovina perimeter, Hunedoara County, concluded between the National Agency for Mineral Resources and SAMAX ROMANIA SRL (unofficial translation)
PRESS INFORMATION regarding the draft normative acts adopted or which the Government took note in the meeting of the Government of Romania from November 9, 2018
32. DECISION on the approval of the concession license no.18174 / 2015 of the mining activity for the exploitation of the copper ore with gold content in the perimeter of Rovina, Hunedoara county, concluded between the National Agency for Mineral Resources and the Commercial Company SAMAX ROMĂNIA SRL
Rovina Valley Mining Licence
• Issued in May 2015: to SamaxRomania SRL, 100% owned subsidiary of Euro Sun Mining
• Transition from exploration to exploitation stage.
• License Ratification CompletedNov 9th, 2018:Licence was signed by Secretary General of Parliament, Minister of Economy, Minister of Environment, Minister of Waters and Forests, Minister of Finance and Minister of Justice and by the Prime Minister of Romania
• The licence is valid for 20 years, and renewable
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
8
ESG Principles for Success in Romania
Environmental Best Practices
✓ Dry Stack Tailings - Lowered environmental liabilities and impacts
• Lowers long-term environmental liabilities and impacts
• Safer design - no risk of dam failure as with wet tailings
• Minimizes water usage and consumption requirements
• Minimizes disturbance area and visual impact from surrounding area
• Facilitates concurrent reclamation and revegetation during operation
✓ Zero Cyanide - Anywhere in the Rovina Valley Project
✓ No Requirements for Decades of Legacy Monitoring✓ Minimized Footprint - Leverage existing infrastructure
Hurdles Specific to Romania:
• Two recent (2000) wet tailings dam failures• Significant negative view of wet tailings management facilities• Backlash towards cyanide use due to previous spills
Euro Sun Best Practice Solutions for Success
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
9
ESG Principles for Success in Romania
Social Licence & Community Engagement
✓ Stakeholder EngagementLocal communities were actively involved in the mining license design stage to address potential visual, noise and dust impacts
✓ Long History of Mining in the RegionA local town operated a mine for almost 80 years until 2006. Local communities have experienced the economic benefits first hand from mining
✓ No Relocation of Towns
✓ Archeological Discharge Certificate – Confirming no archeological remains
Hurdles Specific to Romania:
• Social tensions: fears of pollution, water usage conflicts, distribution of the economic benefits from a mining project, etc
• Opposition to community relocation• Archaeological ruins have a high priority for protection
Euro Sun Best Practice Solutions for Success
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
10
ESG Principles for Success in Romania
Governance & Government Engagement
✓ National Anti-Corruption Directorate (DNA)Romania established DNA prior to EU inclusion. Former head of the DNA is now the EU’s public prosecutor to combat fraud against the EU
✓ Project is 100% Owned The Rovina valley project is a discovery by Euro Sun and is the first mining license ever granted to a non state-owned mining company
✓ Fully Independent BoardEuro Sun maintains a fully independent board of directors with only one executive on the board and has 20% representation of women amongst its independent directors
General Issues and Hurdles Specific to Romania:
• Among five EU countries that do not reach the 50% threshold in the 2019 Corruption Perceptions Index, primarily due to misuse of EU funding
• Prevalence of state-owned resource companies • Board composition (independence from management and gender diversity)
Euro Sun & Romania Governance
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
Upcoming Catalysts in 2020
11
Three Major Projects Expected for Completion in 2020
BankableFeasibility Study
• Environmental Impact Assessment
• Public meetings• Targeting
completionby mid 2020
Urbanization Certificatefor Project
Urbanization Certificatefor Land
• Re-zoning formine construction from pastoral or state forests to commercial applications
• Focused on increased mine life to include both Colnic and Rovina pits in initial plan
Construction Permit
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
Cu-Au Porphyry
M&I: 1 Moz of Gold
573 M lbs of Copper
Au-Cu Porphyry
M&I: 2.2 M oz Gold
302 M lbs Copper
Au-Cu Porphyry
M&I: 3.8 Moz of Gold
518 M lbs of Copper.
3km
CIRESATA DEPOSIT
COLNIC DEPOSIT
ROVINA DEPOSIT
Staged Development Approach
12
PEA Results (Feb 2019): Colnic Only
▪ Only ~29% of total mineral resources
▪ Avg. annual production of 139,000 oz AuEq; 12 year mine life
▪ CAPEX $339.7M, including $264M for a central plant built for all three deposits
▪ AISC of $752/oz
Feasibility Study (2020): Colnic & Rovina ▪ Target mine life +18 years
▪ Initital CAPEX in line with PEA
▪ Substantially increase NPV and IRR
▪ Substantially increase Gold & Copper production
Ciresata▪ Underground deposit- 3.8 Moz Au, 515 Mlb Cu
▪ Technical study to be completed at a later date
PHASE I
PHASE II
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
13
$1,325 Gold
Colnic NPV
US$228M
After TAXNPV
After TAXNPV
After TAXNPV
Significant Leverage to Gold and Copper Prices
$3.10 Copper
$1,600 Gold
Colnic NPV
US$413M
$2.60 Copper
$1,500 Gold
Colnic NPV
US$423M
$3.50 Copper
PEA Metal Prices Spot Metal Prices LT Metal Prices
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
14
ROVINA VALLEY PROJECT STANIJA PROSPECT
27 km² 42 km²
Mining Licence fully approved in November 2018
Prospecting permit granted in October 2016
Stanija Property less than 6 km from Rovina planned mine site
PEA Completed in February 2019
Mining License and Adjacent Prospecting Permit
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
15
42 km2
27 km2
Emerging Gold Camp - Significant Exploration Potential
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
Executive Management Team & Board of Directors
16
Executive Management
G. Scott Moore, MBAPresident & Chief Executive Officer
Paul Bozoki, CA, MBAChief Financial Officer
Brad HumphreyVice President, Corporate Development
Joe Milbourne, FAUSIMMTechnical Services Manager
Sam Rasmussen, B.EngChief Operating Officer
Les Kwasik, B.Eng.Senior VP, Romanian Operations
Randall Ruff, B.Sc., M.Sc.VP, Exploration
Board of Directors
Eva Bellissimo, LLB, Independent Director | Co-head of Mining, McCarthy Tetrault
Michael Barton, CA, Independent Director | Portfolio Manager Orion Mine Finance
Danny Callow, P.Eng.,MBA, Independent Director | Former Glencore Executive
G. Scott Moore, MBA, Director, President and CEO
Bruce Humphrey, P.Eng, Independent Director | Former Goldcorp Executive
David Danziger, CPA, Independent Director | Senior Partner MNP
TSX
: ES
M|
GR
: O
L11
| U
S: C
PN
FF
Updated M&I Mineral Resources (2019)
17
Tonnage
Mt
Au
g/t
Cu
%
Gold
Moz
Copper
Mlb
Au eq*
Moz
Au Eq*
g/t
MEASURED
Rovina 32.1 0.36 0.29 0.37 208.5 0.83 0.53
Colnic 29.2 0.65 0.12 0.61 74.3 0.77 0.82
Ciresata 28.5 0.88 0.16 0.81 102.2 1.03 1.13
Total 89.8 0.62 0.19 1.78 385.1 2.63 0.91
*Au eq. determined by using a long-term gold price of US$1,500 per ounce and a copper price of US$ 3.30/lb. Metallurgical recoveries are not taken into account for Au eq. Base case cut-off grade used in the table are 0.35 g/t Au eq. for the Colnic deposit and 0.25% Cu eq for the Rovina deposit, both of which are amenable to open-pit mining and 0.65 g/t Au eq. for the Ciresata deposit which is amenable to underground bulk mining. For the Rovina and Colnic porphyries, the resources are pit-shell constrained using Lerchs-Grossmann algorithm pit optimizer and market metal values of $1,500/oz Au price and $3.30/lb Cu price, with net prices after smelter payables, concentrate transport, smelter charges, and royalty of US$1,384/oz Au and US$2.61/lb Cu for Colnic and US$1,286/oz Au and US$2.59/Ib Cu for Rovina. Flotation metallurgical recoveries used are: Colnic 81.5% gold, 88.5% copper and Rovina 73.2% gold, 94.7% copper. Rounding of tonnes as required by reporting guidelines may result in apparent differences between tonnes, grade and contained metal content. These mineral resources are not mineral reserves as they do not have demonstrated economic viability
INDICATED
Rovina 74.2 0.27 0.22 0.64 364.6 1.44 0.60
Colnic 106.5 0.47 0.10 1.62 227.5 2.12 0.62
Ciresata 125.9 0.74 0.15 3.01 413.4 3.92 0.97
Total 306.6 0.53 0.15 5.26 1005.5 7.47 0.76
TOTAL M&I
Total 396.4 0.55 0.16 7.05 1,390.6 10.11 0.79
Thank You
Corporate Headquarters
800-65 Queen St. W.
Toronto, Ontario M5H 2M5 Canada
Investor Inquiries & Media
info@eurosunmining.com
TSX: ESM
www.eurosunmining.com