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The ‘New’ Americas Gold Play October 2010 TSX:P
TSX:P Cautionary Statement
2
This presentation may contain “forward-looking” statements within the meaning of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or the anticipated performance of the Company and reflect management’s expectations or beliefs regarding such future events and anticipated performance. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, ”estimates”, ”forecasts”, ”intends”, ”anticipates” or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, ”could”, “would”, ”might”, or “will be taken”, “occur” or “be achieved”, or the negative of these words or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual performance of the Company to be materially different from any anticipated performance expressed or implied by the forward-looking statements. Such factors include various risks related to the Company’s operations, including, without limitation, fluctuations in spot and forward markets for gold, silver and other metals, fluctuations in currency markets, changes in national and local governments in Mexico and the speculative nature of mineral exploration and development, risks associated with obtaining necessary exploitation and environmental licenses and permits, and the presence of laws that may impose restrictions on mining. A complete list of risk factors are described in the Company’s preliminary prospectus and will be detailed from time to time in the Company’s interim and annual financial statements and management’s discussion and analysis of those statements, all of which are, or will be available, for review on SEDAR at www.sedar.com. This presentation uses the terms “measured resources”, “indicated resources” and “inferred resources”. The Company advises readers that although these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI43-101”)), the United States Securities and Exchange Commission does not recognize them. Readers are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted in to reserves. In addition, “inferred resources” have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, or economic studies, except for a Preliminary Assessment as defined under NI43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable. Although the Company has attempted to identify important factors that could cause actual performance to differ materially from that described in forward-looking statements, there may be other factors that cause its performance not to be as anticipated. The Company neither intends nor assumes any obligation to update these forward-looking statements or information to reflect changes in assumptions or circumstances other than required by applicable law. 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 currently anticipated. Accordingly, readers should not place undue reliance on forward-looking statements. Unless otherwise indicated, all dollar values herein are in US$.
TSX:P Investment Highlights
3
San Dimas Gold-Silver Mine
DURANGO MEXICO
TSX:P 2010 Objectives
Source: Production, cash cost and resource numbers from NI 43-101 technical report
1
2
3
4
5
6
7
8
9
Q4
Q4
Q4
4
TSX:P
Strategy of Growth Acquisition Track Record
GROWTH
2010-2011: Optimization & resource expansion
2011-2012: Potential Latin American acquisitions
Leading mid-tier gold producer by 2013
LOW CASH COST
Below industry average cash costs
LOW RISK
Maintain balance sheet strength
Un-hedged gold
Americas pro-mining jurisdictions only
RESPONSIBILITY
Sustainable growth
Commitment to leading CSR programs
TARGETED GROWTH OBJECTIVE1
5 1. Production based on five year average, source NI 43-101 technical report
0
100
200
300
400
2010 2011 2012 2013
SAN DIMAS OPTIMIZATION
LATIN AMERICAN ACQUISITIONS
LEADING MID-TIER GOLD PRODUCER
SAN DIMAS (GOLD EQUIVALENT OUNCES)
EXPLORATION OPTIMIZATION
ACQUISITIONS
TSX:P Capital Structure
6
Exchange TSX:P
SHARE STRUCTURE
Shares outstanding Fully Diluted
88 million
117 million
OWNERSHIP
Management and insiders Goldcorp Institutional & float
3%
36% 61%
BALANCE SHEET
Cash Debt Convertible note
~$50 million $50 million1
$60 million2
(1) 5 year, 6% note repaid $5M/yr with balloon payment at end of year 5 (2) 1 year, rolling, 3% note convertible at $6
0
0.2
0.4
0.6
0.8
1
1.2
1.4
0
1
2
3
4
5
6
7
8
9
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Mill
ion
s
June 2, 2010 Announced San Dimas
acquisition, Joe Conway
appointed CEO
Aug 19, 2010 Commenced
trading on TSX
Sep 20, 2010 Q3 Exploration
Update
TSX:P
Financial Strength Sufficient Capital to Fund Growth
7
After Tax Cumulative Cash Balance1,3 ($M)
1. Years are anniversary of Aug 6, 2010, Includes Silver Wheaton contract impact, resulting in an effective tax rate of approximately 55% 2. Includes interest expense on the Goldcorp promissory and convertables notes 3. Free cash flow includes interest expense on the Goldcorp secured promissory and convertible notes and principal repayment on the Goldcorp secured promissory note (principal on convertible note is paid through excess cash
from financing and exercise of warrants)
Cash flow engine to fund growth
~$70 million operating cash flow/yr
After Tax Operating Cash Flow1,2 ($M)
~$50 million cash
Robust operating margins
$9
00
Au
/
$1
5.0
0 A
g
$9
00
Au
/
$1
5.0
0 A
g
$9
00
Au
/
$1
5.0
0 A
g
$9
00
Au
/
$1
5.0
0 A
g
$9
00
Au
/
$1
5.0
0 A
g
$1
,22
0 A
u /
$1
7.5
0 A
g
$1
,22
0 A
u /
$1
7.5
0 A
g
$1
,22
0 A
u /
$1
7.5
0 A
g
$1
,22
0 A
u /
$1
7.5
0 A
g
$1
,22
0 A
u /
$1
7.5
0 A
g
$-
$50
$100
$150
$200
$250
$300
$350
YEAR1 YEAR2 YEAR3 YEAR4 YEAR5
Free Cash Flow Opening Cash
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
YEAR1 YEAR2 YEAR3 YEAR4 YEAR5
$900 Au / $15.00 Ag $1,220 Au / $17.50 Ag
Improved Cash Flow Amended Silver Agreement
Old Agreement
To 25 Years All silver sold at ~$4 for 25 years (19 years remaining)
Amended Agreement
First 4 years First 3.5 million oz Ag plus 50% of excess sold to SLW at ~$4
50% of Ag production above 3.5 million oz sold at spot
Year 5 to LOM First 6 million oz Ag plus 50% of excess sold to SLW at ~$4
50% of Ag production above 6 million oz sold at spot
5 YEAR AVERAGE ANNUAL:
Amended Agreement1
Goldcorp 2009
Production1
Gold (oz)
Gold Eq (Au Eq oz)
Spot Silver Exposure2 (oz)
107,000 157,000
1,800,000
113,000 113,000
0
Cash Cost1
Co-product (per Au Eq oz)
By-product (per oz)
$337
$60
$392 $287
1. Average annual production and cash cost for next 5 years, gold equivalent based on $900/oz gold and $15/oz silver 2. Attributable to Primero under amended silver purchase agreement and based on NI 43-101 report Source: NI 43-101 technical report and Goldcorp public reports
0
20
40
60
80
100
120
140
160
180
2010E 2011E 2012E 2013E 2014E
Gold Eq Additional Gold Eq Gold
8
Amendment Increased Gold Equivalent Ounces1
TSX:P
Operations
TSX:P
San Dimas Solid Platform with expansion & exploration potential
10 1. Average annual production and cash cost for next 5 years, gold equivalent based on $900/oz gold and $15/oz silver Source: NI 43-101 technical report
5 YEAR AVERAGE PRODUCTION1
157,000 gold equivalent ounces
107,000 ounces
7.1 million ounces
$337 per gold equivalent ounce
San Dimas Gold-Silver Mine
DURANGO MEXICO
Mazatlan Durango
2010E PRODUCTION
106,000-112,000 gold equivalent ounces
90,000-95,000 ounces
4.5-4.7 million ounces
$500-$530 per gold equivalent ounce
2009 PRODUCTION
GOLD EQ 113,000 ounces
GOLD 113,000 ounces
SILVER 5.1 million ounces
CASH COST $392 per gold equivalent ounce
Ventanas Exploration Property
DURANGO MEXICO
SAN DIMAS Durango, Mexico
OWNERSHIP 100%
METALS Gold & Silver
MINING Underground, cut and fill
QUICK FACTS
Proven & Probable Reserves
Tonnes (millions) Grade (g/t) Silver (g/t) Gold (Moz) Silver (Moz)
5.6 4.8 339 0.9 60.9
Inferred Resources (exclusive of reserves)
Tonnes (millions) Grade (g/t) Silver (g/t) Gold (Moz) Silver (Moz)
15.2 3.3 317 1.6 154.6
RESERVES & RESOUCES (as at December 31, 2009)
TSX:P
Established Infrastructure Recent Investments
11
ESTABLISHED INFRASTRUCTURE
Mill capacity 2,100 tpd - expansion potential
Dry tailings filter plant, capacity 2,100 tpd
RECENT INVESTMENTS
New dry tailings pumping system
Tunnels connecting Central Block and Sinaloa
Graben:
Improved access
Hydro Plant:
Reduced cost from $0.11 to $0.015 per kWh
Approx. $5 million annual savings
TSX:P
Infrastructure Optimization Building for the Future
12
TAILINGS FILTER 3
Eliminates wet tailings
Allows process plant flexibility
WASTE ROCK IMPOUNDMENT
3 million m3 Capacity
Proper disposal for waste rock
San Luis bridge: safer, all seasons access
NEW SUB STATION
Additional 7 MW of capacity
Supports future growth
TSX:P Optimization & Expansion
13
INCREASE MINE DEVELOPMENT
Improved operational throughput
Exploration flexibility
OPERATE MILL AT DESIGN CAPACITY
Current:~1,900 tpd, Design: 2,100 tpd
MATCH MILLING TO LEACHING CAPACITY
Mill: 2,100 tpd, Leach: 2,500 tpd
TSX:P
Growth
TSX:P
Historical Production (1990-present)
New High Grade Impact?
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
Au
gra
de
(g/
t)
Pro
du
ctio
n (
oz)
Production (oz) Au grade (g/t)
Central Block Discovery Additional high-grade discoveries
(Roberta, Robertita & Santa Lucia veins)
Acquisition of Luismin by Wheaton River
Sinaloa Graben Discovery
Subsequent Acquisition of San Dimas
by Primero
TSX:P
Proven 90% Resource Conversion Opportunity for Long Term Strategic Planning
16 1. NI 43-101 technical report
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
Initial 2003 2004 2005 2006 2007 2008 2009 End
Re
se
rve
s (
ou
nce
)
San Dimas Reserve Replacement based on Au ounces (2003-2009)1
Reserve Additions Production
TSX:P
Significant Exploration Upside Already Replaced 2010 Production
17
Estimated Proven & Probable Reserves1 Tonnes
Grade (g/t) Gold Silver
Gold (ounces)
Silver (million ounces)
Exploration Drilling 219,302 5.1 348 36,000 2.5
Exploration Drifting 199,948 7.2 439 47,000 2.8
Total New Reserves 419,250 6.1 391 83,000 5.3
More than 100 known veins in district
Drilling in late 2009 identified new high-grade veins in the Sinaloa Graben
Sinaloa Graben million ounce resource potential (only 27koz at Dec. 31, 2009)
2010 exploration budget of $13.5 million, 38,000 metres
Additional 83,000 ounces of gold & 5.3 ounces of silver already announced
Intercepts well above reserve grade
1. See Press Release issued on Sept. 20, 2010
TSX:P
Exploration Success Throughout New Reserves and Higher Grade
Central Block
EL ABRA
VERDOSA
CORONADO
S. ANTONIO
CANDELARIA
CULEBRA
BLENDITA
PATRICIA
5 HERMANOS
EL SOL
TAYOLTITA
Piaxtla River
GUADALUPE
EL CRISTO TUNNEL
ROSARIO SINALOA GRABEN TUNNEL
Santa Rita mine
SAN FRANCISCO
Tayoltita Block
LA VERDOSA RAMP
N
Mill
Tayoltita mine
Central Block mine
San Antonio mine
(Source: San Dimas Geological Office)
San Vicente Area
West Block
Pilar mine
Vein
Fault
Town
Mill
Tunnel done
0 1 2 km
Tunnel Budget 2010
Arana Hanging Wall
Ag-Au High Grade Trend
LEGEND
Proposed Tunnel
DDH Ag g/t Au g/t m MAR-9-17 514 8.86 2.45
DDH Ag g/t Au g/t m A-25-217(1) 778 7.9 0.80 HW-4G-01B 302 8.7 0.60
DDH Ag g/t Au g/t m RO-16-02 132 3.27 1.43 RO-20-05 514 4.23 1.27
DDH Ag g/t Au g/t m SOL-9-02 549 10.67 1.81
DDH Ag g/t Au g/t m RAMP7-129W 1,115 10.30 2.75
DDH Ag g/t Au g/t m TGS-S-22 958 6.81 8.56 TGS-S-15 403 8.08 7.52
18
Sinaloa Graben Tunnel: Julieta - Sinaloa Norte vein (San Salvador system)
19
San Luis Tunnel
Drifting Plan
Drilling Plan 2010
Drifting Plan 2010
Drifting Done
Sinaloa Graben Higher Grade and Wider Widths
SW NE
1,000 m
Sinaloa Mine (San Antonio Area)
Sinaloa Graben San Salvador ( Central Block )
San Luis Tunnel Elev
Santa Anita Tunnel
0 500 1000
M E T E R S
7-660 L Ag g/t Au g/t m 189 3.13 1.24
DDH TGS S-15 Sinaloa Norte intercept
Ag g/t Au g/t m 403 8.08 7.52
Proven Ore
Probable Ore
Probable Ore by Drilling
Explanation
DDH TGS-S-22 Sinaloa Norte Intercept Ag g/t Au g/t m 958 6.81 8.56m
0 m
500 m
0 m
500 m
1,000 m
DDH TGS 7-17 Julieta intercept
Ag g/t Au g/t m 481 3.73 2.22
Tayoltita Mine - San Luis Vein
20
SW NE
500 m
1000 m
San Luis
Shaft
San Luis
Ore body
Tayoltita
Tunnel
0 250 500
M E T E R S
Kpa
Kpr
Piaxtla
Intrusive
Diorite
Intrusive Level 25
Krs
Camichin
Rhyolite
(Source: San Dimas Geological Office
Arana Hanging Wall
Arana Hanging Wall High Grade, Narrower Widths
DDH A-25-217(1) Arana Hanging Wall Ag (g/t) Au (g/t) m 778 7.9 0.8
DDH HW-4G-01B Arana Hanging Wall Ag (g/t) Au (g/t) m 302 8.7 0.6
Historic Production
Tonnes (M) Gold (Moz) Silver (Moz)
1.8 0.680 37.6
TSX:P
One Prolific Vein Many More to Explore
21
Robertita-Nancy Vein
Drilling
35,887m (as at Sep 2010)
Historic Production
Tons k Au (koz) Ag (Moz)
487 177 11.0
Resources
Tons k Au (koz) Ag (Moz)
364 114 6.0
Reserves
Tons k Au (koz) Ag (Moz)
868 243 12.5
Diamond
Drill Holes
Mined Ore
Robertita-Nancy Vein Exploration
The Value Proposition
TSX:P Unlocking Value
23
2011E Gold Eq Production (000 oz)1 2011E Cash Cost ($/Au Eq oz)1,2 Market Capitalization ($B)1
1. Estimates based on Canaccord Genuity research (except for names noted with “*” which are based on company reports and street estimates); Canaccord Genuity prices: Gold Price: 2010: $1,215, 2011: $1,400, 2012: $1,300, 2013: $1,200, 2014: $1,100, LT: $950; Silver Price: 2010: $19.05, 2011: $23.50, 2012: $22.50, 2013: $21.50, 2014: $20.00, LT: $18.25.
2. Cash cost based on total cash cost per gold equivalent ounce Note: As of Oct 15, 2010
$0
.5
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
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50
100
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$100
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$700
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TSX:P P/NAV Multiples
P/NAV Multiples (5% $900 Au/ $16 Ag)1,2
24 1. Estimates based on Canaccord Genuity research (except for names noted with “*” which are based on company reports and street estimates); Canaccord Genuity prices: Gold Price: 2010: $1,215, 2011: $1,400, 2012: $1,300,
2013: $1,200, 2014: $1,100, LT: $950; Silver Price: 2010: $19.05, 2011: $23.50, 2012: $22.50, 2013: $21.50, 2014: $20.00, LT: $18.25 2. Primero NAV calculation assumes non-NI 43-101 resources upside Note: As of Oct 15, 2010
1.0
4x
Jr. Average: 1.23x
Inter. Average: 1.82x
-
0.5x
1.0x
1.5x
2.0x
2.5x
Kir
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Junior Intermediate Senior
TSX:P Cash Flow Multiples
Cash Flow Multiples (2011)1,2
25
1. Estimates based on Canaccord Genuity research (except for names noted with “*” which are based on company reports and street estimates); Canaccord Genuity prices: Gold Price: 2010: $1,215, 2011: $1,400, 2012: $1,300, 2013: $1,200, 2014: $1,100, LT: $950; Silver Price: 2010: $19.05, 2011: $23.50, 2012: $22.50, 2013: $21.50, 2014: $20.00, LT: $18.25
2. Operating cash flow includes interest payments on Goldcorp note Note: As of Oct 15, 2010
7.0
x
Jr. Average: 10.6x
Inter. Average: 12.0x
-
2x
4x
6x
8x
10x
12x
14x
16x
18x
20x
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TSX:P Why Primero Mining?
26
Established Mexican operations
157,000 gold equivalent ounces (2010-2014 average)
Significant cash flow
Market preferred geography
Proven management & board
Acquisition & operations track record
Long life, low cost production
P&P reserves of 860,000 oz Au and 61 M oz Ag
Total resources of 2.5 M oz Au and 216 M oz Ag
Industry low cash cost profile
Ideal growth platform
Well positioned to quickly become a leading mid-tier gold producer
Attractive valuation – re-rating opportunity
Potential re-rating as Primero trades at a discount to peers on all significant value metrics
Source: Production, cash cost and resource numbers from NI 43-101 technical report
APPENDICES
TSX:P Experienced Management
28
Wade Nesmith | Executive Chairman Founder of Mala Noche and CEO since incorporation
Former President of Westport Innovations (Europe)
Founding and current director of Silver Wheaton, Chairman of each of Geovic Mining and Selwyn Resources
Joseph F. Conway | President and C.E.O.
Former CEO, President and Director of IAMGOLD from 2003 to 2010 Grew IAMGOLD from a $50 million royalty company to a $6 billion intermediate gold producer with a sector leading growth profile
Eduardo Luna | President, Mexico
Former Chairman and CEO of Silver Wheaton, Executive VP of Goldcorp and Luismin S.A. de C.V. (San Dimas) and President of Mexican Mining Chamber and the Silver Institute
Chairman of the Advisory Board of the Faculty of Mines at the University of Guanajuato and of the Mineral Resources Council in Mexico
TSX:P District Wide Upside – Long Section
Favorable Horizon
Mineralization – Ore Bodies Extension of the Favorable Horizon Potential
SW NE
0 1 2
K I L O M E T E R S
San Antonio West Block
Central Block Castellana and
Robertas
Tayoltita Block Arana Hanging Wall 3,000 m.
2,000 m.
1,000 m.
3,000 m.
2,000 m.
1,000 m.
Sinaloa Graben Block
Source: San Dimas Geology Office
2010 Priority
2010 Priority
29
PRIMERO MINING CORP. Richmond Adelaide Centre 120 Adelaide Street West, Suite 1202 Toronto, ON M5H 1T1 T 416 814 3160 F 416 814 3170 TF 877 619 3160 Email: [email protected]
INVESTOR RELATIONS Tamara Brown Vice President, Investor Relations T 416 814 3168 [email protected]
The ‘New’ Americas Gold Play