Upload
kurt-hoffman
View
148
Download
0
Embed Size (px)
Citation preview
Full Service Mine Support
Coeur d’Alene DistrictIdaho
2
Disclaimer
This presentation contains certain forward-looking statements that may involve a number of risks anduncertainties. Actual events or results could differ materially from current expectations and projections.Except for statements of historical fact relating to the project, certain information contained herein constitutes"forward-looking statements". Forward-looking statements are frequently characterized by words such as"plan", "expect", "project", "intend", "believe", "anticipate" and other similar words, or statements that certainevents or conditions "may" or "will" occur.
Forward-looking statements are based on the opinions and estimates of management at the date thestatements are made, and are subject to a variety of risks and uncertainties and other factors that could causeactual events or results to differ materially from those projected in the forward-looking statements. Thesefactors include the inherent risks involved in the exploration and development of mineral properties, theuncertainties involved in interpreting drilling results and other geological data, fluctuations in prices &marketplace, the possibility of project cost overruns or unanticipated costs and expenses, uncertaintiesrelating to the availability and costs of financing needed in the future and other factors. Circumstances ormanagement's estimates or opinions could change. The reader is cautioned not to place undue reliance onforward-looking statements.
Located in Pinehurst, Idaho, in the heart of the Silver Valley
mining industry & in the 2nd largest silver producing area in the world
Established in late 2006
Typical mine service providers offer one service, such as labor, consulting, or supplies
3
United Mine Services (UMS) - Overview
UMS – Business Components
Mine Services Division 3 years serving the mining industry
Mine Fabrication & Machine Services Division28 years serving the mining industry
Construction/Contracting Services Division17 years of environmental remediation work
4
UMS is organized into 3 main divisions:
UMS Contract Services
Contract Mining & Administration
• Experienced supervisors & miners
• Underground equipment inventory
• Large network of experienced narrow vein miners
5
Mine Fabrication & Machine Services
• Full service fabrication and mine repair facility
• UMS receives priority service
• Provides consumables at less than retail cost
Construction/Contracting Services
• Contracting environmental remediation to state and federal agencies
• Developed excellent relationship with regulators
• Civil construction
UMS – Corporate Strategy and Goals
One-stop opportunity
UMS provides complete solution
For example, UMS owns a custom welding and fabrication shop, which provides services both internally and to outside customers, giving UMS the opportunity to service, repair, and rebuild its own equipment and provide parts on demand.
UMS has multiple highly trained crews
This “one-stop” opportunity for customers contrasts sharply with today’s mine services industry, which is serviced by relatively few companies offering only one or two services. UMS’s goal is to be a fully “vertically integrated” mine services company that can meet all of the customers needs.
6
UMS – Financial Performance
7
Healthy cash flow and excellent earnings
2007 Revenue: $5.04 Million
2008 Revenue: $7.24 Million
2009 Revenue: $15.75 Million with earnings of $3 Million
2010 Revenue: $14.50 Million (Projected) – heading towards production so revenue may be lower than 2009
2011 Revenue: $30 Million (Projected) – increased revenue as mine is brought into production
Precious metals prices remain strong creating a strong demand for mining services
Silver inventory estimates at or near zero through 2009 creating a strong demand for mining services
UMS plans additional acquisitions:
- Drilling Companies (surface & underground)- Manufacturer of safety equipment- Other opportunities
8
Strong growth and demand in mining
UMS – Growth & Demand
United Mining Group & Public Company
Proposed Pre-Financing Share Structure ($CAD)
9
# of Shares
% of Basic O/S
% of Fully Diluted
Public Company's basic outstanding shares 9,828,667 58.4% 23.2%
Shares issued to UMS Shareholders pursuant to Reverse Takeover 5,000,000 29.7% 11.8%
Transaction Finder's fee 2,000,000 11.9% 4.7%
Basic outstanding post Reverse Takeover 16,828,667 100.0% 39.8%
Exchangeable Securities** 25,000,000 59.1%
Stock options and warrants 466,667 1.1%
Fully Diluted 42,295,334 100.0%
* Each unit consist of one common share and one-half of one share purchase warrant.
** Shares of a separate class that can be converted into common share of Public Company at anytime at the discretion of the holders of such shares without any additionalconsideration.
Note: As of Dec. 31, 2009, UMS has long term debt of US$2.11M (net of current portion of US$0.69M), relating primarily to the acquisition of Mine Fabrication & Machine, plus a note payable to a related party of US$0.572M
Coeur d’Alene DistrictIdaho
Summary Highlights
Advanced-stage, silver exploration & mining project, located in 2nd largest silver producing district in world; area mined and explored for over 100 years & produced
more than 1 billion ounces
Project located between the world-famous Sunshine & Bunker Hill mines; together these three produced 489 million ounces of silver
25 million ounces produced at Crescent Mine between 1917-1981; avg. grade 27
opt Ag; 10.2 million ounces remains in additional defined resources
Primary development already in place
Excellent site and district infrastructure: mining friendly district with other operating mines in the area; little or no issue with permitting
11
12
District Location
Located on the west end of the famous ‘Silver Belt’ of the Coeur d’Alene Mining District, northern Idaho
Located 4 miles SE of the town of Kellogg, Shoshone County, between Bunker Hill and Sunshine Mines; Bunker Hill Mine located approx 3 km to the west of the property area, and Sunshine Mine less than 1 km to the east
Bunker and Sunshine produced nearly half of entire district’s silver
• Sunshine: 328 million ounces• Bunker Hill: 161 million ounces (includes 25 million ounces from Crescent at
average 27 opt Ag)
Active mines in the district are the Lucky Friday and Galena Mines
13
Silver Valley History
Coeur d’Alene Mining District: 1885 - 2009
Second largest silver producing district in world
Over 1 billion ounces produced
Production mainly from narrow, steeply-dipping, high grade veins
Average annual primary production grades range from 10 to 50 opt silver
Photo source U.S. EPA
Idaho’s Silver Valley, 1880’s
Historical Photo of the Sunshine Hoist
Photo source Idaho State University
14
Silver Valley History (Cont’d)
Ore Veins Persist to Depth
Ore bodies in the district are unique in that they are persistent at great depths in excess of one mile
Star Mine – mined one vein over 7,800 vertical feet (2,377 m)
Sunshine – mined associated veins over 6,400 vertical feet (1,951 m)
Bunker Hill – mined over 5,000 vertical feet (1,524 m)
Galena Mine – mined veins over more than 5,000 vertical feet (>1,524 m)
15
Bunker Hill Mine: produced 161 million oz Ag at average grade of 8 opt
Crescent Mine: produced 25 million oz Ag at average grade of 27.3 opt
Sunshine Mine: produced 328 million oz Ag at average grade of 23 opt
16
Approximate limit of exploration
target
Property consists of 25 patented claims totaling about 350 acres plus surface rights to an additional 40 acres
Located between the Sunshine and Bunker Hill Mines and covers more than 6,000 ft (1,829m) of strike between the two historical mines
Land & Claims
Claim Map, Crescent Property
17
The Coeur d'Alene Mining District lies within a broad area of Middle Proterozoic, fine-grained & lightly metamorphosed sediments termed the Belt Super Group
Approximately 98% of the Silver Belt production has been from veins hosted within the St. Regis and Revett Formations
Geology
Geological Map, Crescent Property18
Rocks were strongly deformed during the Cretaceous age Sevier Orogeny, resulting in large-scale folds cut by numerous west-northwest-striking faults and veins
The primary fault at the Crescent property is the Alhambra Reverse Fault, which displaces the stratigraphy in the mine area by approximately 3,000 feet (914 m)
The Crescent hosts five mineralized structures: most of the historic production has come from the Alhambra, East Footwall, Hook and BJ. Veins, while the South Vein hosts much of the recently discovered resource
Structure
19
Stratigraphic Cross-Section
RevettFormation
St. Regis Formation
Wallace Formation
Prichard Formation
20
Mineralization
Mining is characterized by steep, persistent 3 -10’ veins
These silver-bearing veins strike predominantly east-west and dip steeply to the south
The “Silver Belt” veins are composed of siderite, quartz, and various sulfides including pyrite, tetrahedrite, chalcopyrite, and galena
Most of the silver is found within the tetrahedrite, which generally contains between 2% and 6% silver by weight
Substantial amounts of silver are also recovered from galena
21
Mine History
Sunshine Mine and mill as seen from the Crescent Mine portal
1800’s - Exploration/ development/mining began
1926 - Bunker Hill Company began acquiring claims
1917-1981 - Bunker Hill reports production: 978,750 tons Grade of 27 oz Ag / tonTOTAL: 25,139,655 ounces Ag
Mined with overhand stopingmethods (tailings for backfill)
22
Mine Operations (Cont’d)
1930’s - Mill built on site(burned sometime after 1942)
1942 - Mine closed
1953 - Mine reopened as small part of Bunker Hill operations
• Mined @ 150 t/d• Sank Ellis Shaft to 3100 level• Trucked ore to Bunker Hill mill
23
Mine Operations (Cont’d)
1963 - Completed +15,000 foot Yreka cross-cut
All subsequent ore hauled underground to Bunker Hill mine
Ore mined from 12 different veins Most productive veins:
• Alhambra Fault• East Footwall Vein• Hook Vein• BJ Vein
Production averaged +50 opt some years
1983 - Mine closed24
Historical Reserve Calculation
At closure in 1983 mining reserves (resources) were calculated and classified Assured & Probable Possible Projected
Calculation completed by Don Springer Independent consulting geologist QP as defined in NI 43-101 regulations
This equates to a 10 year mine life @ 150 t/d
Combined reserves (1983)
396,500 tons
23.7 oz Ag / ton
TOTAL: 9,395,380 ounces Ag
25
Subsequent Exploration
Exploration between Bunker & Crescent discouraged in 60’s & 70’s by lack of mineralization in Yreka crosscut
Late 70’s - White, Juras & Radford developed new stratigraphic model
Proposed new exploration targets, which were followed up by SNS Silver in 2007
26
SNS Acquisition of Property - 2007
SNS Silver Corp
Exploration company listed on the TSX
Purchased the property from Shoshone County Idaho and the EPA in 2007 for $650K and now owns the mine 100%
Syringa Exploration Inc, along with United Mine Services Inc (UMS) signed a Letter of Intent with SNS on December 1, 2009 to earn up to an 80% interestin the property by spending $9 million over the next 3 years
UMS will also issue 500,000 shares of its stock and along with Syringa, will pay SNS $220,000 in staged payments to be completed upon signing a definitive joint venture agreement and completing a reverse takeover of a public company
27
SNS Exploration Summary
Surface & underground exploration program undertaken based on White, Juras & Radford recommendations of mid 70’s
Drill-tested and confirmed stratigraphic model in near surface holes
Diamond drilling completed over 2 years (2007 and 2008), targeting Alhambra Fault and South Vein
• 70 surface holes• 30 underground holes• Total of 103,215 feet (31,460 m)
28
SNS Exploration Summary (Con’t)
Completed rehabilitation on 2 levels, excavated UG drill platforms and extended Hooper Tunnel 1000 ft west
Encountered favorable stratigraphy (St. Regis) on hanging wall of Alhambra Fault in upper country
Alhambra Fault mineralization has been identified from surface to 2,000 ft
South Vein identified as extending up to 1,500 feet above the Hooper Level and 3,000 feet west of the Crescent Shaft
29
SNS Exploration Summary (Con’t)
St. Regis formation strata found to extend upward to the surface
Encouraging alteration and veins extend throughout nearly the entire length and width of the property above the Hooper Tunnel
Intermediate veins are tentatively interpreted as possessing greater strike and dip dimensions than formerly known
Recent drilling has yet to significantly explore this structure further to the west of the property or to depth
South Vein InterceptsSNS - 403 10 ft at 56 opt
SNS - 305a 6.8 ft at 42.1 opt
SNS - 310 5.6 ft at 25.3 opt
SNS - 1006 6.3 ft at 21.1 opt
SNS - 307 5.1 ft at 21.6 opt
SNS - 1002 7 ft at 17.6 opt
H - 304 7.8 ft at 11 opt
Alhambra Vein InterceptsSNS - 502 6.2 ft at 41.2 opt
SNS - 604 6.2 ft at 16.4 opt
SNS - 1107 4.9 ft at 20.6 opt
30
SNS Drill Hole Locations
31
SNS – New Resource Calculation 2009
SRK calculated Indicated and Inferred resources, based on the recent SNS drilling:
Resources identified on Alhambra Fault & South Vein:
Resources open down-dip on both veins; potential to add to resource with continued exploration
Stratigraphic model indicates potential along strike
Crescent Mine Resource Estimate
Silver Tons Avg. Grade (opt) Ounces
Measured and Indicated 324,000 18.7 6,100,000
Inferred 211,100 19.5 4,100,000
32
Alhambra Resource Grades
Viewing North (drill hole trace in black) 33
Viewing South (red is indicated, green is inferred, drill hole trace in black)
Alhambra- Indicated and Inferred
34
South Vein Resource Grades
Viewing North (drill hole trace in black)35
South Vein – Indicated and Inferred
Viewing South (red is indicated, green is inferred, drill hole trace in black)36
New Crescent Mine Plan
Fully permitted
Work in progress to resolve water discharge issues left from Sterling Silver; long term water discharge agreement in place
Re-establish secondary exit
Re-hab Big Creek #4 level to daylight
Install new ore passes and service hoists for men and material handling
Install backfill system
Drive access to South Vein
37
New Crescent Mine Plan (Cont’d)
Install raise preps on both veins (Alhambra and South Veins)
Raise-up along down dip projection of resources; start mining when ore is encountered
Project cutoff grade = 8.75 opt Ag
Near term production• 3rd quarter @ 225 t/d• 6th quarter @ 400 t/d• 8th quarter @ 500 t/d
Silver Production• Year 1 = 635,000 oz @ $18.67 /oz• Year 2 = 2,500,000 oz @ $8.07 /oz• Year 3 = 3,000,000 oz @ $7.46 /oz
38
Processing Crescent Ore
Custom mill ore
Two facilities available in Silver Valley
1. Coeur Mill at Coeur Mine (US Silver)• Probably lease and self operate
2. New Jersey Mining Company Mill• Purchase mill capacity
Both within easy hauling distance
39
2010 Exploration & Work Plan
Complete resource development costs and schedule
Continue metallurgical research
Review custom milling opportunities for the Crescent ore with several local mining companies
Additional drilling below targets to further extend resource
Develop and expand the resource by means of new raises, drifts, ramps and boreholes
40
Crescent Mine – Summary Points
• Advanced stage silver exploration and mining project, located in 2nd largest silver producing district in world; area mined and explored for over 100 years & produced more than a billion ounces silver
• Project located between Sunshine & Bunker Hill mines; together these two produced more than 460 million ounces of silver
• 25 million ounces produced at Crescent Mine between 1917-1981; average grade at 27 opt Ag; 10.2 million oz in additional defined resources
• SNS work confirmed exploration model and identified new targets for continuing exploration; 12 veins known on property; potential for Sunshine type veins between structures
41
Crescent Mine – Advantages
Primary development in place
Discoveries are above the existing haulage level and well above water level
Significant exploration potential exists in the lower levels of the mine; less than 5% of the known mineralized structures have been significantly explored or mined
Excellent site and district infrastructure: mining friendly district with other operating mines in the area; little or no issue with permitting
The property is underlain by the most favorable geological conditions in the Coeur d' Alene district to yield ore discoveries
Experienced, dedicated management team
42
United Mine Services (UMS) - Advantages
43
UMS will be one of the few publicly traded companies offering a complete range of “one-stop” mining services
Healthy cash flow and excellent earnings
Demand for mining services continues to be strong-based on present day precious metals prices and low inventories
44
United Mine ServicesP.O. Box 828
202 South DivisionPinehurst, Idaho 83850
Offices:Mine Services: 208-682-9018
Fabrication & Machine Services: 208-784-0381Contracting Services: 208-682-9018
Fax: 208-682-9472
Please visit our website @ www.unitedmineservices.com