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Mediterranean Resources Ltd.
On the Road To Production in Turkey www.mediterraneanresources.com
TSX: MNR FFT: MHM1 OTC: MNRUF
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Certain statements in this presentation may constitute “forward looking” statements which involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements in the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this presentation, such statements use such words as “may,” “will,” “expect,” “anticipate,” “project,” “believe,” “plan” and other similar terminology. The risks and uncertainties are detailed from time to time in reports filed by the Company with the securities regulatory authorities, to which viewers of this presentation are referred for additional information concerning the Company, its prospects and the risks and uncertainties relating to the Company and its prospects. New risk factors may arise from time to time, and it is not possible for management to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual res, performance and achievements of the Company to be materially different from those contained in forward looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward looking statements as a prediction of actual results. There should not be an expectation that forward looking information will, in all circumstances, be updated, supplemented or revised, whether as a result of new information, changing circumstances, future events or otherwise.
Forward Looking Statements
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Introduce a strategic Turkish partner with local know-how and
connections into the shareholding structure of our Turkish subsidiaries Make the main Turkish project, Kizildağ, self-financing via a listing of Akdeniz Resources Madencilik on the Istanbul Stock Exchange
Move the Kizildağ pits towards development though ISE financing, trading house off-takes and a debt tranche.
Continue exploration of Çeltik in a separate JV with Turkish partners
Adding other developmental projects to the pipeline in other parts of Turkey and Mediterranean Basin Diversifying metals exposure – seeking base metals and specialty metals deposits (e.g. Chromite, Antimony)
Strategy
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TURKEY: One of the Least Explored Gold Regions
Pro-Investment Government & Policies
Gold Production Exempt from VAT
Refund of VAT on Exploration Expenditures
Modern Mining Code
Excellent Infrastructure
Extensive Roads & Power Lines
Strong Industrial & Manufacturing Base
Location, Access and Infrastructure
Located in north eastern Turkey
120 kilometers north of Erzurum, regular scheduled airline service, population 360,000
100 kilometers south of Hopa, a deep water port with bulk handling capability on the Black Sea
Samsun Smelter nearby on the Black Sea
12 kilometers west of Yusufeli, population 6,400
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Two projects:
Red Mountain/Kızıldağ: consisting of the Taç (gold/copper) deposit, Çorak (gold/lead/zinc) deposit and Çevreli (the exploration area between the two). Çeltik: consisting of a gold exploration project
Kızıldağ
Property
Turkey –Property Locations
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TSX Symbol: MNR Frankfurt Symbol: MHM1 OTC Symbol: MNRUF Current Share Price: $0.08 Share Price : $0.05 - $0.19 (52-Week Range) Issued & Outstanding: 142.1 Million Fully Diluted: 164.7 Million Market Capitalization: ~$11 Million
Leading Shareholders
Investec WIM’s clients
Macquarie Bank
Teck Corporation (3%)
National Bank of Canada
CFO: Anthony Jackson Corporate Sec: Cheryl Harpestad Investor Relations: Sean Davis Country Manager: Nursel Atar (Turkey) Country Manager: Behar Boshkaj (Albania)
Corporate Structure
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Dr. John A. Clarke: Chairman and Director. He brings considerable experience in mineral exploration, corporate acquisition and development in the gold mining sector. He has held roles as Vice Chairman and CEO of Nevsun Resources and Executive Director of Ashanti Goldfields Company Ltd of Ghana. He holds B.Sc. in metallurgy from University College Cardiff, a Ph.D. in metallurgy from Cambridge University and MBA from Middlesex Polytechnic.
Christopher Ecclestone: CEO and Director. He is a Principal at the boutique New York investment bank, Hallgarten & Company, which specializes in mining-related concerns. Prior to that he was a prominent analyst of the Argentine equity market during the 1990s. In the late 1980s, he worked in London as a corporate finance and equities analyst and as a freelance consultant on the restructuring of the securities industry. He has also worked for the Federal and State governments in Australia. He is a native of Melbourne, Australia and graduated in 1981 from the Royal Melbourne Institute of Technology.
John Shanahan: Director. He has been the President and CEO of Revett Minerals (TSX:RVM) since October 2008. Prior to becoming CEO, he was the Chairman of Revett from 2005 until April 2009. His background is in commodity price risk management and he has held senior management positions with Barclays Capital, Rothschild Inc., Pasminco Ltd, and Australian Mining and Smelting. He holds a B. Comm. degree from the University of Melbourne, a graduate diploma in Systems Analysis and Design from the Royal Melbourne Institute of Technology, and an MBA degree from the Columbia School of Business.
Alex Gostevskikh: Director. He holds a MSc and MBA and is a geologist with over 20 years of experience in mining and exploration for gold, silver, and non-ferrous and base metals. He is currently the Managing Director of Uranium Resources PLC (which is listed on the AIM in London), the company is an explorer in Tanzania. He was a Regional Exploration Manager for Centerra Gold Inc (TSX listed), the largest Western gold producer in Central Asia and has held other positions including Exploration Manager for Gulf International Minerals, Senior Geologist for Kinross Gold/Amax Gold, as well as consulting engagements with a number of major and junior mineral exploration companies.
Dr. Michael Hirschberger, Director. He is Principal and CEO of Strategic Min-Metals, AG, Vienna, a niche company focused on the exploitation of Chromite in selected countries. He previously organized and operated Global Min-Metal Holdings, SA, an exploration company, developing manganese ore principally in Panama. He successfully recruited a broad range of professionals with extensive international experience in geology, mining, and large scale production of manganese. His early career was spent in Research & Development, Regulatory Affairs, Business Development and Product Management with Roche, Merck, and Wyeth. Following this he held various positions with the Wall Street firms of White, Weld & Company, Northern Trust, Societe Générale S.A. in New York and his own firm, Healthcare Capital Group.
Directors & Management
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Red Mountain – Kızıldağ Property
TAC and CORAK
Mediterranean acquires properties from Teck Resources in 2006 Excellent cost of discovery - less than $7.00 per oz Metallurgical recoveries at Tac up to 90% for gold and 70% copper using conventional flotation Metallurgical recoveries at Corak up to 85% for gold, 58% silver, 85% lead and 73% zinc Opportunity to increase grade and tonnage P.A. ( Preliminary Assessment) by SRK released in August 2011 E.I.A. (Environmental Impact Assessment) baseline studies continue by Golder & Associates
NI 43-101 Advanced Gold Deposits
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In September 2011, the PEA prepared by SRK was published Two stage mining with Çorak pit being exploited first followed by the Taç
deposit Daily mill throughput of the mill of 5,500 tpd (approximately two million
tonnes per annum Production of a Lead/Zinc concentrate with first pit (for 3 ½ years), and a
Copper concontrate with the Taç pit (for the following 4 years) Initial Capital Expenditure of $125 M (including a 25% contingency) Projected mine life of 7.2 years and average annual production over mine life
of 94,500 oz Au. Cash costs of US$538 per Gold equivalent ounce
In-pit, contained resources of 14.4 Mt, 905,000 oz gold, 104 Mlb of zinc, and 32 Mlb of copper and 40 Mlb of lead
Metal prices for the base case optimisation were US$1,000/oz gold, US$2.75/lb copper, US$16/oz Silver, US$0.85/lb lead and $0.90/lb zinc
Red Mountain/Kızıldağ Production Plan
Parameter Unit Case A
Base Case
Case B 3-year Ave Metal
Prices*
Case C 2-year Ave Metal
Prices*
Case D 1-year Ave Metal
Prices*
Gold Price US$/oz 1,000 1,094 1,207 1,346
Silver Price US$/oz 16.00 19.00 21.96 27.36
Copper Price US$/lb 2.75 3.06 3.41 3.84
Zinc Price US$/lb 0.90 0.86 0.97 1.00
Lead Price US$/lb 0.85 0.89 1.00 1.06
Net Cash Flow - undiscounted and before tax and interest
US$M 87 157 256 366
Net Present Value - before tax and interest (5% Discount rate)
US$M 51 105 184 270
Internal Rate of Return - before tax and interest
% 16 25 37 48
Pre-production Capital Payback Period
Production Years
3 2.5 1 < 1
Payable Gold oz 680,000
Payable Silver oz 115,000
Payable Copper Mlb 29
Payable Zinc Mlb 88
Payable Lead Mlb 33
*As at May 31, 2011 calculated from LME monthly averages
Preliminary Assessment (PEA) Potential Cash Flow Model Outputs
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Initiate an Environmental Impact Application Prepare an Engineering study with real Turkish costs
for Capex and Opex
Identify off-takers for base metal output
Identification of drill targets at new copper zones Work towards a resource at Çeltik
Red Mountain/Kızıldağ Development Plans
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Approach listing as an “emerging market” story rather than a mining listing
Scarcity value : only other listed miner is the phenomenally successful Koza listing
Place 15% of Akdeniz Resources with Turkish domestic and international investors
Strategic Turkish Partner with 25% stake will be a household name for Turkish investors and provide assurance of company’s good connections
Appoint well-positioned Turkish investment bank to manage process
Listing of Akdeniz on the ISE
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Taç Deposit – NI 43-101 1.1 Million oz Gold + Copper
86% Indicated - Open East & West
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Taç - Work to Date
Central Deposit Zone: Major Component of the Taç Resource
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Çorak Deposit - NI 43-101 760,000 oz Gold Plus Lead-Zinc-Silver
83% Indicated - Open at Depth
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Çorak Work to Date
Village & South Areas Contain Çorak High Grade Zones
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Çorak Deposit – Solid Model - Looking North
High Grade Zones Indicate Viable Starter Pit with Relatively Swift Pay-Back
High Grade Domains in Red – Lower Grades in Yellow
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Developing Gold Resources at Çeltik
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Located 2 kilometres North-East of the Taç deposit To be Joint Ventured with a Turkish Strategic Partner Large target approximately 400 metres x 700 metres surface expression
Extensive geophysical IP conducted -12.9 line kilometres
Initial nine hole 1,900 metre drill program initiated in 2008, further five holes in 2009
Best intercepts include: HD-04 18.4 metres of 6.51 g/t Au, 16.85 g/t Ag, 0.9% Cu from 166.2 m to 184.6 m
HD-02 20.6 metres of 1.62 g/t Au, 16.79 g/t Ag from 0 to 20.6 m 40.5 metres of 0.61 g/t Au, 7.60 g/t Ag from 243.4 m to 283.9 m HD-01 13.3 metres of 0.67 g/t Au, 1.66 g/t Ag from 165.9 m to 179.2 m
Potential for a relatively quick move to open-pit mining
Developing Gold Resources at Çeltik
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The company’s current strategy regards the whole Mediterranean Basin
and the countries that border it as potential for future exploration and mining
An initial foray into Albania has convinced MNR that the Balkan region is a highly prospective location for future work, particularly picking up mining licenses with pre-identified resources
A representative office has been opened and a country manager appointed
Action awaits better financing conditions
The Iberian peninsula also represents a target area
Further Afield
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Mediterranean Resources is an advanced gold development company
The company has successfully advanced two at-surface gold deposits Tac and Çorak to the point at which an EIA shall be sought and construction financing begins
NI 43-101 compliant resource of 1.87 Million ounces of gold indicated and inferred and 2.5 Million ounces of gold equivalent indicated and inferred Less than 20% of the 100 square kilometre licensed area has been explored
Favourable mining jurisdiction
Highly targeted exploration program to discover new resource zones
Strong management team and board of directors
Summary
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Mediterranean Resources Ltd.
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