Scotiabank 2012 Global Banking & Markets Mining Conference

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Scotiabank 2012 Global Banking & Markets Mining Conference


<ul><li>1.TSX:P NYSE:PPP Focused on ProductionFocused on GrowthScotiabank Global Banking and Markets Mining ConferenceNovember 28, 2012</li></ul><p>2. Cautionary StatementThis presentation may contain forward-looking statements within the meaning of Canadian securities legislation and the United States Private SecuritiesLitigation Reform Act of 1995. Forward-looking statements relate to future events or the anticipated performance of the Company and reflectmanagements expectations or beliefs regarding such future events and anticipated performance. In certain cases, forward-looking statements can beidentified by the use of words such as plans, expects, is expected, budget, scheduled, estimates, forecasts, intends, anticipates orbelieves, or variations of such words and phrases or statements that certain actions, events or results may, could, would, might, or will betaken, occur or be achieved, or the negative of these words or comparable terminology. By their very nature forward-looking statements involveknown and unknown risks, uncertainties and other factors which may cause the actual performance of the Company to be materially different from anyanticipated performance expressed or implied by the forward-looking statements. Such factors include various risks related to the Companys operations,including, without limitation, fluctuations in spot and forward markets for gold, silver and other metals, fluctuations in currency markets, changes innational and local governments in Mexico and the speculative nature of mineral exploration and development, risks associated with obtaining necessaryexploitation and environmental licenses and permits, and the presence of laws that may impose restrictions on mining. A complete list of risk factors aredescribed in the Companys annual information form and will be detailed from time to time in the Companys continuous disclosure, all of which are, or willbe available, for review on SEDAR at presentation uses the terms measured resources, indicated resources and inferred resources. The Company advises readers that although theseterms 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 mineraldeposits 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 fora Preliminary Assessment as defined under NI43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economicallyor 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 anyobligation to update these forward-looking statements or information to reflect changes in assumptions or circumstances other than required by applicablelaw. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially fromthose 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 | NYSE:PPP 2 3. Primero Creating ValueAMERICAS FOCUSEDLong-life, high-grade asset GOLD-SILVER PRODUCERMEXICOSignificant free cash flowExperienced management &amp; boardSubstantial exploration upside 60%PRIMERO SHARE PRICE PERFORMANCE 20% -20% San Dimas Gold-Silver Mine -60% Primero Ventanas S&amp;P TSX Gold IndexExploration Property-100%Aug 10 Feb 11 Aug 11 Feb 12Aug 12Corporate August 2010 November 2012Acquired San Dimas Strengthened Balance Sheet Increased throughputHistory from Goldcorp Listed on TSX:P, NYSE:PPP Exploration successTSX:P | NYSE:PPP 3 4. San Dimas: Solid Platform for GrowthOne of Mexicos Most Significant Precious Metals Deposits LOCATIONDurango-Sinaloa State Border OWNERSHIP 100% METALSGold &amp; Silver MININGUnderground, cut and fill HISTORY 100+ years of productionExpanded PRODUCTION Revised 2012E Next Five Year Average Est. 1 Gold equivalent production110,000-120,000 160,000 (gold equivalent ounces) Gold production 85,000-95,000120,000 (ounces) Silver production5.0-5.5 7.3 (million ounces)2 Cash cost $610-640 $510 ($ per gold equivalent ounce)2 Cash cost by-product $340-370 $200 ($ per gold ounce)1. Gold equivalent ounces include revenue from silver converted to a gold equivalent based on estimated average realized commodity prices ($1,600 per ounce of gold and $9.41 per ounce of silver in full year 2012, consensus prices thereafter).2. Cash cost is a non-GAAP measure. Refer to the third quarter 2012 MD&amp;A for a reconciliation of cash costs.TSX:P | NYSE:PPP 4 5. Silver Purchase AgreementRecent Tax Ruling Created Positive Silver LeveragePrimero sells 50% of annual silver production above 3.5 million ounces at spotRemainder sold at ~$4 per ounce under silver purchase agreementThreshold commences August 6 to following August 5Threshold increases to 6.0 million ounces on August 6, 2014Expansion anticipated to generate similar silver sales at spot post August 6, 2014Silver Sales(million ounces)Silver sold at spot 0.47Silver sold under contract1.33 1.11 0.250.92 0.80 Q4 2011 Q1 2012 Q2 2012Q3 2012 TSX:P | NYSE:PPP 5 6. Objective: Become a Leading Intermediate Gold ProducerFocused Strategy DeliverOptimize and operational and expand financial results existing mine/s Diversifythrough opportunistic, Increase accretiveReservesacquisitionsthrough exploration TSX:P | NYSE:PPP 6 7. Balance Sheet &amp; Cash Flow Funds GrowthTSX:PExchangesNYSE:PPP$133M Balance SheetCash$133 million $45 millionPromissory note2Strong Cash BalanceOwnershipGoldcorp32%$120M1Management &amp; insidersInstitutional &amp; float~2% ~66%Significant Operating Cash Flow Capital StructureShares outstanding 97 millionFully Diluted3126 millionMarket Cap. At Nov. 26, 2012 ~C$650 million$5MRepayment per year21. Estimated five-year average after-tax operating cash flow based on production profile discussed in the October 15, 2012 News Release Primero Announces Expansion of its San Dimas Mine.Conservative Level of Debt2. Goldcorp: 5 year, 6% note repaid $5M/yr with balloon payment at end of 2015. Principal prepayment equal to 50% of Excess Free Cash Flow.3. Fully diluted shares include 20.8 million warrants with an exercise price of Cdn$8 per share, expiring on July 20, 2015; and 8.5 million options with an average exercise price of Cdn$5.50. TSX:P | NYSE:PPP7 8. Delivering Results Increasing Earnings1 Increasing Throughput2 Adjusted EPS ($ per share) (tonnes per day) $0.50 2,00095% 9% $0.40 1,900 $0.30 1,800 $0.20 $0.10 1,700 $-1,600YTD 2011YTD 2012YTD 2011YTD 2012Increasing Cash Flow Increasing ProductionOp CF before changes in working capital ($ per share)(AuEq ounces)$0.90 120,0008-17%12%110,000$0.80100,000$0.70 90,000$0.60 2011 2012E YTD 2011YTD 2012 1. Refer to third quarter 2012 MD&amp;A for adjustments. 2. Based on 365 days per year. TSX:P | NYSE:PPP 8 9. 2012 Production Guidance Increasing ProductionRevised 2012E(gold equivalent ounces) 120 8-17% 1 Mill Throughput 1,950 115 (tonnes per day) 1102 Gold equivalent production 110,000-120,0001052% (gold equivalent ounces) 100 95 Gold production85,000-95,000 (ounces)90 2010 2011 2012E Silver production 5.0-5.5 (million ounces) Reducing Cash Costs (By-Product $ per gold ounce) 3 Cash cost $610-640 ($ per gold equivalent ounce) 500 18% 3 400 4-11% Cash cost by-product$340-370 ($ per gold ounce)300 200 Capital Expenditures $35 ($ million) 1001. Based on 365 days.-2. Gold equivalent ounces include revenue from silver converted to a gold equivalent based on 2012 estimated20102011 2012E average realized commodity prices ($1,600 per ounce of gold and $9.41 per ounce of silver in full year 2012).3. Cash cost is a non-GAAP measure. Refer to the third quarter 2012 MD&amp;A for a reconciliation of cash costs. TSX:P | NYSE:PPP9 10. Strong Growth Profile200 Estimated Production ProfileEstimated 3,000 TPD production level(000 AuEq ounces1) ~20%150 ~16% 12% 2,500 TPD2,500 TPD1002,150 TPD1,950 TPD1,815 TPD 50 0 2011 2012E 2013E 2014E2015E Gold Gold Equivalent1 . Gold equivalent ounces include silver production converted to a gold equivalent based on estimated average realized commodity prices. 2012: $1,600 perounce of gold and $9.41 per ounce of silver ($30 per ounce for ounces sold at spot and ~$4 per ounce for contract ounces), 2013 onwards uses consensusmetal prices and accounts for silver purchase agreement.TSX:P | NYSE:PPP 10 11. Increased Reserves and Resources at Mid-Year Probable Gold ReservesProbable Gold Reserves increased by 16% (000s ounces) 16% 600Indicated Gold Resources increased 17%500 400Inferred Gold Resources increased by 23%300 200Replaced Depletion by 265% at mid-year100 0Increased Reserve average grade and widthDec 30, 11Jun 30, 12 Increased Reserve Grade (grams per tonne of gold)RESERVES &amp;RESOURCES1 (at June 30, 2012, Resources include Reserves.)5.07%TonnageGold GradeSilver GradeGoldSilverClassification(Mt)(g/t)(g/ t)(koz) (koz)Mineral Reserves4.5 Probable 3.785 4.8 290 584 34,700Mineral Resources Indicated3.193 6.6 400 678 40,6304.0 31-Dec-11 30-Jun-12 Inferred 6.865 4.0 300 866 67,500 1 . See Slide 33 for Reserve &amp; Resource notes &amp; details and Slide 5 for silver purchase agreement details . TSX:P | NYSE:PPP11 12. Objective: Become a Leading Intermediate Gold ProducerFocused Strategy DeliverOptimize and operational and expand financial results existing mine/s Diversifythrough opportunistic, Increase accretiveReservesacquisitionsthrough exploration TSX:P | NYSE:PPP 12 13. Optimize San DimasIncreasing ThroughputMaximize Throughput (tonnes per day)2,000 8% Ensure throughput at mill capacity of 785,000 TPY8% Optimization project to increase throughput fromcurrent 1,950 TPD to capacity of 2,150 TPDControl Costs Reduce costs per tonne1,5002010 2011 2012E Improve productivity per man shiftReducing CostsOptimize Grade($ per gold ounce, by-product) Implement 3D Planning$500$87$14- $450 $44 Control mining dilution $400 $350Accelerate Mine Development $300 Increase number of mining faces$250 Complete lateral haulage connections between $2002010 2011 2012Ecurrent mining and exploration areas TSX:P | NYSE:PPP 13 14. Expand San Dimas to 2,500 TPDProject IRR of 150%, with payback period of less than 24 months1Total capital expenditure of $14.4 millionExpand milling capacity to 912,500 TPY Install third ball mill, already on-site Reconfigure crushers Install new tailings thickener and pumpsExpand mine throughput Develop Sinaloa Graben veins Connect Central Block to Sinaloa Graben New mining equipmentMill Expansion to:Future expansion to 3,000 TPD possible 2,500TPD Dependent on exploration successCAPACITY Minimal capital and no disruption to operation 1 . See October 15, 2012 News Release Primero Announces Expansion of its San Dimas Mine for details.TSX:P | NYSE:PPP 14 15. Expansion Timeline Expansion to 2,500TPD and Potential for Further Expansion to 3,000TPD201220132014 Q3Q4 Q1 Q2Q3 Q4 Q1Q2Q3 Q4Optimization(SD at 2,150TPD)Inc. Truck TonnageEquip. Sequencing3D Mine PlanningExpansion 1(SD at 2,500TPD) Feasibility StudyCrushing/GrindingLeaching Thickening TailingsPotentialExpansion 2(SD at 3,000TPD) TSX:P | NYSE:PPP15 16. Objective: Become a Leading Intermediate Gold ProducerFocused Strategy DeliverOptimize and operational and expand financial results existing mine/s Diversifythrough Increase opportunistic, Reserves accretive throughacquisitionsexploration TSX:P | NYSE:PPP 16 17. Long-Life Mining District Produced 11M oz Au To DateLarge 22,500 hectare land package; Over 120 known veinsARANA HANGING TAYOLTITA WALL BLOCK CENTRALBLOCK TAYOLTITA MINE SINALOA 2012 Mined 1975 - 2002 GRABENTargetBLOCK WESTCENTRAL BLOCK MINE BLOCK Mined 2002 - Present 2012 TargetSAN ANTONIO MINEMined 1987 - 2002 TSX:P | NYSE:PPP 17 18. Improved Geological UnderstandingUnlocks District Wide Exploration Potential West Block 2012 EXPLORATION Sinaloa Graben Central Block Tayoltita Block Arana San AntonioMined 1987-2002 2012 EXPLORATIONMined 2002-Current Mined 1975-2002 Hanging WallSW NE3,000 m. 3,000 m.2,000 m. 2012 EXPLORATION PROGRAM 2,000 m.DRILLING BETWEEN EXISTING MINES1,000 m.1,000 m. Source: San Dimas Geology Office 012 Mineralization Ore Bodies Extension of the Favorable HorizonFaults Favorable Horizon Potential IntrusiveK I L O M E T E R S TSX:P | NYSE:PPP 18 19. Aggressive 2012 Exploration &amp; Development ProgramProgram Targets Vein Extensions from Existing MinesExploration Development $14 million exploration program 6,500 metres development drifting 40,000 metres delineation drilling Tunnels have entered Sinaloa Graben from the 40,000 metres diamond drilling, plus 2,000east (Central Block) and from the southmetres of exploration drifting Lower level tunnel commenced, expected to becompleted in 18-24 monthsROBERTITA CROSS SECTION Sinaloa GrabenCentral Block 2012 EXPLORATIONMined 2002-Current Sinaloa Graben Tunnel DELINEATION Tunnels 2012 Planned Tunnels Future Planned TunnelsTSX:P | NYSE:PPP 19 20. Two Veins Already Discovered in 2012Alexa and Victoria Veins Close to InfrastructureLocated in Prolific Central CorridorStrategic Underground Drill LocationsAlexa located 125m north of Victoria Drilling from old El Pilar workings, SinaloaTargeting inclusion in Reserves by 2012 year-end Graben tunnel and a drift from RobertitaMining access expected by 2012 year-endTSX:P | NYSE:PPP 20 21. Additional Discovery OpportunitiesTargeting Historical Significant Intercepts Close to Infrastructure Length WidthSilver GoldDrift(m)(g/t)1. Aranza 7-129W 792.25435.2 Elia 8-285W2212.8 1,49115.9 Elia 8-359W 692.26688.12. Rob 21-822E1673.0686 13.8Drill HoleWidthSilver Gold3. TGS-S-228.69586.8 7 2 TGS-S-157.54038.14. PIL 7-012.9508 16.0 465. SOL-9-021.8549 10.7 5 36. MAR-9-172.45148.9 17. RO-16-031.42059.5LEGENDTSX:P | NYSE:PPP 21 22. Objective: Become a Leading Intermediate Gold ProducerFocused Strategy Deliver operational and Optimize and financial resultsexpandexisting mine/s DiversifythroughIncrease opportunistic,Reserves accretivethroughacquisitions explorationTSX:P | NYSE:PPP 22 23. Diversification Through AcquisitionSelective Acquisition Criteria Growth Strategy Primary objective is asset base diversification LEADING MID-TIERGOLD PRODUCER Near term focus on advanced projects AMERICAS ACQUISITION/S ACQUISITION...</p>


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