cobre panama basic engineering & financing plan

M 7 2012May 7, 2012

Forward Looking Information

Securities regulators encourage companies to disclose forward-looking information to help investors g g p g punderstand a company’s future prospects. This presentation contains statements about Inmet, and Inmet’s future financial condition, results of operations and business based on assumptions we make about factors that are not within our control but that affect the mining industry generally and our business in particular, such as metal prices, currency exchange rates, the cost of consumables used at our operations and changes in legal and regulatory requirements among othersour operations and changes in legal and regulatory requirements, among others

These statements are “forward-looking” because we have used what we know and expect today to make a statement about the future. Forward-looking statements usually include words such as may,

t ti i t b li th i il d W b li th t ti ti fl t dexpect, anticipate, believe or other similar words. We believe the expectations or assumptions reflected in these forward looking statements are reasonable. However, actual events and results could be substantially different because of the risks and uncertainties associated with our business or events that happen after the date of this presentation. You should not place undue reliance on forward-looking statements. As a general policy, we do not update forward-looking statements, except as required by g p y, p g , p q ysecurities laws and regulations

All values expressed in United States dollars

2

Presenters and Agenda

Strategy, Financing and OutcomeJochen Tilk

President & CEO

Tier One Asset and Basic EngineeringFernando Martinez‐Caro

VP, Engineering & Infrastructure

Privilege to OperateCraig Ford

VP, Corporate Responsibility

Project Economics and UpsideFrank BalintVP, Corporate Development

3

p

Jochen TilkPresident & CEO

“Responsible Growth as a Base Metal Producer Providing S i R Sh h ld ”Superior Returns to our Shareholders”

Based on the quality of the project, the milestones achieved to date,and the solid funding plan, which includes partnerships as well as thirdparty financing, we decided to proceed with the full construction of

Cobre Panama upon closing of the high yield offering.

•

5

Strategy and Introduction

Fi iTier one project

Functional ownership structure

Financing opportunity that didn’t exist before

Operational readiness

Ready for construction

6







7

Cobre Panama: A Ti 1 A i A i J i di iA Tier 1 Asset in an Attractive Jurisdiction

Long Mine Life 31+ years

Meaningful Annual Cu ProductionYear 2‐16 298k t

Significant Cu Reserves & ResourcesReserves 9.3M tM&I (incl. reserves) 14.7M tInferred 8.7M t

LOM 266k t

Low Cash Costs ($/lb Cu)Year 2‐16 $0.72 LOM $0.82

Clean concentrate, no deleterious qualities

Located within immediate proximity to Panama Canal

Large Scale (k tpd) 160‐240+

Strong Annual Free Cash FlowYear 2 16 $0 9Bn

Simple mining and proven technology

Inexpensive and secured power

• 4.4¢ kWh LOM• 2 7¢ kWh first 9 years when excessYear 2‐16 $0.9Bn

LOM $0.8Bn

2.7¢ kWh first 9 years, when excess power sold to grid (before D&A)

8Note: All figures on 100% basis.

Large resource and production at low cash costsLarge resource and production at low cash costs

Privilege to Operate: A M i f l C ib i A i J i di iA Meaningful Contributor in an Attractive Jurisdiction

Panama: Attractive Mining Jurisdiction

Largest project in Panama, with ability to transform exports and address trade deficit

• Stable democratic system with investment grade rating

• U.S. dollar is the primary currency

% of Panamanian Exports

p y y

• Unaffected by 2009 recession; economy continued to grow and reached a rate of 10.6% in 2011

A ti t t l ith diti i il t

Gold3% MPSA

Agricul ture7%• Active contract law with conditions similar to

those in North American, under which MPSA benefits from:

– Duty‐free imports

MPSA82%

7%Seafood

8% Once in production, Minera Panama will become the country’s biggest exporter

– No withholding tax on exports and dividendsbiggest exporter

9

Cobre Panama is a key driver of growth in Panamanian economyCobre Panama is a key driver of growth in Panamanian economy







10







11







12

Management Resource in Place

President & CEOKPMC Liaison Officer PROJECT TEAM

Project Director

HR DirectorPermits & Land

DirectorEnvironment Director

External Relations Director

Finance & Administration

Director

Operations Director

Security Director

Construction Manager

Engineering Manager

Project Controls Manager

13Our Panama City office

Fernando Martinez‐CaroVP, Engineering & Infrastructure

Basic Engineering Capital Costs

AreaCAPEX Total ($ )

% of ProjectArea($ MM)

% of Project

Mining $760 12%

Process plant $1,184 19%

Site & services $550 9%S e se ces $550 9%

Port site facilities $543 9%

Power plant $646 10%

Total Direct Costs $3,682 59%

Construction indirects $844 14%

Total Field Costs $4,526 73%

EPCM services $355 6%

Owner costs $885 14%Owner costs $885 14%

Contingency $415 7%

Project Total Costs $6,181 100%


The estimation process and outcome have been extensively reviewedThe estimation process and outcome have been extensively reviewed

Capex Inflation Controlled From FEED 2010 in Q2 2009 Dollars

CAPEX Total ($ MM)

FEED t d it l t ( l t t i l d d) $4 320FEED study capital costs (power plant not included) $4,320

Power plant $646

Increased process plant capital cost estimate $403

Increased mining capital cost estimate $312Increased mining capital cost estimate $312

Increased port site capital cost estimate $285

Other $215

Basic Engineering Capital Cost Estimate $6,181


Capex increase mostly due to power plant and scope increaseCapex increase mostly due to power plant and scope increase

Engineering is Significantly Advanced

•Process design•Process flow diagrams

Frozen

•Piping & instrumentation diagrams

•Overall engineering

80.0%

37.6%

•Civil engineering

•Geotechnical engineering

43.6%

39.9%

17

Execution risk mitigated by depth of engineering work Execution risk mitigated by depth of engineering work

By the End of 2012, $4 Billion Would be Committed

Proportion of capital based on level of pricing work completed

• 30 % of Capex under Lump sum EPC arrangements

• Not subject to large currency fluctuations: 93% quoted in US dollars, 6% in Canadian dollars, 1% in Euros and Swiss Francs

JVP Estimates$0.57 Bn

19 Packages

Budget$2.0 Bn

10%

32%$74 Packages

Firm$3.61 Bn

70 Packages58%


30% of Cobre Panama’s capex is under lump sum fixed prices 30% of Cobre Panama’s capex is under lump sum fixed prices

What has Changed Since the FEED?

• No use of cyanide

• Increased throughput rate from upsizing of grinding and processing capacity from 150k tpd to 160k tpd, with planned expansion to 240k tpd

• Increased recoveries and higher commodity prices lead to slightly higher cut off

• Coal‐fired power plant on MPSA’s balance sheet lowers power costs significantly

19

Significant improvements since FEED studySignificant improvements since FEED study

Introducing the Construction Team

• 22 years of experience in engineering and construction

Fernando Martinez‐CaroProject Sponsor

f l d d

• Leadership of large EPC projects in Canada, U.S., U.K. and Spain with Grupo Ferrovial

• 23 years of experience in mining, aluminum and process industries

• Worked on both the contractor and owner sides, for companies like Rio Tinto, DuPont, Hatch and SNC‐Lavalin in locations around the world, including the Middle East, North America and Western Africa

Cesar InostrozaProject Director

Owner’s Team

• Qualified and experienced Owner’s Team of 50 members

– Expected to grow to 107 by 2013

• Comprised of senior, seasoned individuals with extensive experience in mining and large project development

EPCM

• The prime EPCM is Joint Venture Panama (JVP), a joint venture led by SNC‐Lavalin with partners GyM S.A. and Techint International Construction

• JVP has mobilized a qualified team of 154, that could peak at 361 in 2013

20

Project Timeline and Milestones

2012Q1 Q2 Q3 Q4

2013Q1 Q2 Q3 Q4

2014Q1 Q2 Q3 Q4

2015Q1 Q2 Q3 Q4

2016Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Full Notice to Proceed

Site capture

Infrastructure construction

Tailings starter dam

Process plant construction

Power plant (both units)

First ore processed

First concentrate shipment

21

First concentrate shipment

Craig FordVP, Corporate Responsibility

Privilege to Operate: O S t i bilit Vi i f C b POur Sustainability Vision for Cobre Panama

Cobre Panama will be a profitable venture to sustain Inmet’s growth objectives, contribute to Panama’s development and be a regional economic engine that will help alleviate poverty in the project area, catalyzing the development of sustainable communities and protection of the rich

biodiversity of the Mesoamerican Biological Corridor

23

Privilege to Operate: S i E i t l C t t f th P j t

• The Cobre Panama project is located in an

Socio‐Environmental Context of the Project

undeveloped and remote part of north‐central Panama

– Within a tropical rainforest with highWithin a tropical rainforest with high biodiversity value

– Presence of threatened and endangered species

– Endemic poverty of local communities

– Physical resettlement of approximately 60 households

– A country with little experience of modern mining

– Presence of artisanal mining

24

Building Privilege to Operate

What is privilege • Building trustWhat is privilege to operate?

• Building trust

• Broad acceptance of our presence

• Approval of our Category III ESIA

What evidence do we have of

privilege to operate?

• Reception of post‐ESIA approval permits

• Lack of conflict in the project area

• Free, Prior and Informed Consent of those physically and economically displaced by the projectoperate?

• Participation in regional development planning

• Participation of local communities

• Open, transparent dialogue, listening to concerns and incorporating

How have we achieved privilege

to operate?

p , p g , g p gthose into our plans since 2007

• Building trust by delivering on our commitments

• Ensuring that the benefits of our operation are shared with the people of Panama

25

the people of Panama

• Actions to deliver net positive benefit socially and environmentally

Setting New Benchmarks for Industry Leadership

• Actions to demonstrate application of evolving best practice and deliver net positive benefit:

Compliance with IFC Performance Standards on Social and Environmental Sustainability

Implementation of the Voluntary Principles on Security and Human Rights

Free, Prior and Informed Consent of those to be resettled

Leading edge biodiversity offset and conservation program

Community‐based environmental monitoringCommunity based environmental monitoring

Best practice community response mechanism with a dedicated Grievance Officer

Developing an independent human rights monitoring function

26

Committed to set new standards socially and environmentallyCommitted to set new standards socially and environmentally

Do the Locals Want it? 2,500+ in March 2012

27

~6,000 jobs to be created (direct and indirect) over operation LOM~6,000 jobs to be created (direct and indirect) over operation LOM

Frank BalintVP, Corporate Development

Economics: Low Operating Costs

Operating Costs per Component ($/t milled)

$1.03$3 29

$0.88$0.28 $6.88

Other

$1.01

$ 03$3.29

Power

$4.08$2.44 Material

$0.77

Mine Process Plant G&A Site Services Total

Labour

29

Low operating costs reflect low strip ratio and inexpensive powerLow operating costs reflect low strip ratio and inexpensive power

Cash Costs or Total Costs: Defensive Economics on Any Basis

3.00

C1 Cash Costs ($/lb Cu)Cost Centre Years 2 16 LOM Avg

Forecast 2020 Copper Industry C1 Cost Curve1

1.00

1.50

2.00

2.50

($US/lb Paid Co

pper)

Cost Centre Years 2‐16 LOM Avg.

Mine $0.30 $0.32

Plant $0.37 $0.44

G&A $0.11 $0.12

Site services $0 03 $0 04

Cobre Panama Y2‐16 $0.72/lb

(0.50)

0.00

0.50

1.00

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

C1 Cash Co

st

CumulativePercentileProduction

Site services $0.03 $0.04

Offsite costs $0.30 $0.30

By‐product credits ($0.40) ($0.40)

C1 Cash Costs $0.72 $0.82

Cobre Panama Y2‐16with Stream Sale:

$0.86/lb

Cumulative Percentile Production

3.00

3.50

4.00

d Co

pper)

C3 Cash Costs ($/lb Cu)

Cost Item Years 2‐16 LOM Avg.

C1 cash costs $0.72 $0.82

$ $

Forecast 2020 Copper Industry C3 Cost Curve1

Cobre Panama Y2‐16$US1.41/lb

0.50

1.00

1.50

2.00

2.50C3

Cash Co

st ($US/lb PaidDepreciation and closure $0.50 $0.48

Royalty and front end taxes $0.14 $0.14

Interest cost (3rd party debt) 2 $0.04 $0.03

C3 Cash Costs $1.41 $1.47Cobre Panama Y2‐16with Stream Sale:

$US1.48/lb

0.000% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Cumulative Percentile Production

301. 2020 Copper Cost League by Brook Hunt with Brook Hunt’s 2012 Q1 assumptions adjusted for metal prices and derived input costs under the Consensus Long‐Term Price Scenario.2. Assumes $1.6Bn debt.

Robust Economics on Three Price Scenarios

$6 0After‐Tax NPV8% ($ Bn)1

$3.2

$4.8

$6.0

LT Consensus F d C 3 Yr Trailing

Cu ($/lb) $2.75 Forward Curve $3.42

IRR (%) 14.3% 18.5% 19.2%

LT Consensus Forward Curve dropping to

LT Consensus

3 Yr Trailing Average

Au ($/oz) $1,250 and LT Consensus $1,316

Ag ($/oz) $20.00 $24.90

Mo ($/lb) $15.00 $14.68

31

Significant leverage to copperSignificant leverage to copper

Note: All figures on 100% basis.1. Assumes $1.6 Bn debt.

Impressive Cash Flow Generation

Debt Case Project Cash Flow ‐ Consensus vs Spot

20

30

40

1 000

1,500

2,000

2,500

(10)

‐

10

(500)

‐

500

1,000

(30)

(20)

(10)

(2,000)

(1,500)

(1,000)

Cobre Panama would generate an annual free cash flow of $1.5 Bn at current prices1

(40)(2,500)2012 2017 2022 2027 2032 2037 2042

Debt Case Cash Flow ‐ Consensus ($USm, LHS) Debt Case Cash Flow ‐ Spot ($USm, LHS)

Cumulative Cash Flow ‐ Consensus ($Usb, RHS) Cumulative Cash Flow ‐ Spot ($USb, RHS)

32

Strong cash flow profile with considerable upsideStrong cash flow profile with considerable upside

Note: All figures on 100% basis.1. Based on spot pricing of Cu $3.74/lb, Mo $13.83/lb, Au $1,642.22/oz and Ag $30.37/oz

Upside Case #1: Accelerating the Third Line

• Assume advance from Year 10 to Year 3• Assume advance from Year 10 to Year 3

• Could enhance copper production profile by 38% during Years 3‐9

• Total metal production increases during the first 10 Years would be2:

+69525%

+725%

+17516%

+3,90031%37 16 34025% 25% 16% 31%

2,7403,435

30

37

1,0751,250

12,440

16,340

Copper (k t) Moly (k t) Gold (k oz) Silver (k oz)

33

Results in ~$5.0 Bn (37%) increase in gross revenue during Years 3‐9 1Results in ~$5.0 Bn (37%) increase in gross revenue during Years 3‐9 1

Note: All figures on 100% basis. Based on the Basic Engineering mine plan accelerated to full 240k tpd throughput during years 3‐9. For illustrative purposes only.1. Based on Consensus Long‐Term Price Scenario.2. Payable metal production.

Upside Case #2: Resources Beyond Current Mine Plan

Contained CuContained Cu (Bn lb)

M&I Resource 32

LESS: Reserve 20

Unexploited M&I 12

Inferred 19

@ 3¢/lb Cu = $0.9 Bn

Potential valuation range@ 3¢/lb Cu $0.9 Bn@ 6¢/lb Cu = $1.8 Bn

34

Option value should be further enhanced when infrastructure is in placeOption value should be further enhanced when infrastructure is in place

Note: All figures on 100% basis.

Mineral Deposits and Defined Resources Plan Map

B a l b o a

35

Upside Case #3: Inferred Resources in Current Mine Pits

• Inferred mineral resources amounting to 321 Mt at 0.26% Cu within current pit pdesign are treated as waste

36

Converting inferred would further reduce the low strip ratioConverting inferred would further reduce the low strip ratio

Successful Exploration…

Cu M&I Resources (Bn lbs) Cu Inferred Resources (Bn lbs)(Inclusive of Reserves)

142%

26%

26

32

142%

126%

15%

11 11

26

1719

7

1992 1998 2010 2012 1992 1998 2010 2012


...and momentum is just beginning...and momentum is just beginning

Strong Exploration Potential

• Concession wide program started late 2010

• Numerous targets identified

• One of the first targets tested in early 2011 resulted in the Balboa discovery

Plan Map Balboa Deposit

• Deposit remains open to expansion in this direction

• Deposit remains open to expansion down plunge, with grades of .86% Cu and 0.26 g/t Au over 241 metres in Hole 11‐116 and 0.78% Cu and 0.81 g/t Au over 237 metres in Hole 11 095Au over 237 metres in Hole 11‐095

• Extensive exploration program for 2012 is underway with some 36 holes testing additional targets on the concession

38

concession

Jochen TilkPresident & CEO

Financing Plan Including Notes Offering

($ Bn)

$1.0

$1.0

$5.6

$6.6

$7.6

$6.2

Other financing options being pursued:

• Project level debt financing, including off‐take financing and equipment financing

• Corporate level debt financing /

Current financing requirement: $0.6 Bn Secured

In process

In discussions

$1.4

$1.0

$3.2

$4.6

p g /revolver

• Sale of additional equity in the project

$1.5

$1.7

Cash onHand

Cash Flow KPMC NoteFinancing

Total Capex PreciousMetalsStream

Other1

40

Inmet has the ability to finance Cobre Panama without equity dilutionInmet has the ability to finance Cobre Panama without equity dilution

1. Based on cash flow from current operations. Net of financing costs.

A Tier One Asset in a Small Universe

LOM Total Cu Production (Bn lbs)

Feasibility & Construction Pre‐Feasibility

25

1713

0

30

Feasibility & Construction Pre Feasibility

Denotes project controlled by <US$10 Bn market cap

10 9 8 7 6 58

6 6 5

OyuTolgoi

CobrePanama

LasBambas

SierraGorda

Rel incho Sentinel Agua Rica

El Morro CerroCasale

Pebble Haquira GaloreCreek

Canariaco Cas ino

$13 40 $13 51$15.31 $15.07

$13 40 $13 51$15.31 $15.07

Operating Cost ($/t milled)Feasibility & Construction Pre‐Feasibility

Denotes project controlled by <US$10 Bn market cap

$6.84 $6.88

$11.48$13.40 $13.51

N/A N/A N/A

$6.28$8.68 $9.70

$12.73

$6.84 $6.88

$11.48$13.40 $13.51

N/A N/A N/A

$6.28$8.68 $9.70

$12.73

Agua Rica

CobrePanama

SierraGorda

OyuTolgoi

CerroCasale

El Morro LasBambas

Rel incho Sentinel Canariaco Haquira Cas ino Pebble GaloreCreek

Agua Rica

CobrePanama

SierraGorda

OyuTolgoi

CerroCasale

El Morro LasBambas

Rel incho Sentinel Canariaco Haquira Cas ino Pebble GaloreCreek

41Source: Individual company reports.Note: All figures on 100% basis.

Cobre Panama – Achievements to Date

• Since our 2010 FEED study we have:

Awarded power plant contract

Completed the resettlement negotiations with local communitiesp g

Received Panamanian approval of the Environmental & Social Impact Assessment

Increased our copper resources

Established a highly experienced and competent project execution team

Finalized our partnership with LS‐Nikko and KORES

A d d bt fi iAnnounced debt financing

42

Substantial value has been built, and risk reducedSubstantial value has been built, and risk reduced

Conclusion: Back to Inmet

• 20+ years as a builder and operator of underground and open pit mines

• Always been a copper stock: 71% of gross sales last year from Cu, and a higher proportion expected this year

• Expect copper production growth ~ 25% this year as Las Cruces approaches design capacityp pp p g y pp g p y

• Cobre Panama delivers another low cash cost mine in a favourable jurisdiction = 30+ years to come

12,703

5,7144 847

Cu Resource (lbs) per $1,000 invested

200%+

Inmet Cu Production (MM lbs)

,4,847

3,971 3,767 2,950

Inmet Lundin First Quantum OZ Minerals PanAust HudBay 2012 2017

220 ‐ 250

43

A natural path for Inmet: copper exposure, low cash costs and growthA natural path for Inmet: copper exposure, low cash costs and growth

Th k YThank You

Appendix

Risks & Opportunities

• Quotes to build power plant and processing plant are written on a “Lump Sum” and “Not to Exceed” basis

• Quotes are received from audited, sophisticated vendors with balance sheets to manage costs

• Quotes are materially conservative – in some cases the labour multiplier (unit of work over unit of time) used for the project is as high as 3X and some of the quotes for individual work packages have small overlaps in scope

Cost Escalation

the project is as high as 3X and some of the quotes for individual work packages have small overlaps in scope

• Advanced stage of engineering (overall 38% complete) in combination with the large portion of firm bids received (58%) should further reduce potential for unforeseen costs

• Panama’s use of U.S. Dollars is another positive characteristic that would reduce material cost escalation throughout

• Engineering, procurement and construction contractors have incentives to stay on schedule and on budget

• Received an opinion from a third party review that there is sufficient firmness and conservativeness in the project budget

• By the end of 2012, 50% of the project spend is expected to be committed against firm contracts

• Actively considering early purchase of bulk commodities for construction

46

Risks & Opportunities (cont’d)

Low Cost• Cobre Panama, while being relatively low grade, would be amenable to large scale mining methods that result in the efficient handling of ore and wasteLow Cost

Production from a Low Grade Mine

g

• Very low strip ratio, roughly a 20% of the average (0.58 vs. 2.53) for all open‐pit copper mines in 2011

• Proximity to the coast permits the use of a pipeline that travels a short distance, providing a cost efficient method of delivering concentrate to the port

• Access to low‐cost, self‐generated power which takes advantage of proximity to a coal source

Management Depth

• Inmet has developed three mines within the tenure of the current management (Las Cruces, Cayeli and Troilus)

• For Cobre Panama, recruited an Owner’s team that has relevant experience in construction and operations and ensured that the engineering, procurement and construction contractors are of a high standard of quality

G ’t & S i l

• Approval of ESIA indicative of support at the highest levels of gov’t; derisks entire permitting process significantly

• Extensive involvement and cooperation at both the gov’t and community level

• Referring to Inmet, Signi Schneider (EDC, Chief CSR Advisor) commented “These companies take a holistic approach to risk and opportunities. They make CSR part of their business strategies. In the mining sector, companies that are acquiring mineral assets don‘t want projects that have put the community offside, where Gov’t & Social p q g p j p y ,there is a high risk that the project may face roadblocks. They also know their financiers require them to get it right early on.” (The Globe & Mail ‐ Jan 1, 2012)

• At the community level, the current lack of conflict in the project area indicates that community engagement efforts are working and a recent study shows overwhelming support for the project.

• Received free prior and informed consent of the community; engaging the local community through employment

47

p y; g g g y g p y

Cobre Panama – Summary May 2012 Study Results

Key Parameters Description

Reserves 9.3M t Cu, 5.2M oz Au, 104M oz Ag, 169k t Mo

M&I resources (incl. Reserves) 14.7M t Cu, 9.0M oz Au, 168M oz Ag, 238k t Mo

Inferred resources 8.7M t Cu, 4.8M oz Au, 121M oz Ag, 156k t Mo

Annual production (Yr 2‐16) 298k t Cu, 106k oz Au, 1.6M oz Ag, 3.1k t Mo

Annual production (LOM) 266k t Cu, 87k oz Au, 1.5M oz Ag, 2.9k t Mo

NSR breakdown at $2.75/lb Cu Cu 87%, Au 6%, Mo 5%, Ag 2%

Life of mine (reserves only) 31+ years

C1 cash costs (Yr 2‐16) $0.72/lb Cu

C1 cash costs (LOM) $0.82/lb Cu

Ore throughput capacity160k tpd to 240k tpd throughput, with further expansion capacity

Strip ratio 0.58:1

Concentrate Clean concentrate with no deleterious qualities

Power source300 megawatt coal fired power plant (reliable and inexpensive source of power)

48

Logistics On tidewater with immediate proximity to Panama Canal

Note: All figures on 100% basis.

Mining

Plan View of Site Infrastructure and Design Pits• Mine production schedule was developed to maximize early revenues and improve overall project returns utilizingearly revenues and improve overall project returns utilizing a conventional mining fleet

• Ultimate pit plans and mining phase designs have not changed from the FEED completed in March 2010, with the exception of the Medio pit extension

• Open pit development sequence has been adjusted to reflect slightly lower effective cut‐off grades that have resulted from increased copper recoveries and higher metal prices used to define ore in the Basic Engineering StudyStudy

• Concentrator site is centrally located within 2 km of the Botija, Colina, and Valle Grande deposits as well as the stockpile

A fourth smaller deposit Medio is about 500 m– A fourth smaller deposit, Medio, is about 500 m northeast of the Colina pit. The new block model incorporates a small Medio pit which was targeted by recent drilling and is part of the mine production schedule in Years 11‐14

49

Processing / Metallurgy

• As part of the 2010 FEED study a large sampling and test program was undertaken to bolster the knowledge from previous work and id i i h i h i bili f h i di d fl iprovide insight into the variability of the grinding and flotation response

– Metallurgy was further optimized with removal of sodium cyanide as a pyrite depressant and refinements to the cleaner circuits

• Metallurgical recoveries used for the production forecasts in this study are based on the results from the 2010 FEED metallurgical difi d b h i d fl h k d i i i iprogram as modified by the revised flow sheet test work during Basic Engineering

• Cobre Panama concentrator would use current proven technology to produce clean copper and molybdenum concentrates

• Project design is based on an initial ore feed rate of 160k tpd to the processing plant using two grinding lines, each having nominal f k d h d l l d k d f fcapacity of 80k tpd. The design also includes an increase to 240k tpd after Year 9 of operations

– This potential expansion includes the addition of a second crusher station to source Colina and Valle Grande ore and a third line in the concentrator which includes crushing, grinding, bulk rougher flotation, water and air systems

• Process plant is designed to process ore at a nominal head grade of 0 5% Cu and 0 01% Mo with design maximum copper head grade• Process plant is designed to process ore at a nominal head grade of 0.5% Cu and 0.01% Mo with design maximum copper head grade of 0.9% Cu and 0.015% Mo

• Copper concentrate would be delivered by a 32km slurry pipeline from the mine site to the filter plant located at the port in Punta Rincon

Af fil i h d d ld b d d b l l i d d l d d b lk

50

• After pressure filtration, the dewatered concentrate would be stored and subsequently reclaimed and loaded onto bulk concentrate vessels for delivery to international customers

Cobre Panama Mineral Resources

• Cobre Panama mineral resources (inclusive of reserves) were re‐estimated in early 2012 to incorporate the 171 holes completed since the2010 FEED study. The bulk of this drilling was focused on infilling the Brazo Deposit and on outlining the 2011 Balboa discovery. The increase in& fl d f d h d d h d d h dd f h lb

Contained Metal (x1,000)Category Tonnes Cu Au Ag Mo Cu Au Ag Mo

M&I resources reflected moving inferred resources into the indicated category on the Brazo deposit and the addition of the Balboa resource.The bulk of the increases in the inferred category came from Balboa’s addition to the resource statement.

Mineral resources are shown on a 100% basis and are inclusive of mineral reserves.

(x 1,000) % g/t g/t % Tonnes ounces ounces tonnes

Measured

Indicated

262,000

3,905,000

0.56

0.34

0.13

0.06

1.5

1.2

0.009

0.005

1,476

13,237

1,118

7,845

12,979

155,392

24

214

Total 4,167,000 0.35 0.07 1.3 0.006 14,715 8,963 168,454 238

Inmet’s Share 80% 11,772 7,170 134,763 190

Inferred 3,749,000 0.23 0.04 1.0 0.004 8,660 4,805 120,534 156

Inmet’s Share 80% 6,928 3,844 96,427 125

The mineral reserve and resource estimates are prepared in accordance with the CIM Definition Standards On Mineral Resources and Mineral Reserves, adopted by CIM Council on November 14, 2004, and the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines, adopted by CIM Council on November 23, 2003, using geostatistical and/or classical methods, plus economic and mining parameters appropriate to each project. You will find the definitions and guidelines at www.cim.org. Estimates for all operations are prepared by or under the supervision of a qualified person as defined in National Instrument 43‐101 (usually an engineer or geologist).

Mineral resources include mineral reserves. Mineral resources which do not form part of the mineral reserves do not have demonstrated economic

51

Mineral resources include mineral reserves. Mineral resources which do not form part of the mineral reserves do not have demonstrated economic viability. Mineral resources as at March 5, 2012, were estimated by Robert Sim, P. Geo., of SIM Geological Inc. Resource grades are estimated using ordinary kriging with a nominal block size of 25 m by 25 m by 15 m. Resources are limited inside a pit shell defined by a copper price of US $2.60/lb, $1.75/t mining cost and $7.02/t total site operating cost, and are tabulated at a cut‐off grade of 0.15% copper.

Cobre Panama Mineral Reserves

Contained Metal (x1,000)Mineral reserves are shown on a 100% basis.

Category Tonnes(x 1,000)

Cu%

Aug/t

Agg/t

Mo%

Cu Tonnes

Au ounces

Ag ounces

Mo tonnes

Proven

Probable

258,000

2,061,000

0.57

0.38

0.14

0.06

1.6

1.4

0.010

0.007

1,478

7,781

1,126

4,041

13,020

91,008

25

145

Total 2,319,000 0.40 0.07 1.4 0.007 9,258 5,167 104,028 169

Inmet’s Share 80% 7,406 4,134 83,223 135

The mineral reserve and resource estimates are prepared in accordance with the CIM Definition Standards On Mineral Resources and Mineral Reserves, adopted by CIM Council on November 14, 2004, and the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines, adopted by CIM Council on November 23 2003 using geostatistical and/or classical methods plus economic and mining parameters appropriate to eachby CIM Council on November 23, 2003, using geostatistical and/or classical methods, plus economic and mining parameters appropriate to each project. You will find the definitions and guidelines at www.cim.org. Estimates for all operations are prepared by or under the supervision of a qualified person as defined in National Instrument 43‐101 (usually an engineer or geologist).

There are no known environmental, permitting, legal, taxation, political or other relevant issues that would materially affect the estimates of the mineral reserves.

Mineral resources as at March 5, 2012, were estimated by Robert Sim, P. Geo., of SIM Geological Inc. Mineral reserves as at December 31, 2011 were , , y , , f g ,estimated by William Rose, P.E., of WLR Consulting, Inc., a qualified person under National Instrument 43‐101.

Reserve estimates are based on the following assumptions:‐ copper price: US $2.25 per pound‐ gold price: US $1,000 per ounce‐ silver price: US $16 per ounce‐molybdenum price: US $13.50 per pound

52

molybdenum price: US $13.50 per pound‐Mining costs : US $ 1.66 per tonne of ore mined, US $ 1.96 per tonne of waste mined and ‐Milling and general and administration cost: US $ 5.27 per tonne of ore milled, average life of mine metallurgical recoveries: 89 percent for copper, 52 percent for gold, 46 percent for silver and 53 percent for molybdenum.

cobre panama basic engineering & financing plan

Documents

didntreadiness structure

forwardlooking statements

forward looking statements

investors g g pgpunderstand

general p g policy

forwardlooking information

w b lit ti i t b li

mt year216