cpn -march_1_2011_corporate_presentation_-_v2
TRANSCRIPT
Carpathian Gold Inc.
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Forward-Looking Statements
Statements made in this presentation may be deemed "forward-looking statements". Forward-looking statements are frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, and other similar words, or statements that certain events or conditions “may” or “will” occur. All statements in this release, other than statements of historical facts, that address future exploration drilling, exploration activities and events or development that the Corporation expects, are forward-looking statements. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. There can be no assurance that forward-looking statements will prove to be accurate, as results and future events could differ materially from those anticipated statements. The Corporation undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.
This presentation includes resource information that is compliant with National Instrument 43-101, unless otherwise specified.
Carpathian Gold Inc.
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Company Highlights
• Two prolific gold development projects
• Global resource of 12.7+ MM oz Au Eq* (8.45 million oz Au; 1.4 billion Ib Cu)
• Robust Preliminary Economic Assessments
• Key long lead plant equipment purchased for the Ricaho dos Machados (“RDM”) Gold Project, Brazil
• Up to US $97 million project financing mandated for RDM Gold Project
• Production targeted to commence 2nd half of 2012 at ≈100,000 oz Au annually with built-in growth profile to 400,000 oz Au annually
• Substantial exploration upside to still be realized
• Attractive valuation at 0.5x NAV versus development and exploration peers at 0.8x and 0.6x NAV, respectively
• Proven management and board
* Global mineral content for information purposes only as N.I. 43-101 does not allow summation of Measured + Indicated + Inferred Resources
Carpathian Gold Inc.
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Capitalization
Capital Structure (as of March 1/11)
Ticker: TSX:CPN One-Month Trading Range: C$0.53 – C$0.64 Ave. Volume: ≈ 2.0 million/day Basic Shares Outstanding: 388.7 MM Options/Warrants Outstanding: 39.63 MM Market Capitalization (F/D): ~257C$ MM Cash on hand plus available cash: ~52.5C$ MM Debt: $0 Enterprise Value (F/D) (excludes available cash):
~C$204.5 MM
Management/Directors/Insiders Ownership ~35% Institutional Ownership ~30%
Strike Expiry Options 19.7 MM $0.40* May 2013 Warrants 10.7 MM $0.33 May 2012 7.8 MM $0.45 Dec 2011 0.23 MM $0.23 May 2011 1.2 MM $0.34 Dec 2011 Total 39.63 MM $0.39 *Average
One-Year Share Price Graph
Analyst (4) 12 month Target
+$1.25/sh
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Management & Board
• Dino Titaro, M.Sc., P. Geo, Director, President and CEO – Former President and CEO of A.C.A. Howe International – Director of Yamana Gold (TSX:YRI)
• Daniel Kivari, P. Eng., COO
– 32 years experience in underground and open pit operations – Former VP Operations for the start-up and pre-operations of the
Chapada copper/gold porphyry deposit, Brazil
• Randall K. Ruff, M.Sc., Executive VP Exploration – Over 15 years experience in exploration in the western U.S., east
and west Africa, and central Europe – Worked as the project geologist for the fast-track discovery-to-
pre-feasibility advancement of the Kukuluma and Matandani gold deposits at Geita,Tanzania
• Guy Charette, Executive VP Corporate – Over 25 years experience in securities law involving resource
transactions and exploration and development finance.
• Linda Prager, CA, CFO
– 10 years accounting and finance experience
• Alexandru Nicolici, Geologist, Romanian Country Manager – 20 years experience in Romania as a geologist and manager – Former CEO of CUART SA, the regional state-owned mineral
exploration company in Romania
• Peter Lehner, Chairman – Held senior management positions in financial institutions and
commodity trading & shipping companies – Former director of Addax & Oryx Advisory and Axmin
(TSXV:AXM)
• Julio Carvalho
– Over 38 years experience in the Brazilian mining sector – Former senior positions with Peak Gold (previously TSX:PIK),
Goldcorp (TSX:G) and Rio Tinto (ASX:RIO) – Current President and Director of Rio Novo Gold (TSX:RN)
• David Danziger – Over 25 years experience in audit, accounting and management
consulting and over 10 years specific in the mineral resource sector
– Director of Cadillac Ventures (TSXV-CDC) and Renforth Resources (CNSX-RFR)
• John W. W. Hick – President of John W Hick Consultants Inc. – Numerous past senior management positions including CEO of
Medoro Resources, Rio Narcea Gold (previously TSX:RNG), and Chairman of Rayrock Resources Inc
• Patrick J. Mars – Over 30 years experience in the investment industry including
serving as CEO and director of Alfred Bunting and Co. – Director of Yamana Gold (TSX:YRI) and Aura Gold (TSX:ORA)
• Dino Titaro – See Management description
Management Board
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Key Assets
* Global mineral content for information purposes only as N.I. 43-101 does not allow summation of Measured + Indicated + Inferred Resources
100% owned brownfields gold project
Initial EIA permits in place
1.5 million oz Au total resource*
Feasibility Study being completed
2nd half of 2012 targeted commencement of production of ~100,000 oz Au per annum
Up to US $97 million project financing mandated
Upside at depth, along strike and in new zone targets
100% owned 3 porphyry gold-copper discoveries
Pre-feasibility/feasibility stage
6.9 million oz Au + 1.4 billion lb Cu total resource*
NPV8% of US $731 million; 24% IRR (pre-tax) – Based on PEA study – US$1,000/oz Au & US$3.00/lb Cu
Deposit remains open in all directions – Recent drill hole (RGD-17), 716 m at 1.14 g/t Au &
0.16% Cu
Brazil Minas Gerais
Bahia
Yamana Properties
Kinross Properties
Eldorado Property
Riacho dos Machados (Feasibility/Construction)
Riacho dos Machados (“RDM”) Production targeted for late 2012
Rovina Valley Project (“RVP”) Advanced Stage – highly leveraged to Gold
Major Deposits
Gold-Copper Deposit
Romania Rovina Valley Project (Drilling & pre-Feasibility)
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RDM – Potentially Prolific Mining Camp
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RDM – Key Advantages
* Total mineral content for information purposes only as NI 43-101 does not allow summation of Measured + Idicated + Inferred Resources Resource calculation assumes $950/oz Au
RDM Gold Project
• Brownfields development – Existing infrastructure (roads, power, water and facilities) – Ownership of surface rights in place
– EIA permits completed for construction
• Robust project economics (from PEA study) & short lead time to production – ~100,000 oz Au annual production
– Low cash cost & low capital requirements – Initial open-pit of 8 years targeted to commence in 2nd half of 2012
• Feasibility being completed followed by construction decision
• Key long lead Plant equipment already purchased
• Up to US $ 127 million project financing arranged and mandated for project development
– US $30 million gold sale agreement completed (included in cash & available cash) – Up to US $97 million mandated with Macquarie Bank + Caterpillar Equipment leasing
• Significant upside – Updated NI 43-101 resource as of July 2010 – total* open-pit + underground resource
of 1.5 million oz Au – Open at depth and along strike within a 14 km long gold mineralized shear zone with
numerous gold targets outlined – Land area of 22,000 ha, with only a small portion (<20%) of the total area evaluated
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RDM – 2010 Resource Model
Open-Pit Resource M&I: 806.2 Koz Au (17,199 Kt at 1.46 g/t Au) Inf: 355.9 Koz Au (7,179 Kt at 1.54 g/t Au)
Underground Resource M&I: 6.2 Koz Au
(53 Kt at 3.63 g/t Au) Inf: 337 Koz Au (3,922 Kt at 2.67 g/t Au)
Resources still open along strike and at depth
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Key Changes & Optimization Parameters
For Feasibility
Study
RDM – PEA Results (July 2009)
Source: Riacho Dos Machodos Gold Project Preliminary Economic Assessment Study prepared by a consortium of engineering companies led by NCL Brasil Ltda, August 2009
Mine Type: Open Pit
Ore Processing Rate: 6,000 tpd
2.2 MM tpa
LOM Strip Ratio: 9:1
Tonnes Produced & Average Mill Feed Grade: 15.2 MM tonnes @ 1.65 g/t Au
Recovery: 90%
Annual Production: 102,050 oz Au
Total Recoverable Gold Production LOM: 725,645 oz
Mine Life: 7.1 years
Operating Cost: US$20.45/t ore
Royalty 2%
Effective Tax Rate: 15.25%
Refining / Transport / Insurance Cost: US $10/oz Au
Total Cash Cost: US $428/oz Au
Initial Capital Cost: US $113 MM
Total Capital Cost, including sustaining capital: US $126 MM
NPV7.5% (after tax, @ US $1,000/oz Au): US $143 MM
Payback Period (@ US $1,000/oz Au): 2.5 years
IRR (@ US $1,000/oz Au): 41%
To be updated upon completion of feasibility study
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RDM – PEA* Summary Overview
Source: Riacho Dos Machodos Gold Project Preliminary Economic Assessment Study prepared by a consortium of engineering companies led by NCL Brasil Ltda, August 2009
NPV Sensitivity
Au Production & Cash Costs Cash Flow
* To be updated upon completion of feasibility study
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RDM – Site Development Plan
Tailings
Pit Outline
Water reservoir
Waste
Mine Buildings & Plant
Source: Riacho Dos Machodos Gold Project Preliminary Economic Assessment Study prepared by a consortium of engineering companies led by NCL Brasil Ltda
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RDM – Immediate Growth Potential
• Underground mineable resource (inferred) of 332,000 oz – 4.0 MM t @ 2.57 g/t Au, ~250 m below pit shell
• 60,000 oz Au per year production – Potentially start in the third year of open-pit operation – 5.5 year mine life – ~US $365/oz Au cash cost ($30/t ore operating cost) – US$58 MM capital cost
• Pre-tax NPV5% of US $51 MM for expansion to an underground mine (@ US $900/oz Au)
– 35% IRR; ~US $25 MM per annum EBITDA
• Further potential of 1.1 MM oz (@ 2.9 g/t Au)
Source: Riacho Dos Machodos Gold Project Preliminary Economic Assessment Study prepared by a consortium of engineering companies led by NCL Brasil Ltda * Global mineral content for information purposes only as NI 43-101 does not allow summation of Measured + Indicated + Inferred Resources
Underground Potential
Zone identified with immediate economic underground mining
potential
PEA Open-Pit
On-strike Potential
2 m of 6.92 g/t Au
3.5 m of 10.22 g/t Au
Exploration Targets north of RDM Mine
14 km Shear Zone with Au-As anomalies
RDM Mine 1.5 Moz Au*
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RVP – Three Au-rich Cu Porphyry Deposits
Romania
Rovina Valley Project (RVP)
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RVP – Property Map (94 km2)
Rovina Cu-Au Porphyry Global Resource: 3.3 MM oz Au Eq*
Colnic Au-Cu Porphyry Global Resource: 3.8 MM oz Au Eq*
Ciresata Au-Cu Porphyry Resource: 4.0 MM oz Au Eq*
“still open in size”
Cordurea Target Rocks 0.32 – 2.16 g/t Au
Dumps up to 101 g/t Au, 2,400 g/t Ag
Valisoara Au - (Pb-Zn) Target Breccia Zone 0.6 – 4.0 g/t Au
* Au Eq: $1,000/oz Au; $3.00/lb Cu. Global mineral content for information purposes only as NI 43-101 does not allow summation of Measured + Indicated + Inferred Mineral Resources
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RVP – Key Advantages
• Large scale 40,000 tpd project
– 11.2 MM oz Au Eq* total resource
• Attractive project economics (from PEA study) – ~200,000 oz Au & ~50 MM lb Cu average annual
production over 19 yr mine life
– US$81/oz Au cash cost (net of Cu credits)
– Standard flotation process producing a saleable Cu concentrate
• Good location in a mining jurisdiction
– Emerging modern mining district
– > 55 MM oz Au of historic production
– Substantial infrastructure (roads, water and power)
– Gov. encouraging investment and sustainable growth
– 16% corporate tax rate
– Streamlined permitting process
• Excellent Value Proposition vs in-country peers
– Gabriel Resources – $2.7 billion market cap
– European Goldfields – $2.3 billion market cap
– Carpathian Gold – $230 million market cap
* Au Eq: $1,000/oz Au; $18.00/oz Ag; $3.00/lb Cu. Global mineral content for information purposes only as NI 43-101 does not allow summation of Measured + Indicated + Inferred Mineral Resources
Golden Quadrilateral Rosia Montana
(GBU) 14 Moz Au
Rosia Poieni (State)
Cu-Au Porphyry
Certej (EGU) 3.5 Moz Au Eq* RVP (CPN)
>11.2 Moz Au Eq* (includes >6.9 Moz Au)
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RVP – PEA Results (March 2010)
Underground Conveyor
Flotation Plant Location Ciresata
Au + Cu Porphyry Rovina
Cu + Au Porphyry Colnic
Au + Cu Porphyry
Source: Rovina Valley Au-Cu Project Preliminary Economic Assessment Study prepared by a consortium of engineering companies led by PEG Mining, March 2010
Mine Type: Open Pit & Underground
Ore Processing Rate: 20,000 tpd Open Pit
20,000 tpd Underground Total 14.4 MM tpa
Tonnes Produced & LOM Average Mill Feed Grade: 265 MM tonnes of 0.66 g/t Au & 0.18% Cu Recovery: 68% Au & 91% Cu Concentrate Production (wet metric tonnes) 122,000 tpa Concentrate Grade (dry) 50 – 60 g Au/t; 18% – 22% Cu
Annual Production: 196,000 oz Au 49.4 MM lb Cu
Mine Life: 19 years Total Recoverable Production LOM 3.72 MM oz Au & 938 MM lbs Cu
Operating Cost: US $8.49/t ore Open Pit US $11.51/t ore Underground
Payability: 97.5% Royalty: 4% Total Cash Cost (net of Cu credits): US $81/oz Au Initial Capital Cost: US $509 MM Total Capital Cost, including sustaining capital: US $786 MM
NPV10% (pre-tax, @ US $1,000/oz Au & US $3.00/lb Cu): US $544 MM
Payback Period (@ US $1,000/oz Au & US $3.00/lb Cu): ~4.0 years IRR (pre-tax, @ US $1,000/oz Au & US $3.00/lb Cu): 24%
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NPV Sensitivity (US $MM)
Financial Model (pre-tax)
Base Case US $900/oz Au US $2.25/lb Cu
Upside Case US $1,000/oz Au US $3.00/lb Cu
NPV0% $1,357 $2,351
NPV5% $569 $1,130
NPV8% $316 $731
NPV10% $200 $544
IRR 16% 24%
RVP – PEA Summary Overview
Source: Rovina Valley Au-Cu Project Preliminary Economic Assessment Study prepared by a consortium of engineering companies led by PEG Mining, March 2010
Production Profile Cash Flow
Highlights Average annual production of 196,000 oz Au and 49 MM
lb Cu (343,600 oz Au Eq) over a 19 year mine life
Operating cash cost per ounce with Cu as a by-product credit of US $81 per gold ounce or US $446 per ounce gold as co-product basis
Project pre-tax NPV of US $544 million based on a 10% discount rate and a gold price of US $1,000 per ounce & copper of US $3.00/lb
Project IRR of 24%, with an ~4.0 year payback on initial project capital expenditures
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Exploration Potential for Resource Growth Gold-Copper mineralized body open to the west and at depth
> 1.2 g/t Au Eq*
Plan View Sectional View
‘Deep drill hole’ and ‘Step-out’ drill programs in-progress
RVP – Ciresata Au-Cu Porphyry
* Au Eq: $1,000/oz Au; $3.00/lb Cu
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Deep drill hole program extends mineralization 280 m below
previous drilling: Depth extension at >0.90 g/t Au-eq; including RGD-18, 114m @
1.14 g/t Au-eq*
Proposed Mining development; 20,000 t/d underground crushing
station
> 1.20 g/t Au-eq*
Au-eq*
RVP – Ciresata Au-Cu Porphyry
High Grade Core
open
N.I. 43-101 Inferred Resource Estimate from 2010 PEA Study;
124.4 Mt at 0.86 g/t Au and 0.17% Cu (1.21 g/t Au eq*)
* Au Eq: $1,000/oz Au; $3.00/lb Cu.
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RGD-17
Drawing by Zhen © SkyscraperPage.com
CN
Tow
er
553
m
RVP – Room for Growth: Deposit Size and Valuation
Company Deposit Mt Au (g/t) Au
MM oz Cu (%) Au Eq*
(g/t) Ag (g/t) Ag
MM oz
Kinross La Coipa 40 1.11 1.4 1.11 42.7 55 Kinross Lobo-Marte 108 1.70 5.9 1.70 Yamana La Pepe 187 0.57 3.4 0.57 Andina Volcan 356 0.87 9.9 0.87 Kinross Refugio 397 0.69 8.8 0.69 Exeter Caspiche 1,774 0.46 26.4 0.17 0.81
Kinross/Barrick Cerro Casale 1,411 0.56 25.4 0.21 0.99 1.6 70.6
Carpathian Gold RVP 371 0.58 7.0 0.18 0.95 Ciresata Porphyry 101 0.90 2.9 0.17 1.27 RVP – PEA Study 265 0.66 3.72 0.18 1.03
From (m) To (m) Length (m) Au (g/t) Cu (%) Au Eq* (g/t)
160 876 716 1.14 0.16 1.47
including 160 593 433 1.38 0.18 1.75 including 216 460 244 1.70 0.22 2.15
and 363 460 97 2.02 0.24 2.51
Hole RGD-17, Ciresata Porphyry
Au-Rich Cu Porphyries – Maricunga Belt Comparisons to the Rovina Valley Project
* Au Eq: $1,000/oz Au; $3.00/lb Cu
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Upcoming Milestones
2011 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Brazil Updated NI 43-101 Resource
Feasibility Study
Mine Financing
Permitting & Construction
Production
Studies For Production Rate Expansion
Expansion Drilling & Regional Exploration
Romania EIA/SIA programs
Drilling & Expansion of Ciresata Porphyry
Updated NI 43-101 Resource
Pre-Feasibility/ Feasibility Study
Permitting Process
Construction (Production targeted for 2015/16)
Regional Exploration Drilling
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N.I. 43-101 Resource
Resource calculation based on US$950/oz Au for RDM; US$675/oz Au and US$1.80/lb Cu for RVP
M&I Resource 210,352,000 3,880,000 oz Au Inferred Resource 188,801,000 4,580,000 oz Au M&I Resource 193,100,000 759,100,000 lbs Cu Inferred Resource 177,700,000 663,100,000 lbs Cu
Total Resources
Category Tonnage Contained Metal
Rovina Valley Project – RVP
Category Tonnage Grade (g/t Au)
Contained Metal (oz Au)
M&I Resource 193,100,000 0.49 3,070,000 Inferred Resource 177,700,000 0.68 3,890,000
Category Tonnage Grade (%Cu)
Contained Metal (lbs Cu)
Riacho dos Machados – RDM
Category Tonnage Grade (g/t Au)
Contained Metal (oz Au)
M&I Resource 17,252,000 1.46 812,300 Inferred Resource 11,101,000 1.94 692,900
M&I Resource 193,100,000 759,100,000 Inferred Resource 177,700,000 663,100,000
0.18 0.17
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Production & Cash Flow Profile
* RVP generates Cu production of 61 MM lb in 2016, 53 MM lb in 2017, and 56 MM lb in 2018 Source: 2009 RDM PEA Study assuming US$1,000/oz Au and 2010 RVP PEA Study, assuming US$1,000/oz Au & US$3.00/lb Cu
Gold Production Profile
Cash Flow Profile
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Comparable Valuations
Notes: - Assumes 1.02 US$/C$ and 1.01 US$/A$ exchange rates (as of February 25, 2011) - NAVs based on consensus analyst estimates
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Summary
* Global mineral content for information purposes only as NI 43-101 does not allow summation of Measured + Indicated + Inferred Resources
• Two prolific gold development projects
• Global resource of 12.7+ MM oz Au Eq* (8.45 million oz Au; 1.4 billion Ib Cu)
• Robust Preliminary Economic Assessments
• Key long lead plant equipment purchased for the Ricaho dos Machados (“RDM”) Gold Project, Brazil
• Up to US $97 million project financing mandated for RDM Gold Project
• Production targeted to commence 2nd half of 2012 at ≈100,000 oz Au annually with built-in growth profile to 400,000 oz Au annually
• Substantial exploration upside to still be realized
• Attractive valuation at 0.5x NAV versus development and exploration peers at 0.8x and 0.6x NAV, respectively
• Proven management and board