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Cervello Capital Presentaion April 2012
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    Cervello Capital Presentaion April 2012 Cervello Capital Presentaion April 2012 Presentation Transcript

    • Presentation
    • Forward Looking StatementThe following information may contain forward looking statements.Forward looking statements address future events and conditions andtherefore involve inherent risks and uncertainties. Actual results may differmaterially from those currently anticipated in such statement. Forward-looking information is subject to known and unknown risks, uncertaintiesand other factors that may cause Oremex Silver Inc., Oremex Gold Inc.,Llave Oro Inc., Mogul Ventures Corp., Honker Gold or Vulture Peak GoldLP actual results, level of activity, performance or achievements to bematerially different from those expressed or implied by such forwardlooking information. Such factors include, but are not limited to:uncertainties related to historical resource estimates, work expenditurecommitments; ability to raise sufficient capital to fund future exploration ordevelopment programs; changes in economic condition or financialmarkets, regulatory, political and competitive developments; technologicalor operational difficulties or an inability to obtain permits required inconnection with maintaining, or advancing projects; and labour relationmatters
    • Cervello Capital Inc.• Toronto-based private merchant bank• Global expertise and focus in the junior resource sector• We provide: seed capital, technical, board and managerial leadership, guidance through the go-public process, capital markets advisory services to international resource projects of interest• Successful track record of taking international projects through this process by focusing on: » Asset quality » Technical expertise » Creation of an appropriate capital structure• Operational experience: Argentina, Brazil, Bolivia, Chile, Colombia, Mexico, Mongolia, and the United States. 3 | www.cervellocapital.com
    • Technical LeadershipMICHAEL R. SMITH, R.G.• Over 20 years of international mining operations experience. Served as Chief Mine Geologist for Barrick Gold Corp. at the Goldstrike Mine in Nevada. Founding CEO, discovered and led exploration of Continental Gold’s (TSX: CNL) Buritica Project.DAVID A. TERRY, PH.D., P.GEO.• Over 20 twenty years of international experience in the natural resource sector with major and junior resource companies. David’s focus has primarily been on exploration and development of precious and base metal deposits in North and South America.BALMER ECHEVERRI• Geological engineer with Masters degree in Economic Geology. Over 10 years of mining experience mainly in Colombia. Former Country Manager at Barrick-Colombia, led discovery of the 7 million oz. Marsella deposit.BILL FEYERABEND• Over 30 years of experience in exploration and development around the world. A member of the American Institute of Professional Geologists.JOHN E. DREIER• Founder and President of public and private companies. Played key roles in the discovery and exploration of the Green Springs, Little Bald Mountain gold deposits and the Sanchez and Piedras Verdes copper deposits. Managed exploration projects throughout the Americas.
    • Developing Silver Resources in Mexico TSX VENTURE: OAG OTCQX: ORAGF FRANKFURT: OSI5 | TSX Venture: OAG | www.oremexsilver.com | www.cervellocapital.com
    • Developing Silver Resources in MexicoFocus on the exploration and development of silver projects along the highlyproductive mineralized belt that made Mexico the largest silver-producingcountry in the world• Oremex Resources Inc. was renamed Oremex Silver Inc. in Q3, 2011 to reflect pure silver focus » Spin-out of gold projects listed as Oremex Gold Inc. (TSX.V: OAU)• Portfolio of silver projects includes mineral resource of 50.8M oz. of silver with P.E.A at the Tejament project• All projects are in mining / capital-friendly jurisdictions• Unlocked unrecognized value and created shareholder value through the distribution of dividend-in-kind of14M common shares Oremex Gold Inc. shares La Purisima shaft at the Chalchihuites property• Experienced Board and Management team » Successful track record of mine building in Mexico with seasoned ability for new project evaluation / acquisition6 | TSX Venture: OAG | www.oremexsilver.com | www.cervellocapital.com
    • Project Locations TEJAMEN (Durango State) SAN LUCAS (Durango State) • Flagship property with 50.8M oz • Similar geology as Tejamen but with base NI 43-101 compliant resource metals with P.E.A • Further drilling to establish resource and • Viability of open pit, heap leach follow up high grade zones, 1,856 g/t Ag operation (Snowden Report, ’06) • Potential to expand resource CHALCHIHUITES (Zacatecas State) • Located in prolific silver producing district » Grades up to 3,800 g/t Ag, 0.99 g/t Au +1.6% Pb • Skarn and CRD manto system with pastEL SOL (Durango State) production of high-grade silver-zinc-lead• Potential for silver-rich, • Initializing follow-up underground and surface drill base metal skarns programs• Adjacent to Southern Silver’s • On strike with and adjacent to First Majestic Cerro Las Minitas Silver’s (NYSE: AG) Del Toro Project (within 4km)• Strong IP geophysics demonstrating buried intrusive and sulfide mineralization indicate excellent drill targets 7 | TSX Venture: OAG | www.oremexsilver.com | www.cervellocapital.com
    • Tejamen ProjectVein outcrops • Flagship projectCERRO PRIETO • 100% mineral rights • Surface access being negotiated Perimeter potential • Wardrop Report (2006) defines LOS MANTOS 50.8M oz. silver open pit › 22Mt at 69 g/t silver • Snowden Report (2006) outlines viability of open pit, heap leach operation › 10,000 TPD › Estimated CapEx USD $45M › 2:1 strip ratio › 3.5 - 4.0M oz. silver per year  Operating cost scenario ofBlock model shows Los Mantos remains open to the south $5.75/tonneand east › Cash operating cost of $4/oz AgSignificant exploration upside in feeder veins beneath LosMantos and Cerro Prieto deposits, grades 6m of 1,400 g/t Ag,with about 5% lead & zinc 8 | TSX Venture: OAG | www.oremexsilver.com | www.cervellocapital.com
    • Value Underpinning Oremex Silver Unchanged9 | TSX Venture: OAG | www.oremexsilver.com | www.cervellocapital.com
    • Advancing High Potential Gold Assets in México TSX VENTURE: OAU FRANKFURT: OM810 | TSX Venture: OAU | www.oremexgold.com | www.cervellocapital.com
    • Portfolio of Gold Projects in Mexico’s Prolific Mining BeltCanadian gold exploration and Oremex Gold Spin-out Structuredevelopment company created from the APPROX. SHAREHOLDER APPROX. %spin-out of gold assets owned by Oremex SHARESSilver Inc. (formerly Oremex Resources Oremex Silver Inc. 14,000,000 40.5%Inc.) in 2011. Black Birch (CPC) 3,342,520 9.7%The company has a portfolio of 100%owned gold properties in the prolific New from Financing 17,200,000 49.8%mining regions of Mexico. Total Basic 34,542,520• Intent to dividend Oremex Gold Inc. Options & Warrants 2,568,502 shares to Oremex Silver Inc. shareholders in the new year Financing Warrants 8,600,000 Oremex Gold Inc. Fully Diluted 45,711,022 • Approx. 34.8 million shares issued • $2.6 million cash (Dec.30.2011) • Fully diluted: 47 million 11 | TSX Venture: OAU | www.oremexgold.com | www.cervellocapital.com
    • Project Locations Exploring and advancing exciting early stage projects within Mexico’s emerging Sierra Rosario Gold Belt. The company’s projects, new management team and experienced Board of Directors represent a platformNAVIDAD for value and growth creation in well-established, mining-friendly regions. CERRO DEL ORO (Zacatecas State) • Located in the historic Melchor Ocampo gold mining district • 22km north of Goldcorp Inc.’s world-class, MACO Peñasquito, gold-silver-lead-zinc mine • Underground drilling program and ground geophysical program commencing prior to Phase I SAN LUCAS surface drilling program CERRO DEL ORO SANTA CATARINA SANTA CATARINA (Sinaloa State) • Located in the prolific Sierra Rosario Gold Belt • Massive sulphide deposit: 20m of 3.2g/t Au, hosted in carbonates • Surface sampling has yielded up to 2.1m @ 20.5 g/t gold • Drill program to commence in 2012 • JV with Oro Mining Ltd. (TSX.V - OGR) to acquire 75% interest in the surrounding 29,000 hectares of the Concordia/ Guasima Projects12 | TSX Venture: OAU | www.oremexgold.com | www.cervellocapital.com
    • Cerro del Oro • Two concessions totaling 78.9 hectares in northern Zacatecas state • Concessions cover the core of the historical Melchor Ocampo gold mining district • Widespread gold mineralization » 460 samples ave. 0.47g/t Au • Assay highlights from surface chip sampling: » 3.2m at 8.3 g/t Au; 13.8m at 2.85 g/t gold; 25.2m at 0.53 g/t gold and 64.1m at 0.45 g/t gold • Expanded mineralized intrusive/skarn domain to 500m by 500m area from a 450m by 300m areaUnderground drilling program and ground geophysical programcommencing prior to Phase I drilling program 13 | TSX Venture: OAU | www.oremexgold.com | www.cervellocapital.com
    • Company Highlights• Uniquely Positioned » Five, 100% owned properties in the prolific mining regions of Mexico » Mining, capital-friendly jurisdictions » Well financed with attractive share structure • Exploration Upside » Highly prospective, early stage gold projects hosting multiple targets » Located in well-known gold mining districts » Significant drill program planned for current year • Focused Growth Platform » Management & Board with a successful track record of exploration, development San Lucas Property and discovery in Mexico as well as elsewhere in Latin America• Mexico has a growing economy and attractive mining legislation » Canadian companies represent ~70% of all mining companies in Mexico 14 | TSX Venture: OAU | www.oremexgold.com | www.cervellocapital.com
    • • Developing 100% owned flagship asset, Black Hills thermal coal project located in Middle Gobi. • Extensive Russian exploration history and the recently completed drill program will resulted in an initial NI 43-101 compliant resource of 89.6 million tons of Inferred Resources in Ovdog Hudag coal deposit.15 | www.mogulvc.com | www.cervellocapital.com
    • Mongolia Overview• Home to some of the world’s largest natural resource deposits including coal, gold and copper• Next door to the biggest consumer of commodities in the world – China• Mining is the most important sector “contributes 30% of GDP and 70% of exports”(1)• Mongolian government focused on long-term development of resource- related sectors and favorable policies Drilling Camp, 2011 towards business and foreign investments• Stable business-friendly democracy: 20 year uninterrupted history of peaceful and democratic government• Homogenous country with minimal risk of ethnic or religious conflict Source: (1) the Ministry of Mineral Resources & Energy of Mongolia 16 | www.mogulvc.com | www.cervellocapital.com
    • Black Hills Project Key Advantages• Strategic location close to existing rail line (parallel line planned) providing ready access to Chinese markets• Open pit accessible thermal coal resources with expected low strip ratio• NI 43-101 compliant Inferred Resource of 89.6 Mt from 2,370m of drilling in 14 holes at Ovdog Hudag deposit• Property has potential for presence of other commodities (Cu, Fe) 17 | www.mogulvc.com | www.cervellocapital.com
    • Company Objectives • Excellent potential to significantly expand the projects’ coal resources through: » Infill and step-out drilling at Ovdog Hudag deposit where substantially larger historical resources were delineated by Russian work in the 1960s and 1970s through more detailed drilling » Ovdog Hudag Coal Deposit remains open to the north » Drilling of the Ikh Ulaan Nuur deposit 7km NNE of Ovdog Hudag (86.4 Mt*1) » Testing the undrilled area between the two known deposits » Phase II drill program planned to commence April 2012 » Potential for copper deposit demonstrated by surface sampling of skarn grading up to 6% Cu18 | www.mogulvc.com | www.cervellocapital.com
    • Timeline H1 2011 H2 2011 Q1 2012 Q2 2012TRANSACTIONCompleted due diligence, Complete audit and prepare Complete public RTO, closeproperty review, Title Opinion, info Circ. Pubco. funding – public listingprivate financing, closed TS LLCpurchase, RTO agreement with Received approvals and signedTSX listed CPC an order for issuance of the mining licenseEXPLORATIONComplete initial independent Complete drill program to Completed NI 43-101 report Implement NI 43-101historical review of coal confirm coal characteristics and recommended programoccurrences historical workACQUISITIONCompleted acquisition of TS Review other potential coalcoal project acquisitionsDEVELOPMENT Confirmation drilling of Black Converted Exploration license Confirm resource and expand Hills to Mining License drilling 19 | www.mogulvc.com | www.cervellocapital.com
    • A Premier Gold Explorer in Colombia20 | www.llaveoro.com | www.cervellocapital.com
    • Value Creation• Large scale gold project acquisitions identified• Located in Antioquia state Pre-IPO $3.4M @ $0.20• Very prolific gold region over past several Financing hundred years Shares 28,709,850• A premier Colombian-based team with a track Outstanding record of significant exploration success » Identified, assembled, negotiated and Fully Diluted 40,009,881 advanced exploration on Continental Gold’s key assets (TSX: CNL) Warrants 8,500,000 @ $0.30• Strong Board with extensive experience building companies and creating shareholder value in the capital markets Options 2,800,031 @ $0.20• Advancing the public listing process• Majors nearby: » AngloGold Ashanti (NYSE: AU), Continental Gold (TSX: CNL), B2 Gold (TSX: BTO) 21 | www.llaveoro.com | www.cervellocapital.com
    • Projects POPALES PROJECT • 7km away from Continental Gold’s 4moz. Buritica project • Multiple gold bearing veins identified through preliminary exploration • High grade vein and bulk mining potential • Drill ready project with high grade vein and bulk mining potential • Grades up to 68 g/t Au • Altered rock between veins assayed up to 13 g/t Au EL RAYO PROJECT • Located approximately 55km NE of Medellin • Open cut exposes a shear zone ~11m wide, length appears to be 1+km • Chip samples yielded 4.2 g/t Au to 16.6 g/t Au • Two mineralized zones identified: • 200m by 50m of gold anomalies ranging LLAVE ORO INC. PROPERTIES 0.1 – 5.4 g/t Au • 270m by 170m ranging 0.1 – 2.6 g/t Au22 | www.llaveoro.com | www.cervellocapital.com
    • Popales Geochemistry • Widespread mineralization indicates: » Large hydrothermal system and » Provides numerous drill targets • Copper and silver mineralization is associated with gold mineralization • Mineralization very similar to Continental Gold’s Buritica 4Moz. deposit
    • Popales & Buritica Comparison• Multiple gold bearing veins identified through preliminary exploration• Grades up to 68 g/t Au• Altered rock between veins assayed up to 13 g/t Au 100 m• Drill-ready project with 7 drill holes identified• High grade vein and bulk mining potential• Distribution and type of high-grade veins at Popales is very similar to Buritica’s 4Moz. Au deposit• Identified 45 high-grade Buritica-like veins Illustrations: Top: Popales Veins Bottom: Buritica Veins 24 | www.llaveoro.com | www.cervellocapital.com
    • Overview• Early-stage investment opportunity• Start-up level valuation• Significant catalysts and activity during 2012• Ongoing program » Geological mapping and sampling » Both Popales and El Rayo have multiple “drill ready” targets » Final stages of permitting » Continued due diligence on additional project acquisitions » Advancement of go–public process Sample from high grade vein, Popales• Best in class team with vast expertise in Colombia• Still “early days” in Colombia 25 | www.llaveoro.com | www.cervellocapital.com
    • Potential to Hold a Multi-Million Tonne Vein Type Gold Deposit26 | www.cervellocapital.com
    • Investor Highlights• Multimillion, bulk-mineable ounce Gold potential in Alaska » In the prolific Tintina Gold Belt » Potential to hold a multi-million 16.5M oz tonne vein type deposit with gold values ranging up to 80 or 90g/t Au 6.7M oz• Previously explored• NI 43-101 report (Jan.30.2011) 29.3M oz• Multiple bulk minable targets identified by surface work and drilling• Proven track record: strong team of mining and financial professionals• Infrastructure: modern mining camp and landing strip 10km away, former USAF fighter base 70km away 27 | www.cervellocapital.com
    • Tintina Gold Belt• In the Tintina Gold Belt Discovery Outcrop (near Galena, Western Alaska)• Discovered in 1981 by Anaconda• 20 claims totaling 1,295 hectares• Vein is defined by 200 surface samples and 10 diamond drill holes• Year round exploration possible given common light snowfall to the area 28 | www.cervellocapital.com
    • Exploration Potential• Two known northeast trending gold veins: Main and West » Cumulative exposure over 150m » Main Vein: continuous train 1km along strike and 170m vertical interval• Historical exploration has barely identified the potential of the mineralized gold deposit » Historic exploration traced the vein to a max. depth of 50m below surface• Mineralization is open to the North, South and at depth29 | www.cervellocapital.com
    • Past Exploration Work• 1981 – 1983: geological mapping, ground magnetometer, IP and MAXMIN EM survey, geochemical sampling and 10 diamond drill holes totalling 1,001.2 m completed » 4 of 10 holes reached the Main Vein• Values range: 1m grading 3.8 g.t Au; 5m grading 9.28 g/t Au; subinterval grading up to 14.5 g/t Au• Two bulk samples (160 and 72.7lbs) collected along the Main Vein ave. 29.14 g/t Au and 29.48 g/t Ag• Anaconda drill holes hit Gold in the Main Vein and disseminated mineralization near the vein 30 | www.cervellocapital.com
    • Milestones & Objectives• Staged exploration program determined » Objective: test the potential of the Honker veins at depth to determine the large-scale potential of the mineral system• Shareholder value creation: through acquisition and development of superior west-coast based minerals projects• Leverage Cervello Capital relationship and use Honker Gold Project as the asset for a public launch Main Vein Sample• Proposed Phase I Work Program Geological mapping to locate additional targets Estimated Budget: Complete 1,500m of core drilling to locate high-grade ore $1.5M zones along the Main Vein and bulk tonnage deposits adjacent to the vein 31 | www.cervellocapital.com
    • • Limited partnership investment vehicle structured to maximize the distribution of cash flow from gold production at the Vulture Gold Mine • The mine, which has produced 340,000 ounces of gold over its operational history, has a gold resource of 328,000 ounces (non-NI 43-101 compliant) and is expected to be a low-capex, low-cost, open pit operation32 | www.vulturepeakgold.com | www.cervellocapital.com
    • Investor Focus • Low capex, low-cost and near-term, open pit gold production • Primary investment objective = cash flow distribution • Project payback less than 18 months • 328,000 ounce base case with additional resource upside • Breakeven cash flow at $450 gold • Examining ability to provide unit holders option to accept physical delivery • Some upfront tax benefits with limited partnership structure • NPV at $1,500 Gold = $88 million33 | www.vulturepeakgold.com | www.cervellocapital.com
    • Resource Block Model• Block model and Resource Estimate created based on drill data from 89 holes to a depth of 200 to 500 feet, deposit extends to at least 650 feet down dip• Vulture Peak Gold conducted panel sampling and surveying of mine workings to a depth of 650 feet 34 | www.vulturepeakgold.com | www.cervellocapital.com
    • Potential Production Scenario• Base case of 328,000 oz. Au• Assumes no additional Resource delineated• Objective of reaching 50,000 oz/yr production over 5 year period, assuming no resource expansion• Cash cost/oz anticipated to be between US $400 and $450• Positive preliminary metallurgical testing completed July, 2011 by Resource Development Inc., (Denver)• Met testing indicates all ores leachable at various crush and grinds• Ore available at mining start to load on Old ore car and high grade mineralization underground leach pads and mill high grade• Expected Capex • Roughly $25M • Finance any potential expansion and milling through cash flow• Projected startup early 201335 | www.vulturepeakgold.com | www.cervellocapital.com
    • Preliminary Estimate Cash Flow Model VULTURE MINE YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 TOTAL DCFREVENUEProcessed OreOunces 19,545 48,864 48,864 48,864 48,864 29,320 244,321% Recovery 0.74 0.74 0.74 0.74 0.74 0.74Recovered Ounces 14,401 36,003 36,003 36,003 36,003 21,603 180,016$$ @ $1200/oz Au $17,280,907 $43,203,594 $43,203,594 $43,203,594 $43,203,594 $25,923,571 216,018,855$$ @ $1500/oz Au $21,601,134 $54,004,493 $54,004,493 $54,004,493 $54,004,493 $32,404,464 270,023,569$$ @ $1800/oz Au $25,921,361 $64,805,391 $64,805,391 $64,805,391 $64,805,391 $38,885,357 324,028,283COSTSProperty Payment $3,275,000 $3,275,000Drilling $400,000 $100,000 $500,000Engineering $300,000 $200,000 $500,000Permitting $300,000 $100,000 $400,000Payroll & facilitiesconstr. $400,000 $400,000 $800,000Leach Pad Constr.Tonnes 3,600,000 720,000 720,000 720,000 720,000 720,000 7,200,000Leach Constr.@ $2.16/t + mill $10,900,000 $1,440,000 $1,440,000 $1,440,000 $1,440,000 $1,440,000 $18,100,000Water Supply $1,000,000 $1,000,000Site Preparation $2,623,000 $2,623,000Operating @ $7.90/t $7,704,000 $13,867,200 $13,867,200 $13,867,200 $13,867,200 $13,867,200 $1,000,000 $78,040,000 $4,675,000 $23,027,000 $15,307,200 $15,307,200 $15,307,200 $15,307,200 $15,307,200 $1,000,000 $105,238,000OPERATINGCASH FLOW$$ @ $1200/oz Au -$4,675,000 -$23,027,000 $1,973,707 $27,896,394 $27,896,394 $27,896,394 $27,896,394 $24,923,571 $110,780,855$$ @ $1500/oz Au -$4,675,000 -$23,027,000 $6,293,934 $38,697,293 $38,697,293 $38,697,293 $38,697,293 $31,404,464 $164,785,569$$ @ $1800/oz Au -$4,675,000 -$23,027,000 $10,614,161 $49,498,191 $49,498,191 $49,498,191 $49,498,191 $37,885,357 $218,790,283DCF: $1,500/ oz Au at 10% discount: $88,000,000 36 | www.vulturepeakgold.com | www.cervellocapital.com
    • $100,000 Investment ScenarioSHARE YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 CUMULATIVE AT $1200 $ (15,586.45) $ (76,772.02) $ 6,580.34 $ 93,006.58 $ 93,006.58 $ 93,006.58 $ 93,006.58 $ 83,095.19 $ 369,343.37 /oz AU $1500 $ (15,586.45) $ (76,772.02) $ 20,983.98 $ 129,016.77 $ 129,016.77 $ 129,016.77 $ 129,016.77 $ 104,702.48 $ 549,395.09 /oz AU $1800 $ (15,586.45) $ (76,772.02) $ 35,387.61 $ 165,026.97 $ 165,026.97 $ 165,026.97 $ 165,026.97 $ 126,309.78 $ 729,446.80 /oz AUNotes Assumes $5 million raised at $30 million pre money value Assumes no additional resource is added to the project Assumes all costs as estimated 37 | www.vulturepeakgold.com | www.cervellocapital.com
    • Investment Structure & Summary• Vulture Peak LLC acts as a General Partner to Vulture Peak Gold LP • Provides turnkey management for development of project• Separate US LP within Canadian LP structure• Up to $5 million equity to be raised within the Company• Proceeds will advance Vulture through Compliant Resource calculation to Feasibility Study• Major Capex requirement will be raised through Project Finance, Credit Facility, Production Streaming• Project payback: less than 18 months• 328,000 oz base case with additional resource upside• Breakeven cash flow at $450 Gold• Primary investment objective = cash flow distribution• Examining ability to provide unit holders option to accept physical delivery• Some upfront tax benefits with LP structure Blast hole drilling, 2012• NPV at $1,500 Gold = $88 million38 | www.vulturepeakgold.com | www.cervellocapital.com
    • Thank You.