20110614 usgold agm_presentation

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20110614 usgold agm_presentation

  1. 1. +Creating a High Growth, Low Cost Mid-tier Silver Producer 1
  2. 2. Forward Looking and Cautionary StatementsThis documents contains certain forward-looking statements and information by each of US Gold andMinera Andes, including “forward looking statements” within the meaning of the Private SecuritiesLitigation Reform Act of 1995. The forward-looking statements and information express, as at the date ofthis press release, US Gold and Minera Andes’ estimates, forecasts, projections, expectations or beliefsas to future events and results. Forward-looking statements and information are necessarily based upona number of estimates and assumptions that, while considered reasonable by management, areinherently subject to significant business, economic and competitive uncertainties, risks andcontingencies, and there can be no assurance that such statements and information will prove to beaccurate. Therefore, actual results and future events could differ materially from those anticipated in suchstatements and information. Risks and uncertainties that could cause results or future events to differmaterially from current expectations expressed or implied by the forward looking statements andinformation include, but are not limited to, the completion of a business combination between MineraAndes and US Gold (including the numerous approvals required in connection with such a businesscombination), risks related to business integration as a result of a successful business combination,factors associated with fluctuations in the market price of precious metals, mining industry risks, risksassociated with foreign operations, risks related to litigation including specifically but not limited to MineraAndes’ Los Azules property, property title, the state of the capital markets, environmental risks andhazards, uncertainty as to calculation of mineral resources and reserves and other risks. Readers shouldnot place undue reliance on forward-looking statements or information. Neither US Gold nor MineraAndes undertake any obligation to reissue or update forward-looking statements or information as aresult of new information or events after the date hereof except as may be required by law. See (i) USGold’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and other filings withthe Securities and Exchange Commission, under the caption “Risk Factors”; and, (ii) Minera Andes’Annual Information Form as filed on SEDAR (www.sedar.com) and form 40F/A filed with the SEC, for theperiod ended December 31, 2010, for additional information on risks, uncertainties and other factorsrelating to the forward-looking statements and information. All forward looking statements and informationmade in this news release are qualified by this cautionary statement. 2
  3. 3. LIFE IS FULL OF DISTRACTIONS.NO MATTER HOW TEMPTING ITMAY BE TO VEER OFF YOURPATH, KEEP YOUR GOALS INFOCUS AND KEEP MOVINGFORWARD.- Gabriel Cid 3
  4. 4. Transaction DetailsProposed Corporate Name: McEwen Mining Inc.Exchange/Ticker: NYSE / TSX : Ticker TBDShare Exchange Ratio: 1:0.4 Minera to US GoldPro-forma Market Cap: US $1.4 BillionPro-forma Shares Outstanding: 252.7 MillionPro-forma Rob McEwen Ownership: 25% ($345 Million)Pro-forma Balance Sheet: US $122 Million – No Bank DebtExpected Closing: Late October 4
  5. 5. Share Performance When Paying Premiums 5
  6. 6. Avg. Share Exchange Ratio Time (Minera : US Gold)18 Months 0.3215 Months 0.3212 Months 0.32 9 Months 0.36 6 Months 0.36 3 Months 0.35 2 Months 0.35 1 Months 0.36 2 weeks 0.37 1 weeks 0.39 June 13 0.39 6
  7. 7. Goldcorp + Wheaton CombinationPremium Paid: 7%Goldcorp PerformanceDay of Announcement $0.01Goldcorp Performance 170%12 Months Upon Closing 7
  8. 8. Highlights of Combination•  Current Production + Significant Growth•  Low Cost Producer•  Strong Balance Sheet•  Well Positioned Exploration Portfolio•  Increases Management’s Focus•  One Step Closer to S&P 500 8
  9. 9. Goal: Qualify for S&P 2015 Requirements 1. US Company ✔   2. Public Float > 50% ✔   3. Liquidity Threshold ✔   4. Sector Representation ✔   5. US Listing ✔   6. Market Cap. > $5 B ✗   7. 4 Qtrs Positive Earnings ✗   9
  10. 10. S&P 500: 2 Remaining Hurdles Today Pro-forma1.  Market Cap. > $5 B $765 MM $1.4 B Cash Flow2. 4 Qtrs Positive Earnings No Begins* As of Jun 13, 2011 10
  11. 11. Diversified in the Americas* San Jose: includes just MAI 49% interest 11
  12. 12. Significant Growth Pipeline 12
  13. 13. Production &Development 13
  14. 14. High Growth + Low CostPro-forma Estimates 7.5 MM oz Growing Production Lowering Costs 2.5 MM oz Cash Cost / Silver oz* (Gold by-product) -$0.40 -$1.50 2011E 2014E 2011E 2014E*Cash cost reported on a by-product basis 14
  15. 15. Rob McEwen Big Ownership – No Salary!Increases Management’s Focus $345 MM 27x Avg. $39 MM $31 MM $5 MM $3 MM $1 MM $0 MM McEwen First Silvercorp Hecla Coeur Pan Silver Mining Majestic D’Alene American Standard* As of Jun 13, 2011 15
  16. 16. Creating a Low Cost, High Margin ProducerCash Cost (By-Product Basis): McEwen Mining vs Peers Silver First Standard Pan $10.95 Majestic American $8.25 $7.85 Coeur $6.50 Hecla Silvercorp McEwen $1.05 -$7.60 Mining 2011 -$0.40 2014 -$1.50*Cash cost reported on a by-product basis** As of March 31, 2011 16
  17. 17. Creating the Next Mid-tier Silver ProducerProduction Profile: McEwen Mining vs Peers 24.3 MM 16.8 MM 10.6 MM 7.5 MM 8.5 MM 7 MM 5.6 MM2.5 MMMcEwen Silvercorp First McEwen Silver Hecla Coeur PanMining Majestic Mining Standard American 2011 2014*Pro-forma production** As of Dec 31, 2010 17
  18. 18. McEwen Mining Market Cap vs Peers $3.1 B $2.0 B $2.0 B $2.1 B $1.7 B $1.5 B $1.4 B*McEwen Silvercorp First Silver Hecla Coeur PanMining Majestic Standard American*Pro-forma market cap** As of June 13, 2011 18
  19. 19. Pro-forma Resource Estimates 100.3 MM oz 88.7 MM oz 10.3 B lbs 4.1 MM oz 2.9 MM oz 2.2 B lbs M&I Inferred M&I Inferred Indicated Inferred Silver Gold Copper* As of Dec 31, 2010 19
  20. 20. Strong Treasury - No Bank DebtCash + Silver / Gold Bullion $122 MM $100 MM $22 MM Pro-forma US Gold Minera Andes* As of May 31, 2011 20
  21. 21. IF LIFE HAS TAUGHT MEANYTHING, IT’S THAT WE ARECAPABLE OF FAR GREATERTHINGS THAN ONE CANPOSSIBLY IMAGINE.- Ari Merkin 21
  22. 22. Early Market Reaction to Deal 7.5% 5.3% Positive! 1.6% 1.4% 0.5% MJGI Silver Gold MAI UXG*As of 2:00 pm, June 14, 2011 22
  23. 23. El Gallo - Results of Preliminary Economic Assessment (Feb 2011) $18.00 Ag $28.50 Ag $1,000 Au $1,350 Au Avg / yr Silver Prod. 5 MM oz 5 MM oz Avg / yr Gold Prod. 50,250 oz 50,250 oz Silver Cash Cost1 $5.90 $2.45 IRR2 27% 65% Payback 2.3 yrs 1.0 yrs NPV (5%)2 $155 MM $520 MM Capex $150 MM $150 MM1) Feb 2011 PEA 2) Net of gold by-product 3) Pre-tax 23
  24. 24. 24
  25. 25. El Gallo: Potential to Expand Production 25
  26. 26. 26
  27. 27. 27
  28. 28. 28
  29. 29. El Gallo – Timeline to Production2011-12: Exploration 15 Drills - $30 Million2011-12: Mine PermittingQ4 2011: Feasibility Study/Resource UpdateLate 2012:Construction2014: Production 29
  30. 30. Gold Bar – Cortez Trend, NevadaPreliminary Economic Assessment (Apr 2010) §  60,000 oz Au / yr §  Cash Costs $600 / oz §  IRR 60%1,2 §  Payback in 3 yrs1 §  Initial Capital $40 MM §  NPV (6%) $105 MM 1,2 §  M&I Resource: 1 Million oz Gold1) $1,150 / oz gold price, 2)Pre-tax, 3) April 2010 PEA 30
  31. 31. Gold Bar: Pre-Feasibility StudyExpected Sept 2011 Gold  Mineraliza5on  >  0.2  gpt   Pit  Design  ($1,200  Gold)   0   100   200   0   300   600   Meters   Feet   31
  32. 32. Gold Bar – Timeline to Production2011-12: Exploration - $5 MillionSept 2011: Gold Bar Pre-feasibility2011-13: Mine Permitting2013: ConstructionLate 2014: Production 32
  33. 33. 33
  34. 34. Nevada - Tonkin - Cortez Trend 34
  35. 35. New Veins @ San Jose Mine Sofia  Vein   10.13  m  @  14.96  g/t  Au,  1,096  g/t  Ag      5.45  m  @  13.54  g/t  Au,        206  g/t  Ag      1.72  m  @  10.94  g/t  Au,  1,255  g/t  Ag   Micaela  Vein      2.45  m  @      8.33  g/t  Au,  1,484  g/t  Ag      1.09  m  @  33.50  g/t  Au,  2,752  g/t  Ag   35
  36. 36. Early Stage 100% OwnedBeside Goldcorp’s $3.6B Purchase 36
  37. 37. SANTA  CRUZ  EXPLORATION  TARGETS   37
  38. 38. Los Azules – Excellent Copper ResultsStepping out: 1.12% copper over62.5 meters4 Best Drill Holes:•  1.08% copper over 145 meters•  1.01% copper over 216 meters•  1.05% copper over 236 meters•  1.04% copper over 168 meters 38
  39. 39. Appendix 39
  40. 40. San Jose Mine – Argentina (49%)•  Started production in 2007•  2010 silver + gold production -  Silver 5.3 MM oz -  Gold 84,000 oz -  Silver cash costs -$1.00•  Started production in 2007•  Large 100,000 acre property remains underexplored•  October 2010, 9 new veins San  Jose  Mine   Tonnes   Ag  Grade   Au  Grade   Ag  (MM  oz) Au  (MM  oz)   (49%)   (MM)(100%)   (g/t)   (g/t)   (100%)   (100%)   announced, significantly P  &  P   1.5   451   6.33   21.3   0.30   extending the mines life M&I  (incl.  P&P)   Inferred   3.1   3.0   475   373   6.80   5.96   46.6   35.8   0.67   0.57   40
  41. 41. El Gallo Project – Mexico (100%)• Located in Sinaloa State, Mexico• Discovered by US Gold in 2009• Consists of the El Gallo, Palmarito, Magistral Deposits• Forecasted production -  5 MM oz Silver -  50,250 oz Gold -  Silver cash cost $2.50 Ag  Grade   Au  Grade   Ag     Au   El  Gallo   Tonnes  (MM)   (g/t)   (g/t)   (MM  oz)    (MM  oz)  • Bankable feasibility Q4 2011 M&I   12.6   77   0.06   31.2   0.02   Inferred   10.0   52   0.03   16.7   0.01        • Commercial production 2014 Ag  Grade   Au  Grade   Ag     Au     Palmarito   Tonnes  (MM)   (g/t)   (g/t)   (MM  oz)   (MM  oz)   M&I   3.7   71   0.14   8.5   0.02   Inferred   1.6   58   0.10   3.0   0.01         Ag  Grade   Au  Grade   Ag     Au     Magistral   Tonnes  (MM)   (g/t)   (g/t)   (MM  oz)   (MM  oz)   M&I   10.4   -­‐   1.50   -­‐   0.50   Inferred   0.2   -­‐   1.14   -­‐   0.01   41
  42. 42. Gold Bar Project – Nevada (100%)• Located in Nevada’s Cortez Trend• Previous producer• Forecasted production -  60,000 oz Gold / yr -  Gold cash cost $600• Pre-feasibility Q3 2011• Commercial production late 2014 Tonnes   Ag  Grade   Au  Grade   Ag  (MM   Au  (MM   Gold  Bar   (MM)   (g/t)   (g/t)   oz)   oz)   M&I     33.5   -­‐   0.91   -­‐   0.97   Inferred   1.3   -­‐   0.54   -­‐   0.02   42
  43. 43. Los Azules Project – Argentina (100%)• Advanced-stage porphyry copper exploration project• One of the worlds largest undeveloped copper deposits• PEA Highlights -  NPV $2.8 Billion -  IRR 21% -  169,000 tonnes Cu / yr -  Capex. $2.9 Billion• Pre-feasibility underway Tonnes   Cu  Grade   Au  Grade   Ag  Grade   Cu  (B   Au     Ag   Los  Azules   (MM)   (%)   (g/t)   (g/t)   lbs)   (oz)   (oz)   Indicated   137   0.73   0.07   1.7   2.2   0.3   7.5   Inferred   900   0.52   0.07   1.7   10.3   2.0   49.2   43

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