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    Teranga bmo 2012 final Teranga bmo 2012 final Presentation Transcript

    • PRODUCINGANDEXPLORINGBMO CAPITAL MARKETSGLOBAL METALS AND MININGCONFERENCE – 2012 1
    • CAUTIONARY STATEMENTThis presentation contains forward looking information, within the meaning of applicable Canadian securities legislation, and forward looking statements, within themeaning of applicable United States securities legislation, which reflects management’s expectations regarding Teranga Gold Corporation’s (“Teranga” or the“Company”) future growth, results of operations (including, without limitation, future production and capital expenditures), performance (both operational andfinancial) and business prospects (including the timing and development of new deposits and the success of exploration activities) and opportunities. Whereverpossible, words such as “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”,“intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, havebeen used to identify such forward looking information. Although the forward looking information contained in this presentation reflect management’s current beliefsbased upon information currently available to management and based upon what management believes to be reasonable assumptions, Teranga cannot be certainthat actual results will be consistent with such forward looking information. A number of factors could cause actual results, performance or achievements to differmaterially from the results expressed or implied in the forward looking information, including those listed in the “Risk Factors” section of the prospectus of Teranga,dated November 11, 2010 (the “Prospectus”). These factors should be considered carefully and prospective investors should not place undue reliance on theforward looking information. Forward looking information necessarily involves significant known and unknown risks, assumptions and uncertainties that may causeTeranga’s actual results, performance, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward lookinginformation. Although Teranga has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from thosedescribed in the forward looking information, there may be other factors and risks that cause actions, events or results not to be as anticipated, estimated orintended. There can be no assurance that the forward looking information will prove to be accurate, as actual results and future events could differ materially fromthose anticipated in such statements. Accordingly, prospective investors should not place undue reliance on such forward looking information. Teranga expresslydisclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, exceptin accordance with applicable securities law.Forward looking information and other information contained herein concerning mineral exploration and management’s general expectations concerning themineral exploration industry are based on estimates prepared by management using data from publicly available industry sources as well as from market researchand industry analysis and on assumptions based on data and knowledge of this industry which management believes to be reasonable. However, this data isinherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While management is not aware ofany misstatements regarding any industry data presented herein, mineral exploration involves risks and uncertainties and industry data is subject to change basedon various factors.In addition, please note that statements relating to “reserves” or “resources” are deemed to be forward looking information as they involve the implied assessment,based on certain estimates and assumptions, that the resources and reserves described can be profitably mined in the future. While management has confidencein its projections based on exploration work done to date, the potential quantity and grade disclosed herein is conceptual in nature, and there has been insufficientexploration to define a mineral resource, therefore it is uncertain if further exploration will result in the targets being delineated as a mineral resource.This presentation does not constitute in any way an offer or invitation to subscribe for securities in Teranga pursuant to the Corporations Act 2001 (Cth) and hasnot been lodged with the Australian Securities and Investment Commission. 2
    • CAPITALIZATION SUMMARY FOCUSEDTicker symbol: TGZ: TSX/ASX ON GROWTHShares outstanding(1): 245.6 million FOCUSED ON:Stock options outstanding: 19.2 million GROWINGShare price (as at February 22, 2012): C$2.66 RESERVESMarket capitalization: C$653 million GROWING PRODUCTIONCash position(2): US$26.5 millionMining Fleet Loan US$24.4 millionFacility(3):(1) As part of the demerger Mineral Deposits Ltd. retained 40 million TGZ shares and received C$50 millionfrom the IPO proceeds(2) Includes short-term investments and restricted cash, as at January 30, 2012(3) Drawn under the mining fleet finance loan facility with Société Générale as at December 31, 2011 3
    • OUR VISIONTo become a preeminent gold producer in West Africa while setting the benchmarkfor responsible miningPhase 1: Become a mid-tier gold producer in Senegal with 250,000 to 350,000 ounces(1) of annual gold production with existing infrastructurePhase 2: Increase annual gold production to 400,000 to 500,000 ounces(1) (1) See Key Assumptions on page 35 4
    • ASSETSOperating mine / mill • Proven performance • Only gold mining operation in the country • Expanding millLarge exploration land package in Senegal, W.A. • >1,500km2 virtually unexplored land surrounding operating mill • An emerging world class gold districtBuilding a stronger balance sheet • Able to self-fund exploration & developmentExperienced management team • Proven track record 5
    • SABODALA GOLD(SENEGAL)Sabodala is the only large-scale goldmine in SenegalSenegal • Mining Code passed in 2003 • Democratic government • Population of ~13.7M • Mining friendly regime • Government holds 10% free-carried interest in Sabodala and 3% royalty • Tax-free holiday that ends May 2015 6
    • SABODALA GOLD(OPERATIONS)First gold pour in March 2009 • $500M invested to dateMill expansion from 2 Mtpa to ~4 Mtpa underway • To be completed by end of Q1 2012 • Expanding to base of 200,000 oz annual run- rateWell developed infrastructure • Located 650km east of the capital Dakar and ~100km north of the town Kedougou – paved road within 56km of mine site • 36 MW heavy fuel oil power plant located on site 7
    • GROWTH STRATEGYFOCUSED ON GROWING RESERVES(1) • Objective: 10-15+ year mine life • Growth through exploration • Growth through regional opportunities (JV’s, acquisitions)FOCUSED ON GROWING PRODUCTION(1) • Objective: 400,000 – 500,000 oz’s producer • Phase 1: 250,000 – 350,000 oz’s annually • Phase 2: 400,000 – 500,000 oz’s annually Leveraging existing mill – land package all truckable • Doubling mill capacity – could increase furtherFOCUSED ON BUILDING FINANCIAL STRENGTH • Eliminating hedge book – quickly but prudently • Margin expansion (lower costs and eliminate hedge) • Significant free cash flow to self-fund exploration strategy • Manageable capex requirements(1) See Key Assumptions on page 35 8
    • 9
    • Production Profile (000 oz)FOCUSED ON 350,000GROWING PRODUCTION 300,0002011 250,000 • Produced 131,461 oz’s at $900/oz 200,000 • In line with revised guidance 150,000 • Costs affected by higher fuel, labour and maintenance costs 100,000 • Capex $76.4M(1) (primarily for mill expansion, mobile equipment and capitalized Mine License exploration) 50,0002012 0 2011 2012 2013 2014 • Est. production 210,000 – 225,000 oz’s at Production Exploration Success $600-$650/oz Assumes increased production from regional exploration • Capex ~ $30M(2) success • Exploration budget: $40M(1) For fiscal year 2011; fiscal year is from October 1, 2010 to December 31, 2011, a 15 month year. Teranga is converting from a June 30 to calendar year end.(2) Excludes capitalized Mine License exploration and capital costs to develop regional deposits 10
    • FOCUSED ON BUILDING Cash Margin ($/oz)(1,2)FINANCIAL STRENGTH 1200Building stronger balance sheet to 1000self-fund exploration and development 800 • Rising production, lowering costs 600 • Additional flexibility provided by deferring delivery of 28,000 ounces due in Q1 until H2400 2012 200 • Margin expansion + increased production profile = significant free cash flow to self-fund 0 exploration and development strategy 2011 2012 2013* 2014 *After eliminating hedge position • Manageable capex requirements in 2012: $30M(3)(1) Assumes $1600/oz gold price and cash cost of $625/oz(2) Non-Deferred Hedge Schedule page 37 11(3) Excludes capitalized Mine License exploration and capital costs to develop regional deposits
    • FOCUSED ON Kedougou-Kenieba Inlier – A Birimian Greenstone BeltGROWING RESERVES Yatela (Anglo Ashanti/Iamgold) 2.4 Moz deposit Reserves and Resources(1,2) Sadiola (Anglo Ashanti/Iamgold) December 31, 2011 9.5 Moz deposit 2.50 2.00 1.50 Loulo (Randgold) 9.6 Moz deposit Moz Gounkoto (Randgold) 3.5 Moz deposit 1.00 2.138 1.659 1.51 0.50 0.00 Proven and Measured and Inferred Probable Indicated Resources Reserves Resources(1) See page 36 (2) M+I Resources are inclusive of reserves 12
    • FOCUSED ONGROWING RESERVES2012 Exploration Program1. Mine License Exploration: $20M (77,000m)2. Regional Exploration: $20M (90,000m) TOTAL: $40M (167,000m) (+140,000m RAB)2011 Exploration Program: $46MFull drill results are posted at terangagold.com 13
    • 1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION 33km2 1,500km2 35 km radius 14
    • 1. SABODALA MINE LICENSEEXPLORATION• $20M exploration program is underway on the Sabodala Mine License• Potential to expand existing gold inventory on the ML from 1.55Moz to 2.5 – 3.5Moz(1,2,3) over the next 12 to 18 months increasing the mine life to ~ 10 to 15 years • From deepening the Sabodala pit to the north along the Main Flat Extension • From continuation of the Masato deposit • From conversion of Niakafiri resources to reserves(1) Potential to expand existing gold mineralization to between 50 and 60 M tonnes at grades of between 1.5 to 2.0 gpt Au for a total inventory of 2.5 to 3.5Moz(2) This exploration target is not a Mineral Resource. The potential quality and grade is conceptual in nature and there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource. 15(3) See Key Assumptions on page 35
    • MINE LICENSE EXPLORATION “THE CORRIDOR” Continuation of the main Sabodala structural trend to the north MAIN FLAT EXTENSION One of the principal gold hosts of the Sabodala deposit immediately adjacent to the current ultimate pit LOWER FLAT ZONE Deeper area directly below the MFE MASATO EXTENSION Continuation of Masato deposit NIAKAFIRI Convert resources to reserves and test at depth and along strike between deposits 16
    • 2011 MINE LICENSEHIGHLIGHTS FOCUSED• Intersection of significant widths of high grade ON GROWTH mineralization outside the Sabodala ultimate pit limit as part of MFE drill program FOCUSED ON:• Discovery of multiple high-grade zones in the LFZ just below the MFE area GROWING RESERVES• Successful intersection and extension of the Masato deposit down dip onto our Mine License and 500m along strike with potentially underground mineable high-grade ore• $14M spent in 2011• $20M budgeted for 2012 17
    • MINE LICENSE EXPLORATION – MAIN FLAT EXTENSION (“MFE”) Main Flat Extension – principal gold hosts of Sabodala deposit • MFE program is designed to test the continuity of this structure to the north beginning with infilling holes • Significant widths of high grade mineralization: 131m at 3.45 gpt 87m at 3.11 gpt 70m at 3.0 gpt 53m at 4.5 gpt Lower Flat Zone (“LFZ”) – deeper zone below MFE • Drilling confirms multiple flat zones immediately below Sabodala ultimate pit: 46m at 9.8 gpt 34m at 6.3 gptFull drill results are posted at terangagold.com 18
    • CROSS SECTION OF SABODALA GOLD DEPOSIT 19
    • MINE LICENSE EXPLORATION – “THE CORRIDOR” and AYOUB’S • Northerly trending extension of Sabodala pit • Mineralization traced more than 200m north of the existing pit along trend Mylonite Shear • Drilling intersected wide widths of alteration similar to Ayoub’s Zone Sabodala and Niakafiri Thrust 15m at 1.34 gpt 20m at 2.10 gpt • The system is continuous and is showing Sabodala style albitic alteration to the north where the target remains open down dip and along strike • The position of Ayoub’s lends itself to sharingSabodala Pit stripping for including deeper MFE mineralization into the ultimate pit Full drill results are posted at terangagold.com 20
    • MINE LICENSE EXPLORATION – MASATO Masato structural trend strikes across onto our Mine License Main Flat Extension • Oromin Joint Venture has identified open pit reserves of 0.5M oz about 2km from our mill • Tracking the deposit as it crosses onto our Masato Down Dip property Sabodala Pit • Multiple mineralized zones have been identified Sambaya Hill with high grade intervals apparent • Confirmed strike length of 500m, a dip extent of Masato Extensions 200m, and a band of about 40m of solid grade mineralization • 2km of strike length still to be tested • Recent results from Masato Down Dip include: 37m at 4.5 gpt 44m at 2.0 gpt Full drill results are posted at terangagold.com 21
    • MINE LICENSE EXPLORATION – NIAKAFIRI Niakafiri area has ~300,000 oz’s in reserves in a mineralized envelope of about ~800,000 oz’s • Deposit remains open below 200m level • Potential 2H 2012 drilling with intentions of adding to reserves • Ongoing community discussions Full drill results are posted at terangagold.com 22
    • 1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION 33km2 1,500km2 35 km radius 23
    • 2. REGIONAL EXPLORATION• From 2007 – 2009, no significant drilling was done on the 1,455km2 Regional Land Package due to cash constraints• There are ~40 drill targets identified; $32M spent in 2011 and $20M planned for 2012• Addition of Garaboureya North exploration permit, land package increases to over 1,500km2 24
    • REGIONAL EXPLORATION 1,500km2 “THE DONUT” Large gold complex (7km x 4km), high gold anomalism, early stages GORA Most advanced target, high grade quartz vein, transitioning to development TOUROKHOTO Large gold anomaly hosted on Main Transcurrent Zone, same as 3Moz Massawa deposit TOUMBOUMBA Newest target, potentially second into development, oxide mineralization 25
    • GORA • 2011: 115,000m RC/DD, 150,000m RAB • Current reserves of 114,000 oz’s at 5 gpt • Most advanced target: moving from exploration to development • Objective of having production in early 2013 permitting dependent • 22km from Sabodala mill, truckable • High grade-drill intersections continue to expand the potential footprint of the deposit Trace of blind veins from RC holes Projected to surface – high correlation with IP trends.Full drill results are posted at terangagold.com 26
    • TOUMBOUMBA – NEWEST TARGET • Latest discovery, potential to become second regional deposit through the mill • Located 10km from Sabodala mill • High grade, lower grade halo, and oxide material • Easily processing at minimum, potential for heap leaching • Alteration hosted mostly in granite (laterite cover) • Oxide mineralization of up to 60m in depth • RAB results: • 6m at 18.54 gpt • 4m at 3.31 gpt • 8m at 5.46 gpt • RC results: • 1m at 5.20 gpt • 2m at 21.45 gpt Full drill results are posted at terangagold.com • 4m at 6.32 gpt 27
    • DIEGOUN NORTH – “THE DONUT” • 7km x 4km complex of gold anomalism • Contrasting rock types, porphyries, granites, Sabodala Ore Body dolerite & sediments • RAB drilling has defined gold mineralization in bedrock • Honey and Jam • First pass RC program at Honey and Jam; 51 holes completed for just under 8,800m (51 holes anomalous levels of gold > 0.1 gpt; 40 holes were >0.5 gpt) • Recognition of a well-developed, auriferous NE trending structureFull drill results are posted at terangagold.com • 2012 drilling to focus on understanding ore-grade structural controls and orientations 28
    • • >5km long, up to 1km wide gold anomaly defined byTOUROKHOTO termite sampling, similar geology as Loulo across the border (12M oz resource) Sabodala Ore Body • Drilling to date has identified a substantial, mineralization system • Potential to host-ore grade shoots within • First pass drill program is designed to test for large, near surface open-pitable resource • Current program is 60% with most assays and interpretation pending • Parallels NE trending shears of the MTZ • 3M oz Massawa deposit hosted on MTZ about 25km south Full drill results are posted at terangagold.com 29
    • Kedougou-Kenieba Inlier – A Birimian Greenstone BeltFOCUSED ON Yatela (Anglo Ashanti/Iamgold)GROWTH 2.4 Moz deposit Sadiola (Anglo Ashanti/Iamgold) 9.5 Moz depositPhase 1: Become a mid-tier gold producer inSenegal with 250,000 to 350,000 ounces(1) ofannual gold production with existinginfrastructure Loulo (Randgold)Phase 2: Increase annual gold production to 9.6 Moz deposit Gounkoto (Randgold)400,000 to 500,000 ounces(1) with a second 3.5 Moz depositmill expansionAn emerging world class gold district.(1) See Key Assumptions on page 35 30
    • CORPORATESOCIAL RESPONSIBILITY• CSR is fundamental to the success of our business• Healthy, safety, education, sustainability• Developing schools, health clinics, and improving access to potable water• Engaged a renowned Canadian group to assist us in putting together a comprehensive regional development plan • Along with local, regional, and national government• Improve the livelihoods of those in the communities in which we operate• A key component of our vision is to set the benchmark in Senegal for responsible miningMining Responsibly and Sharing theBenefits 31
    • SUMMARY –FOCUSED ONGROWTH1. Only mill in Senegal – expansion almost complete2. Largest land position in Senegal3. Rising production, declining costs4. Building a stronger balance sheet – increasing production and free cash flow with margin expansion5. Extensive exploration program6. Experienced management team 32
    • PRODUCINGANDEXPLORINGBMO CAPITAL MARKETSGLOBAL METALS AND MININGCONFERENCE – 2012 33
    • APPENDICES 34
    • KEY ASSUMPTIONSBasis for 250,000 – 350,000 oz’s per annum production capacity – Phase 1 (1 to 3 years) Open pit economics at US$1200/oz gold Using current unit costs, metallurgical recoveries and current expanded mill capacity (~ 4Mtpa)Basis for 400,000 – 500,000 oz’s per annum production capacity – Phase 2 (within 5 years) Second mill expansion Based on success with $40M 2012 exploration program on 1,500km² Regional Land Package and/or JV’s or acquisitions of assets or companies in SenegalBasis for 2.5 – 3.5Moz gold inventory from Mine License Expand upon existing gold mineralization by an additional 20M to 30M tonnes at grades of between 1.5 and 2.0 gpt for a total inventory of 2.5 to 3.5Moz from the Sabodala Mining License (“ML”) over the next 12 to 18 months. The larger gold inventory base is expected to result from the success of deepening the Sabodala pit to the north along the MFE/LFZ, extension of the Masato pit onto the ML, potential conversion of Niakafiri resources to reserves. This exploration target is not a Mineral Resource. The potential quantity and grade disclosed herein is conceptual in nature, and there has been insufficient exploration to define a Mineral Resource, therefore it is uncertain if further exploration will result in the targets being delineated as a Mineral Resource. The goal of the MFE/LFZ programs is to add 250,000 to 500,000 ounces of gold to the open pit mineable gold inventory at an average grade between 1.5 – 2.0 gpt, as well as potentially a similar amount to lower/underground at an average grade between 3.0 and 4.0 gpt, in 2012.Rationale: Recent drilling confirms extension of mineralization to the north of the existing pit Potential for identification of additional ounces through infill drilling within area of existing resources under the ML Minimum 6 drill rigs and exploration budget of US$20M dedicated to ML alone in 2012 Program to continue to test similar geophysical anomalies and identified structures within the ML 35
    • SABODALA GOLD PROJECT: RESERVES & RESOURCES(DECEMBER 31, 2012) M Grade M oz tonnes g/t Au Au Proven and Probable Sabodala 19.89 1.54 0.987 Niakafiri 7.814 1.14 0.287 Stockpile 4.211 0.94 0.128 Subtotal 31.915 1.37 1.402 Sutuba 0.353 1.06 0.012 Gora 0.709 5.01 0.114 Sabodala - additional 3.232 1.26 0.131 Total 36.209 1.43 1.659 Measured and Indicated Sabodala 44.371 1.07 1.525 Niakafiri 10.741 1.12 0.386 Gora 1.282 5.22 0.215 Sutuba 0.353 1.06 0.012 Total 56.747 1.17 2.138 Inferred Sabodala 26.205 1.01 0.848 Niakafiri 7.248 0.88 0.205 Niakafiri West 7.144 0.82 0.188 Soukhoto 0.566 1.32 0.024 Gora 0.286 4.16 0.038 Diadiako 2.917 1.49 0.119 Majiva 2.593 0.64 0.047 Toumboumba 0.855 1.5 0.041 Total 47.814 0.98 1.51 36
    • NON-DEFERRED HEDGE SCHEDULE Delivery Date Price US$/oz Ounces 17-May-2012 846.00 28,000 15-Aug-2012 838.33 41,500 21-Nov-2012 829.45 39,000 20-Feb-2013 832.92 25,000 17-May-2013 790.66 25,000 21-Aug-2013 791.50 16,000 Total $826 174,500 37
    • MANAGEMENTAlan R. Hill • Mining engineer with over 20 years experience globally in project evaluations, acquisitions and mine development as Executive VP of Barrick GoldExecutive Chairman & CEO • Currently a Director of Gold Fields • Former President and CEO of Gabriel Resources (2005 – 2009) and non-Executive Chairman of Alamos Gold (2004 – 2007)Richard S. Young • Over 10 years experience in mining finance, development, corporate development, and investor relations with Barrick GoldPresident & CFO • Former VP and CFO of Gabriel Resources (2005 – 2010)Yani Roditis • Over 10 years experience in mine development and operations with Barrick Gold (1994 – 2005) • Former Chief Operating Officer of Gabriel Resources (2005 – 2010)Vice President, OperationsKathy Sipos • 10 years experience in Corporate Communications and Investor Relations with Barrick Gold (1996 – 2006) • Former VP of Corporate Communications and Investor Relations of Gabriel Resources (2006 – 2009)Vice President, Investor &Stakeholder RelationsDavid Savarie • Over 10 years experience in the legal industry • Former Deputy General Counsel and Corporate Secretary of Gabriel ResourcesVice President, General Counsel & • Previously in private practice at Miller Thomson LLPCorporate SecretaryMark English • Over 24 years experience in the gold mining industry • Previously worked for several companies in Australia, East and West Africa being involved in operating mines andGeneral Manager development, inclusive of greenfield start-ups • Joined Mineral Deposits Ltd. in June 2006Bruce Van Brunt • Mining engineer and geologist with over 20 years experience • Previously worked in a number of technical capacities with Placer Dome and Echo Bay MinesBusiness Development Manager • Joined Mineral Deposits Ltd. in March 2006Martin Pawlitschek • Geologist with over 15 years experience in the mining industry • Previously spent 11 years at BHP and a number of smaller exploration companies, working in Australia, SouthRegional Exploration Manager East Asia and Africa • Joined Mineral Deposits Ltd. in July 2007Macoumba Diop • Geological Engineer, Master of Science in Finance with over 12 years experience in mining industry • Previously spent 11 years in a consulting business and mineral project marketing and developmentGeneral Manager & Government • Joined SGO in July 2011.Relations Manager 38
    • COMPETENT PERSONS STATEMENTThe information in this presentation that relates to exploration results, targets, mineral resources or ore reserves within the SGO Mining License is based oninformation compiled by Mr. Bruce Van Brunt, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr. Van Brunt is a full time employee ofTeranga and therefore not independent. Mr. Van Brunt has sufficient experience relevant to the style of mineralization and type of deposit under consideration andto the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code of Reporting of exploration Results,Mineral Resources and Ore Reserves”. Mr. Van Brunt consents to the inclusion of this information in the form and context in which it appears in this presentation.The information in this document that relates to exploration results, targets, mineral resources or ore reserves within the Regional Exploration Package is based oninformation compiled by Mr. Martin Pawlitschek, who is a member of the Australasian Institute of Geoscientists. Mr. Pawlitschek is a full time employee of Terangaand therefore not independent. Mr. Pawlitschek has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to theactivity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code of Reporting of exploration Results, MineralResources and Ore Reserves”. Mr. Pawlitschek consents to the inclusion of this information in the form and context in which it appears in this presentation. 39