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Cpn -march_1_2011_corporate_presentation_-_v2

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  • 1. Forward-Looking Statements Carpathian Gold Inc.Statements made in this presentation may be deemed "forward-looking statements". Forward-looking statements arefrequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, and othersimilar words, or statements that certain events or conditions “may” or “will” occur. All statements in this release, other thanstatements of historical facts, that address future exploration drilling, exploration activities and events or development that theCorporation expects, are forward-looking statements. Although the Corporation believes the expectations expressed in suchforward-looking statements are based on reasonable assumptions, such statements are not guarantees of futureperformance and actual results or developments may differ materially from those in forward-looking statements. Factors thatcould cause actual results to differ materially from those in forward-looking statements include market prices, exploitation andexploration 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 differmaterially from those anticipated statements. The Corporation undertakes no obligation to update forward-looking statementsif circumstances or management’s estimates or opinions should change. The reader is cautioned not to place undue relianceon forward-looking statements.This presentation includes resource information that is compliant with National Instrument 43-101, unless otherwise specified. 2
  • 2. Company Highlights Carpathian Gold Inc.•  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 3
  • 3. Capitalization Carpathian Gold Inc. 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 Strike Expiry Options Options/Warrants Outstanding: 39.63 MM 19.7 MM Warrants $0.40* May 2013 Market Capitalization (F/D): ~257C$ MM 10.7 MM 7.8 MM $0.33 $0.45 May 2012 Dec 2011 0.23 MM $0.23 May 2011 Cash on hand plus available cash: ~52.5C$ MM 1.2 MM $0.34 Dec 2011 Total Debt: $0 39.63 MM $0.39 *Average Enterprise Value (F/D) (excludes ~C$204.5 MM available cash): Management/Directors/Insiders Ownership ~35% Institutional Ownership ~30% One-Year Share Price Graph Analyst (4) 12 month Target +$1.25/sh 4
  • 4. Management & Board Carpathian Gold Inc. Management Board •  Peter Lehner, Chairman•  Dino Titaro, M.Sc., P. Geo, Director, President and CEO –  Held senior management positions in financial institutions and –  Former President and CEO of A.C.A. Howe International commodity trading & shipping companies –  Director of Yamana Gold (TSX:YRI) –  Former director of Addax & Oryx Advisory and Axmin (TSXV:AXM)•  Daniel Kivari, P. Eng., COO •  Julio Carvalho –  32 years experience in underground and open pit operations –  Over 38 years experience in the Brazilian mining sector –  Former VP Operations for the start-up and pre-operations of the Chapada copper/gold porphyry deposit, Brazil –  Former senior positions with Peak Gold (previously TSX:PIK), Goldcorp (TSX:G) and Rio Tinto (ASX:RIO)•  Randall K. Ruff, M.Sc., Executive VP Exploration –  Current President and Director of Rio Novo Gold (TSX:RN) –  Over 15 years experience in exploration in the western U.S., east •  David Danziger and west Africa, and central Europe –  Over 25 years experience in audit, accounting and management –  Worked as the project geologist for the fast-track discovery-to- consulting and over 10 years specific in the mineral resource pre-feasibility advancement of the Kukuluma and Matandani gold sector deposits at Geita,Tanzania –  Director of Cadillac Ventures (TSXV-CDC) and Renforth Resources (CNSX-RFR)•  Guy Charette, Executive VP Corporate •  John W. W. Hick –  Over 25 years experience in securities law involving resource transactions and exploration and development finance. –  President of John W Hick Consultants Inc. –  Numerous past senior management positions including CEO of•  Linda Prager, CA, CFO Medoro Resources, Rio Narcea Gold (previously TSX:RNG), –  10 years accounting and finance experience and Chairman of Rayrock Resources Inc •  Patrick J. Mars•  Alexandru Nicolici, Geologist, Romanian Country Manager –  Over 30 years experience in the investment industry including –  20 years experience in Romania as a geologist and manager serving as CEO and director of Alfred Bunting and Co. –  Former CEO of CUART SA, the regional state-owned mineral –  Director of Yamana Gold (TSX:YRI) and Aura Gold (TSX:ORA) exploration company in Romania •  Dino Titaro –  See Management description 5
  • 5. Key Assets Carpathian Gold Inc. Riacho dos Machados (“RDM”) Rovina Valley Project (“RVP”) Production targeted for late 2012 Advanced Stage – highly leveraged to Gold Brazil Bahia Minas Gerais Romania Riacho dos Machados Rovina Valley Project (Feasibility/Construction) (Drilling & pre-Feasibility) Yamana Properties Kinross Properties Major Deposits Eldorado Property Gold-Copper Deposit   100% owned brownfields gold project   100% owned 3 porphyry gold-copper discoveries   Initial EIA permits in place   Pre-feasibility/feasibility stage   1.5 million oz Au total resource*   6.9 million oz Au + 1.4 billion lb Cu total resource*   Feasibility Study being completed   NPV8% of US $731 million; 24% IRR (pre-tax) – Based on PEA study   2nd half of 2012 targeted commencement of production – US$1,000/oz Au & US$3.00/lb Cu of ~100,000 oz Au per annum   Deposit remains open in all directions   Up to US $97 million project financing mandated – Recent drill hole (RGD-17), 716 m at 1.14 g/t Au & 0.16% Cu   Upside at depth, along strike and in new zone targets* Global mineral content for information purposes only as N.I. 43-101 does not allow summation of Measured + Indicated + Inferred Resources 6
  • 6. RDM – Potentially Prolific Mining Camp Carpathian Gold Inc. 7
  • 7. RDM – Key Advantages Carpathian Gold Inc.•  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 RDM Gold Project –  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 * 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 8
  • 8. RDM – 2010 Resource Model Carpathian Gold Inc. Open-Pit Resource M&I: 806.2 Koz Au (17,199 Kt at 1.46 g/t Au) Inf: 355.9 Koz Au Underground Resource (7,179 Kt at 1.54 g/t Au) 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 9
  • 9. RDM – PEA Results (July 2009) Carpathian Gold Inc. To be updated upon completion of feasibility study Mine Type: Open Pit 6,000 tpd Ore Processing Rate: 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 Key Changes & Total Recoverable Gold Production LOM: 725,645 oz Optimization Parameters Mine Life: 7.1 years For Operating Cost: US$20.45/t ore Feasibility Study 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%Source: Riacho Dos Machodos Gold Project Preliminary Economic Assessment Study prepared by a consortium of engineering companies led by NCL Brasil Ltda, August 2009 10
  • 10. RDM – PEA* Summary Overview Carpathian Gold Inc. NPV Sensitivity Au Production & Cash Costs Cash Flow ilit y study n of feasib n completio dated upo * To be upSource: Riacho Dos Machodos Gold Project Preliminary Economic Assessment Study prepared by a consortium of engineering companies led by NCL Brasil Ltda, August 2009 11
  • 11. RDM – Site Development Plan Carpathian Gold Inc. Water reservoir Mine Buildings & Plant Tailings Pit Outline WasteSource: Riacho Dos Machodos Gold Project Preliminary Economic Assessment Study prepared by a consortium of engineering companies led by NCL Brasil Ltda 12
  • 12. RDM – Immediate Growth Potential Carpathian Gold Inc. Underground Potential On-strike Potential•  Underground mineable resource (inferred) of 332,000 oz Exploration Targets north of –  4.0 MM t @ 2.57 g/t Au, ~250 m below pit shell RDM Mine 14 km Shear Zone•  60,000 oz Au per year production with Au-As anomalies –  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 PEA Open-Pit 3.5 m of 10.22 g/t Au Zone identified with 2 m of 6.92 g/t Au immediate economic underground mining potential RDM Mine 1.5 Moz Au*•  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 13
  • 13. RVP – Three Au-rich Cu Porphyry Deposits Carpathian Gold Inc. Rovina Valley Project (RVP) Romania 14
  • 14. RVP – Property Map (94 km2) Carpathian Gold Inc. Rovina Cu-Au PorphyryGlobal Resource: 3.3 MM oz Au Eq* Colnic Au-Cu Porphyry Global Resource: 3.8 MM oz Au Eq* Cordurea Target Rocks 0.32 – 2.16 g/t Au Dumps up to 101 g/t Au, 2,400 g/t Ag Ciresata Au-Cu Porphyry Resource: 4.0 MM oz Au Eq* Valisoara Au - (Pb-Zn) Target “still open in size” 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 15
  • 15. RVP – Key Advantages Carpathian Gold Inc.•  Large scale 40,000 tpd project Golden Quadrilateral –  11.2 MM oz Au Eq* total resource Rosia Montana (GBU) 14 Moz Au•  Attractive project economics (from PEA study) –  ~200,000 oz Au & ~50 MM lb Cu average annual Rosia Poieni production over 19 yr mine life (State) Cu-Au Porphyry –  US$81/oz Au cash cost (net of Cu credits) –  Standard flotation process producing a saleable Cu concentrate Certej (EGU)•  Good location in a mining jurisdiction RVP (CPN) 3.5 Moz Au Eq* –  Emerging modern mining district >11.2 Moz Au Eq* (includes >6.9 Moz Au) –  > 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 16
  • 16. RVP – PEA Results (March 2010) Carpathian Gold Inc. Mine Type: Open Pit & Underground 20,000 tpd Open Pit Ore Processing Rate: 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 196,000 oz Au Annual Production: 49.4 MM lb Cu Mine Life: 19 years Total Recoverable Production LOM 3.72 MM oz Au & 938 MM lbs Cu US $8.49/t ore Open Pit Operating Cost: 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% Flotation Plant Underg round Rovina Location Colnic Convey Ciresata or Cu + Au Porphyry Au + Cu Porphyry Au + Cu PorphyrySource: Rovina Valley Au-Cu Project Preliminary Economic Assessment Study prepared by a consortium of engineering companies led by PEG Mining, March 2010 17
  • 17. RVP – PEA Summary Overview Carpathian Gold Inc. Highlights NPV Sensitivity (US $MM)  Average annual production of 196,000 oz Au and 49 MM lb Cu (343,600 oz Au Eq) over a 19 year mine life Base Case Upside Case Financial Model US $900/oz Au US $1,000/oz Au  Operating cash cost per ounce with Cu as a by-product (pre-tax) US $2.25/lb Cu US $3.00/lb Cu credit of US $81 per gold ounce or US $446 per ounce gold as co-product basis NPV0% $1,357 $2,351 NPV5% $569 $1,130  Project pre-tax NPV of US $544 million based on a 10% discount rate and a gold price of US $1,000 per ounce & NPV8% $316 $731 copper of US $3.00/lb NPV10% $200 $544  Project IRR of 24%, with an ~4.0 year payback on initial IRR 16% 24% project capital expenditures Production Profile Cash Flow Source: Rovina Valley Au-Cu Project Preliminary Economic Assessment Study prepared by a consortium of engineering companies led by PEG Mining, March 2010 18
  • 18. RVP – Ciresata Au-Cu Porphyry Carpathian Gold Inc. Exploration Potential for Resource Growth Gold-Copper mineralized body open to the west and at depth ‘Deep drill hole’ and ‘Step-out’ drill programs in-progress Plan View Sectional View > 1.2 g/t Au Eq** Au Eq: $1,000/oz Au; $3.00/lb Cu 19
  • 19. RVP – Ciresata Au-Cu Porphyry Carpathian Gold Inc. Au-eq* > 1.20 g/t Au-eq* re ade Co High Gr n Proposed Mining ope development; 20,000 t/d underground crushing station N.I. 43-101 Inferred Resource Estimate from 2010 PEA Study; Deep drill hole program extends mineralization 280 m below 124.4 Mt at 0.86 g/t Au and previous drilling: 0.17% Cu (1.21 g/t Au eq*) Depth extension at >0.90 g/t Au- eq; including RGD-18, 114m @ 1.14 g/t Au-eq** Au Eq: $1,000/oz Au; $3.00/lb Cu. 20
  • 20. RVP – Room for Growth: Deposit Size and Valuation Carpathian Gold Inc. RGD-17 Hole RGD-17, Ciresata Porphyry 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 Au-Rich Cu Porphyries – Maricunga Belt Comparisons to the Rovina Valley ProjectCN Tower 553 m Au Au Eq* Ag Company Deposit Mt Au (g/t) MM oz Cu (%) (g/t) Ag (g/t) 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 Drawing by Zhen © SkyscraperPage.com * Au Eq: $1,000/oz Au; $3.00/lb Cu 21
  • 21. Upcoming Milestones Carpathian Gold Inc. 2011 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4BrazilUpdated NI 43-101 ResourceFeasibility StudyMine FinancingPermitting & ConstructionProductionStudies For Production Rate ExpansionExpansion Drilling & Regional ExplorationRomaniaEIA/SIA programsDrilling & Expansion of Ciresata PorphyryUpdated NI 43-101 ResourcePre-Feasibility/ Feasibility StudyPermitting ProcessConstruction (Production targeted for 2015/16)Regional Exploration Drilling 22
  • 22. N.I. 43-101 Resource Carpathian Gold Inc. Total Resources Category Tonnage Contained Metal 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 Riacho dos Machados – RDM Category Tonnage Grade Contained Metal (g/t Au) (oz Au) M&I Resource 17,252,000 1.46 812,300 Inferred Resource 11,101,000 1.94 692,900 Rovina Valley Project – RVP Grade Contained Metal Category Tonnage (g/t Au) (oz Au) M&I Resource 193,100,000 0.49 3,070,000 Inferred Resource 177,700,000 0.68 3,890,000 Grade Contained Metal Category Tonnage (%Cu) (lbs Cu) M&I Resource 193,100,000 0.18 759,100,000 Inferred Resource 177,700,000 0.17 663,100,000Resource calculation based on US$950/oz Au for RDM; US$675/oz Au and US$1.80/lb Cu for RVP 23
  • 23. Production & Cash Flow Profile Carpathian Gold Inc. Gold Production Profile 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$3.00/lb Cu 24
  • 24. Comparable Valuations Carpathian Gold Inc.Notes: - Assumes 1.02 US$/C$ and 1.01 US$/A$ exchange rates (as of February 25, 2011) - NAVs based on consensus analyst estimates 25
  • 25. Summary Carpathian Gold Inc.•  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 NI 43-101 does not allow summation of Measured + Indicated + Inferred Resources 26