Iberian Investors Presentation August 2009


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Iberian Investors Presentation August 2009

  1. 1. August 2009<br />
  2. 2. 2<br />Forward Looking Statements<br /> This presentation contains certain “forward-looking statements” and “forward-looking information” under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes 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. Forward looking information may include, but is not limited to, statements with respect to the future financial or operating performances of the Corporation, its subsidiaries and their respective projects, the timing and amount of estimated future production, estimated costs of future production, capital, operating and exploration expenditures, the future price of copper, gold and zinc, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the costs and timing of future exploration, requirements for additional capital, government regulation of exploration, development and mining operations, environmental risks, reclamation and rehabilitation expenses, title disputes or claims, and limitations of insurance coverage. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of the Corporation and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions and other risk factors discussed or referred to in the section entitled “Risk Factors” in the Corporation’s annual information form dated April 30, 2009. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Corporation undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.<br /> <br /> Unless otherwise stated, the information contained in this presentation is as of August 15, 2009.<br />
  3. 3. 3<br />Iberian Minerals – Key Messages<br /><ul><li>Base metals producer – copper, lead, and zinc in concentrate with gold and silver credits
  4. 4. Project debt at Aguas Tenidas paid off
  5. 5. Stable countries of operation (Peru and Spain)
  6. 6. Goal for future growth through mergers and acquisitions, with plans to be multi-mine
  7. 7. Unique story for investors</li></ul>“Growing Iberian Minerals as a major iconic name in the base metals industry”<br />
  8. 8. Iberian Minerals - Key Goals<br />4<br />Continue to… <br /><ul><li>maintain Condestable in steady state of production
  9. 9. ramp-up Aguas Tenidas with a view to achieving commercial production
  10. 10. review and assess corporate and asset opportunities - base metals in North/South America or Europe/Middle East/Africa region
  11. 11. assess and structure hedging/financial transactions to attain best overall group benefits
  12. 12. leverage the Trafigura relationship
  13. 13. focus on key values for social and environmental responsibilities
  14. 14. focus on broad recognition, and the growth of Iberian as an iconic name in the base metals industry </li></ul>...and above all, to enhance value for all shareholders.<br />
  15. 15. 5<br />Corporate Summary<br /><ul><li>Toronto Venture Exchange listed: IZN
  16. 16. Headquartered in Toronto, with offices in Geneva, Seville and Lima
  17. 17. Operations in Peru and Spain
  18. 18. More than 1,750 employees and contract workers worldwide</li></li></ul><li>Common Shares 336.6M<br />Warrants1 26.0M<br />Options 8.4M<br />Debenture2 20.0M<br />Fully Diluted 391.0M<br />52 week range $0.97 - $0.19<br />Month range (June) $0.35 - $0.50<br />Market Cap June 30 $163.3M<br />Average daily volume (3month) 911,147<br />Major Shareholder<br />Trafigura Beheer B.V 45.2%<br />1 8,382,126 warrants expire in August 2009 with exercise prices ranging from $2.20 to $2.60<br />2$25 million convertible debt held by Dundee Resources, bearing interest at 6% and convertible at $1.25. Dundee Resources (Dundee) holds a convertible subordinated Debenture maturing July 26, 2011 with an interest rate of 6% payable semi-annually. The outstanding principal amount of the Debenture will be convertible at Dundee’s option at any time, in whole or in part, into units of the Company at a conversion price of $1.25 per unit. Each unit will be comprised of one common share and one-half of warrant, with each warrant being exercisable into one common share at an exercise price of $2.00 for a period of two years after the date of the issue of the warrants.<br />6<br />Capital Structure TSXV: IZN<br />IZN three month chart<br />
  19. 19. 7<br />Corporate Structure<br />Domicile in Switzerland<br />Created a unique opportunity for the Iberian Group of companies to optimize the structure of future transactions<br />Approved at Iberian’s Annual & Special Meeting of Shareholders on June 10, 2009<br />100%<br />100%<br />100%<br />100%<br />100%<br />100%<br />98.7%<br />
  20. 20. 8<br />Condestable & Aguas Tenidas Mines <br />Condestable Mine, Peru<br />Producing copper concentrates that also contain silver and gold<br />Aguas Tenidas Mine, Spain<br />Producing copper, zinc and bulk lead/copper concentrates that also contain silver and gold<br />
  21. 21. 9<br />Condestable Mine, Peru<br /><ul><li>The Condestable Mine consists of two mines– Condestable and Raul.
  22. 22. Condestable is located 90km from Lima, Peru, with excellent access to infrastructure
  23. 23. Copper mineralization at Condestable occurs in stratiform sulphide-rich replacement bodies (mantos) and crosscutting sulphide bearing quartz veins
  24. 24. Acquired in early 2008, IZN holds 98.7% ownership
  25. 25. Stable mining and processing costs</li></ul>Lima<br />Condestable Mine<br />
  26. 26. Plan view of Infrastructure<br />10<br />Raul Mine<br />Condestable Mine<br />Mill<br />Offices<br />Tailings Dam #4<br />Tailings Dam #1, 2 and 3<br />
  27. 27. 11<br />Condestable Mine – Reserves & Resources<br />Proven and Probable Reserves as at June 30, 2008<br /> 000’s tonnes % Cu <br />Proven 6,696 1.27<br />Probable 3,120 1.30<br />Total Proven & Probable 9,816 1.28<br />Stocks (Proven)262 0.80<br />Total for Mining Plan 10,078 1.27<br />Extracted from SRK Consulting 43-101 Technical Report dated January 2009<br />
  28. 28. Transversal Section – Raul Orebody<br />12<br />
  29. 29. 13<br />Condestable Mine – Overview<br /><ul><li>Major capital projects completed in 2008
  30. 30. New primary crusher
  31. 31. Improved tailings thickener
  32. 32. Lesser dependence on fresh water wells
  33. 33. Optimized at 6000+ tonnes per day, Condestable has low direct costs due to minimal ground support and no required backfilling
  34. 34. New 3 year collective labour agreement signed January 2009
  35. 35. Condestable has historically replaced reserves each year with a comprehensive underground drilling program performed by company personnel</li></li></ul><li>14<br />Condestable Mine - Production<br /><ul><li>Cash Operating costs (C1 and C3) for Q2 were US$ 0.49 and US$1.11 per pound of copper produced
  36. 36. Q2 Recovery rate of 91%, and an average head grade of approximately 1.23% copper</li></ul>Production – First 6 Months 2009<br />
  37. 37. 15<br />Aguas Tenidas Mine - Overview<br /><ul><li>Located in the Andalucia province of Huelva in southwest Spain, Aguas Tenidas is 100% owned by MATSA, a wholly owned Spanish subsidiary of IZN
  38. 38. Aguas Tenidas is 80km from Huelva, which contains a major port facility and smelter
  39. 39. Historically a producing mine, Aguas Tenidas was re-discovered in the 1980’s
  40. 40. The deposit is part of a roughly east-west striking chain of VMS deposits
  41. 41. MATSA currently has 420 company employees and approximately 140 contract workers on site</li></li></ul><li>Aguas Tenidas – June 2008 <br />16<br />
  42. 42. 17<br />Aguas Tenidas Mine – Recent Updates<br /><ul><li>IZN received a 5 year underground mining/operating permit (including blasting) for the recovery of production ore
  43. 43. IZN received the permanent process plant permit covering the life of mine
  44. 44. IZN received approval for a grant from the Andalucia region totaling €10,092,472
  45. 45. Production began at the mine on December 22, 2008 with the start-up of the copper circuit. Ramp-up of the mill continues with necessary adjustments
  46. 46. Both the copper and polymetallic circuit are operational
  47. 47. Metallurgic recoveries for copper meets or exceeds expectations
  48. 48. Polymetallic circuit converted to copper/lead bulk and zinc concentrate
  49. 49. Further optimization of the polymetallic circuit planned</li></li></ul><li>18<br />Aguas Tenidas Mine – Reserves & Resources<br />Extracted from 43-101 Technical Report on the Mineral Resources and Reserves of the AguasTenidas Mine Project – Spain, Prepared for Iberian Minerals Corp. by Adam Wheeler, 25 August 2008<br />
  50. 50. Aguas Tenidas Reserves – Plan View<br />19<br />
  51. 51. Aguas Tenidas – Longitudinal Section<br />20<br />
  52. 52. 21<br />Aguas Tenidas Mine – Copper Stockworks<br /><ul><li>Recent Stockworks results are encouraging
  53. 53. Further work on delineation continues
  54. 54. Current Stockworks resources as of August 2008 shown below
  55. 55. Mine plan adjusted to include Stockworks</li></ul>Extracted from 43-101 Technical Report on the Mineral Resources and Reserves of the AguasTenidas Mine Project – Spain, Prepared for Iberian Minerals Corp. by Adam Wheeler, 25 August 2008<br />
  56. 56. Aguas Tenidas - Geology<br />22<br />18.2m @ 2.30% Cu<br />84.00m @ 2.2%Cu<br />In 9.00m@4.8%Cu<br />In 12.00m@5.00 Cu<br />26.1m @ 5.00% Cu<br />67.0m @ 3.00% Cu<br />8.30m @ 1.2% Cu<br />
  57. 57. 23<br />IZN - Finances<br />2008<br /><ul><li>Net income of $ 47.8 million for fiscal 2008, representing $0.19 per share
  58. 58. Completed through CMC a US$ 70 million loan facility which was used to fund construction at Aguas Tenidas
  59. 59. In Q4 2008, the Company closed out MATSA hedges. This resulted in a net realized gain of approximately US$ 225 million. This gain was used to repay the MATSA project finance facility amounting to approximately US$ 159.87 million
  60. 60. Acquired a further 6.7% interest in CMC on November 5, 2008</li></ul>Key Points<br /><ul><li>Solid balance sheet with no project debt
  61. 61. Flexibility in dealing, with no bank covenants/restrictions
  62. 62. Financing (bought deal) completed in May 2009 for proceeds of C$40 million</li></li></ul><li>Iberian – Capex 2009<br />24<br />Condestable Capex 2009/2010: <br /><ul><li> US$4.7 million
  63. 63. Acquisition of two six-yard scoops, one diamond drill, mill spares (main power transformer and ball mill motor) and completion of the automated plant monitoring and control system.
  64. 64. Limited exploration program on Vinchos Este consisting of 1,500 meters of surface diamond drilling</li></ul>Aguas Tenidas Capex 2009/2010: <br />
  65. 65. Capex – Aguas Tenidas<br />25<br />
  66. 66. Iberian - Hedging<br />26<br />The cornerstone of Iberian&apos;s Hedging Policy is the protection of the Company&apos;s assets.  Hedging activity and monitoring is overseen by the Company&apos;s Hedging Committee.<br />As of July 31, 2009, copper production at the Condestable Mine has been hedged as to approximately 89% of production until the end of 2011. The average price for 2009 and 2010 is US$4,424 per tonne and the price for 2011 is US$3,494 per tonne of copper. Gold production (2,400 oz per year) has been hedged at US$741.50 per oz for 2009-2011, while silver production for the balance of 2009 (18,900 oz) has been hedged at US$13.35 per oz. Hedging at Condestable is required pursuant to the Company’s banking arrangements.<br />The hedging program for AguasTenidas Mine is continually reviewed, and as of July 31, 2009 is as follows:<br /><ul><li> 5,000 tonnes of copper forward at US$4,989 per tonne for 2009
  67. 67. 15,100 tonnes of copper forward at average price of US$3,839 per tonne for 2010
  68. 68. 6,100 tonnes copper calls at a strike price of US$4,200 per tonne maturing in 2010/11
  69. 69. 5,000 tonnes of zinc forward at US$1,611 per tonne maturing in 2009
  70. 70. 12,350 tonnes of zinc forward at an average price of US$1,333 per tonne maturing in 2010
  71. 71. 4,900 tonnes zinc calls at with a strike price of US$1,500 per tonne maturing in 2010.</li></ul>The Hedging Committee continually reviews the markets in which the Company trades, and depending on circumstances, decides if any additional or altered hedging is appropriate to enhance the future cash flow of the Company’s operations, and protection of the Company’s assets. <br />
  72. 72. Trafigura – Available Support<br /><ul><li>Leverage – project and debt funding
  73. 73. Expertise in hedging commodities and currencies
  74. 74. Off-take agreements – single customer at benchmark/spot
  75. 75. Board expertise – Jeremy Weir and Jesus Fernandez, with invaluable global insight (2 of 7 board members)
  76. 76. Traditionally supportive in financing requirements</li></ul>27<br />
  77. 77. 28<br />Future Plans - Criteria<br /><ul><li>Potential acquisition targets in the base metals space
  78. 78. Focus on copper, zinc, lead
  79. 79. Potential interest in nickel
  80. 80. Mid size with ideally a minimum of 25kt annual production of copper equivalent units
  81. 81. Assets preferably in in North/South America or Europe/Middle East/Africa region
  82. 82. Producing (preferable) or (second choice) near production stage with at least a completed bankable feasibility study
  83. 83. Corporate merger or asset acquisition</li></li></ul><li>29<br />Board of Directors<br />Norman Brewster P.Geo, Chairman of the Board, Director – Norman is a geologist who joined IZN in 2002. He also sits on the board of Cadillac Ventures Inc. <br />Philippe Blavier, Director – Philippe is Chairman of the Company’s Audit Committee and a member of the Remuneration Committee of the Company. He has extensive experience at BNP Paribas, where he was Head of Corporate & Investment Banking and Member of the Executive Committee.<br />Jesus Fernandez, Director – Jesus has been part of the Trafigura team since 2004 as Manager of the Corporate Finance team, with an emphasis on mining and downstream oil project investments. He joined IZN’s board in 2008.<br />L. Jack Gunter, P.Eng, FIMM, Director – Jack has over 45 years experience in the mining industry. He has worked previously with Rio Tinto and Phelps Dodge, and also sits on the board of Galantas Gold Corp. <br />Murray John, Director – Murray is an engineer with more than 25 years experience in the resource industry. He is currently the President & CEO of Dundee Resources.<br />Jeremy Weir, Director – Jeremy works as Executive Director and Manager at Trafigura, where he has also been head of the metals derivatives trading structured products and risk management departments.<br />Daniel Vanin, Director – Daniel is the President and CEO of Iberian.<br />
  84. 84. 30<br />Management<br />Daniel Vanin – P.Eng, President & CEO – Daniel has worked in the mining industry for over 30 years and has strong international mine development and management skills with extensive experience in Canada, South America, Africa and Russia. He is a professional mining engineer and graduated from McGill University, Montreal, in 1975. Most recently, Daniel was Executive VP & Chief Operating Officer at High River Gold. Prior to that, he was Chief Executive Officer of RBG Resources Plc, in Bolivia, where he managed all operations, project development and construction at the Vinto smelter and Huanuni tin mine. <br />David Poynton, Senior Vice-President, General Counsel and Corporate Secretary - David is a lawyer with more than 20 years experience in private practice with public companies, private entrepreneurs and the non-profit sector, with a particular emphasis on, and understanding of the mining industry. David acted as primary counsel to many TSX and TSX-V issuers before joining Iberian in January 2009.<br />Jeff Hillis, CFO - Mr. Hillis joined Iberian in June 2009.  He has worked in the mining industry for over 5 years in progressively more senior finance and reporting positions.  He most recently served as CFO of a TSX listed mining company based in Toronto.  Jeffrey is a Chartered Accountant (Ontario, 2001).  He worked for three years in the audit group of Ernst & Young with major clients in the mining industry.<br />
  85. 85. Photo Gallery<br />31<br />Crushed ore at Condestable<br />Condestable Plant & Concentrator<br />Ramp underground at Condestable<br />Underground at Condestable<br />Copper flotation at Condestable<br />
  86. 86. Photo Gallery<br />32<br />Underground at Aguas Tenidas<br />Underground at Aguas Tenidas<br />Aguas Tenidas<br />Underground at Aguas Tenidas<br />View of the two stockpiles at Aguas Tenidas<br />
  87. 87. Photo Gallery<br />33<br />Aguas Tenidas Process Plant<br />Ball & SAG mills at Aguas Tenidas<br />Concentrates awaiting shipping<br />at Aguas Tenidas<br />Paste plant at Aguas Tenidas<br />