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Building the iron dragon: exploring for iron ore in Bolivia

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Objective Capital's Industrial Metals, Minerals & Mineable Energy Investment Summit 2011 ...

Objective Capital's Industrial Metals, Minerals & Mineable Energy Investment Summit 2011

Ironmongers' Hall, City of London
3 November 2011
Speaker: Nick Tintor, Ferrum Americas Mining

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Building the iron dragon: exploring for iron ore in Bolivia Presentation Transcript

  • 1. INDUSTRIAL METALS, MINERALS& MINEABLE ENERGYINVESTMENT SUMMIT Building the iron dragon: exploring for iron ore in Bolivia Nick Tintor– Ferrum Americas MiningIRONMONGERS’ HALL, CITY OF LONDON ● THURSDAY, 3 NOV 2011www.ObjectiveCapitalConferences.com
  • 2. Size, Grade, Infrastructure – A World Class Combination Objective Capital Conference – London November 3 - 2011
  • 3. All statements and other information contained in this document relatedto Ferrum Americas Mining Inc. (“FAM”), as well as other statementsabout anticipated future events or results, constitute forward-lookingstatements. Forward-looking statements often, but not always, areidentified by the use of words such as “seek”, “anticipate”, “believe”,“plan”, “estimate”, “expect”, “intend”, “forecast”, “project”, “likely”,“potential”, “targeted” and “possible” and statements that an event orresult “may”, “will”, “would”, “should”, “could” or “might” occur or beachieve and other similar expressions. Forward-looking statements aresubject to known and unknown business and economic risks anduncertainties and other factors that could cause actual results ofoperations to differ materially from those expressed or implied by theforward-looking statements. Forward-looking statements are based onestimates and opinions of management at the date the statements aremade. FAM does not undertake any obligation to update forward-lookingstatements even if circumstances or management’s estimates or opinionsshould change. For the reasons set forth above, investors should not placeundue reliance on forward-looking statements.
  • 4. Laurence Curtis, Ph.D Geologist and company founder with more than 40 years experience inNon-Executive Chairman global mineral exploration. Laurie is also the founder and a director of Intrepid Minerals and is an analyst at Dundee Securities.Alistair Maxwell Investment banker with more than 15 years experience. Alistair was theVice Chairman founder and President and CEO, of Clarus Securities for the past 8 years.Nick Tintor, B.Sc. Geologist and company founder. Nick has been involved for the past 20President, CEO years in project generation and financing of exploration companies. He isand Director also a director of Cerro Resources, Southern Andes Energy Inc. and is Managing Director of RG Mining Investments Inc.Barry Lavin, P. Eng Mining engineer with more than 25 years experience in all facets of mineDirector project development and management. Most recently, Barry spent 18 years with Rio Tinto where he was Head – Technical Services and was General Manager, Iron Ore Business Development in Australia.Stephen M. Gledhill Certified Management Accountant with over 25 years of financial control andChief Financial Officer reporting experience. He has acted as CFO for numerous publically-traded small to mid-cap mineral exploration companies and is Managing Director and CFO of RG Mining Investments Inc.Michael Bennett Former RTZ geologist with +20 years project management experience in BoliviaConsultant and Brazil.Jim McNamee Bolivia-based geologist for the past 30 years with exploration experience in a varietyProject Manager of geological environments across Latin America.
  • 5. Appendix  Chinese demand drives prices  China’s urbanization policies fuel construction growth  RTZ forecast 800 mt Fe ore demand increase over next 8 years  Steel production forecast to soar 25% by 2015 to 750 million tonnes in accordance with latest Five Year Plan (1)(1) The Australian, May 31, 2011 quoting the China Iron and Steel Association
  • 6.  Cerro Rojo part of Fe trend extending across from Brazil Vale’s Urucum mine in operation and ships product via barge convoy down river Jindal is developing Mutun Suarez Bolivia area being readied for Fe development
  • 7.  RTZ discovery in 1999 following regional Fe recon program  Cerro Rojo identified as part of a “new iron ore province...” (1)  RTZ program included 64 surface samples averaging +50% Fe  Large shallow dipping scarp slope strikes for 4.5 km and up to 1.5 km in width Jindal Vale  Target potential resources exceed 250 million tonnes  Cerro Lejo and Cerro Chico projects host lower grade BIF’s: 30%-40% Fe.(1)RTZ Internal Memorandum – Iron Ore Project, Eastern Bolivia,December 11, 1999
  • 8.  Sampling of BIF suggests +50% Fe grades in hematite/magnetite Gentle dip scarp slope suggests good open pit potential Colluvium cover on dip slope possible enriched starter ore? Left photo: walking up dip slope Right photo: BIF scarp edge with dip to left
  • 9.  Mapping of BIF outcrop shows potential for resourceStrikes for more than 4.5 km growth  RTZ exploration target of 250 mt is Scarp dip slope up to 1.5 km conservative  Mapping suggests +600 mt potential  Rights over Cerro Chico and Cerro Lejos deposits in same trend.  Cerros Chico and Lejos host lower grading BIFs ranging 30%-40%
  • 10.  Cerro Rojo grades rank high on global scale Resource increase will push Cerro up rank Combination of grade, size potential and logistic advantages suggests a world class project
  • 11. Rail crossing near project site Gas line parallels rail line Located near Puerto Suarez, Bolivia by Brazil Project is 8 km from rail line 55 km by rail to port Excellent road access to site Excellent local infrastructure including gas power lines
  • 12.  Barge convoys provide shipping solution to Panamax load out at Rosario, Argentina Ample land available for major storage and loading infrastructure
  • 13.  Major river artery to Atlantic Ocean Project is 55 km from river Low cost barge convoys attractive for bulk transport of Fe Convoys up to 50,000 t capacity Vale’s Corumba uses barge convoys to transport Fe to Rosario
  • 14.  A rich and diverse mining history and economy Government supports private mining as this sector encompasses thousands of small private mining entities – crucial to Bolivia’s economy Santa Cruz province is pro-businessForeign companies include: Sumitomo British Gas – BG Group Jindal Steel TOTAL Energy Gazprom Opportunity to develop a world class iron ore project complemented by superb logistics
  • 15. Sumitomo-San Cristobal  US$1.3 billion capex Coeur – San Bartolome  US$238 million  600,000 tonnes conc/year capex  Production October 2007  Production June 2008  Major tax generator in BoliviaOrvana – Don Mario Pan American –San Vincente  US$21 million capex  US$72 million capex  1,900 tpd operation  Production March 2009  Production started July, 2003
  • 16.  Dr. Rolando Kempff is a Governor and Director of the Banco National de Bolivia  Owns and manages Terrasur – one of Bolivia’s largest real estate companies.  Dr. Oscar Kempff is Bolivia’s most respected geologist credited with numerous discoveries such Don Mario  Parque Nacional Noel Kempff Mercado, is named in honour of the late Bolivian biologist and conservationist, Professor Noel Kempff  The Kempff family have deep roots in Bolivia and are key partners in the development of Cerro RojoDr. Rolando Kempff Dr. Oscar Kempff
  • 17. Kempff family are partners and vendors  Cash: US$10.5 million over three years (1)  On IPO, issue $1 million in shares  First anniversary of IPO, $1.5 million in shares  Bonus payments capped at $10 million (2)(1) Three year option period begins on receipt of all operating and environmental permits(2) Bonus based on $0.02 per tonne on next 100 mt grading +50% Fe above threshold of 150 mt. On next 100 mt, bonus paid is $0.03 per tonne. All bonuses owing are only payable on receipt of positive bankable feasibility study and arrangement of project financing.
  • 18.  Complete 4,000 m phased drill program. Outline and confirm deposit footprint150 kg of surface sample in lab for first phase beneficiation test work Complete additional beneficiation work to determine final product and process 52% Fe is “marginal” DSO. Determine process to upgrade to +58%-63% Complete initial resource estimate by 4th quarter 2012
  • 19. $1.90 $1.39 $1.14 $0.99 $0.70 MeanUS$0.61/t Fe $0.52 $0.42 $0.31 $0.32 $0.25 $0.16 $0.18 $0.19 $0.11 Source: Thomson One, Metals Economics Group, SEDAR, and Company Reports Ferrum Americas valuation assumed based on current RTO LOI with RAP and assumes a $10M financing. Resources are potential resources based on historic exploration (270Mt @ 52% Fe)
  • 20. Ferrum Americas is currently a private Ontario corporation and is finalizing an RTO transaction with acompany listed on the TSXV.On the close of the RTO transaction and a contemporaneous minimum financing of $3 million at$0.50 per share, the capital structure of Ferrum Americas is estimated as follows: Pre-financing Post Financing Shares % Shares (1) % Ferrum Shareholders & Option holders 24,952,500 91 24,952,500 74.9 RAP Shareholders, Option holders and 2,348,300 9 2,348,300 7.1 Warrant holders Financing - - 6,000,000 18.0 Total 27,300,800 100 33,300,800 100Post Market Capitalization: $16.65 million
  • 21.  Cerro Rojo project has potential for +600 mt grading +50% Fe Cerro Rojo has an infrastructure advantage over far more remote projects in the world. Proximity to the Hidrovia - Latin Americas Mississippi River system – an attractive shipping option for bulk commodities. Located in Santa Cruz province, the pro-business centre of Bolivia. Kempff family are our partners. Key advantage in governmental relations Strategic plan – advance Cerro Rojo in 2012 and build our Fe asset base in the Americas Ferrum’s small capitalization provides opportunity for significant growth as projects are advanced
  • 22. For additional Information please contact:Nick TintorFerrum Americas Mining Inc.120 Adelaide Street West -Suite 2400Toronto, Ontario – M5H 1T1Telephone: 416 987 0855Email: ntintor@rgmi.ca