Developing the Zeus property in Quebec


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Objective Capital's Rare Earths, Speciality & Strategic Metals Investment Summit 2011
Ironmongers' Hall, City of London
17 March 2011
Speaker: André Gauthier, Matamec Exploration

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Developing the Zeus property in Quebec

  1. 1. RARE EARTHS, SPECIALITY& STRATEGIC METALSINVESTMENT SUMMIT Developing the Zeus property in Quebec André Gauthier – CEO, Matamec Exploration IRONMONGERS’ HALL, CITY OF LONDON ● THURSDAY, 17 MAR 2011
  2. 2. Kipawa Heavy Rare Earths Deposit A Compact, High Quality and Low Cost Mine for 2014 An Investment Opportunity March, 2011TSX-V: MAT
  3. 3. DisclaimerThe information contained herein has been prepared to assist interested parties in making theirown assessment of Matamec Explorations Inc. (the “Company”) and does not purport to containall of the information that an interested party may desire. In all cases, interested parties shouldconduct their own investigation and analysis of the Company, its assets, financial condition andprospects, and of the data set forth in this presentation. The Company does not assume anyresponsibility for independent verification of any of the information set forth herein, including anyfinancial forecasts or statements about the prospects of the Company contained herein. TheCompany does not make any representation or warranty as to the accuracy or completeness ofthis presentation or the information contained in, or for any omissions from, this presentation orany other written or oral communications transmitted to the recipient in the course of itsassessment of the Company. By the receipt of this presentation, the recipient acknowledges thatonly those particular representations and warranties, if any, which may be made to a party in adefinitive written agreement regarding a transaction involving the Company if, as and whenexecuted, and subject to such limitations and restrictions as may be specified therein,will have any legal effect. 3 TSX-V: MAT Corporate Presentation
  4. 4. Future Producer of “Strategic Metals” •Future producer of “Strategic Metals” •Small environmental footprint on the Zeus property. •Matamec evaluating options for its gold assets, particularly its Matheson JV property, along strike of the Goldcorp’s high grade gold Hoyle Pond mine in the Timmins Gold Camp. 4 TSX-V: MAT Corporate Presentation
  5. 5. REE Market: Matamec’s Niche – Heavy Rare Earths Amount of REE per Application TREO forecast production 2010f: 125,000 Metric Ton Kilograms Grams 2015f: 185,000 30% 25% 20% 2010f 2015f 15% 10% 5% 0% Magnets (Tb, Dy) Metal Alloys Phosphors (Y, Tb, Dy) Glass (Er) Polishing Ceramics OtherSource: Dudley J. Kingsnorth, IMCOA, November 2010 5 TSX-V: MAT Corporate Presentation
  6. 6. Production Curve: TREO tonnes IMCOA Kaiser Hykawy220000200000180000160000140000120000100000 2010 2014 •60,000t of new capacity will be required to meet global demand in 2015
  7. 7. A Strategic Committee For Rare Earths Advises Matamec’s Board Of Directors A PhD geologist, worked on the Has worked as a consultant for Matamec on identification of eudialyte and other rareAnthony Mariano earth-bearing minerals at the Kipawa the mineralogy of the Kipawa Complex since 2007. Alkalic Complex Has worked on the Kipawa deposit from A MSc geologist with more than thirty 1985 to 1990. Since 2007, has advised Alex Knox four years of field experience in Matamec on the exploration for rare-earths. exploration He will be supervising the upcoming exploration program. A chemical engineer with over thirty five years of experience in the metallurgical Since 2008, he has worked as a consultant and management ends of the mining Les Heymann industry. Has over eighteen years of to Matamec. Is currently directing Matamec’s metallurgical testing program. experience of the production of rare earths A mining engineer with more than thirty- Since 2008, he has advised MatamecRaynald Vézina five years of experience in the mining regarding the development of the Kipawa industry. deposit. 7 TSX-V: MAT Corporate Presentation
  8. 8. Zeus Property & HREE Kipawa Deposit - Location The First Criteria for Industrial Mineral Deposits is Location Near Infrastructure •In Quebec, a premier mine jurisdiction •Near all weather roads •Near railway •Near mining towns with services •Near electrical power grid 8 TSX-V: MAT Corporate Presentation
  9. 9. Kipawa Deposit Geology and Exploration Potential Resource Calculations Metallurgy Timeline Going to Production in 2014 Budget 9 TSX-V: MAT Corporate Presentation
  10. 10. Zeus Property – Geology and Exploration Potential Kipawa Alkalic Complex Kipawa Deposit + Other Zones and Showings + Untested targets over 25 km strike on the property along the Kipawa Alkalic Complex TSX-V: MAT 1 0 Corporate Presentation
  11. 11. Kipawa Heavy Rare Earths Deposit: Surface Expression Logging Road 300 m of the West part of the Deposit Kipawa DepositDeposit continuous over a distance of 1.45 kilometres 11 TSX-V: MAT Corporate Presentation
  12. 12. Resource Calculation: Showing Growth Potential Winter 2011 - Infill Drilling Program Completed Feb. Spacing 50 X 50m New Resource Estimate Coming this Spring Deposit Open Laterally and at Depth 12 TSX-V: MAT Corporate Presentation
  13. 13. Kipawa Deposit Schematic Cross-Section TREO Enriched ZonesSW NE 70% 20% 10% 37% HREE/TREEZirconium Zone (with TREO) Heavy Rare Earth Enriched Zones: Cut-off of Dy2O3 0.016% 4,920,000 Indicated tonnes + 4,260,000 Inferred tonnes (January 20, 2011, NI43-101) 13 TSX-V: MAT Corporate Presentation
  14. 14. Indicated and Inferred NI 43-101 Resources: at a Cut-off of Dy2O3 @ 0.016% 20 Kipawa Deposit K tons Advantage 15 10 5 0 La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Lu Y $0Price in Millions $200 $400 $600 $800 Inferred Value $1,000 Indicated Value $1,200 Gross value in situ 14 TSX-V: MAT $0 $1,000,000,000 $2,000,000,000 $3,000,000,000 $4,000,000,000 $5,000,000,000 $6,000,000,000 Corporate Presentation
  15. 15. Kipawa Deposit: Ore ProcessingRecovery of 89.2% of TREO to be found in eudialyte concentrate = less volume to leach = low costBecause medium grained, well-crystallized and not intergrownUnique in the world: simple mineralogy 15 TSX-V: MAT Corporate Presentation
  16. 16. Ore Crushing Kipawa Deposit Rare Earth Ore Processing Grinding Physical Concentration The physical characteristics of the Kipawa ore allow forHeat Acid low-cost chemical Cracking extraction, which gives it a competitive edge against Water current rare earth producers Leaching (January 20,2011) Solid / Liquid Solid Tailings Test results: recovery Separation 81% Liquor Stabilization TREO Purification/ Precipitation Raffinate or Solvent Extraction Barren Liquor Products Products 16 TSX-V: MAT Corporate Presentation
  17. 17. IM Exposure – Sept. 2009Rare Earth Elements (REE)-Yttrium-Zirconium Kipawa Deposit isthe subject of a one page article in the Exposure section of theIndustrial Minerals magazine September 2009.“… exploitation of the Kipawa deposit faces two challenges:-the first one is “to increase the Ree-Y gross tonnage contents of 42,000tonnes to 100,000 tonnes to be interesting for an end-user,” …-the second one is to work on solving the liquid/solid separation step, iesilica gel forming during the dissolution of the Ree in the ore. …” TSX-V: MAT 1 7 Corporate Presentation
  18. 18. Project TimelineDevelopment 2009 2010 2011 2012 2013 2014Activity Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Explora Zeustion KipawaResource UpdateMetallurgicalTestsPEAPrefeasibilityFeasibilityBusiness PlanPermitting 18 TSX-V: MAT Corporate Presentation
  19. 19. Kipawa REE-Y-Zr Deposit: 3 Year Plan - Budget Cost and Schedule of Future Work 2011 2012 20131- Geology $1.970M $3.630M $1.500M2- Engineering Studies including Mining - PEA $0.300M - Pre-Feasibility $1.100M - Feasibility $3.850M3- Mineral Processing and Metallurgy - Specific Testwork $1.000M - Continuous Testwork $2.500M - Pilot Plant - Construction $3.750M $0.400M $0.600M $0.600M4- Environment and Permitting $0.150M $0.500M $0.850M5- Relation with the Community Incl. in the6- Market Study - - Eng. Studies Total: $3.820M $8.330M $10.550M $22.700M TSX-V: MAT 1 9 Corporate Presentation
  20. 20. 2011 – Exploration Program & Budget Properties Program Budget6 100 M$ % Strategic/Critical/Green/Energy MetalsZeus -Kipawa Deposit Drilling Program/PEA Study 3.820M 63% -PB-PS Zone – Surprise/TH/Falaise Drilling Program/Trenching $(REE-Y-Zr-Nb) Showings -Other untested targets – large Mag-EM-Radiometric /Soil coverage of the KAC Sampling Surveys/TrenchingTansim -Tanco Model Mag-Radiometric Ground Survey 0.380M 6% -Rare metals in simple and Prospecting/Mapping/ Trenching $(Li-Ta-Nb-Cs) complex pegmatites Drilling ProgramVulcain - World Class untested target Mag-EM-Radiometric survey 0.4M$ 7% identified by WMC in 2005(Ni-Cu-Co-PGM-Au) GoldMatheson JV - NE of the Goldcorp High Grade Drilling Program 0.6M$ 10% Hoyle Pond Mine - Basal till anomalies unexplainedWachigabau/Lespérance - Geophysical Gold Anomlies Mag Survey 0.6M$ 10% - Known gold showings Drilling ProgramSakami - Zone 25 as compared with Geochemical Study 0.1M$ 2% Goldcorp’s Eloneore Deposit CompilationValmont - Gold and massive sulphide Prospecting/Mapping/Tenching 0.1M$ 2% anomalies TSX-V: MAT 2 0 Corporate Presentation
  21. 21. Markets: Rare Earth Supply Chain Scrap/Ore Mixture Oxide Metal Alloy Magnet Product RecyclingChina•China produces 97%:•Sichuan Mianning Canada/UK •GMMining Co •GWMG Japan •Ford•Jiangxi Copper China •Aichi Steel •Toyota•Baotou Steel Rare Earth •CAS Key Laboratory Corp •Nissan•Sichuan Hanxin Mining of Rare Earth USA •HyundaiJapan Chemistry and •Allstar •Mitsubishi•Japan Industrial CoJapan Physics •Quadrant •AppleOil, Gas and Metals •Neo Materials •Adams •LGNational Corp Japan •Bunting •SamsungAustralia •Santoku, •Etc.•Lynas – exp. 2011 •Shin EtsuUSA•Molycorp – exp. 2012 TSX-V: MAT 2 1 Corporate Presentation
  22. 22. Summary – One of the few known HREO resources in the world with well understood and simple low cost processing solution – Mining friendly location with low cost electricity Low Cost – Excellent access to infrastructure and mining services – Open pit , low cost mining – Addresses worsening shortage of REE and HREE supply High Value – Highly favourable exploration potential (chance of finding more) – Fits demand Timely – Advanced discussions with end-users Undervalued Compared with its Peers 22 TSX-V: MAT Corporate Presentation
  23. 23. Capitalization and Cash Position Current Market Price (Mar. 4th, 2011) $ 0.485Price Range – 52 Weeks $0.11 to $0.7015-Day VWAP $0.48930-Day VWAP $0.493Average daily volume – last 6 months 592,000Insider Ownership 1.7%Known Institutional Ownership 25%Market Capitalization $56MCommon Shares Outstanding 116MStock Options (Average exercise price: $0.22) 7MWarrants (Average exercise price: $0.41) 15MCommon Shares Fully Diluted 138 MCash Position $7MCash Position Fully Diluted $14.85M 23 TSX-V: MAT Corporate Presentation
  24. 24. Is Matamec in your REE stock portfolio? Share Heavy Capital Last Development stage Value Market REE Company REE Out- Completed ($) Capital Deposits standing (Mar. 4) Lake Pre-FeasibilityAvalon (T: AVL) 93.338M 7.12 664M$ Zone (July 2010)Quest (V: QRM) B Zone PEA Study (Sept 2010) 58.358M 5.80 338M$ Resource Calculation:Matamec (V:MAT) Kipawa Indicated and Inferred 116.465M 0.485 56M$ (January 20, 2011) Norra Resource Calculation:Tasman (V: TSM) 56.636M 5.00 283M$ Karr Inferred (Nov. 30, 2010) Bokan-UCORE (V: UCU) Dotson - 142.902M 1.10 157M$ Ridge 24 TSX-V: MAT Corporate Presentation
  26. 26. Appendix TSX-V: MAT 2 6 Corporate Presentation
  27. 27. Management and Board of DirectorsPRESIDENT & CEO André Gauthier(2003) More than 25 years experience in the mining industry Brought in 5 properties to Matamec in 2003, including the HREE Kipawa depositV-P EXPLORATION Aline Leclerc(2003) 1976-2011 Geologist-consultantSECRETARY TREASURER Laval St-Gelais(2005) 1980-2011 Chartered accountantDIRECTOR Marcel Bergeron(2009) 1981-1983 CMA 1981-1983 Chartered accountant 2007-2011 Director - Strateco Resources Inc (TSX-RSC)INDEPENDENT DIRECTOR Normand Tamaro(2009) 1982-2011 Lawyer – LL.D (specialized in intellectual property law)INDEPENDENT DIRECTOR Sylvie Prud’homme(2010) 1979-2011 Geologist 2005-2011 Director of Investor Relations – Osisko Mining Corporation (TSX-OSK) TSX-V: MAT 2 7 Corporate Presentation
  28. 28. A Strategic Committee: Advises Matamec’s Board Of Directors President and Chief Executive Officer of Osisko Since 2011, has advised Matamec regarding it’s Sean Roosen since March 2006. corporate strategy Mr. Wares was President and Chief Executive Officer of Osisko from August 1998 to March Since 2011, has advised Matamec regarding the Robert Wares 2006 and has been Executive Vice-President and development of the Kipawa deposit Chief Operating Officer of the Corporation since March 2006. A chemical engineer with over thirty five years of experience in the metallurgical and management Since 2008, has worked as a consultant to Les Heymann ends of the mining industry. Has over eighteen Matamec. Is currently directing Matamec’s years of experience in the production of rare metallurgical testing program. earths A mining engineer with more than thirty-five Since 2008, has advised Matamec regarding theRaynald Vézina years of experience in the mining industry. development of the Kipawa deposit. TSX-V: MAT 2 8 Corporate Presentation
  29. 29. Recent Rare Earth Market DevelopmentChinese policy changes continue to dominate the landscape• Government rare earth pricing mechanism introduced and industry consolidation being pursued• Clampdown on illegal mining and stricter environmental controls now in force• Further significant reductions in export quotas announced 28 December 2010 (-35% H1 vs. H1 2010)• Significant increase in REO prices in last 6 months, with strong price growth forecast to continue through 2015 and beyondUS government to re-establish domestic REE supply chain• Rare Earth and Critical Revitalization Act passed by House of Representatives in Oct 2010.High level discussions between Washington and China regarding security of rare earth supply continuingChina confirms only 15-20 years of HREO and MREO reserves (Oct 2010)Plans by countries including China, Japan and more recently US, to stockpile rare earths widely reported 29 TSX-V: MAT Corporate Presentation
  30. 30. Media: Recommendations and ArticlesJudith Chegwidden and Dudley Kingsnorth, at the Metal-Events Conference inHong Kong, 9-11 Nov. 2010 ─ Identified five heavy rare earths projects in the world: Dubbo, Nechalacho, Strange Lake, Bokan-Dotson Ridge and Kipawa.Matt Gowing, Mackie Research Capital Corporation, Alternative Energy – Rare Earth Industry Update (Feb. 2011) - Recommended plays- Focus on Heavy Rare EarthsMr. Yasushi Watanabe (National Institute of Advanced Industrial Science andTechnology) highlighted, at this same conference – That the Japanese government and private sectors are looking for sources of rare earths outside of China, particularly heavy rare earths deposits. “These sources must be timely, compact and inexpensive projects.”John Kaiser, John Kaiser Bottom Fishing (Oct. 26th, 2010) ─ Recommends buying Matamec shares Because they offer the potential for 500% (or higher) gains in medium to long term time frames. 30 TSX-V: MAT Corporate Presentation
  31. 31. Zeus Property – Surprise Showing: One of many potential areasMatamec identifies: Surprise, best channelled interval:2 large rare earths and niobium soil 2m @ 5.3% TREOanomalies in the Surprise showing area (66% of HeavyREO+Y2O3/TREO), 3.6% ZrO2 and 3.9% Nb2O5. TSX-V: MAT 3 1 Corporate Presentation
  32. 32. KIPAWA DEPOSIT GROSS VALUE UNRECOVERED IN THE GROUND Zone TREO ENRICHED ZONES (Cut-off of Dy2O3 ˃0.016%) – February 10, 2011 Tonnage 4,920,000** 4,260,000** Value in Situ Classification Indicated t** Value in Situ (USD) Inferred t** (USD) Lanthanum (61$/kg*) La 4,200 256,200,000 3,600 219,600,000 Cerium (66$/kg*) Ce 8,700 574,200,000 7,600 501,600,000Praseodymium (102$/kg*) Pr 1100 112,200,000 900 91,800,000Neodymium (103$/kg*) Nd 4,000 412,000,000 3,500 360,500,000 Samarium (60$/kg*) Sm 900 54,000,000 800 48,000,000 Europium (620$/kg*) Eu 100 62,000,000 100 62,000,000 Gadolinium (67$/kg*) Gd 900 60,300,000 800 53,600,000 Terbium (620$/kg*) Tb 200 124,000,000 200 124,000,000Dysprosium (360$/kg*) Dy 1100 396,000,000 1,000 360,000,000 Holmium (44$/kg*) Ho 200 8,800,000 200 8,800,000 Erbium (58$/kg*) Er 800 46,400,000 700 40,600,000 Thulium (N/A) Tm 100 100 Ytterbium (N/A) Yb 700 600 Lutetium (288$/kg*) Lu 100 28,800,000 100 28,800,000 Yttrium (75$/kg*) Y 6,700 502,500,000 6,400 480,000,000 Zirconium (4$/kg*) Zr 43,400 173,600,000 43,000 172,000,000 2,811,000,000 2,551,300,000*Prices from Metal-Pages , Industrial Minerals and Asian Metals, February 10, 2011. REE oxides 99% min FOB China, Y oxide 99.999% min FOB China and Zr structruralceramic/electronic grade. 1 CNY = 0.151711 USD. **Source: SGS Geostat (November 29th, 2010).LREO: Light rare earths in oxides = La2O3 to Nd2O3. MREO: Medium rare earths in oxides = Sm2O3 to Gd2O3. HREO: Heavy rare earths in oxides = Tb2O3 to Lu2O3. TSX-V: MAT TSX-V: MAT Corporate Presentation Corporate Presentation 32
  33. 33. Sustainable Development- Clean-tech and ‘new age’ applications- Small environmental footprint- Implication of the local communities from the beginning- Preferential hiring policy for locals 33 TSX-V: MAT Corporate Presentation