Murray Nye: Gold and Silver Production in North America (Day 1 - Session 3: Precious Metals Sector)
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Day 1- Session 3: Precious Metals Sector ...

Day 1- Session 3: Precious Metals Sector

Gold and Silver Production in North America

Objective Capital Global Mining Investment Conference 2010
Stationers' Hall, City of London
28-29 September 2010
Speaker:
Murray Nye - RX Exploration

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Murray Nye: Gold and Silver Production in North America (Day 1 - Session 3: Precious Metals Sector) Presentation Transcript

  • 1. day 1 - session 3: Precious Metals sector
    Gold & Silver Production in North AmericaMurray Nye – CEO, RX Exploration Inc.
  • 2. GLOBAL MININGINVESTMENT CONFERENCE 2010
    Lead sponsors:
    Media partners:
    Other sponsors & participating organisations:
  • 3. September 2010
  • 4. Safe Harbour
    The following presentation may include certain “forward-looking statements” within the meaning of the United States Private Litigation Reform Act of 1995 and applicable Canadian Securities Laws. All statements, other than statements of historical fact, included in the presentation, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of RX Exploration Inc., are forward-looking statements. Words such as “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “intend”, “believe” and other similar expressions are forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather reflect our current views with respect to future events and are subject to risks, uncertainties, assumptions and other factors, and actual results and future events could differ materially from those anticipated in such statements. There can be no assurance that such forward-looking statements will prove to be accurate.
    Some of the important factors that could cause actual results to differ materially from our expectations are disclosed under the heading “Risk Factors” and elsewhere in documents filed from time to time with the Canadian provincial securities regulators. We base our forward-looking statements on information currently available to us and we do not assume any obligation to update them, except as required by law.
    An additional Cautionary Note to Investors – In the event that we use certain terms in this presentation, such as “resource”, “measured resource”, “indicated resource” and “inferred resource”. U.S investors are cautioned that, while such terms are recognized and required by Canadian Securities Laws, the United States Securities and Exchange Commission does not recognize them. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination has been made. U.S. investors should not assume that all or any part of measured or indicated resources will ever be converted into reserves. In addition, “inferred resources” have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Accordingly, information concerning descriptions of mineralization in this presentation may not be comparable to information made public by companies that are subject to the SEC’s Industry Guide 7.
    4
  • 5. High Grade Gold and Silver Producer
    • Cash flow positive, no debt, no gold or silver hedge
    • 6. High-grade gold and silver production from the Drumlummon Mine in Montana US (100% owned).
    • 7. Mine opened in May 2010, forecasted production of 15,000 ounces gold equivalent to December 2010.
    • 8. Expected production in 2011 of 50,000 ounces of gold equivalent.
    • 9. Fully permitted 1,000 ton per day mill leased by RX currently operating at 180 tons per day, ramping up through 450 tons per day in Q1 2011.
    • 10. Goal is to increase production beyond 1,000 tons per day mine and mill rate
    • 11. Aggressive exploration drill program has identified multiple gold and silver veins on the property.
    • 12. Current NI 43-101 resource of 70,703 ounces Au and 1,915,560 ounces Ag (September 2009).
    • 13. NI 43-101 resource: 155,518 tonnes grading 15.6 grams per tonne Au, and 422 grams per tonne silver
    5
  • 14. Location of Mine and Mill
    Marysville, Montana is located 25 miles North-West of Helena, Montana’s capital city.
    Contact Mill, Philipsburg, 114 miles by road southwest from Marysville
    Drumlummon Mine
    Helena
    USA
    Phillipsburg Mill
    6
    - Year round access by paved roads
    - Grid power at mine and mill
    - $15 million spent in past two years opening mine.
  • 15. Marysville, MT
    Drumlummon Mine
    N
    Bald Butte Mine
    Patented Ground
    Staked Claims
    1 km
    Drumlummon: Property Map
    The property consists of 48 patented mining claims and 132 staked claims totaling 2,680 acres
    7
  • 16. N
    Drumlummon: Known Veins
    EmpireVein
    Frankie Vein
    400 Level Adit
    Castletown Vein
    North Star Vein
    Charly Vein
    D Block
    Xmas Vein
    DrumlummonVein
    St Louis Vein
    9-hr Workings
    500 metres
    8
  • 17. History of the Drumlummon Mine
    Price of gold in USD
    1876:Drumlummon deposit discovered by Thomas Cruse.
    1883 - 1910: Montana Co. puts mine into production with two shafts and 25 miles of drifts down to 1,600 foot level. Loses claim dispute in 1901 and floods mine.
    1910: Montana Co. loses claim dispute. Closes mine.
    1910 - 1929: St Louis Company achieves minor production.
    1941 - 1951: Montana Rainbow Co.restarts production in 1946. Mill burns down.
    2007: RX consolidates all land claims, initiates surface drilling, completes NI 43-101 report. Begins underground rehabilitation of old workings on 400 foot level.
    2008:Charly Vein system discovered
    2010: RX reopens the mine
    26,453 oz Au
    140,393 oz Ag
    21,284 oz Au
    138,773 oz Ag
    35,685 oz Au
    388,375 oz Ag
    775,000 oz Au eq
    9
  • 18. Development Progress 2009 - 2010
    10
  • 19. 11
    Development Progress (cont.)
    Charly Vein
  • 20. Milling Progress
    • Existing mill 114 miles from mine accessible by paved highway ($20.50 per ton hauling cost)
    • 21. 1,000 ton per day capacity in two circuits including crusher, regrind mills, gravity and flotation circuits
    • 22. 1.5 million tons of tailings space currently available at the mill site
    • 23. $30,000 per month plus per ton milling fee
    • 24. Operating at 180 tons per day in August (accelerating to 250 tpd in September)
    • 25. To date RX has processed 10,000 tons of ore from Drumlummon
    12
  • 26. Mill Recoveries
    Mill recoveries on gravity circuit: 92%
    Mill recoveries on floatation circuit: 90%
    Dore bar refinery charge: 1%
    Float concentrate smelter charge: 8%
    *These numbers are before Net Smelter Return Royalty average at 2%
    13
  • 27. 14
    Continuous Mining and Milling Schedule
    * Assumes all recovery, refinery and NSR charges
  • 28. Selected Drill Results to Date
    15
  • 29. Exploration – Surface Drilling
    Drill Stations
    Company has planned 1,280 metres of drilling from two surface drill pads in Phase I of surface program
    16
  • 30. 17
    Exploration – Underground Drilling (8,000 metres)
    Plan View 800 Level
    3 Dimensional View
    N
    Charly vein
    450’ level
    Christmas vein
    Drill Station #9
    Proposed Drill Holes
    800’ level
    Company has planned 60 drill holes from drill station #9 - not all shown here - for a total 8,000 metres (Phase 1 & 2)
  • 31. Other Property Targets
    18
    N
    Bald Butte Mine
    Patented Ground
    Staked Claims
    1 km
    Only 5% of property has been explored
  • 32. Bald Butte – Surface Drilling
    19
    Phase I - 1,250 metres
  • 33. Exploration Drill Program (Phase I & II)
    20
    • Drilling to be completed in Q1 2011
    • 34. Phase I & II underground drilling to target Targeting Charly vein, X-mas vein, Drumlummon vein, and Castleton vein
    • 35. Phase I surface drilling to target Targeting Empire vein, Drumlummon North vein and Frankie vein
    • 36. NI 43-101 report for Drumlummon Mine to be updated in Q1, 2011
  • Permitting and Community Relations
    RX has received all permits and exemptions required for production:
    Approval of exploration license including water discharge by the Montana Department of Environmental Quality
    Approval of small miner exemption which permits the company to mine so long as surface operations do not exceed five acres
    Approval of the alternative mine rescue capabilities by the U.S. Mine Safety and Health Administration
    21
    • Approvalof the ventilation, escape and evacuation plan by the U.S. Mine Safety and Health Administration
    RX has been conducting regular Town Hall meetings to encourage community involvement and has addressed all of the concerns of the people of Marysville
  • 37. The RX Exploration Team
    Management
    CEO: Murray Nye – Co-founder,director, principal of Venbanc, Inc., an investment and merchant bank specializing in the structuring and financing of start-up companies; provides follow-up financial and management advisory assistance.
    CFO: Max Polinsky, B.Comm – Co-founder, director and principal of Venbanc, Inc.
    Director of Mining Operations: Mike Gunsinger – Mike was employed for 40 years by Patrick Harrison and Co., underground mining contractor, servicing major mining companies such as Inco and Noranda, and the US Military. Established his own underground contracting company and has been active in Utah and Montana.
    Consulting Mine Geologist:Ben Porterfield – Ben leads a team of geologists at the Drumlummon mine. He was formerly a geologist for Kennecott, focused on their Terra gold project in Alaska.
    Board of Directors
    John O’Donnell (B.A. Econ, L.L.B.) Chairman
    Murray Nye
    Max Polinsky
    Bill Fisher (P.Geo.) Former Chairman, Aurelian Resources and VP Exploration, Boliden Ltd.
    John Ryan (CGA) President, Spruce Ridge Resources
    Edward Ellwood (MBA) Management Consultant
    Paul Teodorovici Property Management Consultant
    22
  • 38. Share Capital
    RX Exploration was recently listed on the TSX Venture Exchange and began trading on August 4th, 2010.
    1 As of September 14th, 2010
    23
  • 39. RX Exploration: Why Invest?
    • Cash flow positive, no debt, no metals hedge
    • 40. Production of 15,000 ounces gold equivalent in 2010, 50,000 ounces gold equivalent in 2011
    • 41. High grade gold and silver with average grade 14 grams per ton gold equivalent
    • 42. Aggressive 14,000 metre drilling program to expand 43-101 resource
    • 43. Exploration of adjacent properties
    24
  • 44. GLOBAL MININGINVESTMENT CONFERENCE 2010
    Lead sponsors:
    Media partners:
    Other sponsors & participating organisations: