Objective Capital Global Mining Investment Conference - Platinum Group Metals: Chris Dundas
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Objective Capital Global Mining Investment Conference - Platinum Group Metals: Chris Dundas

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Nokomis Deposit: A Combined PGM & Base Metal Investment Opportunity ...

Nokomis Deposit: A Combined PGM & Base Metal Investment Opportunity
Objective Capital Global Mining Investment Conference
30 Sep 2009
by Chris Dundas, Duluth Metals

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  • 1. London Global Mining Investment Conference
    10.20 Platinum Group Metals
    Christopher Dundas
    Chairman & Director
    Duluth Metals Limited
    Stationers Hall, London
    Wednesday 30th September 2009
    www.ObjectiveCapitalConferences.com
  • 2. 2
    Nokomis Deposit:
    A Combined PGM & Base Metal Investment Opportunity
    Objective Capital’s London Global
    Mining Investment Conference
    September 2009
  • 3. 3
    Duluth Metals’ strategy is to systematically explore and develop the Nokomis Property, which hosts the Company’s main asset – the combined base and precious metal Nokomis Deposit.
    The vision of the Company is to move the world class Nokomis copper-nickel-PGM Deposit through feasibility into production.
  • 4. No regulatory authority has approved or disapproved the information contained in this presentation. This presentation includes certain statements that may be deemed “forward looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995.  Such forward looking statements include statements about our plans, strategies, business prospects, changes and trends in our business. In some cases, you can identify forward looking statements by the use of words such as "may," "could" "should," "would," "expect," "plan," "anticipate," "intend," "forecast," "believe," "estimate," "predict," "propose," "purpose," "potential" or "continue" or the negative or derivative of such words. In particular, all statements in this presentation, other than statement of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements.  Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from the forward-looking statements.  As they are based on management's current plans, estimates, expectations, beliefs and assumptions concerning future events, they involve a number of risks and uncertainties.   Factors that could cause actual results to differ materially from those in the forward-looking statements include market prices for commodities, exploitation and exploration successes, continued availability of capital and financing, general economic, market or business conditions  and other factors disclosed in the Company's public filings . The Company does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, save and except as may be required by applicable securities laws.
    4
    Cautionary and Forward Looking Statement
  • 5. 5
    Property Location
  • 6. 6
    Significant Contained PGM’s & Base Metals
    Contained Metals in Expanded Nokomis Resource*
    Base
    Precious
    *Based on resource estimated at 1.0% copper equivalent cut-off.
    Reference: July 18, 2008 Technical Report on the Resource Estimate for the Nokomis Deposit on the Maturi Extension Properties, Minnesota, U.S.A.
    6
  • 7. 7
    Nokomis Deposit
    NI 43-101 Resource Estimate
    NI 43-101 Estimate by Scott Wilson RPA dated June 2008
    Scott Wilson RPA estimated the Mineral Resource using average long-term metal US$ prices of $1.75/lb copper, $7.00/lb nickel, $10.00/lb Co, $600/oz Au, $1100/oz Pt and $350/oz Pd.
    Copper equivalent (CuEq%) = Cu% + 3.03 x Ni% + 0.63 x Co% + 0.30 x Au g/t + 0.76 x Pt g/t + 0.24 x Pd g/t based on expected metal prices and process recovery and refining charges.
    TPM (g/t) = Pt (g/t) + Pd (g/t) + Au (g/t)
    *Cu Equivalent cut-off grade methodology approximates 0.4% Cu
    7
  • 8. 8
    Nokomis: A Diversified Basket of Commodities
    Potential Annual Production @ 40,000 tpd
    Total TPM Annual Production = 251,000 ozs
    *Reference: January 8, 2009 Scott Wilson RPA Preliminary Assessment on the Nokomis Project, Minnesota, U.S.A.
    8
  • 9. 9
    Nokomis Property: Higher PGM Potential
  • 10. 10
    Financial Leverage on World Metal Prices
    $3.2
    Billion
    as of September 16-09
    spot prices
    Three different economic cases are highlighted by Scott Wilson RPA: Low Metal Price Case of 1.55/lb Cu; $4.90/lb Ni; $10.00/lb Co; $795/oz Pt; $295/oz Pd; $600/oz Au; Base Price Case of $1.75/lb Cu; $7.00/lb Ni; $10.00/lb Co; $1,100/oz Pt; $350/oz Pd; $600/oz Au; and Market Price Case* as of January 13, 2008 of $3.31/lb Cu, $12.70/lb Ni, $47/lb Co, $1,559/oz Pt, $376/oz Pd, $895/oz Au: (all monetary units are in $US)
    *Scott Wilson RPA used Market Prices on January 13, 2008 in the earlier NI 43-101 Report dated January 22, 2008.
    Reference: January 8, 2009 Scott Wilson RPA Preliminary Assessment on the Nokomis Project, Minnesota, U.S.A.
  • 11. 11
    Valuable Asset for Future Mine Plan
    Dunka Property Option
    Advantages of Dunka:
    • Potential site for future tailings and processing.
    • 12. Cost effective.
    • 13. Recycling an existing brownfields site.
  • Metal Value Contributions
    12
    Metal Value Contributions
    Base Case Metal Distribution – Approximate Relative Contribution to Value.
    Ratio is dependent on relative world spot metal prices.
    Reference: January 18, 2008 Technical Report on the Preliminary Assessment on the Nokomis Project, Minnesota, U.S.A.
    12
  • 14. Forecast Production Cost*
    Viewed as a Potential Copper Mine
    (with all other metals as by-product credits)
    Including Capital Costs
    Not Including Capital Costs
    $6
    $4
    $2
    $0
    -$2
    -$4
    -$6
    -$8
    -$10
    $6
    $4
    $2
    $0
    -$2
    -$4
    -$6
    -$8
    -$10
    Base Case
    Low Metal Price Case
    Low Metal Price Case
    Base Case
    Market Case**
    Market Case**
    Cost per Pound of Production
    $0.32
    -$0.30
    -$0.09
    -$0.72
    -$1.94
    -$2.36
    *Based on NI 43-101January 2009 Scoping Study
    **Market case as of January 13, 2008
    13
    13
  • 15. Forecast Production Cost*
    Viewed as a Potential Nickel Mine
    (with all other metals as by-product credits)
    Including Capital Costs
    Not Including Capital Costs
    $6
    $4
    $2
    $0
    -$2
    -$4
    -$6
    -$8
    -$10
    $6
    $4
    $2
    $0
    -$2
    -$4
    -$6
    -$8
    -$10
    Base Case
    Low Metal Price Case
    Low Metal Price Case
    Base Case
    Market Case**
    Market Case**
    Cost per Pound of Production
    -$2.15
    -$0.36
    -$1.82
    -$3.61
    -$9.83
    -$11.63
    *Based on NI 43-101 January 2009 Scoping Study **Market case as of January 13, 2008
    14
    14
  • 16. A World Class Deposit
    15
    “Mineral deposits occur rarely in the Earth’s crust and
    large ones are especially uncommon”1
    Nokomis is a World Class Deposit
    “World class deposits are defined as the upper 10 percent of deposits in terms of contained metal”2
    1 ,2 Singer, D.A., (USGS Geologist), 1995, World-Class Base and Precious Metal Deposits – A Quantitative Analysis: Economic Geology, v. 90, p. 88-104.
  • 17. Size Comparison of Camps/Deposits
    16
  • 18. 17
    Contained Metal: Duluth Deposits
    Nokomis is the largest and still growing
    NE SW
  • 19. 18
    Important to the United States
    Nokomis as a percent of the identified resources
    (Measured, Indicated & Inferred) of the United States
    U.S. Geological Survey, 2008, Mineral commodity summaries 2009: U.S. Geological Survey, various pages.
    18
    October 8, 2009
  • 20. Importance of the Nokomis Deposit
    19
    Based on reported data of contained metal, the Nokomis Deposit is the second largest Cu-Ni-PGE deposit on
    Earth, only Russia’s Noril’sk deposit is larger.
  • 21. 20
    Non-ferrous Exploration Activity
    The Nokomis Deposit
    Part of an evolving mining district.
    Nokomis
    449 Million Tonnes Indicated 0.624% Cu, 0.199% Ni, 600 ppb Pt+Pd+Au
    284 .2 Million Tonnes Inferred
    0.645% Cu, 0.180% Ni ,
    697 ppb Pt+Pd+Au
    Reference: University of Minnesota Duluth see athttp://www.d.umn.edu/prc/workshops/08_InvWorkshop.html
    Duluth Metals resource estimates are NI 43-101 compliant, other deposits are as reported.
    20
    October 8, 2009
  • 22. 21
    Strategic Land Additions
    Acquisition of additional mineral rights and/or surface rights including:
    • Dunka Property Option
    • State Lands (multiple properties)
    • Other Private Lands (multiple properties)
    The new land acquisitions bring the current mineral holdings of Duluth Metals to approximately 18,500 acres and 14,000 acres of surface rights.
  • 23. Exploration Summary
    22
    Exploration
    From 2006 to 2009 the Company operated the largest concerted drilling program ever undertaken in Minnesota to define the Nokomis Deposit.
    Duluth Metals completed a total of
    155 vertical holes & 67 wedge holes,
    totaling 153,425 meters (503,363 feet)
    or 153.4 kilometers (95.3 miles).
    All holes drilled to target depth intercepted mineralization
    in varying widths and grades
    (all assay results available on SEDAR.com)
    Cumulative Meters Drilled
  • 24. Advancement of the Nokomis Project
    23
    A year of accomplishments in a challenging economic climate:
    • Expanded the size of Nokomis deposit
    – 30% increase in Indicated Resources to 449 Million Tonnes – 162% increase in Inferred Resources to 284 Million Tonnes
    • Second NI 43-101 Preliminary Assessment of the Nokomis Project
    – Expanded 40,000 tonnes per day production rate scenario demonstrates positive economics
    • Delineated significant Eastern Area Higher Grade Zones
    • Increased strategic land assets
    • Environmental baseline studies underway
    • Commenced a third NI 43-101 Resource Estimate with Scott Wilson RPA
  • 25. Geological Interpretation: Nokomis Deposit
    24
    Cross sections views through the Nokomis Deposit
    Figures from Peterson, 2008
  • 26. Nokomis Cross Sections: East
    25
  • 27. Nokomis Cross Sections: West
    26
  • 28. Nokomis Ore Deposit Model
    27
  • 29. 28
    Next Steps – 2009 and Beyond
    Major Activities:
    • Geologic analysis – insight of the mineralization leads to enhanced understanding and discovery.
    • Resource definition – identifyingcontiguous, large tonnage, higher grade zones is important.
    • Mine planning – designing the optimal extraction system.
    • Metallurgical testing – confirming the optimal recovery system.
    • Environmental assessments – critical to the permittability and future development of the project.
    • Project optimization – insuring the best operation and the most profitable economic scenario, within the operational constraints.
    28
  • 30. 29
    Timeline to Advance the Nokomis Deposit
    Towards Production
    2006 -2009
    Exploration to define Nokomis Deposit
    2007 ongoing
    Environmental Base Line Studies for EIS
    2008 ongoing
    Collection of Drill Core for metallurgical tests
    Mine Planning and Engineering
    2009 ongoing
    Pre-Feasibility and subsequent Bankable Feasibility Studies
    Project Optimization
    Environmental Review, EIS and Permitting
  • 31. 30
    Environmental Good News
    • Environmental work on Nokomis began in early 2007.
    • 32. Baseline studies are proceeding well and many are almost completed.
    • 33. Nokomis will have reduced surface impact as an underground mine vs an open pit mine.
    • 34. Reuse of the Dunkabrownfields site is considered positive.
    • 35. Nokomis appears to be permittable within current environmental standards.
    • 36. PolyMet has helped define the process for permitting a nonferrous mine in Minnesota.
    • 37. Duluth Metals continues to work with the State, Federal Government, local groups and other stakeholders to address all environmental questions and issues.
  • 31
    As of August 31, 2009Share Structure
  • 38. Management
    Christopher DundasChairman & DirectorFormerly Senior Partner Murray & Co. Over 30 years experience in project & corporate finance. Debt & equity finance specializing in real estate and infrastructure. B.Commerce – Queens University & MBA - U. of California, Berkeley.
    Henry SandriPresident, CEO & DirectorFormerly President of Select Resources, former executive of Inco Ltd., Queensland Nickel, and Burlington Northern Inc. International mineral economist. BSc Foreign Service-Georgetown U., MA Applied Economics-American U. & PhD Mineral Economics-Colorado School of Mines.
    Dean PetersonSenior Vice-President ExplorationPre-eminent authority on Duluth Complex mineralization through previous position as Senior Research Associate at the Natural Resources Research Institute of the U. of Minnesota in Duluth as well as co-director of the Precambrian Research Center at the University.
    John FrancisChief Financial OfficerEarned his Chartered Accountant degree in 1976 with Coopers & Lybrand. Over 25 years experience in finance & accounting within the mining and natural resource sectors. Has held senior finance positions with Jaguar Nickel, Queenston Mining, and Harbinson Mining Group.
    H. James BlakeSecretarySenior law partner of McLean & Kerr LLP. Appointed Queen’s Counsel in 1980. Member of the Ontario Bar Association. LLM Business Law-York University.
    32
    32
  • 39. Directors
    James J. Jackson, R.C.A. DirectorFormer Alcan executive, former Senior Vice-President and Chief Financial Officer of MobiFon. Current member of the supervisory board of Bite Lithuania, a mobile telephone company and Board member of Neo Materials Technologies Inc. A member of the Canadian Institute of Chartered Accountants and a registered Certified Public Accountant in the United States. He serves as Director & Chairman of the Audit Committee.
    Michael J. Knuckey DirectorFormer President and CEO of Noranda Mining and Exploration and involved in the discovery and development of numerous mines including the giant Collahuasi deposit, Chile; Corbet; Winston Lake; Ansil; Thayer Lindsley; Samatosum; Raglan’s new zones and Ujina. Inductee to Canadian Mining Hall of Fame.
    Thomas F. Pugsley DirectorFormer Senior Vice President of Projects and Engineering at Falconbridge Limited, he managed Falconbridge’s interest in the US$1.8 billion Collahuasi Copper Project, Chile, and, was responsible for the implementation of Falconbridge’s $600 million Raglan Project, Nunavik Quebec as well as the design, planning and development of Falconbridge’s US$3 billion Koniambo Ferronickel Project in New Caledonia.
    Barry Simmons B.Sc. DirectorFormer executive of Teck Cominco Ltd., Falconbridge Limited and Cameco Corporation, with worldwide experience in exploration and development of copper, nickel, precious metals and uranium.
    Alar Soever P.Geo Director President of Wallbridge Mining Company and Professional Geologist with over 25 years experience in the mining industry in Canada and overseas.
    33
  • 40. Company Highlights
    Single Focus
    Focused on One Property
    • Growing the Asset Value of the Nokomis Deposit
    • Advancing Nokomis to Development and Production
    Experienced Management
    Experienced Board, Management & Staff
    Debt Free
    Cash Position
    Approximately $6.7 Million Cash as of June 30, 2009
    34
  • 41. Attractive Investment Vehicle
    35
    Investment Summary
    • Diversified PGM and Base Metal Opportunity
    • 42. Significant upside to increase Nokomis Resource
    • 43. Strong financial leverage to increasing
    base and precious metal prices
    • Low political risk & historical mining
    culture
    • Excellent infrastructure in the centre of
    North America
  • 44. 36
    TSXDM
    www.duluthmetals.com
  • 45. London Global Mining Investment Conference
    Christopher Dundas
    Chairman & Director
    Duluth Metals Limited
    Chris Dundas is the Chairman and a Director of Duluth Metals Limited. Mr Dundas obtained an MBA from the University of California (Berkeley) in 1973 and has 33 years of investment banking experience in real estate, corporate, and infrastructure finance. During that period he participated in arranging financings totalling several billions of dollars. Since late 2005, he has led the IPO, development and growth of Duluth Metals Limited, a publicly listed company on the Toronto Stock Exchange. He is formerly a Director of Murray & Company Holdings Limited, a full service financial intermediary headquartered in Toronto and formerly the President of Murray & Company’s Quebec subsidiary. He is a former Director of Wallbridge Mining Limited.
    Stationers Hall, London
    Wednesday 30th September 2009
    www.ObjectiveCapitalConferences.com