June 2011 IR presentation

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June 2011 IR presentation

  1. 1. CANADIAN ARROW MINES LTD. CRO.V Canada’s Emerging Nickel-Copper ProducerThis presentation may contain "forward-looking statements" within the meaning of Canadian securitieslegislation and the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date of this presentation and the Company does not intend, anddoes not assume any obligation, to update these forward-looking statements.Forward-looking statements relate to future events or the anticipated performance of the Company andreflect management’s expectations or beliefs regarding such future events and anticipated Kenbridgeperformance. In certain cases, forward-looking statements can be identified by the use of words suchas "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", Timmins"anticipates" or "believes", or variations of such words and phrases or statements that certain actions,events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved", or thenegative of these words or comparable terminology. By their very nature forward-looking statementsinvolve known and unknown risks, uncertainties and other factors which may cause the actual Turtlepondperformance of the Company to be materially different from any anticipated performance expressed orimplied by the forward-looking statements. Such factors include various risks related to the Company’soperations, which are detailed from time to time in the Company’s interim and annual financialstatements and management’s discussion and analysis of those statements, all of which are filed andavailable for review on SEDAR at www. sedar.com. Although the Company has attempted to identifyimportant factors that could cause actual performance to differ materially from that described in forward-looking statements, there may be other factors that cause its performance not to be as anticipated.There can be no assurance that forward-looking statements will prove to be accurate, as actual resultsand future events could differ materially from those anticipated in such statements. Accordingly,readers should not place undue reliance on forward-looking statements. Corporate Review – June 2011
  2. 2. Net asset value in excess of $280M vs. market cap of  $13M3 Key Nickel‐Copper Assets: 110M lbs of NI 43‐101 contained nickel plus 52M lbs of contained copper:1. Kenbridge nickel‐copper project: 98M lbs of Ni (indicated resource NPV @ US$10/lb Ni net of Cu credits:  $253M 3 years to production; US$3.55/lb C1 prod. cost2. Alexo and Kelex nickel mines: 9.9M lbs of Ni (indicated resource) contained nickel value at US$10/lb nickel: US$40M 9 months to production3. 2% royalty in Hart nickel project, (Liberty Mines Inc. PEA, Feb 26, 2010): Life of mine NSR revenue est’d @ $246M*1 NPV (@US$7/lb), or $440M  (@ US$10/lb)Market Capitalization: Low cost; low risk;  Arrow Shares outstanding:  132,742,030 @ $0.09 near production Market Capitalization: $13M (96% discount to NAV) Current  nickel LME price:  US$11.50/lb  Arrow Market Cap/lb Ni: US$0.12/lb (99% discount to LME market)
  3. 3. Corporate Information (as of June 3, 2011)TSX Venture  symbol: CRO Majority Shareholders:Share price  $0.085 • Pinetree Capital                   10.0 %Market capitalization $12.6 M • Management  4.6 %Shares outstanding      132.7 MWarrants     16.1 MFully Diluted        148.8 M52 week high/low                 $0.135‐ $0.025 Pre‐recession high of $0.73/share
  4. 4. Why invest in nickel? Two thirds of world nickel  production consumed in stainless steel. • World stainless production has increased by avg. 8% qtr Stainless and Heat Resisting Crude Steel Production over qtr in 2009-10. 35,000 • Record world production @ 30,000 32mt in 2010 World 25,000 China • China has led the way: 41%(1000 tonnes) Asia w/ China 20,000 Asia w/o China domestic production increase 15,000 The Americas over the period. 10,000 Central + Eastern Europe 5,000 W.Europe/Africa • 70 nickel producers shut 0 down in 2008, many 2004 2005 2006 2007 2008 2009 2010 permanent. Few new projects Source: ISSF International Stainless Steel in pipeline Forum • Conventional Ni sulphide deposits are low risk, low *1% Nickel ~ 0.18 opt or 6 gpt gold equivalent capital, low op’g cost compared to laterites, pig nickel
  5. 5. Corporate Objectives:Re‐start Kelex production: Kelex metallurgical work ( Xstrata Process  Services, Sudbury) Closure plan amendment (Approved) Finalize custom milling/concentrate off‐take  terms with Xstrata integrating met test work  recoveries Financing Secure contractors Resume productionUse cash flow from Kelex plus Hart NSR to finance Kenbridge feasibility ($3M) and construction ($108M)
  6. 6. Production Timelines 2011 2012 2013Timmins Production Kenbridge: Permitting  Feasibility Road work Production Construction Hart NSR Timmins projects offer opportunity to finance Kenbridge through feasibility  and into production with the Company’s own cash flow and minimal  requirement for equity financing
  7. 7. Timmins Projects Economics: 9.9 M lbs of contained  nickel in 6 zones Kelex• Total NI 43‐101Resource: Kidd Met Site • 9.9M lbs of contained  nickel Redstone Mill • 473,000 tonnes @  0.96% nickel indicated • 66,000 tonnes @  0.82% nickel inferred• Permits remain in place• Direct ore shipping options
  8. 8. Recent 2011 Drill Success: 2,800 metres over 17 holes @ $285,000 total cost 95% increase in resource estimate: 250,000 tonnes increased to 473,000 tonnes @ 0.96%  Ni 81 tonnes of indicated resource per metre drilled vs. 9  tonnes/metre historically Increase of 4M lbs of contained nickel $40M of contained nickel value @ $10/lb at a cost of  $0.285M or $0.07/lb! Excellent upside for future drilling programs
  9. 9. 2011 Drilling Results: New Massive Sulphide Lens  Discovery 2.13% Ni/4.9mHUX‐04: 1.81% Ni/1.3m Indicated  resource blocks 30 0m un New 2011 massive  dr ille sulphide lens discovery: d ALX‐01‐96: 2.51% Ni/0.77m •5.84% Ni/0.6m gvp •5.01% Ni/1.0m
  10. 10. Short Range Plans: 9 months to 1 year Kelex Phase 1 Pit: 20,000 tonnes @ 2% Ni (0.9M lbs of contained Ni) Metallurgical test work – to determine mill recoveries for custom milling Conclude custom milling and concentrate off‐take agreements Amended Closure Plan – submitted and awaiting MNDMF response Exemption to Refine Domestically – received May 13, 2011 Pit dewatering – 9 months under current permits.  Permit upgrade for more  rapid dewatering submitted and awaiting approval Secure mining contracts Re‐start Production: 2‐3 months duration Kelex‐Alexo Phase 2 Pit Expansion: 220,000 tonnes @ 0.78% Ni (diluted) 3.7M lbs of contained Ni Updated mine plan, Closure Plan Kelex‐Alexo Phase 3 Underground:  360,000 tonnes @ 0.87% Ni (diluted) 6.8M lbs of contained Ni Updated mine plan, Closure Plan
  11. 11. Hart Project: Liberty Mines Inc.PEA completed March 2010: 1.7Mt @ 1.26% Ni 0.10% Cu potentially  mineable, 47.8m lbs contained Ni Underground, ramp access, 4.5 yr LOM @  1,500 tpdNet smelter revenue to Arrow: $246M net NSR revenue: 2% NSR @ US$7/lb Ni = $3.5m $435M net NSR revenue: 2% NSR @ US$10/lb Ni = $5.5m
  12. 12. Kenbridge Nickel‐Copper Project• NI 43‐101resource of 98M lbs nickel, 52M lbs copper, contained • Arrow completed PEA: stand alone open pit + UG,  mill/concentrator facility • LOM C1 cash cost/lb Ni net of Cu:  US$3.55/lb Kenbridge • Road access within 100 km of either CN or CP railheads;  1,500 km by rail to Sudbury • Start‐up capital: $108M• Former Falconbridge project, 60 man camp (1952‐58) • 623m x 3 compartment shaft, (4th compartment at bottom 2  levels) • two levels developed, bulk sampled • metallurgical work completed (high Ni recoveries, low MgO) • Base metals price crash in 1958 ‐ never mined • Approximately $100M expended historically • $11M additionally expended in 2007‐2010 by Arrow Significantly de-risked
  13. 13. Kenbridge – Resources @ US$10/lb Aug. 2008 NI 43‐101 Mine area & class Tonnes % Ni % Cu Open Pit (M&I) 4.46 Mt 0.42 0.23 Underground (M&I) 2.67 Mt 0.96 0.50 Underground (Inf.) 0.1 Mt 1.38 0.88• 98 M lbs of contained nickel• 52 M lbs of contained copper 7.2% Ni• Deposit is open at depth in all directions /5.5m• High grades at depth, including  • 7.2% Ni over 5.5m (1.5 opt Au equiv) OP • 4.3% Ni over 3.0m EN OP• PEA economics: EN •US$10.00/lb Ni, $2.50/lb Cu, US$0.90 exch. •LOM C1 cash cost/lb Ni net of Cu:  US$3.55/lb •pre‐tax NPV7.5%: $253 M, ($144M@ US$8/lb) •pre‐tax IRR: 65% OPEN 4.3% Ni/3.0m
  14. 14. Kenbridge Site Camp Proposed pit Existing 2000’ Massive  ShaftSulphides  exposed at surface
  15. 15. Lynn Lake, Manitoba Geological Model: Comparable to Kenbridge Ni District ‐ Multiple Deposits,  mostly sub‐surface Kenbridge, (superimposed) Lynn Lake, Manitoba (Sherritt Gordon Mines) North America’s 3rd largest nickel camp (1953-1976):(Source: Victory Nickel • 22 Mt @ 1% Ni, 0.5% Cu from 12 deposits; 8 of which were sub-surfaceCorp.)
  16. 16. Regional Exploration: an underexplored Ni‐Cu‐PGM belt Kenbridge North Turtlepond/Denmark projects:  • 9 separate Ni/Cu occurrences  including three new discoveries  within 70 km of Kenbridge Kenbridge 15km strike of favourable structural  corridor Several untested magnetic and EM  anomalies for field follow‐up. Caribou Lodge Discovery; 4.5% Ni/0.7m
  17. 17. Turtlepond Lake ‐ EM targets & recent drill results Night Danger (new discovery 2010): ND-09-01: 0.60% Ni, 0.42% Cu/2m Night Danger ND-09-02: 0.57% Ni, 0.44% Cu/9m ND-10-03: 1.02% Ni, 0.38% Cu/4m (Incl. 4.53% Ni, 0.08% Cu/0.7m) Emmons EM-09-07: 0.44% Ni, 0.44% Cu, 0.25 gpt PGE+Au/ 11.5m Double E (new Discovery 2010) EE-09-01: 1.35% Ni, 0.81% Cu, 0.94 gpt PGE+Au/2.0m EE-09-01: 0.55% Ni, 0.38% Cu, 0.28 gpt PGE+Au/4.8m EE-10-04: 0.52% Ni, 0.28% Cu, 0.29 gpt PGE+Au/1.9m EE-10-04: 0.51% Ni, 0.23% Cu, 0.21 gpt PGE+Au/1.9m
  18. 18. Canadian Arrow Mines Summary: Robust nickel/stainless steel market outlook over coming decade  Two low‐risk, near‐term production projects plus NSR revenue exceeding  $280M in net asset value Market capitalization of $13M, (96% discount to NAV)  Opportunity to re‐start production, generate revenue with minimal capital  outlay and requirement to finance in coming months Excellent exploration opportunities and land positions in both project  areas  NI 43‐101 indicated nickel inventory market valuation of US$0.12/lb vs.  LME avg market price of $US11.50/lb Ni: 96% discount to LME nickel price

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