ROMARCO Corporate Presentation - AUGUST 2012
Upcoming SlideShare
Loading in...5
×
 

Like this? Share it with your network

Share

ROMARCO Corporate Presentation - AUGUST 2012

on

  • 1,504 views

 

Statistics

Views

Total Views
1,504
Views on SlideShare
536
Embed Views
968

Actions

Likes
0
Downloads
1
Comments
0

3 Embeds 968

http://www.romarco.com 953
http://romarco.com 13
http://translate.googleusercontent.com 2

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

ROMARCO Corporate Presentation - AUGUST 2012 Presentation Transcript

  • 1. CORPORATE PRESENTATIONAUGUST 2012 WWW .R O MA R C O .C O M
  • 2. Cautionary Statement  The  informa-on  in  this  document  has  been  prepared  as  of  March  13,  2012.  Certain  statements  contained  in  this  document  cons-tute  “forward-­‐looking  statements”  within  the  meaning  of  the  United  States  Private  Securi-es  Li-ga-on  Reform  Act  of  1995  and  forward  looking  informa-on  under  the  provisions  of  Canadian  provincial  securi-es  laws.  When  used  in  this  document,  the  words  “an-cipate”,  “expect”,  “es-mate”,  “forecast”,  “will”,  “planned”,  and  similar  expressions  are  intended  to  iden-fy  forward-­‐looking  statements  or  informa-on.    Specifically,  this  presenta-on  contains  forward  looking  statements  regarding  the  results  and  projec-ons  contained  in  the  March  13,  2012  technical  report  of  the     TSX : RHaile  Gold  project,  including  the  expected  mine  life,  recovery,  capital  costs,  cash  opera-ng  costs  and  other  costs  and  an-cipated  produc-on  of  the  described  open  pit  mine,  the  projected  internal  rate  of  return,  the  projected  payback  period,  the  availability  of  capital  for  development,  sensi-vity  to  metal  prices,  ore  grade,  the  reserve  and  resource  es-mates  on  the  project,  the  financial  analysis,  the  -ming  for  comple-on  of  the  revised  feasibility  study  on  the    Haile  Gold    project,    the  -ming  and  amount  of  future  produc-on,  the  -ming  of  construc-on  of  the  proposed  mine  and  process  facili-es,  capital  and  opera-ng  expenditures,  the  -ming  of  the  receipt    of  permits,  rights  and  authoriza-ons,  communica-ons  with  local  stakeholders  and  community  rela-ons,  availability  of  financing  and  any  and  all  other  -ming,  development,  opera-onal,  financial,  economic,  legal,  regulatory  and  poli-cal  factors  that  may  influence  future  events  or  condi-ons  and  expected  drilling  ac-vi-es.    In  addi-on,  this  presenta-on  also  contains  updated  resource  es-mates  contained  in  the  March  13,  2012  technical  reports.   WWW .R O MA R C O .C O M  Scien-fic  and  technical  informa-on  referred  herein  has  been  extracted  from  and  are  hereby  qualified  in  their  en-rety  by  reference  to  the  aforemen-oned  technical  reports  (“Technical  Reports”).    Joshua  Snider,  P.E.,  Thomas  L.  Drielick,  P.E.,  Lee  “Pat”  Gochnour,  M.M.S.A.,  John  Marek,  P.E.  and  Derek  Wiwer,  P.E.  are  responsible  for  preparing  the  Technical  Reports.    Each  of  the  above  referenced  persons  is  a  “qualified  person”  as  defined  in  Na-onal  Instrument  43-­‐101  —  Standards  of  Disclosure  for  Mineral  Projects.    Such  forward-­‐looking  statements  are  based  on  a  number  of  material  factors  and  assump-ons,  including,  but  not  limited  in  any  manner,  those  disclosed  in  any  another  of  Romarco’s  public  filings,  and  include  the  ul-mate  determina-on  of  mineral  reserves  and  resources,  availability  and  final  receipt  of  required  approvals,  licenses  and  permits,  sufficient  working  capital  to  develop  and  operate  the  proposed  mine,  access  to  adequate  services  and  supplies,  economic  condi-ons,  commodity  prices,  foreign  currency  exchange  rates,  interest  rates,  access  to  capital  and  debt  markets  and  associated  cost  of  funds,  availability  of  a  qualified  work  force,  lack  of  social  opposi-on  and  legal  challenges,  and  the  ul-mate  ability  to  mine,  process  and  sell  mineral  products  on  economically  favorable  terms.  While  Romarco  considers  these  assump-ons  to  be  reasonable  based  on  informa-on  currently  available  to  it,  they  may  prove  to  be  incorrect.  Actual  results  may  vary  from  such  forward-­‐looking  informa-on  for  a  variety  of  reasons,  including  but  not  limited  to  risks  and  uncertain-es  disclosed  in  other  Romarco  filings  at  www.sedar.com.  Forward-­‐looking  statements  are  based  upon  management’s  beliefs,  es-mate  and  opinions  on  the  date  the  statements  are  made  and,  other  than  as  required  by  law,  Romarco  does  not  intend,  and  undertakes  no  obliga-on  to  update  any  forward-­‐looking  informa-on  to  reflect,  among  other  things,  new  informa-on  or  future  events      Cau-onary  Note  to  United  States  Investors  Concerning  Es-mates  of  Measured,  Indicated  and  Inferred  Resources:  Certain  tables  may  use  the  terms  “Measured”,  “Indicated”  and  “Inferred”  Resources.  United  States  investors  are  advised  that  while  such  terms  are  recognized  and  required  by  Canadian  regula-ons,  however,  the  United  States  Securi-es  and  Exchange  Commission  does  not  recognize  them.  “Inferred  Mineral  Resources”  have  a  great  amount  of  uncertainty  as  to  their  existence,  and  as  to  their  economic  and  legal  feasibility.  It  cannot  be  assumed  that  all  or  any  part  of  an  Inferred  Mineral  Resource  will  ever  be  upgraded  to  a  higher  category.  Under  Canadian  rules,  es-mates  of  Inferred  Mineral  Resources  may  not  form  the  basis  of  feasibility  or  other  economic  studies.  United  States  investors  are  cau-oned  not  to  assume  that  all  or  any  part  of  Measured  or  Indicated  Mineral  Resources  will  ever  be  converted  into  Mineral  Reserves.  United  States  investors  are  also  cau-oned  not  to  assume  that  all  or  any  part  of  a  Mineral  Resource  is  economically  or  legally  mineable.    All  figures  are  US$  unless  otherwise  indicated    2   
  • 3. Introduction Haile Gold Mineu  Currently in EIS and Permitting process TSX : Ru  Detailed engineering work on-going •  Target 75% completion by year end WWW .R O MA R C O .C O Mu  Continuous review of mine plan, alternatives, expansion studies, underground reviewu  Exploration reduced in current economic environment •  3 rigs operating at Haile and regional targetsu  $80M in the bank (at July 31, 2012)u  Continued institutional shareholder support 3  
  • 4. What makes Haile a unique asset?u  Rated #6 out of 76 new mines starting in 2012 to 2020 by BMO (May 7, 2012) TSX : Ru  Experienced development team in placeu  Key long-lead equipment ordered and secured WWW .R O MA R C O .C O M •  Mobile mine fleet •  SAG / Ball millsu  Location – Location – Locationu  Low capex ($320mm)u  Low operating costs ($379 / oz LOM)u  High grade (2.06 g/t)u  District potential 4  
  • 5. ENVIRONMENTAL IMPACTSTATEMENT PROCESS þ Contractor  (3rd  Party)  SelecOon  –  Sept.  2,  2011  (announced  Sept.  26,  2011) þ NoOce  of  Intent  Federal  Register  –  Sept.  23,  2011   TSX : R þ 30  day  noOce  period   þ Public  Scoping  MeeOng  –  Oct.  27,  2011   WWW .R O MA R C O .C O M þ Scoping  Comment  Period  Closed  –  Nov.  28,  2011  CURRENT STAGE PreparaOon  of  DraJ  EIS   DraJ  EIS  filed  and  comment  period  opens  –  Dec.  14,  2012   DraJ  EIS  Public  Hearing  –  Jan.  29,  2013   DraJ  EIS  comment  period  closes  –  Feb.  28,  2013   Final  EIS  filed  –  July  19,  2013   Record  of  Decision  (ROD)  on  404  Wetlands  permit  –  Aug.  16,  2013   5  
  • 6. HGM PERMITTING TSX : R Federal – USACE* State – DHEC** •  404 Wetlands Permit only •  401 Water Quality Certification USACE is sole deciding •  Mine Operating Permit WWW .R O MA R C O .C O M •  regulatory body •  Air Quality Permit •  All other agencies are •  NPDES Permit cooperating or commenting agencies only – EPA, US Fish •  Others and Wildlife, Catawba Nation, DHEC, SCDNR etc.* US Army Corps of Engineers** South Carolina Department of Health and Environmental Control 6  
  • 7. CLEAR PLAN TO BRING HAILE INTO PRODUCTION •  Strong balance sheet with approximately $80M in cash and no debt(1) •  Well defined project schedules and clear development milestones TSX : R Project Schedule for EIS Haile Milestones and Status Report 2011 2012 2013 2014 2015 Milestone / Activity Status WWW .R O MA R C O .C O M Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 H1 H2 Complete feasibility study P State mine operating permit submitted PFeasibility Study 401/404 permit submitted POptimization Resource / reserve report PPermitting Expand Haile & Horseshoe P Identify new targets PConstruction Acquire other properties PProduction Explore regional targets P Update Resource PExploration Draft EIS 2012 7   (1) As disclosed in Q2 MD&A June 30, 2012
  • 8. RESOURCES & RESERVES OPEN PIT & UNDERGROUND 2011 MEASURED + INDICATED RESOURCES AT US$1,200 GOLD (1) METRIC TONNES g/t CONTAINED oz TSX : R (000s) Au (000s) MEASURED 36,894 1.79 2,125 INDICATED 34,277 1.74 1,914 WWW .R O MA R C O .C O M MEASURED + INDICATED 71,171 1.77 4,039 INFERRED 20,125 1.24 801 2010 RESERVES AT US$950 GOLD (1) METRIC TONNES g/t CONTAINED oz (000s) Au (000s) PROVEN RESERVE 19,592 2.19 1,382 PROBABLE RESERVE 10,917 1.82 636 PROVEN & PROBABLE 30,509 2.06 2,018 RESERVE (1)  From March 13, 2012 Technical Report filed on www.sedar.com on March 19, 2012 8  
  • 9. LOW CAPITAL COST Development Capex per ounce of Measured & Indicated Resources (inclusive) (US$/oz Au Eq.)(1) $156 TSX : R $83 Average: $85 $81 $78 WWW .R O MA R C O .C O M $70 $66 $63 Torex Rainy River Extorre International Tower Guyana Goldfields Romarco Victoria Gold Hill 9  Source: BMO Capital Markets, as at April 30, 2012(1) Includes precious metals only calculated at long term consensus prices of Au US$1,200/oz and Ag of US$21.35/oz
  • 10. HIGH GRADE FOR OPEN PIT TSX : R3.50! 3.17!3.00!2.50! 2.09! 2.06! WWW .R O MA R C O .C O M2.00! 1.46!1.50! 1.03!1.00! 0.78! 0.73!0.50!0.00! Guyana Goldfields! NovaGold! ROMARCO! Gabriel Resources! Detour Gold! Victoria Gold! Andina! Reserve Grade for Primary Open Pit Asset (g/t Au) (1) 10   (1) Source: Company Disclosure at March 31, 2012
  • 11. LOW CASH COST TSX : R $700! $617! LOWEST QUARTILE AVERAGE CASH $600! COST IN Q4 2011 (1) WWW .R O MA R C O .C O M $500! $379! $428! $400! $300! $200! $100! $0! Industry Average (1) ROMARCO Lowest Quartile (1) LOM Average (2) 11  (1)  Source: Brook Hunt estimates(2)  As per February 2011 Feasibility Study results included in March 13, 2012 Technical Report filed on March 19, 2012 on sedar.com
  • 12. NPV & IRR SENSITIVITYTO GOLD PRICE Pre-tax NPV and IRR Sensitivity to Gold Price (1) TSX : R ($ Millions, except gold price) Gold PAYBACK Price NPV @0% NPV @ 5% NPV @ 10% IRR % YEARS Per oz. WWW .R O MA R C O .C O M $1500 $1,426 $930 $621 47.0% 2.0 $1400 $1,259 $811 $534 42.3% 2.2 $1300 $1,092 $693 $447 37.6% 2.4 $1200 $925 $575 $359 32.7% 2.7 $1100 $758 $457 $272 27.6% 3.1 $1000 $591 $339 $185 22.3% 3.8 BASE CASE $950 $507 $279 $141 19.6% 4.2 $800 $257 $102 $10 10.7% 7.6 $700 $90 ($16) ($77) 4.0% 9.4 12  (1) As per February 2011 Feasibility Study included in March 13, 2012 Technical Report filed on March 19, 2012 on sedar.com - based on capital costs of $275 million not updated capital cost of $320million from December 31, 2011 MD&A
  • 13. HAILE GOLD MINEFEASIBILITY STUDY HIGHLIGHTSu  Feasibility Study does not include deep mineralization: Ø  Horseshoe, Mustang, Palomino and Snake Deep deposits TSX : R 3.5 km WWW .R O MA R C O .C O M 274 m DEPTH (m) 610 m 13  
  • 14. HAILE CROSS SECTION14   WWW .R O MA R C O .C O M TSX : R
  • 15. HAILE CROSS SECTION15   WWW .R O MA R C O .C O M TSX : R
  • 16. HAILE CROSS SECTION16   WWW .R O MA R C O .C O M TSX : R
  • 17. RESOURCE GROWTHAt year end 2011 3.5 km LEDBETTER TSX : R MUSTANG CHAMPION HORSESHOE WWW .R O MA R C O .C O M SMALL SNAKE SOUTH PIT PALOMINO CHAMPION SMALL SOUTH PIT LEDBETTER SNAKEHAILE LONG SECTION US$950 RESERVE PIT LIMITS HORSESHOE MUSTANG US$1200 RESOURCE SHELL DISCOVERY HOLE RC-1816 RC-1724 17   2012 EXPLORATION TARGETS 77.7m of 8.0 g/t Au RCT-129 PALOMINO 62.5m @9.6 g/t Au 70.1m @ 5.5 g/t Au
  • 18. CAPITAL STRUCTURE Capitalization Summary TSX : R Exchange/ Symbol TSX:R Share Price(1) C$0.60 WWW .R O MA R C O .C O M Shares Outstanding (Basic) 584.3M FD Shares Outstanding (TSM)(2) 586.4M Market Capitalization(1) C$350M 52 Week High / Low(1) C$1.78 / C$0.49 Cash Balance (July 31, 2012) US$80M(1) As at close on July 31, 2012 18  (2) Includes 2.1M “in-the-money” options at an average strike price of C$0.30 as of July 31, 2012
  • 19. 70% Institutional Ownership BlackRock Sun Valley Gold TSX : R Franklin Templeton Investments TOP 15 SHAREHOLDERS Van Eck Oppenheimer Funds WWW .R O MA R C O .C O M Norges Bank Tocqueville Colonial First State J.P. Morgan Fidelity Investments OF OUR SHARES ARE TD INSTITUTIONALLY Baker Steel Capital Managers / Ruffer OWNED URAM BMO Asset Management Universal Investment 19  
  • 20. ANALYST COVERAGE TSX : R TARGET PRICE NBF $2.05 WWW .R O MA R C O .C O M Paradigm $2.00 RBC $1.25 GMP $1.00 BMO $0.75 20  
  • 21. P/Street NAV TSX : R AVERAGE = 0.55x WWW .R O MA R C O .C O M ROMARCO 21   Source: BMO Capital Markets, as at June 30, 2012
  • 22. EV / Resources (1) $250 $230 TSX : R $200 WWW .R O MA R C O .C O M $150 $108 $100 AVERAGE = $79 $45 $43 $50 $35 $31 $31 $30 $0 Rubicon Torex Belo Sun Romarco ROMARCO Eco Oro Gabriel Rainy River Midas Gold Minerals Minerals Resources 22   Source: BMO Capital Markets, as at June 30, 2012 (1) Resources include P&P, M&I and Inferred precious metals only
  • 23. CAPITAL COSTS BREAKDOWN TSX : R Component of CAPEX Feasibility $275M vs March 2012 $320M EQUIPMENT ~ 1/3 •  Scope changes to water treatment plant WWW .R O MA R C O .C O M CONSTRUCTION ~ 1/3 •  Additional liners OTHER ~ 1/3 •  Updated commodity pricing TOTAL PROJECT $320M •  Design enhancements for tailings and overburden storage areas •  Improved silver recovery circuit •  Added $17M to cover potential inflation 23  
  • 24. CAPITAL COSTS BREAKDOWN -EQUIPMENT (in millions of USD) EQUIPMENT TOTAL ~ 1/3 of CAPEX TSX : R Ordered and locked in ~$45 •  CAT, Hitachi Shovel, SAG/Ball mill, Other processing WWW .R O MA R C O .C O M equipment •  CAT equipment currently in South Carolina •  ~$0.2 in monthly progress/holding payments Orders negotiated / prices set ~$25 (pending release for manufacture – indexed to commodities) •  Fine grinding mills, Water Treatment plant, etc. Not yet ordered, not long-lead time ~$30 24  
  • 25. CAPITAL COSTS BREAKDOWN -CONSTRUCTION (in millions of USD) CONSTRUCTION TOTAL ~ 1/3 of CAPEX TSX : R Exposure to inflation •  Oil / diesel, concrete, steel etc. WWW .R O MA R C O .C O M •  Recently priced •  Supply and demand •  Currently local area has many contractors and high unemployment 25  
  • 26. CAPITAL COSTS BREAKDOWN -OTHER (in millions of USD) OTHER TOTAL ~ 1/3 of CAPEX TSX : R •  Contingency $30 •  Inflation $17 WWW .R O MA R C O .C O M •  Owner’s Cost ~$20 •  EPCM ~$24 •  Pre-stripping ~$20 •  Little risk of inflation •  $47M combined in contingency ($30M) and inflation ($17M) 26  
  • 27. CAPEX CREEP?u  Why such low capex at Haile (relative to other projects)? u  Other projects are remote and in high risk TSX : R environments WWW .R O MA R C O .C O Mu  Location and Infrastructure excellent at Haile u  Not building local/regional Ø  Power plant Ø  Dams for water supplies Ø  Many kilometers of roads Ø  Employee camp 27  
  • 28. BURN RATE – Through 2012 Cash at July 31, 2012 - $80M (in millions of USD) TSX : R Remaining 2012 burn •  Exploration ~$7 - 9 WWW .R O MA R C O .C O M •  Corporate ~$4 - 6 •  HGM project ~$26 - 28 includes capex, engineering, equipment payment, EIS, land, etc. Projected Cash at end of 2012 - $50M to $55M 28  
  • 29. Financing Alternativesu  Funding required ~$370M u  Engagement with Barclays u  Construction ~$300M Bank PLC TSX : R u  Pre-stripping ~$20M u  Barclays engaged as u  Working capital ~$50M financial advisor for potential debt financing WWW .R O MA R C O .C O Mu  Funding sources u  Independent review (PAH) u  Debt – targeting ~$175M - $225M complete u  Equipment lease – targeting ~$25M u  Other options – targeting ~$170M - $220M Ø  Equity Ø  Royalty stream Ø  Forward sale Ø  Alternative debt (eg., high yield, convertible) Ø  Strategic Investor 29  
  • 30. STRONG BOARD, MANAGEMENT & TECHNICAL TEAM Proven gold mine development, finance, permitting and operations experience Romarco has the team in place to bring Haile into production TSX : R Experienced Board of Directors Strong Management & Technical TeamLeendert Krol, acting Chairman Diane R. Garrett, Ph.D., President & CEO§  Former Newmont §  Former Dayton Mining, US Global Investors James R. Arnold, Sr. VP, COODiane R. Garrett §  Former Freeport, Gold Fields – Richards Award Winner WWW .R O MA R C O .C O M§  Former Dayton Mining, US Global Investors Stan Rideout, Sr. VP, CFOJames R. Arnold §  Former Phelps Dodge§  Former Freeport, Gold Fields – Richards Award Winner David Thomas, VP, General ManagerDon MacDonald James Berry, Chief Geologist & Regional Exploration Manager§  CFO KGHM International (formerly QuadraFNX), former §  Former Barrick NovaGold, DeBeers, Dayton Mining Brent Anderson, Mine ManagerJohn Marsden §  Former Quadra, Freeport§  Consultant, former Freeport – Richards Award Winner Mike Gleason, Construction ManagerPatrick Michaels §  Former Freeport§  Portfolio Manager – Zuri-invest, Switzerland Jim Wickens, Process Manager §  Former BarrickGary A. Sugar§  Former RBC Capital Markets Johnny Pappas, Director of Environmental Affairs §  Former FreeportRobert van Doorn§  Former Mundoro, Rio Narcea, Morgan Stanley Ramona Schneider, Environmental Manager §  Former Kinross Dan Symons, Vice President, Investor Relations §  Former Renmark Financial 30  
  • 31. CONTACT INFORMATIONDan SymonsVice President, Investor Relationsdsymons@romarco.comBrookfield Place161 Bay Street, 27th FloorToronto, Ontario M5J 2S1Tel: 416.367.5500Fax: 416.367.5505Email: info@romarco.com WWW .R O MA R C O .C O M