Aura Minerals May 2010 Corporate Presentation
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Aura Minerals May 2010 Corporate Presentation Presentation Transcript

  • 1. New Intermediate Gold Producer Investor Presentation, June 2010
  • 2. Forward-Looking Statements and Cautionary Notes Forward-Looking Statements All statements made in this presentation, other than statements of historical fact, constitute forward-looking statements. The actual results of Aura Minerals may differ significantly from those anticipated in the forward-looking statements and readers are cautioned not to place undue reliance on these forward-looking statements. Except as required by securities regulations, the Company undertakes no obligation to publicly release the results of any revisions to forward-looking statements that may be made to reflect events or circumstances after the above-stated date or to reflect the occurrence of unanticipated events. Forward-looking statements include, but are not limited to, statements with respect to the future price of copper, gold, nickel and iron ore, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and the timing and possible outcome of litigation. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to the integration of acquisitions; risks related to international operations; risks related to joint venture operations; actual results of current exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of copper, gold, nickel and iron ore; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Disclaimer Aura Minerals Inc. ("Aura Minerals") ("Aura Minerals" or the "Company") is a Canadian company and a reporting issuer in the Province of British Columbia and the Province of Ontario, Canada. The Company has taken all reasonable care in producing and publishing information contained in this presentation, and will endeavor to do so regularly. Material in this report may still contain technical or other inaccuracies, omissions, or typographical errors, for which Aura Minerals assumes no responsibility. Aura Minerals does not warrant or make any representations regarding the use, validity, accuracy, timeliness, completeness or reliability of any claims, statements or information in this presentation. Under no circumstances, including, but not limited to, negligence, shall Aura Minerals be liable for any direct, indirect, special, incidental, consequential, or other damages, including but not limited to loss of profits, whether or not advised of the possibility of damage, arising from use, or inability to use, the material in this presentation. The information herein is not a substitute for independent professional advice before making any investment decisions. The information in this presentation may be superseded by subsequent disclosures. This presentation presents a review of Aura Minerals' projects in Brazil, Honduras, and of Mexico. Readers are cautioned that some of Aura Minerals’ projects in Brazil and Mexico are at an early stage of exploration and production, respectively, and that estimates and projections contained herein are based on limited or incomplete data. More work is required before the mineralization on the projects and their economic aspects can be confidentially modeled. Therefore, the work results and estimates herein may be considered to be generally indicative only of the nature and quality of the projects. No representation or prediction is intended as to the results of future work, nor can there be any promises that the estimates herein will be confirmed by future exploration or analysis, or that the projects will otherwise prove to be economic. The Toronto Stock Exchange has not reviewed the information in this presentation and does not accept responsibility for the adequacy or accuracy of it. TSX : ORA 2
  • 3. Aura Minerals Aranzazu Copper-Gold –Silver Project, Mexico Aura Minerals Inc. is focused on the acquisition, exploration, development and operation of gold San Andres Gold Mine, Honduras Inaja Project, Brazil and base metal projects in the Americas. The (Under option agreement to Vale) Company’s portfolio includes the producing San Andres Gold Mine in Honduras, the producing Sao Vicente Gold Mine, Sao Francisco and Sao Vicente gold mines in Brazil Sao Francisco Gold Mine, Brazil, the pre-production copper-gold-silver Brazil Arapiraca Copper-Gold- Aranzazu Project in Mexico, and the feasibility- Iron Ore Project, Brazil stage Serrote Deposit located at the copper-gold- iron ore Arapiraca Project in Brazil. Operations Advanced development Exploration TSX: ORA 3
  • 4. Focused Discipline Strategy Maintaining Pursuing Strong Growth Financial Position • Acquired three gold mines • Constructing fourth producing • Strong treasury position with mine for Q3/2010 startup over $100 mm in cash • Advancing development of • Strong cash flow for 2010 organic growth assets • Low debt • Pursuing accretive strategic • Advanced-stage Arapiraca growth opportunities moving towards JV during 2010 Executing Operational Strategy • Quarterly production growth at San Andres Mine • Cash cost per ounce reduction to <$500/oz gold •Gold production target of 185,000 ozs in 2010 • Aranzazu on schedule for 2010 startup TSX: ORA 4
  • 5. Board of Directors and Management Board of Directors • Patrick Mars, Chairman • Patrick Downey, President and CEO, Director • John Ivany, Director • Elizabeth Martin, Director • William Murray, Director • Tom Ogryzlo, Director Executive • Patrick Downey, President and CEO Management Team • J. Britt Reid, Chief Operating Officer • Fausto Taddei, Chief Financial Officer • Alan Hitchborn, Vice President, Exploration • Gonzalo Rios, Vice President, Safety, Health and Environment • Deepk Hundal, In-House Counsel and Corporate Secretary • Michele Jones, Vice President, Corporate Affairs • Meghan Lewis, Vice President, Corporate Development • Dale Tweed, Vice President, Projects TSX: ORA 5
  • 6. Capital Structure* Exchange/Symbol TSX/ORA Share Structure Issued and outstanding shares 206 mm Fully diluted 222 mm Ownership Management and insiders 28% Institutional 45% Yamana Gold 10% Financial Cash (approximately) US$110 mm Long-term debt US$65 mm *Share data information as at April 30, 2010 TSX : ORA 6
  • 7. Reserves and Resources San Andres Gold Mine, Honduras* Aranzazu Copper-Silver-Gold Au Project, Mexico (000 oz) Cu Au P&P 640 (mm lbs) (000 oz) M&I 2,229 M&I 536 309 Inferred 120 Inferred 157 52 Sao Vicente Gold Mine, Brazil* Au (000 oz) P&P 281 Arapiraca Copper-Gold-Iron Ore M&I 580 Project, Brazil Inferred 101 Cu Au (mm lbs) (000 oz) Sao Francisco Gold Mine, Brazil* M&I 2,139 570 Au Inferred 337 90 (000 oz) P&P 630 M&I 909 Inferred 18 * Mineral Resources are inclusive of Mineral Reserves Operations Advanced development Exploration TSX : ORA 7
  • 8. Gold Production Growth San Andres Gold Mine 300,000 Targeting greater than 90,000 oz of Au in 2010 Sao Francisco Gold Mine 250,000 Targeting 60,000 to 65,000 oz of Au in 2010* Annual Gold Production Sao Vicente Gold Mine Targeting 35,000 to 40,000 oz of Au in 2010* 200,000 Aranzazu Copper-Gold-Silver Project Targeting restart in 2010 with annualized 150,000 production of 20 mm lbs Cu and 15,000 gold equivalent ounces 100,000 Arapiraca Copper-Gold- Iron Ore Project Advancing to feasibility and reviewing strategic alternatives 50,000 Inaja Iron Ore Project Ongoing JV with Vale on large iron ore target 0 2009 2010 2011 2012 *Gold production attributable to Aura Minerals for the eight-month period following the close of the acquisition on April 30, 2010. TSX : ORA 8
  • 9. Operations
  • 10. San Andres Gold Mine Project Type • Open-pit, heap leach Forecast • 2010 estimated production of 90,000 ounces at an Production average cash cost between $480 and $520 per ounce – currently below $500/oz Au – Ahead of target • Targeted run rate of 100,000 ounces per annum by Q4/2010 after capital improvements Operational • New crusher/conveyor line to increase throughput Improvements and to reduce haulage and operating costs now complete • Expanded leach pads and new stacker complete by June 2010 • In-fill drilling during 2010 planned to increase overall reserve base Category Tonnage (000 t) Grade (g/t Au) Contained Gold (000 oz) Total P&P Reserve 32,508 0.61 640 Total M&I Resource 116,675 0.59 2,229 Inferred Resource 4,703 0.79 120 Note: Mineral Resources are inclusive of Mineral Reserves TSX : ORA 10
  • 11. San Andres – Conveyor System TSX: ORA 11
  • 12. San Andres – New Primary Crusher TSX: ORA 12
  • 13. San Andres – New Crusher Location Increase Throughput and Reduce Cash Costs Current New TSX : ORA 13
  • 14. Sao Francisco Gold Mine Project Type • Open Pit - Heap Leach - Gravity Circuit Acquisition • April 30, 2010 Date Forecasted • 65,000 ounces of gold production in 2010 Production attributable to Aura Minerals • Planned production of 90,000 ounces of gold per annum Capital • Update mine plan to improve grade control and Projects improve mine contractor productivity • Upgrade current crushing plant to increase feed to gravity circuit • Reconfigure and improve recovery of gravity circuit • Approximately $15 million budgeted in 2010 for upgrades to increase crusher throughput and gravity recovery Category Tonnage (000 t) Grade (g/t Au) Contained Gold (000 oz) Total P&P Reserve 26,218 0.75 630 Total M&I Resource 39,486 0.72 909 Inferred Resource 720 0.80 18 Note: Mineral Resources are inclusive of Mineral Reserves TSX : ORA 14
  • 15. Sao Francisco – Typical Ore Section QUARTZ VEINS 1ST MINERALIZATION TSX : ORA 15
  • 16. Sao Francisco – Gold Mineralization Above (left): Nuggets associated with quartz veins or microscopic crystals associated with sericitic bands Above (right): In quartz veins – massive and irregular and sulphides. grains, 1mm to 5mm in size. Occurs in lamelar grains. TSX: ORA 16
  • 17. Sao Francisco – Current Circuit Crushing Plant Gravity Plant Crushing Plant, Secondary and Tertiary TSX : ORA 17
  • 18. Sao Francisco – Tabling of Gravity Gold TSX : ORA 18
  • 19. Sao Francisco – Recovered Gold TSX : ORA 19
  • 20. Sao Vicente Gold Mine Project Type • Open-pit, heap leach, gravity circuit Acquisition • April 30, 2010 Date Forecasted • 40,000 ounces of gold production in 2010 attributable Production to Aura Minerals • 50,000 to 55,000 ounces of gold production per annum over a five-year mine life • Potential for further upside through continued mine exploration Capital • Modify heap leach stacking system to improve Projects recoveries • Conduct program of definition and expansion drilling to increase resource base • Evaluate potential for reprocessing of historic dredge tailings • Review current process plant to upgrade plant availability and increase recovery Category Tonnage (000 t) Grade (g/t Au) Contained Gold (000 oz) Total P&P Reserve 10,167 0.86 281 Total M&I Resource 26,215 0.69 580 Inferred Resource 3,553 0.88 101 Note: Mineral Resources are inclusive of Mineral Reserves TSX : ORA 20
  • 21. Development Projects
  • 22. Aranzazu Copper-Gold-Silver Project Project Type • Bulk tonnage, underground, flotation mill History • Limited operating history under previous owner • Basically no exploration on property from early ‘80s to 2007 • Located in centre of a major copper-gold-silver district Forecast • Planned re-start in 2010 at 2,600 tpd Production • Planned run rate production of +20 mm lbs copper, +12,000 oz gold and +140,000 oz silver – excellent upside on gold and silver production • Stage 2 – next increase to 3,000 tpd • By-product gold and silver contributes to low projected cash costs below US$1.00 per lb copper Capital • Mine development and mill upgrades commenced October 2009 Projects • Estimated capex of approximately US$25 mm in 2010 Exploration • Major exploration program underway to define expansion potential Category Tonnage Grade Grade Grade Cu Au (000 t) (Cu %) (g/t Au) (g/t Ag) (mm lbs) (000 oz) Total M&I Resource 24,082 1.01 0.40 9.09 536 309 Inferred Resource 8,674 0.82 0.18 4.39 157 52 Note: Resources at a 0.5% Cu only cut-off. TSX : ORA 22
  • 23. Aranzazu Project – Overall Layout TSX : ORA 23
  • 24. Aranzazu Project – Mill Float Plant 24 TSX : ORA 24
  • 25. Aranzazu Project Significant Expansion/Exploration Upside • Only 50% of drill holes in database were assayed for gold • Precious metals grades continue to improve with additional drilling • Large resource base, open at depth • 2010/11 drill program planned to target +70 million tonnes at lower Cu cut- off (0.5% Cu) – if successful, will be the basis of a feasibility study on a large bulk mining underground operation TSX : ORA 25
  • 26. Aranzazu Project Underground Drill Program Planned for 2010/11 TSX : ORA 26
  • 27. Aranzazu Project Continues to Demonstrate High-Grade Copper-Gold-Silver Potential Along Strike Hole # Dip From To Interval Cu1 Au Ag (o) (m) (m) (m) (%) (g/t) (g/t) AZC-079 -52 159.0 168.0 9.0 1.42 2.63 18.1 AZC-080 -46 13.5 27.0 13.5 1.03 1.59 12.4 AZC-081 -47 12.0 64.5 52.5 1.27 0.78 15.4 AZC-085 -48 169.5 210.0 40.5 1.38 1.69 13.8 AZC-085 -48 216.0 235.5 19.5 1.13 1.16 11.8 AZC-088 -51 339.0 355.5 16.5 2.16 1.96 26.1 AZR-052 -41 6.1 30.5 24.4 1.17 0.19 12.3 AZR-054 -47 288.0 315.5 27.4 1.64 1.37 22.2 AZR-055 -48 172.2 201.2 29.0 1.35 1.60 23.6 AZR-055 -48 320.0 356.6 36.6 2.81 3.66 26.1 AZR-058 -51 25.9 35.1 9.1 1.33 1.77 9.8 AZR-059 -54 193.6 204.2 10.7 1.37 1.28 15.1 AZR-062 -43 59.4 77.7 18.3 1.61 1.69 20.1 AZR-063 -71 36.6 54.9 18.3 1.80 2.54 26.5 AZR-066 -45 45.7 57.9 12.2 3.51 3.55 49.8 1. Using a copper cutoff grade of 0.5% 27 TSX : ORA 27
  • 28. Aranzazu Project Large Resource with Exploration Upside TSX : ORA 28
  • 29. Aranzazu Project – Limited Deep Drill Results Hole # Dip From To Interval Cu Au Ag (o) (m) (m) (m) (%) (g/t) (g/t) 54200-4 -90 330.00 368.00 38.00 1.21 0.71 13.27 54300-3 -90 338.00 379.48 41.48 2.48 1.15 25.09 54350-2 -80 373.20 428.00 54.80 1.96 1.15 23.28 54375-1 -85 474.00 526.00 52.00 2.24 0.95 16.64 54475-2 -80 400.00 438.00 38.00 1.08 0.40 12.82 54475-2 -80 462.00 468.00 6.00 1.34 0.56 21.90 54475-5 -80 364.34 141.00 49.66 2.06 0.58 19.00 TSX : ORA 29
  • 30. Aranzazu Targets Frisco – Tayahua Mine El Cobre Target La Apuesta Sedimentary Target Aranzazu Strike Extensions TSX : ORA 30
  • 31. Arapiraca Project Feasibility Stage Copper-Gold-Iron Ore Deposit Project Type • Open Pit – Copper Flotation – Magnetic Separation Plant Forecasted • Preliminary Economic Assessment completed September 2009, considers Production commissioning Q4/2012 • Average annual production of 137 mm lbs copper, 27,000 oz. gold and 1.3 mm tonnes of magnetite concentrate grading 67% Fe • Low projected cash costs of US$0.65 – US$0.82 per lb of copper (net of by-products) Capital Projects • Capex US$490 million • Construction permit received August 2009 – now fully permitted • Potential to enhance project economics with addition of oxide plant to produce an additional 20 mm lbs copper cathode per annum • Excellent infrastructure – access to roads, railway, ports, towns Resources • Preliminary Economic Assessment does not consider additional resources at Caboclo Deposit (drilling underway) – resource estimate update for Caboclo Deposit Q3/2010 Mineral Resources Tonnes Grade Grade Grade Cu Au (000 t) (Cu %) (g/t Au) (Fe %) (mm lbs) (000 oz) Serrote Total M&I Resource 195,889 0.49 0.09 15.48 2,139 570 Serrote Inferred 31,267 0.49 0.09 14.01 337 90 Caboclo Total M&I Resource 7,587 0.57 0.16 19.34 95 40 Caboclo Inferred 4,616 0.57 0.11 14.24 58 20 Based on a 0.3% Cu equivalent cut-off grade. TSX : ORA 31
  • 32. Preliminary Economic Assessment Highlights Arapiraca Project Years 1 to 3 Life of Mine Mill Feed (Note 1) 40.2 million tonnes 169.6 million tonnes Strip Ratio (Note 2) 3.7 to 1 3.12 to 1 Copper Grade 0.60% 0.51% Gold Grade 0.103g/t 0.09g/t Iron Grade 17.6% 14.8% Copper Recovery 85% 85% Gold Recovery 65% 65% Magnetite Recovery (Note 3) 92% 92% Copper Production 155M lbs per annum 137M lbs per annum Gold Production 29,750 oz per annum 26,850 oz per annum Iron in Magnetite 874,000 tonnes per annum 767,000 tonnes per annum Total Cash Cost per Pound Copper (Note 4) $0.65 $0.82 Project Total Capital Costs $US 490M Sustaining Capital Costs $US 76M Mine Life 12 years Arapiraca Project: Economics – Post Tax (Note 5) Demonstrates Potential NPV@8% $US 417M for Strategic Partnerships NPV@10% $US 325M NPV@12% $US 250M IRR 25.4% Payback 2.8 Years Note 1 Mined and processed resource is 92% classified as Measured and Indicated. In-pit Inferred resources amount to 8% of the total in-pit resources, and are mined at the end of the mine life. Note 2 Strip ratio includes oxide material which may be processed by heap leach not considered in the Preliminary Economic Assessment Note 3 Average magnetite concentrate production is estimated at 1.3 million tonnes per annum grading 67% relative to an 11% mass pull for Fe Note 4 Total cash cost per pound of copper includes treatment and transportation costs and royalties, as well as by-product credits for sales of gold and iron ore TSX : ORA 32 32 Note 5 Commodity prices assumed for financial analysis are US$2.00/lb Cu, US$800/oz Au, and US¢85/dmtu Fe fines
  • 33. Compelling Valuation P/NAV1,2 AMC/P&P Recoverable Reserves1,3 1.80x $3,000 1.57x $2,634 1.60x $2,500 1.40x 1.29x 1.19x 1.17x 1.16x P / NAV AMC / P&P Recoverable Reserves 1.20x $2,000 1.00x 0.81x 0.79x 0.75x $1,500 (US$/oz Au) 0.80x $1,105 0.49x $888 0.60x $1,000 $783 $669 $608 0.40x $536 $500 $363 $241 0.20x 0.00x $0 2011E Production Price to Cash Flow 2011E1,2 600 564 25.0x 21.5x 20.2x 500 20.0x Production 2011E (Au 000oz) P/CF 2011E 377 375 400 14.4x 15.0x 286 279 300 10.4x 9.9x 216 9.5x 10.0x 8.0x 175 168 6.5x 200 5.6x 113 5.0x 100 0 0.0x 1. Share Price Information as at May 14, 2010 2. NAV based on a 5% discount rate and the following Canaccord Genuity Research forecasts for gold prices: US$1,250/oz in 2010, US$1,100/oz in 2011, US$1,000/oz in 2012, US$900/oz in 2013 and US$850/oz in 2014+ 3. AMC = Basic market cap + net debt + working capital + estimated capex TSX : ORA 33 Source: Canaccord Genuity Research
  • 34. 2010 Objectives San Andres Mine 1 Commission new primary crusher-conveyor system 2 Complete new stacking system, Phase 4 leach pad expansion and Retention Pond 6 Q3/2010 Sao Francisco and Sao Vicente Mines 3 Integrate Sao Francisco and Sao Vicente Gold Mines and implement key cost 2010 reduction and gold recovery improvement opportunities Aranzazu Project 4 Release updated resource and new reserve estimate Q3/2010 5 Re-start Aranzazu Project and implement staged production increases Q3/2010 6 Test depth potential at the Aranzazu Project as part of a major expansion program 2010 Arapiraca Project 7 Release updated resource estimate for Caboclo Deposit Q3/2010 8 Advance development of Serrote Deposit to feasibility study level Q4/2010 Strategic Objectives 9 Continue to evaluate strategic opportunities focused on private or undervalued Ongoing production or advance stage development gold projects TSX:ORA 34
  • 35. Thank You Aura Minerals Inc. P.O. Box 10434 - Pacific Centre 777 Dunsmuir Street, Suite 1950 Vancouver, BC V7Y 1K4 Tel: 604-669-4777 Fax: 604-696-0212 Email: info@auraminerals.com Web: www.auraminerals.com