Aura Minerals   March 2010
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Aura Minerals March 2010

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Corporate Presentation March 2010

Corporate Presentation March 2010

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Aura Minerals   March 2010 Aura Minerals March 2010 Presentation Transcript

  • New Intermediate Gold Producer Investor Presentation March 2010
  • 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' proposed acquisition of projects in Brazil and Honduras, and of its existing projects in Brazil and Mexico. Readers are cautioned that Aura Minerals’ existing 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. Estimates and projections relating to the projects Aura Minerals proposes to acquire are based on data published by Yamana Gold Inc. 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
  • Corporate Update • Creation of new intermediate gold producer through acquisition of three producing gold mines • Closed acquisition of the San Andres Gold Mine (Honduras) – Closing of acquisition of Sao Francisco and Sao Vicente Gold Mines (Brazil), expected in Q1/2010 – Average annual production of 220,000 oz. gold (Au) anticipated for the next five years from these three mines – Ongoing work at all three operations to increase production and reduce cash costs – Large resource base with excellent potential to add to current reserves • Updated resource estimate for Aranzazu Project (Mexico); planned restart of mine in Q2/2010 which will add to production base and further reduce overall mine site cash costs • Excellent expansion upside over longer term at Aranzazu – drilling now commenced to test depth potential • Completed Preliminary Economic Assessment of Arapiraca Project (Brazil); demonstrates robust economics TSX:ORA 3
  • Post-Acquisition Capital Structure Share Structure Pro-forma1 Issued and outstanding shares 205 mm Fully diluted 218 mm Ownership Pro-forma1 Management and insiders 28% Institutional 45% Yamana Gold 10% Financial Pro-forma1 Cash (approximately) US$100 mm Long-term debt US$70 mm 1 Pro Forma Shares on completion of the Acquisition includes 14 million shares to be issued to Yamana Gold Inc. on closing of Phase 2 of the Acquisition. Pro Forma Cash on completion of the Acquisition includes payment of US$56 million to Yamana Gold Inc. on closing of Phase 2 of the Acquisition. TSX:ORA 4
  • Gold Production Growth in 2010 San Andres Gold Mine Aranzazu Copper-Gold-Silver • Targeting greater than 90,000 oz of Au in 2010 at a Project, Mexico cash cost of less than $500/oz Au San Andres Gold Mine, Honduras Sao Francisco Gold Mine • Targeting 90,000 oz of Au in 2010 at a cash cost of Inaja Project, Brazil Sao Vicente (Under option approximately $600/oz Au agreement to Vale) Gold Mine, Brazil Sao Vicente Gold Mine • Targeting 55,000 oz of Au in 2010 at a cash cost of approximately $600/oz Au Sao Francisco Gold Mine, Aranzazu Copper-Gold-Silver Project Brazil • Targeting restart in Q2/2010 with annualized production of 25 mm lbs Cu and 16,000 oz Au eq. at cash costs of below $1.00/lb Cu Arapiraca Copper-Gold- Arapiraca Copper-Gold- Iron Ore Project Iron Ore Project, Operations Brazil • Advancing to feasibility and reviewing strategic Advanced development alternatives Exploration TSX:ORA 5
  • 2010 Strategic Focus 2010 Objectives Timeline • Increase production at San Andres Gold Mine through commissioning of Q1/2010, new crusher/conveyor system and operational improvements, with ongoing corresponding reduction of cash costs • Integrate Sao Francisco and Sao Vicente Gold Mines and identify key 2010 cost reductions and throughput and gold recovery improvement opportunities • Re-start Aranzazu Project and implement staged production increases Q2/2010 • Test depth potential at Aranzazu as part of a major expansion program Q1/2010 • Advance development of Serrote Deposit (Arapiraca Project) to Q3/2010 feasibility study level • Continue to evaluate strategic opportunities focused on private or Ongoing undervalued production or advance stage development gold projects TSX:ORA 6
  • OPERATIONS TSX:ORA 7
  • San Andres Gold Mine Forecast • Approximately 70,000 oz. of gold production for 2009 Production • Long term production of greater than 80,000 oz. of gold expected annually at an average cash cost below US$500/oz Au for a 7-year mine life Capital • New crusher/conveyor line to increase throughput and to reduce haulage Projects and operating costs • Power connection with the national grid in evaluation • Continuous gold mineralization between current mining operations at East Ledge and the proposed mining operations at the Twin Hills zones are expected to increase gold production Category Tonnage (tonnes) Grade (g/t Au) Contained Metal (oz Au) Total P&P Reserve 31,122,000 0.63 734,000 Total M&I Resource 120,511,000 0.60 2,328,000 Inferred Resource 4,704,000 0.79 120,000 Note: Resources are inclusive of reserves TSX:ORA 8
  • San Andres - Operational Improvements • Full integration of new mining contractor on site – Has led to a substantial increase in month-over-month mine production in Q3/2009 • Focus on solution management – Has led to highest monthly gold production during a rainy season month (6,983 oz. produced in October 2009) • Construction continuing on the new primary crusher/conveyor system – Will significantly reduce haulage distances and increase throughput • Commencement of metallurgical testwork on site – Will optimize gold leach cycle and reagent dosage to increase recovery • Implementation of a new stacking and leaching plan – Will optimize gold recovery and reduce cash costs TSX:ORA 9
  • San Andres - Operational Improvements • Mechanical completion of the crusher in November 2009, with completion of the conveyor system in Q1/2010 • Leach pad Phase IV expansion and Retention Pond 6 projects approved for 2010 TSX:ORA 10
  • San Andres – New Crusher Location – Increase Throughput and Reduce Cash Costs Current New TSX:ORA 11
  • Sao Francisco Gold Mine Operating • Producing since 2006 History • Gold production of 76,000 oz. in 2008 at cash cost of US$629/oz. Forecasted • 75,000 to 85,000 oz. of gold production in 2009 Production • +/- 90,000 oz. of gold production in 2010 Capital • New mine plan implemented in 2008; improvements included better ore Projects grade estimation and new geological modeling • New mine fleet in place June 2009 – improved productivity and efficiency • Enhanced mine productivity and cost reduction focus will continue in 2009 – gravity plant, heap metallurgy and mine planning Category Tonnage (tonnes) Grade (g/t Au) Contained Metal (oz Au) Total P&P Reserve 31,882,000 0.71 727,000 Total M&I Resource 45,150,000 0.69 1,007,000 Inferred Resource 751,000 0.80 19,000 Note: Resources are inclusive of reserves TSX:ORA 12
  • Sao Francisco – Key Focus in 2010 • Improve grade control through changes to drilling and blasting practices • Increase throughput of current crushing plant for improved recoveries • Investigate potential to crush low grade dump leach ore to significantly improve recoveries • Improve heap operational parameters, including lime and cyanide consumption • Reconfigure and improve recovery of gravity circuit • Evaluate reprocessing of existing tailings TSX:ORA 13
  • Sao Francisco – Typical Ore Section QUARTZ VEINS 1ST MINERALIZATION TSX:ORA 14
  • Sao Francisco – Gold Mineralization Above (left): Nuggets associated with Above (right): In quartz veins – massive quartz veins or microscopic crystals and irregular grains, 1mm to 5mm in size. associated with sericitic bands and Occurs in lamelar grains. sulphides. TSX:ORA 15
  • Sao Francisco – Current Circuit Crushing Plant Gravity Plant Crushing Plant, Secondary and Tertiary TSX:ORA 16
  • Tabling of Gravity Gold TSX:ORA 17
  • Recovered Gold TSX:ORA 18
  • Recovered Gold TSX:ORA 19
  • Sao Vicente Gold Mine Operating • Commenced commissioning December 2008 History • Commercial production achieved in Q3/2009 Forecasted • 40,000 to 50,000 oz. of gold production in 2009 Production • 50,000 to 55,000 oz. of gold production in 2010 • Estimated mine life of at least five years • Potential for further upside through continued mine exploration • 2010 focus – process plant, heap and metallurgy improvements, mine exploration to convert additional resources to reserves Category Tonnage (tonnes) Grade (g/t Au) Contained Metal (oz. Au) Total P&P Reserve 16,018,000 0.65 335,000 Total M&I Resource 25,482,000 0.74 605,000 Inferred Resource 3,623,000 0.87 101,000 Note: Resources are inclusive of reserves TSX:ORA 20
  • Sao Vicente – Key Focus for 2010 • Conduct program of definition and expansion drilling to increase resource base • Review of current process plant for potential modification to significantly increase recovery (grinding vs. gravity) • Drill nearby targets identified for increased production • Evaluate potential for reprocessing of historic dredge tailings TSX:ORA 21
  • DEVELOPMENT PROJECTS TSX:ORA 22
  • Aranzazu Copper-Gold-Silver Project • Limited operating history under previous owner History • Basically no exploration on property from early’80’s to 2007 • Located in centre of what appears to be a major copper gold silver district Forecast • Planned re-start Q2/2010 at 2,600 tpd Production • Planned run rate production of +25 mm lbs copper, +12,000 oz gold and +250,000 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 • Estimated capex of approximately US$20 mm in 2009/10 Projects • Mine development and mill upgrades commenced October 2009 Category Tonnes Grade (Cu Grade Grade Cu Au %) (Au g/t) (Ag g/t) (mm lbs) (000 oz.) Total M&I Resource 12,847,000 1.34 0.50 11.87 379 207 Inferred 3,217,000 1.17 0.28 6.44 83 29 Note: Resources at a 0.8% Cu only cut-off TSX:ORA 23
  • Aranzazu Project – Significant Upside Potential to Increase Resources TSX:ORA 24
  • Aranzazu Project - Arroyos Azules Zone - Continues to Demonstrate Potential Hole Dip From To Interval Cu1 Au Ag # (o) (m) (m) (m) (%) (g/t) (g/t) AZC-042 -63 192.00 211.50 19.50 3.07 0.93 34.21 AZC-043 -69 256.40 262.30 5.90 2.30 3.84 43.88 AZC-044 -46 138.00 190.50 52.50 1.56 1.33 14.79 AZC-048 -50 322.50 348.00 25.50 1.80 0.48 22.63 AZC-050 -45 175.50 189.00 13.50 1.62 0.64 19.87 AZC-057 -47 129.00 142.50 13.50 3.41 1.25 21.26 AZC-061 -70 252.00 313.50 61.50 1.89 1.03 26.58 AZC-062 -67 231.00 315.00 84.00 2.19 0.67 16.09 AZR-038 -47 217.90 230.10 12.20 1.07 1.16 12.68 1. Using a copper cutoff grade of 0.5% TSX:ORA 25
  • Overall Layout TSX:ORA 26
  • Mill Float Plant TSX:ORA 27
  • On-Going Plant Modifications TSX:ORA 28
  • On-Going Plant Modifications TSX:ORA 29
  • Aranzazu Project – Large Resource with Exploration Upside Deep High Grade Intercepts Red – 0.5% Cu grade shell Black – mined out stopes and underground workings Grey - untested TSX:ORA 30
  • Aranzazu Copper-Gold-Silver Project Exploration • Only 50% of drill holes in database were assayed for gold Upside • Precious metals grades are likely to improve with additional drilling • Large resource base, open at depth • 2010 drill program planned to target +50 million tonnes at lower Cu cut-off (0.5% Cu) – if successful, will be the basis of a feasibility study on a larger underground operation (potential sub-level caving) November 2009: Resources at a 0.5% Cu only cut-off: Category Tonnes Grade Grade Grade Cu Au (Cu %) (Au g/t) (Ag g/t) (mm lbs) (000 oz.) Measured 2,690,000 1.04 0.47 9.99 65 45 Indicated 21,121,000 1.01 0.39 8.96 470 265 Total M&I Resource 24,082,000 1.01 0.40 9.09 535 310 Inferred 8,674,000 0.82 0.18 4.39 157 50 TSX:ORA 31
  • 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 -80 364.34 414.00 49.66 2.06 0.58 19.00 TSX:ORA 32
  • Aranzazu Project – Major Surface and Underground Drill Program Planned for 2010/11 TSX:ORA 33
  • Aranzazu Targets El Cobre Target La Apuesta Sedimentary Target Aranzazu Strike Extensions TSX:ORA 34
  • Arapiraca Project – Feasibility Stage Copper-Gold-Iron Ore Deposit Forecasted • Preliminary Economic Assessment completed September 2009, considers commissioning Production 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 • Capex US$490 million Projects • 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 Q2/2010 Grade Grade Grade Cu Au Mineral Resources Tonnes (Cu %) (Au g/t) (Fe %) (mm lbs) (mm oz.) Serrote Total M&I Resource 195,727,000 0.49 0.09 15.46 2,139 0.57 Serrote Inferred 31,181,000 0.49 0.09 13.93 337 0.09 Caboclo Total M&I Resource 7,587,000 0.57 0.16 19.34 95 0.04 Caboclo Inferred 4,616,000 0.57 0.11 14.24 58 0.02 TSX:ORA 35
  • 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% Arapiraca Project: Gold Grade 0.103g/t 0.09g/t Iron Grade 17.6% 14.8% Demonstrates Copper Recovery 85% 85% Potential for Strategic Gold Recovery 65% 65% Partnerships 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 Economics – Post Tax (Note 5) NPV@8% $US 417M Note 1 Mined and processed resource is 92% classified as Measured and Indicated. In-pit Inferred NPV@10% $US 325M 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 NPV@12% $US 250M Preliminary Economic Assessment Note 3 Average magnetite concentrate production is estimated at 1.3 million tonnes per annum grading IRR 25.4% 67% relative to an 11% mass pull for Fe Payback 2.8 Years 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 Note 5 Commodity prices assumed for financial analysis are US$2.00/lb Cu, US$800/oz Au, and US¢85/dmtu Fe fines TSX:ORA 36
  • LOOKING AHEAD TSX:ORA
  • Compelling Valuation: Comparable Analysis P/NAV1,2 AMC/P&P Recoverable Reserves1,3,4 1.60x $2,500 1.42x $2,173 1.40x 1.34x $2,008 AMC / P&P Recoverable Reserves $2,000 1.20x 1.07x P / NAV 1.01x 0.97x 0.97x 1.00x $1,500 0.84x (US$/oz Au) 0.75x 0.80x 0.67x 0.60x $1,000 $746 $701 $696 0.40x $470 $403 $500 $348 0.20x $170 0.00x $0 Minerals Minefinders Northgate Minerals Wheaton Golden Star Gammon Golden Wheaton Northgate Alamos New Gold Red Back Minefinders Gammon New Gold Alamos Red Back Minerals Minerals Gold Mining Gold Mining Aura Star Aura Gold Gold Gold Gold 2010E Production Price to Cash Flow 2010E1,2 600 13.3x 14.0x 511 500 12.0x 430 10.1x Production 2010E (Au 000oz) P/CF 2010E 400 10.0x 9.1x 344 325 317 8.0x 7.2x 300 6.5x 237 5.9x 185 6.0x 4.8x 200 167 3.8x 3.5x 4.0x 100 78 2.0x 0 0.0x Northgate Wheaton Minerals Minefinders Golden New Gold Alamos Red Back Gammon Minerals Northgate Wheaton Minefinders Minerals Gold New Gold Golden Alamos Mining Red Back Gammon Star Minerals Aura Gold Gold Gold Mining Star Aura Gold Gold 1. Share Price Information as at February 5, 2010 2. NAV based on a 5% discount rate and the following Canaccord Adams 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. Aura Minerals market capitalization on a pro-forma basis includes 14 million shares to be issued to Yamana Gold Inc. on closing of Phase 2 of the Acquisition TSX:ORA 38 4. AMC = Basic market cap + net debt + working capital + estimated capex Source: Canaccord Adams Research
  • Positioned for Growth • Gold production continues to generate cash flow in 2010 – Sao Francisco and Sao Vicente Gold Mines expected to close in Q1/2010 – Aranzazu Project to re-start operations in 2010 • Operational plan promotes increased organic growth through mine improvements and expansion potential – Initiatives in place for improved efficiencies at all operations • On-going evaluation of strategic initiatives focused on long-term growth – M&A activity centred on private or undervalued assets TSX:ORA 39
  • 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 www.auraminerals.com TSX:ORA TSX:ORA 40
  • Gold Mine Acquisition Summary • Agreement to acquire a 100% interest in three gold mines from Yamana Gold Inc. in June 2009 (the Acquisition) – Closed the San Andres Gold Mine in August 2009 (Phase 1) – Awaiting regulatory approval of Sao Francisco and Sao Vicente Gold Mines (anticipated in Q1/2010 – Phase 2) • Consideration includes the following: – US$40 million in Aura Minerals stock at closing at a deemed price of C$2.00/share – US$90 million in cash, paid in two tranches – US$70 million in a 3 year promissory note – Contingent consideration up to a maximum of US$40 million, based on operations generating net free cash flow above certain milestones • All net free cash flow generated from Sao Francisco and Sao Vicente Gold Mines prior to closing will accrue to Aura Minerals in form of purchase price adjustment TSX:ORA 41
  • Arapiraca Project - Large Land Position – Over 177,000 Hectares New Claims Paved Roads Railway Original Claims Town of Arapiraca TSX:ORA 42